UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			FOR THE QUARTERLY PERIOD ENDED MARCH 31, ~~2021~~2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM__________ TO__________

COMMISSION FILE ~~NUMBER~~NUMBER: 001-03551

EQT CORPORATION

(Exact name of registrant as specified in its charter)


Pennsylvania						25-0464690
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

625 Liberty Avenue, Suite 1700
Pittsburgh, Pennsylvania						15222
(Address of principal executive offices)						(Zip Code)

(412) 553-5700

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, no par value

EQT

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April ~~30, 2021, 279,098,036~~22, 2022, 369,535,705 shares of common stock, no par value, of the registrant were outstanding.

Table of Contents

TABLE OF CONTENTS

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS (UNAUDITED)

Three Months Ended
March 31,
2021 2020
(Thousands, except per share amounts)
Operating revenues:
Sales of natural gas, natural gas liquids and oil $ 1,130,951 $ 715,201
(Loss) gain on derivatives not designated as hedges (188,813) 389,436
Net marketing services and other 7,785 2,420
Total operating revenues 949,923 1,107,057
Operating expenses:
Transportation and processing 445,784 439,834
Production 47,230 40,380
Exploration 949 923
Selling, general and administrative 45,006 34,938
Depreciation and depletion 377,116 357,526
Amortization of intangible assets 0 7,478
(Gain) loss on sale/exchange of long-lived assets (1,207) 48,852
Impairment and expiration of leases 16,757 53,768
Other operating expenses 9,443 0
Total operating expenses 941,078 983,699
Operating income 8,845 123,358
Gain on Equitrans Share Exchange (see Note 8) 0 (187,223)
(Income) loss from investments (11,848) 390,628
Dividend and other income (3,304) (24,714)
Loss on debt extinguishment 4,424 16,610
Interest expense 75,099 62,374
Loss before income taxes (55,526) (134,317)
Income tax (benefit) expense (14,494) 32,822
Net loss (41,032) (167,139)
Less: Net loss attributable to noncontrolling interest (514) 0
Net loss attributable to EQT Corporation $ (40,518) $ (167,139)
Loss per share of common stock attributable to EQT Corporation:
Basic:
Weighted average common stock outstanding 278,852 255,435
Net loss $ (0.15) $ (0.65)
Diluted:
Weighted average common stock outstanding 278,852 255,435
Net loss $ (0.15) $ (0.65)


	Three Months Ended March 31,
	2022		2021

	(Thousands, except per share amounts)
Operating revenues:
Sales of natural gas, natural gas liquids and oil	$	2,486,624	$	1,130,951
Loss on derivatives not designated as hedges	(3,077,637)		(188,813)
Net marketing services and other	11,903		7,785
Total operating revenues	(579,110)		949,923
Operating expenses:
Transportation and processing	516,104		445,784
Production	71,012		47,230
Exploration	772		949
Selling, general and administrative	69,096		45,006
Depreciation and depletion	422,098		377,116
Gain on sale/exchange of long-lived assets	(1,209)		(1,207)
Impairment of contract asset	184,945		—
Impairment and expiration of leases	29,991		16,757
Other operating expenses	16,347		9,443
Total operating expenses	1,309,156		941,078
Operating (loss) income	(1,888,266)		8,845
Loss (income) from investments	20,785		(11,848)
Dividend and other income	(3,596)		(3,304)
Loss on debt extinguishment	6,923		4,424
Interest expense	67,902		70,473
Loss before income taxes	(1,980,280)		(50,900)
Income tax benefit	(465,697)		(12,959)
Net loss	(1,514,583)		(37,941)
Less: Net income (loss) attributable to noncontrolling interest	1,465		(514)
Net loss attributable to EQT Corporation	$	(1,516,048)	$	(37,427)

Loss per share of common stock attributable to EQT Corporation:
Basic and diluted:
Weighted average common stock outstanding	374,142		278,852
Net loss	$	(4.05)	$	(0.13)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED COMPREHENSIVE ~~(LOSS) INCOME~~LOSS (UNAUDITED)


								Three Months Ended March 31,
		Three Months Ended March 31,				2022		2021
		2021		2020
		(Thousands)						(Thousands)
Net loss	Net loss	$	(41,032)	$	(167,139)		Net loss	$	(1,514,583)	$	(37,941)
Other comprehensive income, net of tax:	Other comprehensive income, net of tax:						Other comprehensive income, net of tax:
Other post-retirement benefits liability adjustment, net of tax expense: $27 and $24		80		12
Other postretirement benefits liability adjustment, net of tax expense: $20 and $27							Other postretirement benefits liability adjustment, net of tax expense: $20 and $27	63		80
Comprehensive loss	Comprehensive loss	(40,952)		(167,127)			Comprehensive loss	(1,514,520)		(37,861)
Less: Comprehensive loss attributable to noncontrolling interests		(514)		0
Less: Comprehensive income (loss) attributable to noncontrolling interest							Less: Comprehensive income (loss) attributable to noncontrolling interest	1,465		(514)
Comprehensive loss attributable to EQT Corporation	Comprehensive loss attributable to EQT Corporation	$	(40,438)	$	(167,127)		Comprehensive loss attributable to EQT Corporation	$	(1,515,985)	$	(37,347)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


							March 31, 2022		December 31, 2021
		March 31, 2021		December 31, 2020
		(Thousands)					(Thousands)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	40,670	$	18,210	Cash and cash equivalents	$	16,913	$	113,963
Accounts receivable (less provision for doubtful accounts: $7,049 and $6,239)		682,496		566,552
Accounts receivable (less provision for doubtful accounts: $321 and $321)						Accounts receivable (less provision for doubtful accounts: $321 and $321)	1,212,596		1,438,031
Derivative instruments, at fair value	Derivative instruments, at fair value	431,949		527,073		Derivative instruments, at fair value	1,304,109		543,337
Prepaid expenses and other	Prepaid expenses and other	158,590		103,615		Prepaid expenses and other	492,312		191,435
Total current assets	Total current assets	1,313,705		1,215,450		Total current assets	3,025,930		2,286,766

Property, plant and equipment	Property, plant and equipment	22,168,856		21,995,249		Property, plant and equipment	26,304,423		26,016,092
Less: Accumulated depreciation and depletion	Less: Accumulated depreciation and depletion	6,270,840		5,940,984		Less: Accumulated depreciation and depletion	8,008,534		7,597,172
Net property, plant and equipment	Net property, plant and equipment	15,898,016		16,054,265		Net property, plant and equipment	18,295,889		18,418,920

Contract asset	Contract asset	390,005		410,000		Contract asset	29,250		410,000

Other assets	Other assets	437,678		433,754		Other assets	463,542		491,702
Total assets	Total assets	$	18,039,404	$	18,113,469	Total assets	$	21,814,611	$	21,607,388

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of debt	Current portion of debt	$	29,291	$	154,161	Current portion of debt	$	493,815	$	1,060,970
Accounts payable	Accounts payable	812,273		705,461		Accounts payable	1,416,274		1,339,251
Derivative instruments, at fair value	Derivative instruments, at fair value	651,058		600,877		Derivative instruments, at fair value	5,362,080		2,413,608
Other current liabilities	Other current liabilities	257,405		301,911		Other current liabilities	333,118		372,412
Total current liabilities	Total current liabilities	1,750,027		1,762,410		Total current liabilities	7,605,287		5,186,241

Credit facility borrowings	Credit facility borrowings	300,000		300,000		Credit facility borrowings	26,000		—
Senior notes	Senior notes	4,378,270		4,371,467		Senior notes	4,437,572		4,435,782
Note payable to EQM Midstream Partners, LP	Note payable to EQM Midstream Partners, LP	98,487		99,838		Note payable to EQM Midstream Partners, LP	92,891		94,320
Deferred income taxes	Deferred income taxes	1,358,489		1,371,967		Deferred income taxes	433,769		907,306
Other liabilities and credits	Other liabilities and credits	923,765		945,057		Other liabilities and credits	1,013,059		1,012,740
Total liabilities	Total liabilities	8,809,038		8,850,739		Total liabilities	13,608,578		11,636,389

Equity:	Equity:					Equity:
Common stock, 0 par value, shares authorized: 640,000, shares issued: 280,003		8,238,643		8,241,684
Treasury stock, shares at cost: 1,222 and 1,658		(21,469)		(29,348)
Retained earnings		1,007,741		1,048,259
Common stock, no par value, shares authorized: 640,000, shares issued: 369,266 and 377,432						Common stock, no par value, shares authorized: 640,000, shares issued: 369,266 and 377,432	9,921,348		10,071,820
Treasury stock, shares at cost: 192 and 1,033						Treasury stock, shares at cost: 192 and 1,033	(2,848)		(18,046)
Accumulated deficit						Accumulated deficit	(1,725,279)		(94,400)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(5,275)		(5,355)		Accumulated other comprehensive loss	(4,548)		(4,611)
Total common shareholders' equity	Total common shareholders' equity	9,219,640		9,255,240		Total common shareholders' equity	8,188,673		9,954,763
Noncontrolling interests in consolidated subsidiaries		10,726		7,490
Noncontrolling interest in consolidated subsidiary						Noncontrolling interest in consolidated subsidiary	17,360		16,236
Total equity	Total equity	9,230,366		9,262,730		Total equity	8,206,033		9,970,999
Total liabilities and equity	Total liabilities and equity	$	18,039,404	$	18,113,469	Total liabilities and equity	$	21,814,611	$	21,607,388

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS (UNAUDITED)

Three Months Ended March 31,
2021 2020
(Thousands)
Cash flows from operating activities:
Net loss $ (41,032) $ (167,139)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income tax (benefit) expense (13,505) 127,860
Depreciation and depletion 377,116 357,526
Amortization of intangible assets 0 7,478
Loss on sale/exchange of long-lived assets and impairment and expiration of leases 15,550 102,620
Gain on Equitrans Share Exchange 0 (187,223)
(Income) loss from investments (11,848) 390,628
Loss on debt extinguishment 4,424 16,610
Share-based compensation expense 6,239 4,684
Amortization, accretion and other 10,968 3,303
Loss (gain) on derivatives not designated as hedges 188,813 (389,436)
Cash settlements (paid) received on derivatives not designated as hedges (38,140) 245,736
Net premiums (paid) on derivative instruments (3,147) 0
Changes in other assets and liabilities:
Accounts receivable (112,899) 149,057
Accounts payable 116,732 (85,840)
Income tax receivable and payable (23,909) (92,809)
Other items, net (75,447) 17,207
Net cash provided by operating activities 399,915 500,262
Cash flows from investing activities:
Capital expenditures (251,277) (256,156)
Cash received for Equitrans Share Exchange 0 52,323
Other investing activities 3,367 140
Net cash used in investing activities (247,910) (203,693)
Cash flows from financing activities:
Proceeds from credit facility borrowings 1,581,000 206,000
Repayment of credit facility borrowings (1,581,000) (500,000)
Proceeds from issuance of debt 0 1,750,000
Debt issuance costs 0 (15,662)
Repayments and retirements of debt (126,396) (1,701,224)
Premiums paid on debt extinguishment (4,267) (13,660)
Contributions from noncontrolling interests 3,750 0
Dividends paid 0 (7,664)
Cash paid for taxes related to net settlement of share-based incentive awards (2,632) (304)
Net cash used in financing activities (129,545) (282,514)
Net change in cash and cash equivalents 22,460 14,055
Cash and cash equivalents at beginning of period 18,210 4,596
Cash and cash equivalents at end of period $ 40,670 $ 18,651
Cash paid (received) during the period for:
Interest, net of amount capitalized $ 85,211 $ 29,628
Income taxes, net 22,751 (1,950)
Non-cash activity during the period for:
Increase in right-of-use lease assets and liabilities $ 783 $ 303
Increase in asset retirement costs and obligations 907 3,761
Capitalization of non-cash equity share-based compensation 1,228 0


	Three Months Ended March 31,
	2022		2021

	(Thousands)
Cash flows from operating activities:
Net loss	$	(1,514,583)	$	(37,941)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income tax benefit	(473,557)		(11,970)
Depreciation and depletion	422,098		377,116
Impairments of long-lived assets and gain on sale/exchange of long-lived assets	213,727		15,550
Loss (income) from investments	20,785		(11,848)
Loss on debt extinguishment	6,923		4,424
Share-based compensation expense	7,470		6,239
Amortization, accretion and other	13,179		6,342
Loss on derivatives not designated as hedges	3,077,637		188,813
Net cash settlements paid on derivatives not designated as hedges	(885,539)		(38,140)
Net premiums received (paid) on derivative instruments	372		(3,147)
Changes in other assets and liabilities:
Accounts receivable	225,968		(112,899)
Accounts payable	52,867		116,732

Other current assets	(107,455)		(34,066)
Other items, net	(38,673)		(65,290)
Net cash provided by operating activities	1,021,219		399,915
Cash flows from investing activities:
Capital expenditures	(292,281)		(251,277)

Proceeds from sale of assets	1,258		—

Other investing activities	(149)		3,367
Net cash used in investing activities	(291,172)		(247,910)
Cash flows from financing activities:
Proceeds from credit facility borrowings	2,721,000		1,581,000
Repayment of credit facility borrowings	(2,695,000)		(1,581,000)


Repayment and retirement of debt	(570,174)		(126,396)
Premiums paid on debt extinguishment	(6,240)		(4,267)
Dividends paid	(47,063)		—
Cash paid for taxes related to net settlement of share-based incentive awards	(13,648)		(2,632)
Proceeds from exercises under employee compensation plans	1,214		—

Repurchase and retirement of common stock	(216,491)		—
(Distribution to) contribution from noncontrolling interest	(341)		3,750
Other financing activities	(354)		—
Net cash used in financing activities	(827,097)		(129,545)
Net change in cash and cash equivalents	(97,050)		22,460
Cash and cash equivalents at beginning of period	113,963		18,210
Cash and cash equivalents at end of period	$	16,913	$	40,670

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

See Note 1 for supplemental cash flow information.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED EQUITY (UNAUDITED)


		Common Stock							Accumulated Other Comprehensive Loss (a)				Noncontrolling Interests in Consolidated Subsidiaries									Common Stock
		Shares	No Par Value		Treasury Stock		Retained Earnings								Total Equity				Shares				No Par Value			Treasury Stock			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Loss (a)			Noncontrolling Interest in Consolidated Subsidiary			Total Equity
		(Thousands, except per share amounts)
Balance at January 1, 2020		255,171	$	7,818,205	$	(32,507)	$	2,023,089			$	(5,199)			$	0				$	9,803,588
Comprehensive loss, net of tax:
Net loss							(167,139)										(167,139)
Other postretirement benefits liability adjustment, net of tax expense: $24									12								12
Dividends ($0.03 per share)							(7,664)										(7,664)
Share-based compensation plans		91	3,426		1,655												5,081

Balance at March 31, 2020		255,262	$	7,821,631	$	(30,852)	$	1,848,286	$	(5,187)			$	0			$	9,633,878
																						(Thousands, except per share amounts)
Balance at January 1, 2021	Balance at January 1, 2021	278,345	$	8,241,684	$	(29,348)	$	1,048,259	$	(5,355)			$	7,490			$	9,262,730		Balance at January 1, 2021		278,345		$	8,145,539		$	(29,348)		$	1,056,626		$	(5,355)		$	7,490		$	9,174,952
Comprehensive loss, net of tax:	Comprehensive loss, net of tax:																			Comprehensive loss, net of tax:
Net loss	Net loss						(40,518)						(514)				(41,032)			Net loss										(37,427)						(514)			(37,941)
Other postretirement benefits liability adjustment, net of tax expense: $27	Other postretirement benefits liability adjustment, net of tax expense: $27								80								80			Other postretirement benefits liability adjustment, net of tax expense: $27													80						80
Share-based compensation plans	Share-based compensation plans	436	(3,041)		7,879												4,838			Share-based compensation plans		436		(3,041)			7,879												4,838
Contributions from noncontrolling interests													3,750				3,750
Contribution from noncontrolling interest																				Contribution from noncontrolling interest																3,750			3,750
Balance at March 31, 2021	Balance at March 31, 2021	278,781	$	8,238,643	$	(21,469)	$	1,007,741	$	(5,275)			$	10,726			$	9,230,366		Balance at March 31, 2021		278,781		$	8,142,498		$	(21,469)		$	1,019,199		$	(5,275)		$	10,726		$	9,145,679

Balance at January 1, 2022																				Balance at January 1, 2022		376,399		$	10,071,820		$	(18,046)		$	(94,400)		$	(4,611)		$	16,236		$	9,970,999
Comprehensive loss, net of tax:																				Comprehensive loss, net of tax:
Net (loss) income																				Net (loss) income										(1,516,048)						1,465			(1,514,583)
Other postretirement benefits liability adjustment, net of tax expense: $20																				Other postretirement benefits liability adjustment, net of tax expense: $20													63						63
Dividends ($0.125 share)																				Dividends ($0.125 share)										(47,063)									(47,063)
Share-based compensation plans																				Share-based compensation plans		1,207		(18,220)			15,198												(3,022)
Issuance of common stock for Convertible Notes settlement (Note 6)																				Issuance of common stock for Convertible Notes settlement (Note 6)		1		8															8
Repurchase and retirement of common stock																				Repurchase and retirement of common stock		(8,533)		(132,260)						(67,768)									(200,028)
Distribution to noncontrolling interest																				Distribution to noncontrolling interest																(341)			(341)
Balance at March 31, 2022																				Balance at March 31, 2022		369,074		$	9,921,348		$	(2,848)		$	(1,725,279)		$	(4,548)		$	17,360		$	8,206,033

Common shares authorized: ~~320,000 and 640,000 at March 31, 2020 and 2021, respectively.~~

640,000. Preferred shares authorized: 3,000. There were 0no preferred shares issued or outstanding.

(a)Amounts included in accumulated other comprehensive loss are related to other postretirement benefits liability adjustments, net of ~~tax. Losses (gains), net of~~ tax, which are attributable to net actuarial losses and net prior service costs.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

1. Financial Statements

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes required by GAAP for complete financial statements. In the opinion of management, these statements include all adjustments (consisting of only normal recurring accruals, unless otherwise disclosed in this Quarterly Report on Form 10-Q) necessary for a fair presentation of the financial position of EQT Corporation and subsidiaries as of March 31, ~~2021~~2022 and December 31, ~~2020, and~~2021, the results of its operations, equity and cash flows ~~and equity~~ for the three month periods ended March 31, ~~2021~~2022 and ~~2020.~~2021. Certain previously reported amounts have been reclassified to conform to the current year presentation. In this Quarterly Report on Form 10-Q, references to "EQT," "EQT Corporation" and "the Company" refer collectively to EQT Corporation and its consolidated subsidiaries.

~~The Condensed Consolidated Balance Sheet at December 31, 2020 has been derived from~~These financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements ~~at that date. For further information, refer to the Consolidated Financial Statements~~ and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

Recently Issued Accounting Standards

In ~~December 2019,~~August 2020, the Financial Accounting Standards Board ~~(FASB)~~ issued Accounting Standards Update (ASU) ~~2019-12,~~ ~~Income Taxes: Simplifying the Accounting for Income Taxes. This ASU simplifies accounting for income taxes by eliminating certain exceptions to ASC 740,~~ ~~Income Taxes,~~ related to the general approach for intraperiod tax allocation, methodology for calculating income taxes in an interim period and recognition of deferred taxes when there are investment ownership changes. In addition, this ASU simplifies aspects of accounting for franchise taxes and interim period effects of enacted changes in tax laws or rates and provides clarification on accounting for transactions that result in a step up in the tax basis of goodwill and allocation of consolidated income tax expense to separate financial statements of entities not subject to income tax. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, and early adoption is permitted. The Company adopted this ASU in the first quarter of 2021 with no material impact on its financial statements and related disclosures.

~~In August 2020, the FASB issued ASU~~ 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging: Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This ASU simplifies accounting for convertible instruments by removing certain separation models for convertible instruments. For convertible instruments with conversion features that are not accounted for as derivatives under ~~ASC~~Accounting Standards Codification 815 or do not result in substantial premiums accounted for as paid-in capital, the convertible instrument's embedded conversion features are no longer separated from the host contract. Consequently, and as long as no other feature requires bifurcation and recognition as a derivative, the convertible instrument is accounted for as a single liability measured at its amortized cost. ~~This~~Under ASU ~~also amends~~2020-06, entities are required to use the if-converted method to calculate the impact of convertible instruments on ~~the calculation of~~ diluted earnings per share (EPS) ~~and~~. The if-converted method assumes share settlement of the instrument, which increases the number of potentially dilutive securities used to calculate diluted EPS. This ASU also adds several new disclosure requirements. ~~This ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.~~

The Company ~~plans to adopt~~adopted this ASU oneffective as of January 1, 2022 using the full retrospective method of adoption. The ~~Company is evaluating~~following tables present the impact ~~this standard will have~~of the adoption of ASU 2020-06 on ~~its financial statements~~the Company's previously reported historical results. See Note 6 for discussion of the Convertible Notes (defined in Note 6).


	Three Months Ended March 31, 2021
	As Reported		ASU 2020-06 Adoption Adjustment		As Adjusted

	(Thousands, except per share amounts)
Interest expense	$	75,099	$	(4,626)	$	70,473
Income tax benefit	(14,494)		1,535		(12,959)
Net loss	(41,032)		3,091		(37,941)
Less: Net loss attributable to noncontrolling interest	(514)		—		(514)
Net loss attributable to EQT Corporation	$	(40,518)	$	3,091	$	(37,427)

Basic and diluted:
Weighted average common stock outstanding (a)	278,852		—		278,852
Loss per share of common stock attributable to EQT Corporation	$	(0.15)	$	0.02	$	(0.13)

(a)For the three months ended March 31, 2021, diluted weighted average common stock outstanding did not change because the potentially dilutive securities had an anti-dilutive effect on loss per share.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)


	December 31, 2021
	As Reported		ASU 2020-06 Adoption Adjustment		As Adjusted

	(Thousands)
Current portion of debt (a)	$	954,900	$	106,070	$	1,060,970
Deferred income taxes	938,612		(31,306)		907,306
Common stock, no par value	10,167,963		(96,143)		10,071,820
Accumulated deficit	(115,779)		21,379		(94,400)

(a)Pursuant to the terms of the Convertible Notes indenture, a sale price condition for conversion of the Convertible Notes was satisfied as of December 31, 2021, and, ~~related disclosures.~~accordingly, holders of the Convertible Notes were permitted to convert any of their Convertible Notes at their option at any time during the three months ended March 31, 2022, subject to all terms and conditions set forth in the Convertible Notes indenture. Therefore, as of December 31, 2021, the net carrying value of the Convertible Notes was included in current portion of debt in the Consolidated Balance Sheet.

Certain line items in the Statement of Condensed Consolidated Cash Flows were adjusted to reflect the impact of the adoption of ASU 2020-06; however, the adoption did not impact cash and did not change net cash provided by operating, investing or financing activities.

Supplemental Cash Flow Information. The following table summarizes net cash paid for interest and income taxes and non-cash activity included in the Statements of Condensed Consolidated Cash Flows.


	Three Months Ended March 31,
	2022		2021

	(Thousands)
Cash paid during the period for:
Interest, net of amount capitalized	$	82,698	$	85,211
Income taxes, net	2,129		22,751

Non-cash activity during the period for:
Increase in asset retirement costs and obligations	$	6,475	$	907
Capitalization of non-cash equity share-based compensation	1,033		1,228
Issuance of common stock for Convertible Notes settlement (Note 6)	8		—
Increase in right-of-use assets and lease liabilities, net	—		783

2. Revenue from Contracts with Customers

Under the Company's natural gas, natural gas liquids (NGLs) and oil sales contracts, the Company generally considers the delivery of each unit (MMBtu or Bbl) to be a separate performance obligation that is satisfied upon delivery. These contracts typically require payment within 25 days of the end of the calendar month in which the commodity is delivered. A significant number of these contracts contain variable consideration because the payment terms refer to market prices at future delivery dates. In these situations, the Company has not identified a standalone selling price because the terms of the variable payments relate specifically to the Company's efforts to satisfy the performance obligations. Other contracts, such as fixed price contracts or contracts with a fixed differential to New York Mercantile Exchange (NYMEX) or index prices, contain fixed consideration. The fixed consideration is allocated to each performance obligation on a relative standalone selling price basis, which requires judgment from management. For these contracts, the Company generally concludes that the fixed price or fixed differentials in the contracts are representative of the standalone selling price.

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~~EQT CORPORATION AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~

Based on management's judgment, the performance obligations for the sale of natural gas, NGLs and oil are satisfied at a point in time because the customer obtains control and legal title of the asset when the natural gas, NGLs or oil is delivered to the designated sales point.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The sales of natural gas, NGLs and oil presented in the Statements of Condensed Consolidated Operations represent the Company's share of revenues net of royalties and exclude revenue interests owned by others. When selling natural gas, NGLs and oil on behalf of royalty or working interest owners, the Company acts as an agent and, thus, reports the revenue on a net basis.

For contracts with customers where the Company's performance obligations had been satisfied and an unconditional right to consideration existed as of the balance sheet date, the Company recorded amounts due from contracts with customers of ~~$467.8~~$898.4 million and ~~$394.1~~$1,093.9 million in accounts receivable in the Condensed Consolidated Balance Sheets as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

The table below provides disaggregated information on the Company's revenues. Certain other revenue contracts ~~that provide for the release of capacity that is not used to transport the Company's produced volumes~~ are outside the scope of ASU 2014-09, Revenue from Contracts with Customers. ~~The costs of, and recoveries on, such capacity~~These contracts are reported in net marketing services and other in the Statements of Condensed Consolidated Operations. Derivative contracts are also outside the scope of ASU 2014-09.


									Three Months Ended March 31,
		Three Months Ended March 31,					2022		2021
		2021		2020
		(Thousands)				(Thousands)
Revenues from contracts with customers:	Revenues from contracts with customers:							Revenues from contracts with customers:
Natural gas sales	Natural gas sales	$	1,013,080	$	673,230			Natural gas sales	$	2,289,365	$	1,013,080
NGLs sales	NGLs sales	100,257		35,756				NGLs sales	173,503		100,257
Oil sales	Oil sales	17,614		6,215				Oil sales	23,756		17,614
Total revenues from contracts with customers	Total revenues from contracts with customers	$	1,130,951	$	715,201			Total revenues from contracts with customers	$	2,486,624	$	1,130,951

Other sources of revenue:	Other sources of revenue:							Other sources of revenue:
(Loss) gain on derivatives not designated as hedges		(188,813)		389,436
Loss on derivatives not designated as hedges								Loss on derivatives not designated as hedges	(3,077,637)		(188,813)
Net marketing services and other	Net marketing services and other	7,785		2,420				Net marketing services and other	11,903		7,785
Total operating revenues	Total operating revenues	$	949,923	$	1,107,057			Total operating revenues	$	(579,110)	$	949,923

The following table summarizes the transaction price allocated to the Company's remaining performance obligations on all contracts with fixed consideration as of March 31, ~~2021.~~2022. Amounts shown exclude contracts that qualified for the exception to the relative standalone selling price method as of March 31, ~~2021.~~2022.

2021 (a) 2022 2023 Total
(Thousands)
Natural gas sales $ 133,576 $ 8,158 $ 6,794 $ 148,528


	2022 (a)		2023		Total

	(Thousands)
Natural gas sales	$	6,146	$	6,795	$	12,941

(a)April 1 through December 31.

3. Derivative Instruments

The Company's primary market risk exposure is the volatility of future prices for natural gas and NGLs, which can affect the Company's operating results. The Company uses derivative commodity instruments to hedge its cash flows from sales of produced natural gas and NGLs. The overall objective of the Company's hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices.

The derivative commodity instruments used by the Company are primarily swap, collar and option agreements. These agreements may require payments to, or receipt of payments from, counterparties based on the differential between two prices for the commodity. The Company uses these agreements to hedge its NYMEX and basis exposure. The Company may also use other contractual agreements when executing its commodity hedging strategy. The Company typically enters into over the counter (OTC) derivative commodity instruments with financial institutions, and the creditworthiness of all counterparties is regularly monitored.

910

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

~~(OTC) derivative commodity instruments with financial institutions, and the creditworthiness of all counterparties is regularly monitored.~~

The Company does not designate any of its derivative instruments as cash flow hedges; therefore, all changes in fair value of the Company's derivative instruments are recognized in operating revenues in the Statements of Condensed Consolidated Operations. The Company recognizes all derivative instruments as either assets or liabilities at fair value on a gross basis. These derivative instruments are reported as either current assets or current liabilities due to their highly liquid nature. The Company can net settle its derivative instruments at any time.

Contracts that result in physical delivery of a commodity expected to be sold by the Company in the normal course of business are generally designated as normal sales and are exempt from derivative accounting. Contracts that result in the physical receipt or delivery of a commodity but are not designated or do not meet all of the criteria to qualify for the normal purchase and normal sale scope exception are subject to derivative accounting.

The Company's OTC derivative instruments generally require settlement in cash. The Company also enters into exchange traded derivative commodity instruments that are generally settled with offsetting positions. Settlements of derivative commodity instruments are reported as a component of cash flows from operating activities in the Statements of Condensed Consolidated Cash Flows.

With respect to the derivative commodity instruments held by the Company, the Company hedged portions of its expected sales of production and portions of its basis exposure covering approximately ~~1,954 Bcf~~2,471 billion cubic feet (Bcf) of natural gas and ~~9,984 Mbbl~~2,143 thousand barrels (Mbbl) of NGLs as of March 31, ~~2021~~2022 and ~~1,955~~2,184 Bcf of natural gas and ~~3,462~~3,055 Mbbl of NGLs as of December 31, ~~2020.~~2021. The open positions at both March 31, ~~2021~~2022 and December 31, ~~2020~~2021 had maturities extending through December ~~2024.~~2027.

Certain of the Company's OTC derivative instrument contracts provide that, if the Company's credit rating assigned by Moody's Investors Service, Inc. (Moody's) or, S&P Global Ratings (S&P) or Fitch Ratings Service (Fitch) is below the agreed-upon credit rating threshold (typically, below investment grade), and if the associated derivative liability exceeds the agreed-upon dollar threshold for such credit rating, the counterparty to such contract can require the Company to deposit collateral. Similarly, if such counterparty's credit rating assigned by Moody's, S&P or ~~S&P~~Fitch is below the agreed-upon credit rating threshold and if the associated derivative liability exceeds the agreed-upon dollar threshold for such credit rating, the Company can require the counterparty to deposit collateral with the Company. Such collateral can be up to 100% of the derivative liability. Investment grade refers to the quality of a company's credit as assessed by one or more credit rating agencies. To be considered investment grade, a company must be rated "Baa3" or higher by Moody's, "BBB–" or higher by S&P and "BBB–" or higher by ~~Fitch Rating Service (Fitch).~~Fitch. Anything below these ratings is considered non-investment grade. As of March 31, ~~2021,~~2022, the Company's senior notes were rated ~~"Ba2"~~"Ba1" by Moody's, ~~and "BB"~~"BBB–" by S~~&P.~~&P and "BBB–" by Fitch.

When the net fair value of any of the Company's OTC derivative instrument contracts represents a liability to the Company that is in excess of the agreed-upon dollar threshold for the Company's then-applicable credit rating, the counterparty has the right to require the Company to remit funds as a margin deposit in an amount equal to the portion of the derivative liability that is in excess of the dollar threshold amount. The Company records these deposits as a current asset in the Condensed Consolidated Balance Sheets. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the aggregate fair value of all OTC derivative instruments with credit rating risk-related contingent features that were in a net liability position was ~~$176.6~~$639.6 million and ~~$137.7~~$594.9 million, respectively, for which the Company deposited and recorded current assets of 0$117.7 million and ~~$21.1~~$0.1 million, respectively.

When the net fair value of any of the Company's OTC derivative instrument contracts represents an asset to the Company that is in excess of the agreed-upon dollar threshold for the counterparty's then-applicable credit rating, the Company has the right to require the counterparty to remit funds as a margin deposit in an amount equal to the portion of the derivative asset that is in excess of the dollar threshold amount. The Company records these deposits as a current liability in the Condensed Consolidated Balance Sheets. As of both March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, there were 0no such deposits recorded in the Condensed Consolidated Balance Sheets.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

When the Company enters into exchange traded natural gas contracts, exchanges may require the Company to remit funds to the corresponding broker as good-faith deposits to guard against the risks associated with changing market conditions. The Company is required to make such deposits based on an established initial margin requirement and the net liability position, if any, of the fair value of the associated contracts. The Company records these deposits as a current asset in the Condensed Consolidated Balance Sheets. When the fair value of such contracts is in a net asset position, the broker may remit funds to the Company. The Company records these deposits as a current liability in the Condensed Consolidated Balance Sheets. The initial margin

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~~EQT CORPORATION AND SUBSIDIARIES~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

requirements are established by the exchanges based on the price, volatility and the time to expiration of the contract. The margin requirements are subject to change at the exchanges' discretion. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company recorded ~~$111.7~~$141.6 million and ~~$61.5~~$147.7 million, respectively, of such deposits as current assets in the Condensed Consolidated Balance Sheets.

~~Refer to Note 8 for a discussion of the derivative liability recorded in connection with the Equitrans Share Exchange (defined in Note 8).~~

The Company has netting agreements with financial institutions and its brokers that permit net settlement of gross commodity derivative assets against gross commodity derivative liabilities. The table below summarizes the impact of netting agreements and margin deposits on gross derivative assets and liabilities.


		Gross derivative instruments recorded in the Condensed Consolidated Balance Sheets		Derivative instruments subject to master netting agreements		Margin requirements with counterparties		Net derivative instruments			Gross derivative instruments recorded in the Condensed Consolidated Balance Sheets		Derivative instruments subject to master netting agreements		Margin requirements with counterparties		Net derivative instruments
		(Thousands)
March 31, 2021
											(Thousands)
March 31, 2022										March 31, 2022
Asset derivative instruments, at fair value	Asset derivative instruments, at fair value	$	431,949	$	(340,292)	$	0	$	91,657	Asset derivative instruments, at fair value	$	1,304,109	$	(1,268,394)	$	—	$	35,715
Liability derivative instruments, at fair value	Liability derivative instruments, at fair value	651,058		(340,292)		(111,737)		199,029		Liability derivative instruments, at fair value	5,362,080		(1,268,394)		(259,245)		3,834,441

December 31, 2020
December 31, 2021										December 31, 2021
Asset derivative instruments, at fair value	Asset derivative instruments, at fair value	$	527,073	$	(328,809)	$	0	$	198,264	Asset derivative instruments, at fair value	$	543,337	$	(468,266)	$	—	$	75,071
Liability derivative instruments, at fair value	Liability derivative instruments, at fair value	600,877		(328,809)		(82,552)		189,516		Liability derivative instruments, at fair value	2,413,608		(468,266)		(147,773)		1,797,569

The Consolidated GGA (defined in Note 8) executed in connection with the Equitrans Share Exchange (defined in Note 8) provides for additional cash bonus payments (the Henry Hub Cash Bonus) payable by the Company during the period beginning on the first day of the quarter in which the Mountain Valley Pipeline is placed in service and ending on the earlier of 36 months thereafter or December 31, 2024. Such payments are conditioned upon the quarterly average of the NYMEX Henry Hub natural gas settlement price exceeding certain price thresholds. As of March 31, 2022 and December 31, 2021, the derivative liability related to the Henry Hub Cash Bonus had a fair value of approximately $51 million and $111 million, respectively. The fair value of the derivative liability related to the Henry Hub Cash Bonus is based on significant inputs that are interpolated from observable market data and, as such, is a Level 2 fair value measurement. See Note 4 for a description of the fair value hierarchy.

During the second quarter of 2020, the Company closed a transaction to sell certain non-strategic assets located in Pennsylvania and West Virginia (the 2020 Divestiture), the purchase and sale agreement for which, among other things, provides for additional cash bonus payments (the Contingent Consideration) payable to the Company of up to $20 million, conditioned upon the three-month average of the NYMEX Henry Hub natural gas settlement price relative to stated floor and target price thresholds beginning on August 31, 2020 and ending on November 30, 2022. As of March 31, 2022 and December 31, 2021, the derivative asset related to the Contingent Consideration had a fair value of approximately $5.8 million and $8.2 million, respectively. During the three months ended March 31, 2022, the Company received cash from the Contingent Consideration of $2.5 million. Changes in fair value are recorded in gain on sale/exchange of long-lived assets in the Statements of Condensed Consolidated Operations. The fair value of the derivative asset related to the Contingent Consideration is based on significant inputs that are interpolated from observable market data and, as such, is a Level 2 fair value measurement. See Note 4 for a description of the fair value hierarchy.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

4. Fair Value Measurements

The Company records its financial instruments, which are principally derivative instruments, at fair value in the Condensed Consolidated Balance Sheets. The Company estimates the fair value of its financial instruments using quoted market prices when available. If quoted market prices are not available, the fair value is based on models that use market-based parameters, including forward curves, discount rates, volatilities and nonperformance risk, as inputs. Nonperformance risk considers the effect of the Company's credit standing on the fair value of liabilities and the effect of the counterparty's credit standing on the fair value of assets. The Company estimates nonperformance risk by analyzing publicly available market information, including a comparison of the yield on debt instruments with credit ratings similar to the Company's or counterparty's credit rating and the yield on a risk-free instrument.

The Company has categorized its assets and liabilities recorded at fair value into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Assets and liabilities that use Level 2 inputs primarily include the Company's swap, collar and option agreements.

Exchange traded commodity swaps have Level 1 inputs. The fair value of the commodity swaps with Level 2 inputs is based on standard industry income approach models that use significant observable inputs, including, but not limited to, NYMEX natural gas forward curves, LIBOR-based discount rates, basis forward curves and ~~natural gas liquids~~NGLs forward curves. The Company's collars and options are valued using standard industry income approach option models. The significant observable inputs used by the option pricing models include NYMEX forward curves, natural gas volatilities and LIBOR-based discount rates.

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~~EQT CORPORATION AND SUBSIDIARIES~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

The table below summarizes assets and liabilities measured at fair value on a recurring basis.


		Gross derivative instruments recorded in the Condensed Consolidated Balance Sheets			Fair value measurements at reporting date using:									Gross derivative instruments recorded in the Condensed Consolidated Balance Sheets			Fair value measurements at reporting date using:
				Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)						Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
				(Thousands)
March 31, 2021
														(Thousands)
March 31, 2022													March 31, 2022
Asset derivative instruments, at fair value	Asset derivative instruments, at fair value	$	431,949		$	65,167		$	366,782		$	0	Asset derivative instruments, at fair value	$	1,304,109		$	306,902		$	997,207		$	—
Liability derivative instruments, at fair value	Liability derivative instruments, at fair value	651,058			120,650			530,408			0		Liability derivative instruments, at fair value	5,362,080			193,244			5,168,836			—

December 31, 2020
December 31, 2021													December 31, 2021
Asset derivative instruments, at fair value	Asset derivative instruments, at fair value	$	527,073		$	70,603		$	456,470		$	0	Asset derivative instruments, at fair value	$	543,337		$	66,833		$	476,504		$	—
Liability derivative instruments, at fair value	Liability derivative instruments, at fair value	600,877			93,361			507,516			0		Liability derivative instruments, at fair value	2,413,608			126,053			2,287,555			—

The carrying values of cash equivalents, accounts receivable and accounts payable approximate fair value due to their short-term maturities. The carrying value of the Company's investment in Equitrans Midstream Corporation (Equitrans Midstream) approximates fair value as Equitrans Midstream is a publicly traded company. The carrying value of borrowings under the Company's credit facility approximates fair value as the interest rate is based on prevailing market rates. The Company considered all of these fair values to be Level 1 fair value measurements.

During April 2022, the Company sold the remaining balance of its Equitrans Midstream common stock for net proceeds of approximately $189 million.

The Company has an investment in a fund (the Investment Fund) that invests in companies developing technology and operating solutions for exploration and production companies. The investment is valued using, as a practical expedient, the net asset value provided in the financial statements received from fund managers.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The Company estimates the fair value of its senior notes using established fair value methodology. Because not all of the Company's senior notes are actively traded, their fair value is a Level 2 fair value measurement. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company's senior notes had a fair value of approximately ~~$5.2~~$5.8 billion and $6.5 billion, respectively, and a carrying value of approximately ~~$4.4~~$4.9 billion and ~~$4.5~~$5.5 billion, respectively, inclusive of any current portion. The fair value of the Company's note payable to EQM Midstream Partners, LP (EQM) is estimated using an income approach model with a market-based discount rate and is a Level 3 fair value measurement. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company's note payable to EQM had a fair value of approximately ~~$122~~$109 million and ~~$130~~$118 million, respectively, and a carrying value of approximately ~~$104~~$98 million and ~~$105~~$100 million, respectively, inclusive of any current portion. See Note 6 for further discussion of the Company's debt.

The Company recognizes transfers between Levels as of the actual date of the event or change in circumstances that caused the transfer. There were no transfers between Levels 1, 2 and 3 during the periods presented.

See Note 3 for a discussion of the fair value measurement of the derivative liability recorded in connection with the Equitrans Share Exchange and the embedded derivative recorded in connection with the 2020 Divestiture. See Note 8 for a discussion of the fair value measurement of the ~~Equitrans Share Exchange and Note 9 for a discussion of the fair value measurement of the 2020 Asset Exchange Transactions and 2020 Divestiture (each defined in Note 9).~~contract asset. See Note 1 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for a discussion of the fair value measurement of the Company's oil and gas properties and other long-lived assets, ~~related to the~~including impairment and expiration of leases.

5. Income Taxes

For the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, the Company calculated the provision for income taxes for interim periods by applying an estimate of the annual effective tax rate for the full fiscal year to "ordinary" income or loss (pre-tax income or loss excluding unusual or infrequently occurring items) for the period. There were no material changes to the Company's methodology for determining unrecognized tax benefits during the three months ended March 31, ~~2021.~~2022.

The Company recorded income tax ~~(benefit) expense~~benefit at an effective tax rate of ~~26.1%~~23.5% and ~~(24.4)%~~25.5% for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ respectively. The Company's effective tax rate for the three months ended March 31, 2022 was higher compared to the U.S. federal statutory rate due primarily to state taxes, including valuation allowances limiting certain state tax benefits. The Company's effective tax rate for the three months ended March 31, 2021 was higher compared to the U.S. federal statutory rate due primarily to state taxes, including valuation allowances limiting certain state tax benefits, ~~partially~~partly offset by tax expense ~~relating~~related to deduction limitations for executive compensation. The Company's effective tax rate for the three months ended March 31, 2020 was lower than the U.S. federal statutory rate due primarily to valuation allowances provided against federal and state deferred tax assets for the additional unrealized losses on the Company's investment in Equitrans Midstream incurred in the first quarter of 2020 that, if such investment is sold, would become capital losses. The Company believes it is more likely than not that such additional unrealized losses will not be realized for tax purposes.

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~~EQT CORPORATION AND SUBSIDIARIES~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

On April 13, 2021, West Virginia enacted corporate income tax legislation that primarily impacts the way that taxable income is apportioned to West Virginia for tax years beginning on or after January 1, 2022. The Company is evaluating the impact of this change in law on the consolidated financial statements.

6. Debt

Credit facility. The Company has a $2.5 billion credit facility. On April 23, 2021, the Company entered into an Extension Agreement and First Amendment to Second Amended and Restated Credit Agreement (the Extension Agreement and First Amendment), amending the Second Amended and Restated Credit Agreement, dated as offacility that matures in July 31, 2017, among the Company, PNC Bank, National Association, as administrative agent, swing line lender and an L/C issuer and the other lenders party thereto (the Credit Agreement). The Extension Agreement and First Amendment, among other things, (i) extends the maturity date of the commitments and loans under the Credit Agreement from July 31, 2022 to July 31, 2023, (ii) adds customary provisions to provide for the eventual replacement of LIBOR as a benchmark interest rate and (iii) adds an additional pricing level for the Applicable Rate (as defined in the Credit Agreement).2023.

The Company had approximately ~~$770~~$425 million and ~~$791~~$440 million of letters of credit outstanding under its credit facility as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Under the Company's credit facility, for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, the maximum amounts of outstanding borrowings were ~~$890~~$615 million and ~~$356~~$890 million, respectively, the average daily balances were approximately ~~$525~~$306 million and ~~$86~~$525 million, respectively, and interest was incurred at weighted average annual interest rates of ~~2.1%~~2.0% and ~~3.2%~~2.1%, respectively.

~~Term loan facility.~~ The Company had a $1.0 billion term loan facility that was scheduled to mature in May 2021. During the second quarter 2020, the Company used proceeds from the offering of its Convertible Notes (see below), income tax refunds received by the Company and proceeds from the 2020 Divestiture (see Note 9) to fully repay its term loan facility on June 30, 2020. Under the Company's term loan facility, from January 1, 2020 through March 31, 2020, the average daily balance was approximately $949 million and interest was incurred at a weighted average annual interest rate of 2.8%.

~~4.875% Senior Notes~~Debt repayments. ~~On February 1, 2021,~~In the first quarter of 2022, the Company redeemed or repurchased all $568.8 million of the remaining ~~$125.1 million~~ aggregate principal amount of ~~the Company's 4.875%~~its 3.00% senior notes at a total cost of ~~$130.7~~$581.5 million, inclusive of ~~redemption~~ premiums of ~~$4.3~~$5.5 million and accrued but unpaid interest of ~~$1.3~~$7.2 million.

Convertible Notes. OnIn April ~~28,~~ 2020, the Company issued $500 million aggregate principal amount of 1.75% convertible senior notes (the Convertible Notes) due May 1, 2026 unless earlier redeemed, repurchased or converted. The Convertible Notes were issued in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. After deducting offering costs of $16.9 million and Capped Call Transactions (defined and described below) costs of $32.5 million, the net proceeds from the offering of $450.6 million were used to repay $450 million of the Company's term loan facility borrowings as well as for general corporate purposes.

Holders of the Convertible Notes may convert their Convertible Notes at their option at any time prior to the close of business on January 30, 2026 under the following circumstances:

•during any quarter ~~commencing after the quarter ended June 30, 2020~~ as long as the last reported price of EQT common stock for at least 20 trading days (consecutive or otherwise) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding quarter is greater than or equal to 130% of the conversion price on each such trading ~~day;~~day (the Sale Price Condition);

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

•during the 5-business-day period after any 5-consecutive-trading-day period (the measurement period) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period is less than 98% of the product of the last reported price of EQT common stock and the conversion rate for the Convertible Notes on each such trading day;

•if the Company calls any or all of the Convertible Notes for redemption at any time prior to the close of business on the second scheduled trading day immediately preceding such redemption date; and

•upon the occurrence of certain corporate events set forth in the Convertible Notes indenture.

On or after February 1, 2026, holders of the Convertible Notes may convert their Convertible Notes at their option at any time until the close of business on the second scheduled trading date immediately preceding May 1, 2026.

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~~EQT CORPORATION AND SUBSIDIARIES~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

Upon conversion of the Convertible Notes, the Company intends to use a combined settlement approach to satisfy its obligation by paying or delivering to holders of the Convertible Notes cash equal to the principal amount of the obligation and EQT common stock for amounts that exceed the principal amount of the obligation.

The Company may not redeem the Convertible Notes prior to May 5, 2023. On or after May 5, 2023 and prior to February 1, 2026, the Company may redeem for cash all or any portion of the Convertible Notes at its option at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed plus accrued and unpaid interest up to the redemption date as long as the last reported price per share of EQT common stock has been at least 130% of the conversion price in effect for at least 20 trading days (consecutive or otherwise) during any 30-consecutive-trading-day period ending on the trading day immediately preceding the date on which the Company delivers notice of redemption. A sinking fund is not provided for the Convertible Notes.

The initial conversion rate for the Convertible Notes iswas 66.6667 shares of EQT common stock per $1,000 principal amount of the Convertible Notes, which iswas equivalent to an initial conversion price of $15.00 per share of EQT common stock. The initial conversion price represents a premium of 20% to the $12.50 per share closing price of EQT common stock on April 23, 2020. The conversion rate is subject to adjustment under certain circumstances. In addition, following certain corporate events that occur prior to May 1, 2026 or if the Company delivers notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such corporate event or notice of redemption.

As a result of the cash dividend the Company paid on its common stock in the first quarter of 2022, effective February 11, 2022, the conversion rate for the Convertible Notes was adjusted to 67.0535 shares of EQT common stock per $1,000 principal amount of the Convertible Notes. Future dividend payments by the Company will result in further adjustments to the conversion rate per share of EQT common stock.

The Sale Price Condition for conversion of the Convertible Notes was satisfied as of December 31, 2021 and March 31, 2022, and, accordingly, holders of the Convertible Notes are permitted to convert any of their Convertible Notes at their option at any time beginning on January 1, 2022 and continuing until June 30, 2022, subject to the terms and conditions set forth in the Convertible Notes indenture. Therefore, as of December 31, 2021 and March 31, 2022, the net carrying value of the Convertible Notes was included in current portion of debt on the Condensed Consolidated Balance Sheets.

The following table summarizes Convertible Notes conversion right exercises from issuance through April 22, 2022. The Company elected to settle all such conversions by issuing to the converting holders shares of EQT common stock.


Settlement Month	Principal Converted		Shares Issued	Average Conversion Price
	(Thousands)
September 2021	$	9	599	$	19.64
March 2022	8		536	33.65
April 2022	26		1,742	34.78

Upon conversion of the remaining outstanding Convertible Notes, the Company may satisfy its conversion obligation by paying and/or delivering at the Company's election, in the manner and subject to the terms and conditions provided in the Convertible Notes indenture, cash, shares of EQT common stock or a combination thereof. The Company intends to use a combined settlement approach to satisfy its obligation by paying or delivering to holders of the Convertible Notes cash equal to the principal amount of the obligation and EQT common stock for amounts that exceed the principal amount of the obligation.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

In connection with the Convertible Notes offering, the Company entered into privately negotiated capped call transactions (the Capped Call Transactions), the purpose of which is to reduce the potential dilution to EQT common stock upon conversion of the Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of such obligation, with such reduction and offset subject to a cap. The Capped Call Transactions have an initial strike price of $15.00 per share of EQT common stock and an initial capped price of $18.75 per share of EQT common stock, each of which are subject to certain customary ~~adjustments.~~

~~For accounting purposes,~~adjustments, including adjustments as a result of the Company separated the Convertible Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of similar debt instruments that do not have associated convertible features. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the principal value of the Convertible Notes. The equity component is not remeasured as long as it continues to meet the condition for equity classification. The excess of the principal amount of the liability component overpaying a dividend on its carrying amount (the debt discount) will be amortized to interest expense over the term of the Convertible Notes, which is approximately 6 years, at an effective interest rate of 8.4%. At inception, the Company recorded the Convertible Notes at fair value of approximately $358.1 million, a net deferred tax liability of $41.0 million and an equity component of $100.9 million.

Issuance costs were allocated to the liability and equity components of the Convertible Notes based on their relative fair values. Issuance costs attributable to the liability component of $12.1 million were recorded as a reduction to the liability component of the Convertible Notes and will be amortized to interest expense over the term of the Convertible Notes at an effective interest rate of 8.4%. Issuance costs attributable to the equity component of $4.8 million, representing the conversion option, were netted with the equity component.common stock.

The Capped Call Transactions are separate from the Convertible Notes. The Capped Call Transactions were recorded in shareholders' equity and were not accounted for as derivatives. The cost to purchase the Capped Call Transactions ~~were~~of $32.5 million was recorded as a reduction to equity and will not be remeasured.

~~During~~Based on the ~~second quarter~~closing stock price of ~~2020,~~EQT common stock of $34.41 on March 31, 2022 and excluding the ~~Convertible Notes had a net shareholders' equity~~ impact of ~~$63.6 million, which consisted of the conversion option equity component of $100.9 million less~~ the Capped Call Transactions, ~~costs~~the if-converted value of ~~$32.5 million and issuance costs attributable to~~ the ~~equity component of $4.8~~Convertible Notes exceeded the principal amount by $651 million.

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~~EQT CORPORATION AND SUBSIDIARIES~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

The table below summarizes the net carrying ~~amount~~value and fair value of the Convertible ~~Notes, including the unamortized debt discount and debt issuance costs.~~Notes.


							March 31, 2022		December 31, 2021
		March 31, 2021		December 31, 2020
		(Thousands)					(Thousands)
Principal	Principal	$	500,000	$	500,000	Principal	$	499,983	$	499,991
Less: unamortized debt discount		124,151		129,103
Less: unamortized debt issuance costs		10,920		11,263
Less: Unamortized debt issuance costs						Less: Unamortized debt issuance costs	11,764		12,448
Net carrying value of Convertible Notes	Net carrying value of Convertible Notes	$	364,929	$	359,634	Net carrying value of Convertible Notes	$	488,219	$	487,543

Fair value of Convertible Notes (a)						Fair value of Convertible Notes (a)	$	1,187,320	$	854,985

(a)The fair value is a Level 2 fair value measurement. See Note 4 for further discussion.

The table below summarizes the components of interest expense related to the Convertible Notes.

Three Months Ended
March 31, 2021

~~(Thousands)~~

~~Contractual interest expense~~

~~2,188~~

~~Amortization of debt discount~~

~~4,952~~

~~Amortization of issuance costs~~

~~343~~

~~Total Convertible Notes interest expense~~

~~7,483~~

~~Based on the closing stock price of EQT common stock of $18.58 on March 31, 2021, the if-converted value of~~The effective interest rate for the Convertible Notes ~~exceeded the principal amount by $119 million. The Convertible Notes were not convertible at March 31, 2021.~~is 2.4%.


	Three Months Ended March 31,
	2022		2021

	(Thousands)
Contractual interest expense	$	2,187	$	2,188
Amortization of issuance costs	684		669
Total Convertible Notes interest expense	$	2,871	$	2,857

7. Earnings Per Share

In periods when the Company reports a net loss, all options, restricted stock, performance awards and stock appreciation rights are excluded from the calculation of diluted weighted average shares outstanding because of their anti-dilutive effect on loss per share. As a result, for the three months ended March 31, 2022 and 2021, ~~and 2020,~~ all such securities, totaling ~~7,745,522~~7,336,020 and ~~6,753,915,~~7,745,522, respectively, were excluded from potentially dilutive securities because of their anti-dilutive effect on ~~EPS.~~loss per share.

~~As discussed in Note 6,~~Additionally, the Company ~~issued~~uses the ~~Convertible Notes during~~if-converted method to calculate the ~~second quarter of 2020 and, upon conversion~~impact of the Convertible Notes ~~intends to use a combined settlement approach to satisfy its obligation under the Convertible Notes. As such, there is no adjustment to the~~on diluted ~~EPS numerator for the cash-settled portion of the instrument. In addition, for~~EPS. For the three months ended March 31, 2022 and 2021, ~~the conversion premium of 6,666,670~~approximately 33.5 million and 33.3 million shares, ~~was~~respectively, were excluded from potentially dilutive securities because of ~~its~~their anti-dilutive effect on ~~EPS.~~loss per share. See Notes 1 and 6 for further discussion of the Convertible Notes.

~~8. Equitrans Share Exchange~~

On February 26, 2020, the Company entered into 2 share purchase agreements (the Share Purchase Agreements) with Equitrans Midstream, pursuant to which, among other things, the Company sold to Equitrans Midstream a total of 25,299,752 shares of Equitrans Midstream's common stock in exchange for approximately $52 million in cash and rate relief under certain of the Company's gathering contracts with EQM, an affiliate of Equitrans Midstream (the Equitrans Share Exchange). The transactions contemplated by the Share Purchase Agreements closed on March 5, 2020 (the Share Purchase Closing Date). The rate relief was effected through the execution of the Consolidated GGA (defined herein).

On February 26, 2020, the Company entered into a gas gathering and compression agreement (the Consolidated GGA) with an affiliate of EQM, pursuant to which, among other things, EQM agreed to provide to the Company gas gathering services in the Marcellus and Utica Shales of Pennsylvania and West Virginia, and the Company committed to an initial annual minimum volume commitment of 3.0 Bcf per day and an acreage dedication in Pennsylvania and West Virginia. The Consolidated GGA is effective through December 31, 2035 and will renew annually thereafter unless terminated by the Company or EQM. The Consolidated GGA provides for additional cash bonus payments (the Henry Hub Cash Bonus) payable by the Company to EQM during the period beginning on the first day of the quarter in which the Mountain Valley Pipeline (MVP) is placed in service and ending on the earlier of 36 months thereafter or December 31, 2024. Such payments are conditioned upon the quarterly average of the NYMEX Henry Hub natural gas settlement price exceeding certain price thresholds. In addition, the Consolidated GGA

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

8. Impairment of Contract Asset

During the first quarter of 2020, the Company sold to Equitrans Midstream approximately 50% of the Company's equity interest in Equitrans Midstream in exchange for a combination of cash and rate relief under certain of the Company's gathering contracts with an affiliate of Equitrans Midstream (the Equitrans Share Exchange). The rate relief was effected through the execution of a consolidated gas gathering and compression agreement entered into between the Company and an affiliate of Equitrans Midstream (the Consolidated GGA). In addition, because the Mountain Valley Pipeline was not in service by January 1, 2022, the Consolidated GGA provides the Company with the option to forgo a portion of the gathering fee relief that would otherwise be applicable following the Mountain Valley Pipeline in-service date in exchange for a cash payment ~~option that grants~~to the Company of $196 million. The cash payment option can be exercised following January 1, 2022 and ending on the ~~right to receive payments from EQM in~~earlier of the ~~event that the MVP~~Mountain Valley Pipeline in-service date or December 31, 2022. To date, the Company has not ~~occurred prior to January 1, 2022.~~exercised the cash payment option.

On the closing date of the Equitrans Share ~~Purchase Closing Date,~~Exchange, the Company recorded in the Condensed Consolidated Balance Sheet a contract asset of $410 million representing the estimated fair value of the rate relief ~~provided by~~inclusive of the Consolidated GGA of $410 million, a derivative liability related to the Henry Hub Cash Bonus of approximately $117 million and a decrease in the Company's investment in Equitrans Midstream of approximately $158 million. The resulting gain of approximately $187 million was recorded in the Statement of Condensed Consolidated Operations duringcash payment option. During the first quarter of ~~2020. Beginning with the MVP in-service date,~~2022, the Company ~~expects to recognize amortization of~~identified indicators that the contract asset over a period of approximately four years in a manner consistent with the expected timing of the Company's realization of the economic benefits of the rate relief provided by the Consolidated GGA. As of March 31, 2021, the current portion of the contract asset was approximately $20 million. As of March 31, 2021, the derivative liability related to the Henry Hub Cash Bonus was approximately $113 million.

~~The fair~~carrying value of the contract asset ~~was based on significant inputs that are~~may not observable in the market and, as such, is a Level 3 fair value measurement. Key assumptions used in the fair value calculation included an estimated production volume forecast, a market-based discount rate and a probability-weighted estimatebe fully recoverable, including increased uncertainty of the ~~in-service date~~estimated timing of completion of the ~~MVP. The fair value of the derivative liability related~~Mountain Valley Pipeline due to the Henry Hub Cash Bonus was based on significant inputs that were interpolated from observable market data and, as such, is a Level 2 fair value measurement. See Note 4 for a description of the fair value hierarchy.

~~9. 2020 Asset Exchange Transactions and 2020 Divestiture~~

~~2020 Asset Exchange Transactions.~~ During the first quarter of 2020, the Company closed on various acreage trade agreements (collectively, the 2020 Asset Exchange Transactions), pursuant to which the Company exchanged approximately 5,000 aggregate net revenue interest acres for approximately 5,000 aggregate net revenue interest acres, all of which are located primarily in Greene County, Pennsylvania.recent court rulings. As a result of the ~~2020 Asset Exchange Transactions,~~Company's impairment evaluation, the Company recognized ~~a loss~~impairment of ~~$48.9~~$184.9 million ~~in (gain) loss on sale/exchange of long-lived assets~~ in the Statement of Condensed Consolidated Operations for the three months ended March 31, ~~2020.~~

2022. The impairment reduced the carrying value of the contract asset to its estimated fair value as of March 31, 2022 of $225 million, of which $196 million was attributable to the cash payment option provided by the Consolidated GGA and presented in prepaid expenses and other in the Condensed Consolidated Balance Sheet and $29 million was attributable to the residual rate relief realizable upon the in-service date of the Mountain Valley Pipeline and presented in contract asset in the Condensed Consolidated Balance Sheet. The fair value of ~~leases acquired were~~the contract asset was based on significant inputs that are not observable in the market and, as such, is a Level 3 fair value measurement. See Note 4 for a description of the fair value hierarchy. Key assumptions used in the fair value calculation included ~~market-based prices for comparable acreage.~~

~~2020 Divestiture.~~ ~~On May 11, 2020,~~ the ~~Company closed~~following: (i) a transaction to sell certain non-strategic assets located in Pennsylvania and West Virginia (the 2020 Divestiture) for an aggregate purchase price of approximately $125 million in cash, subject to customary purchase price adjustments and the Contingent Consideration defined and discussed below. The Pennsylvania assets sold included 80 Marcellus wells and approximately 33 miles of gathering lines; the West Virginia assets sold included 809 conventional wells and approximately 154 miles of gathering lines. In addition, the 2020 Divestiture relieved the Company of approximately $49 million in asset retirement obligations and other liabilities associated with the sold assets. Proceeds from the sale were used to pay down the Company's term loan facility.

The purchase and sale agreement for the 2020 Divestiture provides for additional cash bonus payments (the Contingent Consideration) payable to the Company of up to $20 million. Such Contingent Consideration is conditioned upon the three-month averageprobability-weighted estimate of the NYMEX Henry Hub natural gas settlement price relative to stated floor and target price thresholds beginning on August 31, 2020 and ending on November 30, 2022. The Contingent Consideration represents an embedded derivative that is recorded at fair value in the Consolidated Balance Sheets. The Contingent Consideration had a fair value of $3.1 million and $1.9 million as of March 31, 2021 and December 31, 2020, respectively. Changes in fair value are recorded in (gain) loss on sale/exchange of long-lived assets in the Statements of Condensed Consolidated Operations. The fair valuein-service date of the ~~Contingent Consideration is based on significant inputs that are interpolated from observable market data and, as such, is a Level 2 fair value measurement. See Note 4 for a description~~Mountain Valley Pipeline; (ii) an estimate of the ~~fair value hierarchy.~~

potential exercise and timing of the cash payment option; (iii) an estimated production volume forecast and (iv) a market-based weighted average cost of capital.

1617

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~~EQT CORPORATION AND SUBSIDIARIES~~

~~Notes to the Condensed Consolidated Financial Statements (Unaudited)~~

~~10. Subsequent Events~~

On May 5, 2021, the Company, through one of its wholly owned subsidiaries, entered into a membership interest purchase agreement (the Alta Purchase Agreement) with Alta Resources Development, LLC, a Delaware limited liability company (Alta), Alta Marcellus Development, LLC, a Delaware limited liability company (Alta Marcellus) and ARD Operating, LLC, a Delaware limited liability company (ARD), pursuant to which the Company agreed to acquire all of the issued and outstanding equity interests of Alta Marcellus and ARD, which collectively hold all of Alta’s upstream and midstream assets (the Alta Acquisition).

Pursuant to the terms of the Alta Purchase Agreement, the consideration to be paid by the Company for the Alta Acquisition consists of $1.0 billion in cash and 105,306,346 shares of EQT common stock (the Equity Consideration), subject to certain purchase price adjustments to be calculated as of the closing date (with all post effective date purchase price adjustments netted against the Equity Consideration). The Alta Purchase Agreement contains customary representations and warranties, covenants, indemnification and termination provisions and has an effective date of January 1, 2021.

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto included in this report. Unless the context otherwise indicates, all references in this report to "EQT," the "Company," "we," "us," or "our" are to EQT Corporation and its subsidiaries, collectively.

CAUTIONARY STATEMENTS

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the Securities Act of 1933, as amended. Statements that do not relate strictly to historical or current facts are forward-looking and are usually identified by the use of words such as "anticipate," "estimate," "could," "would," "will," "may," "forecast," "approximate," "expect," "project," "intend," "plan," "believe" and other words of similar meaning, or the negative thereof, in connection with any discussion of future operating or financial matters. Without limiting the generality of the foregoing, forward-looking statements contained in this Quarterly Report on Form 10-Q include the expectations of our plans, strategies, objectives and growth and anticipated financial and operational performance, including guidance regarding our strategy to develop our reserves; drilling plans and programs, ~~(including~~including availability of capital to complete these plans and ~~programs); the projected scope and timing of our combo-development projects; estimated reserves, including potential future downward adjustments of reserves and reserve life;~~programs; total resource potential and drilling inventory duration; projected production and sales volume and growth ~~rates (including liquids production and sales volume and growth rates);~~rates; natural gas prices; changes in basis and the impact of commodity prices on our business; potential future impairments of our assets; ~~our ability to reduce our~~projected well costs and capital ~~expenditures, and the timing of achieving any such reductions;~~expenditures; infrastructure programs; the cost, capacity, and timing of obtaining regulatory approvals; our ability to successfully implement and execute our operational, organizational, technological and ~~ESG~~environmental, social and governance (ESG) initiatives, and achieve the anticipated results of such initiatives; projected ~~reductions of our~~ gathering and compression rates resulting from our consolidated gas gathering and compression agreement with Equitrans Midstream Corporation (Equitrans Midstream), and the anticipated cost savings and other strategic benefits associated with the execution of such agreement;rates; monetization transactions, including asset sales, joint ventures or other transactions involving our assets, and our planned use of the proceeds from such monetization transactions; potential acquisition transactions or other strategic transactions, the timing thereof and our ability to achieve the intended operational, financial and strategic benefits from any such transactions; the ~~timing and structure of any dispositions of our remaining retained shares of Equitrans Midstream's common stock, and the planned use of the proceeds from any such dispositions; the~~ amount and timing of any repayments, redemptions or repurchases of our common stock, outstanding debt securities or other debt instruments; our ability to reduce our debt and the timing of such reductions, if any; the projected ~~dividends, if any;~~amount and timing of dividends; projected cash flows and free cash ~~flow; projected capital expenditures;~~flow and the timing thereof; liquidity and financing requirements, including funding sources and availability; our ability to maintain or improve our credit ratings, leverage levels and financial profile; our hedging ~~strategy;~~strategy and projected margin posting obligations; the effects of litigation, government regulation and tax position; and the expected impact of changes to tax laws.

The forward-looking statements included in this Quarterly Report on Form 10-Q involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. We have based these forward-looking statements on current expectations and assumptions about future events, taking into account all information currently known by us. While we consider these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond our control. These risks and uncertainties include, but are not limited to, volatility of commodity prices; the costs and results of drilling and operations; ~~access to and cost of capital;~~ uncertainties about estimates of reserves, identification of drilling locations and the ability to add proved reserves in the future; the assumptions underlying production forecasts; the quality of technical data; our ability to appropriately allocate capital and resources among our strategic opportunities; access to and cost of capital; our hedging and other financial contracts; inherent hazards and risks normally incidental to drilling for, producing, transporting and storing natural gas, natural gas liquids (NGLs) and oil; cyber security risks; availability and cost of drilling rigs, completion services, equipment, supplies, personnel, oilfield services and water required to execute our exploration and development ~~plans;~~plans, including as a result of the COVID-19 pandemic; risks associated with operating primarily in the Appalachian Basin and obtaining a substantial amount of our midstream services from Equitrans Midstream Corporation (Equitrans Midstream); the ability to obtain environmental and other permits and the timing thereof; government regulation or ~~action;~~action, including regulations pertaining to methane and other greenhouse gas emissions; negative public perception of the fossil fuels industry; increased consumer demand for alternatives to natural gas; environmental and weather risks, including the possible impacts of climate change; and disruptions to our business due to acquisitions and other significant transactions. These and other risks and uncertainties are described under Item 1A., "Risk Factors" and elsewhere in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021 and set forth in other documents we file from time to time with the Securities and Exchange Commission.

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~~EQT CORPORATION AND SUBSIDIARIES~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

Any forward-looking statement speaks only as of the date on which such statement is made, and we do not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

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EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Consolidated Results of Operations

Net loss attributable to EQT Corporation for the three months ended March 31, ~~2021~~2022 was ~~$40.5~~$1,516.0 million, ~~$0.15~~$4.05 per diluted share, compared to net loss attributable to EQT Corporation for the same period in ~~2020~~2021 of ~~$167.1~~$37.4 million, ~~$0.65~~$0.13 per diluted share. The ~~improvement~~change was attributable primarily to ~~higher sales of natural gas, NGLs and oil, income from investments, lower impairments and an income tax benefit, partly offset by~~the loss on derivatives not designated as hedges and, to a lesser extent, the ~~gain on the Equitrans Share Exchange (defined and discussed~~impairment of our contract asset (discussed in Note 8 to the Condensed Consolidated Financial Statements) ~~in the first quarter of 2020, lower dividends~~, increased transportation and ~~other income,~~processing expense, increased depreciation and depletion and a loss from investments, partly offset by increased ~~selling, general~~sales of natural gas, NGLs and ~~administrative expense.~~oil and higher income tax benefit.

Results of operations for 2022 include the results of our operation of assets acquired from Alta Resources Development, LLC (the Alta Acquisition), which closed in July 2021.

See "Sales Volume and Revenues" and "Operating Expenses" for discussions of items affecting operating income and "Other Income Statement Items" for a discussion of other income statement items. See "Investing Activities" under "Capital Resources and Liquidity" for a discussion of capital expenditures.

Average Realized Price Reconciliation

The following table presents detailed natural gas and liquids operational information to assist in the understanding of our consolidated operations, including the calculation of our average realized price ($/Mcfe), which is based on adjusted operating revenues, a non-GAAP supplemental financial measure. Adjusted operating revenues is presented because it is an important measure we use to evaluate period-to-period comparisons of earnings trends. Adjusted operating revenues should not be considered as an alternative to total operating revenues. See "Non-GAAP Financial Measures Reconciliation" for a reconciliation of adjusted operating revenues with total operating revenues, the most directly comparable financial measure calculated in accordance with GAAP.

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EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations


									Three Months Ended March 31,
		Three Months Ended March 31,					2022		2021
		2021		2020
		(Thousands, unless otherwise noted)				(Thousands, unless otherwise noted)
NATURAL GAS	NATURAL GAS							NATURAL GAS
Sales volume (MMcf)	Sales volume (MMcf)	390,298		369,742				Sales volume (MMcf)	466,136		390,298
NYMEX price ($/MMBtu)	NYMEX price ($/MMBtu)	$	2.69	$	1.95			NYMEX price ($/MMBtu)	$	4.90	$	2.69
Btu uplift	Btu uplift	0.15		0.10				Btu uplift	0.23		0.15
Natural gas price ($/Mcf)	Natural gas price ($/Mcf)	$	2.84	$	2.05			Natural gas price ($/Mcf)	$	5.13	$	2.84

Basis ($/Mcf) (a)	Basis ($/Mcf) (a)	$	(0.25)	$	(0.22)			Basis ($/Mcf) (a)	$	(0.22)	$	(0.25)
Cash settled basis swaps (not designated as hedges) ($/Mcf)		(0.09)		0.05
Cash settled basis swaps not designated as hedges ($/Mcf)								Cash settled basis swaps not designated as hedges ($/Mcf)	(0.21)		(0.09)
Average differential, including cash settled basis swaps ($/Mcf)	Average differential, including cash settled basis swaps ($/Mcf)	$	(0.34)	$	(0.17)			Average differential, including cash settled basis swaps ($/Mcf)	$	(0.43)	$	(0.34)
Average adjusted price ($/Mcf)	Average adjusted price ($/Mcf)	$	2.50	$	1.88			Average adjusted price ($/Mcf)	$	4.70	$	2.50
Cash settled derivatives (not designated as hedges) ($/Mcf)		(0.01)		0.60
Cash settled derivatives not designated as hedges ($/Mcf)								Cash settled derivatives not designated as hedges ($/Mcf)	(1.73)		(0.01)
Average natural gas price, including cash settled derivatives ($/Mcf)	Average natural gas price, including cash settled derivatives ($/Mcf)	$	2.49	$	2.48			Average natural gas price, including cash settled derivatives ($/Mcf)	$	2.97	$	2.49
Natural gas sales, including cash settled derivatives	Natural gas sales, including cash settled derivatives	$	972,494	$	915,411			Natural gas sales, including cash settled derivatives	$	1,383,196	$	972,494

LIQUIDS	LIQUIDS							LIQUIDS
Natural gas liquids (NGLs), excluding ethane:
NGLs, excluding ethane:								NGLs, excluding ethane:
Sales volume (MMcfe) (b)	Sales volume (MMcfe) (b)	14,600		10,820				Sales volume (MMcfe) (b)	14,634		14,600
Sales volume (Mbbl)	Sales volume (Mbbl)	2,433		1,803				Sales volume (Mbbl)	2,439		2,433
Price ($/Bbl)	Price ($/Bbl)	$	37.28	$	18.58			Price ($/Bbl)	$	64.05	$	37.28
Cash settled derivatives (not designated as hedges) ($/Bbl)		(2.99)		—
Average NGLs price, including cash settled derivatives ($/Bbl)		$	34.29	$	18.58
Cash settled derivatives not designated as hedges ($/Bbl)								Cash settled derivatives not designated as hedges ($/Bbl)	(4.85)		(2.99)
Average price, including cash settled derivatives ($/Bbl)								Average price, including cash settled derivatives ($/Bbl)	$	59.20	$	34.29
NGLs sales	NGLs sales	$	83,443	$	33,511			NGLs sales	$	144,381	$	83,443
Ethane:	Ethane:							Ethane:
Sales volume (MMcfe) (b)	Sales volume (MMcfe) (b)	8,587		3,329				Sales volume (MMcfe) (b)	9,839		8,587
Sales volume (Mbbl)	Sales volume (Mbbl)	1,431		555				Sales volume (Mbbl)	1,640		1,431
Price ($/Bbl)	Price ($/Bbl)	$	6.66	$	4.05			Price ($/Bbl)	$	10.54	$	6.66
Ethane sales	Ethane sales	$	9,534	$	2,245			Ethane sales	$	17,289	$	9,534
Oil:	Oil:							Oil:
Sales volume (MMcfe) (b)	Sales volume (MMcfe) (b)	1,705		1,179				Sales volume (MMcfe) (b)	1,666		1,705
Sales volume (Mbbl)	Sales volume (Mbbl)	284		197				Sales volume (Mbbl)	278		284
Price ($/Bbl)	Price ($/Bbl)	$	61.98	$	31.63			Price ($/Bbl)	$	85.55	$	61.98
Oil sales	Oil sales	$	17,614	$	6,215			Oil sales	$	23,756	$	17,614

Total liquids sales volume (MMcfe) (b)	Total liquids sales volume (MMcfe) (b)	24,892		15,328				Total liquids sales volume (MMcfe) (b)	26,139		24,892
Total liquids sales volume (Mbbl)	Total liquids sales volume (Mbbl)	4,148		2,555				Total liquids sales volume (Mbbl)	4,357		4,148
Total liquids sales	Total liquids sales	$	110,591	$	41,971			Total liquids sales	$	185,426	$	110,591

TOTAL	TOTAL							TOTAL
Total natural gas and liquids sales, including cash settled derivatives (c)	Total natural gas and liquids sales, including cash settled derivatives (c)	$	1,083,085	$	957,382			Total natural gas and liquids sales, including cash settled derivatives (c)	$	1,568,622	$	1,083,085
Total sales volume (MMcfe)	Total sales volume (MMcfe)	415,190		385,070				Total sales volume (MMcfe)	492,275		415,190
Average realized price ($/Mcfe)	Average realized price ($/Mcfe)	$	2.61	$	2.49			Average realized price ($/Mcfe)	$	3.19	$	2.61

(a)Basis represents the difference between the ultimate sales price for natural gas, including the effects of delivered price benefit or deficit associated with our firm transportation agreements, and the New York Mercantile Exchange (NYMEX) natural gas price.

(b)NGLs, ethane and oil were converted to Mcfe at a rate of six Mcfe per barrel.

(c)Total natural gas and liquids sales, including cash settled derivatives, is also referred to in this report as adjusted operating revenues, a non-GAAP supplemental financial measure.

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EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Non-GAAP Financial Measures Reconciliation

The table below reconciles adjusted operating revenues, a non-GAAP supplemental financial measure, with total operating revenues, its most directly comparable financial measure calculated in accordance with GAAP. Adjusted operating revenues (also referred to in this report as total natural gas and liquids sales, including cash settled derivatives) is presented because it is an important measure we use to evaluate period-to-period comparisons of earnings trends. Adjusted operating revenues excludes the revenue impacts of changes in the fair value of derivative instruments prior to settlement and net marketing services and other. We use adjusted operating revenues to evaluate earnings trends because, as a result of the measure's exclusion of the often-volatile changes in the fair value of derivative instruments prior to settlement, the measure reflects only the impact of settled derivative contracts. Net marketing services and other ~~primarily includes~~consists of the costs of, and recoveries on, pipeline capacity ~~releases.~~releases, revenues for gathering services provided to third parties and other revenues. Because we consider net marketing services and other to be unrelated to our natural gas and liquids production activities, adjusted operating revenues excludes net marketing services and other. We believe that adjusted operating revenues provides useful information to investors for evaluating period-to-period comparisons of earnings trends.


									Three Months Ended March 31,
		Three Months Ended March 31,					2022		2021
		2021		2020
		(Thousands, unless otherwise noted)				(Thousands, unless otherwise noted)
Total operating revenues	Total operating revenues	$	949,923	$	1,107,057			Total operating revenues	$	(579,110)	$	949,923
Add (deduct):	Add (deduct):							Add (deduct):
Loss (gain) on derivatives not designated as hedges		188,813		(389,436)
Net cash settlements (paid) received on derivatives not designated as hedges		(38,140)		245,736
Premiums (paid) for derivatives that settled during the period		(9,726)		(3,555)
Loss on derivatives not designated as hedges								Loss on derivatives not designated as hedges	3,077,637		188,813
Net cash settlements paid on derivatives not designated as hedges								Net cash settlements paid on derivatives not designated as hedges	(885,539)		(38,140)
Premiums paid for derivatives that settled during the period								Premiums paid for derivatives that settled during the period	(32,463)		(9,726)
Net marketing services and other	Net marketing services and other	(7,785)		(2,420)				Net marketing services and other	(11,903)		(7,785)
Adjusted operating revenues, a non-GAAP financial measure	Adjusted operating revenues, a non-GAAP financial measure	$	1,083,085	$	957,382			Adjusted operating revenues, a non-GAAP financial measure	$	1,568,622	$	1,083,085

Total sales volume (MMcfe)	Total sales volume (MMcfe)	415,190		385,070				Total sales volume (MMcfe)	492,275		415,190
Average realized price ($/Mcfe)	Average realized price ($/Mcfe)	$	2.61	$	2.49			Average realized price ($/Mcfe)	$	3.19	$	2.61

Sales Volume and Revenues


											Three Months Ended March 31,
		Three Months Ended March 31,						2022	2021		Change		% Change
		2021		2020		%
		(Thousands, unless otherwise noted)					(Thousands, unless otherwise noted)
Sales volume by shale (MMcfe):	Sales volume by shale (MMcfe):									Sales volume by shale (MMcfe):
Marcellus (a)		373,941		333,751		12.0
Marcellus										Marcellus	455,427		373,941		81,486		21.8
Ohio Utica	Ohio Utica	39,929		49,775		(19.8)				Ohio Utica	34,206		39,929		(5,723)		(14.3)
Other	Other	1,320		1,544		(14.5)				Other	2,642		1,320		1,322		100.2
Total sales volume (b)		415,190		385,070		7.8
Total sales volume (a)										Total sales volume (a)	492,275		415,190		77,085		18.6

Average daily sales volume (MMcfe/d)	Average daily sales volume (MMcfe/d)	4,613		4,232		9.0				Average daily sales volume (MMcfe/d)	5,470		4,613		857		18.6

Operating revenues:	Operating revenues:									Operating revenues:
Sales of natural gas, NGLs and oil	Sales of natural gas, NGLs and oil	$	1,130,951	$	715,201	58.1				Sales of natural gas, NGLs and oil	$	2,486,624	$	1,130,951	$	1,355,673	119.9
(Loss) gain on derivatives not designated as hedges		(188,813)		389,436		(148.5)
Loss on derivatives not designated as hedges										Loss on derivatives not designated as hedges	(3,077,637)		(188,813)		(2,888,824)		1,530.0
Net marketing services and other	Net marketing services and other	7,785		2,420		221.7				Net marketing services and other	11,903		7,785		4,118		52.9
Total operating revenues	Total operating revenues	$	949,923	$	1,107,057	(14.2)				Total operating revenues	$	(579,110)	$	949,923	$	(1,529,033)	(161.0)

(a)~~Includes Upper Devonian wells.~~

~~(b)~~NGLs, ethane and oil were converted to Mcfe at a rate of six Mcfe per barrel.

~~Sales of natural gas, NGLs and oil.~~ Sales of natural gas, NGLs and oil increased for the three months ended March 31, 2021 compared to the same period in 2020 due to higher sales volume and a higher average realized price. Average realized price

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EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Sales of natural gas, NGLs and oil. Sales of natural gas, NGLs and oil increased for the three months ended March 31, 2022 compared to the same period in 2021 due to a higher average realized price and increased sales volume.

Average realized price for the three months ended March 31, 2022 compared to the same period in 2021 increased due to higher NYMEX prices and higher liquids prices, partly offset by unfavorable cash settled ~~derivatives.~~derivatives and unfavorable differential. For the three months ended March 31, 2022 and 2021, we paid $885.5 million and $38.1 million, ~~of net cash settlements on derivatives not designated as hedges and for the same period in 2020, we received $245.7 million~~respectively, of net cash settlements on derivatives not designated as hedges, which are included in average realized price but may not be included in operating revenues.

Sales volume increased primarily as a result of sales volume ~~of 34 Bcfe~~increases from ~~upstream~~the assets we acquired ~~from Chevron U.S.A. Inc.~~ in the ~~fourth quarter of 2020 (Chevron Acquisition), partly offset by a decrease of 5 Bcfe attributable to assets we divested in the second quarter of 2020.~~Alta Acquisition.

~~(Loss) gain~~Loss on derivatives not designated as hedges. For the three months ended March 31, 2022 and 2021, we recognized a loss ~~of $188.8 million~~ on derivatives not designated as hedges of $3,077.6 million and ~~for the same period in 2020, we recognized a gain of $389.4 million.~~$188.8 million, respectively. The ~~loss for the three months ended March 31, 2021 was~~losses were related primarily to decreases in the fair market value of our NYMEX swaps and options due to increases in NYMEX forward prices. ~~The gain~~

Net marketing services and other. Net marketing services and other increased for the three months ended March 31, ~~2020 was related~~2022 compared to the same period in 2021 due primarily to ~~increases~~third-party gathering revenues recognized on the midstream assets acquired in the ~~fair market value of our NYMEX swaps and options due to decreases in NYMEX forward prices.~~Alta Acquisition.

Operating Expenses

The following table presents information on our production-related operating expenses.

Three Months Ended March 31,
2021 2020 %
(Thousands, unless otherwise noted)
Operating expenses:
Gathering $ 280,361 $ 261,721 7.1
Transmission 124,872 147,162 (15.1)
Processing 40,551 30,951 31.0
Lease operating expenses (LOE), excluding production taxes 27,019 28,023 (3.6)
Production taxes 20,211 12,357 63.6
Exploration 949 923 2.8
Selling, general and administrative 45,006 34,938 28.8
Production depletion $ 373,008 $ 353,077 5.6
Other depreciation and depletion 4,108 4,449 (7.7)
Total depreciation and depletion $ 377,116 $ 357,526 5.5
Per Unit ($/Mcfe):
Gathering $ 0.68 $ 0.68 —
Transmission 0.30 0.38 (21.1)
Processing 0.10 0.08 25.0
LOE, excluding production taxes 0.07 0.07 —
Production taxes 0.05 0.03 66.7
Exploration — — —
Selling, general and administrative 0.11 0.09 22.2
Production depletion 0.90 0.92 (2.2)


	Three Months Ended March 31,
	2022		2021		Change		% Change

	(Thousands, unless otherwise noted)
Operating expenses:
Gathering	$	320,529	$	280,361	$	40,168	14.3
Transmission	147,106		124,872		22,234		17.8
Processing	48,469		40,551		7,918		19.5
Lease operating expenses (LOE)	39,829		27,019		12,810		47.4
Production taxes	31,183		20,211		10,972		54.3
Exploration	772		949		(177)		(18.7)
Selling, general and administrative	69,096		45,006		24,090		53.5

Production depletion	$	416,925	$	373,008	$	43,917	11.8
Other depreciation and depletion	5,173		4,108		1,065		25.9
Total depreciation and depletion	$	422,098	$	377,116	$	44,982	11.9

Per Unit ($/Mcfe):
Gathering	$	0.65	$	0.68	$	(0.03)	(4.4)
Transmission	0.30		0.30		—		—
Processing	0.10		0.10		—		—
LOE	0.08		0.07		0.01		14.3
Production taxes	0.06		0.05		0.01		20.0

Selling, general and administrative	0.14		0.11		0.03		27.3
Production depletion	0.85		0.90		(0.05)		(5.6)

~~Gathering.~~ Gathering expense increased on an absolute basis for the three months ended March 31, 2021 compared to the same period in 2020 due to increased sales volume and additional gathering capacity acquired as a result of the Chevron Acquisition and a higher gathering rate structure as a result of the Consolidated GGA (defined and discussed in Note 8 to the Condensed Consolidated Financial Statements). We expect to realize fee relief and a lower gathering rate structure from the Consolidated GGA beginning with the Mountain Valley Pipeline (MVP) in-service date.

~~Transmission.~~ Transmission expense decreased on an absolute and per Mcfe basis for the three months ended March 31, 2021 compared to the same period in 2020 due primarily to released capacity on, and credits received from, the Texas Eastern Transmission Pipeline and the Tennessee Gas Pipeline.

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Gathering. Gathering expense increased on an absolute basis for the three months ended March 31, 2022 compared to the same period in 2021 due primarily to increased sales volume from the assets acquired in the Alta Acquisition and higher gathering rates on certain contracts indexed to price. Gathering expense decreased on a per Mcfe basis for the three months ended March 31, 2022 compared to the same period in 2021 due primarily to the lower gathering rate structure on the assets acquired in the Alta Acquisition.

Transmission. Transmission expense increased on an absolute basis for the three months ended March 31, 2022 compared to the same period in 2021 due primarily to additional capacity acquired as part of the Alta Acquisition, lower credits received from and higher rates on the Texas Eastern Transmission Pipeline and additional capacity acquired on the Rockies Express Pipeline in the third quarter of 2021.

Processing. Processing expense increased on an absolute basis for the three months ended March 31, 2022 compared to the same period in 2021 due to increased liquid sales volume as a result of increased development of liquids-rich areas throughout 2021.

LOE. LOE increased on an absolute and per Mcfe basis for the three months ended March 31, ~~2021~~2022 compared to the same period in ~~2020 due to higher liquid sales volume~~2021 due primarily to additional lease operating costs as a result of the ~~Chevron Acquisition and increased development of liquids-rich areas.~~Alta Acquisition.

Production taxes. Production taxes increased on an absolute and per Mcfe basis for the three months ended March 31, ~~2021~~2022 compared to the same period in ~~2020~~2021 due ~~primarily~~ to increased West Virginia severance taxes, ~~as a result of~~which resulted primarily from higher prices, and ~~sales volume.~~increased Pennsylvania impact fees, which resulted from the additional wells acquired in the Alta Acquisition, higher prices and inflation.

Selling, general and administrative. Selling, general and administrative expense increased on an absolute and per Mcfe basis for thethree months ended March 31, ~~2021~~2022 compared to the same period in ~~2020~~2021 due primarily to higher long-term incentive compensation costs ~~due to~~as a result of changes in the fair value of ~~awards.~~awards and higher litigation expense. Long-term incentive compensation may fluctuate with changes in our stock price and performance conditions.

Depreciation and depletion. Production depletion expense increased on an absolute basis for the three months ended March 31, ~~2021~~2022 compared to the same period in ~~2020~~2021 due to increased sales volume, partly offset by a lower annual depletion rate. Production depletion expense decreased on a per Mcfe basis for the three months ended March 31, ~~2021~~2022 compared to the same period in ~~2020~~2021 due to a lower annual depletion rate.

~~Amortization~~Impairment of ~~intangible assets.~~contract asset. ~~Amortization of intangible assetsfor~~During the three months ended March 31, ~~2020 was $7.5 million. The intangible assets were fully amortized in the fourth quarter of 2020.~~

~~(Gain) loss on sale/exchange of long-lived assets.~~ ~~During the first quarter of 2020,~~2022, we recognized ~~a loss on exchange~~impairment of ~~long-lived assets~~our contract asset of ~~$48.9 million related to the 2020 Asset Exchange Transactions.~~$184.9 million. See Note 98 to the Condensed Consolidated Financial Statements.

Impairment and expiration of leases. ~~Impairment and expiration of leases for~~During the three months ended March 31, 2022 and 2021, ~~was~~we recognized impairment and expiration of leases of $30.0 million and $16.8 million, ~~compared~~respectively, related to ~~$53.8 million for the same period in 2020. The decrease was driven by higher lease expirations in 2020 due~~leases that we no longer expect to ~~changes in market conditions.~~extend or develop prior to their expiration based on our development plan.

Other operating expenses. Other operating expenses for the three months ended March 31, 2022 of $16.3 million were attributable primarily to changes in legal reserves, including settlements. Other operating expenses for the three months ended March 31, 2021 of $9.4 million were ~~due~~attributable primarily to ~~certain transaction-related~~transaction costs associated with ~~the~~our acquisition of upstream assets from Chevron ~~Acquisition~~U.S.A. Inc. and changes in legal reserves, including settlements.

Other Income Statement Items

~~Gain on Equitrans Share Exchange.~~ ~~During the first quarter of 2020, we recognized a gain on the Equitrans Share Exchange of $187.2 million. See Note 8 to the Condensed Consolidated Financial Statements.~~

~~(Income) loss~~Loss (income) from investments. For the three months ended March 31, ~~2021,~~2022, we recognized a gain on an investment in a fund that invests in companies developing technology and operating solutions for exploration and production companies and a gain on our investment in Equitrans Midstream. Our investment in Equitrans Midstream fluctuates with changes in Equitrans Midstream's stock price, which was $8.16 and $8.04 as of March 31, 2021 and December 31, 2020, respectively. For the three months ended March 31, 2020, we recognizedloss from investments due primarily to a loss on our investment in Equitrans Midstream, ~~due to~~which resulted from a decrease in Equitrans Midstream's stock price ~~during the three months ended~~to $8.44 as of March 31, ~~2020~~2022 from $10.34 as ~~well as~~of December 31, 2021, partly offset by a ~~decrease~~gain on our investment in the ~~number of shares of Equitrans Midstream's common stock that we own as a result of~~Investment Fund (defined in Note 4 to the ~~Equitrans Share Exchange.~~

~~Dividend~~Condensed Consolidated Financial Statements) and ~~other income.~~ ~~Dividend and other income decreased for~~equity earnings on our investment in Laurel Mountain Midstream LLC. For the three months ended March 31, 2021, ~~compared to the same period in 2020 due primarily to lower dividends received from~~we recognized gains on our ~~investment in Equitrans Midstream driven by the decrease~~investments in the ~~number of shares of~~Investment Fund and Equitrans ~~Midstream's common stock that we own as well as a decrease in the dividend amount per share.~~Midstream.

Loss on debt extinguishment. During the three months ended March 31, 2022, we recognized a loss on debt extinguishment of $6.9 million due to the repayment of our 3.00% senior notes. During the three months ended March 31, 2021, we recognized a loss on debt extinguishment of $4.4 million ~~related~~due to the repayment of our 4.875% senior notes. ~~During the three months ended March 31, 2020, we recognized a loss on debt extinguishment of $16.6 million related~~See Note 6 to the ~~repayment of all or a portion of our 4.875% senior notes, 2.50% senior notes and floating rate notes.~~

Condensed Consolidated Financial Statements.

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Management's Discussion and Analysis of Financial Condition and Results of Operations

Interest expense. Interest expense ~~increased~~decreased for the three months ended March 31, ~~2021~~2022 compared to the same period in ~~2020~~2021 due primarily to ~~increased~~reduced interest ~~incurred~~expense on ~~new debt and~~ letters of credit ~~issued throughout 2020 as well as higher~~and lower borrowings under our credit facility. ~~These increases were partly offset by lower interest incurred due to debt repayments throughout 2020 and the first quarter of 2021.~~ See Note 6 to the Condensed Consolidated Financial Statements.

Income tax ~~(benefit) expense.~~benefit. See Note 5 to the Condensed Consolidated Financial Statements.

Capital Resources and Liquidity

Although we cannot provide any assurance, we believe cash flows from operating activities and availability under our credit facility should be sufficient to meet our cash requirements inclusive of, but not limited to, normal operating needs, debt service obligations, planned capital expenditures and commitments for at least the next twelve months and, based on current expectations, for the ~~long-term.~~long term.

Planned Capital Expenditures and Sales Volume. In ~~2021,~~2022, we expect to spend approximately ~~$1,025 million~~$1.30 to ~~$1,125 million~~$1.45 billion in total capital expenditures, excluding amounts attributable to noncontrolling ~~interests, which are expected~~interest. We expect to ~~be funded by operating~~fund our capital expenditures with cash ~~flow~~generated from operations and, if required, borrowings under our credit facility. Because we are the operator of a high percentage of our developed acreage, the amount and timing of these capital expenditures are largely discretionary. We could choose to defer a portion of these planned 2022 capital expenditures depending on a variety of factors, including prevailing and anticipated prices for natural gas, NGLs and oil; the availability of necessary equipment, infrastructure and capital; the receipt and timing of required regulatory permits and approvals; and drilling, completion and acquisition costs. Sales volume in ~~2021~~2022 is expected to be ~~1,620~~1,950 Bcfe to ~~1,700~~2,050 Bcfe.

Operating Activities. Net cash provided by operating activities was ~~$400~~$1,021 million for the three months ended March 31, ~~2021~~2022 compared to ~~$500~~$400 million for the same period in ~~2020.~~2021. The ~~decrease~~increase was due primarily to ~~decreased~~higher cash ~~settlements received on derivatives not designated as hedges~~operating revenues and ~~unfavorable~~favorable timing of working capital payments, partly offset by net cash settlements paid on derivatives not designated as hedges and higher cash operating ~~revenues.~~expenses.

Our cash flows from operating activities are affected by movements in the market price for commodities. We are unable to predict such movements outside of the current market view as reflected in forward strip pricing. Refer to Item 1A., "Risk Factors – Natural gas, NGLs and oil price volatility, or a prolonged period of low natural gas, NGLs and oil prices, may have an adverse effect on our revenue, profitability, future rate of growth, liquidity and financial position" in our Annual Report on ~~Form~~For m 10-K for the year ended December 31, ~~2020.~~2021.

Investing Activities. Net cash used in investing activities was ~~$248~~$291 million for the three months ended March 31, ~~2021~~2022 compared to ~~$204~~$248 million for the same period in ~~2020.~~2021. The increase was due ~~primarily~~ to ~~cash received during the first quarter of 2020 for the Equitrans Share Exchange, partly offset by lower~~increased capital expenditures.

The following table summarizes our capital expenditures.


									Three Months Ended March 31,
		Three Months Ended March 31,					2022		2021
		2021		2020
		(Millions)				(Millions)
Reserve development	Reserve development	$	189	$	223			Reserve development	$	229	$	189
Land and lease (a)	Land and lease (a)	23		22				Land and lease (a)	49		23
Capitalized overhead	Capitalized overhead	13		11				Capitalized overhead	12		13
Capitalized interest	Capitalized interest	4		4				Capitalized interest	6		4
Other production infrastructure	Other production infrastructure	5		1				Other production infrastructure	13		5
Other corporate items		4		1
Other								Other	1		4
Total capital expenditures	Total capital expenditures	238		262				Total capital expenditures	310		238
Add (deduct) non-cash items (b)		13		(6)
(Deduct) add: Non-cash items (b)								(Deduct) add: Non-cash items (b)	(18)		13
Total cash capital expenditures	Total cash capital expenditures	$	251	$	256			Total cash capital expenditures	$	292	$	251

(a)Capital expenditures attributable to noncontrolling ~~interests~~interest were $1.9 million and $1.3 million for the three months ended March 31, ~~2021.~~2022 and 2021, respectively.

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(b)Represents the net impact of non-cash capital expenditures, including the effect of timing of receivables from working interest partners, accrued capital expenditures and capitalized share-based compensation costs. The impact of accrued capital expenditures includes the current period estimate, net of the reversal of the prior period ~~accrual as well as the current period estimate.~~accrual.

Financing Activities. Net cash used in financing activities was ~~$130~~$827 million for the three months ended March 31, ~~2021~~2022 compared to ~~$283~~$130 million for the same period in ~~2020.~~2021. For the three months ended March 31, 2022, the primary use of financing cash flows was repayment and retirement of debt, repurchase and retirement of EQT common stock and payment of dividends, and the primary source of financing cash flows was net proceeds from credit facility borrowings. For the three months ended March 31, 2021, the primary use of financing cash flows

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~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

was net repayments of debt. For the three months ended March 31, 2020, the primary uses of financing cash flows were net repayments of debt and credit facility borrowings, and the primary source of financing cash flows was net proceeds from the issuance of debt.

See Note 6 to the Condensed Consolidated Financial Statements for further discussion of our debt and borrowings under our credit facility.

On April 20, 2022, our Board of Directors declared a quarterly cash dividend of $0.125 per share of EQT common stock, payable on June 1, 2022, to shareholders of record at the close of business on May 11, 2022.

During April 2022, we sold the remaining balance of our Equitrans Midstream common stock for net proceeds of approximately $189 million.

Depending on our actual and anticipated sources and uses of liquidity, prevailing market conditions and other factors, we may from time to time seek to ~~retire~~redeem or repurchase our outstanding debt or equity securities through cash purchases in the open market or privately negotiated transactions. The amounts involved in any such transactions may be material. ~~Additionally, we plan to dispose of our remaining retained shares of Equitrans Midstream's common stock and use the proceeds to reduce our debt.~~

Security Ratings and Financing Triggers

The table below reflects the credit ratings and rating outlooks assigned to our debt instruments as of April ~~30, 2021.~~22, 2022. Our credit ratings and rating outlooks are subject to revision or withdrawal at any time by the assigning rating agency, and each rating should be evaluated independent from any other rating. We cannot ensure that a rating will remain in effect for any given period of time or that a rating will not be lowered or withdrawn by a rating agency if, in the rating agency's judgment, circumstances so warrant. See Note 3 to the Condensed Consolidated Financial Statements for ~~further discussion~~a description of what is deemed investment grade.

Rating agency

Senior notes

Outlook

Moody's Investors Service (Moody's)

~~Ba2~~Ba1

Stable

Standard & Poor's Ratings Service (S&P)

BBBBB–

Stable

Fitch Ratings Service (Fitch)

BBBBB–

~~Positive~~Stable

Changes in credit ratings may affect our access to the capital markets, the cost of short-term debt through interest rates and fees under our ~~lines of~~ credit facility, the interest rate on ~~the~~our senior notes with adjustable rates, the rates available on new long-term debt, our pool of investors and funding sources, the borrowing costs and margin deposit requirements on our over the counter (OTC) derivative instruments and credit assurance requirements, including collateral, in support of our midstream service contracts, joint venture arrangements or construction contracts. Margin deposits on our OTC derivative instruments are also subject to factors other than credit rating, such as natural gas prices and credit thresholds set forth in the agreements between us and our hedging counterparties.

As of April ~~30, 2021,~~22, 2022, we had sufficient unused borrowing capacity, net of letters of credit, under our credit facility to satisfy any requests for margin deposit or other collateral that our counterparties are permitted to request of us pursuant to our OTC derivative instruments, midstream services contracts and other contracts. As of April ~~30, 2021,~~22, 2022, such assurances could be up to approximately ~~$1.1~~$1.0 billion, inclusive of letters of credit, OTC derivative instrument margin deposits and other collateral posted of approximately ~~$0.9~~$0.8 billion in the aggregate. See Notes 3 and 6 to the Condensed Consolidated Financial Statements for further information.

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EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

Our debt agreements and other financial obligations contain various provisions that, if not complied with, could result in default or event of default under our credit facility, mandatory partial or full repayment of amounts outstanding, reduced loan capacity or other similar actions. The most significant covenants and events of default under the debt agreements relate to maintenance of a debt-to-total capitalization ratio, limitations on transactions with affiliates, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of other financial obligations and change of control provisions. Our credit facility contains financial covenants that require us to have a total debt to total capitalization ratio no greater than 65%. The calculation of this ratio excludes the effects of accumulated other comprehensive ~~income.~~loss. As of March 31, ~~2021,~~2022, we were in compliance with all debt provisions and covenants under our debt agreements.

See Note 6 to the Condensed Consolidated Financial Statements for a discussion of borrowings under our credit facility.

Commodity Risk Management

The substantial majority of our commodity risk management program is related to hedging sales of our produced natural gas. The overall objective of our hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices.

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~~EQT CORPORATION AND SUBSIDIARIES~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~

The derivative commodity instruments that we use are primarily swap, collar and option agreements. The following table summarizes the approximate ~~volumes~~volume and prices of our NYMEX hedge positions ~~through 2024~~ as of April ~~30, 2021.~~

2021 (a) 2022 2023 2024
Swaps:
Volume (MMDth) 863 618 115 2
Average Price ($/Dth) $ 2.73 $ 2.67 $ 2.51 $ 2.67
Calls – Net Short:
Volume (MMDth) 269 284 77 15
Average Short Strike Price ($/Dth) $ 2.92 $ 2.89 $ 2.89 $ 3.11
Puts – Net Long:
Volume (MMDth) 158 135 69 15
Average Long Strike Price ($/Dth) $ 2.59 $ 2.35 $ 2.40 $ 2.45
Fixed Price Sales (b):
Volume (MMDth) 54 4 3 —
Average Price ($/Dth) $ 2.49 $ 2.38 $ 2.38 $ —

~~(a)April 1 through December 31.~~

~~(b)~~22, 2022. The difference between the fixed price and NYMEX price is included in average differential presented in our price reconciliation in "Average Realized Price Reconciliation." The fixed price natural gas sales agreements can be physically or financially settled.


	Q2 2022 (a)		Q3 2022		Q4 2022		Q1 2023		Q2 2023		Q3 2023		Q4 2023		2024
Hedged Volume (MMDth)	329		286		287		185		233		236		204		17
Hedged Volume (MMDth/d)	3.6		3.1		3.1		2.1		2.6		2.6		2.2		—

Swaps, including Futures
Volume (MMDth)	296		253		232		—		41		42		42		2
Avg. Price ($/Dth)	$	2.63	$	2.34	$	2.40	$	—	$	2.53	$	2.53	$	2.53	$	2.67

Calls – Net Short
Volume (MMDth)	101		102		102		162		192		194		127		15
Avg. Short Strike ($/Dth)	$	3.00	$	3.05	$	3.02	$	8.07	$	4.16	$	4.16	$	4.18	$	3.11

Puts – Net Long
Volume (MMDth)	32		32		54		184		191		193		162		15
Avg. Long Strike ($/Dth)	$	2.78	$	2.68	$	2.68	$	3.77	$	2.73	$	2.73	$	2.85	$	2.45

Fixed Price Sales
Volume (MMDth)	0.9		0.9		0.9		0.9		0.9		0.9		0.3		—
Avg. Price ($/Dth)	$	2.38	$	2.38	$	2.38	$	2.38	$	2.38	$	2.38	$	2.38	$	—

(a)April 1 through June 30.

For ~~2021~~2022 (April 1 through December 31), ~~2022,~~ 2023 and 2024, we have natural gas sales agreements for approximately 14 ~~MMDth, 18~~ MMDth, 88 MMDth and 11 MMDth, respectively, that include average NYMEX ceiling prices of $3.17, ~~$3.17,~~ $2.84 and $3.21, respectively.

We entered into 455 MMDth per day of NYMEX swaps at a weighted average price of $6.05 that offset existing NYMEX swaps related to the first quarter of 2023 with a weighted average price of $2.53. These positions have been excluded from the table above.

We have also entered into derivative instruments to hedge basis. We may use other contractual agreements to implement our commodity hedging strategy from time to time.

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EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of Operations

See Item 3., "Quantitative and Qualitative Disclosures About Market Risk" and Note 3 to the Condensed Consolidated Financial Statements for further discussion of our hedging program.

Commitments and Contingencies

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against us. While the amounts claimed may be substantial, we are unable to predict with certainty the ultimate outcome of such claims and proceedings. We accrue legal and other direct costs related to loss contingencies when actually incurred. We have established reserves that we believe to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, we believe that the ultimate outcome of any pending matter ~~currently pending against~~involving us will not materially affect our financial condition, results of operations or liquidity. See Note 16 to the Consolidated Financial Statements and Part I, Item 3., "Legal Proceedings" in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 for a discussion of our commitments and contingencies.

Recently Issued Accounting Standards

Our recently issued accounting standards are described in Note 1 to the Condensed Consolidated Financial Statements.

Critical Accounting Policies and Estimates

Our critical accounting policies, including a discussion regarding the estimation uncertainty and the impact that our critical accounting estimates have had, or are reasonably likely to have, on our financial condition or results of operations, are described in Item 7., "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. The application of our critical accounting policies may require us to make judgments and estimates about the amounts reflected in the Condensed Consolidated Financial Statements. We use historical experience and all available information to make these estimates and judgments. Different amounts could be reported using different assumptions and estimates.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk and Derivative Instruments. Our primary market risk exposure is the volatility of future prices for natural gas and NGLs. Due to the volatility of commodity prices, we are unable to predict future potential movements in the market prices for natural gas and NGLs at our ultimate sales points and, thus, cannot predict the ultimate impact of prices on our operations. Prolonged low, or significant, extended declines in, natural gas and NGLs prices could adversely affect, among other things, our development plans, which would decrease the pace of development and the level of our proved reserves. Increases in natural gas and NGLs prices may be accompanied by, or result in, increased well drilling costs, increased production taxes, increased lease operating expenses, increased volatility in seasonal gas price spreads for our storage assets and increased end-user conservation or conversion to alternative fuels. In addition, to the extent we have hedged our production at prices below the current market price, we will not benefit fully from an increase in the price of natural ~~gas.~~gas, and, depending on our then-current credit ratings and the terms of our hedging contracts, we may be required to post additional margin with our hedging counterparties.

The overall objective of our hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices. Our use of derivatives is further described in Note 3 to the Condensed Consolidated Financial Statements and "Commodity Risk Management" under "Capital Resources and Liquidity" in Item 2., "Management's Discussion and Analysis of Financial Condition and Results of Operations." Our OTC derivative commodity instruments are placed primarily with financial institutions and the creditworthiness of those institutions is regularly monitored. We primarily enter into derivative instruments to hedge forecasted sales of production. We also enter into derivative instruments to hedge basis. Our use of derivative instruments is implemented under a set of policies approved by our management-level Hedge and Financial Risk Committee and is reviewed by our Board of Directors.

For derivative commodity instruments used to hedge our forecasted sales of production, which are at, for the most part, NYMEX natural gas prices, we set policy limits relative to the expected production and sales levels that are exposed to price risk. We have an insignificant amount of financial natural gas derivative commodity instruments for trading purposes.

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The derivative commodity instruments we use are primarily swap, collar and option agreements. These agreements may require payments to, or receipt of payments from, counterparties based on the differential between two prices for the commodity. We use these agreements to hedge our NYMEX and basis exposure. We may also use other contractual agreements when executing our commodity hedging strategy.

We monitor price and production levels on a continuous basis and make adjustments to quantities hedged as warranted.

A hypothetical decrease of 10% in the ~~market price of~~NYMEX natural gas price on March 31, ~~2021~~2022 and December 31, ~~2020~~2021 would increase the fair value of our natural gas derivative commodity instruments by approximately ~~$473~~$763 million and ~~$501~~$577 million, respectively. A hypothetical increase of 10% in the ~~market price of~~NYMEX natural gas price on March 31, ~~2021~~2022 and December 31, ~~2020~~2021 would decrease the fair value of our natural gas derivative commodity instruments by approximately ~~$469~~$769 million and ~~$495~~$581 million, respectively. For purposes of this analysis, we applied the 10% change in the ~~market price of~~NYMEX natural gas price on March 31, ~~2021~~2022 and December 31, ~~2020~~2021 to our natural gas derivative commodity instruments as of March 31, ~~2021~~2022 and December 31, ~~2020~~2021 to calculate the hypothetical change in fair value. The change in fair value was determined using a method similar to our normal process for determining derivative commodity instrument fair value described in Note 4 to the Condensed Consolidated Financial Statements.

The above analysis of our derivative commodity instruments does not include the offsetting impact that the same hypothetical price movement may have on our physical sales of natural gas. The portfolio of derivative commodity instruments held to hedge our forecasted produced gas approximates a portion of our expected physical sales of natural gas; therefore, an adverse impact to the fair value of the portfolio of derivative commodity instruments held to hedge our forecasted production associated with the hypothetical changes in commodity prices referenced above should be offset by a favorable impact on our physical sales of natural gas, assuming that the derivative commodity instruments are not closed in advance of their expected term and the derivative commodity instruments continue to function effectively as hedges of the underlying risk.

If the underlying physical transactions or positions are liquidated prior to the maturity of the derivative commodity instruments, a loss on the financial instruments may occur or the derivative commodity instruments might be worthless as determined by the prevailing market value on their termination or maturity date, whichever comes first.

Interest Rate Risk. Changes in market interest rates affect the amount of interest we earn on cash, cash equivalents and short-term investments and the interest rate we pay on borrowings under our credit facility. None of the interest we pay on our senior notes ~~fluctuate~~fluctuates based on changes to market interest rates. A 1% increase in interest rates on the borrowings under our credit facility during the three months ended March 31, ~~2021~~2022 would have increased interest expense by approximately $5$3 million.

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Interest rates on our 6.125% senior notes due 2025 and 7.00% senior notes due 2030 fluctuate based on changes to the credit ratings assigned to our senior notes by Moody's, S&P and Fitch. Interest rates on our other outstanding senior notes do not fluctuate based on changes to the credit ratings assigned to our senior notes by Moody's, S&P and Fitch. For a discussion of credit rating downgrade risk, see Item 1A., "Risk Factors – Our exploration and production operations have substantial capital requirements, and we may not be able to obtain needed capital or financing on satisfactory terms" in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. Changes in interest rates affect the fair value of our fixed rate debt. See Note 6 to the Condensed Consolidated Financial Statements for further discussion of our debt and Note 4 to the Condensed Consolidated Financial Statements for a discussion of fair value measurements, including the fair value measurement of our debt.

Other Market Risks. We are exposed to credit loss in the event of nonperformance by counterparties to our derivative contracts. This credit exposure is limited to derivative contracts with a positive fair value, which may change as market prices change. Our OTC derivative instruments are primarily with financial institutions and, thus, are subject to events that would impact those companies individually as well as the financial industry as a whole. We use various processes and analyses to monitor and evaluate our credit risk exposures, including monitoring current market conditions and counterparty credit fundamentals. Credit exposure is controlled through credit approvals and limits based on counterparty credit fundamentals. To manage the level of credit risk, we enter into transactions primarily with financial counterparties that are of investment grade, enter into netting agreements whenever possible and may obtain collateral or other security.

Approximately ~~41%~~16%, or ~~$367~~$997 million, of our OTC derivative contracts outstanding at March 31, ~~2021~~2022 had a positive fair value. Approximately ~~47%~~17%, or ~~$456~~$477 million, of our OTC derivative contracts outstanding at December 31, ~~2020~~2021 had a positive fair value.

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As of March 31, ~~2021,~~2022, we were not in default under any derivative contracts and had no knowledge of default by any counterparty to our derivative contracts. During the three months ended March 31, ~~2021,~~2022, we made no adjustments to the fair value of our derivative contracts due to credit related concerns outside of the normal non-performance risk adjustment included in our established fair value procedure. We monitor market conditions that may impact the fair value of our derivative contracts.

We are exposed to the risk of nonperformance by credit customers on physical sales of natural gas, NGLs and oil. Revenues and related accounts receivable from our operations are generated primarily from the sale of produced natural gas, NGLs and oil to marketers, utilities and industrial customers located in the Appalachian Basin and in markets that are accessible through our transportation portfolio, which includes markets in the Gulf Coast, Midwest and Northeast United States and Canada. We also contract with certain processors to market a portion of NGLs on our behalf.

No one lender of the large group of financial institutions in the syndicate for our credit facility holds more than 10% of the financial commitments under such facility. The large syndicate group and relatively low percentage of participation by each lender are expected to limit our exposure to disruption or consolidation in the banking industry.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

~~Under the supervision and~~Our management, with the participation of ~~management, including~~ our ~~Principal Executive Officer~~principal executive officer and ~~Principal Financial Officer, an evaluation~~our principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), ~~was conducted~~ as of the end of the period covered by this report. Based on that evaluation, ~~the Principal Executive Officer~~our principal executive officer and ~~Principal Financial Officer~~our principal financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

During the first quarter of 2021, we completed the implementation of an enterprise resource planning (ERP) system, and revised and updated the related controls. As a result of the implementation, there were certain changes to processes and procedures, which resulted in changes to our internal control over financial reporting. The ERP implementation is expected to strengthen our financial controls by automating certain manual processes and standardizing business processes and reporting across the organization. We will continue to evaluate and monitor the internal controls over financial reporting and will continue to evaluate the operating effectiveness of related key controls.

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There were no ~~other~~ changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred during the first quarter of ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against us. While the amounts claimed may be substantial, we are unable to predict with certainty the ultimate outcome of such claims and proceedings. We accrue legal and other direct costs related to loss contingencies when actually incurred. We have established reserves in amounts that we believe to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, we believe that the ultimate outcome of any pending matter ~~currently pending against~~involving us will not materially affect our financial ~~condition,~~position, results of operations or liquidity.

~~West Virginia Air Quality Permit Violations, Wetzel County, West Virginia.~~ ~~In mid-March 2021, we discovered that a small subset of nine~~There have been no material updates to the matters previously disclosed in Item 3, "Legal Proceedings" of our ~~well pads located in Wetzel County, West Virginia (collectively known as the Stone pads) were out of compliance with the air quality permits and/or permit determinations originally obtained~~Annual Report on Form 10-K for the well pads. The Stone pads were permitted to utilize a pipeline to transport condensate generated from the associated wells on the pads. Beginning in late 2019, we began storing condensate generated from the associated wells in production tanks located on the Stone pads and trucking the condensate off site, as opposed to utilizing a pipeline for transportation. This change in procedure resulted in higher emissions being generated on site. In March 2021, we self-disclosed this information to the West Virginia Department of Environmental Protection (WVDEP) and took corrective actions to ensure that the Stone pads are in compliance with their requisite permits. On April 21, 2021, the WVDEP requested additional information from us related to this matter, and we responded to their requests on April 30,year ended December 31, 2021. While we believe that there is a reasonable possibility that the penalties related to this matter may exceed $300,000, we expect that the resolution of this matter will not have a material impact on our financial condition, results of operations or liquidity.

~~See also “Commitments and Contingencies” under Part I, Item 2. “Management's Discussion and Analysis of Financial Condition and Results of Operations.”~~

Item 1A. Risk Factors

There have been no material changes ~~from~~to the risk factors previously disclosed in Item ~~1A,~~1A., "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Conversion of Certain Convertible Notes

In March 2022, we received notices from holders of the Convertible Notes (defined and described in Note 6 to the Condensed Consolidated Financial Statements) requesting the conversion of the aggregate principal of Convertible Notes stated in the table below (the Converted Notes). We ~~did not repurchase any~~settled the conversion of the Converted Notes by issuing to the converting holders of the Converted Notes shares of EQT common stock. Such shares were issued in transactions exempt from registration under the Securities Act of 1933, as amended, by virtue of Section 3(a)(9) thereof, because no commission or other remuneration was paid in connection with conversion of the Converted Notes.


Settlement Date	Principal Converted		Shares Issued	Fair Market Value
	(Thousands)			(Thousands)
March 31, 2022	$	8	536	$	18
April 4, 2022	26		1,742	63

Repurchases of Equity Securities

The following table sets forth our repurchases of equity securities registered under Section 12 of the ~~Securities~~ Exchange Act ~~of 1934, as amended,~~that have occurred during the three months ended March 31, ~~2021.~~2022.


	Total number of shares purchased (a)	Average price paid per share (b)		Total number of shares purchased as part of publicly announced plans or programs (c)	Approximate dollar value of shares that may yet be purchased under the plans or programs (c)
January 1, 2022 – January 31, 2022	1,119,691	$	20.88	1,118,569	$	947,284,444
February 1, 2022 – February 28, 2022	3,772,657	22.41		3,772,657	862,731,746
March 1, 2022 – March 31, 2022	3,641,659	25.25		3,641,659	770,784,573
Total	8,534,007			8,532,885

(a)In January 2022, we withheld 1,122 shares at an average price paid per share of $21.81 to pay taxes upon vesting of restricted stock. There were no shares withheld to pay taxes upon vesting of restricted stock in February and March 2022.

(b)Excludes any fees, commissions or other expenses associated with the share repurchases.

(c)On December 13, 2021, we announced that our Board of Directors approved a share repurchase program to repurchase shares of our outstanding common stock for an aggregate purchase price of up to $1 billion, excluding fees, commissions and expenses. Pursuant to the share repurchase authority, we may repurchase shares from time to time in the open market or in privately negotiated transactions. The share repurchase authority does not obligate us to acquire any specific number of shares, was effective immediately and is valid through December 31, 2023. As of March 31, 2022, we had purchased shares for an aggregate purchase price of $229.2 million, excluding fees, commissions and expenses, under this authorization since its inception. The total number of shares purchased and the approximate dollar value of shares that may yet be purchased under our repurchase authority reported in this table reflect shares purchased in each month based on the trade date; however, certain purchases may not have settled until the following month.

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Item 6. Exhibits

Exhibit No.

Description

Method of Filing

3.01(a)

Restated Articles of Incorporation of EQT Corporation (as amended through November 13, 2017).

Incorporated herein by reference to Exhibit 3.1 to Form 8-K (#001-3551) filed on November 14, 2017.

3.01(b)

Articles of Amendment to the Restated Articles of Incorporation of EQT Corporation (effective May 1, 2020).

Incorporated herein by reference to Exhibit 3.1 to Form 8-K (#001-3551) filed on May 4, 2020.

3.01(c)

Articles of Amendment to the Restated Articles of Incorporation of EQT Corporation (effective July 23, 2020).

Incorporated herein by reference to Exhibit 3.1 to Form 8-K (#001-3551) filed on July 23, 2020.

3.02

Amended and Restated Bylaws of EQT Corporation (as amended through May 1, 2020).

Incorporated herein by reference to Exhibit 3.4 to Form 8-K (#001-3551) filed on May 4, 2020.

*10.01(a)10.01*

Letter Agreement ~~(Wherry)~~(Ealy North – February 2022), dated February ~~2, 2021,~~4, 2022, among EQT Corporation, EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and EQM Gathering ~~OpCo,~~Opco, LLC, amending that certain Gas Gathering and Compression Agreement, dated February 26, 2020, as ~~amended.~~amended and restated.

Filed herewith as Exhibit ~~10.01(a).~~

*10.01(b)

Letter Agreement (Ealy), dated February 3, 2021, among EQT Corporation, EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and EQM Gathering OpCo, LLC, amending that certain Gas Gathering and Compression Agreement, dated February 26, 2020, as amended.

~~Filed herewith as Exhibit 10.01(b).~~

*10.01(c)

Letter Agreement (Oxford 43), dated February 9, 2021, among EQT Corporation, EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and EQM Gathering OpCo, LLC, and acknowledged and agreed to by Rice Drilling D LLC and EQM Olympus Midstream, LLC, amending that certain Gas Gathering and Compression Agreement, dated February 26, 2020, as amended.

~~Filed herewith as Exhibit 10.01(c).~~

*10.01(d)

Letter Agreement (JT Farms), dated February 23, 2021, among EQT Corporation, EQT Production Company, Rice Drilling B LLC, EQT Energy, LLC and EQM Gathering OpCo, LLC, amending that certain Gas Gathering and Compression Agreement, dated February 26, 2020, as amended.

~~Filed herewith as Exhibit 10.01(d).~~

~~10.02~~

Extension Agreement and First Amendment to Second Amended and Restated Credit Agreement, dated as of April 23, 2021, among EQT Corporation, PNC Bank, National Association, as administrative agent, and each lender party thereto.

~~Incorporated herein by reference to Exhibit 10.1 to Form 8-K (#001-3551) filed on April 26, 2021.~~10.01.

31.01

Rule 13(a)-14(a) Certification of Principal Executive Officer.

Filed herewith as Exhibit 31.01.

31.02

Rule 13(a)-14(a) Certification of Principal Financial Officer.

Filed herewith as Exhibit 31.02.

Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.

Furnished herewith as Exhibit 32.

101

Interactive Data File.

Filed herewith as Exhibit 101.

104

Cover Page Interactive Data File.

Formatted as Inline XBRL and contained in Exhibit 101.

*Certain ~~terms in~~schedules and similar attachments to this exhibit have been ~~redacted~~omitted pursuant to Item 601(a)(5) and/or Item 601(b)(10)(iv), as applicable, of Regulation S-K. AEQT Corporation agrees to furnish an unredacted, supplemental copy ~~of the unredacted exhibit will be furnished~~(including any omitted schedule or attachment) to the SEC upon request. ~~Omissions~~Redactions and omissions are designated with brackets containing asterisks.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~Registrant~~registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


						EQT CORPORATION
						(Registrant)


			By:			/s/ David M. Khani
						David M. Khani
						Chief Financial Officer

Date: ~~May 6, 2021~~April 28, 2022

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		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Statements of Condensed Consolidated Operations	3
	Statements of Condensed Consolidated Comprehensive ~~(Loss) Income~~Loss	4
	Condensed Consolidated Balance Sheets	5
	Statements of Condensed Consolidated Cash Flows	6
	Statements of Condensed Consolidated Equity	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	2829

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2930
Item 6.	Exhibits	3031

Signature		3132


	2021 (a)		2022		2023		Total
	(Thousands)
Natural gas sales	$	133,576	$	8,158	$	6,794	$	148,528