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Item 8. Financial Statements and Supplementary Data

2023-02-16 compared with 2022-02-10 · 572 added, 530 removed, 1055 unchanged (51% of the section changed)

11 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of EQT Corporation and subsidiaries (the Company) as of December 31, 2021 and 2020, the related statements of consolidated operations, comprehensive loss, cash flows and equity for each of the three years in the period ended December 31, 2021, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2021 and 2020, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S.

We have audited the accompanying consolidated balance sheets of EQT Corporation and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, cash flows and equity for each of the three years in the period ended December 31, 2022, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Depreciation, depletion and amortization ('DD&A') of proved oil and natural gas properties

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Total proved reserves, also estimated by the Company's engineers, are used to calculate depletion on property acquisitions.

Proved natural gas, natural gas liquids (NGLs) and oil reserve estimates are based on geological and engineering evaluations of in-place hydrocarbon volumes.

Significant judgment is required by the Company's engineers in evaluating geological and engineering data when estimating proved natural gas, NGLs and oil reserves.

Estimating reserves also requires the selection of inputs, including natural gas, NGLs and oil price assumptions, future operating and capital costs assumptions and tax rates by jurisdiction, among others.

Proved natural gas, natural gas liquids (NGLs) and oil reserve estimates are prepared using standard geological and engineering methods generally recognized in the petroleum industry based on evaluations of estimated in-place hydrocarbon volumes using financial and non-financial inputs.

Significant judgment is required by the Company's engineers in interpreting the data when estimating proved natural gas, NGLs and oil reserves.

Estimating reserves also requires the selection of inputs, including natural gas, NGLs and oil price assumptions, and future operating and capital costs assumptions, among others.

Because of the complexity involved in estimating natural gas, NGLs and oil reserves, management used independent engineers to audit the estimates prepared by the Company's internal engineers as of December 31, 2022.

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For proved undeveloped reserves, we evaluated management's development plan for compliance with the SEC rule that undrilled locations are scheduled to be drilled within five years, unless specific circumstances justify a longer time, by assessing consistency of the development projections with the Company's drill plan and the availability of capital relative to the drill plan.

We also tested the mathematical accuracy of the DD&A calculations, including comparing the proved natural gas, NGLs and oil reserves amounts used to the Company’s reserve report.

Valuation of Acquired Natural Gas and Oil Properties

Description of the Matter As described in Note 6 to the consolidated financial statements, on July 21, 2021, the Company completed the acquisition of Alta Marcellus Development, LLC and ARD Operating, LLC and subsidiaries.

The Company's accounting for the acquisition included determining the fair value of the acquired natural gas and oil properties.

The determination of fair value of the acquired natural gas and oil properties included significant judgment and assumptions by management, including future commodity prices, anticipated production volumes, future operating and development costs, and a weighted average cost of capital (WACC).

Auditing the Company's valuation of acquired natural gas and oil properties involved a high degree of subjectivity as the determination of fair value was based on assumptions as described above about future market and economic conditions.

In addition, certain of the assumptions developed by the Company’s internal engineers in conjunction with the reserve estimates described in the preceding critical audit matter are used as inputs in the cash flow model.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's process to estimate fair value for the acquired natural gas and oil properties.

For example, we tested controls over management's assessment of the appropriateness of the significant assumptions that are inputs to the fair value calculation and management’s review of the valuation model.

Our audit procedures included, among others, evaluating the professional qualifications and objectivity of the Company engineer primarily responsible for overseeing the preparation of the reserve estimates by the internal engineering staff, the independent engineers used to audit the estimates, and the external valuation specialist used to assist with the determination of the fair value of certain acquired assets.

Our testing of the Company’s estimate of fair value of the acquired natural gas and oil properties included, among other procedures, evaluating the significant assumptions used and testing the completeness and accuracy of the underlying data.

The audit effort involved the use of our valuation specialists to assist in evaluating the appropriateness of the methodology used in the cash flow model, as well as testing the significant market-related assumptions described above used to develop the fair value estimate.

We evaluated the reasonableness of management's assumptions by comparing the key market-related assumptions (including future natural gas prices and WACC rates) used in the cash flow model to external market and third-party data and anticipated production volumes to the reserve estimates audited by the independent engineers.

Finally, we tested that the DD&A expense calculations are based on the appropriate proved natural gas, NGLs, and oil reserve balances from the Company's reserve report.

/s/ Ernst & Young LLP

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In our opinion, EQT Corporation and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related statements of consolidated operations, comprehensive loss, cash flows and equity for each of the three years in the period ended December 31, 2021 and the related notes and the financial statement schedule listed in the Index at Item 15(a) of the Company, and our report dated February 10, 2022 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, cash flows and equity for each of the three years in the period ended December 31, 2022 and the related notes and the financial statement schedule listed in the Index at Item 15(a) of the Company, and our report dated February 16, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

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Sales of natural gas, natural gas liquids and oil $ 12,114,168 $ 6,804,020 $ 2,650,299

(Loss) gain on derivatives not designated as hedges ( 3,775,042 ) 400,214 616,634

(Loss) gain on derivatives ( 4,642,932 ) ( 3,775,042 ) 400,214

Net marketing services and other 26,453 35,685 8,330

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(Gain) loss/impairment on sale/exchange of long-lived assets ( 8,446 ) ( 21,124 ) 100,729

Impairment of intangible and other assets — 34,694 15,411

Impairment of contract and other assets 214,195 — 34,694

Impairment and expiration of leases 176,606 311,835 306,688

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Total operating expenses 4,779,692 4,425,638 3,936,509

Operating loss ( 1,360,975 ) ( 877,666 ) ( 1,152,110 )

Gain on Equitrans Share Exchange (see Note 5) — ( 187,223 ) —

(Income) loss from investments ( 71,841 ) 314,468 336,993

Operating income (loss) 2,717,997 ( 1,360,975 ) ( 877,666 )

Gain on Equitrans Share Exchange (Note 5) — — ( 187,223 )

Loss (income) from investments 4,931 ( 71,841 ) 314,468

Dividend and other income ( 11,280 ) ( 19,105 ) ( 35,512 )

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Interest expense 249,655 289,753 259,268

Loss before income taxes ( 1,588,688 ) ( 1,266,034 ) ( 1,597,471 )

Income tax benefit ( 434,175 ) ( 298,858 ) ( 375,776 )

Net loss ( 1,154,513 ) ( 967,176 ) ( 1,221,695 )

Net income (loss) attributable to noncontrolling interest 1,246 ( 10 ) —

Net loss attributable to EQT Corporation $ ( 1,155,759 ) $ ( 967,166 ) $ ( 1,221,695 )

Loss per share of common stock attributable to EQT Corporation:

Basic and diluted:

Income (loss) before income taxes 2,334,662 ( 1,569,538 ) ( 1,254,102 )

Income tax expense (benefit) 553,720 ( 428,037 ) ( 295,293 )

Net income (loss) 1,780,942 ( 1,141,501 ) ( 958,809 )

Net income (loss) attributable to noncontrolling interests 9,977 1,246 ( 10 )

Net income (loss) attributable to EQT Corporation $ 1,770,965 $ ( 1,142,747 ) $ ( 958,799 )

Income (loss) per share of common stock attributable to EQT Corporation:

Weighted average common stock outstanding 370,048 323,196 260,613

Net loss attributable to EQT Corporation $ ( 3.58 ) $ ( 3.71 ) $ ( 4.79 )

Net income (loss) attributable to EQT Corporation $ 4.79 $ ( 3.54 ) $ ( 3.68 )

Diluted (Note 1):

Weighted average common stock outstanding 406,495 323,196 260,613

Net income (loss) attributable to EQT Corporation $ 4.38 $ ( 3.54 ) $ ( 3.68 )

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

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2022 2021 2020

Net loss $ ( 1,154,513 ) $ ( 967,176 ) $ ( 1,221,695 )

Net income (loss) $ 1,780,942 $ ( 1,141,501 ) $ ( 958,809 )

Other comprehensive income (loss), net of tax:

Net change in interest rate cash flow hedges, net of tax:

$ 210 in 2019

Other postretirement benefits liability adjustment, net of tax:

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1,617 744 ( 156 )

Change in accounting principle — — ( 496 )

Other comprehensive income (loss) 744 ( 156 ) 207

Comprehensive loss ( 1,153,769 ) ( 967,332 ) ( 1,221,488 )

Comprehensive income (loss) 1,782,559 ( 1,140,757 ) ( 958,965 )

Comprehensive income (loss) attributable to noncontrolling interest 9,977 1,246 ( 10 )

Comprehensive loss attributable to EQT Corporation $ ( 1,155,015 ) $ ( 967,322 ) $ ( 1,221,488 )

Comprehensive income (loss) attributable to EQT Corporation $ 1,772,582 $ ( 1,142,003 ) $ ( 958,955 )

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

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Total current liabilities 3,732,220 5,186,241

Credit facility borrowings — 300,000

Senior notes 5,167,849 4,435,782

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Treasury stock, shares at cost:

1,033 and 1,658

( 18,046 ) ( 29,348 )

(Accumulated deficit) retained earnings ( 115,779 ) 1,048,259

zero and 1,033

Retained earnings (accumulated deficit) 1,283,578 ( 94,400 )

Accumulated other comprehensive loss ( 2,994 ) ( 4,611 )

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Cash flows from operating activities:

Net loss $ ( 1,154,513 ) $ ( 967,176 ) $ ( 1,221,695 )

Net income (loss) $ 1,780,942 $ ( 1,141,501 ) $ ( 958,809 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Deferred income tax benefit ( 433,608 ) ( 155,840 ) ( 275,063 )

Deferred income tax expense (benefit) 534,612 ( 427,470 ) ( 152,275 )

Depreciation and depletion 1,665,962 1,676,702 1,393,465

Amortization of intangible assets — — 26,006

Gain/loss/impairment on sale/exchange of long-lived assets and impairment and expiration of leases 290,711 442,111 1,710,122

Impairments and (gain) loss on sale/exchange of long-lived assets 382,355 290,711 442,111

Gain on Equitrans Share Exchange — — ( 187,223 )

(Income) loss from investments ( 71,841 ) 314,468 336,993

Loss (income) from investments 4,931 ( 71,841 ) 314,468

Loss on debt extinguishment 140,029 9,756 25,435

Share-based compensation expense 45,201 28,169 19,552

Distribution of earnings from equity method investment 50,220 14,911 —

Amortization, accretion and other 32,645 32,175 25,482

Loss (gain) on derivatives not designated as hedges 3,775,042 ( 400,214 ) ( 616,634 )

Cash settlements (paid) received paid on derivatives not designated as hedges ( 2,091,003 ) 897,190 246,639

Net premiums (paid) received on derivative instruments ( 66,495 ) ( 46,665 ) 22,616

Loss (gain) on derivatives 4,642,932 3,775,042 ( 400,214 )

Cash settlements (paid) received paid on derivatives ( 5,927,698 ) ( 2,091,003 ) 897,190

Net premiums received (paid) on derivative instruments 14,200 ( 66,495 ) ( 46,665 )

Changes in other assets and liabilities:

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Capital expenditures ( 1,400,443 ) ( 1,055,128 ) ( 1,042,231 )

Cash paid for acquisitions, net of cash acquired (see Note 6) ( 1,030,239 ) ( 691,942 ) —

Proceeds from sale of assets 2,452 126,080 —

Cash paid for acquisitions, net of cash acquired (Note 6) ( 55,347 ) ( 1,030,239 ) ( 691,942 )

Deposit on acquisition (Note 6) ( 150,000 ) — —

Proceeds from sale/exchange of assets 8,572 2,452 126,080

Proceeds from sale/exchange of investment shares 189,249 24,369 52,323

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Proceeds from issuance of debt 1,000,000 1,000,000 2,600,000

Debt issuance costs and Capped Call Transactions (see Note 10) ( 19,713 ) ( 71,056 ) ( 913 )

Debt issuance costs and Capped Call Transactions (Note 10) ( 26,506 ) ( 19,713 ) ( 71,056 )

Repayment and retirement of debt ( 917,039 ) ( 154,336 ) ( 2,822,262 )

Premiums paid on debt extinguishment ( 135,308 ) ( 9,599 ) ( 21,132 )

Contributions from noncontrolling interest 7,500 7,500 —

Dividends paid — ( 7,664 ) ( 30,655 )

Cash paid for taxes related to net settlement of share-based incentive awards ( 3,845 ) ( 596 ) ( 7,224 )

Repurchase and retirement of common stock ( 409,485 ) ( 12,922 ) —

Dividends paid ( 203,629 ) — ( 7,664 )

Contribution from noncontrolling interest 15,000 7,500 7,500

Distribution to noncontrolling interest ( 11,592 ) — —

Other financing activities ( 10,567 ) ( 4,883 ) ( 596 )

Net cash provided by (used in) financing activities 506,047 31,713 ( 249,453 )

Net cash (used in) provided by financing activities ( 699,126 ) 506,047 31,713

Net change in cash and cash equivalents 1,344,681 95,753 13,614

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YEARS ENDED DECEMBER 31, 2022, 2021 and 2020

Common Stock Accumulated Other

Comprehensive Loss Noncontrolling Interest in

Common Stock Treasury Stock Retained Earnings

(Accumulated Deficit) Accumulated Other

Comprehensive Loss (a) Noncontrolling Interest in

Consolidated Subsidiaries

Shares No Par Value Treasury Stock Retained Earnings

(Accumulated Deficit) Total Equity

Shares No Par Value Total Equity

(Thousands, except per share amounts)

Balance at December 31, 2019 255,171 $ 7,818,205 $ ( 32,507 ) $ 2,023,089 $ ( 5,199 ) $ — $ 9,803,588

Comprehensive (loss) income, net of tax:

Net loss ( 1,221,695 ) ( 1,221,695 )

Net change in interest rate cash flow hedges, net of tax:

Other postretirement benefits liability adjustment, net of tax:

Dividends ($ 0.12 per share)

( 30,655 ) ( 30,655 )

Share-based compensation plans 921 6,355 16,687 23,042

Change in accounting principle 496 ( 496 ) —

Distribution of Equitrans Midstream Corporation (see Note 9) ( 2,234 ) 93,123 90,889

Other ( 222 ) ( 14,470 ) ( 2,455 ) ( 16,925 )

Balance at December 31, 2019 255,171 7,818,205 ( 32,507 ) 2,023,089 ( 5,199 ) — 9,803,588

Comprehensive loss, net of tax:

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Share-based compensation plans 174 18,911 3,159 22,070

Equity component of convertible senior notes (see Note 10) 63,645 63,645

Issuance of common shares 23,000 340,923 340,923

Contributions from noncontrolling interest 7,500 7,500

Capped Call Transactions (Note 10) ( 32,500 ) ( 32,500 )

Issuance of common stock 23,000 340,923 340,923

Contribution from noncontrolling interest 7,500 7,500

Balance at December 31, 2020 278,345 8,145,539 ( 29,348 ) 1,056,626 ( 5,355 ) 7,490 9,174,952

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Repurchase and retirement of common stock ( 1,362 ) ( 21,106 ) ( 8,279 ) ( 29,385 )

Alta Acquisition (see Note 6) 98,789 1,925,405 1,925,405

Contributions from noncontrolling interest 7,500 7,500

Alta Acquisition (Note 6) 98,789 1,925,405 1,925,405

Contribution from noncontrolling interest 7,500 7,500

Balance at December 31, 2021 376,399 10,071,820 ( 18,046 ) ( 94,400 ) ( 4,611 ) 16,236 9,970,999

Comprehensive income, net of tax:

Net income 1,770,965 9,977 1,780,942

Other postretirement benefits liability adjustment, net of tax:

Dividends ($ 0.55 per share)

( 203,629 ) ( 203,629 )

Share-based compensation plans 2,100 23,671 18,046 41,717

Convertible Notes settlements (Note 10) 4 63 63

Repurchase and retirement of common stock ( 13,140 ) ( 203,664 ) ( 189,358 ) ( 393,022 )

Distribution to noncontrolling interest ( 11,592 ) ( 11,592 )

Contribution from noncontrolling interest 15,000 15,000

Other 11,233 11,233

Balance at December 31, 2022 365,363 $ 9,891,890 $ — $ 1,283,578 $ ( 2,994 ) $ 40,854 $ 11,213,328

Common shares authorized:

320,000 at December 31, 2019 and 640,000 at December 31, 2020 and 2021.

Preferred shares authorized:

There were no preferred shares issued or outstanding.

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

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

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Principles of Consolidation.

The Consolidated Financial Statements include the accounts of EQT Corporation and all subsidiaries, ventures and partnerships in which EQT holds a controlling interest (collectively, EQT or the Company).

The Consolidated Financial Statements include the accounts of EQT Corporation and all subsidiaries, ventures and partnerships in which EQT Corporation directly or indirectly holds a controlling interest (collectively, the Company).

Intercompany accounts and transactions have been eliminated in consolidation.

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The Company records noncontrolling interest in its Consolidated Financial Statements for any non-wholly-owned consolidated subsidiary.

In 2020, the Company entered into a partnership with a third-party investor (the Partnership).

Because the Partnership is a variable interest entity that the Company has the power to direct the activities that most significantly affect the Partnership's economic performance, the Company consolidates the Partnership.

Certain of the Company's midstream gathering systems are not wholly-owned but are operated by the Company pursuant to a construction, ownership and operation agreement.

The Company records the pro rata share of revenues, expenses, assets and liabilities it is entitled under the agreement.

See "Investment in Equitrans Midstream" and "Equity Method Investments" for discussion of the Company's accounting of its investment in equity securities and equity method investments.

The Company records the pro rata share of revenues, expenses, assets and liabilities that it is entitled under the agreement in the Company's financial statements.

The Company's operations consist of one reportable segment.

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Proved oil and gas properties that have carrying amounts in excess of estimated future undiscounted cash flows are written down to fair value, which is estimated by discounting the estimated future cash flows using discount rates and other assumptions that marketplace participants would use in their fair value estimates.

There were no indicators of impairment identified in 2021 and 2020.

During the fourth quarter of 2019, there were indicators that the carrying values of certain of the Company's properties may be impaired due to depressed natural gas prices and changes in the Company's development strategy, including the Company's contemplation of a potential asset divestiture of certain of its non-strategic exploration and production assets.

As a result of the 2019 impairment evaluation, the Company recorded total impairment of $ 1,124.4 million, of which $ 1,035.7 million was associated with the Company's non-strategic assets located in the Ohio Utica and $ 88.7 million was associated with the Company's Pennsylvania and West Virginia Utica assets.

The impairment was recorded as a reduction to the assets' carrying values to their estimated fair values of approximately $ 839.4 million with respect to the Company's Ohio Utica assets and approximately $ 26.8 million with respect to the Company's Pennsylvania and West Virginia Utica assets.

The fair value of the impaired assets, as determined at December 31, 2019, was based on significant inputs that are not observable in the market and, as such, are considered a Level 3 fair value measurement.

See Note 4 for a description of the fair value hierarchy.

Key assumptions included in the calculation of the fair value included the following:

(i) reserves, including risk adjustments for probable reserves;

(ii) future commodity prices;

(iii) to the extent available, market-based indicators of fair value, including estimated proceeds that could be realized upon a potential disposition;

(iv) production rates based on the Company's experience with similar properties;

(v) future operating and development costs;

(vi) inflation and (vii) a market-based weighted average cost of capital.

There were no indicators of impairment identified during 2022, 2021 and 2020.

Impairment and Expiration of Leases.

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The Company's unproved properties had a net book value of approximately $ 1,748 million and $ 2,406 million at December 31, 2022 and 2021, respectively.

Contract Asset.

See Note 5 for discussion of the Company's contract asset.

The carrying value of the Company's contract asset is reviewed for impairment when events or circumstances indicate that the remaining carrying value may not be recoverable.

To determine whether impairment of the Company's contract asset has occurred, the Company compares the estimated undiscounted future cash flows to the carrying value.

Estimated future cash flows are based on estimated volume and the in-service date of the Mountain Valley Pipeline.

If the contract asset's carrying amount exceeds the estimated future undiscounted cash flows, it is written down to fair value, which is estimated by discounting the estimated future cash flows using discount rates and other assumptions that marketplace participants would use in their fair value estimates.

During 2020, the Company identified indicators that the carrying value of the contract asset may not be fully recoverable due to further delays of the timing of completion of the Mountain Valley Pipeline as well as changes to the regulatory landscape.

The Company performed the first step of the impairment test and determined the estimated expected undiscounted future cash flows exceeded the carrying value of the contract asset, indicating the contract asset was not impaired.

The estimated undiscounted future cash flows were based on significant inputs that are not observable in the market and, as such, are considered a Level 3 fair value measurement.

See Note 4 for a description of the fair value hierarchy.

Key assumptions in the calculation of estimated undiscounted future cash flows included estimated production volume subject to the Consolidated GGA (defined in Note 5) and a probability-weighted estimate of the in-service date of the Mountain Valley Pipeline.

There were no additional indicators of impairment identified in 2021.

Investment in Equitrans Midstream Corporation.

As of December 31, 2021, the Company owned approximately 23 million shares of common stock of Equitrans Midstream Corporation (Equitrans Midstream).

The Company does not have the ability to exercise significant influence and does not have a controlling financial interest in Equitrans Midstream or any of its subsidiaries.

As such, its investment in Equitrans Midstream is accounted for as an investment in equity securities and recorded at fair value in other assets in the Consolidated Balance Sheets.

The fair value is calculated by multiplying the closing stock price of Equitrans Midstream's common stock by the number of shares of Equitrans Midstream's common stock owned by the Company.

Changes in fair value are recorded in (income) loss on investments in the Statements of Consolidated Operations.

See Note 4 for a description of the fair value hierarchy.

Dividends received on the investment in Equitrans Midstream are recorded in dividend and other income in the Statements of Consolidated Operations.

Equity Method Investments.

The Company applies the equity method of accounting to its investments over which it does not have the power to direct the activities that most significantly impact the investment's economic performance.

The Company applies the equity method of accounting to its investments in entities that the Company does not have the power to direct the activities that most significantly affect those entities' economic performance.

The carrying value of the Company's equity method investments is recorded in other assets in the Consolidated Balance Sheets.

The Company's pro-rata share of earnings in equity method investments is recorded in (income) loss from investments in the Statements of Consolidated Operations.

The Company's pro-rata share of income/loss from the Company's equity method investments is recorded in loss (income) from investments in the Statements of Consolidated Operations.

The Company evaluates its equity method investments for impairment when events or changes in circumstances indicate that the investment's fair value is less than its carrying value.

The recognition of an impairment loss is required if the impairment is considered other than temporary.

Investments in Equity Securities.

The Company has an investment in a fund (the Investment Fund) that invests in companies that develop technology and operating solutions for exploration and production companies.

The Company does not have the ability to exercise significant influence over the Investment Fund and, as such, accounts for its investment in the Investment Fund as an investment in equity securities that is recorded at fair value in other assets in the Consolidated Balance Sheets.

The Company values its investment using, as a practical expedient, the net asset value provided in the financial statements received from fund managers.

Changes in the fair value of the Company's investment in the Investment Fund are recorded in loss (income) from investments in the Statements of Consolidated Operations.

Dividends received on the Company's investment in the Investment Fund are recorded in dividend and other income in the Statements of Consolidated Operations.

The Company previously owned shares of common stock of Equitrans Midstream Corporation (Equitrans Midstream).

During 2022, the Company sold the remaining balance of its shares of Equitrans Midstream's common stock.

The Company did not have the ability to exercise significant influence over Equitrans Midstream or any of its subsidiaries and, as such, accounted for its investment in Equitrans Midstream as an investment in equity securities that, as of December 31, 2021, was recorded at fair value in other assets in the Consolidated Balance Sheet.

The Company valued its investment by multiplying the closing stock price of Equitrans Midstream's common stock by the number of shares of Equitrans Midstream's common stock owned by the Company.

Changes in the fair value of the Company's investment in Equitrans Midstream were recorded in loss (income) from investments in the Statements of Consolidated Operations.

Dividends received on the Company's investment in Equitrans Midstream were recorded in dividend and other income in the Statements of Consolidated Operations.

Contract Asset.

See Note 5 for discussion of the Company's contract asset and impairment thereof.

Intangible Assets.

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executives, were fully amortized as of December 31, 2020.

In 2019 the Company recognized impairment of its intangible assets associated with non-compete agreements with former Rice Energy Inc.

executives who are now employees of the Company.

Other Current Liabilities.

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Accrued taxes other than income 84,755 86,755

Current portion of long-term capacity contracts 57,440 50,504

Accrued incentive compensation 50,894 51,224

Current portion of long-term capacity contracts 39,589 57,440

Current portion of lease liabilities 35,449 27,972

Accrued severance 3,815 2,536

Income tax payable — 23,909

Other accrued liabilities 42,320 60,407

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Deferred tax assets are reduced by a valuation allowance if it is more likely than not that a portion or all of the deferred tax asset will not be realized.

When evaluating whether or not a valuation allowance should be established, the Company exercises judgment on whether it is more likely than not (a likelihood of more than 50%) that a portion or all of the deferred tax assets will not be realized.

deferred tax assets will not be realized.

To determine whether a valuation allowance is needed, the Company considers all available evidence, both positive and negative, including carrybacks, tax planning strategies, reversals of deferred tax assets and liabilities and forecasted future taxable income.

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These policies may be subject to deductible or retention amounts, coverage limitations and exclusions.

The Company was previously self-insured for certain material losses related to general liability and certain other casualty coverages, such as workers compensation, auto liability and environmental liability.

However, the Company is no longer self-insured with respect to any material losses related to general liability, workers compensation or environmental liability arising on or after November 12, 2020, or for losses related to auto liability arising on or after November 12, 2019.

The Company was previously self-insured for certain material losses related to general liability, workers compensation and environmental liability;

however, the Company now maintains insurance for such losses arising on or after November 12, 2020.

Reserves are estimated based on analyses of historical data and actuarial estimates, where applicable, and are not discounted.

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The initial capitalized costs are depleted over the useful lives of the related assets.

The Company's asset retirement obligations related to the abandonment of oil and gas producing facilities include reclaiming drilling sites, plugging wells and dismantling related structures.

The Company's asset retirement obligations related to the abandonment of oil and gas producing facilities include reclaiming well pads, reclaiming water impoundments, plugging wells and dismantling related structures.

Estimates are based on historical experience of plugging and abandoning wells and reclaiming or disposing other assets and estimated remaining lives of the wells and assets.

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Liabilities removed in divestitures ( 697 ) ( 3,315 )

Change in estimates (a) 5,223 41,978

Change in estimates 20,245 5,223

Balance at December 31 $ 732,803 $ 661,334

(a) During 2020, the Company had changes in estimates for the plugging of horizontal and conventional wells that were related primarily to pad reclamation and increased cost assumptions for the Company's compliance with existing regulatory requirements that were derived, in part, from recent plugging experience and actual costs incurred.

The Company does not have any assets that are legally restricted for purposes of settling these obligations.

The Company operates in several states that have implemented expanded requirements that resulted in the Company's use of additional materials during the plugging process, which has increased the estimated cost for plugging horizontal and conventional wells.

The Company operates in several states that have implemented expanded requirements resulting in the Company's use of additional materials during the plugging process, which has increased the estimated cost for plugging horizontal and conventional wells.

Revenue Recognition.

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2022 2021 2020

Changes in legal and environmental reserves, including settlements $ 30,394 $ 5,175 $ 11,350

Transactions 14,185 57,430 11,739

Energy transition initiatives 11,985 — —

Reorganization, including severance and contract terminations 767 7,458 5,448

Changes in legal reserves, including settlements 5,175 11,350 82,395

Proxy — — 19,343

Total other operating expenses $ 57,331 $ 70,063 $ 28,537

Other Postretirement Benefits Plan.

The Company sponsors a postretirement benefits plan.

Defined Contribution Plan and Other Postretirement Benefits Plan.

The Company recognized expense related to its defined contribution plan of $ 7.8 million, $ 7.0 million and $ 6.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.

In addition, the Company sponsors an other postretirement benefits plan.

Earnings Per Share (EPS).

Basic EPS is computed by dividing net income attributable to EQT Corporation by the weighted average number of common shares outstanding during the period.

Diluted EPS is computed by dividing net income attributable to EQT Corporation by the weighted average number of common shares and potentially dilutive securities, net of shares assumed to be repurchased using the treasury stock method.

Potentially dilutive securities arise from the assumed conversion of outstanding stock options and other share-based awards as well as the conversion premium on the Convertible Notes.

Purchases of treasury shares are calculated using the average share price of EQT common stock during the period.

Basic EPS is computed by dividing net income (loss) attributable to EQT Corporation by the weighted average number of common shares outstanding during the period.

Diluted EPS is computed by dividing net income (loss) attributable to EQT Corporation plus the applicable numerator adjustments by the weighted average number of common shares and potentially dilutive securities, net of shares assumed to be repurchased using the treasury stock method.

Potentially dilutive securities arise from the assumed conversion of outstanding stock options and other share-based awards as well as the Convertible Notes (defined in Note 10).

Purchases of treasury shares are calculated using the average share price of EQT Corporation common stock during the period.

The Company uses the if-converted method to calculate the impact of the Convertible Notes on diluted earnings (loss) per share.

The following table shows the computation for basic and diluted EPS.

December 31, 2022

(Thousands, except per share amounts)

Net income attributable to EQT Corporation – basic earnings available to shareholders $ 1,770,965

Interest expense on Convertible Notes, net of tax 8,019

Diluted earnings available to shareholders $ 1,778,984

Weighted average common stock outstanding – basic 370,048

Options, restricted stock, performance awards and stock appreciation rights

Convertible debt 30,716

Weighted average common stock outstanding – diluted 406,495

Income per share of common stock attributable to EQT Corporation:

Diluted $ 4.38

In periods when the Company reports a net loss, all options, restricted stock, performance awards and stock appreciation rights are excluded from the calculation of diluted weighted average shares outstanding because of their anti-dilutive effect on loss per share.

As a result, for the years ended December 31, 2021, 2020 and 2019, all such securities, totaling 8,237,352 , 6,778,383 and 3,035,247 , respectively, were excluded from potentially dilutive securities because of their anti-dilutive effect on EPS.

As discussed further in Note 10, the Company issued the Convertible Notes (defined in Note 10) during the second quarter of 2020 and, upon conversion of the Convertible Notes, intends to use a combined settlement approach to satisfy its obligation under the Convertible Notes.

As such, there is no adjustment to the diluted EPS numerator for the cash-settled portion of the instrument.

In addition, for the years ended December 31, 2021 and 2020, the conversion premium of approximately 6.7 million shares was excluded from potentially dilutive securities because of its anti-dilutive effect on EPS.

As a result, for the years ended December 31, 2021 and 2020, all such securities of 8.2 million and 6.8 million, respectively, were excluded from potentially dilutive securities because of their anti-dilutive effect on loss per share.

In addition, for the years ended December 31, 2021 and 2020, if-converted securities of approximately 33.3 million shares were excluded from potentially dilutive securities because of their anti-dilutive effect on loss per share.

Supplemental Cash Flow Information.

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Non-cash activity during the period for:

Increase in right-of-use assets and lease liabilities, net 20,834 18,877 113,350

Increase in asset retirement costs and obligations $ 54,608 $ 15,961 $ 52,271

Increase in right-of-use assets and lease liabilities, net 23,356 20,834 18,877

Capitalization of non-cash equity share-based compensation 5,406 4,994 3,142

Equity issued as consideration for the Alta Acquisition (see Note 6) 1,925,405 — —

Issuance of common stock for Convertible Notes settlements (Note 10) 63 — —

Equity issued as consideration for the Alta Acquisition (Note 6) — 1,925,405 —

Recently Issued Accounting Standards

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes:

Simplifying the Accounting for Income Taxes .

This ASU simplifies accounting for income taxes by eliminating certain exceptions to Accounting Standards Codification (ASC) 740, Income Taxes , related to the general approach for intraperiod tax allocation, methodology for calculating income taxes in an interim period and recognition of deferred taxes when there are investment ownership changes.

In addition, this ASU simplifies aspects of accounting for franchise taxes and interim period effects of enacted changes in tax laws or rates and provides clarification on accounting for transactions that result in a step up in the tax basis of goodwill and allocation of consolidated income tax expense to separate financial statements of entities not subject to income tax.

The Company adopted this ASU in the first quarter of 2021 with no material changes to its financial statements or disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging:

In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging:

Accounting for Convertible Instruments and Contracts in an Entity's Own Equity .

This ASU simplifies accounting for convertible instruments by removing certain separation models for convertible instruments.

For convertible instruments with conversion features that are not accounted for as derivatives under ASC 815 or do not result in substantial premiums accounted for as paid-in capital, the convertible instrument's embedded conversion features are no longer separated from the host contract.

For convertible instruments with conversion features that are not accounted for as derivatives under Accounting Standards Codification 815 or that do not result in substantial premiums accounted for as paid-in capital, the convertible instrument's embedded conversion features are no longer separated from the host contract.

Consequently, and as long as no other feature requires bifurcation and recognition as a derivative, the convertible instrument is accounted for as a single liability measured at its amortized cost.

This ASU also amends the impact of convertible instruments on the calculation of diluted EPS and adds several new disclosure requirements.

This ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

The Company plans to adopt this ASU effective as of January 1, 2022 using the full retrospective method of adoption.

The Company has determined the impact that this standard will have on its financial statements and will include the applicable adoption disclosures in its Quarterly Report on Form 10-Q for the period ending March 31, 2022.

The amounts presented below represent the increase (decrease) to each financial statement line item as a result of the adoption of ASU 2020-06.

Years Ended December 31,

Under ASU 2020-06, entities are required to use the if-converted method to calculate the impact of convertible instruments on diluted EPS.

The if-converted method assumes share settlement of the

instrument, which increases the number of potentially dilutive securities used to calculate diluted EPS.

This ASU also adds several new disclosure requirements.

The Company adopted ASU 2020-06 effective as of January 1, 2022 using the full retrospective method of adoption.

Accordingly, the consolidated financial statements have been recast.

The following tables present the impact of the adoption of ASU 2020-06 on the Company's previously reported historical results.

See Note 10 for discussion of the Convertible Notes.

Year Ended December 31, 2021

As Reported ASU 2020-06 Adoption Adjustment As Adjusted

(Thousands, except per share amounts)

Interest expense $ 308,903 $ ( 19,150 ) $ 289,753

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Net loss ( 1,154,513 ) 13,012 ( 1,141,501 )

Net income (loss) attributable to noncontrolling interest — —

Net income attributable to noncontrolling interests 1,246 — 1,246

Net loss attributable to EQT Corporation $ ( 1,155,759 ) $ 13,012 $ ( 1,142,747 )

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Net loss per share of common stock attributable to EQT Corporation $ ( 3.58 ) $ 0.04 $ ( 3.54 )

(a) For the years ended December 31, 2021 and 2020, diluted weighted average common stock outstanding will not change because the potentially dilutive securities have an anti-dilutive effect on loss per share.

Current portion of debt $ 106,072 $ —

Senior notes — 125,222

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

Year Ended December 31, 2020

As Reported ASU 2020-06 Adoption Adjustment As Adjusted

(Thousands, except per share amounts)

Interest expense $ 271,200 $ ( 11,932 ) $ 259,268

Income tax benefit ( 298,858 ) 3,565 ( 295,293 )

Net loss ( 967,176 ) 8,367 ( 958,809 )

Net loss attributable to noncontrolling interest ( 10 ) — ( 10 )

Net loss attributable to EQT Corporation $ ( 967,166 ) $ 8,367 $ ( 958,799 )

Basic and diluted:

Weighted average common stock outstanding (a) 260,613 — 260,613

Net loss per share of common stock attributable to EQT Corporation $ ( 3.71 ) $ 0.03 $ ( 3.68 )

(a) For the year ended December 31, 2020, diluted weighted average common stock outstanding did not change because the potentially dilutive securities had an anti-dilutive effect on loss per share.

December 31, 2021

As Reported ASU 2020-06 Adoption Adjustment As Adjusted

Current portion of debt (a) $ 954,900 $ 106,070 $ 1,060,970

Deferred income taxes 938,612 ( 31,306 ) 907,306

Common stock, no par value 10,167,963 ( 96,143 ) 10,071,820

(Accumulated deficit) retained earnings 21,379 8,367

Accumulated deficit ( 115,779 ) 21,379 ( 94,400 )

(a) Pursuant to the terms of the Convertible Notes indenture, a sale price condition for conversion of the Convertible Notes was satisfied as of December 31, 2021, and, accordingly, holders of the Convertible Notes were permitted to convert any of their

Convertible Notes at their option at any time during the three months ended March 31, 2022, subject to all terms and conditions set forth in the Convertible Notes indenture.

Therefore, as of December 31, 2021, the net carrying value of the Convertible Notes was included in current portion of debt in the Consolidated Balance Sheet.

Certain line items in the Statements of Consolidated Cash Flows were adjusted to reflect the impact of the adoption of ASU 2020-06;

however, the adoption did not impact cash and did not change net cash provided by operating, investing or financing activities.

Subsequent Events.

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The table below provides disaggregated information on the Company's revenues.

Certain other revenue contracts are outside the scope of ASU 2014-09, Revenue from Contracts with Customers.

These contracts are reported in net marketing services and other in the Statements of Consolidated Operations.

Derivative contracts are also outside the scope of ASU 2014-09.

Derivative contracts and certain other revenue contracts are outside the scope of ASU 2014-09, Revenue from Contracts with Customers.

Years Ended December 31,

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Other sources of revenue:

(Loss) gain on derivatives not designated as hedges ( 3,775,042 ) 400,214 616,634

(Loss) gain on derivatives ( 4,642,932 ) ( 3,775,042 ) 400,214

Net marketing services and other 26,453 35,685 8,330

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The Company does not designate any of its derivative instruments as cash flow hedges;

therefore, all changes in fair value of the Company's derivative instruments are recognized in operating revenues in the Statements of Consolidated Operations.

therefore, all changes in fair value of the Company's derivative instruments are recognized in operating revenues in (loss) gain on derivatives in the Statements of Consolidated Operations.

The Company recognizes all derivative instruments as either assets or liabilities at fair value on a gross basis.

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With respect to the derivative commodity instruments held by the Company, the Company hedged portions of its expected sales of production and portions of its basis exposure covering approximately 1,424 billion cubic feet (Bcf) of natural gas and 1,483 thousand barrels (Mbbl) of NGLs as of December 31, 2022 and 2,184 Bcf of natural gas and 3,055 Mbbl of NGLs as of December 31, 2021.

The open positions at December 31, 2021 and 2020 had maturities extending through December 2027 and December 2024, respectively.

The open positions at both December 31, 2022 and 2021 had maturities extending through December 2027.

Certain of the Company's OTC derivative instrument contracts provide that, if the Company's credit rating assigned by Moody's Investors Service, Inc.

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Anything below these ratings is considered non-investment grade.

As of December 31, 2021, the Company's senior notes were rated "Ba1" by Moody's, "BB+" by S&P and "BB+" by Fitch.

When the net fair value of any of the Company's OTC derivative instrument contracts represents a liability to the Company that is in excess of the agreed-upon dollar threshold for the Company's then-applicable credit rating, the counterparty has the right to require the Company to remit funds as a margin deposit in an amount equal to the portion of the derivative liability that is in excess of the dollar threshold amount.

As of December 31, 2022, the Company's senior notes were rated "Ba1" by Moody's, "BBB–" by S&P and "BBB–" by Fitch.

require the Company to remit funds as a margin deposit in an amount equal to the portion of the derivative liability that is in excess of the dollar threshold amount.

The Company records these deposits as a current asset in the Consolidated Balance Sheets.

As of December 31, 2021 and 2020, the aggregate fair value of all OTC derivative instruments with credit rating risk-related contingent features that were in a net liability position was $ 594.9 million and $ 137.7 million, respectively, for which, the Company deposited and recorded current assets of $ 0.1 million and $ 21.1 million, respectively.

As of December 31, 2022 and 2021, the aggregate fair value of all OTC derivative instruments with credit rating risk-related contingent features that were in a net liability position was $ 347.6 million and $ 594.9 million, respectively, for which, the Company deposited and recorded current assets of zero and $ 0.1 million, respectively.

When the net fair value of any of the Company's OTC derivative instrument contracts represents an asset to the Company that is in excess of the agreed-upon dollar threshold for the counterparty's then-applicable credit rating, the Company has the right to require the counterparty to remit funds as a margin deposit in an amount equal to the portion of the derivative asset that is in excess of the dollar threshold amount.

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As of December 31, 2022 and 2021, the Company recorded $ 100.6 million and $ 147.7 million, respectively, of such deposits as current assets in the Consolidated Balance Sheets.

Refer to Note 5 for a discussion of the derivative liability recorded in connection with the Equitrans Share Exchange (defined therein).

The Company has netting agreements with financial institutions and its brokers that permit net settlement of gross commodity derivative assets against gross commodity derivative liabilities.

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Liability derivative instruments at fair value 2,413,608 ( 468,266 ) ( 147,773 ) 1,797,569

Refer to Note 5 for a discussion of the derivative liability recorded in connection with the Equitrans Share Exchange (defined therein).

Refer to Note 8 for a discussion of the derivative liability recorded in connection with the 2020 Divestiture (defined therein).

Fair Value Measurements

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The Company has categorized its assets and liabilities recorded at fair value into a three-level fair value hierarchy based on the priority of the inputs to the valuation technique.

The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The fair value hierarchy gives the highest priority to quoted prices in active

markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

Assets and liabilities that use Level 2 inputs primarily include the Company's swap, collar and option agreements.

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The carrying values of cash equivalents, accounts receivable and accounts payable approximate fair value due to their short-term maturities.

The carrying value of the Company's investment in Equitrans Midstream approximates fair value as Equitrans Midstream is a publicly traded company.

The carrying value of borrowings under the Company's credit facility approximates fair value as the interest rate is based on prevailing market rates.

The Company considered all of these fair values to be Level 1 fair value measurements.

The Investment Fund is valued using, as a practical expedient, the net asset value provided in the financial statements received from fund managers.

The Company estimates the fair value of its senior notes using established fair value methodology.

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There were no transfers between Levels 1, 2 and 3 during the periods presented.

See Note 5 for a discussion of the fair value measurement of the Equitrans Share Exchange (defined therein).

See Note 5 for a discussion of the fair value measurement of the Equitrans Share Exchange.

See Notes 6, 7 and 8 for a discussion of the fair value measurement of the Company's acquisitions, asset exchange transactions and divestiture, respectively.

See Note 1 for a discussion of the fair value measurement and any subsequent impairments of the Company's proved and unproved oil and gas properties and other long-lived assets.

Equitrans Share Exchange

Contract Asset

During the first quarter of 2020, the Company sold to Equitrans Midstream a total of 25,299,752 shares of Equitrans Midstream's common stock in exchange for approximately $ 52 million in cash and rate relief under certain of the Company's gathering contracts with EQM, an affiliate of Equitrans Midstream (the Equitrans Share Exchange).

The rate relief was effected through the execution of a consolidated gas gathering and compression agreement entered into between the Company and an affiliate of EQM (the Consolidated GGA).

The Company recorded in the Consolidated Balance Sheet a contract asset representing the estimated fair value of the rate relief and, beginning on the Mountain Valley Pipeline in-service date, expects to recognize amortization of the contract asset over a period of approximately four years in a manner consistent with the expected timing of the Company's realization of the economic benefits of the rate relief.

The Consolidated GGA provides for additional cash bonus payments (the Henry Hub Cash Bonus) payable by the Company to EQM during the period beginning on the first day of the quarter in which the Mountain Valley Pipeline is placed in service and ending on the earlier of 36 months thereafter or December 31, 2024.

Such payments are conditioned upon the quarterly average of the NYMEX Henry Hub natural gas settlement price exceeding certain price thresholds.

As of December 31, 2021 and 2020, the derivative liability related to the Henry Hub Cash Bonus was approximately $ 111 million and $ 107 million, respectively.

In addition, the Consolidated GGA provides a cash payment option that grants the Company the right to receive payments from EQM, in lieu of receiving the rate relief under the Consolidated GGA, beginning January 1, 2022 and ending on the earlier of the Mountain Valley Pipeline in-service date or December 31, 2022.

The fair value of the contract asset was based on significant inputs that are not observable in the market and, as such, is a Level 3 fair value measurement.

Key assumptions used in the fair value calculation included an estimated production volume forecast, a market-based discount rate and a probability-weighted estimate of the in-service date of the Mountain Valley Pipeline.

The fair value of the derivative liability related to the Henry Hub Cash Bonus was based on significant inputs that were interpolated from observable market data and, as such, is a Level 2 fair value measurement.

In addition, because the Mountain Valley Pipeline was not in service by January 1, 2022, the Consolidated GGA provided the Company the option to forgo a portion of the gathering fee relief that would otherwise be applicable following the Mountain Valley Pipeline in-service date in exchange for a cash payment of approximately $ 196 million (the Cash Payment Option).

On the closing date of the Equitrans Share Exchange, the Company recorded in the Consolidated Balance Sheet a contract asset of $ 410 million representing the estimated fair value of the rate relief inclusive of the Cash Payment Option.

The Company also recorded a derivative liability related to the Henry Hub Cash Bonus of approximately $ 117 million and a decrease in the Company's investment in Equitrans Midstream of approximately $ 158 million.

The resulting gain of approximately $ 187 million was recorded in the Statement of Consolidated Operations.

The carrying value of the Company's contract asset is reviewed for impairment when events or circumstances indicate that the remaining carrying value may not be recoverable.

To determine whether impairment of the Company's contract asset has occurred, the Company compares the estimated undiscounted future cash flows to the carrying value.

The fair value of the contract asset at inception and the estimated future cash flows were based on significant inputs that are not observable in the market and, as such, are a Level 3 fair value measurement.

The fair value of the derivative liability related to the Henry Hub Cash Bonus is based on significant inputs that are interpolated from observable market data and, as such, is a Level 2 fair value measurement.

See Note 4 for a description of the fair value hierarchy.

Reliance Asset Acquisition.

On April 1, 2021, the Company closed on the acquisition of certain oil and gas assets (the Reliance Asset Acquisition) from Reliance Marcellus, LLC (Reliance), pursuant to the Company's exercise of a preferential purchase right that was triggered by Northern Oil and Gas, Inc.'s acquisition of Reliance's Marcellus assets.

The total purchase price for the acquisition was approximately $ 69 million, and the assets acquired consisted of approximately 40 MMcfe per day of current production and 4,100 net acres located in southwest Pennsylvania.

The Reliance Asset Acquisition was accounted for as an asset acquisition and, as such, its proceeds were allocated to property, plant and equipment.

Key assumptions used in the fair value calculation of the contract asset included the following:

(i) a probability-weighted estimate of the in-service date of the Mountain Valley Pipeline, (ii) an estimate of the potential exercise and timing of the Cash Payment Option;

(iii) an estimated production volume forecast and (iv) a market-based weighted average cost of capital.

During 2022, the Company identified indicators that the carrying value of the contract asset may not be fully recoverable, including increased uncertainty of the estimated timing of completion of the Mountain Valley Pipeline due to court rulings and public statements from Equitrans Midstream with respect to its completion.

As a result of the Company's impairment evaluation, the Company recognized impairment of $ 214 million in the Statement of Consolidated Operations.

During 2022, the Company elected to exercise the Cash Payment Option provided by the Consolidated GGA and received cash proceeds of $ 196 million as a result of making such election.

As of December 31, 2022, the impairment and election of the Cash Payment Option reduced the carrying value of the contract asset to zero .

As of December 31, 2022, the Company also reduced the derivative liability related to the Henry Hub Cash Bonus to zero given the uncertainties surrounding the in-service date of the Mountain Valley Pipeline and the Company's belief that achieving an in-service date of the Mountain Valley Pipeline prior to December 31, 2024 is not probable.

Future changes in the uncertainties surrounding the in-service date of the Mountain Valley Pipeline could result in future changes to the accounting treatment of the Henry Hub Cash Bonus.

There was no impairment of the contract asset in 2021 or 2020.

Tug Hill and XcL Midstream Acquisition

On September 6, 2022 (the Original Execution Date), EQT Corporation entered into a purchase agreement (the Original Purchase Agreement) with its wholly-owned indirect subsidiary EQT Production Company (the Buyer, and together with EQT Corporation, the EQT Parties), THQ Appalachia I, LLC (the Upstream Seller) and THQ-XcL Holdings I, LLC (the Midstream Seller, and together with the Upstream Seller, the Sellers), pursuant to which the EQT Parties agreed to acquire the Upstream Seller’s upstream assets and the Midstream Seller’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 (the Tug Hill and XcL Midstream Acquisition) for consideration of approximately $ 2.6 billion in cash and 55.0 million shares of EQT Corporation common stock, as adjusted pursuant to customary closing purchase price adjustments.

Following execution of the Original Purchase Agreement, the EQT Parties and the ultimate parent entities of the to-be-acquired interests and assets thereunder each received a request for additional information and documentary materials (the Second

Request) from the U.S.

Federal Trade Commission (the FTC) in connection with the FTC’s review of the Tug Hill and XcL Midstream Acquisition.

The Second Request extends the waiting period imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the HSR Act), until 30 days after the parties have substantially complied with the Second Request, unless that period is terminated sooner by the FTC.

As a result, subject to certain exceptions provided in the Original Purchase Agreement, either the Buyer or the Sellers had the right to terminate the Original Purchase Agreement if the Tug Hill and XcL Midstream Acquisition did not close by December 30, 2022 (the Original Outside Date).

On December 23, 2022 (the A&R Execution Date), the EQT Parties and the Sellers entered into an Amended and Restated Purchase Agreement (the A&R Purchase Agreement, and the Original Purchase Agreement, as amended by the A&R Purchase Agreement, is referred to herein as the Tug Hill and Xcl Midstream Purchase Agreement), which amends and restates the Original Purchase Agreement in its entirety and, among other things, extends the Original Outside Date to December 29, 2023.

The A&R Purchase Agreement also contains other amendments to the Original Purchase Agreement that are related to such extension, including modifications to certain purchase price adjustments and interim period operating covenants for the period beginning after the A&R Execution Date.

Pursuant to the Original Purchase Agreement, within two business days after the Original Execution Date, the Company deposited $ 150 million (together with any interest accrued thereon, the Escrowed Amount) into escrow, which was to be applied towards the cash consideration to be paid by the Buyer at the closing of the Tug Hill and XcL Midstream Acquisition (or, had the Original Purchase Agreement been terminated in accordance with its terms and conditions, the Escrowed Amount would have been disbursed to the Company or the Sellers as provided in the Original Purchase Agreement).

Pursuant to the A&R Purchase Agreement, on the A&R Execution Date, the Company and the Sellers instructed the escrow agent to release the Escrowed Amount to the Sellers, to be used exclusively to pay down certain of the Upstream Seller’s existing indebtedness, and the Upstream Seller issued to the Company an unsecured promissory note in an amount equal to the Escrowed Amount (the Upstream Seller Note).

The maturity date of the Upstream Seller Note is one year after the Termination Date (as defined in the A&R Purchase Agreement).

Prior to the Termination Date, interest on the Upstream Seller Note will accrue on the outstanding principal amount at the rate of zero percent per annum;

thereafter, interest will accrue on the outstanding principal amount at the rate of 10.0 % per annum, with such rate increasing in increments of 0.50 % on each quarterly interest payment date.

Upon consummation of the Tug Hill and XcL Midstream Acquisition, the loans outstanding under the Upstream Seller Note will be applied towards the cash consideration to be paid by the Company at the closing of the Tug Hill and XcL Midstream Acquisition and such loans will be extinguished.

If, however, the Tug Hill and XcL Midstream Purchase Agreement is terminated and the Sellers are entitled pursuant to the terms of Section 13.2(b) of the A&R Purchase Agreement to, and elect to, retain the Deposit (as defined in the A&R Purchase Agreement), then the loans outstanding under the Upstream Seller Note would be applied towards the Sellers’ receipt of the Deposit in accordance with Section 13.2(b) of the A&R Purchase Agreement and such loans would be extinguished.

The Tug Hill and XcL Midstream Purchase Agreement has an effective date of July 1, 2022.

The closing of the pending Tug Hill and XcL Midstream Acquisition remains subject to regulatory approvals, including the termination or expiration of the applicable waiting periods under the HSR Act.

2022 Asset Acquisition

In the fourth quarter of 2022, the Company closed on the acquisition of approximately 4,600 net Marcellus acres in northeast Pennsylvania (the 2022 Asset Acquisition).

The total purchase price for the acquisition was approximately $ 56 million.

The 2022 Asset Acquisition was accounted for as an asset acquisition and, as such, the purchase price was allocated to property, plant and equipment.

Alta Acquisition

On July 21, 2021, the Company completed its acquisition (the Alta Acquisition) of Alta Marcellus Development, LLC and ARD Operating, LLC and subsidiaries (together, the Alta Target Entities), pursuant to that certain Membership Interest Purchase Agreement, dated May 5, 2021 (the Alta Purchase Agreement), by and among the Company, EQT Acquisition HoldCo LLC (a wholly-owned indirect subsidiary of the Company), Alta Resources Development, LLC (Alta Resources) and the Alta Target Entities.

On July 21, 2021, the Company completed its acquisition (the Alta Acquisition) of Alta Marcellus Development, LLC and ARD Operating, LLC and subsidiaries (together, the Alta Target Entities), pursuant to that certain Membership Interest Purchase Agreement, dated May 5, 2021 (the Alta Purchase Agreement), by and among EQT Corporation, its indirect wholly-owned subsidiary EQT Acquisition HoldCo LLC, Alta Resources Development, LLC (Alta Resources) and the Alta Target Entities.

The Alta Target Entities collectively held all of Alta Resources' upstream and midstream assets and liabilities.

The purchase price for the Alta Acquisition consisted of approximately $ 1.0 billion in cash and 98,789,388 shares of EQT common stock, as adjusted pursuant to customary closing purchase price adjustments set forth in the Alta Purchase Agreement.

The purchase price for the Alta Acquisition consisted of approximately $ 1.0 billion in cash and 98,789,388 shares of EQT Corporation common stock, as adjusted pursuant to customary closing purchase price adjustments set forth in the Alta Purchase Agreement.

The Alta Purchase Agreement has an effective date of January 1, 2021.

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

As a result of the Alta Acquisition, the Company acquired approximately 300,000 net Marcellus acres in northeast Pennsylvania, approximately 1.0 Bcfe per day of net production at the time of acquisition, approximately 300 miles of midstream gathering systems, approximately 100 miles of a freshwater system and a firm transportation portfolio to premium demand markets.

Allocation of Purchase Price .

The Alta Acquisition was accounted for as a business combination using the acquisition method.

The table below summarizes the preliminary purchase price and estimated fair values of assets acquired and liabilities assumed as of July 21, 2021.

Certain information necessary to complete the purchase price allocation is not yet available, including, but not limited to, final appraisals of assets acquired and liabilities assumed.

The Company expects to complete the purchase price allocation once it has received all necessary information, at which time the value of the assets acquired and liabilities assumed will be revised, if necessary.

Preliminary Purchase Price Allocation

The following table summarizes the purchase price and fair values of assets acquired and liabilities assumed as of July 21, 2021.

The Company completed the purchase price allocation during the second quarter of 2022, at which time the value of the assets acquired and liabilities assumed were revised.

The purchase accounting adjustments recorded in 2022 were not material to the Company's financial statements.

Purchase Price Allocation

Consideration:

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Sales of natural gas, NGLs and oil $ 725,807

Loss on derivatives not designated as hedges ( 168,017 )

Loss on derivatives ( 168,017 )

Net marketing services and other 7,284

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The table below summarizes the Company's results as though the Alta Acquisition had been completed on January 1, 2020.

Certain of Alta Resources' historical amounts were reclassified to conform to the Company's financial presentation of operations.

Certain of the Alta Target Entities' historical amounts were reclassified to conform to the Company's financial presentation of operations.

The following unaudited pro forma information is provided for informational purposes only and does not represent what consolidated results of operations would have been had the Alta Acquisition occurred on January 1, 2020 nor are they necessarily indicative of future consolidated results of operations.

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Pro forma sales of natural gas, NGLs and oil $ 7,248,870 $ 3,092,762

Pro forma (loss) gain on derivatives not designated as hedges ( 3,902,076 ) 501,910

Pro forma (loss) gain on derivatives ( 3,902,076 ) 501,910

Pro forma net marketing services and other 40,491 17,737

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Pro forma loss per share (diluted) $ ( 3.47 ) $ ( 3.57 )

Reliance Asset Acquisition

The total purchase price for the acquisition was approximately $ 69 million, and the assets acquired consisted of approximately 40 MMcfe per day of production at the time of acquisition and 4,100 net acres located in southwest Pennsylvania.

The Reliance Asset Acquisition was accounted for as an asset acquisition and, as such, the purchase price was allocated to property, plant and equipment.

Chevron Acquisition

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The transaction closed on November 30, 2020 and had an effective date of July 1, 2020.

The Chevron Acquisition included approximately 335,000 net Marcellus acres, approximately 400,000 net Utica acres, approximately 550 gross wells, which are producing approximately 450 net MMcfe per day, and approximately 100 work-in-process wells at various stages in the development cycle.

The Chevron Acquisition included approximately 335,000 net Marcellus acres, approximately 400,000 net Utica acres, approximately 550 gross wells, which were producing approximately 450 net MMcfe per day at the time of acquisition, and approximately 100 work-in-process wells at various stages in the development cycle.

The Chevron Acquisition also included a 31 % investment in Laurel Mountain Midstream, LLC (LMM), which owns gathering assets that are operated by The Williams Companies, Inc., and two water systems that provide both fresh and produced water handling capabilities.

The Company does not have the power to direct the activities that most significantly impact LMM's economic performance;

therefore, the Company is not the primary beneficiary and accounts for its investment in LMM as an equity method investment.

The Company's pro-rata share of earnings in LMM is recorded in (income) loss from investments on the Statements of Consolidated Operations.

Allocation of Purchase Price .

The Chevron Acquisition was accounted for as a business combination using the acquisition method.

The following table summarizes the purchase price and the fair values of assets acquired and liabilities assumed as of November 30, 2020.

The following table summarizes the purchase price and the fair values of assets acquired and liabilities assumed in the Chevron Acquisition as of November 30, 2020.

The Company completed the purchase price allocation during the fourth quarter of 2021, at which time the value of the assets acquired and liabilities assumed were revised.

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(a) The difference between cash consideration and the aggregate purchase price of $ 735 million represents the results of operating activities between the effective date of July 1, 2020 and the closing date of November 30, 2020 as well as amounts related to customary post-closing matters.

(b) Other liabilities and credits included liabilities due to minimum volume commitment (MVC) contracts as well as liabilities for asset retirement obligations and environmental obligations.

(b) Other liabilities and credits includes liabilities due to minimum volume commitment (MVC) contracts as well as liabilities for asset retirement obligations and environmental obligations.

The fair value of the acquired natural gas and oil properties was measured using discounted cash flow valuation techniques based on inputs that are not observable in the market and, as such, are considered Level 3 fair value measurements.

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Significant inputs include future development plans from a market participant perspective and value per undeveloped acre.

The fair value of the acquired investment in LMM, which is included in other assets on the Consolidated Balance Sheet, was primarily measured using discounted cash flow valuation techniques.

The fair value of the acquired investment in LMM, which is included in other assets in the Consolidated Balance Sheet, was primarily measured using discounted cash flow valuation techniques.

A majority of the inputs are not observable in the market and, as such, are considered Level 3 fair value measurements.

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Significant inputs include estimated future volume and market participant cost of debt.

Asset Exchange Transactions

2020 Asset Exchange Transactions.

Asset Transactions

During 2020, the Company closed on various acreage trade agreements (collectively, the 2020 Asset Exchange Transactions), pursuant to which the Company exchanged approximately 24,400 aggregate net revenue interest acres across Greene, Allegheny, Armstrong, Westmoreland and Washington Counties, Pennsylvania;

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As a result of the 2020 Asset Exchange Transactions, the Company recognized a net loss of $ 61.6 million in (gain) loss/impairment on sale/exchange of long-lived assets in the Statement of Consolidated Operations for the year ended December 31, 2020.

2019 Asset Exchange Transaction.

During the third quarter of 2019, the Company closed on an acreage trade agreement and purchase and sale agreement with a third party (the 2019 Asset Exchange Transaction), pursuant to which the Company exchanged approximately 16,000 net revenue interest acres primarily in Wetzel and Marion Counties, West Virginia.

Under the terms of the purchase and sale agreement, the Company assigned to the third party a gas gathering agreement that covers a portion of Tyler County, West Virginia and provides a firm gathering commitment, and the Company was released from its remaining obligations under that gas gathering agreement.

As consideration for the third party's assumption of the Tyler County gas gathering agreement, the Company agreed to reimburse the third party for certain firm gathering costs under the gas gathering agreement through December 2022 and assign the third party an additional approximately 3,000 net revenue interest acres in Tyler and Wetzel Counties, West Virginia.

As a result of the 2019 Asset Exchange Transaction, the Company recognized a net loss of $ 13.9 million in (gain) loss/impairment on sale/exchange of long-lived assets in the Statement of Consolidated Operations for the year ended December 31, 2019.

As of December 31, 2021 and 2020, the liability for the reimbursement of those certain firm gathering costs was $ 12.6 million and $ 25.8 million, respectively, and was recorded in other current and noncurrent liabilities in the Consolidated Balance Sheets.

The fair value of leases acquired and, for the 2019 Asset Exchange Transaction, the fair value of the liability for the reimbursement of certain firm gathering costs were based on inputs that are not observable in the market and, as such, are a Level 3 fair value measurement.

The fair value of leases acquired were based on inputs that are not observable in the market and, as such, are a Level 3 fair value measurement.

See Note 4 for a description of the fair value hierarchy.

Key assumptions used in the fair value calculations included market-based prices for comparable acreage and, for the 2019 Asset Exchange Transaction, the net present value of expected payments due for reimbursement.

The key assumption used in the fair value calculations included market-based prices for comparable acreage.

2020 Divestiture

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In addition, the 2020 Divestiture relieved the Company of approximately $ 49 million in asset retirement obligations and other liabilities associated with the sold assets.

Proceeds from the sale were used to pay down the Company's term loan facility.

The purchase and sale agreement for the 2020 Divestiture provides for additional cash bonus payments (the Contingent Consideration) payable to the Company of up to $ 20 million.

Such Contingent Consideration is conditioned upon the three-month average of the NYMEX Henry Hub natural gas settlement price relative to stated floor and target price thresholds beginning on August 31, 2020 and ending on November 30, 2022.

The Contingent Consideration represents an embedded derivative that is recorded at fair value in the Consolidated Balance Sheets.

The Contingent Consideration had a fair value of approximately $ 8.2 million and $ 1.9 million as of December 31, 2021 and 2020, respectively .

During the years ended December 31, 2021 and 2020 , the Company received cash from the Contingent Consideration of $ 10.6 million and $ 0.9 million, respectively.

Changes in fair value are recorded in (gain) loss/impairment on sale/exchange of long-lived assets in the Statements of Consolidated Operations.

The fair value of the Contingent Consideration is based on significant inputs that are interpolated from observable market data and, as such, is a Level 2 fair value measurement.

Proceeds from the sale were used to pay down the Company's then-outstanding term loan facility.

The purchase and sale agreement for the 2020 Divestiture provided for additional cash bonus payments (the Contingent Consideration) payable to the Company of up to $ 20 million.

Such Contingent Consideration was conditioned upon the three-month average of the NYMEX Henry Hub natural gas settlement price relative to stated floor and target price thresholds beginning on August 31, 2020 and ending on November 30, 2022.

The Contingent Consideration represented an embedded derivative that was recorded at fair value in the Consolidated Balance Sheets.

During the years ended December 31, 2022, 2021 and 2020, the Company received cash from the Contingent Consideration of $ 8.5 million, $ 10.6 million and $ 0.9 million, respectively.

Changes in fair value were recorded in (gain) loss/impairment on sale/exchange of long-lived assets in the Statements of Consolidated Operations.

The fair value of the Contingent Consideration was based on significant inputs that are interpolated from observable market data and, as such, was a Level 2 fair value measurement.

See Note 4 for a description of the fair value hierarchy.

As a result of the 2020 Divestiture, the Company recognized a net loss of $ 39.1 million, including the impact of the change in fair value of the Contingent Consideration, in (gain) loss/impairment on sale/exchange of long-lived assets in the Statement of Consolidated Operations during the year ended December 31, 2020.

The following table summarizes income tax (benefit) expense.

The following table summarizes the Company's income tax (benefit) expense.

Years Ended December 31,

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Subtotal 534,612 ( 427,470 ) ( 152,275 )

Total income tax benefit $ ( 434,175 ) $ ( 298,858 ) $ ( 375,776 )

For the year ended December 31, 2021, the current federal and state income tax benefit related primarily to the sale of state research and development credits.

For the year ended December 31, 2020, the current federal and state income tax benefit consisted primarily of refunds of $ 117 million, including interest, related to the Company's alternative minimum tax (AMT) credit carryforward, the Tax Cuts and Jobs Act of 2017 (the Tax Cuts and Jobs Act) and the acceleration of the receipt of such refunds with the Coronavirus Aid, Relief and Economic Security Act (CARES Act).

Total income tax expense (benefit) $ 553,720 $ ( 428,037 ) $ ( 295,293 )

For the year ended December 31, 2022, the current income tax expense related primarily to state income tax liabilities.

For the year ended December 31, 2021, the current income tax benefit related primarily to the sale of state research and development credits.

For the year ended December 31, 2020, the current income tax benefit consisted primarily of federal refunds of $ 117 million, including interest, related to the Company's alternative minimum tax (AMT) credit carryforward, the Tax Cuts and Jobs Act of 2017 (the Tax Cuts and Jobs Act) and the acceleration of the receipt of such refunds under the Coronavirus Aid, Relief and Economic Security Act (CARES Act).

The remainder of the tax benefit of $ 26 million, including interest, was related to federal and state audits that were settled in 2020.

For the year ended December 31, 2019, the current U.S.

federal income tax benefit consisted primarily of expected refunds of $ 120 million related to the Company's AMT credit carryforward and the Tax Cuts and Jobs Act.

On December 22, 2017, the U.S.

Congress enacted the Tax Cuts and Jobs Act, which made significant changes to U.S.

federal income tax law, including lowering the federal corporate tax rate to 21 % from 35 % and repealing the AMT beginning January 1, 2018.

In connection with repealing the AMT, the Tax Cuts and Jobs Act also provided that existing AMT credit carryforwards can be used to offset current federal taxes owed with 50% of any remaining balance being refunded in tax years 2018 through 2020.

With the passing of the CARES Act, the Company was able to accelerate these refunds to 2020.

As a result of an IRS announcement in January 2019 that reversed its position that AMT refunds were subject to sequestration by the federal government at a rate equal to 6.2 % of the refund, the Company reversed the related valuation allowance of $ 13 million in the first quarter of 2019.

The Tax Cuts and Jobs Act limited the deductibility of interest expense, and, as a result, the Company recorded a valuation allowance in 2019 for a portion of the interest expense limit imposed for separate company state income tax purposes.

During 2020, final regulations were issued that provided clarity on several issues that were beneficial to the Company, including (i) the exclusion of commitment fees and debt issuance costs from the definition of interest and (ii) the inclusion of the adding back depreciation, depletion and amortization associated with cost of goods sold to arrive at adjusted taxable income.

These changes eliminated the interest expense limitation for the Company and the related valuation allowance was reversed in 2020.

The Company has federal net operating loss (NOLs) carryforwards related to its 2017 acquisition of Rice Energy Inc.

and NOLs generated in 2017 in excess of amounts carried back to prior years.

The Company also has NOLs acquired in the Company's 2016 acquisition of Trans Energy, Inc., of which a nominal amount is available for use annually over the next 15 years.

On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (IRA).

The IRA establishes a 15% corporate alternative minimum tax for certain corporations and a 1% excise tax on stock repurchases made by publicly traded U.S.

corporations.

The IRA also includes new and renewed options for energy credits.

These changes are effective for tax years beginning after December 31, 2022.

The Company is evaluating the impact these changes will have on its financial statements and disclosures.

The Tax Cuts and Jobs Act limited the utilization of NOLs generated after December 31, 2017 that have been carried forward into future years to 80% of taxable income and eliminated the ability to carry NOLs back to earlier tax years for refunds of taxes paid.

NOLs generated in 2018 and in future periods can be carried forward indefinitely.

As a result of the CARES Act, NOLs generated in 2018, 2019 and 2020 can be carried back five years and are allowed to fully offset taxable income ignoring the 80% limitation if utilized prior to 2021.

Income tax benefit from continuing operations differed from amounts computed at the federal statutory rate of 21 % on pre-tax income for reasons summarized below.

Income tax expense (benefit) from continuing operations differed from amounts computed at the federal statutory rate of 21% on pre-tax income for reasons summarized below.

Years Ended December 31,

2022 2021 2020

Amount Rate Amount Rate Amount Rate

(Thousands) (Thousands) (Thousands)

Income (loss) before income taxes $ 2,334,662 $ ( 1,569,538 ) $ ( 1,254,102 )

Tax at statutory rate $ 490,279 21.0 % $ ( 329,603 ) 21.0 % $ ( 263,361 ) 21.0 %

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Valuation allowance 12,685 0.5 % 9,616 ( 0.6 ) % 106,548 ( 8.5 ) %

Convertible debt repurchase premium 35,957 1.5 % — — % — — %

State law change ( 49,511 ) ( 2.1 ) % ( 8,496 ) 0.5 % — — %

Tax settlements — — % — — % ( 33,384 ) 2.7 %

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Other 19,659 0.8 % 3,551 ( 0.2 ) % ( 19,492 ) 1.6 %

Income tax benefit $ ( 434,175 ) $ ( 298,858 ) $ ( 375,776 )

Effective tax rate 27.3 % 23.6 % 23.5 %

Income tax expense (benefit) $ 553,720 23.7 % $ ( 428,037 ) 27.3 % $ ( 295,293 ) 23.5 %

The Company's effective tax rate for the year ended December 31, 2022 was higher compared to the U.S.

federal statutory rate due primarily to state taxes, including valuation allowances limiting certain state tax benefits and nondeductible repurchase premiums on the Convertible Notes partly offset with state tax benefits relating to Pennsylvania tax legislation enacted on July 8, 2022 (Pennsylvania tax legislation).

The Pennsylvania tax legislation lowers the corporate net income tax rate from 9.99% to 8.99% in 2023 and by 0.5% thereafter until the corporate net income tax rate reaches 4.99% in 2031.

Included in the state law change above is a decrease in state net operating loss (NOL) carryforwards of $ 214.1 million and a decrease in state valuation allowance on NOL carryforwards of $ 198.5 million.

The Company's effective tax rate for the year ended December 31, 2021 was higher compared to the U.S.

federal statutory rate due primarily to state taxes, partly offset by valuation allowances that limit certain federal and state tax benefits as well as the West Virginia tax legislation enacted on April 13, 2021 that changed the way taxable income is apportioned in West Virginia for tax years beginning on or after January 1, 2022.

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federal statutory rate due primarily to state income taxes and federal and state income tax settlements, partly offset by valuation allowances that limit certain federal and state tax benefits.

The Company's effective tax rate for the year ended December 31, 2019 was higher compared to the U.S.

federal statutory rate due primarily to state income taxes and the release of the valuation allowance related to AMT sequestration, partly offset by valuation allowances that limit certain state tax benefits.

The Company believes that it is more likely than not that the benefit from certain state NOL carryforwards and certain federal NOLs acquired in recent acquisitions will not be realized.

The following table summarizes the source and tax effects of temporary differences between financial reporting and tax bases of assets and liabilities.

Deferred tax assets:

NOL carryforwards $ 580,188 $ 948,707

Net unrealized losses 171,697 456,751

Federal and state capital loss carryforward 99,837 32,706

Federal tax credits 88,015 83,244

Alternative minimum tax credit carryforward 81,237 81,237

Investment in Equitrans Midstream — 69,159

Incentive compensation and deferred compensation plans 14,586 20,409

Other 6,001 2,499

1,041,561 1,694,712

Valuation allowance ( 365,140 ) ( 550,967 )

Net deferred tax asset 676,421 1,143,745

Deferred tax liabilities:

Property, plant and equipment ( 2,118,827 ) ( 2,051,051 )

Net deferred tax liability $ ( 1,442,406 ) $ ( 907,306 )

During 2022, net deferred tax liability increased by $ 535.1 million compared to 2021 due primarily to unrealized mark to market gains on unsettled commodities hedges, NOL utilization for federal and state, and accelerated cost recovery of property, plant and equipment partially offset by a reduction in state NOLs and valuation allowance primarily related to the Pennsylvania tax legislation.

The following table details the expiration periods of the NOL carryforward deferred tax assets presented above and associated valuation allowance by jurisdiction.

NOL carryforwards:

Federal (expires between 2035 and 2037) $ 62,931 $ 244,032

Federal (indefinite expiration) 202,711 189,948

State (expires between 2027 and 2037) 299,933 500,676

State (indefinite expiration) 14,613 14,051

Total NOL carryforwards $ 580,188 $ 948,707

Valuation allowance on NOL carryforwards:

Federal $ ( 23,626 ) $ ( 22,848 )

State ( 241,638 ) ( 426,243 )

Total valuation allowance on NOL carryforwards $ ( 265,264 ) $ ( 449,091 )

The remaining valuation allowance not presented in the table above primarily relates to the Company's investment in Equitrans Midstream which is a capital asset for tax purposes.

Any capital losses from the sale of the investment can only be utilized to offset capital gains and are limited to being carried back 3 years and forward 5 years for potential utilization.

In 2022, the Company sold the remaining portion of its investment in Equitrans Midstream, which generated a capital loss that can only be carried forward for potential future utilization.

In 2021, the Company incurred an unrealized gain when adjusting the investment to fair value and sold a portion of its investment in Equitrans Midstream generating a capital loss that can be partially carried back to offset capital gains recognized in an earlier year, with the remainder being carried forward.

For the period ending December 31, 2022, the Company has a valuation allowance related to the capital loss carryforward totaling

$ 52.7 million for federal income tax and $ 47.1 million for state income tax purposes due to the limitations on future potential utilization.

For the period ending December 31, 2021, the Company has a valuation allowance related to the capital loss carryforward and any unrealized losses on its investment in Equitrans Midstream totaling $ 44.0 million for federal income tax and $ 57.5 million for state income tax purposes due to the limitations on future potential utilization.

A valuation allowance is required when it is more likely than not that all or a portion of a deferred tax asset will not be realized.

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At December 31, 2022 and 2021, positive evidence considered included the reversals of financial-to-tax temporary differences, the implementation of and/or ability to employ various tax planning strategies and the estimation of future taxable income.

Negative evidence considered included historical pre-tax book losses of the Company.

A review of positive and negative evidence regarding these tax benefits resulted in the conclusion that valuation allowances for certain NOLs were warranted as it was more likely than not that the Company would not use them prior to expiration.

Uncertainties such as future commodity prices can affect the Company's calculations and its ability to use these NOLs prior to expiration.

Further, because of the Tax Cuts and Jobs Act, the Company recorded a write-off of deferred tax assets related to certain executive incentive-based awards to be paid in a future year that will not be deductible.

During 2021, the Company released some of the valuation allowance previously recorded due to unrealized gains recognized during the year and the partial sale of its investment in Equitrans Midstream that resulted in a capital loss that will be carried back to offset capital gains recognized in an earlier year.

During 2020 and 2019, the Company recorded a partial valuation allowance against a deferred tax asset related to the unrealized loss recorded on its investment in Equitrans Midstream that it does not believe it will be able to utilize due to limitations imposed on capital losses.

The Company provided a valuation allowance on the portion in excess of the carryback.

Management will continue to assess the potential for realizing deferred tax assets based on the feasibility of future tax planning strategies and may record adjustments to the related valuation allowances in future periods that could materially impact net income.

Negative evidence considered included historical pre-tax book losses of the Company, the uncertainty of future commodity prices and inability to generate capital gains.

A review of positive and negative evidence regarding these tax benefits resulted in the conclusion that valuation allowances for certain NOLs and capital loss carryforwards were warranted as it was more likely than not that the Company would not use them prior to expiration.

The Company intends to maintain a valuation allowance on certain of its state NOL carryforwards until there is sufficient evidence to support a reversal of all or a portion of such allowance.

However, given the Company's anticipated future earnings, the Company believes that there is a reasonable possibility that, in the near term, sufficient positive evidence may become available that supports the release of a portion of the Company's valuation allowance, which would result in the recognition of certain state NOL carryforwards and a decrease to income tax expense for the period in which the release is recorded.

The exact timing and amount of the valuation allowance release would be subject to change based on the level of profitability that the Company can achieve.

The following table reconciles the beginning and ending amount of reserve for uncertain tax positions, excluding interest and penalties.

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Balance at December 31 $ 204,035 $ 182,032 $ 175,213

Included in the reserve for uncertain tax positions are unrecognized tax benefits of $ 97.8 million, $ 91.0 million and $ 150.9 million that, if recognized, would affect the effective tax rates as of December 31, 2021, 2020 and 2019, respectively.

Also included in the reserve are uncertain tax positions of $ 97.2 million, $ 90.3 million and $ 113.7 million for the years ended December 31, 2021, 2020 and 2019, respectively, that were recorded in the Consolidated Balance Sheets as a reduction of the related deferred tax asset for general business credit carryforwards and NOLs.

The following table shows specific line items that are included in the reserve for uncertain tax positions.

2022 2021 2020

If recognized, affect the effective tax rate $ 117,341 $ 97,783 $ 91,003

Recorded in Consolidated Balance Sheets as reduction of related deferred tax asset for general business credit carryforwards and NOLs $ 110,744 $ 97,160 $ 90,341

During 2020, the Company adjusted its tax reserves as a result of settling its 2010 to 2012 amended return refund claim with the IRS by (i) reducing the uncertain tax positions and increasing the amount of the deferred tax asset for AMT credits by $ 14.9 million, (ii) reducing the uncertain tax position offset to the deferred tax asset for Research and Experimentation credits by $ 35.3 million and (iii) writing down the deferred tax asset by $ 22.6 million to the settlement amount.

In addition, in 2020, the Company settled a dispute related to its 2013 Pennsylvania returns and reduced the uncertain tax positions by $ 46.9 million and agreed to remit $ 33.5 million to the Commonwealth of Pennsylvania.

During 2019, the Company released $ 84.0 million of reserves and reinstated the related deferred tax asset for AMT due to settlement of the 2013 amended return refund claim with the IRS.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.

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Interest and penalties of $ 22.2 million and $ 15.5 million were included in the Consolidated Balance Sheets at December 31, 2022 and 2021, respectively.

As of December 31, 2021, the Company believed that, as a result of potential settlements with, or legal or administrative guidance by, relevant taxing authorities or the lapse of applicable statutes of limitation, it is reasonably possible that a decrease of $ 125.9 million in unrecognized tax benefits related to federal tax positions may be necessary within twelve months.

The Company's consolidated U.S.

federal income tax liability has been settled with the IRS through 2013.

As of December 31, 2022, the Company believed that, as a result of potential settlements with relevant taxing authorities it is reasonably possible that a decrease of $ 125.9 million in unrecognized tax benefits related to federal tax positions may be necessary within twelve months.

In January of 2023, the Company settled its consolidated U.S.

federal income tax liability with the IRS through 2017 at amounts included in the reserve above with minimal impacts to the effective tax rate.

The settlement will result in an immaterial cash tax payment and a reduction in liabilities and deferred tax assets of $ 81.2 million and foregone R&D tax credits of $ 44.7 million reflected in the table above.

Periodically, the Company is also the subject of various state income tax examinations.

As of December 31, 2021, with few exceptions, the Company is no longer subject to state examinations by tax authorities for years before 2015.

As of December 31, 2022, with few exceptions, the Company is no longer subject to state examinations by tax authorities for years prior to 2015.

There were no material changes to the Company's methodology for accounting for unrecognized tax benefits during 2022.

The following table summarizes the source and tax effects of temporary differences between financial reporting and tax bases of assets and liabilities.

Deferred tax assets:

NOL carryforwards $ 948,707 $ 789,544

Net unrealized losses 456,751 43,475

Federal tax credits 83,244 79,846

Alternative minimum tax credit carryforward 81,237 81,237

Investment in Equitrans Midstream 69,159 94,689

Federal and state capital loss carryforward 32,706 28,317

Incentive compensation and deferred compensation plans 20,409 22,419

Other 2,544 1,286

Total deferred tax assets 1,694,757 1,140,813

Valuation allowances ( 550,967 ) ( 529,992 )

Net deferred tax asset 1,143,790 610,821

Deferred tax liabilities:

Property, plant and equipment ( 2,051,051 ) ( 1,945,299 )

Convertible debt ( 31,351 ) ( 37,489 )

Total deferred tax liabilities ( 2,082,402 ) ( 1,982,788 )

Net deferred tax liability $ ( 938,612 ) $ ( 1,371,967 )

During 2021, net deferred tax liability decreased by $ 433.4 million compared to 2020 due primarily to unrealized mark to market losses and net operating losses for federal and state, partly offset by increased tax depreciation in excess of book depreciation and the Company's investment in Equitrans Midstream.

As of December 31, 2021, the Company had a deferred tax asset of $ 244.0 million, subject to a valuation allowance of $ 22.8 million, related to tax benefits from federal NOL carryforwards generated prior to 2018 and expiring between 2035 and 2037.

Federal NOLs generated in 2018 and thereafter are represented by a deferred tax asset of $ 190.0 million and will carryforward indefinitely but will be limited to offset 80% of taxable income in each year.

As of December 31, 2021, the Company had a deferred tax asset of $ 514.7 million, subject to a valuation allowance of $ 426.2 million, related to tax benefits from state NOL carryforwards with expiration dates ranging from 2021 to 2041 with some being carried forward indefinitely.

Due to a decrease in state apportionment rates and impairment of assets, the Company will have less realizable NOLs in future years on a separate company basis and, as such, as of December 31, 2021 the Company had a valuation allowance recorded on its property, plant and equipment state deferred tax asset of $ 0.3 million.

In 2021, the Company incurred an unrealized gain and sold a portion of its investment in Equitrans Midstream, which generated a capital loss that will be carried back to offset capital gains recognized in an earlier year.

This investment is a capital asset for tax purposes, and capital losses can only be utilized to offset a capital gain and are limited to being carried back 3 years and forward 5 years for potential utilization.

Due to these limitations, the Company also recorded a valuation allowance for the portion of the capital loss recognized in excess of the carryback and any net unrealized losses against the deferred tax asset for its retained equity stake of Equitrans Midstream of $ 57.5 million for separate company state income tax reporting purposes and $ 44.0 million for federal income tax reporting purposes.

As of December 31, 2020, the Company had a deferred tax asset of $ 233.2 million, subject to a valuation allowance of $ 22.8 million, related to tax benefits from federal NOL carryforwards generated prior to 2018 and expiring between 2035 and 2037.

Federal NOLs generated in 2018 and thereafter are represented by a deferred tax asset of $ 75.6 million and will carryforward indefinitely but will be limited to offset 80% of taxable income in each year.

As of December 31, 2020, the Company had a deferred tax asset of $ 480.8 million, subject to a valuation allowance of $ 387.7 million, related to tax benefits from state NOL carryforwards with expiration dates ranging from 2021 to 2040.

Due to a decrease in state apportionment rates and impairment of assets, the Company will have less realizable NOLs in future years on a separate company basis and, as such, in 2020 recorded a valuation allowance on its property, plant and equipment state deferred tax asset of $ 0.6 million.

In 2020, the Company incurred an unrealized loss on its investment in Equitrans Midstream.

This investment is a capital asset for tax purposes, and capital losses can only be utilized to offset a capital gain and are limited to being carried back three years and forward five years for potential utilization.

Due to these limitations, the Company also recorded a valuation allowance on the deferred tax asset for its retained equity stake of Equitrans Midstream of $ 62.4 million for separate company state income tax reporting purposes and $ 56.4 million for federal income tax reporting purposes.

On November 12, 2018, the Company completed the separation of its midstream business, which was composed of the separately operated natural gas gathering, transmission and storage and water services businesses of the Company, from its upstream business, which is composed of the natural gas, NGLs and oil development, production and sales and commercial operations of the Company (the Separation).

The Separation was effected by the transfer of the midstream business from the Company to Equitrans Midstream and the distribution of 80.1 % of the outstanding shares of Equitrans Midstream's common stock to the Company's shareholders (the Distribution).

For the year ended December 31, 2019, the Company recorded a $ 90.9 million adjustment to retained earnings and additional paid-in-capital related to the Separation and Distribution.

The Separation and Distribution resulted in the recognition of a tax gain related to a pre-Separation transaction.

Recognition occurred as a result of Equitrans Midstream exiting the Company's consolidated federal filing group.

The gain amount reported in the tax return was different than the amount estimated in the 2018 financial statements;

therefore, the Company recorded a return-to-provision adjustment in 2019.

This adjustment impacts the amount of deferred taxes transferred to Equitrans Midstream as of the Separation and Distribution date of November 12, 2018.

The table below summarizes the Company's outstanding debt.

December 31, 2022 December 31, 2021

Principal Value Carrying Value (a) Fair Value (b) Principal Value Carrying Value (a) Fair Value (b)

Credit Facility expires July 31, 2023 $ — $ — $ — $ 300,000 $ 300,000 $ 300,000

Senior notes:

8.81 % to 9.00 % series A notes due 2020 – 2021

— — — 24,000 24,000 25,232

4.875 % notes due November 15, 2021

— — — 125,118 124,943 128,231

3.00 % notes due October 1, 2022

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911,467 908,168 915,833 1,000,000 994,643 1,133,000

5.678 % notes due October 1, 2025

500,000 496,578 500,370 — — —

1.75 % convertible notes due May 1, 2026

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1,233,008 1,227,582 1,152,875 1,250,000 1,243,340 1,344,688

5.700 % notes due April 1, 2028

500,000 493,941 505,325 — — —

5.00 % notes due January 15, 2029

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Total debt 5,726,550 5,678,965 6,153,284 5,643,652 5,591,072 6,572,606

Current portion of debt 1,074,332 954,900 1,439,165 154,336 154,161 159,943

Current portion of debt (d) 430,668 422,632 983,758 1,074,332 1,060,970 1,439,165

Long-term debt $ 5,295,882 $ 5,256,333 $ 5,169,526 $ 4,569,320 $ 4,530,102 $ 5,133,441

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See Note 4 for a description of the fair value hierarchy.

For the notes due February 1, 2025 and the notes due February 1, 2030, the interest rates were 7.875 % and 8.750 %, respectively, as of December 31, 2020.

(c) Interest rates for this tranche of the Company's senior notes fluctuate based on changes to the credit ratings assigned to the Company's senior notes by Moody's, S&P and Fitch.

(d) As of December 31, 2022, the current portion of debt includes the 7.42 % series B notes, the 1.75 % convertible notes and a portion of the note payable to EQM.

As of December 31, 2021, the current portion of debt includes the 3.00 % notes, the 1.75 % convertible notes and a portion of the note payable to EQM.

Credit Facility.

The Company has a $ 2.5 billion credit facility.

On April 23, 2021, the Company entered into an Extension Agreement and First Amendment to Second Amended and Restated Credit Agreement (the Extension Agreement and First Amendment), amending the Second Amended and Restated Credit Agreement, dated as of July 31, 2017, among the Company, PNC Bank, National Association, as administrative agent, swing line lender and an L/C issuer, and the other lenders party thereto (the Credit Agreement).

The Extension Agreement and First Amendment, among other things, (i) extends the maturity date of the commitments and loans under the Credit Agreement from July 31, 2022 to July 31, 2023, (ii) adds customary provisions to provide for the eventual replacement of LIBOR as a benchmark interest rate and (iii) adds an additional pricing level for the Applicable Rate (as defined in the Extension Agreement and First Amendment).

The Company is permitted to request one additional one-year extension of the expiration date, the approval of which is subject to satisfaction of certain conditions.

The Company may, on a one-time basis, request that the lenders' commitments be increased to an aggregate of up to $ 3.0 billion, subject to certain terms and conditions.

Each lender in the facility may decide if it will increase its commitment.

On June 28, 2022, the Company entered into the Third Amended and Restated Credit Agreement (the Third Amendment) with the lenders party thereto and PNC Bank, National Association, as administrative agent, swing line lender and L/C issuer, amending and restating the Second Amended and Restated Credit Agreement, dated as of July 31, 2017 (the Credit Agreement).

The Third Amendment, among other things, (i) extends the maturity date of the commitments and loans under the Credit Agreement to June 28, 2027 and provides, at the

Company's option, two one-year extensions thereafter, subject to the approval of the lenders, (ii) allows for commitment increases of up to $ 500 million, subject to the agreement of the Company and new or existing lenders and (iii) allows for Base Rate Loans, Term SOFR Rate Loans, Daily Simple SOFR Loans and Swing Line Loans (each defined in the Third Amendment).

Base Rate Loans bear interest at a Base Rate (as defined in the Third Amendment) plus a margin based on the Company's then current credit ratings.

The credit facility may be used for working capital, capital expenditures, share repurchases and any other lawful corporate purposes.

The credit facility is underwritten by a syndicate of 17 financial institutions, each of which is obligated to fund its pro-rata portion of any borrowings by the Company.

Under the terms of the credit facility, the Company may obtain base rate loans or Eurodollar rate loans denominated in U.S.

Base rate loans bear interest at a Base Rate (as defined in the Extension Agreement and First Amendment) plus a margin based on the Company's then current credit ratings.

Eurodollar rate loans bear interest at a Eurodollar Rate (as defined in the Extension Agreement and First Amendment) plus a margin based on the Company's then current credit ratings.

The credit facility is underwritten by a syndicate of a large group of financial institutions, each of which is obligated to fund its pro-rata portion of any borrowings by the Company.

No one lender of the large group of financial institutions in the syndicate for the credit facility holds more than 10 % of the financial commitments under such facility.

The large syndicate group and relatively low percentage of participation by each lender are expected to limit the Company's exposure to disruption or consolidation in the banking industry.

The Company is not required to maintain compensating bank balances.

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Certain of the Company's senior notes also include an offer to repurchase provision applicable upon the occurrence of certain change of control events specified in the applicable indentures.

Interest rates on the Company's $ 1.0 billion aggregate principal amount of senior notes due February 1, 2025 and $ 750 million aggregate principal amount of senior notes due February 1, 2030 (together, the Adjustable Rate Notes) fluctuate based on changes to the credit ratings assigned to the Company's senior notes by Moody's, S&P and Fitch.

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

A s of December 31, 2021, aggregate maturities for the Company's senior notes were $ 569 million in 2022, $ 10 million in 2023, zero in 2024, $ 1,000 million in 2025, $ 1,115 million in 2026 and $ 2,850 million thereafter.

Interest rates on the Company's senior notes due February 1, 2025 and senior notes due February 1, 2030 fluctuate based on changes to the credit ratings assigned to the Company's senior notes by Moody's, S&P and Fitch.

Interest rates on the Company's other outstanding senior notes do not fluctuate.

As of December 31, 2022 , aggregate maturities for the Company's senior notes were $ 10 million in 2023, zero in 2024, $ 1,411 million in 2025, $ 971 million in 2026, $ 1,233 million in 2027 and $ 2,007 million thereafter.

5.678 % Senior Notes and 5.700 % Senior Notes.

On May 17, 2021, the Company issued $ 500 million aggregate principal amount of 3.125 % senior notes due May 15, 2026 and $ 500 million aggregate principal amount of 3.625 % senior notes due May 15, 2031.

After deducting offering costs of $ 15.6 million, net proceeds from the sale of the notes of $ 984.4 million were used to partly fund the Alta Acquisition described in Note 6 .

On October 4, 2022, the Company 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.

The Company intends to use the net proceeds from the sale of the notes of $ 989.9 million (after deducting offering costs of $ 10.1 million) to partly fund the Tug Hill and XcL Midstream Acquisition.

The covenants of the 5.678 % senior notes and 5.700 % senior notes are consistent with the Company's existing senior unsecured notes.

provided, however, that the 3.125 % senior notes and 3.625 % senior notes include an offer to repurchase provision applicable upon the occurrence of certain change of control events specified in the applicable indentures.

The 5.678 % senior notes and 5.700 % senior notes have a special mandatory redemption provision that provides that if the consummation of the Tug Hill and XcL Midstream Acquisition does not occur on or before June 30, 2023 or if the Company notifies the trustee of the notes that it will not pursue consummation of the Tug Hill and XcL Midstream Acquisition, the Company is required to redeem the notes of each series then outstanding at a price equal to 101 % of the principal amount of the notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date.

Debt Repayments .

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

In January 2022, the Company redeemed $ 206.0 million aggregate principal amount of the its 3.00 % senior notes at a total cost of $ 210.4 million, inclusive of redemption premiums of $ 2.6 million and accrued but unpaid interest of $ 1.8 million.

Term Loan Facility .

The Company had a $ 1.0 billion term loan facility that was scheduled to mature in May 2021.

On June 30, 2020, the Company used proceeds from the offering of its Convertible Notes (see below), cash from its income tax refunds (see Note 9 ) and proceeds from the 2020 Divestiture (described in Note 8 ) to fully repay its term loan facility.

Under the Company's term loan facility, for the period beginning January 1, 2020 and ending June 30, 2020, the average daily balance was approximately $ 692 million and interest was incurred at a weighted average annual interest rate of 2.6 %.

For the period May 31, 2019 through December 31, 2019, the average daily balance was $ 1.0 billion and interest was incurred at a weighted average annual interest rate of 3.1 %.

The Company redeemed or repurchased the following debt during the year ended December 31, 2022.

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

3.00 % notes due October 1, 2022

$ 568,823 $ 5,546 $ 7,150 $ 581,519

6.125 % notes due February 1, 2025

88,533 3,064 2,691 94,288

1.75 % convertible notes due May 1, 2026

85,096 127,906 250 213,252

3.125 % notes due May 15, 2026

59,143 ( 3,998 ) 524 55,669

3.90 % notes due October 1, 2027

16,992 ( 753 ) 195 16,434

5.00 % notes due January 15, 2029

22,899 ( 1,039 ) 350 22,210

7.000 % notes due February 1, 2030

35,200 1,978 934 38,112

3.625 % notes due May 15, 2031

34,835 ( 5,341 ) 556 30,050

Total $ 911,521 $ 127,363 $ 12,650 $ 1,051,534

Term Loan Facility and Bridge Loan Facility .

In connection with entering into the Tug Hill and XcL Midstream Purchase Agreement, on September 6, 2022, the Company entered into a debt commitment letter, which was amended and restated on September 20, 2022.

Pursuant to such amended and restated debt commitment letter, Royal Bank of Canada, PNC Bank, National Association, Mizuho Bank, Ltd.

and certain other financial institutions committed to provide the Company with an unsecured bridge loan facility in an aggregate principal amount of $ 1.25 billion (the Bridge Loan Facility) and an unsecured term loan facility in an aggregate principal amount of $ 1.25 billion (the Term Loan Facility), subject to satisfaction of standard conditions.

On November 9, 2022, the Company entered into a Credit Agreement (the Term Loan Credit Agreement) with PNC Bank, National Association, as administrative agent and the other lenders parties thereto, under which the Company may obtain unsecured term loans in a single draw in an aggregate principal amount up to $ 1.25 billion to partially finance the Tug Hill and XcL Midstream Acquisition.

On December 23, 2022, the Company amended the Term Loan Credit Agreement to extend the termination date for commitments under the Term Loan Facility to June 30, 2023.

As of December 31, 2022, the Term Loan Facility commitments thereunder remained undrawn.

The Company will incur commitment fees of approximately 20 basis points on the undrawn portion of the Term Loan Facility to maintain credit availability.

In connection with the closing of the offering of the Company’s 5.678 % senior notes and 5.700 % senior notes on October 4, 2022, the commitments under the Bridge Loan Facility were automatically reduced by $ 989.9 million (the net proceeds from the sale of the notes) in accordance with the terms of the Bridge Loan Facility.

The remaining commitments under the Bridge Loan Facility were terminated by the Company on December 23, 2022, as the Company determined that the remaining commitments were no longer necessary to finance the Tug Hill and XcL Midstream Acquisition.

Note Payable to EQM.

EQM owns a preferred interest in EQT Energy Supply, LLC, a subsidiary of the Company, that is accounted for as a note payable due to the terms of the operating agreement of EQT Energy Supply, LLC.

The fair value of the note payable to EQM is a Level 3 fair value measurement and is estimated using an income approach model using a market-based discount rate.

Principal amounts due for the note payable to EQM are $ 5.8 million in 2023 , $ 6.3 million in 2024 , $ 6.5 million in 2025 , $ 6.9 million in 2026 , $ 7.3 million in 2027 and $ 61.5 million thereafter.

Surety Bonds.

The Company had approximately $ 245 million and $ 93 million of surety bonds outstanding as of December 31, 2021 and 2020, respectively, in response to its credit downgrades by Moody's, S&P and Fitch.

The Company had approximately $ 180 million and $ 245 million of surety bonds outstanding as of December 31, 2022 and 2021, respectively, which were issued pursuant to contractual requirements as a result of the Company's then-existing credit ratings by Moody's, S&P and Fitch.

Convertible Notes.

In April 2020, the Company issued $ 500 million aggregate principal amount of 1.75 % convertible senior notes (the Convertible Notes) due May 1, 2026 unless earlier redeemed, repurchased or converted.

The Convertible Notes were issued in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended.

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

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

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

• during any quarter as long as the last reported price of EQT Corporation common stock for at least 20 trading days (consecutive or otherwise) during the period of 30 consecutive trading days ending on the last trading day of the

immediately preceding quarter is greater than or equal to 130 % of the conversion price on each such trading day (the Sale Price Condition);

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

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

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

The initial conversion rate for the Convertible Notes is 66.6667 shares of EQT common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to an initial conversion price of $ 15.00 per share of EQT common stock.

The initial conversion price represents a premium of 20 % to the $ 12.50 per share closing price of EQT common stock on April 23, 2020.

The conversion rate is subject to adjustment under certain circumstances.

In addition, following certain corporate events that occur prior to May 1, 2026 or if the Company delivers notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such corporate event or notice of redemption.

Upon conversion of the remaining outstanding Convertible Notes, the Company may satisfy its conversion obligation by paying and/or delivering at the Company's election, in the manner and subject to the terms and conditions provided in the Convertible Notes indenture, cash, shares of EQT common stock or a combination thereof.

Pursuant to the terms of the Convertible Notes indenture, the Sale Price Condition for conversion of the Convertible Notes was satisfied as of June 30, 2021, and, accordingly, holders of Convertible Notes were permitted to convert any of their Convertible Notes, at their option, at any time during the quarter beginning on July 1, 2021 and ending on September 30, 2021, subject to all terms and conditions set forth in the Convertible Notes indenture.

During the three months ended September 30, 2021, holders of the Convertible Notes exercised their conversion right with respect to $ 9 thousand in aggregate principal amount of the Convertible Notes.

The Company elected to settle all such conversions by issuing to the converting holders of the Convertible Notes 599 shares of EQT common stock in the aggregate at an average conversion price of $ 19.64 .

The Sale Price Condition for conversion of the Convertible Notes was not satisfied as of September 30, 2021, and, accordingly, holders of Convertible Notes were not permitted to convert any of their Convertible Notes during the three months ended December 31, 2021.

The Sale Price Condition for conversion of the Convertible Notes was satisfied as of December 31, 2021 and, accordingly, holders of Convertible Notes may convert any of their Convertible Notes, at their option, at any time during the quarter beginning on January 1, 2022 and ending on March 31, 2022, subject to all terms and conditions set forth in the Convertible Notes indenture.

Therefore, as of December 31, 2021, the net carrying value of the liability portion of the Convertible Notes was included in current portion of debt on the Consolidated Balance Sheet.

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

The Company may not redeem the Convertible Notes prior to May 5, 2023.

On or after May 5, 2023 and prior to February 1, 2026, the Company may redeem for cash all or any portion of the Convertible Notes, at its option, at a redemption price equal to 100 % of the principal amount of the Convertible Notes to be redeemed plus accrued and unpaid interest up to the redemption date as long as the last reported price per share of EQT common stock has been at least 130 % of the conversion price in effect for at least 20 trading days (consecutive or otherwise) during any 30 -consecutive-trading-day period ending on the trading day immediately preceding the date on which the Company delivers notice of redemption.

On or after May 5, 2023 and prior to February 1, 2026, the Company may redeem for cash all or any portion of the Convertible Notes at its option at a redemption price equal to 100 % of the principal amount of the Convertible Notes to be redeemed plus accrued and unpaid interest up to the redemption date as long as the last reported price per share of EQT Corporation common stock has been at least 130 % of the conversion price in effect for at least 20 trading days (consecutive or otherwise) during any 30 -consecutive-trading-day period ending on the trading day immediately preceding the date on which the Company delivers notice of redemption.

A sinking fund is not provided for the Convertible Notes.

In connection with the Convertible Notes offering, the Company entered into privately negotiated capped call transactions (the Capped Call Transactions), the purpose of which is to reduce the potential dilution to EQT common stock upon conversion of the Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of such obligation, with such reduction and offset subject to a cap.

The Capped Call Transactions have an initial strike price of $ 15.00 per share of EQT common stock and an initial capped price of $ 18.75 per share of EQT common stock, each of which are subject to certain customary adjustments.

For accounting purposes, the Company separated the Convertible Notes into liability and equity components.

The carrying amount of the liability component was calculated by measuring the fair value of similar debt instruments that do not have associated convertible features.

The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the principal value of the Convertible Notes.

The equity component is not remeasured as long as it continues to meet the condition for equity classification.

The excess of the principal amount of the liability component over its carrying amount (the debt discount) will be amortized to interest expense over the term of the Convertible Notes, which is approximately 6 years, at an effective interest rate of 8.4 %.

At inception, the Company recorded the Convertible Notes at fair value of approximately $ 358.1 million, a net deferred tax liability of $ 41.0 million and an equity component of $ 100.9 million.

Issuance costs were allocated to the liability and equity components of the Convertible Notes based on their relative fair values.

Issuance costs attributable to the liability component of $ 12.1 million were recorded as a reduction to the liability component of the Convertible Notes and will be amortized to interest expense over the term of the Convertible Notes at an effective interest rate of 8.4 %.

Issuance costs attributable to the equity component of $ 4.8 million, representing the conversion option, were netted with the equity component.

The initial conversion rate for the Convertible Notes was 66.6667 shares of EQT Corporation common stock per $1,000 principal amount of the Convertible Notes, which was equivalent to an initial conversion price of $ 15.00 per share of EQT Corporation common stock.

The initial conversion price represents a premium of 20 % to the $ 12.50 per share closing price of EQT Corporation common stock on April 23, 2020.

The conversion rate is subject to adjustment under certain circumstances.

As a result of the cash dividends EQT Corporation paid on its common stock during 2022, the conversion rate for the Convertible Notes was adjusted as noted in the following table.

Future dividend payments by EQT Corporation will result in further adjustments to the conversion rate per share of EQT Corporation common stock.

Dividend Paid Effective Date of Adjustment to Conversion Rate Conversion Shares of EQT Corporation Common Stock per $1,000 Principal Amount

Q1 2022 February 11, 2022 67.0535

Q2 2022 May 10, 2022 67.2836

Q3 2022 August 8, 2022 67.5232

Q4 2022 November 8, 2022 67.7532

The Sale Price Condition for conversion of the Convertible Notes was satisfied as of December 31, 2022 and December 31, 2021, and, accordingly, holders of the Convertible Notes could convert any of their Convertible Notes at their option at any time during the first quarter of 2023 and 2022, respectively, subject to the terms and conditions set forth in the Convertible Notes indenture.

Therefore, as of December 31, 2022 and December 31, 2021, the net carrying value of the Convertible Notes was included in current portion of debt in the Consolidated Balance Sheets.

The following table summarizes Convertible Notes conversion right exercises from issuance through February 10, 2023.

The Company elected to settle all such conversions by issuing to the converting holders shares of EQT Corporation common stock.

Settlement Month Principal Converted Shares Issued Average Conversion Price

September 2021 $ 9 599 $ 19.64

March 2022 8 536 33.65

April 2022 26 1,742 34.78

July 2022 5 335 36.91

October 2022 11 741 40.07

December 2022 6 405 36.66

January 2023 7 473 33.70

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

In connection with the Convertible Notes offering, the Company entered into privately negotiated capped call transactions (the Capped Call Transactions), the purpose of which is to reduce the potential dilution to EQT Corporation common stock upon conversion of the Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of such obligation, with such reduction and offset subject to a cap.

The Capped Call Transactions have an initial strike price of $ 15.00 per share of EQT Corporation common stock and an initial capped price of $ 18.75 per share of EQT Corporation common stock, each of which are subject to certain customary adjustments, including adjustments as a result of the Company paying a dividend on its common stock.

The Capped Call Transactions are separate from the Convertible Notes.

The Capped Call Transactions were recorded in shareholders' equity and were not accounted for as derivatives.

The cost to purchase the Capped Call Transactions was recorded as a reduction to equity and will not be remeasured.

For the year ended December 31, 2020, the Convertible Notes had a net shareholders' equity impact of $ 63.6 million, which consisted of the conversion option equity component of $ 100.9 million less the Capped Call Transactions costs of $ 32.5 million and issuance costs attributable to the equity component of $ 4.8 million.

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

The cost to purchase the Capped Call Transactions of $ 32.5 million was recorded as a reduction to equity and will not be remeasured.

Based on the closing stock price of EQT Corporation common stock of $ 33.83 on December 31, 2022 and excluding the impact of the Capped Call Transactions, the if-converted value of the Convertible Notes exceeded the principal amount by $ 536 million.

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

Principal $ 414,832 $ 499,991

Unamortized debt discount 108,719 129,102

Unamortized debt issuance costs 8,036 12,448

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

The effective interest rate for the Convertible Notes is 2.4 %.

Years Ended December 31,

2022 2021 2020

Contractual interest expense $ 8,006 $ 8,750 $ 5,906

Amortization of debt discount 20,382 12,856

Amortization of issuance costs 2,522 2,695 1,777

Total Convertible Notes interest expense $ 10,528 $ 11,445 $ 7,683

Based on the closing stock price of EQT common stock of $ 21.81 on December 31, 2021 and excluding the impact of the Capped Call Transactions, the if-converted value of the Convertible Notes exceeded the principal amount by $ 227 million.

As of December 31, 2021, the Company had reserved 5.5 million shares of authorized and unissued EQT common stock for stock compensation plans and approximately 40 million shares of authorized and unissued EQT common stock for settlement of the Convertible Notes.

In December 2021, the Company announced that the Board of Directors approved a share repurchase program to repurchase shares of its common stock for an aggregate purchase price up to $ 1 billion.

Debt Repayments .

The Company redeemed or repurchased the following debt during the period January 1, 2023 through February 10, 2023.

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

6.125 % notes due February 1, 2025

$ 9,946 $ 86 $ 268 $ 10,300

3.125 % notes due May 15, 2026

47,942 ( 3,042 ) 296 45,196

3.90 % notes due October 1, 2027

63,505 ( 3,534 ) 781 60,752

5.00 % notes due January 15, 2029

8,607 ( 309 ) 137 8,435

7.000 % notes due February 1, 2030

40,000 2,736 1,313 44,049

3.625 % notes due May 15, 2031

30,000 ( 4,011 ) 167 26,156

Total $ 200,000 $ ( 8,074 ) $ 2,962 $ 194,888

As of December 31, 2022, the Company had reserved 18.9 million shares of authorized and unissued EQT Corporation common stock for stock compensation plans and approximately 40 million shares of authorized and unissued EQT Corporation common stock for settlement of the Convertible Notes.

In December 2021, the Company announced that the Board of Directors approved a share repurchase program to repurchase shares of its common stock for an aggregate purchase price up to $ 1 billion, excluding fees, commissions and expenses.

In September 2022, the Company announced that the Board of Directors approved a $ 1 billion increase to the share repurchase program previously announced, pursuant to which the Company is authorized to repurchase shares of its common stock for an aggregate purchase price of up to $ 2 billion, excluding fees, commissions and expenses.

The share repurchase authority is valid through December 31, 2023.

In December 2021, the Company repurchased 1,361,668 shares of EQT common stock for an aggregate purchase price of $ 29.4 million at an average price of $ 21.56 per share, excluding fees and broker commissions, under this share repurchase program.

In July 2021, the Company issued 98,789,388 shares of EQT common stock as part of the consideration for the Alta Acquisition described in Note 6.

In October 2020, the Company entered into an underwriting agreement under which the Company sold 20,000,000 shares of EQT common stock at a price to the public of $ 15.50 per share.

The following table presents the shares of EQT Corporation common stock repurchased under this share repurchase program through December 31, 2022.

Shares of EQT Corporation Common Stock Repurchased Aggregate Purchase Price (a) Average Price Per Share (a)

Year Ended December 31, 2021 1,361,668 $ 29.4 $ 21.56

Year Ended December 31, 2022 13,139,641 392.7 29.89

Total 14,501,309 $ 422.1

(a) Excludes fees and broker commissions.

In July 2021, the Company issued 98,789,388 shares of EQT Corporation common stock as part of the consideration for the Alta Acquisition described in Note 6.

In October 2020, the Company entered into an underwriting agreement under which the Company sold 20,000,000 shares of EQT Corporation common stock at a price to the public of $ 15.50 per share.

In November 2020, the option to purchase 3,000,000 additional shares was exercised by the underwriters on the same terms.

After deducting offering costs of $ 15.6 million, the net proceeds of $ 340.9 million were used to fund a portion of the purchase price of the Chevron Acquisition described in Note 6 .

Changes in Accumulated Other Comprehensive Loss by Component

The following table explains the changes in accumulated other comprehensive loss by component.

Interest rate cash flow hedges,

net of tax Other postretirement

benefits liability adjustment, net of tax Accumulated

other comprehensive loss, net of tax

December 31, 2018 $ ( 387 ) $ ( 5,019 ) $ ( 5,406 )

Losses reclassified from accumulated other comprehensive loss, net of tax 387 (a) 316 (b) 703

Change in accounting principle — ( 496 ) ( 496 )

December 31, 2019 — ( 5,199 ) ( 5,199 )

Gains reclassified from accumulated other comprehensive loss, net of tax — ( 156 ) (b) ( 156 )

December 31, 2020 — ( 5,355 ) ( 5,355 )

Losses reclassified from accumulated other comprehensive loss, net of tax — 744 (b) 744

December 31, 2021 $ — $ ( 4,611 ) $ ( 4,611 )

(a) Losses, net of tax, related to interest rate cash flow hedges were reclassified from accumulated other comprehensive loss into interest expense.

(b) Losses (gains), net of tax, related to other postretirement benefits liability adjustments were attributable to net actuarial losses/gains and net prior service costs.

After deducting offering costs of

$ 15.6 million, the net proceeds of $ 340.9 million were used to fund a portion of the purchase price of the Chevron Acquisition described in Note 6 .

During the period January 1, 2023 through February 10, 2023, the Company repurchased 5,906,159 shares of EQT Corporation common stock for approximately $ 200 million excluding fees and broker commissions.

Share-Based Compensation Plans

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Incentive Performance Share Unit Programs $ 23,443 $ 15,386 $ 10,457

Value Driver Performance Share Unit Award Programs — 885 3,376

Restricted stock awards 23,028 19,217 10,480

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Total share-based compensation expense (a) $ 67,411 $ 47,507 $ 27,549

(a) For the years ended December 31, 2021, 2020 and 2019, share-based compensation expense of $ 4.7 million, $ 2.1 million and $ 28.6 million, respectively, was included in other operating expenses related primarily to reorganization costs.

The Company typically uses treasury stock to fund awards paid in stock, but the Company can elect to fund such awards by stock acquired by the Company in the open market or from any other person, issued directly by the Company or any combination of the foregoing.

(a) For the years ended December 31, 2021 and 2020, share-based compensation expense of $ 4.7 million and $ 2.1 million, respectively, was included in other operating expenses related primarily to reorganization costs.

The Company typically elects to fund awards paid in stock through stock acquired by the Company in the open market or from any other person, issued directly by the Company or any combination of the foregoing.

Prior to 2023, the Company typically used treasury stock to fund awards paid in stock.

Cash received from exercises under all share-based payment arrangements for employees and directors for the year ended December 31, 2022 was $ 15.9 million.

There was no cash received from exercises under all share-based payment arrangements for employees and directors for the years ended December 31, 2021 and 2020.

During the years ended December 31, 2022, 2021 and 2020, share-based payment arrangements paid in stock generated tax benefits of $ 4.1 million, $ 1.3 million and $ 1.0 million, respectively.

In connection with the Separation in 2018, the Company transferred obligations related to then-outstanding share-based compensation awards to Equitrans Midstream.

To preserve the aggregate fair value of awards held prior to the Separation, as measured immediately before and immediately after the Separation, each holder of share-based compensation awards generally received an adjusted award consisting of both a stock-based compensation award denominated in Company equity and a stock-based compensation award denominated in Equitrans Midstream equity.

These awards were adjusted in accordance with the basket method, which resulted in participants retaining one unit of the existing Company incentive award and receiving an additional 0.80 units of an Equitrans Midstream-based award.

All awards subject to this adjustment were vested as of December 31, 2021.

The Company recognized compensation cost related to unvested awards held by its employees, regardless of who settles the obligation.

Upon vesting the Company was obligated to settle all outstanding share-based compensation awards denominated in the Company's equity, regardless of whether the holders were employees of the Company or Equitrans Midstream.

Likewise, upon vesting, Equitrans Midstream was obligated to settle all of the outstanding share-based compensation awards denominated in its equity, regardless of whether the holders were employees of Equitrans Midstream or the Company.

Changes in performance and number of outstanding awards can impact the ultimate amount of these obligations.

Share counts for awards discussed herein represent outstanding shares to be remitted by the Company to its employees and those remitted to employees of Equitrans Midstream.

When an award has graduated vesting, the Company records expense equal to the vesting percentage on the vesting date.

Cash paid for taxes related to net settlement of share-based incentive awards for the years ended December 31, 2022, 2021 and 2020 were $ 24.8 million, $ 3.8 million and $ 0.6 million, respectively.

Incentive Performance Share Unit Programs – Equity & Liability

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The programs noted above are collectively referred to as the Incentive PSU Programs.

The 2020 Incentive PSU Program and 2021 Incentive PSU Program granted equity awards.

The 2017 Incentive PSU Program, 2018 Incentive PSU Program and 2019 Incentive PSU Program granted both equity and liability awards.

The 2020 Incentive PSU Program, 2021 Incentive PSU Program and 2022 Incentive PSU Program granted equity awards.

The 2018 Incentive PSU Program and 2019 Incentive PSU Program granted both equity and liability awards.

The Incentive PSU Programs were established to provide long-term incentive opportunities to executives and key employees to further align their interests with those of the Company's shareholders and with the strategic objectives of the Company.

The performance period for each of the awards under the Incentive PSU Programs is 36 months, with vesting occurring upon payment following the expiration of the performance period.

Executive performance incentive program awards granted in year 2017 were earned based on:

• the level of total shareholder return relative to a predefined peer group;

• the cumulative total sales volume growth, in each case, over the performance period.

Executive performance incentive program awards granted in years 2018 and 2019 were earned based on:

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• the level of absolute total shareholder return and total shareholder return relative to a predefined peer group.

Prior to 2020, the payout factor varied between zero and 300 % of the number of outstanding units contingent upon the performance metrics listed above.

The 2020 Incentive PSU Program has a payout factor that ranges from zero to 150 % and the 2021 Incentive PSU Program has a payout factor that ranges from zero to 200 %.

The Company recorded the 2020 Incentive PSU Program, the 2021 Incentive PSU Program and the portion of the 2017 Incentive PSU Program, 2018 Incentive PSU Program and 2019 Incentive PSU Program to be settled in stock as equity awards using a grant date fair value determined through a Monte Carlo simulation, which projected the share price for the Company and its peers at the end point of the performance period.

The 2017 Incentive PSU Program, 2018 Incentive PSU Program and 2019 Incentive PSU Program also included awards to be settled in cash, which are recorded at fair value as of the measurement date determined through a Monte Carlo simulation, which projected the share price for the Company and its peers at the end point of the performance period.

Executive performance incentive program awards granted in year 2022 are earned based on:

• the level of absolute total shareholder return and total shareholder return relative to a predefined peer group;

• the Company's performance in achieving its 2025 net zero Scopes 1 and 2 emissions target.

Prior to 2020, the payout factor for the Incentive PSU Programs varied between zero and 300 % of the number of outstanding units contingent upon the performance metrics listed above.

The 2020 Incentive PSU Program has a payout factor that ranges from zero to 150 %, the 2021 Incentive PSU Program has a payout factor that ranges from zero to 200 % and the 2022 Incentive PSU Program has a payout factor that ranges from zero to 220 %.

The Company recorded the 2020 Incentive PSU Program, the 2021 Incentive PSU Program, the 2022 Incentive PSU Program and the portion of the 2018 Incentive PSU Program and 2019 Incentive PSU Program to be settled in stock as equity awards using a grant date fair value determined through a Monte Carlo simulation, which projected the share price for the Company and its peers at the end point of the performance period.

The 2018 Incentive PSU Program and 2019 Incentive PSU Program also included awards to be settled in cash, which are recorded at fair value as of the measurement date determined through a Monte Carlo simulation, which projected the share price for the Company and its peers at the end point of the performance period.

The expected share prices were generated using each company's annual volatility for the expected term and the commensurate three-year risk-free rate shown in the chart below.

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615,293 $ 44.27 $ 27,239,021

Granted 463,380 29.45 13,646,541

Granted in Period 1,376,198 6.62 9,110,431

Granted from Multiplier 28,705 120.60 3,461,823

Vested ( 73,278 ) 120.60 ( 8,837,327 )

Forfeited ( 7,190 ) 13.28 ( 95,483 )

Outstanding at December 31, 2020

1,939,728 15.92 30,878,465

Granted 1,376,198 6.62 9,107,846

Granted in Period 922,260 23.44 21,617,774

Granted from Multiplier 61,076 76.53 4,674,146

Vested ( 168,416 ) 76.53 ( 12,888,876 )

Forfeited ( 7,190 ) 13.28 ( 95,483 )

Outstanding at December 31, 2021 2,754,648 16.08 44,281,509

Granted 922,260 23.44 21,617,038

Granted in Period 575,120 29.73 (b) 17,098,318

Granted from Multiplier 162,183 29.45 4,776,289

Vested ( 625,563 ) 29.45 ( 18,422,830 )

Forfeited ( 4,398 ) 13.28 ( 58,405 )

Outstanding at December 31, 2022

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(a) For the years ended December 31, 2021 and 2020, the Company settled total shares of 9,550 and 7,020 , respectively, for Equitrans Midstream employees.

(b) The 2022 Incentive PSU Program was granted as a liability award and converted to an equity award in April 2022.

The fair value determined through a Monte Carlo simulation at the time of conversion totaled $ 75.32 per share, which was an increase of $ 45.59 per share from fair value determined through a Monte Carlo simulation at the grant date.

The following table summarizes Incentive PSU Programs to be settled in cash and classified as liability awards.

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452,410 $ 60.19 $ 27,230,558

Granted 255,920 29.45 7,536,844

Granted from Multiplier 60,123 120.60 7,250,834

Vested ( 153,482 ) 120.60 ( 18,509,929 )

Forfeited ( 19,356 ) 61.43 ( 1,189,039 )

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339,695 43.52 14,782,424

Granted from Multiplier 32,350 76.53 2,475,746

Vested ( 134,525 ) 76.53 ( 10,293,571 )

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233,580 29.32 6,848,566

Granted from Multiplier 81,753 29.32 2,396,998

Vested ( 315,333 ) 29.32 ( 9,245,564 )

Forfeited ( 3,940 ) 29.45 ( 116,033 )

Outstanding at December 31, 2022

233,580 $ 29.32 $ 6,848,039

(a) For the years ended December 31, 2021 and 2020, the Company settled total shares paid in cash of 84,697 and 40,018 , respectively, for Equitrans Midstream employees.

(a) For the years ended 2021 and 2020, the Company settled total shares paid in cash of 84,697 and 40,018 , respectively, for Equitrans Midstream employees.

Total capitalized compensation costs related to the Incentive PSU Programs for the years ended December 31, 2022 , 2021 and 2020 were $ 0.6 million, $ 0.8 million and $ 0.9 million, respectively.

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therefore, dividend yield is not applicable.

Value Driver Performance Share Unit Award Programs

Historically, the Compensation Committee adopted the following programs:

• 2017 Value Driver Performance Share Unit Award Program (2017 EQT VDPSU Program) under the 2014 LTIP;

• 2018 Value Driver Performance Share Unit Award Program (2018 EQT VDPSU Program) under the 2014 LTIP;

• 2019 Value Driver Performance Share Unit Award Program (2019 EQT VDPSU Program) under the 2014 LTIP.

The programs noted above are collectively referred to as the VDPSU Programs.

The VDPSU Programs were established to align the interests of key employees with the interests of shareholders and customers and the strategic objectives of the Company.

Under each VDPSU Program, 50 % of the confirmed awards vested upon payment following the first anniversary of the grant date;

the remaining 50 % of the confirmed awards vested upon payment following the second anniversary of the grant date, subject to continued service through such date.

Due to the graded vesting of each award under the VDPSU Programs, the Company recognized compensation cost over the requisite service period for each separately vesting tranche of the award as though each award was, in substance, multiple awards.

The payments were contingent upon adjusted earnings before interest, income taxes, depreciation and amortization performance as compared to the Company's annual business plan and individual, business unit and Company value driver performance over the respective one-year periods.

The following table provides additional detailed information on each historical award.

VDPSU Program Accounting Treatment Weighted Average Fair Value Cash Paid (Millions) Awards Outstanding (including Accrued Dividends) as of December 31, 2021 (a)

2017 Liability $ 65.40 $ 14.0 N/A

$ 65.40 $ 4.0 N/A

2018 Liability $ 56.92 $ 4.9 N/A

$ 56.92 $ 1.2 N/A

2019 Liability $ 18.89 $ 1.7 N/A

$ 18.89 $ 1.7 N/A

(a) The 2017 EQT VDPSU Program and 2018 EQT VDPSU Program included 95,452 and 130,355 awards, respectively, for Equitrans Midstream employees that were settled by the Company.

Total capitalized compensation costs related to the VDPSU Programs for the years ended December 31, 2020 and 2019 was $ 0.4 million and $ 2.5 million, respectively.

There were no compensation costs related to the VDPSU Programs for the year ended December 31, 2021.

Restricted Stock Unit Awards – Equity

The Company granted 1,288,430 , 1,980,230 and 1,767,960 restricted stock unit equity awards to employees of the Company during the years ended December 31, 2022, 2021 and 2020, respectively.

Awards granted in 2019 will fully vest at the end of the three-year period commencing with the date of grant, assuming continued service through such date, while the 2021 and 2020 awards are subject to a three-year graded vesting schedule, also assuming continued service through such date.

For the years ended December 31, 2021, 2020 and 2019, the weighted average fair value of these restricted stock unit grants, based on the grant date fair value of EQT common stock, was approximately $ 13.92 , $ 10.02 and $ 17.42 , respectively.

Awards are subject to a three-year graded vesting schedule commencing with the date of grant, assuming continued service through each vesting date.

For the years ended December 31, 2022, 2021 and 2020, the weighted average fair value of these restricted stock unit grants, based on the grant date fair value of EQT Corporation common stock, was approximately $ 21.65 , $ 13.92 and $ 10.02 , respectively.

The total fair value of restricted stock unit equity awards vested during the years ended December 31, 2022, 2021 and 2020 was $ 16.6 million, $ 8.6 million and $ 3.2 million, respectively.

Total capitalized compensation costs related to the restricted stock unit equity awards was $ 6.7 million and $ 3.0 million for the years ended December 31, 2021 and 2020, respectively.

Total capitalized compensation costs related to the restricted stock unit equity awards was $ 6.6 million, $ 6.7 million and $ 3.0 million for the years ended December 31, 2022, 2021 and 2020, respectively.

As of December 31, 2022, $ 15.7 million of unrecognized compensation cost related to nonvested restricted stock unit equity awards was expected to be recognized over a remaining weighted average vesting term of approximately 0.7 years.

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Outstanding at January 1, 2021 1,868,400 $ 11.56 $ 21,594,314

Granted 1,980,230 13.92 27,563,546

Vested ( 621,930 ) 13.85 ( 8,612,563 )

Forfeited ( 122,419 ) 12.16 ( 1,488,862 )

Outstanding at December 31, 2021

3,104,281 12.58 39,056,435

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Restricted Stock Unit Awards – Liability

During the year ended December 31, 2019, the Company granted 686,350 restricted stock unit liability awards, respectively, to key employees of the Company that will be paid in cash.

The Company did not grant restricted stock unit awards to be paid in cash during the years ended December 31, 2021 and 2020.

Adjusted for forfeitures, there were 417,265 awards outstanding as of December 31, 2021.

Because these awards are liability awards, the Company records compensation expense based on the fair value of the awards as remeasured at the end of each reporting period.

The restricted stock units granted will be fully vested at the end of the three-year period commencing with the date of grant, assuming continued service through such date.

The total liability recorded for these restricted stock units was $ 8.1 million, $ 4.5 million and $ 4.4 million as of December 31, 2021, 2020 and 2019, respectively.

The Company did no t grant restricted stock unit awards to be paid in cash during the years ended December 31, 2022, 2021 and 2020.

All outstanding restricted stock unit awards to be paid in cash had vested as of December 31, 2022.

Because these awards were liability awards, the Company recorded compensation expense based on the fair value of the awards as remeasured at the end of each reporting period.

The restricted stock units granted fully vested at the end of the three-year period commencing with the date of grant, assuming continued service through each vesting date.

The total liability recorded for these restricted stock units was $ 8.1 million and $ 4.5 million as of December 31, 2021 and 2020, respectively.

Non-Qualified Stock Options

The fair value of the Company's option grants was estimated at the grant date using a Black-Scholes option-pricing model with the assumptions indicated in the table below for the years ended December 31, 2020 and 2019.

The risk-free rate for periods within the contractual life of the option is based on the U.S.

Treasury yield curve in effect at the date of grant.

The dividend yield is based on the dividend yield of EQT common stock at the time of grant.

Expected volatilities are based on historical volatility of EQT common stock.

The dividend yield is based on the dividend yield of EQT Corporation common stock at the time of grant.

Expected volatilities are based on historical volatility of EQT Corporation common stock.

The expected term represents the period of time that options granted are expected to be outstanding based on historical option exercise experience.

There were no stock options granted in 2021.

Years Ended December 31,

There were no stock options granted in 2022 and 2021.

December 31, 2020

Risk-free interest rate 1.10 %

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Volatility factor 60.00 %

Expected term 4 years 5 years

Expected term 4 years

Number of Options Granted 1,000,000

Weighted Average Grant Date Fair Value $ 1.61

(a) There were two grant dates for the 2019 options.

Amount shown represents weighted average.

As of December 31, 2022, $ 0.1 million of unrecognized compensation cost related to outstanding nonvested stock options was expected to be recognized by December 31, 2023.

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Exercised ( 1,517,407 ) 26.83

Expired ( 365,586 ) 28.21

Outstanding at December 31, 2022

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During 2020, the Company granted stock appreciation rights subject to certain performance conditions, such as adjusted well costs and adjusted free cash flow.

Once vested, the participant is entitled to receive, upon exercise, a number of shares of EQT’s common stock, cash or a combination of the two, based upon the excess of the fair market value as of the date of exercise over a base price of $ 10.00 .

The awards are accounted for as liability awards and, as such, compensation expense is recorded based on the fair value of the awards as remeasured at the end of each reporting period using a Black-Scholes option-pricing model with the assumptions indicated in the table below.

Once vested, the participant is entitled to receive, upon exercise, a number of shares of EQT Corporation common stock, cash or a combination of the two, based upon the excess of the fair market value as of the date of exercise over a base price of $ 10.00 .

Assumptions at grant date are indicated in the table below.

The risk-free rate is based on the U.S.

Treasury yield curve in effect at the reporting date.

The dividend yield is based on the dividend yield of EQT common stock at the reporting date, which is set at zero for the stock appreciation rights as the Company declared no dividends during 2021.

The dividend yield is based on the dividend yield of EQT Corporation common stock at the reporting date.

Expected volatilities are based on a 50-50 blend of the expected term-matched historical volatility as of the valuation date and the weighted-average implied volatility from thirty days prior to the valuation date.

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Exercisable at December 31, 2022

333,333 $ 10.00 7.0 years $ 7,943,325

Non-employee Directors' Share-Based Awards

Prior to 2020, the Company granted share-based awards that vested upon grant to non-employee directors.

The share-based awards were historically paid in cash or EQT common stock following a directors' termination of service on the Company's Board of Directors.

Beginning in 2020, the Company grants to non-employee directors restricted stock unit awards that vest on the date of the Company's annual meeting of shareholders immediately following the grant of such awards.

The restricted stock unit awards are settled in EQT common stock on the vesting date or, if elected by the director, following a director's termination of service on the Company's Board of Directors.

Awards to be paid in cash are accounted for as liability awards and, as such, compensation expense is recorded based on the fair value of the awards as remeasured at the end of each reporting period.

Awards to be settled in EQT common stock are accounted for as equity awards and, as such, compensation expense is recorded based on the fair value of the awards at the grant date fair value.

The Company grants to non-employee directors restricted stock unit awards that vest on the date of the Company's annual meeting of shareholders immediately following the grant of such awards.

The restricted stock unit awards are settled in EQT Corporation common stock on the vesting date or, if elected by the director, following a director's termination of service on the Company's Board of Directors.

Awards granted prior to 2020 that are to be paid in cash are accounted for as liability awards and, as such, compensation expense is recorded based on the fair value of the awards as remeasured at the end of each reporting period.

Awards to be settled in EQT Corporation common stock are accounted for as equity awards and, as such, compensation expense is recorded based on the fair value of the awards at the grant date fair value.

A total of 373,857 non-employee director share-based awards, including accrued dividends, were outstanding as of December 31, 2022.

A total of 44,800 , 120,080 and 201,300 share-based awards were granted to non-employee directors during the years ended December 31, 2022, 2021 and 2020, respectively.

The weighted average fair value of these grants, based on the closing EQT common stock price on the business day prior to the grant date, was $ 17.49 , $ 13.46 and $ 18.11 for the years ended December 31, 2021, 2020 and 2019, respectively.

The weighted average fair value of these grants, based on the closing price of EQT Corporation common stock on the business day prior to the grant date, was $ 43.97 , $ 17.49 and $ 13.46 for the years ended December 31, 2022, 2021 and 2020, respectively.

Effective in 2023, the Compensation Committee adopted the 2023 Incentive Performance Share Unit Program (2023 Incentive PSU Program) under the 2020 LTIP.

1 unchanged sentence

A total of 360,400 share units were granted under the 2023 Incentive PSU Program.

The payout of the share units will vary between zero and 200 % of the number of outstanding units contingent upon a combination of the Company's absolute total shareholder return and total shareholder return relative to a predefined peer group over the period January 1, 2022 through December 31, 2024, modified based on the Company's performance in achieving its objective of net zero Scope 1 and Scope 2 greenhouse gas emissions by 2025.

Effective in 2022, the Compensation Committee granted 1,248,120 restricted stock unit equity awards that will follow a three-year graded vesting schedule commencing with the date of grant, assuming continued employment.

The share total includes the instituted "equity-for-all" program, which granted equity awards to all permanent full-time employees beginning in 2021.

The payout of the share units will vary between zero and 200 % of the number of outstanding units contingent upon the Company's absolute total shareholder return and total shareholder return relative to a predefined peer group over the period of January 1, 2023 through December 31, 2025.

Effective in 2023, the Compensation Committee granted 916,680 restricted stock unit equity awards that will follow a three-year graded vesting schedule commencing with the date of grant, assuming continued employment through each vesting date.

The share total includes the Company's "equity-for-all" program, instituted in 2021, pursuant to which the Company grants equity awards to all permanent full-time employees.

Commitments and Contingencies

Purchase Obligations

The Company has commitments for demand charges under existing long-term contracts and binding precedent agreements with various pipelines as well as commitments for processing capacity.

Aggregate future payments for these items as of December 31, 2022 were $ 23.7 billion, composed of $ 1.8 billion in 2023, $ 1.7 billion in 2024, $ 2.0 billion in 2025, $ 1.7 billion in 2026, $ 1.6 billion in 2027 and $ 14.9 billion thereafter (primarily concentrated in 2028 through 2044).

In addition, the Company has commitments to pay for services and materials related to its operations, which primarily include minimum volume commitments to obtain water services and electric hydraulic fracturing services and commitments to purchase equipment, materials and sand.

As of December 31, 2022, future commitments under these contracts were $ 627.3 million, composed of $ 176.1 million in 2023, $ 80.1 million in 2024, $ 87.8 million in 2025, $ 83.8 million in 2026, $ 56.6 million in 2027 and $ 142.9 million thereafter.

See Note 15 for a summary of undiscounted future cash flows owed by the Company as lessee to lessors pursuant to contractual agreements in effect as of December 31, 2022.

Conditioned upon the credit ratings assigned by Moody's, S&P and Fitch to the Company's senior notes, counterparties to the Company's derivative and midstream services contracts may request additional assurances of the Company, including collateral.

See Note 3 for a description of what is deemed investment grade and a discussion of other factors, aside from credit ratings, that may affect margin deposit requirements on the Company's derivative contracts.

See Note 10 for a discussion of letters of credit outstanding and surety bonds posted as of December 31, 2022.

Legal and Regulatory Proceedings

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against the Company.

While the amounts claimed may be substantial, the Company is unable to predict with certainty the ultimate outcome of such claims and proceedings.

The Company evaluates its legal proceedings, including litigation and regulatory and governmental investigations and inquiries, on a regular basis and accrues a liability for such matters when the Company believes that a loss is probable and the amount of the loss can be reasonably estimated.

Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances.

In the event the Company determines that (i) a loss to the Company is probable but the amount of the loss cannot be reasonably

estimated, or (ii) a loss to the Company is less likely than probable but is reasonably possible, then the Company is required to disclose the matter herein, although the Company is not required to accrue such loss.

When able, the Company determines an estimate of reasonably possible losses or ranges of reasonably possible losses, whether in excess of any related accrued liability or where there is no accrued liability, for legal proceedings.

In instances where such estimates can be made, any such estimates are based on the Company’s analysis of currently available information and are subject to significant judgment and a variety of assumptions and uncertainties and may change as new information is obtained.

The ultimate outcome of the matters described below, such as whether the likelihood of loss is remote, reasonably possible, or probable, or if and when the range of loss is reasonably estimable, is inherently uncertain.

Furthermore, due to the inherent subjectivity of the assessments and unpredictability of outcomes of legal proceedings, any amounts accrued or estimated as possible losses may not represent the ultimate loss to the Company from the legal proceedings in question and the Company’s exposure and ultimate losses may be higher, and possibly significantly so, than the amounts accrued or estimated.

Securities Class Action Litigation .

On December 6, 2019, an amended putative class action complaint was filed in the United States District Court for the Western District of Pennsylvania by Cambridge Retirement System, Government of Guam Retirement Fund, Northeast Carpenters Annuity Fund, and Northeast Carpenters Pension Fund, on behalf of themselves and all those similarly situated, against EQT Corporation, and certain former executives and current and former board members of EQT Corporation (the Securities Class Action).

The complaint alleges that certain statements made by EQT Corporation regarding its merger with Rice Energy Inc.

in 2017 (the Rice Merger) were materially false and violated various federal securities laws.

Pursuant to the complaint, the plaintiffs seek compensatory or rescissory damages in an unspecified amount for all damages allegedly sustained by the class as a result of alleged negative impacts to EQT Corporation’s stock price in 2018 and 2019.

This legal proceeding is currently in discovery and a trial date has not been determined.

Additionally, following the filing of the Securities Class Action complaint, several other lawsuits were filed in the United States District Court for the Western District of Pennsylvania and the Court of Common Pleas of Allegheny County, Pennsylvania by certain shareholders of EQT Corporation against EQT Corporation and certain former executives and current and former board members of EQT Corporation asserting substantially the same allegations as those raised in the Securities Class Action.

These matters are currently pending, the majority of which have been stayed pending a ruling on dispositive motions in the Securities Class Action.

The Company believes the claims asserted in the Securities Class Action and related litigation have no merit, but unpredictability is inherent in litigation and the Company cannot predict the outcomes with any certainty.

With respect to the matters described above, the Company is unable at this time to estimate the losses that are reasonably possible to be incurred or a range of such losses due to various factors, including that the proceedings are still in their early stages and discovery is not complete;

the matters present meaningful legal uncertainties;

and predicting the outcome depends on making assumptions about future decisions of courts and the behavior of other parties for which the Company does not currently have sufficient information.

The matters described above contain certain information related to claims against the Company as alleged in pleadings.

While information of this type may provide insight into the potential magnitude of a matter, it does not necessarily represent the Company’s estimate of a probable or reasonably possible loss or the Company’s judgment as to any currently appropriate accrual.

Regulatory and Environmental Matters .

The Company is subject to various federal, state and local environmental and environmentally-related laws and regulations.

These laws and regulations, which are constantly changing, can require expenditures for remediation and may result in the assessment of fines.

The Company has established procedures for ongoing evaluation of its operations to identify potential environmental exposures and to assure compliance with regulatory policies and procedures.

The estimated costs associated with identified situations that require remedial action are accrued.

Ongoing expenditures for compliance with environmental laws and regulations, including investments in plant and facilities to meet environmental requirements, have not been material.

Management believes that any such required expenditures will not be significantly different in either their nature or amount in the future and does not know of any environmental liabilities that will have a material effect on the Company's financial position, results of operations or liquidity.

The Company has identified situations that require remedial action for which approximately $ 5.1 million was recorded in other liabilities and credits in the Consolidated Balance Sheet as of December 31, 2022.

Other Matters .

In addition to the matters described above, the Company, in the normal course of business, is subject to various other pending and threatened legal proceedings in which claims for monetary damages or other relief are asserted.

The Company does not anticipate, at the present time, that the ultimate aggregate liability, if any, arising out of such other legal proceedings will have a material adverse effect on the Company’s financial position, results of operations or liquidity.

Concentrations of Credit Risk

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The Company leases drilling rigs, facilities, vehicles and drilling and compression equipment.

On January 1, 2019, in connection with the Company's adoption of ASU 2016-02, Leases , the Company recorded in its Consolidated Balance Sheet $ 89.0 million of right-of-use assets and lease liabilities representing the present value of the Company's right to use its leased assets and obligation to make lease payments on those leased assets, respectively.

To determine the present value of its right-of-use assets and lease liabilities at adoption and thereafter, the Company calculates a discount rate per lease contract based on an estimate of the rate of interest that the Company would pay to borrow (on a collateralized basis, over a similar term) an amount equal to the lease payment obligation.

Upon adoption of ASU 2016-02, the Company elected a practical expedient to forgo application of the recognition requirements under the standard to short-term leases;

To determine the present value of its right-of-use assets and lease liabilities, the Company calculates a discount rate per lease contract based on an estimate of the rate of interest that the Company would pay to borrow (on a collateralized basis, over a similar term) an amount equal to the lease payment obligation.

Upon adoption of ASU 2016-02, Leases , the Company elected a practical expedient to forgo application of the recognition requirements under the standard to short-term leases;

as such, short-term leases are not recorded in the Consolidated Balance Sheets.

10 unchanged sentences

Total lease costs (a) $ 35,364 $ 31,342 $ 44,208

(a) Includes drilling rig lease costs capitalized to property, plant and equipment of $ 22.1 million, $ 29.9 million and $ 58.5 million, respectively, of which $ 16.5 million, $ 19.9 million and $ 48.1 million, respectively, were operating lease costs.

For the years ended December 31, 2021, 2020 and 2019, cash paid for lease liabilities and reported in cash flows provided by operating activities in the Statements of Consolidated Cash Flows was $ 9.7 million, $ 10.4 million and $ 10.8 million, respectively.

For the year ended December 31, 2021, cash paid for lease liabilities and reported in cash flows provided by financing activities in the Statements of Consolidated Cash Flows was $ 1.1 million.

(a) Includes drilling rig lease costs capitalized to property, plant and equipment of $ 25.4 million, $ 22.1 million and $ 29.9 million, respectively, of which $ 17.7 million, $ 16.5 million and $ 19.9 million, respectively, were operating lease costs for the years ended December 31, 2022, 2021 and 2020.

For the years ended December 31, 2022, 2021 and 2020, cash paid for lease liabilities and reported in net cash provided by operating activities in the Statements of Consolidated Cash Flows was $ 10.3 million, $ 9.7 million and $ 10.4 million, respectively.

For the years ended December 31, 2022 and 2021, cash paid for lease liabilities and reported in net cash (used in) provided by financing activities in the Statements of Consolidated Cash Flows was $ 1.8 million and $ 1.1 million, respectively.

During the years ended December 31, 2022, 2021 and 2020, the Company recorded $ 23.4 million, $ 20.8 million and $ 18.9 million, respectively, of right-of-use assets in exchange for new lease liabilities.

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As of December 31, 2022 and 2021, total right-of-use assets were $ 29.2 million and $ 26.1 million, respectively, and total lease liabilities were $ 48.0 million and $ 52.7 million, respectively, of which $ 35.4 million and $ 28.0 million, respectively, were classified as current.

During the fourth quarter of 2020, the Company recognized $ 22.8 million of right-of-use asset impairment in impairment of intangible and other assets in the Statement of Consolidated Operations as a result of the Company's assessment that the fair values of certain of the Company's right-of-use assets were less than their carrying values.

During the fourth quarter of 2020, the Company recognized $ 22.8 million of right-of-use asset impairment in impairment of contract and other assets in the Statement of Consolidated Operations as a result of the Company's assessment that the fair values of certain of the Company's right-of-use assets were less than their carrying values.

The following table summarizes the Company's lease payment obligations as of December 31, 2022.

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Present value of lease liabilities $ 48,018

Commitments and Contingencies

The Company has commitments for demand charges under existing long-term contracts and binding precedent agreements with various pipelines as well as commitments for processing capacity.

Aggregate future payments for these items as of December 31, 2021 were $ 23.8 billion, composed of $ 1.7 billion in 2022, $ 1.8 billion in 2023, $ 1.8 billion in 2024, $ 1.8 billion in 2025, $ 1.7 billion in 2026 and $ 15.0 billion thereafter.

As of December 31, 2021, future commitments under these contracts were $ 135.6 million in 2022, $ 99.0 million in 2023, $ 47.5 million in 2024, $ 40.0 million in 2025, $ 40.0 million in 2026 and $ 178.3 million thereafter.

See Note 15 for a summary of undiscounted future cash flows owed by the Company as lessee to lessors pursuant to contractual agreements in effect as of December 31, 2021.

See Note 10 for a discussion of letters of credit outstanding and surety bonds posted as of December 31, 2021.

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against the Company.

While the amounts claimed may be substantial, the Company is unable to predict with certainty the ultimate outcome of such claims and proceedings.

The Company accrues legal and other direct costs related to loss contingencies when actually incurred.

The Company has established reserves it believes to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, the Company believes that the ultimate outcome of any matter currently pending against the Company will not materially affect the financial position, results of operations or liquidity of the Company.

The Company is subject to various federal, state and local environmental and environmentally-related laws and regulations.

These laws and regulations, which are constantly changing, can require expenditures for remediation and may result in the assessment of fines.

The Company has established procedures for ongoing evaluation of its operations to identify potential environmental exposures and to assure compliance with regulatory policies and procedures.

The estimated costs associated with identified situations that require remedial action are accrued.

Ongoing expenditures for compliance with environmental laws and regulations, including investments in plant and facilities to meet environmental requirements, have not been material.

The Company has identified situations that require remedial action for which approximately $ 8.3 million was recorded in other liabilities and credits in the Consolidated Balance Sheet as of December 31, 2021.

In connection with the sale of its NORESCO domestic operations in 2005, the Company agreed to maintain in-place guarantees of certain warranty obligations of NORESCO.

The savings guarantees provided that, once an energy-efficiency construction project was completed by NORESCO, the customer would experience a certain dollar amount of energy savings over a number of years.

The undiscounted maximum aggregate payments that may be due related to these guarantees were approximately $ 30 million as of December 31, 2021, extending at a decreasing amount for approximately 7 years.

This guarantee is exempt from ASC Topic 460, Guarantees .

The Company considers the likelihood that it will be required to perform on these arrangements to be remote and expects any potential payments to be immaterial to the Company's financial position, results of operations and liquidity.

As such, the Company has not recorded any liabilities related to this guarantee in its Consolidated Balance Sheets.

Natural Gas Producing Activities (Unaudited)

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(a) Amounts exclude capital expenditures for facilities, information technology and other corporate items as well as the acquired midstream assets described in Note 6.

(b) Amounts in 2021 include $ 1,754.7 million and $ 450.0 million for Marcellus wells and leases, respectively, acquired in the Alta Acquisition and Reliance Asset Acquisition described in Note 6.

(b) Amounts in 2022 include $ 40.5 million for Marcellus leases acquired in the 2022 Asset Acquisition.

Amounts in 2021 include $ 1,754.7 million and $ 450.0 million for Marcellus wells and leases, respectively, acquired in the Alta Acquisition and Reliance Asset Acquisition described in Note 6.

Amounts in 2020 include $ 674.0 million and $ 6.5 million for Marcellus and Utica wells, respectively, acquired in the Chevron Acquisition.

Amounts in 2021 include $ 743.3 million for unproved properties acquired in the Alta Acquisition.

Amounts in 2020 include $ 38.9 million for unproved properties acquired in the Chevron Acquisition.

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The Company's estimate of proved natural gas, NGLs and crude oil reserves was prepared by Company engineers.

The engineer primarily responsible for overseeing the preparation of the reserves estimate holds a bachelor's degree in chemical engineering from Michigan Technological University, a master's degree in chemical engineering from Colorado State University and an executive master of business administration in energy from the University of Oklahoma and has 21 years of experience in the oil and gas industry.

The engineer primarily responsible for overseeing the preparation of the reserves estimate holds a bachelor's degree in chemical engineering from Michigan Technological University, a master's degree in chemical engineering from Colorado State University, an executive master's of business administration in energy from the University of Oklahoma and is a licensed professional engineer with 23 years of experience in the oil and gas industry.

To support the accurate and timely preparation and disclosure of its reserve estimates, the Company established internal controls over its reserve estimation processes and procedures, including the following:

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All of the Company's proved reserves are located in the United States.

During 2020, the Company conducted a study of its reserves areas to determine the reliability of the technology used in calculating the Company's reserves.

This study demonstrated that technologies used in the course of the Company's reserves determination are reliable, provide reasonable certainty of future performance and economics of the Company's wells, and conform to booking practices when using reliable technologies.

The technologies used in the estimation of the Company's proved reserves include, but are not limited to, empirical evidence through drilling results and well performance, production data, decline curve analysis, well logs, geologic maps, core data, seismic data, demonstrated relationship between geologic parameters and performance, and the implementation and application of statistical analysis.

The Company utilizes reliable technologies in the calculation of its proved undeveloped reserves.

The technologies used in the estimation of the Company's proved undeveloped reserves include, but are not limited to, empirical evidence through drilling results and well performance, production data, decline curve analysis, well logs, geologic maps, core data, seismic data, demonstrated relationship between geologic parameters and performance, and the implementation and application of statistical analysis.

For all tables presented, NGLs and oil were converted at a rate of one Mbbl to approximately six million cubic feet (MMcf).

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• Extensions, discoveries and other additions of 2,495 Bcfe, which exceeded 2022 production of 1,940 Bcfe.

Extensions, discoveries and other additions included an increase of 2,077 Bcfe of proved undeveloped additions associated with acreage that was previously unproved but became proved due to 2022 reserve development that expanded the number of the Company's proven locations and additions to the Company's five-year drilling plan and 418 Bcfe from converting unproved reserves to proved developed reserves.

• Negative revisions of 1,625 Bcfe related to proved undeveloped locations that are no longer expected to be developed as proved reserves within five years of initial booking as a result of development schedule changes, driven largely by third-party impacts, which has pushed planned completion dates into a future period from when originally planned.

• Positive revisions to proved undeveloped locations of 518 Bcfe due primarily to changes in ownership interests.

• Positive revisions of 356 Bcfe primarily from proved developed locations as a result of positive curve revisions.

• Positive revisions of 96 Bcfe from higher pricing that impacted well economics.

• Purchase of hydrocarbons in place of 141 Bcfe from the 2022 Asset Acquisition described in Note 6.

The change in reserves during the year ended December 31, 2021 resulted from the following:

• Conversions of 1,634 Bcfe of proved undeveloped reserves to proved developed reserves.

• Extensions, discoveries and other additions of 3,104 Bcfe, which exceeded 2021 production of 1,858 Bcfe.

Extensions, discoveries and other additions included an increase of 2,828 Bcfe of proved undeveloped additions associated with acreage that was previously unproved but became proved due to 2021 reserve development that expanded the number of the Company's proven locations, implementation of, and alignment with, the Company's combo-development strategy and additions to the Company's five-year drilling plan, 52 Bcfe from extension of proved undeveloped reserves lateral lengths and 224 Bcfe from converting unproved reserves to proved developed reserves.

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• Sale of hydrocarbons in place of 257 Bcfe due to the 2020 Divestiture described in Note 8.

The change in reserves during the year ended December 31, 2019 resulted from the following:

• Conversions of 2,646 Bcfe of proved undeveloped reserves to proved developed reserves.

• Extensions, discoveries and other additions of 2,068 Bcfe, which exceeded 2019 production of 1,508 Bcfe.

Extensions, discoveries and other additions included an increase of 1,796 Bcfe from proved undeveloped additions associated with acreage that was previously unproved, but became proved due to 2019 reserve development that expanded the number of the Company's technically proven locations, implementation of, and alignment with, the Company's combo-development strategy and revisions to the Company's five-year drilling plan;

156 Bcfe from converting unproved reserves to proved developed reserves;

and 116 Bcfe from extension of proved undeveloped reserves lateral lengths.

• Negative revisions of 4,508 Bcfe from proved undeveloped locations that are no longer expected to be developed within five years of initial booking as proved reserves as a result of implementation of the Company's combo-development strategy, which has refocused operations in the Company's core assets and driven execution of new development sequencing processes that emphasize productivity.

While these efforts are expected to result in decreased well costs, they negatively impact proved undeveloped reserves as a result of (i) derecognizing previously-recorded proved undeveloped reserves that are now outside the Company's substantially revised five-year capital allocation program for purposes of the Company's reserves calculations and (ii) executing new development sequencing processes that will result in increased probable-to-proved developed conversion.

Standard Measure of Discounted Future Cash Flow

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(a) The majority of the Company's production is sold through liquid trading points on interstate pipelines.

For 2021, reserves were computed using average first-day-of-the-month closing prices for the prior twelve months of $ 66.55 per Bbl for West Texas Intermediate (WTI) less regional adjustments of $ 14.98 per Bbl, or $ 51.57 per Bbl, and $ 3.598 per MMBtu for NYMEX less regional adjustments of $ 1.04 per MMBtu, or $ 2.694 per Mcf.

Reserves were computed using average first-day-of-the-month closing prices for the prior twelve months less regional adjustments.

Regional adjustments were calculated using historical average realized prices received in the Appalachian Basin.

For 2021, NGLs pricing using average first-day-of-the-month closing prices for the prior twelve months for NGLs components, adjusted using the regional component makeup of proved NGLs, resulted in a price of $ 29.95 per Bbl.

For 2020, reserves were computed using average first-day-of-the-month closing prices for the prior twelve months of $ 39.54 per Bbl for WTI less regional adjustments of $ 18.60 per Bbl, or $ 20.94 per Bbl, and $ 1.985 per MMBtu for NYMEX less regional adjustments of $ 0.68 per MMBtu, or $ 1.38 per Mcf.

Regional adjustments were calculated using historical average realized prices received by the Company in the Appalachian Basin.

For 2020, NGLs pricing using average first-day-of-the-month closing prices for the prior twelve months for NGLs components, adjusted using the regional component makeup of proved NGLs, resulted in a price of $ 11.97 per Bbl.

For 2019, reserves were computed using average first-day-of-the-month closing prices for the prior twelve months of $ 55.69 per Bbl for WTI less regional adjustments of $ 14.26 per Bbl, or $ 41.43 per Bbl, and $ 2.58 per MMBtu for NYMEX less regional adjustments of $ 0.29 per MMBtu, or $ 2.41 per Mcf.

Regional adjustments were calculated using historical average realized prices received by the Company in the Appalachian Basin.

For 2019, NGLs pricing using average first-day-of-the-month closing prices for the prior twelve months for NGLs components, adjusted using the regional component makeup of proved NGLs, resulted in a price of $ 16.81 per Bbl.

NGLs pricing was calculated using average first-day-of-the-month closing prices for the prior twelve months for NGLs components, adjusted using the regional component makeup of proved NGLs.

2022 2021 2020

Oil for West Texas Intermediate (WTI) ($/Bbl) $ 94.14 $ 66.55 $ 39.54

Less regional adjustments ($/Bbl) $ 17.31 $ 14.98 $ 18.60

Oil price ($/Bbl) $ 76.83 $ 51.57 $ 20.94

Natural gas for NYMEX ($/MMBtu) $ 6.357 $ 3.598 $ 1.985

Less regional adjustments ($/MMBtu) $ 1.094 $ 1.040 $ 0.680

Natural gas price ($/Mcf) $ 5.543 $ 2.694 $ 1.380

NGLs price ($/Bbl) $ 38.66 $ 29.95 $ 11.97

(b) Includes approximately $ 2,098 million, $ 1,937 million and $ 1,554 million for future plugging and abandonment costs as of December 31, 2022, 2021 and 2020, respectively.

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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-K

Item 8. Financial Statements and Supplementary Data