SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			FOR THE QUARTERLY PERIOD ENDED JUNE 30, ~~2021~~2022

☐

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

FOR THE TRANSITION PERIOD FROM__________ TO__________


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)

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 July ~~23, 2021, 378,016,134~~22, 2022, 369,956,790 shares of common stock, no par value, of the registrant were outstanding.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS (UNAUDITED)

Three Months Ended
June 30, Six Months Ended
June 30,
2021 2020 2021 2020
(Thousands, except per share amounts)
Operating revenues:
Sales of natural gas, natural gas liquids and oil $ 1,077,904 $ 498,772 $ 2,208,855 $ 1,213,973
(Loss) gain on derivatives not designated as hedges (1,345,532) 26,426 (1,534,345) 415,862
Net marketing services and other 7,512 1,876 15,297 4,296
Total operating revenues (260,116) 527,074 689,807 1,634,131
Operating expenses:
Transportation and processing 464,016 405,636 909,800 845,470
Production 47,546 38,329 94,776 78,709
Exploration 1,779 876 2,728 1,799
Selling, general and administrative 49,853 43,341 94,859 78,279
Depreciation and depletion 380,288 323,096 757,404 680,622
Amortization of intangible assets 0 7,477 0 14,955
(Gain) loss on sale/exchange of long-lived assets (16,816) 49,207 (18,023) 98,059
Impairment and expiration of leases 25,634 41,279 42,391 95,047
Other operating expenses 5,225 4,745 14,668 4,745
Total operating expenses 957,525 913,986 1,898,603 1,897,685
Operating loss (1,217,641) (386,912) (1,208,796) (263,554)
Gain on Equitrans Share Exchange (see Note 8) 0 0 0 (187,223)
(Income) loss from investments (11,829) (82,983) (23,677) 307,645
Dividend and other income (3,765) (3,590) (7,069) (28,304)
Loss on debt extinguishment 5,332 353 9,756 16,963
Interest expense 76,986 65,386 152,085 127,760
Loss before income taxes (1,284,365) (366,078) (1,339,891) (500,395)
Income tax benefit (347,846) (103,003) (362,340) (70,181)
Net loss (936,519) (263,075) (977,551) (430,214)
Less: Net loss attributable to noncontrolling interest (62) 0 (576) 0
Net loss attributable to EQT Corporation $ (936,457) $ (263,075) $ (976,975) $ (430,214)
Loss per share of common stock attributable to EQT Corporation:
Basic:
Weighted average common stock outstanding 279,156 255,524 278,996 255,477
Net loss $ (3.35) $ (1.03) $ (3.50) $ (1.68)
Diluted:
Weighted average common stock outstanding 279,156 255,524 278,996 255,477
Net loss $ (3.35) $ (1.03) $ (3.50) $ (1.68)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021

	(Thousands, except per share amounts)
Operating revenues:
Sales of natural gas, natural gas liquids and oil	$	3,365,211	$	1,077,904	$	5,851,835	$	2,208,855
Loss on derivatives	(845,095)		(1,345,532)		(3,922,732)		(1,534,345)
Net marketing services and other	7,392		7,512		19,295		15,297
Total operating revenues	2,527,508		(260,116)		1,948,398		689,807
Operating expenses:
Transportation and processing	539,704		464,016		1,055,808		909,800
Production	82,556		47,546		153,568		94,776
Exploration	1,741		1,779		2,513		2,728
Selling, general and administrative	59,276		49,853		128,372		94,859
Depreciation and depletion	429,143		380,288		851,241		757,404
Gain on sale/exchange of long-lived assets	(981)		(16,816)		(2,190)		(18,023)
Impairment of contract asset	—		—		184,945		—
Impairment and expiration of leases	47,048		25,634		77,039		42,391
Other operating expenses	7,120		5,225		23,467		14,668
Total operating expenses	1,165,607		957,525		2,474,763		1,898,603
Operating income (loss)	1,361,901		(1,217,641)		(526,365)		(1,208,796)
(Income) loss from investments	(3,577)		(11,829)		17,208		(23,677)
Dividend and other income	(7,313)		(3,765)		(10,909)		(7,069)
Loss on debt extinguishment	104,348		5,332		111,271		9,756
Interest expense	65,985		72,254		133,887		142,727
Income (loss) before income taxes	1,202,458		(1,279,633)		(777,822)		(1,330,533)
Income tax expense (benefit)	308,234		(346,311)		(157,463)		(359,270)
Net income (loss)	894,224		(933,322)		(620,359)		(971,263)
Less: Net income (loss) attributable to noncontrolling interests	2,863		(62)		4,328		(576)
Net income (loss) attributable to EQT Corporation	$	891,361	$	(933,260)	$	(624,687)	$	(970,687)

Income (loss) per share of common stock attributable to EQT Corporation:
Basic:
Weighted average common stock outstanding	369,866		279,156		372,023		278,996
Net income (loss)	$	2.41	$	(3.34)	$	(1.68)	$	(3.48)
Diluted:
Weighted average common stock outstanding	407,303		279,156		372,023		278,996
Net income (loss)	$	2.19	$	(3.34)	$	(1.68)	$	(3.48)

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

EQT CORPORATION AND SUBSIDIARIES

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

Three Months Ended
June 30, Six Months Ended
June 30,
2021 2020 2021 2020
(Thousands)
Net loss $ (936,519) $ (263,075) $ (977,551) $ (430,214)
Other comprehensive income, net of tax:
Other post-retirement benefits liability adjustment, net of tax expense: $27, $24, $54 and $48 81 72 161 84
Comprehensive loss (936,438) (263,003) (977,390) (430,130)
Less: Comprehensive loss attributable to noncontrolling interests (62) 0 (576) 0
Comprehensive loss attributable to EQT Corporation $ (936,376) $ (263,003) $ (976,814) $ (430,130)


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021

	(Thousands)
Net income (loss)	$	894,224	$	(933,322)	$	(620,359)	$	(971,263)
Other comprehensive income, net of tax:
Other postretirement benefits liability adjustment, net of tax expense: $21, $27, $41 and $54	64		81		127		161
Comprehensive income (loss)	894,288		(933,241)		(620,232)		(971,102)
Less: Comprehensive income (loss) attributable to noncontrolling interests	2,863		(62)		4,328		(576)
Comprehensive income (loss) attributable to EQT Corporation	$	891,425	$	(933,179)	$	(624,560)	$	(970,526)

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

EQT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Common stock, no par value,

shares authorized: 640,000, shares issued: 369,912 and 377,432

Common stock, no par value,

shares authorized: 640,000, shares issued: 369,912 and 377,432

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

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS (UNAUDITED)

Six Months Ended June 30,
2021 2020
(Thousands)
Cash flows from operating activities:
Net loss $ (977,551) $ (430,214)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income tax (benefit) expense (362,299) 24,987
Depreciation and depletion 757,404 680,622
Amortization of intangible assets 0 14,955
Gain/loss on sale/exchange of long-lived assets and impairment and expiration of leases 24,368 193,106
Gain on Equitrans Share Exchange 0 (187,223)
(Income) loss from investments (23,677) 307,645
Loss on debt extinguishment 9,756 16,963
Share-based compensation expense 13,515 8,123
Amortization, accretion and other 22,097 12,614
Loss (gain) on derivatives not designated as hedges 1,534,345 (415,862)
Cash settlements (paid) received on derivatives not designated as hedges (109,581) 561,129
Net premiums received (paid) on derivative instruments 3,654 (53,473)
Changes in other assets and liabilities:
Accounts receivable (99,564) 206,322
Accounts payable 111,191 (85,973)
Income tax receivable and payable (23,909) 96,920
Other current assets (422,618) (2,597)
Other items, net (13,737) (923)
Net cash provided by operating activities 443,394 947,121
Cash flows from investing activities:
Capital expenditures (470,259) (512,095)
Cash paid for acquisitions (209,764) 0
Proceeds from sale of assets 0 110,937
Cash received for Equitrans Share Exchange 0 52,323
Other investing activities 5,125 (135)
Net cash used in investing activities (674,898) (348,970)
Cash flows from financing activities:
Proceeds from credit facility borrowings 2,686,000 781,000
Repayment of credit facility borrowings (2,986,000) (1,037,000)
Proceeds from issuance of debt 1,000,000 2,250,000
Debt issuance costs and Capped Call Transactions (See Note 6) (19,713) (65,102)
Repayments and retirements of debt (127,691) (2,507,074)
Premiums paid on debt extinguishment (9,599) (13,635)
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 (2,683) (304)
Net cash provided by (used in) financing activities 544,064 (599,779)
Net change in cash and cash equivalents 312,560 (1,628)
Cash and cash equivalents at beginning of period 18,210 4,596
Cash and cash equivalents at end of period $ 330,770 $ 2,968


	Six Months Ended June 30,
	2022		2021

	(Thousands)
Cash flows from operating activities:
Net loss	$	(620,359)	$	(971,263)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income tax benefit	(164,677)		(359,229)
Depreciation and depletion	851,241		757,404
Impairments of long-lived assets and gain on sale/exchange of long-lived assets	259,794		24,368
Loss (income) from investments	17,208		(23,677)
Loss on debt extinguishment	111,271		9,756
Share-based compensation expense	21,558		13,515
Amortization, accretion and other	31,256		12,739
Loss on derivatives	3,922,732		1,534,345
Net cash settlements paid on derivatives	(2,639,271)		(109,581)
Net premiums received on derivative instruments	14,073		3,654
Changes in other assets and liabilities:
Accounts receivable	(626,620)		(99,564)
Accounts payable	360,208		111,191
Other current assets	(190,358)		(422,618)
Other items, net	(96,416)		(37,646)
Net cash provided by operating activities	1,251,640		443,394
Cash flows from investing activities:
Capital expenditures	(684,972)		(470,259)
Cash paid for acquisitions	—		(209,764)
Proceeds from sale/exchange of assets	2,414		—
Proceeds from sale of investment shares	189,249		—
Other investing activities	(14,376)		5,125
Net cash used in investing activities	(507,685)		(674,898)
Cash flows from financing activities:
Proceeds from credit facility borrowings	6,237,000		2,686,000
Repayment of credit facility borrowings	(6,137,000)		(2,986,000)
Proceeds from issuance of debt	—		1,000,000
Debt issuance costs	(9,154)		(19,713)
Repayment and retirement of debt	(576,640)		(127,691)
Premiums paid on debt extinguishment	(15,128)		(9,599)
Dividends paid	(93,272)		—
Cash paid for taxes related to net settlement of share-based incentive awards	(13,742)		(2,683)
Proceeds from exercises under employee compensation plans	13,882		—
Repurchase and retirement of common stock	(216,491)		—
(Distribution to) contribution from noncontrolling interest	(2,894)		3,750
Other financing activities	(734)		—
Net cash (used in) provided by financing activities	(814,173)		544,064
Net change in cash and cash equivalents	(70,218)		312,560
Cash and cash equivalents at beginning of period	113,963		18,210
Cash and cash equivalents at end of period	$	43,745	$	330,770

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

See Note 1 for supplemental cash flow information.

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED EQUITY (UNAUDITED)

Common Stock Accumulated Other
Comprehensive Loss (a) Noncontrolling Interests in Consolidated Subsidiaries
Shares No Par
Value Treasury Stock Retained Earnings Total Equity
(Thousands, except per share amounts)
Balance at April 1, 2020 255,262 $ 7,821,631 $ (30,852) $ 1,848,286 $ (5,187) $ 0 $ 9,633,878
Comprehensive loss, net of tax:
Net loss (263,075) (263,075)
Other postretirement benefits liability adjustment, net of tax expense: $24 72 72
Share-based compensation plans 28 3,796 511 4,307
Equity component of convertible senior notes (See Note 6) 63,645 63,645
Balance at June 30, 2020 255,290 $ 7,889,072 $ (30,341) $ 1,585,211 $ (5,115) $ 0 $ 9,438,827
Balance at April 1, 2021 278,781 $ 8,238,643 $ (21,469) $ 1,007,741 $ (5,275) $ 10,726 $ 9,230,366
Comprehensive loss, net of tax:
Net loss (936,457) (62) (936,519)
Other postretirement benefits liability adjustment, net of tax expense: $27 81 81
Share-based compensation plans 77 7,109 1,385 8,494
Balance at June 30, 2021 278,858 $ 8,245,752 $ (20,084) $ 71,284 $ (5,194) $ 10,664 $ 8,302,422


	Common Stock
	Shares	No Par Value		Treasury Stock		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss (a)		Noncontrolling Interest in Consolidated Subsidiaries		Total Equity

	(Thousands, except per share amounts)
Balance at April 1, 2021	278,781	$	8,142,498	$	(21,469)	$	1,019,199	$	(5,275)	$	10,726	$	9,145,679
Comprehensive loss, net of tax:
Net loss						(933,260)				(62)		(933,322)
Other postretirement benefits liability adjustment, net of tax expense: $27								81				81
Share-based compensation plans	77	7,109		1,385								8,494
Balance at June 30, 2021	278,858	$	8,149,607	$	(20,084)	$	85,939	$	(5,194)	$	10,664	$	8,220,932

Balance at April 1, 2022	369,074	$	9,921,348	$	(2,848)	$	(1,725,279)	$	(4,548)	$	17,360	$	8,206,033
Comprehensive income, net of tax:
Net income						891,361				2,863		894,224
Other postretirement benefits liability adjustment, net of tax expense: $21								64				64
Dividends ($0.125 per share)						(46,209)						(46,209)
Share-based compensation plans	645	27,268										27,268
Convertible Notes settlements (Note 6)	1	30										30
Distribution to noncontrolling interest										(2,553)		(2,553)
Other										11,233		11,233
Balance at June 30, 2022	369,720	$	9,948,646	$	(2,848)	$	(880,127)	$	(4,484)	$	28,903	$	9,090,090

Common shares authorized: ~~320,000 and 640,000 at June 30, 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, 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.

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED EQUITY (UNAUDITED)

Common Stock Accumulated Other
Comprehensive Loss (a) Noncontrolling Interests in Consolidated Subsidiaries
Shares No Par
Value Treasury Stock Retained Earnings 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 (430,214) (430,214)
Other postretirement benefit liability adjustment, net of tax expense: $48 84 84
Dividends ($0.03 per share) (7,664) (7,664)
Share-based compensation plans 119 7,222 2,166 9,388
Equity component of convertible senior notes (See Note 6) 63,645 63,645
Balance at June 30, 2020 255,290 $ 7,889,072 $ (30,341) $ 1,585,211 $ (5,115) $ 0 $ 9,438,827
Balance at January 1, 2021 278,345 $ 8,241,684 $ (29,348) $ 1,048,259 $ (5,355) $ 7,490 $ 9,262,730
Comprehensive loss, net of tax:
Net loss (976,975) (576) (977,551)
Other postretirement benefit liability adjustment, net of tax expense: $54 161 161
Share-based compensation plans 513 4,068 9,264 13,332
Contributions from noncontrolling interests 3,750 3,750
Balance at June 30, 2021 278,858 $ 8,245,752 $ (20,084) $ 71,284 $ (5,194) $ 10,664 $ 8,302,422


	Common Stock
	Shares	No Par Value		Treasury Stock		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss (a)		Noncontrolling Interest in Consolidated Subsidiaries		Total Equity

	(Thousands, except per share amounts)
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:
Net loss						(970,687)				(576)		(971,263)
Other postretirement benefits liability adjustment, net of tax expense: $54								161				161
Share-based compensation plans	513	4,068		9,264								13,332
Contribution from noncontrolling interest										3,750		3,750
Balance at June 30, 2021	278,858	$	8,149,607	$	(20,084)	$	85,939	$	(5,194)	$	10,664	$	8,220,932

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:
Net (loss) income						(624,687)				4,328		(620,359)
Other postretirement benefits liability adjustment, net of tax expense: $41								127				127
Dividends ($0.25 per share)						(93,272)						(93,272)
Share-based compensation plans	1,852	9,048		15,198								24,246
Convertible Notes settlements (Note 6)	2	38										38
Repurchase and retirement of common stock	(8,533)	(132,260)				(67,768)						(200,028)
Distribution to noncontrolling interest										(2,894)		(2,894)
Other										11,233		11,233
Balance at June 30, 2022	369,720	$	9,948,646	$	(2,848)	$	(880,127)	$	(4,484)	$	28,903	$	9,090,090

Common shares authorized: ~~320,000 and 640,000 at June 30, 2020 and 2021, respectively.~~

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

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 June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the results of its operations and equity for the three and six month periods ended June 30, ~~2021~~2022 and ~~2020~~2021 and its cash flows for the six month periods ended June 30, ~~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 Accounting Standards Codification (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 changes to its financial statements or 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 that 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 and disclosures.~~the Company's previously reported historical results. See Note 6 for discussion of the Convertible Notes (defined in Note 6).


	Three Months Ended June 30, 2021
	As Reported		ASU 2020-06 Adoption Adjustment		As Adjusted

	(Thousands, except per share amounts)
Interest expense	$	76,986	$	(4,732)	$	72,254
Income tax benefit	(347,846)		1,535		(346,311)

Net loss	(936,519)		3,197		(933,322)
Less: Net loss attributable to noncontrolling interest	(62)		—		(62)
Net loss attributable to EQT Corporation	$	(936,457)	$	3,197	$	(933,260)

Basic and diluted:
Weighted average common stock outstanding (a)	279,156		—		279,156
Loss per share of common stock attributable to EQT Corporation	$	(3.35)	$	0.01	$	(3.34)

(a)For the three months ended June 30, 2021, diluted weighted average common stock outstanding did not change because the potentially dilutive securities had an anti-dilutive effect on loss per share.

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

Six Months Ended June 30,
2021 2020
(Thousands)
Cash paid (received) during the period for:
Interest, net of amount capitalized $ 127,082 $ 74,596
Income taxes, net 21,768 (191,598)
Non-cash activity during the period for:
Increase in right-of-use lease assets and liabilities $ 1,091 $ 1,697
Increase in asset retirement costs and obligations 1,943 6,596
Capitalization of non-cash equity share-based compensation 2,499 1,611

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)


	Six Months Ended June 30, 2021
	As Reported		ASU 2020-06 Adoption Adjustment		As Adjusted

	(Thousands, except per share amounts)
Interest expense	$	152,085	$	(9,358)	$	142,727
Income tax benefit	(362,340)		3,070		(359,270)

Net loss	(977,551)		6,288		(971,263)
Less: Net loss attributable to noncontrolling interest	(576)		—		(576)
Net loss attributable to EQT Corporation	$	(976,975)	$	6,288	$	(970,687)

Basic and diluted:
Weighted average common stock outstanding (a)	278,996		—		278,996
Loss per share of common stock attributable to EQT Corporation	$	(3.50)	$	0.02	$	(3.48)

(a)For the six months ended June 30, 2021, diluted weighted average common stock outstanding did not change because the potentially dilutive securities had an anti-dilutive effect on loss per share.


	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, 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 for the six months ended June 30, 2021 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.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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.


	Six Months Ended June 30,
	2022		2021

	(Thousands)
Cash paid during the period for:
Interest, net of amount capitalized	$	133,269	$	127,082
Income taxes, net	6,415		21,768

Non-cash activity during the period for:
Increase in asset retirement costs and obligations	$	10,245	$	1,943
Capitalization of non-cash equity share-based compensation	2,550		2,499
Increase in right-of-use assets and lease liabilities, net	819		1,091
Issuance of common stock for Convertible Notes settlements (see Note 6)	38		—

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.

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.

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 ~~$471.5~~$1,558.1 million and ~~$394.1~~$1,093.9 million in accounts receivable in the Condensed Consolidated Balance Sheets as of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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 volume~~ 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.

The following table summarizes the transaction price allocated to the Company's remaining performance obligations on all contracts with fixed consideration as of June 30, ~~2021.~~2022. Amounts shown exclude contracts that qualified for the exception to the relative standalone selling price method as of June 30, ~~2021.~~2022.

2021 (a) 2022 2023 Total
(Thousands)
Natural gas sales $ 87,901 $ 8,158 $ 6,794 $ 102,853


	2022 (a)		2023		Total

	(Thousands)
Natural gas sales	$	12,148	$	10,747	$	22,895

(a)July 1 through December 31.

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~~EQT CORPORATION AND SUBSIDIARIES~~

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

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.

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 loss on derivatives in the Statements of Condensed Consolidated Operations. Because the Company does not designate any of its derivative instruments as cash flow hedges, the Company has changed the references to "derivatives not designated as hedges" to "derivatives" throughout the Condensed Consolidated Financial Statements as of and for the three and six months ended June 30, 2022. 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.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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 ~~2,773 Bcf~~2,227 billion cubic feet (Bcf) of natural gas and ~~7,687 Mbbl~~1,830 thousand barrels (Mbbl) of NGLs as of June 30, ~~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 June 30, ~~2021~~2022 and December 31, ~~2020~~2021 had maturities extending through December ~~2027 and December 2024, respectively.~~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 Ratings Service (Fitch).~~Fitch. Anything below these ratings is considered non-investment grade. As of June 30, ~~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 June 30, ~~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 ~~$1,166.3~~$465.0 million and ~~$137.7~~$594.9 million, respectively, for which the Company deposited and recorded current assets of ~~$284.4~~$238.0 million and ~~$21.1~~$0.1 million, respectively.

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~~EQT CORPORATION AND SUBSIDIARIES~~

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

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 June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, there were 0no such deposits recorded in the Condensed Consolidated Balance Sheets.

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 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 June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company recorded ~~$205.7~~$109.4 million and ~~$61.5~~$147.7 million, respectively, of such deposits as current assets in the Condensed Consolidated Balance Sheets.

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EQT CORPORATION AND SUBSIDIARIES

Notes to ~~Note 8 for a discussion of~~ the ~~derivative liability recorded in connection with the Equitrans Share Exchange (defined in Note 8).~~Condensed Consolidated Financial Statements (Unaudited)

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)									(Thousands)
June 30, 2021
June 30, 2022										June 30, 2022
Asset derivative instruments, at fair value	Asset derivative instruments, at fair value	$	648,855	$	(576,429)	$	0	$	72,426	Asset derivative instruments, at fair value	$	1,409,199	$	(1,363,094)	$	—	$	46,105
Liability derivative instruments, at fair value	Liability derivative instruments, at fair value	2,160,253		(576,429)		(490,109)		1,093,715		Liability derivative instruments, at fair value	4,568,003		(1,363,094)		(347,426)		2,857,483

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 June 30, 2022 and December 31, 2021, the derivative liability related to the Henry Hub Cash Bonus had a fair value of approximately $53 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 June 30, 2022 and December 31, 2021, the derivative asset related to the Contingent Consideration had a fair value of approximately $3.9 million and $8.2 million, respectively. During the six months ended June 30, 2022 and 2021, the Company received cash from the Contingent Consideration of $4.5 million and $0.6 million, respectively. 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.

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.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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.

The carrying values of cash equivalents, accounts receivable and accounts payable approximate fair value due to their short-term maturities. The December 31, 2021 carrying value of the Company's investment in Equitrans Midstream Corporation (Equitrans Midstream) approximates fair value as Equitrans Midstream is a publicly traded company. In April 2022, the Company sold the remaining balance of its Equitrans Midstream common stock for net proceeds of approximately $189 million. 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.

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.

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 June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company's senior notes had a fair value of approximately ~~$6.5~~$5.4 billion and ~~$5.2~~$6.5 billion, respectively, and a carrying value of approximately ~~$5.4~~$4.8 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 June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company's note payable to EQM had a fair value of approximately ~~$123~~$102 million and ~~$130~~$118 million, respectively, and a carrying value of approximately ~~$102~~$97 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.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the six months ended June 30, ~~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 six months ended June 30, ~~2021.~~2022.

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~~EQT CORPORATION AND SUBSIDIARIES~~

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

The Company recorded income tax benefit at an effective tax rate of ~~27.0%~~20.2% and ~~14.0%~~27.0% for the six months ended June 30, 2022 and 2021, ~~and 2020,~~ respectively. The Company's effective tax rate for the six months ended June 30, 2022 was lower compared to the U.S. federal statutory rate due primarily to nondeductible repurchase premiums on the Convertible Notes, partly offset by state taxes, including valuation allowances limiting certain state tax benefits. The Company's effective tax rate for the six months ended June 30, 2021 was higher compared to the U.S. federal statutory rate due primarily to state taxes, including valuation allowances limiting certain state tax benefits and West Virginia tax legislation enacted on April 13, 2021 that changed the way taxable income is apportioned to West Virginia for tax years beginning on or after January 1, 2022.

~~The Company's effective~~

On July 8, 2022, the Pennsylvania General Assembly enacted House Bill 1342, which reduces the corporate net income tax rate from 9.99% to 8.99% in 2023 and continues to reduce that rate by 0.5% per year beginning in 2024 and ending at 4.99% in 2031 and thereafter. The Company is evaluating the impact this change in law will have on the Company's consolidated financial statements.

The table below summarizes the Company's outstanding debt.


	June 30, 2022				December 31, 2021
	Principal Value		Carrying Value (a)			Principal Value		Carrying Value (a)

	(Thousands)
Credit Facility expiring June 28, 2027	$	100,000	$	100,000		$	—	$	—
Senior notes:
3.00% notes due October 1, 2022	—		—			568,823		567,909
7.42% series B notes due 2023	10,000		10,000			10,000		10,000
6.625% notes due February 1, 2025 (b)	995,315		990,848			1,000,000		994,643
1.75% convertible notes due May 1, 2026	434,856		425,225			499,991		487,543
3.125% notes due May 15, 2026	497,694		491,661			500,000		493,157
7.75% debentures due July 15, 2026	115,000		112,970			115,000		112,721
3.90% notes due October 1, 2027	1,250,000		1,243,919			1,250,000		1,243,340
5.00% notes due January 15, 2029	349,565		344,771			350,000		344,835
7.500% notes due February 1, 2030 (b)	737,650		732,498			750,000		744,417
3.625% notes due May 15, 2031	500,000		493,060			500,000		492,669
Note payable to EQM	97,117		97,117			99,838		99,838
Total debt	5,087,197		5,042,069			5,643,652		5,591,072
Less: Current portion of debt (c)	450,531		440,900			1,074,332		1,060,970
Long-term debt	$	4,636,666	$	4,601,169		$	4,569,320	$	4,530,102

(a)For the Company's credit facility and note payable to EQM, the principal value represents the carrying value. For all other debt, the principal value less the unamortized debt issuance costs and debt discounts represents the carrying value.

(b)Interest rates for this tranche of the Company's senior notes fluctuate based on changes to the credit ratings assigned to the Company's senior notes by Moody's, S&P and Fitch. Interest rates on the Company's other outstanding senior notes do not fluctuate based on changes to the credit ratings assigned to its senior notes by Moody's, S&P and Fitch.

(c)As of June 30, 2022, the current portion of debt includes the 7.42% series B notes, the 1.75% convertible notes (described below) and a portion of the note payable to EQM. As of December 31, 2021, the current portion of debt includes the 3.00% notes, the 1.75% convertible notes and a portion of the note payable to EQM.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Debt repayments. The Company redeemed or repurchased the following debt during the six months ended June 30, ~~2020 was lower compared~~2022.


Debt Tranche	Principal (a)		Premiums/(Discounts) (a)		Accrued but Unpaid Interest		Total Cost

	(Thousands)
3.00% notes due October 1, 2022	$	568,823	$	5,546	$	7,150	$	581,519
6.625% notes due February 1, 2025	4,685		142		130		4,957
1.75% convertible notes due May 1, 2026	65,096		101,879		186		167,161
3.125% notes due May 15, 2026	2,306		(143)		10		2,173
5.00% notes due January 15, 2029	435		(15)		10		430
7.500% notes due February 1, 2030	12,350		877		387		13,614

(a)Of the total principal repurchased and premiums recorded during the six months ended June 30, 2022, approximately $80 million and $94 million, respectively, were accrued but not yet paid as of June 30, 2022 due to 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 halftiming of ~~2020 that, if such investment is sold, would become capital losses. The Company believes that it is more likely than not that such additional unrealized losses will not be realized for tax purposes.~~settlements.

The Company redeemed or repurchased the following debt during the period beginning July 1, 2022 and ending July 26, 2022.

~~6. Debt~~


Debt Tranche	Principal		Premiums/(Discounts)		Accrued but Unpaid Interest		Total Cost

	(Thousands)
6.625% notes due February 1, 2025	$	79,721	$	2,904	$	2,491	$	85,116
1.75% convertible notes due May 1, 2026	20,000		26,027		64		46,091
3.125% notes due May 15, 2026	34,340		(1,907)		177		32,610
3.90% notes due October 1, 2027	15,567		(643)		188		15,112
5.00% notes due January 15, 2029	13,111		(430)		185		12,866
7.500% notes due February 1, 2030	7,650		551		253		8,454
3.625% notes due May 15, 2031	4,835		(601)		28		4,262

Credit facility. The Company has a $2.5 billion credit facility. On ~~April 23, 2021,~~June 28, 2022, the Company entered into ~~an Extension Agreement and First Amendment to Second~~the Third Amended and Restated Credit Agreement (the ~~Extension Agreement~~Third Amendment) with the lenders party thereto and ~~First Amendment),~~PNC Bank, National Association, as administrative agent, swing line lender and L/C issuer, amending and restating the Second Amended and Restated Credit Agreement, dated as of 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~~Third 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,~~June 28, 2027 and provides at the Company's option 2 one-year extensions thereafter, subject to the approval of the lenders, (ii) ~~adds customary provisions~~allows for commitment increases of up to ~~provide for~~$500 million, subject to the ~~eventual replacement~~agreement of ~~LIBOR as a benchmark interest rate~~the Company and new or existing lenders and (iii) ~~adds an additional pricing level~~allows for ~~the Applicable~~Base Rate ~~(as~~Loans, Term SOFR Rate Loans and Swing Line Loans (each defined in the ~~Credit Agreement)~~Third Amendment).

The Company had approximately ~~$670~~$208 million and ~~$791~~$440 million of letters of credit outstanding under its credit facility as of June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Under the Company's credit facility, for the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the maximum ~~amounts~~amount of outstanding borrowings ~~were $578~~was $1,300 million and ~~$173~~$578 million, respectively, the average daily balances were approximately ~~$236~~$844 million and ~~$35~~$236 million, respectively, and interest was incurred at a weighted average annual interest ~~rates~~rate of ~~2.1%~~2.3% and ~~2.4%~~2.1%, respectively. Under the Company's credit facility, for the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, the maximum ~~amounts~~amount of outstanding borrowings ~~were $890~~was $1,300 million and ~~$356~~$890 million, respectively, the average daily balances were approximately ~~$188~~$576 million and ~~$60~~$188 million, respectively, and interest was incurred at a weighted average annual interest ~~rates~~rate of ~~2.1%~~2.2% and ~~2.9%~~2.1%, respectively.

~~Term loan facility.~~Table of Contents ~~The Company had a $1.0 billion term loan facility that was scheduled~~

EQT CORPORATION AND SUBSIDIARIES

Notes to ~~mature in May 2021. On June 30, 2020,~~ the Company used proceeds from the offering of its Convertible Notes (see below), cash from its income tax refunds and proceeds from the 2020 Divestiture (see Note 9) to fully repay its term loan facility. Under the Company's term loan facility, for the three and six months ended June 30, 2020, the average daily balances were approximately $431 million and $692 million, respectively, and interest was incurred at weighted average annual interest rates of 2.2% and 2.6%, respectively.Condensed Consolidated Financial Statements (Unaudited)

3.125% senior notes and 3.625% senior ~~notes~~notes.. On May 17, 2021, the Company issued $500 million aggregate principal amount of 3.125% senior notes due May 15, 2026 and $500 million aggregate principal amount of 3.625% senior notes due May 15, 2031. After deducting offering costs of $15.6 million, net proceeds from the sale of the notes of $984.4 million were used to partly fund the Alta Acquisition (defined ~~and described~~ in Note ~~10)~~9). The covenants of the 3.125% senior notes and 3.625% senior notes are consistent with the Company's existing senior unsecured ~~notes. Similar to the 5.00% senior notes due January 2029 issued in November 2020,~~notes; however, the 3.125% senior notes and 3.625% senior notes include an offer to repurchase provision applicable upon the occurrence of certain change of control events specified in the applicable indentures.

~~4.875% senior notes~~. On February 1, 2021, the Company redeemed the remaining $125.1 million aggregate principal amount of its 4.875% senior notes at a total cost of $130.7 million, inclusive of redemption premiums of $4.3 million and accrued but unpaid interest of $1.3 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.

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~~EQT CORPORATION AND SUBSIDIARIES~~

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

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 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 (the Sale Price Condition);

•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.

Pursuant to the terms of the Convertible Notes indenture, the Sale Price Condition for conversion of the Convertible Notes was satisfied as of June 30, 2021, and, accordingly, holders of Convertible Notes may convert any of their Convertible Notes, at their option, at any time during the quarter beginning on July 1, 2021 and ending on September 30, 2021, subject to all terms and conditions set forth in the Convertible Notes indenture. Therefore, as of June 30, 2021, the net carrying value of the liability portion of the Convertible Notes was included in current portion of debt on the Condensed Consolidated Balance Sheet.

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. As a result of the cash dividend the Company paid on its common stock in the second quarter of 2022, effective May 10, 2022, the conversion rate for the Convertible Notes was adjusted to 67.2836 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.

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The Sale Price Condition for conversion of the Convertible Notes was satisfied as of December 31, 2021, March 31, 2022 and June 30, 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 September 30, 2022, subject to the terms and conditions set forth in the Convertible Notes indenture. Therefore, as of December 31, 2021 and June 30, 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 July 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
July 2022	5		335	36.91

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.

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

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~~EQT CORPORATION AND SUBSIDIARIES~~

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

~~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.

For the second quarter of 2020, 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 of $32.5 million and issuance costs attributable to the equity component of $4.8 million.

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

June 30, 2021 December 31, 2020
(Thousands)
Principal $ 500,000 $ 500,000
Less: Unamortized debt discount 119,105 129,103
Less: Unamortized debt issuance costs 10,562 11,263
Net carrying value of Convertible Notes $ 370,333 $ 359,634

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

Three Months Ended
June 30, Six Months Ended
June 30,
2021 2020 2021 2020
(Thousands)
Contractual interest expense $ 2,187 $ 1,507 $ 4,375 $ 1,507
Amortization of debt discount 5,046 3,231 9,998 3,231
Amortization of issuance costs 358 209 701 209
Total Convertible Notes interest expense $ 7,591 $ 4,947 $ 15,074 $ 4,947

Based on the closing stock price of EQT common stock of ~~$22.26~~$34.40 on June 30, ~~2021~~2022 and excluding the impact of the Capped Call Transactions, the if-converted value of the Convertible Notes exceeded the principal amount by ~~$242~~$572 million.

The table below summarizes the net carrying value and fair value of the Convertible Notes.


	June 30, 2022		December 31, 2021

	(Thousands)
Principal	$	434,856	$	499,991
Less: Unamortized debt issuance costs	9,631		12,448
Net carrying value of Convertible Notes	$	425,225	$	487,543

Fair value of Convertible Notes (a)	$	1,036,292	$	854,985

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

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The table below summarizes the components of interest expense related to the Convertible Notes. The effective interest rate for the Convertible Notes is 2.4%.


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021

	(Thousands)
Contractual interest expense	$	2,183	$	2,187	$	4,370	$	4,375
Amortization of issuance costs	687		672		1,371		1,341
Total Convertible Notes interest expense	$	2,870	$	2,859	$	5,741	$	5,716

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 six months ended June 30, 2022 and the three and six months ended June 30, 2021, ~~and 2020,~~ all such securities were excluded from potentially dilutive securities because of their anti-dilutive effect on ~~EPS.~~loss per share. Such securities for the six months ended June 30, 2022 were 6,855,482, and such securities for the three and six months ended June 30, 2021 were 7,679,584 and 7,712,354, ~~respectively,~~respectively. For the three months ended June 30, 2022, such potentially dilutive securities included in the calculation of diluted earnings per share were 4,132,337.

Additionally, the Company uses the if-converted method to calculate the impact of the Convertible Notes on diluted earnings (loss) per share. For the six months ended June 30, 2022 and ~~such securities for~~ the three and six months ended June 30, ~~2020~~2021, all such if-converted securities were ~~6,769,822 and 6,739,305, respectively.~~

As discussed in Note 6, the Company issued the Convertible Notes during the second quarter of 2020 and, upon conversion 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 diluted EPS numerator for the cash-settled portion of the instrument. In addition, for the three and six

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~~EQT CORPORATION AND SUBSIDIARIES~~

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

~~months ended June 30, 2021 and for the period of April 28, 2020 through June 30, 2020, the conversion premium of 6,666,670 shares was~~ excluded from potentially dilutive securities because of ~~its~~their anti-dilutive effect on ~~EPS.~~loss per share. Such securities for the six months ended June 30, 2022 were approximately 33.4 million, and such securities for both the three and six months ended June 30, 2021 were approximately 33.3 million. For the three months ended June 30, 2022, such potentially dilutive securities included in the calculation of diluted earnings per share were 33.3 million. See Notes 1 and 6 for further discussion of the Convertible Notes.

8. ~~Equitrans Share Exchange~~Impairment of Contract Asset

During the first quarter of 2020, the Company sold to Equitrans Midstream ~~a total~~approximately 50% of ~~25,299,752 shares of~~the Company's then-owned equity interest in Equitrans ~~Midstream's common stock~~Midstream in exchange for ~~approximately $52 million in~~a combination of cash and rate relief under certain of the Company's gathering contracts with ~~EQM,~~ 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 ~~EQM~~Equitrans Midstream (the Consolidated GGA). ~~The~~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 to the Company of approximately $196 million (the Cash Payment Option). On July 8, 2022, the Company delivered notice to Equitrans Midstream that it had elected to exercise the Cash Payment Option.

On the closing date of the Equitrans Share 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 ~~and, beginning on~~inclusive of the Cash Payment Option. During the first quarter of 2022, the Company identified indicators that the carrying value of the contract asset may not be fully recoverable, including increased uncertainty of the estimated timing of completion of the Mountain Valley Pipeline ~~(MVP) in-service date, expects~~due to ~~recognize amortization~~recent court rulings. As a result of the Company's impairment evaluation, the Company recognized impairment of $184.9 million in the Statement of Condensed Consolidated Operations. The impairment reduced the carrying value of the contract asset ~~over a period~~to its estimated fair value as of ~~approximately four years in a manner consistent with the expected timing~~March 31, 2022 of ~~the Company's realization~~$225 million, of ~~the economic benefits of the rate relief.~~

~~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 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. As of June 30, 2021 and December 31, 2020, the derivative liability related$196 million was attributable to the ~~Henry Hub~~ Cash ~~Bonus was approximately $97 million and $107 million, respectively. In addition,~~Payment Option provided by the Consolidated GGA ~~provides a cash payment option that grants the Company the right to receive payments from EQM~~and presented in prepaid expenses and other in the ~~event that~~Condensed Consolidated Balance Sheet and $29 million was attributable to the ~~MVP~~residual rate relief realizable upon the in-service date ~~has not occurred prior to January 1, 2022.~~

of the Mountain Valley Pipeline and presented in contract asset in the Condensed Consolidated Balance Sheet. The fair value of 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. Key assumptions used in the fair value calculation included an estimated production volume forecast, a market-based discount rate and a probability-weighted estimate of the in-service date of the MVP. The fair value of the derivative liability related 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. Asset Exchange Transactions and Divestiture~~

~~2020 Asset Exchange Transactions.~~ During the first and second quarters of 2020, the Company closed on various acreage trade agreements (collectively, the 2020 Asset Exchange Transactions), pursuant to which the Company exchanged approximately 11,700 aggregate net revenue interest acres across Greene, Allegheny and Westmoreland Counties, Pennsylvania and Wetzel and Marshall Counties, West Virginia for approximately 11,700 aggregate net revenue interest acres across Greene and Washington Counties, Pennsylvania and Wetzel County, West Virginia. As a result of the 2020 Asset Exchange Transactions, the Company recognized a loss of $6.7 million and $55.6 million in (gain) loss on sale/exchange of long-lived assets in the Statements of Condensed Consolidated Operations for the three and six months ended June 30, 2020, respectively. The fair value of leases acquired were based on 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 the following: (i) a probability-weighted estimate of the in-service date of the Mountain Valley Pipeline; (ii) an estimate of the potential exercise and timing of the Cash Payment Option; (iii) an estimated production volume forecast and (iv) a market-based ~~prices for comparable acreage.~~weighted average cost of capital.

~~2020 Divestiture.~~ On May 11, 2020, the Company closed 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 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. The Contingent Consideration represents an embedded derivative that is recorded at fair value in the Condensed Consolidated Balance Sheets. The Contingent Consideration had a fair value of $17.5 million and $1.9 million as of June 30, 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 value of the

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EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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.9. Alta Acquisition

As a result of the 2020 Divestiture, the Company recognized a loss of $42.5 million in (gain) loss on sale/exchange of long-lived assets in the Statements of Condensed Consolidated Operations during the second quarter of 2020.

~~10. Acquisitions~~

~~Reliance Asset Acquisition~~. On April 1, 2021, the Company closed on the acquisition of certain oil and gas assets (the Reliance Asset Acquisition) from Reliance Marcellus, LLC (Reliance), pursuant to the Company's exercise of a preferential purchase right that was triggered by Northern Oil and Gas, Inc.'s acquisition of Reliance's Marcellus assets. The total purchase price for the acquisition was approximately $69 million, and the assets acquired consisted of approximately 40 MMcfe per day of current production and 4,100 net acres located in southwest Pennsylvania. The Reliance Asset Acquisition was accounted for as an asset acquisition and not a business combination and, as such, its proceeds were allocated to property, plant and equipment.

~~Alta Acquisition~~. On July 21, 2021, the Company completed its ~~previously announced~~ acquisition (the Alta Acquisition) of Alta Marcellus Development, LLC and ARD Operating, LLC and subsidiaries (together, the Alta Target Entities), pursuant to that certain Membership Interest Purchase Agreement, dated May 5, 2021 (the Alta Purchase Agreement), by and among the Company, EQT Acquisition HoldCo LLC (a wholly-owned indirect subsidiary of the Company), Alta Resources Development, LLC (Alta Resources) and the Alta Target Entities. The Alta Target Entities collectively ~~hold~~held all of Alta Resources' upstream and midstream assets and liabilities. The purchase price for the Alta Acquisition consisted of approximately $1.0 billion in cash and 98,789,388 shares of ~~the Company's~~EQT common stock, as adjusted pursuant to customary closing purchase price adjustments set forth in the Alta Purchase Agreement. The Alta Purchase Agreement ~~contains customary representations and warranties, covenants, indemnification and termination provisions and~~ has an effective date of January 1, 2021.

As a result of the Alta Acquisition, the Company acquired approximately 300,000 net Northeast Marcellus acres, approximately 1.0 Bcfe per day of current net production, approximately 300 miles of midstream gathering systems, approximately 100 miles of a freshwater system and a firm transportation portfolio to premium demand markets. ~~In May 2021, upon execution~~

The Company completed the purchase price allocation for the Alta Acquisition during the second quarter of 2022, at which time the value of the assets acquired and liabilities assumed were revised. The purchase accounting adjustments recorded in 2022 were not material.

Unaudited Pro Forma Information. The table below summarizes the Company's results as though the Alta ~~Purchase Agreement,~~Acquisition had been completed on January 1, 2021. Certain of Alta Resources' historical amounts were reclassified to conform to the ~~Company deposited $146.3 million in an escrow account, which was disbursed to~~Company's financial presentation of operations. The following unaudited pro forma information is provided for informational purposes only and does not represent what consolidated results of operations would have been had the Alta ~~Resources at closing. As~~Acquisition occurred on January 1, 2021 nor are they necessarily indicative of ~~June 30, 2021, this deposit was reflected in other assets in the Condensed Consolidated Balance Sheet.~~future consolidated results of operations.


	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021

	(Thousands, except per share amounts)
Pro forma sales of natural gas, NGLs and oil	$	1,254,006	$	2,598,753
Pro forma loss on derivatives	(1,475,430)		(1,650,581)
Pro forma net marketing services and other	10,051		20,654
Pro forma total operating revenues	$	(211,373)	$	968,826

Pro forma net loss	$	(1,009,899)	$	(976,368)
Pro forma net loss attributable to noncontrolling interests	(62)		(576)
Pro forma net loss attributable to EQT Corporation	$	(1,009,837)	$	(975,792)

Pro forma loss per share (basic and diluted)	$	(3.62)	$	(3.50)

1821

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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.~~amended (the Securities Act). 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, including our acquisition of certain upstream and midstream assets from Alta Resources Development, LLC; 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;transactions; 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.

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.

1922

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

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

Consolidated Results of Operations

Net ~~loss~~income attributable to EQT Corporation for the three months ended June 30, ~~2021~~2022 was ~~$936.5~~$891.4 million, ~~$3.35~~$2.19 per diluted share, compared to net loss attributable to EQT Corporation for the same period in ~~2020~~2021 of ~~$263.1~~$933.3 million, ~~$1.03~~$3.34 per diluted share. The change was attributable primarily to ~~the loss on derivatives not designated as hedges, lower income from investments, increased transportation and processing expense and increased depreciation and depletion, partly offset by~~ increased sales of natural gas, NGLs and oil ~~higher~~and a smaller loss on derivatives, partly offset by income tax ~~benefit, the gain~~expense, increased loss on ~~sale of long-lived assets~~debt extinguishment and ~~decreased impairment~~increased transmission and ~~expiration of leases.~~processing, depreciation and depletion and production expenses.

Net loss attributable to EQT Corporation for the six months ended June 30, ~~2021~~2022 was ~~$977.0~~$624.7 million, ~~$3.50~~$1.68 per diluted share, compared to net loss attributable to EQT Corporation for the same period in ~~2020~~2021 of ~~$430.2~~$970.7 million, ~~$1.68~~$3.48 per diluted share. The change was attributable primarily to ~~the~~increased sales of natural gas, NGLs and oil, partly offset by a greater loss on derivatives, ~~not designated as hedges,~~decreased income tax benefit, the ~~gain on Equitrans Share Exchange (defined and discussed~~impairment of our contract asset (discussed in Note 8 to the Condensed Consolidated Financial Statements) ~~recognized in the first quarter of 2020, increased depreciation and depletion and~~, increased transportation and processing expense, ~~partly offset by~~ increased ~~sales~~loss on debt extinguishment and increased depreciation and depletion expense.

Results of ~~natural gas, NGLs~~operations for 2022 include the results of our operation of assets acquired in the Alta Acquisition (defined and ~~oil,~~discussed in Note 9 to the ~~income from investments, higher income tax benefit, the gain on sale of long-lived assets and decreased impairment and expiration of leases.~~Condensed Consolidated Financial Statements), 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.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021

		(Thousands, unless otherwise noted)									(Thousands, unless otherwise noted)
NATURAL GAS	NATURAL GAS									NATURAL GAS
Sales volume (MMcf)	Sales volume (MMcf)	394,268		325,248		784,566		694,990		Sales volume (MMcf)	476,723		394,268		942,859		784,566
NYMEX price ($/MMBtu)	NYMEX price ($/MMBtu)	$	2.84	$	1.71	$	2.76	$	1.84	NYMEX price ($/MMBtu)	$	7.16	$	2.84	$	6.05	$	2.76
Btu uplift	Btu uplift	0.16		0.09		0.15		0.09		Btu uplift	0.38		0.16		0.31		0.15
Natural gas price ($/Mcf)	Natural gas price ($/Mcf)	$	3.00	$	1.80	$	2.91	$	1.93	Natural gas price ($/Mcf)	$	7.54	$	3.00	$	6.36	$	2.91

Basis ($/Mcf) (a)	Basis ($/Mcf) (a)	$	(0.57)	$	(0.36)	$	(0.41)	$	(0.29)	Basis ($/Mcf) (a)	$	(0.88)	$	(0.57)	$	(0.56)	$	(0.41)
Cash settled basis swaps (not designated as hedges) ($/Mcf)		(0.02)		(0.02)		(0.05)		0.02
Cash settled basis swaps ($/Mcf)										Cash settled basis swaps ($/Mcf)	0.01		(0.02)		(0.10)		(0.05)
Average differential, including cash settled basis swaps ($/Mcf)	Average differential, including cash settled basis swaps ($/Mcf)	$	(0.59)	$	(0.38)	$	(0.46)	$	(0.27)	Average differential, including cash settled basis swaps ($/Mcf)	$	(0.87)	$	(0.59)	$	(0.66)	$	(0.46)
Average adjusted price ($/Mcf)	Average adjusted price ($/Mcf)	$	2.41	$	1.42	$	2.45	$	1.66	Average adjusted price ($/Mcf)	$	6.67	$	2.41	$	5.70	$	2.45
Cash settled derivatives (not designated as hedges) ($/Mcf)		(0.13)		1.00		(0.07)		0.79
Cash settled derivatives ($/Mcf)										Cash settled derivatives ($/Mcf)	(3.66)		(0.13)		(2.71)		(0.07)
Average natural gas price, including cash settled derivatives ($/Mcf)	Average natural gas price, including cash settled derivatives ($/Mcf)	$	2.28	$	2.42	$	2.38	$	2.45	Average natural gas price, including cash settled derivatives ($/Mcf)	$	3.01	$	2.28	$	2.99	$	2.38
Natural gas sales, including cash settled derivatives	Natural gas sales, including cash settled derivatives	$	897,429	$	786,595	$	1,869,923	$	1,702,006	Natural gas sales, including cash settled derivatives	$	1,433,018	$	897,429	$	2,816,214	$	1,869,923

LIQUIDS	LIQUIDS									LIQUIDS
Natural gas liquids (NGLs), excluding ethane:
NGLs, excluding ethane:										NGLs, excluding ethane:
Sales volume (MMcfe) (b)	Sales volume (MMcfe) (b)	16,158		10,572		30,758		21,392		Sales volume (MMcfe) (b)	14,568		16,158		29,202		30,758
Sales volume (Mbbl)	Sales volume (Mbbl)	2,693		1,762		5,126		3,565		Sales volume (Mbbl)	2,428		2,693		4,867		5,126
Price ($/Bbl)		$	34.83	$	13.52	$	36.00	$	16.08
Cash settled derivatives (not designated as hedges) ($/Bbl)		(9.31)		(0.52)		(6.31)		(0.26)
NGLs price ($/Bbl)										NGLs price ($/Bbl)	$	58.48	$	34.83	$	61.27	$	36.00
Cash settled derivatives ($/Bbl)										Cash settled derivatives ($/Bbl)	(4.67)		(9.31)		(4.76)		(6.31)
Average NGLs price, including cash settled derivatives ($/Bbl)	Average NGLs price, including cash settled derivatives ($/Bbl)	$	25.52	$	13.00	$	29.69	$	15.82	Average NGLs price, including cash settled derivatives ($/Bbl)	$	53.81	$	25.52	$	56.51	$	29.69
NGLs sales	NGLs sales	$	68,737	$	22,910	$	152,180	$	56,421	NGLs sales	$	130,641	$	68,737	$	275,022	$	152,180
Ethane:	Ethane:									Ethane:
Sales volume (MMcfe) (b)	Sales volume (MMcfe) (b)	7,803		8,769		16,390		12,098		Sales volume (MMcfe) (b)	8,768		7,803		18,607		16,390
Sales volume (Mbbl)	Sales volume (Mbbl)	1,301		1,461		2,732		2,016		Sales volume (Mbbl)	1,461		1,301		3,101		2,732
Price ($/Bbl)		$	6.58	$	3.38	$	6.62	$	3.56
Ethane price ($/Bbl)										Ethane price ($/Bbl)	$	17.70	$	6.58	$	13.92	$	6.62
Ethane sales	Ethane sales	$	8,560	$	4,941	$	18,094	$	7,186	Ethane sales	$	25,865	$	8,560	$	43,154	$	18,094
Oil:	Oil:									Oil:
Sales volume (MMcfe) (b)	Sales volume (MMcfe) (b)	2,366		1,058		4,071		2,237		Sales volume (MMcfe) (b)	1,458		2,366		3,124		4,071
Sales volume (Mbbl)	Sales volume (Mbbl)	394		176		678		373		Sales volume (Mbbl)	243		394		521		678
Price ($/Bbl)		$	56.18	$	10.17	$	58.61	$	21.48
Oil price ($/Bbl)										Oil price ($/Bbl)	$	91.38	$	56.18	$	88.27	$	58.61
Oil sales	Oil sales	$	22,158	$	1,795	$	39,772	$	8,010	Oil sales	$	22,206	$	22,158	$	45,962	$	39,772

Total liquids sales volume (MMcfe) (b)	Total liquids sales volume (MMcfe) (b)	26,327		20,399		51,219		35,727		Total liquids sales volume (MMcfe) (b)	24,794		26,327		50,933		51,219
Total liquids sales volume (Mbbl)	Total liquids sales volume (Mbbl)	4,388		3,399		8,536		5,954		Total liquids sales volume (Mbbl)	4,132		4,388		8,489		8,536
Total liquids sales	Total liquids sales	$	99,455	$	29,646	$	210,046	$	71,617	Total liquids sales	$	178,712	$	99,455	$	364,138	$	210,046

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)	$	996,884	$	816,241	$	2,079,969	$	1,773,623	Total natural gas and liquids sales, including cash settled derivatives (c)	$	1,611,730	$	996,884	$	3,180,352	$	2,079,969
Total sales volume (MMcfe)	Total sales volume (MMcfe)	420,595		345,647		835,785		730,717		Total sales volume (MMcfe)	501,517		420,595		993,792		835,785
Average realized price ($/Mcfe)	Average realized price ($/Mcfe)	$	2.37	$	2.36	$	2.49	$	2.43	Average realized price ($/Mcfe)	$	3.21	$	2.37	$	3.20	$	2.49

(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.

Table of Contents

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.

Sales Volume and Revenues
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 % 2021 2020 %
(Thousands, unless otherwise noted)
Sales volume by shale (MMcfe):
Marcellus (a) 375,116 305,752 22.7 749,057 639,503 17.1
Ohio Utica 44,034 38,430 14.6 83,963 88,205 (4.8)
Other 1,445 1,465 (1.4) 2,765 3,009 (8.1)
Total sales volume (b) 420,595 345,647 21.7 835,785 730,717 14.4
Average daily sales volume (MMcfe/d) 4,622 3,798 21.7 4,618 4,015 15.0
Operating revenues:
Sales of natural gas, NGLs and oil $ 1,077,904 $ 498,772 116.1 $ 2,208,855 $ 1,213,973 82.0
(Loss) gain on derivatives not designated as hedges (1,345,532) 26,426 (5,191.7) (1,534,345) 415,862 (469.0)
Net marketing services and other 7,512 1,876 300.4 15,297 4,296 256.1
Total operating revenues $ (260,116) $ 527,074 (149.4) $ 689,807 $ 1,634,131 (57.8)

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

~~(b)NGLs, ethane and oil were converted~~Three Months Ended June 30, 2022 Compared to ~~Mcfe at a rate of six Mcfe per barrel.~~Three Months Ended June 30, 2021


	Three Months Ended June 30,
	2022		2021		Change		% Change

	(Thousands, unless otherwise noted)
Sales volume by shale (MMcfe):
Marcellus	465,715		375,116		90,599		24.2
Ohio Utica	33,469		44,034		(10,565)		(24.0)
Other	2,333		1,445		888		61.5
Total sales volume	501,517		420,595		80,922		19.2

Average daily sales volume (MMcfe/d)	5,511		4,622		889		19.2

Operating revenues:
Sales of natural gas, NGLs and oil	$	3,365,211	$	1,077,904	$	2,287,307	212.2
Loss on derivatives	(845,095)		(1,345,532)		500,437		(37.2)
Net marketing services and other	7,392		7,512		(120)		(1.6)
Total operating revenues	$	2,527,508	$	(260,116)	$	2,787,624	(1,071.7)

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

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

~~Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020~~

Sales of natural gas, NGLs and oil. Sales of natural gas, NGLs and oil increased for the three months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due to ~~increased sales volume and~~ a higher average realized ~~price.~~ price and increased sales volume.

Average realized price for the three months ended June 30, 2022 compared to the same period in 2021 increased due to higher NYMEX prices and higher liquids prices, partly offset by ~~lower~~unfavorable cash settled derivatives and unfavorable differential. For the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, we paid ~~$71.4~~$1,753.7 million and ~~received $315.4~~$71.4 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 ~~prior period sales volume decreases of 36 Bcfe from the 2020 Strategic Production Curtailments (defined below) and~~ sales volume increases ~~of 33 Bcfe~~ from the assets acquired from the Chevron Acquisition (defined below). The 2020 Strategic Production Curtailments refers to our strategic decision to temporarily curtail approximately 1.4 Bcfe per day of gross production, equivalent to approximately 1.0 Bcfe per day of net production, beginning in May 2020 and ending in July 2020, at which time we began a moderated approach to bringing back on-line production that had been curtailed. The Chevron Acquisition refers to our acquisition of upstream assets from Chevron U.S.A. Inc. in the ~~fourth quarter of 2020.~~Alta Acquisition.

~~(Loss) gain~~Loss on ~~derivatives not designated as hedges.~~derivatives. For the three months ended June 30, ~~2021~~2022 and ~~2020,~~2021, we recognized a loss on derivatives of $845.1 million and $1,345.5 million, ~~and a gain of $26.4 million, respectively,~~respectively. The loss on derivatives ~~not designated as hedges. The 2021 loss was~~for 2022 related primarily to decreases in the fair market value of our NYMEX swaps and options due to increases in NYMEX ~~forward~~ prices. The ~~2020 gain was~~loss on derivatives for 2021 related primarily to increases in the fair market value of our NYMEX swaps and options due to ~~decreases~~increases in NYMEX forward prices.

~~Net marketing services and other.~~ Net marketing services and other increased for the three months ended June 30, 2021 compared to the same period in 2020 due primarily to the liquids uplift realized on gas purchased at the wellhead from other operators.

Six Months Ended June 30, ~~2021~~2022 Compared to Six Months Ended June 30, ~~2020~~2021


	Six Months Ended June 30,
	2022		2021		Change		% Change

	(Thousands, unless otherwise noted)
Sales volume by shale (MMcfe):
Marcellus	921,142		749,057		172,085		23.0
Ohio Utica	67,675		83,963		(16,288)		(19.4)
Other	4,975		2,765		2,210		79.9
Total sales volume	993,792		835,785		158,007		18.9

Average daily sales volume (MMcfe/d)	5,491		4,618		873		18.9

Operating revenues:
Sales of natural gas, NGLs and oil	$	5,851,835	$	2,208,855	$	3,642,980	164.9
Loss on derivatives	(3,922,732)		(1,534,345)		(2,388,387)		155.7
Net marketing services and other	19,295		15,297		3,998		26.1
Total operating revenues	$	1,948,398	$	689,807	$	1,258,591	182.5

Sales of natural gas, NGLs and oil. Sales of natural gas, NGLs and oil increased for the six months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due to ~~increased sales volume and~~ a higher average realized ~~price.~~ price and increased sales volume.

Average realized price for the six months ended June 30, 2022 compared to the same period in 2021 increased due to higher NYMEX prices and higher liquids prices, partly offset by ~~lower~~unfavorable cash settled derivatives and unfavorable differential. For the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, we paid ~~$109.6~~$2,639.3 million and ~~received $561.1~~$109.6 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 increases ~~of 67 Bcfe~~ from the assets acquired ~~from~~in the ~~Chevron Acquisition and prior period sales volume decreases of 36 Bcfe from the 2020 Strategic Production Curtailments.~~Alta Acquisition.

~~(Loss) gain~~Loss on ~~derivatives not designated as hedges.~~derivatives. For the six months ended June 30, ~~2021~~2022 and ~~2020,~~2021, we recognized a loss on derivatives of $3,922.7 million and $1,534.3 million, ~~and a gain of $415.9 million, respectively,~~respectively. The loss on derivatives ~~not designated as hedges. The 2021 loss was~~for 2022 related primarily to decreases in the fair market value of our NYMEX swaps and options due to increases in NYMEX forward prices. The ~~2020 gain was~~loss on derivatives for 2021 related primarily to ~~increases~~decreases in the fair market value of our NYMEX swaps and options due to ~~decreases~~increases in NYMEX forward prices.

~~Net marketing services and other.~~ Net marketing services and other increased for the six months ended June 30, 2021 compared to the same period in 2020 due primarily to the liquids uplift realized on gas purchased at the wellhead from other operators.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

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

~~The following table presents information on our production-related operating expenses.~~
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 % 2021 2020 %
(Thousands, unless otherwise noted)
Operating expenses:
Gathering $ 286,405 $ 252,095 13.6 $ 566,766 $ 513,816 10.3
Transmission 130,235 119,515 9.0 255,107 266,677 (4.3)
Processing 47,376 34,026 39.2 87,927 64,977 35.3
Lease operating expenses (LOE), excluding production taxes 25,547 25,894 (1.3) 52,566 53,917 (2.5)
Production taxes 21,999 12,435 76.9 42,210 24,792 70.3
Exploration 1,779 876 103.1 2,728 1,799 51.6
Selling, general and administrative 49,853 43,341 15.0 94,859 78,279 21.2
Production depletion $ 376,813 $ 317,905 18.5 $ 749,821 $ 670,982 11.7
Other depreciation and depletion 3,475 5,191 (33.1) 7,583 9,640 (21.3)
Total depreciation and depletion $ 380,288 $ 323,096 17.7 $ 757,404 $ 680,622 11.3
Per Unit ($/Mcfe):
Gathering $ 0.68 $ 0.73 (6.8) $ 0.68 $ 0.70 (2.9)
Transmission 0.31 0.35 (11.4) 0.31 0.36 (13.9)
Processing 0.11 0.10 10.0 0.11 0.09 22.2
LOE, excluding production taxes 0.06 0.07 (14.3) 0.06 0.07 (14.3)
Production taxes 0.05 0.04 25.0 0.05 0.03 66.7
Selling, general and administrative 0.12 0.13 (7.7) 0.11 0.11 —
Production depletion 0.90 0.92 (2.2) 0.90 0.92 (2.2)

Three Months Ended June 30, ~~2021~~2022 Compared to Three Months Ended June 30, ~~2020~~2021


	Three Months Ended June 30,
	2022		2021		Change		% Change

	(Thousands, unless otherwise noted)
Operating expenses:
Gathering	$	339,100	$	286,405	$	52,695	18.4
Transmission	149,383		130,235		19,148		14.7
Processing	51,221		47,376		3,845		8.1
Lease operating expenses (LOE)	42,814		25,547		17,267		67.6
Production taxes	39,742		21,999		17,743		80.7
Exploration	1,741		1,779		(38)		(2.1)
Selling, general and administrative	59,276		49,853		9,423		18.9

Production depletion	$	423,935	$	376,813	$	47,122	12.5
Other depreciation and depletion	5,208		3,475		1,733		49.9
Total depreciation and depletion	$	429,143	$	380,288	$	48,855	12.8

Per Unit ($/Mcfe):
Gathering	$	0.68	$	0.68	$	—	—
Transmission	0.30		0.31		(0.01)		(3.2)
Processing	0.10		0.11		(0.01)		(9.1)
LOE	0.09		0.06		0.03		50.0
Production taxes	0.08		0.05		0.03		60.0

Selling, general and administrative	0.12		0.12		—		—
Production depletion	0.85		0.90		(0.05)		(5.6)

Gathering. Gathering expense increased on an absolute basis for the three months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due primarily to increased sales volume ~~additional gathering capacity acquired~~ from the ~~Chevron~~assets acquired in the Alta Acquisition and a higher gathering ~~rate structure as a result of the Consolidated GGA (defined and discussed in Note 8~~rates on certain contracts indexed 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.

Appalachian Basin prices. Gathering expense ~~decreased~~remained flat on a per Mcfe basis for the three months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due ~~primarily~~ to ~~increased sales volume, which resulted in utilization of lower overrun rates as part of the Consolidated GGA, and~~ a lower gathering rate structure on the assets acquired ~~from~~in the ~~Chevron Acquisition.~~Alta Acquisition, offset primarily by increased gathering rates on contracts indexed to price.

Transmission. Transmission expense increased on an absolute basis for the three months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due primarily to ~~released~~additional capacity acquired as part of the Alta Acquisition, higher rates on ~~and credits received from,~~ the Texas Eastern Transmission Pipeline and additional capacity acquired on the Rockies Express Pipeline in ~~2020.~~the third quarter of 2021. Transmission expense decreased on a per Mcfe basis for the three months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due primarily to increased sales volume ~~some of~~from the Alta Acquisition, which ~~does not have associated~~has a lower average transmission expense ~~such as the assets acquired from the Chevron Acquisition.~~per Mcfe when compared to our historical transmission portfolio.

Processing. Processing expense increased on an absolute ~~and~~basis for the three months ended June 30, 2022 compared to the same period in 2021 due to increased liquid sales volume as a result of increased development of liquids-rich areas. Processing expense decreased on a per Mcfe basis for the three months ended June 30, ~~2021~~2022 compared to the same period in ~~2020 due to increased liquid sales volume~~2021 due primarily to increased ~~development of liquids-rich areas and increased processed volume from the Chevron Acquisition.~~sales volume.

LOE. LOE increased on an absolute basis for the three months ended June 30, 2022 compared to the same period in 2021 due primarily to higher salt water disposal costs and additional lease operating costs as a result of the Alta Acquisition. LOE increased on a per Mcfe basis for the three months ended June 30, 2022 compared to the same period in 2021 due primarily to higher salt water disposal costs.

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EQT CORPORATION AND SUBSIDIARIES

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

Production taxes. Production taxes increased on an absolute and per Mcfe basis for the three months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due to increased West Virginia severance taxes, which resulted primarily tofrom higher prices, and increased Pennsylvania impact fees, which resulted from the additional wells acquired in the Alta Acquisition, higher prices and ~~West Virginia severance taxes as a result of higher prices.~~inflation.

Selling, general and administrative. Selling, general and administrative expense increased on an absolute basis for thethree months ended June 30, ~~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. 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 June 30, ~~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 June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due to a lower annual depletion rate.

~~Amortization of intangible assets.~~ ~~Amortization of intangible assetsfor the three months ended June 30, 2020 was $7.5 million. Our intangible assets were fully amortized in the fourth quarter of 2020.~~

~~(Gain) loss~~Gain on sale/exchange of long-lived assets. During the three months ended June 30, 2021, we recognized a gain on sale of long-lived assets of $16.8 million related primarily to changes in the fair value of the Contingent Consideration from the 2020 Divestiture (defined and discussed in Note 93 to the Condensed Consolidated Financial Statements). During the three months ended June 30, 2020, we recognized a loss on sale/exchange of long-lived assets of $49.2 million, of which $6.7 million related to the 2020 Asset Exchange Transactions and $42.5 million related to the 2020 Divestiture. See Note 9 to the Condensed Consolidated Financial Statements.

Impairment and expiration of leases. ~~Impairment and expiration of leases for~~During the three months ended June 30, 2022 and 2021, ~~was~~we recognized impairment and expiration of leases of $47.0 million and $25.6 million, ~~compared~~respectively, related to ~~$41.3 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 June 30, 2021~~Table of ~~$5.2 million were attributable primarily to transaction costs associated with the Chevron Acquisition~~Contents

EQT CORPORATION AND SUBSIDIARIES

Management's Discussion and ~~Alta Acquisition (defined~~Analysis of Financial Condition and ~~discussed in Note 10 to the Condensed Consolidated Financial Statements). Other operating expenses for the three months ended June 30, 2020~~Results of ~~$4.7 million were attributable primarily to transaction and reorganization costs.~~Operations

Six Months Ended June 30, ~~2021~~2022 Compared to Six Months Ended June 30, ~~2020~~2021


	Six Months Ended June 30,
	2022		2021		Change		% Change

	(Thousands, unless otherwise noted)
Operating expenses:
Gathering	$	659,629	$	566,766	$	92,863	16.4
Transmission	296,489		255,107		41,382		16.2
Processing	99,690		87,927		11,763		13.4
LOE	82,643		52,566		30,077		57.2
Production taxes	70,925		42,210		28,715		68.0
Exploration	2,513		2,728		(215)		(7.9)
Selling, general and administrative	128,372		94,859		33,513		35.3

Production depletion	$	840,860	$	749,821	$	91,039	12.1
Other depreciation and depletion	10,381		7,583		2,798		36.9
Total depreciation and depletion	$	851,241	$	757,404	$	93,837	12.4

Per Unit ($/Mcfe):
Gathering	$	0.66	$	0.68	$	(0.02)	(2.9)
Transmission	0.30		0.31		(0.01)		(3.2)
Processing	0.10		0.11		(0.01)		(9.1)
LOE	0.08		0.06		0.02		33.3
Production taxes	0.07		0.05		0.02		40.0

Selling, general and administrative	0.13		0.11		0.02		18.2
Production depletion	0.85		0.90		(0.05)		(5.6)

Gathering. Gathering expense increased on an absolute basis for the six months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due primarily to increased sales volume ~~additional gathering capacity acquired~~ from the ~~Chevron~~assets acquired in the Alta Acquisition and a higher gathering ~~rate structure as a result of the Consolidated GGA. We expect~~rates on certain contracts indexed to ~~realize fee relief and a lower gathering rate structure from the Consolidated GGA beginning with the MVP in-service date.~~

Appalachian Basin prices. Gathering expense decreased on a per Mcfe basis for the six months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due primarily to ~~increased sales volume, which resulted in utilization of lower overrun rates as part of~~ the ~~Consolidated GGA, and a~~ lower gathering rate structure on the assets acquired ~~from~~in the ~~Chevron~~Alta Acquisition.

Transmission. Transmission expense ~~decreased~~increased on an absolute basis for the six months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due primarily to ~~released~~additional capacity acquired as part of the Alta Acquisition, higher rates on and lower credits received from the Texas Eastern Transmission Pipeline ~~in 2020~~ and ~~released~~additional capacity acquired on the ~~Tennessee Gas Pipeline.~~Rockies Express Pipeline in the third quarter of 2021. Transmission expense decreased on a per Mcfe basis for the six months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due primarily to increased sales volume ~~some of~~from the Alta Acquisition, which ~~does not have associated~~has a lower average transmission expense ~~such as the assets acquired from the Chevron Acquisition.~~per Mcfe when compared to our historical transmission portfolio.

Processing. Processing expense increased on an absolute ~~and~~basis for the six months ended June 30, 2022 compared to the same period in 2021 due to increased liquid sales volume as a result of increased development of liquids-rich areas. Processing expense decreased on a per Mcfe basis for the six months ended June 30, ~~2021~~2022 compared to the same period in ~~2020 due to increased liquid sales volume~~2021 due primarily to increased ~~development of liquids-rich areas and increased processed volume from the Chevron Acquisition.~~sales volume.

~~Production taxes.~~LOE. ~~Production taxes~~LOE increased on an absolute basis for the six months ended June 30, 2022 compared to the same period in 2021 due primarily to higher salt water disposal costs and additional lease operating costs as a result of the Alta Acquisition. LOE increased on a per Mcfe basis for the six months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due primarily to ~~increased West Virginia severance taxes and Pennsylvania impact fees as a result of~~ higher ~~prices.~~salt water disposal costs.

2529

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EQT CORPORATION AND SUBSIDIARIES

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

Production taxes. Production taxes increased on an absolute and per Mcfe basis for the six months ended June 30, 2022 compared to the same period in 2021 due to increased West Virginia severance taxes, which resulted primarily from higher prices, and 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 thesix months ended June 30, ~~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 six months ended June 30, ~~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 six months ended June 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 due to a lower annual depletion rate.

~~Amortization of intangible assets.~~ ~~Amortization of intangible assetsfor the six months ended June 30, 2021 was $15.0 million. The intangible assets were fully amortized in the fourth quarter of 2020.~~

~~(Gain) loss~~Gain on sale/exchange of long-lived assets.During the six months ended June 30, 2021, we recognized a gain on sale of long-lived assets of $18.0 million related primarily to changes in the fair value of the Contingent Consideration from the 2020 Divestiture.

Impairment of contract asset. During the six months ended June 30, ~~2020,~~2022, we recognized ~~a loss on sale/exchange~~impairment of ~~long-lived assets~~our contract asset of ~~$98.1 million, of which $55.6 million related to the 2020 Asset Exchange Transactions and $42.5 million related to the 2020 Divestiture.~~$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 six months ended June 30, 2022 and 2021, ~~was~~we recognized impairment and expiration of leases of $77.0 million and $42.4 million, ~~compared~~respectively, related to ~~$95.0 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 six months ended June 30, 2022 of $23.5 million were attributable primarily to changes in legal and environmental reserves. Other operating expenses for the six months ended June 30, 2021 of $14.7 million were attributable primarily to transaction costs associated with ~~the~~our acquisition of upstream assets from Chevron ~~Acquisition~~U.S.A. Inc. in November 2020 and the Alta Acquisition ~~and~~as well as changes in legal ~~reserves, including settlements. Other operating expenses for the six months ended June 30, 2020 of $4.7 million were attributable primarily to transaction and reorganization costs.~~reserves.

Other Income Statement Items

~~Gain~~(Income) loss from investments. For the three months ended June 30, 2022, we recognized income from investments due primarily to equity earnings on ~~Equitrans Share Exchange.~~ ~~During~~our equity method investments. For the ~~first quarter of 2020,~~six months ended June 30, 2022, we recognized a loss from investments due primarily to a loss on our sale of our investment in Equitrans Midstream, which resulted from a decrease in Equitrans Midstream's stock price to $8.65 as of April 20, 2022, the date of the final sale of our investment, from $10.34 as of December 31, 2021, partly offset by a gain on our investment in the ~~Equitrans Share Exchange of $187 million. See~~Investment Fund (defined in Note 84 to the Condensed Consolidated Financial ~~Statements.~~

~~(Income) loss from~~Statements) and equity earnings on our equity method investments. For the three and six months ended June 30, 2021, we recognized income on our ~~investment~~investments in Equitrans Midstream and income on our investment in a fund that invests in companies developing technology and operating solutions for exploration and production companies. Our investment in Equitrans Midstream fluctuates with changes in Equitrans Midstream's stock price, which was $8.51 and $8.04 as of June 30, 2021 and December 31, 2020, respectively. For the three months ended June 30, 2020, we recognized income on our investment in Equitrans Midstream due to an increase in Equitrans Midstream's stock price during the three months ended June 30, 2020. For the six months ended June 30, 2020, we recognized a loss on our investment in Equitrans Midstream due to a decrease in Equitrans Midstream's stock price during the six months ended June 30, 2020 as well as a decrease in the number of shares of Equitrans Midstream's common stock that we own as a result of the Equitrans Share Exchange.Investment Fund.

Dividend and other ~~income.~~income. Dividend and other income ~~decreased~~increased for the three and six months ended June 30, ~~2021~~2022 compared to the same ~~period~~periods in ~~2020~~2021 due primarily to ~~lower~~ dividends received ~~from~~on the Investment Fund, partly offset by decreased dividends received on our investment in Equitrans Midstream, ~~driven by a decrease~~which was fully disposed of in ~~the number of shares of Equitrans Midstream's common stock that we own as well as a decrease in the dividend amount per share.~~April 2022.

Loss on debt extinguishment. During the three and six months ended June 30, 2022, we recognized a loss on debt extinguishment of $104.3 million and $111.3 million, respectively, due primarily to the repayment and repurchases of our Convertible Notes (defined and discussed in Note 6 to the Condensed Consolidated Financial Statements). During the three and six months ended June 30, 2021, we recognized a loss on debt extinguishment of $5.3 million and $9.8 million, respectively, due to fees incurred for a bridge-loan commitment related to the Alta Acquisition and the repayment of our 4.875% senior notes. During the three and six months ended June 30, 2020, we recognized a loss on debt extinguishment of $0.4 million and $17.0 million, respectively, related to the repayment of our 4.875% senior notes, 2.50% senior notes, floating rate notes and term loan facility. See Note 6 to the Condensed Consolidated Financial Statements.

Interest expense. Interest expense ~~increased~~decreased for the three and six months ended June 30, ~~2021~~2022 compared to the same periods in ~~2020~~2021 due primarily to reduced interest expense on letters of credit and our senior notes, partly offset by increased interest ~~incurred on new debt,~~expense due primarily to higher borrowings under our credit facility and increased interest due to letters of credit issued throughout 2020. These increases were partly offset by lower interest incurred due to debt repayments throughout 2020 and the first quarter of 2021.facility. See Note 6 to the Condensed Consolidated Financial Statements.

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

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EQT CORPORATION AND SUBSIDIARIES

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

~~Income tax 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.

Planned Capital Expenditures and Sales Volume. In ~~2021,~~2022, we expect to spend approximately ~~$1,100 million~~$1.4 billion to ~~$1,175 million~~$1.5 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 ~~1,800~~1,950 Bcfe to ~~1,875~~2,050 Bcfe. ~~The planned capital expenditures and expected sales volume include amounts attributable to the assets acquired from the Alta Acquisition, which closed on July 21, 2021.~~

Operating Activities. Net cash provided by operating activities was ~~$443~~$1,252 million for the six months ended June 30, ~~2021~~2022 compared to ~~$947~~$443 million for the same period in ~~2020.~~2021. The ~~decrease~~increase was due primarily to ~~decreased~~higher cash operating revenues, partly offset by net cash settlements ~~received~~paid on derivatives, ~~not designated~~higher cash operating expenses and unfavorable changes in working capital due to higher natural gas prices as ~~hedges and~~well as unfavorable timing of working capital payments including increased collateral and margin deposits associated with the Company's over the counter derivative instrument contracts and exchange traded natural gas contracts, partly offset by higher cash operating revenues.payments.

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 10-K for the year ended December 31, ~~2020.~~2021.

Investing Activities. Net cash used in investing activities was ~~$675~~$508 million for the six months ended June 30, ~~2021~~2022 compared to ~~$349~~$675 million for the same period in ~~2020.~~2021. The ~~increase~~decrease was due ~~primarily~~ to cash paid for acquisitions in 2021 and ~~cash received in 2020~~proceeds from the sale of ~~assets and the~~our remaining investment in Equitrans ~~Share Exchange,~~Midstream common stock, partly offset by ~~lower~~increased capital expenditures.

The following table summarizes our capital expenditures.


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021

		(Millions)									(Millions)
Reserve development	Reserve development	$	178	$	235	$	367	$	458	Reserve development	$	297	$	178	$	526	$	367
Land and lease (a)	Land and lease (a)	31		28		54		50		Land and lease (a)	39		31		88		54
Capitalized overhead	Capitalized overhead	14		13		27		24		Capitalized overhead	13		14		25		27
Capitalized interest	Capitalized interest	4		4		8		8		Capitalized interest	6		4		12		8
Other production infrastructure	Other production infrastructure	19		19		24		20		Other production infrastructure	19		19		32		24
Other corporate items		—		4		4		5
Other										Other	2		—		3		4
Total capital expenditures	Total capital expenditures	246		303		484		565		Total capital expenditures	376		246		686		484
Deduct: Non-cash items (b)		(27)		(47)		(14)		(53)
Add (deduct): Non-cash items (b)										Add (deduct): Non-cash items (b)	17		(27)		(1)		(14)
Total cash capital expenditures	Total cash capital expenditures	$	219	$	256	$	470	$	512	Total cash capital expenditures	$	393	$	219	$	685	$	470

(a)Capital expenditures attributable to noncontrolling ~~interests~~interest were $2.5 million and $3.8 million for the three months ended June 30, 2022 and 2021, respectively, and $4.4 million and $5.1 million for the ~~three and~~ six months ended June 30, 2022 and 2021, respectively.

(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.

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EQT CORPORATION AND SUBSIDIARIES

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

Financing Activities. Net cash ~~provided by~~used in financing activities was ~~$544~~$814 million for the six months ended June 30, ~~2021~~2022 compared to net cash ~~used in~~provided by financing activities of ~~$600~~$544 million for the same period in ~~2020.~~2021. For the six months ended June 30, 2022, the primary uses of financing cash flows were 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 six months ended June 30, 2021, the primary source of financing cash flows was net proceeds from the issuance of debt, and the primary uses of financing

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~~EQT CORPORATION AND SUBSIDIARIES~~

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

cash flows were net repayments of credit facility borrowings and debt. For the six months ended June 30, 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 July 20, 2022, our Board of Directors declared a quarterly cash dividend of $0.15 per share of EQT common stock, payable on September 1, 2022, to shareholders of record at the close of business on August 9, 2022.

On July 8, 2022, we delivered notice to Equitrans Midstream that we have elected to exercise the Cash Payment Option (defined and discussed in Note 8 to the Condensed Consolidated Financial Statements).

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 tender offers or other cash purchases in the open market or privately negotiated transactions. The amounts involved in any such transactions may be material. ~~Additionally, we plan~~See Note 6 to ~~dispose~~the Condensed Consolidated Financial Statements for discussion of ~~our remaining retained shares~~redemptions and repurchases 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 July ~~27, 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)

Ba1

~~Stable~~Positive

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

~~BB+~~BBB–

~~Positive~~Stable

Fitch Ratings Service (Fitch)

~~BB+~~BBB–

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 July ~~27, 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 July ~~27, 2021,~~22, 2022, such assurances could be up to approximately ~~$1.2~~$0.9 billion, inclusive of letters of credit, OTC derivative instrument margin deposits and other collateral posted of approximately ~~$1.2~~$0.5 billion in the aggregate. See Notes 3 and 6 to the Condensed Consolidated Financial Statements for further information.

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.~~ As of June 30, ~~2021,~~2022, we were in compliance with all debt provisions and covenants under our debt agreements.

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EQT CORPORATION AND SUBSIDIARIES

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

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. The derivative commodity instruments that we use are primarily swap, collar and option agreements. The following table summarizes the approximate volume and prices of our NYMEX hedge positions ~~through 2024~~ as of July ~~23, 2021.~~

2021 (a) 2022 2023 2024
Swaps:
Volume (MMDth) 741 1,277 166 2
Average Price ($/Dth) $ 2.77 $ 2.77 $ 2.53 $ 2.67
Calls – Net Short:
Volume (MMDth) 180 391 77 15
Average Short Strike Price ($/Dth) $ 2.92 $ 2.96 $ 2.89 $ 3.11
Puts – Net Long:
Volume (MMDth) 105 169 69 15
Average Long Strike Price ($/Dth) $ 2.59 $ 2.65 $ 2.40 $ 2.45
Fixed Price Sales (b):
Volume (MMDth) 36 4 3 —
Average Price ($/Dth) $ 2.49 $ 2.38 $ 2.38 $ —

~~(a)July 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.


	Q3 2022 (a)		Q4 2022		Q1 2023		Q2 2023		Q3 2023		Q4 2023		2024
Hedged Volume (MMDth)	272		284		216		258		261		225		17
Hedged Volume (MMDth/d)	3.0		3.1		2.4		2.8		2.8		2.4		—

Swaps – Long
Volume (MMDth)	125		157		41		41		42		14		—
Avg. Price ($/Dth)	$	4.86	$	5.59	$	6.05	$	4.77	$	4.77	$	4.77	$	—

Swaps – Short
Volume (MMDth)	362		332		41		41		42		42		2
Avg. Price ($/Dth)	$	2.93	$	2.88	$	2.53	$	2.53	$	2.53	$	2.53	$	2.67

Calls – Long
Volume (MMDth)	42		36		40		40		40		40		51
Avg. Strike ($/Dth)	$	3.79	$	2.79	$	2.72	$	2.72	$	2.72	$	2.72	$	3.20

Calls – Short
Volume (MMDth)	145		195		202		274		277		182		66
Avg. Strike ($/Dth)	$	3.33	$	5.39	$	8.07	$	4.48	$	4.48	$	4.34	$	3.11

Puts – Long
Volume (MMDth)	71		119		215		257		260		197		15
Avg. Strike ($/Dth)	$	3.11	$	4.82	$	4.04	$	3.06	$	3.06	$	3.08	$	2.45

Puts – Short
Volume (MMDth)	37		11		—		—		—		—		—
Avg. Strike ($/Dth)	$	3.12	$	2.35	$	—	$	—	$	—	$	—	$	—

Fixed Price Sales
Volume (MMDth)	1		1		1		1		1		—		—
Avg. Price ($/Dth)	$	2.38	$	3.47	$	4.09	$	2.38	$	2.38	$	—	$	—

Option Premiums
Cash Settlement of Deferred Premiums (millions)	$	—	$	—	$	(61)	$	(42)	$	(42)	$	(45)	$	—

(a)July 1 through September 30.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

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

For ~~2021~~2022 (July 1 through December 31), ~~2022,~~ 2023 and 2024, we have natural gas sales agreements for approximately 9 ~~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.


		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited):
	Statements of Condensed Consolidated Operations	3
	Statements of Condensed Consolidated Comprehensive Income (Loss) ~~Income~~	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	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1922
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3034
Item 4.	Controls and Procedures	3136

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	3236
Item 1A.	Risk Factors	3236
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3237
Item 6.	Exhibits	3338

Signature		3439


		June 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021

		(Thousands)					(Thousands)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	330,770	$	18,210	Cash and cash equivalents	$	43,745	$	113,963
Accounts receivable (less provision for doubtful accounts: $7,049 and $6,239)		651,568		566,552
Accounts receivable (less provision for doubtful accounts: $475 and $321)						Accounts receivable (less provision for doubtful accounts: $475 and $321)	2,058,953		1,438,031
Derivative instruments, at fair value	Derivative instruments, at fair value	648,855		527,073		Derivative instruments, at fair value	1,409,199		543,337
Prepaid expenses and other	Prepaid expenses and other	537,462		103,615		Prepaid expenses and other	573,732		191,435
Total current assets	Total current assets	2,168,655		1,215,450		Total current assets	4,085,629		2,286,766

Property, plant and equipment	Property, plant and equipment	22,497,579		21,995,249		Property, plant and equipment	26,640,549		26,016,092
Less: Accumulated depreciation and depletion	Less: Accumulated depreciation and depletion	6,678,508		5,940,984		Less: Accumulated depreciation and depletion	8,438,478		7,597,172
Net property, plant and equipment	Net property, plant and equipment	15,819,071		16,054,265		Net property, plant and equipment	18,202,071		18,418,920

Contract asset	Contract asset	410,000		410,000		Contract asset	29,250		410,000
Other assets	Other assets	587,531		433,754		Other assets	304,714		491,702
Total assets	Total assets	$	18,985,257	$	18,113,469	Total assets	$	22,621,664	$	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	$	399,699	$	154,161	Current portion of debt	$	440,900	$	1,060,970
Accounts payable	Accounts payable	820,134		705,461		Accounts payable	1,700,406		1,339,251
Derivative instruments, at fair value	Derivative instruments, at fair value	2,160,253		600,877		Derivative instruments, at fair value	4,568,003		2,413,608
Other current liabilities	Other current liabilities	299,115		301,911		Other current liabilities	480,438		372,412
Total current liabilities	Total current liabilities	3,679,201		1,762,410		Total current liabilities	7,189,747		5,186,241

Credit facility borrowings	Credit facility borrowings	0		300,000		Credit facility borrowings	100,000		—
Senior notes	Senior notes	4,999,502		4,371,467		Senior notes	4,409,727		4,435,782
Note payable to EQM Midstream Partners, LP	Note payable to EQM Midstream Partners, LP	97,117		99,838		Note payable to EQM Midstream Partners, LP	91,442		94,320
Deferred income taxes	Deferred income taxes	1,009,721		1,371,967		Deferred income taxes	742,670		907,306
Other liabilities and credits	Other liabilities and credits	897,294		945,057		Other liabilities and credits	997,988		1,012,740
Total liabilities	Total liabilities	10,682,835		8,850,739		Total liabilities	13,531,574		11,636,389

Equity:	Equity:					Equity:
Common stock, 0 par value, shares authorized: 640,000, shares issued: 280,003		8,245,752		8,241,684
Treasury stock, shares at cost: 1,145 and 1,658		(20,084)		(29,348)
Retained earnings		71,284		1,048,259
Common stock, no par value, shares authorized: 640,000, shares issued: 369,912 and 377,432						Common stock, no par value, shares authorized: 640,000, shares issued: 369,912 and 377,432	9,948,646		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	(880,127)		(94,400)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(5,194)		(5,355)		Accumulated other comprehensive loss	(4,484)		(4,611)
Total common shareholders' equity	Total common shareholders' equity	8,291,758		9,255,240		Total common shareholders' equity	9,061,187		9,954,763
Noncontrolling interests in consolidated subsidiaries		10,664		7,490
Noncontrolling interest in consolidated subsidiaries						Noncontrolling interest in consolidated subsidiaries	28,903		16,236
Total equity	Total equity	8,302,422		9,262,730		Total equity	9,090,090		9,970,999
Total liabilities and equity	Total liabilities and equity	$	18,985,257	$	18,113,469	Total liabilities and equity	$	22,621,664	$	21,607,388


						EQT CORPORATION
						(Registrant)


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


	2021 (a)		2022		2023		Total

	(Thousands)
Natural gas sales	$	87,901	$	8,158	$	6,794	$	102,853


		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)												(Thousands)
June 30, 2021
June 30, 2022													June 30, 2022
Asset derivative instruments, at fair value	Asset derivative instruments, at fair value	$	648,855		$	134,691		$	514,164		$	0	Asset derivative instruments, at fair value	$	1,409,199		$	297,009		$	1,112,190		$	—
Liability derivative instruments, at fair value	Liability derivative instruments, at fair value	2,160,253			315,372			1,844,881			0		Liability derivative instruments, at fair value	4,568,003			222,871			4,345,132			—

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			—


Settlement Date	Principal Converted		Shares Issued	Fair Market Value
	(Thousands)			(Thousands)
July 1, 2022	$	3	201	$	7
July 5, 2022	2		134	5