What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-10-27 compared with 2022-07-28 · 117 added, 105 removed, 320 unchanged (41% of the section changed)

18 unchanged sentences

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;

potential or pending acquisition transactions, including the Tug Hill and XcL Midstream Acquisition (defined in Note 9 to the Condensed Consolidated Financial Statements), or other strategic transactions, the timing thereof and our ability to achieve the intended operational, financial and strategic benefits from any such transactions;

the amount and timing of any repayments, redemptions or repurchases of our common stock, outstanding debt securities or other debt instruments;

17 unchanged sentences

our ability to appropriately allocate capital and resources among our strategic opportunities;

access to and cost of capital;

access to and cost of capital, including rising interest rates;

our hedging and other financial contracts;

1 unchanged sentence

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, 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);

4 unchanged sentences

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, 2021 and set forth in other documents we file from time to time with the Securities and Exchange Commission.

and disruptions to our business due to acquisitions and other significant transactions, including the Tug Hill and XcL Midstream Acquisition.

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, 2021, as updated by Part II, Item 1A., "Risk Factors" in this Quarterly Report on Form 10-Q and 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.

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Consolidated Results of Operations

Net income attributable to EQT Corporation for the three months ended June 30, 2022 was $891.4 million, $2.19 per diluted share, compared to net loss attributable to EQT Corporation for the same period in 2021 of $933.3 million, $3.34 per diluted share.

The change was attributable primarily to increased sales of natural gas, NGLs and oil and a smaller loss on derivatives, partly offset by income tax expense, increased loss on debt extinguishment and increased transmission and processing, depreciation and depletion and production expenses.

Net loss attributable to EQT Corporation for the six months ended June 30, 2022 was $624.7 million, $1.68 per diluted share, compared to net loss attributable to EQT Corporation for the same period in 2021 of $970.7 million, $3.48 per diluted share.

The change was attributable primarily to increased sales of natural gas, NGLs and oil, partly offset by a greater loss on derivatives, decreased income tax benefit, the impairment of our contract asset (discussed in Note 8 to the Condensed Consolidated Financial Statements), increased transportation and processing expense, increased loss on debt extinguishment and increased depreciation and depletion expense.

Results of operations for 2022 include the results of our operation of assets acquired in the Alta Acquisition (defined and discussed in Note 9 to the Condensed Consolidated Financial Statements), which closed in July 2021.

Net income attributable to EQT Corporation for the three months ended September 30, 2022 was $683.7 million, $1.69 per diluted share, compared to net loss attributable to EQT Corporation for the same period in 2021 of $1,976.8 million, $5.54 per diluted share.

The change was attributable primarily to increased sales of natural gas, NGLs and oil and a smaller loss on derivatives, partly offset by income tax expense, increased transportation and processing expense and decreased income from investments.

Net income attributable to EQT Corporation for the nine months ended September 30, 2022 was $59.0 million, $0.16 per diluted share, compared to net loss attributable to EQT Corporation for the same period in 2021 of $2,947.5 million, $9.67 per diluted share.

The change was attributable primarily to increased sales of natural gas, NGLs and oil, partly offset by decreased income tax benefit, a greater loss on derivatives, increased transportation and processing expense, the impairment of our contract asset (discussed in Note 8 to the Condensed Consolidated Financial Statements) and increased loss on debt extinguishment.

Results of operations for 2022 and for the period beginning July 21, 2021 and ending September 30, 2021 include the results of our operation of assets acquired in the Alta Acquisition (defined and discussed in Note 9 to the Condensed Consolidated Financial Statements).

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,

2022 2021 2022 2021

17 unchanged sentences

Average NGLs price, including cash settled derivatives ($/Bbl) $ 44.99 $ 33.04 $ 52.80 $ 30.85

NGLs sales $ 130,641 $ 68,737 $ 275,022 $ 152,180

NGLs sales, including cash settled derivatives $ 103,789 $ 90,877 $ 378,811 $ 243,057

Sales volume (MMcfe) (b) 8,464 10,546 27,071 26,936

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

10 unchanged sentences

Sales Volume and Revenues

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

Three Months Ended June 30,

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

Three Months Ended September 30,

2022 2021 Change % Change

14 unchanged sentences

Sales of natural gas, NGLs and oil.

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

Average realized price for the three months ended June 30, 2022 compared to the same period in 2021 increased due to higher NYMEX prices and higher liquids prices, partly offset by unfavorable cash settled derivatives and unfavorable differential.

For the three months ended June 30, 2022 and 2021, we paid $1,753.7 million and $71.4 million, respectively, of net cash settlements on derivatives, 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 from the assets acquired in the Alta Acquisition.

Sales of natural gas, NGLs and oil increased for the three months ended September 30, 2022 compared to the same period in 2021 due to a higher average realized price, partly offset by decreased sales volume.

Average realized price for the three months ended September 30, 2022 compared to the same period in 2021 increased due to higher NYMEX prices, partly offset by unfavorable cash settled derivatives and unfavorable differential.

For the three months ended September 30, 2022 and 2021, we paid $2,033.7 million and $619.9 million, respectively, of net cash settlements on derivatives, which are included in average realized price but may not be included in operating revenues.

Sales volume decreased primarily as a result of sales volume decreases from natural decline of producing wells and fewer wells turned-in-line, partly offset by sales volume increases from the assets acquired in the Alta Acquisition.

Sales volume for the three months ended September 30, 2022 was negatively impacted by fewer wells turned-in-line as a result of third-party supply chain constraints.

Supply chain constraints may continue to impact our future operating revenues.

The pending Tug Hill and XcL Midstream Acquisition, which is expected to close in the fourth quarter of 2022, subject to regulatory approvals, is expected to add approximately 800 MMcfe per day of sales volume, 20% of which is liquids sales volume.

Loss on derivatives.

For the three months ended June 30, 2022 and 2021, we recognized a loss on derivatives of $845.1 million and $1,345.5 million, respectively.

The loss on derivatives for 2022 related primarily to decreases in the fair market value of our NYMEX swaps and options due to increases in NYMEX prices.

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

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

Six Months Ended June 30,

For the three months ended September 30, 2022 and 2021, we recognized a loss on derivatives of $1,627.3 million and $3,257.2 million, respectively, related primarily to decreases in the fair market value of our NYMEX swaps and options due to increases in NYMEX forward prices.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Nine Months Ended September 30,

2022 2021 Change % Change

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Sales of natural gas, NGLs and oil.

Sales of natural gas, NGLs and oil increased for the six months ended June 30, 2022 compared to the same period in 2021 due to a higher average realized 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 unfavorable cash settled derivatives and unfavorable differential.

For the six months ended June 30, 2022 and 2021, we paid $2,639.3 million and $109.6 million, respectively, of net cash settlements on derivatives, 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 from the assets acquired in the Alta Acquisition.

Loss on derivatives.

For the six months ended June 30, 2022 and 2021, we recognized a loss on derivatives of $3,922.7 million and $1,534.3 million, respectively.

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

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

Average realized price for the nine months ended September 30, 2022 compared to the same period in 2021 increased due to higher NYMEX prices and higher liquids prices, partly offset by unfavorable cash settled derivatives and unfavorable differential.

For the nine months ended September 30, 2022 and 2021, we paid $4,673.0 million and $729.4 million, respectively, of net cash settlements on derivatives, 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 from the assets acquired in the Alta Acquisition, partly offset by natural decline of producing wells and fewer wells turned-in-line.

EQT CORPORATION AND SUBSIDIARIES

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

Loss on derivatives.

For the nine months ended September 30, 2022 and 2021, we recognized a loss on derivatives of $5,550.0 million and $4,791.6 million, respectively, related primarily to decreases in the fair market value of our NYMEX swaps and options due to increases in NYMEX forward prices.

Operating Expenses

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

Three Months Ended June 30,

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

Three Months Ended September 30,

2022 2021 Change % Change

18 unchanged sentences

0.09 0.05 0.04 80.0

Exploration — 0.04 (0.04) (100.0)

Selling, general and administrative 0.14 0.10 0.04 40.0

Production depletion 0.85 0.88 (0.03) (3.4)

Gathering expense increased on an absolute basis for the three months ended June 30, 2022 compared to the same period in 2021 due primarily to increased sales volume from the assets acquired in the Alta Acquisition and higher gathering rates on certain contracts indexed to Appalachian Basin prices.

Gathering expense remained flat on a per Mcfe basis for the three months ended June 30, 2022 compared to the same period in 2021 due to a lower gathering rate structure on the assets acquired in the Alta Acquisition, offset primarily by increased gathering rates on contracts indexed to price.

Operating expenses on a per Mcfe basis for the three months ended September 30, 2022 compared to the same period in 2021 were negatively impacted by lower sales volume unless otherwise noted.

Sales volume for the three months ended September 30, 2022 was negatively impacted by fewer wells turned-in-line as a result of third-party supply chain constraints.

Supply chain constraints and inflationary pressures may continue to impact our future operating expenses.

Gathering expense increased on an absolute and per Mcfe basis for the three months ended September 30, 2022 compared to the same period in 2021 due primarily to higher gathering rates on certain contracts indexed to price.

Transmission.

Transmission expense increased on an absolute basis for the three months ended June 30, 2022 compared to the same period in 2021 due primarily to additional capacity acquired as part of the Alta Acquisition, higher rates on the Texas Eastern Transmission Pipeline and additional capacity acquired on the Rockies Express Pipeline in the third quarter of 2021.

Transmission expense decreased on a per Mcfe basis for the three months ended June 30, 2022 compared to the same period in 2021 due primarily to increased sales volume from the Alta Acquisition, which has a lower average transmission expense per Mcfe when compared to our historical transmission portfolio.

Processing expense increased on an absolute 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, 2022 compared to the same period in 2021 due primarily to increased sales volume.

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.

Transmission expense increased on an absolute and per Mcfe basis for the three months ended September 30, 2022 compared to the same period in 2021 due primarily to higher rates on and lower credits received from the Texas Eastern Transmission Pipeline and additional capacity acquired on the Rockies Express Pipeline in September 2021.

LOE increased on an absolute and per Mcfe basis for the three months ended September 30, 2022 compared to the same period in 2021 due primarily to higher salt water disposal costs.

Production taxes.

Production taxes increased on an absolute and per Mcfe basis for the three months ended September 30, 2022 compared to the same period in 2021 due to increased West Virginia severance taxes, which resulted primarily from higher prices.

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, 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.

Exploration .

Exploration decreased on an absolute and per Mcfe basis for the three months ended September 30, 2022 compared to the same period in 2021 due primarily to our prior year 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 three months ended June 30, 2022 compared to the same period in 2021 due primarily to higher long-term incentive compensation costs as a result of changes in the fair value of awards.

Selling, general and administrative expense increased on an absolute and per Mcfe basis for the three months ended September 30, 2022 compared to the same period in 2021 due primarily to higher long-term incentive compensation costs 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, 2022 compared to the same period in 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, 2022 compared to the same period in 2021 due to a lower annual depletion rate.

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 3 to the Condensed Consolidated Financial Statements).

Production depletion expense decreased on an absolute and per Mcfe basis for the three months ended September 30, 2022 compared to the same period in 2021 due to a lower annual depletion rate and decreased sales volume.

Impairment and expiration of leases.

During the three months ended June 30, 2022 and 2021, we recognized impairment and expiration of leases of $47.0 million and $25.6 million, respectively, related to leases that we no longer expect to extend or develop prior to their expiration based on our development plan.

During the three months ended September 30, 2022 and 2021, we recognized impairment and expiration of leases of $20.5 million and $41.1 million, respectively, related to leases that we no longer expect to extend or develop prior to their expiration based on our development plan.

Other operating expenses .

Other operating expenses for the three months ended September 30, 2022 of $15.5 million were attributable primarily to changes in legal reserves as well as transaction costs associated with the Tug Hill and XcL Midstream 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.

EQT CORPORATION AND SUBSIDIARIES

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

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

Six Months Ended June 30,

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Nine Months Ended September 30,

2022 2021 Change % Change

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0.08 0.05 0.03 60.0

Exploration — 0.02 (0.02) (100.0)

Selling, general and administrative 0.13 0.11 0.02 18.2

Production depletion 0.85 0.89 (0.04) (4.5)

Gathering expense increased on an absolute basis for the six months ended June 30, 2022 compared to the same period in 2021 due primarily to increased sales volume from the assets acquired in the Alta Acquisition and higher gathering rates on certain contracts indexed to Appalachian Basin prices.

Gathering expense decreased on a per Mcfe basis for the six months ended June 30, 2022 compared to the same period in 2021 due primarily to the lower gathering rate structure on the assets acquired in the Alta Acquisition.

Gathering expense increased on an absolute and per Mcfe basis for the nine months ended September 30, 2022 compared to the same period in 2021 due primarily to increased sales volume from the assets acquired in the Alta Acquisition and higher gathering rates on certain contracts indexed to price, partly offset by the lower gathering rate structure on the assets acquired in the Alta Acquisition.

Transmission.

Transmission expense increased on an absolute basis for the six months ended June 30, 2022 compared to the same period in 2021 due primarily to additional capacity acquired as part of the Alta Acquisition, higher rates on and lower credits received from the Texas Eastern Transmission Pipeline and additional capacity acquired on the Rockies Express Pipeline in the third quarter of 2021.

Transmission expense decreased on a per Mcfe basis for the six months ended June 30, 2022 compared to the same period in 2021 due primarily to increased sales volume from the Alta Acquisition, which has a lower average transmission expense per Mcfe when compared to our historical transmission portfolio.

Processing expense increased on an absolute 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, 2022 compared to the same period in 2021 due primarily to increased sales volume.

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, 2022 compared to the same period in 2021 due primarily to higher salt water disposal costs.

Transmission expense increased on an absolute and per Mcfe basis for the nine months ended September 30, 2022 compared to the same period in 2021 due primarily to higher rates on and lower credits received from the Texas Eastern Transmission Pipeline, additional capacity acquired as part of the Alta Acquisition and additional capacity acquired on the Rockies Express Pipeline in September 2021.

Processing expense increased on an absolute basis for the nine months ended September 30, 2022 compared to the same period in 2021 due to increased volumes that require processing as a result of increased development of liquids-rich areas.

LOE increased on an absolute and per Mcfe basis for the nine months ended September 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.

Production taxes.

Production taxes increased on an absolute and per Mcfe basis for the nine months ended September 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.

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.

Exploration .

Exploration decreased on an absolute and per Mcfe basis for the nine months ended September 30, 2022 compared to the same period in 2021 due primarily to our prior year purchase of seismic data following the completion of the Alta Acquisition.

Selling, general and administrative.

Selling, general and administrative expense increased on an absolute and per Mcfe basis for the six months ended June 30, 2022 compared to the same period in 2021 due primarily to higher long-term incentive compensation costs as a result of changes in the fair value of awards and higher litigation expense.

Selling, general and administrative expense increased on an absolute and per Mcfe basis for the nine months ended September 30, 2022 compared to the same period in 2021 due primarily to higher long-term incentive compensation costs 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 six months ended June 30, 2022 compared to the same period in 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, 2022 compared to the same period in 2021 due to a lower annual depletion rate.

Production depletion expense increased on an absolute basis for the nine months ended September 30, 2022 compared to the same period in 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 nine months ended September 30, 2022 compared to the same period in 2021 due to a lower annual depletion rate.

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.

During the nine months ended September 30, 2022 and 2021, we recognized a gain on sale of long-lived assets of $2.5 million and $18.4 million, respectively, related primarily to changes in the fair value of the Contingent Consideration (defined in Note 3 to the Condensed Consolidated Financial Statements).

Impairment of contract asset.

During the six months ended June 30, 2022, we recognized impairment of our contract asset of $184.9 million.

During the nine months ended September 30, 2022, we recognized impairment of our contract asset of $184.9 million.

See Note 8 to the Condensed Consolidated Financial Statements.

Impairment and expiration of leases.

During the six months ended June 30, 2022 and 2021, we recognized impairment and expiration of leases of $77.0 million and $42.4 million, respectively, related to leases that we no longer expect to extend or develop prior to their expiration based on our development plan.

During the nine months ended September 30, 2022 and 2021, we recognized impairment and expiration of leases of $97.5 million and $83.5 million, respectively, related to leases that we no longer expect to 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 our acquisition of upstream assets from Chevron U.S.A.

in November 2020 and the Alta Acquisition as well as changes in legal reserves.

Other operating expenses for the nine months ended September 30, 2022 of $39.0 million were attributable primarily to changes in legal and environmental reserves as well as transaction costs associated with the Tug Hill and XcL Midstream Acquisition.

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 our acquisition of upstream assets from Chevron U.S.A.

in November 2020.

Other Income Statement Items

(Income) loss from investments.

For the three months ended June 30, 2022, we recognized income from investments due primarily to equity earnings on our equity method investments.

For the 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 Investment Fund (defined in Note 4 to the Condensed Consolidated Financial Statements) and equity earnings on our equity method investments.

For the three and six months ended June 30, 2021, we recognized income on our investments in Equitrans Midstream and the Investment Fund.

For the three months ended September 30, 2022, we recognized income from investments due to equity earnings on our equity method investments, partly offset by a loss on our investment in the Investment Fund (defined in Note 4 to the Condensed Consolidated Financial Statements).

For the three months ended September 30, 2021, we recognized income from investments due primarily to a gain on our investment in Equitrans Midstream.

For the nine months ended September 30, 2022, we recognized a loss from investments due to a loss on the 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 equity earnings on our equity method investments and a gain on our investment in the Investment Fund.

For the nine months ended September 30, 2021, we recognized income from investments due primarily to a gain on our investments in Equitrans Midstream and the Investment Fund.

Dividend and other income .

Dividend and other income increased for the three and six months ended June 30, 2022 compared to the same periods in 2021 due primarily to dividends received on the Investment Fund, partly offset by decreased dividends received on our investment in Equitrans Midstream, which was fully disposed of in April 2022.

Dividend and other income decreased for the three months ended September 30, 2022 compared to the same period in 2021 due primarily to decreased dividends received on our investment in Equitrans Midstream, which was fully disposed in 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.

See Note 6 to the Condensed Consolidated Financial Statements.

During the three and nine months ended September 30, 2022, we recognized a loss on debt extinguishment of $27.8 million and $139.1 million, respectively, due to the debt repayment and repurchases discussed in Note 6 to the Condensed Consolidated Financial Statements.

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.

EQT CORPORATION AND SUBSIDIARIES

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

Interest expense.

Interest expense decreased for the three and six months ended June 30, 2022 compared to the same periods in 2021 due primarily to reduced interest expense on letters of credit and our senior notes, partly offset by increased interest expense due primarily to higher borrowings under our credit facility.

Interest expense decreased for the three months ended September 30, 2022 compared to the same period in 2021 due primarily to reduced interest expense on our senior notes driven by lower balances and lower interest rates as well as reduced interest expense due to a reduction of letters of credit balances, partly offset by increased interest expense due primarily to increased interest rates on borrowings under our credit facility.

Interest expense decreased for the nine months ended September 30, 2022 compared to the same period in 2021 due primarily to reduced interest expense on our senior notes driven by lower interest rates and lower balances as well as reduced interest expense due to a reduction of letters of credit balances, partly offset by increased interest expense due primarily to increased interest rates and higher borrowings under our credit facility.

See Note 6 to the Condensed Consolidated Financial Statements.

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See Note 5 to the Condensed Consolidated Financial Statements.

EQT CORPORATION AND SUBSIDIARIES

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

Capital Resources and Liquidity

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Planned Capital Expenditures and Sales Volume .

In 2022, we expect to spend approximately $1.4 billion to $1.5 billion in total capital expenditures, excluding amounts attributable to noncontrolling interest.

In 2022, we expect to spend approximately $1.400 billion to $1.475 billion in total capital expenditures, excluding amounts attributable to noncontrolling interest and amounts attributable to the assets expected to be acquired in the Tug Hill and XcL Midstream Acquisition.

We expect to fund our capital expenditures with cash generated from operations and, if required, borrowings under our credit facility.

4 unchanged sentences

and drilling, completion and acquisition costs.

Sales volume in 2022 is expected to be 1,950 Bcfe to 2,050 Bcfe.

In 2022, we expect our sales volume to be 1,925 Bcfe to 1,975 Bcfe, excluding amounts attributable to the assets expected to be acquired in the Tug Hill and XcL Midstream Acquisition.

Operating Activities.

Net cash provided by operating activities was $1,252 million for the six months ended June 30, 2022 compared to $443 million for the same period in 2021.

The increase was due primarily to higher cash operating revenues, partly offset by net cash settlements paid on derivatives, higher cash operating expenses and unfavorable changes in working capital due to higher natural gas prices as well as unfavorable timing of working capital payments.

Net cash provided by operating activities was $2,402 million for the nine months ended September 30, 2022 compared to $492 million for the same period in 2021.

The increase was due primarily to higher cash operating revenues and favorable changes in working capital, partly offset by higher net cash settlements paid on derivatives and higher cash operating expenses.

During the third quarter of 2022, we elected to exercise the Cash Payment Option pursuant to the Consolidated GGA (each defined and discussed in Note 8 to the Condensed Consolidated Financial Statements), and, on October 4, 2022, we received the cash proceeds from the Cash Payment Option.

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

2 unchanged sentences

Investing Activities.

Net cash used in investing activities was $508 million for the six months ended June 30, 2022 compared to $675 million for the same period in 2021.

The decrease was due to cash paid for acquisitions in 2021 and proceeds from the sale of our remaining investment in Equitrans Midstream common stock, partly offset by increased capital expenditures.

Net cash used in investing activities was $1,017 million for the nine months ended September 30, 2022 compared to $1,715 million for the same period in 2021.

The decrease was due to cash paid for acquisitions in 2021 and proceeds from the sale of our remaining investment in Equitrans Midstream common stock in 2022, partly offset by increased capital expenditures and a deposit on acquisition in 2022.

EQT CORPORATION AND SUBSIDIARIES

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

The following table summarizes our capital expenditures.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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Total cash capital expenditures $ 362 $ 237 $ 1,047 $ 707

(a) Capital expenditures attributable to noncontrolling 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 six months ended June 30, 2022 and 2021, respectively.

(a) Capital expenditures attributable to noncontrolling interest were $6.6 million and $0.7 million for the three months ended September 30, 2022 and 2021, respectively, and $11.0 million and $5.7 million for the nine months ended September 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.

EQT CORPORATION AND SUBSIDIARIES

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

Financing Activities.

Net cash used in financing activities was $814 million for the six months ended June 30, 2022 compared to net cash provided by financing activities of $544 million for the same period in 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 cash flows were net repayments of credit facility borrowings and debt.

Net cash used in financing activities was $1,411 million for the nine months ended September 30, 2022 compared to net cash provided by financing activities of $1,228 million for the same period in 2021.

For the nine months ended September 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.

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.

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).

On October 20, 2022, our Board of Directors declared a quarterly cash dividend of $0.15 per share of EQT common stock, payable on December 1, 2022, to shareholders of record at the close of business on November 9, 2022.

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 redeem or repurchase our outstanding debt or equity securities through tender offers or other cash purchases in the open market or privately negotiated transactions.

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See Note 6 to the Condensed Consolidated Financial Statements for discussion of redemptions and repurchases of debt.

Material Cash Requirements.

On September 6, 2022, we entered into the Tug Hill and XcL Midstream Purchase Agreement (defined in Note 9 to the Condensed Consolidated Financial Statements), pursuant to which we agreed to acquire THQ Appalachia I, LLC's upstream assets and THQ-XcL Holdings I, LLC's gathering and processing assets through the acquisition of all of the issued and outstanding membership interests of each of THQ Appalachia I Midco, LLC and THQ-XcL Holdings I Midco, LLC for consideration of approximately $2.6 billion in cash and 55.0 million shares of EQT common stock, as adjusted pursuant to customary closing purchase price adjustments.

Upon execution of the Tug Hill and XcL Midstream Purchase Agreement, we deposited $150 million into an escrow account, which will be credited toward the cash consideration upon closing of the Tug Hill and XcL Midstream Acquisition.

On October 4, 2022, we issued $500 million aggregate principal amount of 5.678% senior notes due October 1, 2025 and $500 million aggregate principal amount of 5.700% senior notes due April 1, 2028.

We intend to use the net proceeds from the sale of the notes, together with borrowings under the Term Loan Facility (defined in Note 6 to the Condensed Consolidated Financial Statements), cash on hand and/or borrowings under our credit facility, to fund the cash consideration for the Tug Hill and XcL Midstream Acquisition.

The Tug Hill and XcL Midstream Acquisition is expected to close in the fourth quarter of 2022, subject to regulatory approvals.

EQT CORPORATION AND SUBSIDIARIES

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

Security Ratings and Financing Triggers

The table below reflects the credit ratings and rating outlooks assigned to our debt instruments as of July 22, 2022.

The table below reflects the credit ratings and rating outlooks assigned to our debt instruments as of October 21, 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.

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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 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 22, 2022, such assurances could be up to approximately $0.9 billion, inclusive of letters of credit, OTC derivative instrument margin deposits and other collateral posted of approximately $0.5 billion in the aggregate.

As of October 21, 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 October 21, 2022, such assurances could be up to approximately $0.7 billion, inclusive of letters of credit, OTC derivative instrument margin deposits and other collateral posted of approximately $0.3 billion in the aggregate.

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

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Our credit facility contains financial covenants that require us to have a total debt to total capitalization ratio no greater than 65%.

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

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

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

EQT CORPORATION AND SUBSIDIARIES

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

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

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 as of July 22, 2022.

The following table summarizes the approximate volume and prices of our NYMEX hedge positions as of October 21, 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

Q4 2022 (a) Q1 2023 Q2 2023 Q3 2023 Q4 2023 2024

Hedged Volume (MMDth) 290 300 353 356 283 17

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Cash Settlement of Deferred Premiums (millions) $ — $ (107) $ (81) $ (82) $ (75) $ —

(a) July 1 through September 30 .

(a) October 1 through December 31 .

For 2022 (October 1 through December 31), 2023 and 2024, we have natural gas sales agreements for approximately 5 MMDth, 88 MMDth and 11 MMDth, respectively, that include average NYMEX ceiling prices of $3.17, $2.84 and $3.21, respectively.

EQT CORPORATION AND SUBSIDIARIES

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

For 2022 (July 1 through December 31), 2023 and 2024, we have natural gas sales agreements for approximately 9 MMDth, 88 MMDth and 11 MMDth, respectively, that include average NYMEX ceiling prices of $3.17, $2.84 and $3.21, respectively.

We have also entered into derivative instruments to hedge basis.

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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