What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-10-28 compared with 2021-07-29 · 118 added, 108 removed, 278 unchanged (45% of the section changed)

7 unchanged sentences

drilling plans and programs (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;

total resource potential and drilling inventory duration;

3 unchanged sentences

potential future impairments of our assets;

our ability to reduce our well costs and capital expenditures, and the timing of achieving any such reductions;

projected well costs and capital expenditures;

infrastructure programs;

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projected cash flows and free cash flow;

projected capital expenditures;

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;

our hedging strategy and projected margin posting obligations;

the effects of litigation, government regulation and tax position;

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Consolidated Results of Operations

Net loss attributable to EQT Corporation for the three months ended June 30, 2021 was $936.5 million, $3.35 per diluted share, compared to net loss attributable to EQT Corporation for the same period in 2020 of $263.1 million, $1.03 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 income tax benefit, the gain on sale of long-lived assets and decreased impairment and expiration of leases.

Net loss attributable to EQT Corporation for the six months ended June 30, 2021 was $977.0 million, $3.50 per diluted share, compared to net loss attributable to EQT Corporation for the same period in 2020 of $430.2 million, $1.68 per diluted share.

The change was attributable primarily to the loss on derivatives not designated as hedges, the gain on Equitrans Share Exchange (defined and 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 of natural gas, NGLs and oil, the income from investments, higher income tax benefit, the gain on sale of long-lived assets and decreased impairment and expiration of leases.

Net loss attributable to EQT Corporation for the three months ended September 30, 2021 was $1,980.1 million, $5.55 per diluted share, compared to net loss attributable to EQT Corporation for the same period in 2020 of $600.6 million, $2.35 per diluted share.

The change was attributable primarily to the loss on derivatives not designated as hedges, increased depreciation and depletion, increased transportation and processing expense and increased other operating expenses, partly offset by increased sales of natural gas, NGLs and oil, higher income tax benefit and higher income from investments.

Net loss attributable to EQT Corporation for the nine months ended September 30, 2021 was $2,957.1 million, $9.70 per diluted share, compared to net loss attributable to EQT Corporation for the same period in 2020 of $1,030.9 million, $4.03 per diluted share.

The change was attributable primarily to the loss on derivatives not designated as hedges, the gain on Equitrans Share Exchange (defined and discussed in Note 8 to the Condensed Consolidated Financial Statements) recognized in the first quarter of 2020, increased depreciation and depletion, increased transportation and processing expense and increased other operating expenses, partly offset by increased sales of natural gas, NGLs and oil, higher income tax benefit, the income from investments, the gain on sale of long-lived assets and decreased impairment and expiration of leases.

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.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

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Natural gas sales, including cash settled derivatives $ 1,021,529 $ 811,122 $ 2,891,452 $ 2,513,128

Natural gas liquids (NGLs), excluding ethane:

NGLs, excluding ethane:

Sales volume (MMcfe) (b) 16,504 10,661 47,262 32,053

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Cash settled derivatives not designated as hedges ($/Bbl) (16.35) — (9.82) (0.17)

Average NGLs price, including cash settled derivatives ($/Bbl) $ 25.52 $ 13.00 $ 29.69 $ 15.82

Average price, including cash settled derivatives ($/Bbl) $ 33.04 $ 19.83 $ 30.85 $ 17.16

NGLs sales $ 90,877 $ 35,227 $ 243,057 $ 91,648

23 unchanged sentences

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 the costs of, and recoveries on, pipeline capacity releases.

Net marketing services and other consists of the costs of, and recoveries on, pipeline capacity 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.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

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Add (deduct):

Loss (gain) on derivatives not designated as hedges 1,345,532 (26,426) 1,534,345 (415,862)

Loss on derivatives not designated as hedges 3,257,237 427,182 4,791,582 11,320

Net cash settlements (paid) received on derivatives not designated as hedges (619,864) 252,089 (729,445) 813,218

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Sales Volume and Revenues

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 % 2021 2020 %

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Sales of natural gas, NGLs and oil $ 1,784,050 $ 598,992 197.8 $ 3,992,905 $ 1,812,965 120.2

(Loss) gain on derivatives not designated as hedges (1,345,532) 26,426 (5,191.7) (1,534,345) 415,862 (469.0)

Loss on derivatives not designated as hedges (3,257,237) (427,182) 662.5 (4,791,582) (11,320) 42,228.5

Net marketing services and other 8,349 317 2,533.8 23,646 4,613 412.6

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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

Three Months Ended September 30, 2021 Compared to Three Months Ended September 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 compared to the same period in 2020 due to increased sales volume and a higher average realized price.

Average realized price increased due to higher NYMEX prices and higher liquids prices, partly offset by lower cash settled derivatives and unfavorable differential.

For the three months ended June 30, 2021 and 2020, we paid $71.4 million and received $315.4 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.

Sales of natural gas, NGLs and oil increased for the three months ended September 30, 2021 compared to the same period in 2020 due to increased sales volume.

Average realized price for the three months ended September 30, 2021 compared to the same period in 2020 remained consistent due to higher NYMEX prices and higher liquids prices, offset by lower cash settled derivatives and unfavorable differential.

For the three months ended September 30, 2021 and 2020, we paid $619.9 million and received $252.1 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 74 Bcfe from the assets acquired in the Alta Acquisition (defined and discussed in Note 10 to the Condensed Consolidated Financial Statements), sales volume increases of 34 Bcfe from the assets acquired in the Chevron Acquisition (defined below) and prior period sales volume decreases of 15 Bcfe from the 2020 Strategic Production Curtailments (defined below).

The Chevron Acquisition refers to our acquisition of upstream assets from Chevron U.S.A.

in the fourth quarter of 2020.

(Loss) gain on derivatives not designated as hedges.

For the three months ended June 30, 2021 and 2020, we recognized a loss of $1,345.5 million and a gain of $26.4 million, respectively, on derivatives not designated as hedges.

The 2021 loss was 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 related primarily to increases in the fair market value of our NYMEX swaps and options due to decreases in NYMEX forward prices.

The 2020 Strategic Production Curtailments refers to our strategic decisions to temporarily curtail 2020 production.

In May 2020, we temporarily curtailed approximately 1.4 Bcf per day of gross production, equivalent to approximately 1.0 Bcf per day of net production.

In July 2020, we began a moderated approach to bring back on-line the curtailed production.

In September 2020, we curtailed approximately 0.6 Bcf per day of gross production, equivalent to approximately 0.4 Bcf per day of net production.

In October 2020, we began a phased approach to bring back on-line the curtailed production, which was completed in November 2020.

Loss on derivatives not designated as hedges.

For the three months ended September 30, 2021 and 2020, we recognized a loss on derivatives not designated as hedges of $3,257.2 million and $427.2 million, respectively.

The losses were related primarily to decreases in the fair market value of our NYMEX swaps and options due to 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 Compared to Six Months Ended June 30, 2020

Net marketing services and other increased for the three months ended September 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 and third-party gathering revenues recognized on the midstream assets acquired in the Alta Acquisition.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Sales of natural gas, NGLs and oil.

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

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

Average realized price increased due to higher NYMEX prices and higher liquids prices, partly offset by lower cash settled derivatives and unfavorable differential.

For the six months ended June 30, 2021 and 2020, we paid $109.6 million and received $561.1 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 the Chevron Acquisition and prior period sales volume decreases of 36 Bcfe from the 2020 Strategic Production Curtailments.

(Loss) gain on derivatives not designated as hedges.

For the six months ended June 30, 2021 and 2020, we recognized a loss of $1,534.3 million and a gain of $415.9 million, respectively, on derivatives not designated as hedges.

The 2021 loss was 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 related primarily to increases in the fair market value of our NYMEX swaps and options due to decreases in NYMEX forward prices.

For the nine months ended September 30, 2021 and 2020, we paid $729.4 million and received $813.2 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 101 Bcfe from the assets acquired in the Chevron Acquisition, sales volume increases of 74 Bcfe from the assets acquired in the Alta Acquisition and prior period sales volume decreases of 51 Bcfe from the 2020 Strategic Production Curtailments.

Loss on derivatives not designated as hedges.

For the nine months ended September 30, 2021 and 2020, we recognized a loss on derivatives not designated as hedges of $4,791.6 million and $11.3 million, respectively.

The losses were related primarily to decreases in the fair market value of our NYMEX swaps and options due to 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.

Net marketing services and other increased for the nine months ended September 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 and third-party gathering revenues recognized on the midstream assets acquired in the Alta Acquisition.

EQT CORPORATION AND SUBSIDIARIES

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 % 2021 2020 %

18 unchanged sentences

0.05 0.03 66.7 0.05 0.03 66.7

Exploration 0.04 0.01 300.0 0.02 — —

Selling, general and administrative 0.10 0.14 (28.6) 0.11 0.12 (8.3)

Production depletion 0.88 0.92 (4.3) 0.89 0.92 (3.3)

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

Gathering expense increased on an absolute basis for the three months ended June 30, 2021 compared to the same period in 2020 due to increased sales volume, additional gathering capacity acquired from the Chevron Acquisition and a higher gathering rate structure as a result of the Consolidated GGA (defined and discussed in Note 8 to the Condensed Consolidated Financial Statements).

We expect to realize fee relief and a lower gathering rate structure from the Consolidated GGA beginning with the Mountain Valley Pipeline (MVP) in-service date.

Gathering expense decreased on a per Mcfe basis for the three months ended June 30, 2021 compared to the same period in 2020 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 the Chevron Acquisition.

Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020

Gathering expense increased on an absolute basis for the three months ended September 30, 2021 compared to the same period in 2020 due primarily to increased sales volume from the assets acquired in the Alta Acquisition and Chevron Acquisition.

Gathering expense decreased on a per Mcfe basis for the three months ended September 30, 2021 compared to the same period in 2020 due primarily to a lower gathering rate structure on the assets acquired in the Alta Acquisition and Chevron Acquisition.

Transmission.

Transmission expense increased on an absolute basis for the three months ended June 30, 2021 compared to the same period in 2020 due primarily to released capacity on, and credits received from, the Texas Eastern Transmission Pipeline in 2020.

Transmission expense decreased on a per Mcfe basis for the three months ended June 30, 2021 compared to the same period in 2020 due primarily to increased sales volume, some of which does not have associated transmission expense, such as the assets acquired from the Chevron Acquisition.

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

Transmission expense increased on an absolute basis for the three months ended September 30, 2021 compared to the same period in 2020 due primarily to additional capacity acquired as part of the Alta Acquisition and fewer capacity releases on the Tennessee Gas Pipeline.

Transmission expense decreased on a per Mcfe basis for the three months ended September 30, 2021 compared to the same period in 2020 due primarily to increased sales volume, some of which, particularly sales volume from assets acquired in the Alta Acquisition and Chevron Acquisition, has lower transmission expense on a per Mcfe basis as compared to our historical transmission portfolio.

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

EQT CORPORATION AND SUBSIDIARIES

1 unchanged sentence

Production taxes.

Production taxes increased on an absolute and per Mcfe basis for the three months ended June 30, 2021 compared to the same period in 2020 due primarily to increased Pennsylvania impact fees and West Virginia severance taxes as a result of higher prices.

Selling, general and administrative.

Selling, general and administrative expense increased on an absolute basis for the three months ended June 30, 2021 compared to the same period in 2020 due primarily to higher long-term incentive compensation costs due to changes in the fair value of awards.

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

Exploration increased on an absolute and per Mcfe basis for the three months ended September 30, 2021 compared to the same period in 2020 due primarily to our purchase of seismic data following the completion of the Alta Acquisition.

Depreciation and depletion.

Production depletion expense increased on an absolute basis for the three months ended June 30, 2021 compared to the same period in 2020 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 compared to the same period in 2020 due to a lower annual depletion rate.

Production depletion expense increased on an absolute basis for the three months ended September 30, 2021 compared to the same period in 2020 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 September 30, 2021 compared to the same period in 2020 due to a lower annual depletion rate.

Amortization of intangible assets.

Amortization of intangible assets for the three months ended June 30, 2020 was $7.5 million.

Amortization of intangible assets for the three months ended September 30, 2020 was $7.5 million.

Our intangible assets were fully amortized in the fourth quarter of 2020.

(Gain) loss 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 9 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.

During the three months ended September 30, 2021, we recognized a gain on sale/exchange of long-lived assets of $0.4 million related primarily to changes in the fair value of the Contingent Consideration from the 2020 Divestiture (defined and discussed in Note 9 to the Condensed Consolidated Financial Statements).

During the three months ended September 30, 2020, we recognized a loss on sale/exchange of long-lived assets of $4.7 million related primarily to the 2020 Asset Exchange Transactions (defined and discussed in Note 9 to the Condensed Consolidated Financial Statements), partly offset by changes in the fair value of the Contingent Consideration from the 2020 Divestiture.

See Note 9 to the Condensed Consolidated Financial Statements.

Impairment and expiration of leases.

Impairment and expiration of leases for the three months ended June 30, 2021 was $25.6 million compared to $41.3 million for the same period in 2020.

Impairment and expiration of leases for the three months ended September 30, 2021 was $41.1 million compared to $50.4 million for the same period in 2020.

The decrease was driven by higher lease expirations in 2020 due to changes in market conditions.

Other operating expenses.

Other operating expenses for the three months ended June 30, 2021 of $5.2 million were attributable primarily to transaction costs associated with the Chevron Acquisition and Alta Acquisition (defined and discussed in Note 10 to the Condensed Consolidated Financial Statements).

Other operating expenses for the three months ended June 30, 2020 of $4.7 million were attributable primarily to transaction and reorganization costs.

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

Gathering expense increased on an absolute basis for the six months ended June 30, 2021 compared to the same period in 2020 due to increased sales volume, additional gathering capacity acquired from the Chevron Acquisition and a higher gathering rate structure as a result of the Consolidated GGA.

We expect to realize fee relief and a lower gathering rate structure from the Consolidated GGA beginning with the MVP in-service date.

Gathering expense decreased on a per Mcfe basis for the six months ended June 30, 2021 compared to the same period in 2020 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 the Chevron Acquisition.

Other operating expenses for the three months ended September 30, 2021 of $38.8 million were attributable primarily to transaction costs associated with the Alta Acquisition.

Other operating expenses for the three months ended September 30, 2020 of $6.5 million were attributable primarily to changes in legal reserves, including settlements and reorganization costs.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

Gathering expense increased on an absolute basis for the nine months ended September 30, 2021 compared to the same period in 2020 due to increased sales volume.

Gathering expense decreased on a per Mcfe basis for the nine months ended September 30, 2021 compared to the same period in 2020 due primarily to increased sales volume, which resulted in our utilization of lower overrun rates as part of the Consolidated GGA (defined and discussed in Note 8 to the Condensed Consolidated Financial Statements), and a lower gathering rate structure on the assets acquired in the Chevron Acquisition and Alta Acquisition.

Transmission.

Transmission expense decreased on an absolute basis for the six months ended June 30, 2021 compared to the same period in 2020 due primarily to released capacity on, and credits received from, the Texas Eastern Transmission Pipeline in 2020 and released capacity on the Tennessee Gas Pipeline.

Transmission expense decreased on a per Mcfe basis for the six months ended June 30, 2021 compared to the same period in 2020 due primarily to increased sales volume, some of which does not have associated transmission expense, such as the assets acquired from the Chevron Acquisition.

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

Transmission expense decreased on an absolute basis for the nine months ended September 30, 2021 compared to the same period in 2020 due primarily to released capacity on, and credits received from, the Texas Eastern Transmission Pipeline in 2020 and released capacity on the Tennessee Gas Pipeline, partly offset by additional capacity acquired as part of the Alta Acquisition.

Transmission expense decreased on a per Mcfe basis for the nine months ended September 30, 2021 compared to the same period in 2020 due primarily to increased sales volume, some of which, particularly volume from the Chevron Acquisition and Alta Acquisition, has lower transmission expense on a per Mcfe basis as compared to our historical transmission portfolio.

Processing expense increased on an absolute and per Mcfe basis for the nine months ended September 30, 2021 compared to the same period in 2020 due to increased liquid sales volume due primarily to increased development of liquids-rich areas and increased processed volume from the Chevron Acquisition.

Production taxes.

Production taxes increased on an absolute and per Mcfe basis for the six months ended June 30, 2021 compared to the same period in 2020 due primarily to increased West Virginia severance taxes and Pennsylvania impact fees as a result of higher prices.

Production taxes increased on an absolute and per Mcfe basis for the nine months ended September 30, 2021 compared to the same period in 2020 due primarily to increased West Virginia severance taxes as a result of increased West Virginia production from the Chevron Acquisition and higher prices as well as increased Pennsylvania impact fees as a result of higher prices and additional wells acquired in the Alta Acquisition and Chevron Acquisition.

EQT CORPORATION AND SUBSIDIARIES

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

Exploration increased on an absolute and per Mcfe basis for the nine months ended September 30, 2021 compared to the same period in 2020 due primarily to our purchase of seismic data following the completion of the Alta Acquisition.

Selling, general and administrative.

Selling, general and administrative expense increased on an absolute basis for the six months ended June 30, 2021 compared to the same period in 2020 due primarily to higher long-term incentive compensation costs due to changes in the fair value of awards.

Selling, general and administrative expense increased on an absolute basis for the nine months ended September 30, 2021 compared to the same period in 2020 due primarily to higher long-term incentive compensation costs due to changes in the fair value of awards as well as higher litigation expense.

Depreciation and depletion.

Production depletion expense increased on an absolute basis for the six months ended June 30, 2021 compared to the same period in 2020 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 compared to the same period in 2020 due to a lower annual depletion rate.

Production depletion expense increased on an absolute basis for the nine months ended September 30, 2021 compared to the same period in 2020 due to increased sales volume, partly offset by a lower annual depletion rate.

Production depletion expense decreased on a per Mcfe basis for the nine months ended September 30, 2021 compared to the same period in 2020 due to a lower annual depletion rate.

Amortization of intangible assets.

Amortization of intangible assets for the six months ended June 30, 2021 was $15.0 million.

The intangible assets were fully amortized in the fourth quarter of 2020.

Amortization of intangible assets for the nine months ended September 30, 2020 was $22.4 million.

Our intangible assets were fully amortized in the fourth quarter of 2020.

(Gain) loss 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.

During the six months ended June 30, 2020, we recognized a loss on sale/exchange of long-lived assets 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.

During the nine months ended September 30, 2021, we recognized a gain on sale/exchange of long-lived assets of $18.4 million related primarily to changes in the fair value of the Contingent Consideration from the 2020 Divestiture.

During the nine months ended September 30, 2020, we recognized a loss on sale/exchange of long-lived assets of $102.7 million, of which $67.2 million related to the 2020 Asset Exchange Transactions and $35.5 million related to asset sales, including the 2020 Divestiture.

See Note 9 to the Condensed Consolidated Financial Statements.

Impairment and expiration of leases.

Impairment and expiration of leases for the six months ended June 30, 2021 was $42.4 million compared to $95.0 million for the same period in 2020.

Impairment and expiration of leases for the nine months ended September 30, 2021 was $83.5 million compared to $145.5 million for the same period in 2020.

The decrease was driven by higher lease expirations in 2020 due to changes in market conditions.

Other operating expenses.

Other operating expenses for the six months ended June 30, 2021 of $14.7 million were attributable primarily to transaction costs associated with the Chevron Acquisition and Alta Acquisition and 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.

Other operating expenses for the nine months ended September 30, 2021 of $53.4 million were attributable primarily to transaction costs associated with the Alta Acquisition and Chevron Acquisition.

Other operating expenses for the nine months ended September 30, 2020 of $11.3 million were attributable primarily to changes in legal reserves, including settlements, reorganization and transaction costs.

Other Income Statement Items

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(Income) loss from investments.

For the three and six months ended June 30, 2021, we recognized income on our investment 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.

For the three and nine months ended September 30, 2021, we recognized income on our investment 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 $10.14 and $8.04 as of September 30, 2021 and December 31, 2020, respectively.

For the three months ended September 30, 2020, we recognized income on our investment in Equitrans Midstream due to an increase in Equitrans Midstream's stock price.

For the nine months ended September 30, 2020, we recognized a loss on our investment in Equitrans Midstream due to a decrease in Equitrans Midstream's stock price as well as a decrease in the number of shares of Equitrans Midstream's common stock that we owned as a result of the Equitrans Share Exchange.

Dividend and other income.

Dividend and other income decreased for the six months ended June 30, 2021 compared to the same period in 2020 due primarily to lower dividends received from our investment in Equitrans Midstream driven by a decrease 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.

Dividend and other income decreased for the nine months ended September 30, 2021 compared to the same period in 2020 due primarily to lower dividends received from our investment in Equitrans Midstream driven by a decrease in the number of shares of Equitrans Midstream's common stock that we owned as well as a decrease in the dividend amount per share.

Loss on debt extinguishment.

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 for the three and six months ended June 30, 2021 compared to the same periods in 2020 due to increased interest incurred on new debt, 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.

During the nine months ended September 30, 2021, we recognized a loss on debt extinguishment of $9.8 million 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 nine months ended September 30, 2020, we recognized a loss on debt extinguishment of $3.7 million and $20.7 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.

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

Interest expense.

Interest expense increased for the three and nine months ended September 30, 2021 compared to the same periods in 2020 due to increased interest incurred on new debt, 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 in the first quarter of 2021.

See Note 6 to the Condensed Consolidated Financial Statements.

Income tax benefit.

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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 .

Planned Capital Expenditures and Sales Volume .

In 2021, we expect to spend approximately $1,075 million to $1,125 million in total capital expenditures, excluding amounts attributable to noncontrolling interests, which are expected to be funded by operating cash flow and, if required, borrowings under our credit facility.

Sales volume in 2021 is expected to be 1,840 Bcfe to 1,870 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 million for the six months ended June 30, 2021 compared to $947 million for the same period in 2020.

The decrease was due primarily to decreased cash settlements received on derivatives not designated as hedges and 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.

Net cash provided by operating activities was $492 million for the nine months ended September 30, 2021 compared to $1,132 million for the same period in 2020.

The decrease was due primarily to the cash settlements paid on derivatives not designated as hedges, unfavorable timing of working capital payments, including increased payments for collateral and margin deposits associated with our over the counter (OTC) derivative instrument contracts and exchange traded natural gas contracts, and income tax refunds received in the prior year, partly offset by higher cash operating revenues.

Our cash flows from operating activities are affected by movements in the market price for commodities.

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Investing Activities.

Net cash used in investing activities was $675 million for the six months ended June 30, 2021 compared to $349 million for the same period in 2020.

The increase was due primarily to cash paid for acquisitions in 2021 and cash received in 2020 from the sale of assets and the Equitrans Share Exchange, partly offset by lower capital expenditures.

Net cash used in investing activities was $1,715 million for the nine months ended September 30, 2021 compared to $623 million for the same period in 2020.

The increase was due primarily to cash paid for acquisitions in 2021 and proceeds received from the sale of assets and the Equitrans Share Exchange in 2020, partly offset by lower capital expenditures.

The following table summarizes our capital expenditures.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

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Total capital expenditures 297 248 781 813

(Deduct) add back:

Non-cash items (b) (60) 28 (74) (25)

Total cash capital expenditures $ 237 $ 276 $ 707 $ 788

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

(a) Capital expenditures attributable to noncontrolling interests were $0.7 million and $5.7 million for the three and nine months ended September 30, 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 reversal of the prior period accrual as well as the current period estimate.

Financing Activities.

Net cash provided by financing activities was $544 million for the six months ended June 30, 2021 compared to net cash used in financing activities of $600 million for the same period in 2020.

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

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.

Financing Activities.

Net cash provided by financing activities was $1,228 million for the nine months ended September 30, 2021 compared to net cash used in financing activities of $500 million for the same period in 2020.

For the nine months ended September 30, 2021, the primary sources of financing cash flows were net proceeds from the issuance of debt and credit facility borrowings, and the primary use of financing cash flows was net repayments of debt.

For the nine months ended September 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.

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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.

The table below reflects the credit ratings and rating outlooks assigned to our debt instruments as of October 22, 2021.

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.

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Fitch Ratings Service (Fitch) BB+ 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, the interest rate on the 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.

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, the interest rate on 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 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, 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, such assurances could be up to approximately $1.2 billion, inclusive of letters of credit, OTC derivative instrument margin deposits and other collateral posted of approximately $1.2 billion in the aggregate.

As of October 22, 2021, 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 October 22, 2021, such assurances could be up to approximately $1.1 billion, inclusive of letters of credit, OTC derivative instrument margin deposits and other collateral posted of approximately $0.8 billion in the aggregate.

During the third quarter of 2021, we amended agreements with six of our largest OTC hedge counterparties to permanently or temporarily reduce or eliminate our margin posting obligations associated with our OTC derivative instruments with such OTC hedge counterparties.

The purpose of such amendments was to mitigate the amount of cash collateral that we would otherwise have been required to post based on current NYMEX strip pricing.

As of October 22, 2021, our margin balance on our existing hedge portfolio, including both OTC and broker margin balances, was approximately $0.4 billion, compared to approximately $0.5 billion as of June 30, 2021, despite a significant increase in natural gas prices between June 30, 2021 and October 22, 2021.

See Notes 3 and 6 to the Condensed Consolidated Financial Statements for further information.

EQT CORPORATION AND SUBSIDIARIES

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

Our debt agreements and other financial obligations contain various provisions that, if not complied with, could result in default or event of default under our credit facility, mandatory partial or full repayment of amounts outstanding, reduced loan capacity or other similar actions.

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The calculation of this ratio excludes the effects of accumulated other comprehensive income.

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

EQT CORPORATION AND SUBSIDIARIES

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

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

Commodity Risk Management

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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.

The following table summarizes the approximate volume and prices of our NYMEX hedge positions through 2024 as of October 22, 2021.

2021 (a) 2022 2023 2024

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Average Price ($/Dth) $ 2.49 $ 2.38 $ 2.38 $ —

(a) July 1 through December 31.

(a) October 1 through December 31.

(b) 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.

For 2021 (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.

For 2021 (October 1 through December 31), 2022, 2023 and 2024, we have natural gas sales agreements for approximately 5 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.

During the third quarter of 2021 and during the period beginning October 1, 2021 and ending October 22, 2021, we purchased $54 million and $18 million, respectively, of winter calls to reposition our 2021 and 2022 hedge portfolio to enable incremental upside participation in rising natural gas prices and to further mitigate potential incremental margin posting requirements.

These positions cover approximately 149 MMDth in 2021 and 2022 and have been excluded from the table above.

In addition, during the third quarter of 2021, we purchased $3 million of 2022 swaptions.

If exercised, these positions will be converted into approximately 37 MMDth of swaps and have been excluded from the table above.

We have also entered into derivative instruments to hedge basis.

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

EQT CORPORATION AND SUBSIDIARIES

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

Commitments and Contingencies

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See Note 16 to the Consolidated Financial Statements and Part I, Item 3., "Legal Proceedings" in our Annual Report on Form 10-K for the year ended December 31, 2020 for a discussion of our commitments and contingencies.

See also Part II, Item 1., "Legal Proceedings."

Recently Issued Accounting Standards

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis