What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-07-26 compared with 2023-04-27 · 162 added, 80 removed, 277 unchanged (47% of the section changed)

17 unchanged sentences

projected gathering and compression rates;

potential or pending acquisition transactions, including the pending acquisition of Tug Hill's upstream assets and XcL Midstream's gathering and processing assets (the Tug Hill and XcL Midstream Acquisition), or other strategic transactions, the timing thereof and our ability to achieve the intended operational, financial and strategic benefits from any such transactions;

potential or pending acquisition transactions, including the pending Tug Hill and XcL Midstream Acquisition (defined and discussed in Note 6 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022), or other strategic transactions, the timing thereof and our ability to achieve the intended operational, financial and strategic benefits from any such transactions;

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

34 unchanged sentences

Consolidated Results of Operations

Net income attributable to EQT Corporation for the three months ended March 31, 2023 was $1,218.5 million, $3.10 per diluted share, compared to net loss attributable to EQT Corporation for the same period in 2022 of $1,516.0 million, $4.05 per diluted share.

The change was attributable primarily to a gain on derivatives in the first quarter of 2023 as compared to a loss on derivatives in the first quarter of 2022 and impairment of the contract asset in the first quarter of 2022, partly offset by increased income tax expense and lower sales of natural gas, NGLs and oil.

Net loss attributable to EQT Corporation for the three months ended June 30, 2023 was $66.6 million, $0.18 per diluted share, compared to net income attributable to EQT Corporation for the same period in 2022 of $891.4 million, $2.19 per diluted share.

The change was attributable primarily to decreased sales of natural gas, NGLs and oil, partly offset by a gain on derivatives in 2023 compared to a loss on derivatives in 2022 and income tax benefit in 2023 compared to income tax expense in 2022.

Net income attributable to EQT Corporation for the six months ended June 30, 2023 was $1,151.9 million, $2.94 per diluted share, compared to net loss attributable to EQT Corporation for the same period in 2022 of $624.7 million, $1.68 per diluted share.

The change was attributable primarily to a gain on derivatives in 2023 compared to a loss on derivatives in 2022 and impairment of the contract asset in 2022, partly offset by decreased sales of natural gas, NGLs and oil and income tax expense in 2023 compared to income tax benefit in 2022.

See "Sales Volume and Revenues" and "Operating Expenses" for discussions of items affecting operating income and "Other Income Statement Items" for a discussion of other income statement items.

1 unchanged sentence

Trends and Uncertainties

Our sales volume and operating expenses for 2022 and the first quarter of 2023 were negatively impacted by fewer wells turned-in-line during 2022 compared to our 2022 planned development schedule due to third-party supply chain constraints.

As a result of such third-party supply chain constraints during 2022, we shifted the planned development of approximately 30 wells from 2022 to 2023 (the Rescheduled Wells).

As we work to complete the Rescheduled Wells, we anticipate that our capital expenditures will be elevated until the Rescheduled Wells are completed and turned-in-line, which we project will occur during the first half of 2023;

however, supply chain constraints or declines in natural gas prices may result in us adjusting our 2023 planned development schedule.

Adjustments to our 2023 planned development schedule could impact our future sales volume, operating revenues and expenses, per unit metrics and capital expenditures.

The annual inflation rate in the United States was particularly high during 2022, and, although the inflation rate began to fall in the first quarter of 2023, it still remains elevated compared to historical levels.

Furthermore, many analysts anticipate inflation will remain elevated through 2023.

Our sales volume and operating expenses on a per Mcfe basis for 2022 and the first half of 2023 were negatively impacted by fewer wells turned-in-line during 2022 compared to our 2022 planned development schedule due to third-party supply chain constraints.

In addition, as a result of third-party supply chain constraints in 2022, we shifted the planned development of approximately 30 wells from 2022 to 2023 (the Rescheduled Wells).

All of the Rescheduled Wells have been completed and turned-to-sales as of July 20, 2023;

however, future supply chain constraints or declines in natural gas prices may result in adjustments to our 2023 planned development schedule.

Our sales volume and operating expenses on a per Mcfe basis for the second quarter of 2023 were also negatively impacted by lower-than-expected liquids volumes from unscheduled downtime at an in-basin ethane cracker plant to conduct equipment repairs and maintenance and a delay in the development schedule of certain wells that are not operated by us but in which we have a working interest in the volumes produced from such wells.

We cannot control or otherwise influence the development schedule of non-operated wells in which we have a working interest.

Adjustments to our 2023 planned development schedule or delays in the development schedule of non-operated wells in which we have a working interest could impact our future sales volume, operating revenues and expenses, per unit metrics and capital expenditures.

The annual inflation rate in the United States was particularly high during 2022, and, although the inflation rate has decreased through the first half of 2023, it still remains elevated compared to historical levels.

Inflationary pressures have multiple impacts on our business, including increasing our operating expenses and our cost of capital.

While the prices for certain of the raw materials and services we use in our operations have generally decreased from the peak prices experienced during 2022, we will not fully realize the benefit of such reduced prices until we enter into new contracts for such materials and services, and inflationary pressures may cause prices to fluctuate.

Additionally, certain of our commitments for demand charges under our existing long-term contracts and processing capacity are subject to consumer price index adjustments.

Although we believe our scale and supply chain contracting strategy of using multi-year sand and frac crew contracts allows us to maximize capital and operating efficiencies, future increases in the inflation rate will negatively impact our long-term contracts with consumer price index adjustments.

Additionally, while the prices for natural gas, NGLs and oil have historically been volatile, price volatility was especially pronounced during 2022, and continued to be volatile during the first quarter of 2023.

The daily spot prices for NYMEX Henry Hub natural gas ranged from a high of $9.85 per MMBtu to a low of $1.93 per MMBtu between the period from January 1, 2022 through March 31, 2023, and the daily spot prices for NYMEX West Texas Intermediate crude oil ranged from a high of $123.64 per barrel to a low of $66.61 per barrel during the same period.

We expect commodity price volatility to continue or increase throughout the remainder of 2023 due to rising macroeconomic uncertainty and geopolitical tensions, including the Russian invasion of Ukraine, which began in February 2022 and has put upward pressure on natural gas and oil prices.

Additionally, while the prices for natural gas, NGLs and oil have historically been volatile, price volatility was especially pronounced during 2022, with natural gas prices peaking in August 2022 and steadily declining thereafter.

While natural gas prices through the first half of 2023 have declined from the high prices experienced during the majority of 2022, we expect commodity price volatility to continue or increase throughout the remainder of 2023 due to macroeconomic uncertainty and geopolitical tensions, including continued developments pertaining to Russia's invasion of Ukraine, which began in February 2022 and has put upward pressure on natural gas and oil prices.

Our revenue, profitability, rate of growth, liquidity and financial position will continue to be impacted in the future by the market prices for natural gas and, to a lesser extent, NGLs and oil.

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(Thousands, unless otherwise noted)

45 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

(Thousands, unless otherwise noted)

Total operating revenues $ 1,018,751 $ 2,527,508 $ 3,679,822 $ 1,948,398

Add (deduct):

(Deduct) add:

(Gain) loss on derivatives (164,386) 845,095 (989,238) 3,922,732

Net cash settlements received (paid) on derivatives 212,247 (1,753,732) 369,247 (2,639,271)

Premiums paid for derivatives that settled during the period (99,417) (32,463)

Premiums (paid) received for derivatives that settled during the period (67,495) 251 (166,912) (32,212)

Net marketing services and other (6,040) (7,392) (11,901) (19,295)

2 unchanged sentences

Average realized price ($/Mcfe) $ 2.11 $ 3.21 $ 3.10 $ 3.20

EQT CORPORATION AND SUBSIDIARIES

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

Sales Volume and Revenues

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Three Months Ended March 31,

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

Three Months Ended June 30,

2023 2022 Change % Change

11 unchanged sentences

Total operating revenues $ 1,018,751 $ 2,527,508 $ (1,508,757) (59.7)

Sales of natural gas, NGLs and oil.

Sales of natural gas, NGLs and oil decreased for the three months ended June 30, 2023 compared to the same period in 2022 due to decreased sales volume and lower average realized price.

Sales volume decreased for the three months ended June 30, 2023 primarily as a result of sales volume decreases from natural decline of producing wells, fewer wells turned-in-line throughout 2022 as a result of third-party supply chain constraints and a delay in the development schedule of certain non-operated wells in which we have a working interest, partly offset by increased volumes from our operated wells as a result efficiencies realized within our drilling and completions operations.

The assets that we intend to acquire in the pending Tug Hill and XcL Midstream Acquisition, which is subject to regulatory approvals, are currently producing approximately 800 MMcfe per day of sales volume, 20% of which is liquids sales volume.

Average realized price decreased for the three months ended June 30, 2023 compared to the same period in 2022 due to lower NYMEX and liquids prices, partly offset by favorable cash settled derivatives and favorable differential.

For the three months ended June 30, 2023, we received $212.2 million of net cash settlements on derivatives, composed of $304.8 million of net cash settlements received on our NYMEX natural gas hedge positions and $92.6 million of net cash settlements paid on our basis and liquids hedge positions.

For the same period in 2022, we paid $1,753.7 million of net cash settlements on derivatives, composed of $1,747.2 million of net cash settlements paid on our NYMEX natural gas hedge positions and $6.5 million of net cash settlements paid on our basis and liquids hedge positions.

Net cash settlements received (paid) on derivatives are included in average realized price but may not be included in operating revenues.

For the three months ended June 30, 2023 and 2022, we paid $67.5 million and received $0.3 million, respectively, of premiums for derivatives that settled during the period.

Gain (loss) on derivatives.

For the three months ended June 30, 2023, we recognized a gain on derivatives of $164.4 million related primarily to increases in the fair market value of our basis swaps, which were in a liability position as of March 31, 2023, partly offset by a loss on the derivative liability related to the Henry Hub Cash Bonus (defined and discussed in Note 4 to the Condensed Consolidated Financial Statements).

For the same period in 2022, we recognized a loss on derivatives of $845.1 million related primarily to decreases in the fair market value of our NYMEX swaps and options due to increases in NYMEX forward prices.

EQT CORPORATION AND SUBSIDIARIES

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

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

Six Months Ended June 30,

2023 2022 Change % Change

(Thousands, unless otherwise noted)

Sales volume by shale (MMcfe):

Marcellus 883,780 921,142 (37,362) (4.1)

Ohio Utica 42,680 67,675 (24,995) (36.9)

Other 3,184 4,975 (1,791) (36.0)

Total sales volume 929,644 993,792 (64,148) (6.5)

Average daily sales volume (MMcfe/d) 5,136 5,491 (355) (6.5)

Operating revenues:

Sales of natural gas, NGLs and oil $ 2,678,683 $ 5,851,835 $ (3,173,152) (54.2)

Sales of natural gas, NGLs and oil decreased for the three months ended March 31, 2023 compared to the same period in 2022 due to decreased sales volume, partly offset by a higher average realized price.

Sales volume decreased for the three months ended March 31, 2023 primarily as a result of sales volume decreases from natural decline of producing wells and fewer wells turned-in-line throughout 2022 as a result of third-party supply chain constraints.

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

The assets which we intend to acquire in the pending Tug Hill and XcL Midstream Acquisition, which is subject to regulatory approvals, are currently producing approximately 800 MMcfe per day of sales volume, 20% of which is liquids sales volume.

Average realized price for the three months ended March 31, 2023 compared to the same period in 2022 increased due to favorable cash settled derivatives and favorable differential, partly offset by lower NYMEX and liquids prices.

For the three months ended March 31, 2023, we received $157.0 million of net cash settlements on derivatives and for the same period in 2022, we paid $885.5 million of net cash settlements on derivatives, which are included in average realized price but may not be included in operating revenues.

For the three months ended March 31, 2023 and 2022, we paid premiums for derivatives that settled during the period of $99.4 million and $32.5 million, respectively.

Gain (loss) on derivatives 989,238 (3,922,732) 4,911,970 (125.2)

For the three months ended March 31, 2023, we recognized a gain on derivatives of $824.9 million related primarily to increases in the fair market value of our NYMEX swaps and options due to decreases in NYMEX forward prices.

For the same period in 2022, we recognized a loss on derivatives of $3,077.6 million related primarily to decreases in the fair market value of our NYMEX swaps and options due to increases in NYMEX forward prices.

Net marketing services and other 11,901 19,295 (7,394) (38.3)

Total operating revenues $ 3,679,822 $ 1,948,398 $ 1,731,424 88.9

Sales of natural gas, NGLs and oil.

Sales of natural gas, NGLs and oil decreased for the six months ended June 30, 2023 compared to the same period in 2022 due to decreased sales volume and lower average realized price.

Sales volume decreased for the six months ended June 30, 2023 primarily as a result of sales volume decreases from natural decline of producing wells, fewer wells turned-in-line throughout 2022 as a result of third-party supply chain constraints and a delay in the development schedule of certain non-operated wells in which we have a working interest, partly offset by increased volumes from our operated wells as a result efficiencies realized within our drilling and completions operations.

Average realized price decreased for the six months ended June 30, 2023 compared to the same period in 2022 due to lower NYMEX and liquids prices, partly offset by favorable cash settled derivatives and favorable differential.

For the six months ended June 30, 2023 and 2022, we received $369.2 million, composed of $539.0 million of net cash settlements received on our NYMEX natural gas hedge positions and $169.8 million of net cash settlements paid on our basis and liquids hedge positions.

For the same period in 2022, we paid $2,639.3 million of net cash settlements on derivatives, composed of $2,522.3 million of net cash settlements paid on our NYMEX natural gas hedge positions and $117.0 million of net cash settlements paid on our basis and liquids hedge positions.

Net cash settlements received (paid) on derivatives are included in average realized price but may not be included in operating revenues.

For the six months ended June 30, 2023 and 2022, we paid premiums for derivatives that settled during the period of $166.9 million and $32.2 million, respectively.

Gain (loss) on derivatives.

For the six months ended June 30, 2023, we recognized a gain on derivatives of $989.2 million related primarily to increases in the fair market value of our NYMEX swaps and options due to decreases in NYMEX forward prices, partly offset by a loss on the derivative liability related to the Henry Hub Cash Bonus.

For the same period in 2022, we recognized a loss on derivatives of $3,922.7 million related primarily to decreases in the fair market value of our NYMEX swaps and options due to increases in NYMEX forward prices, partly offset by a gain on the derivative liability related to the Henry Hub Cash Bonus.

EQT CORPORATION AND SUBSIDIARIES

1 unchanged sentence

Operating Expenses

Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Three Months Ended March 31,

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

Three Months Ended June 30,

2023 2022 Change % Change

20 unchanged sentences

Production depletion 0.83 0.85 (0.02) (2.4)

Operating expenses on a per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 were negatively impacted by lower sales volume unless otherwise noted.

Sales volume for the three months ended March 31, 2023 was negatively impacted by fewer wells turned-in-line throughout 2022 as a result of third-party supply chain constraints.

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

Gathering expense decreased on an absolute basis for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to lower sales volume and lower gathering rates on certain contracts indexed to price.

Operating expenses on a per Mcfe basis for the three months ended June 30, 2023 compared to the same period in 2022 were negatively impacted by decreased sales volume.

Gathering expense decreased on an absolute basis for the three months ended June 30, 2023 compared to the same period in 2022 due primarily to decreased sales volume and lower gathering rates on certain contracts indexed to price.

Transmission.

Transmission expense increased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to additional capacity acquired in November 2022 and lower credits received from the Texas Eastern Transmission Pipeline.

Processing expense increased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to increased volumes that require processing as a result of increased development of liquids-rich areas throughout 2022 and inflation.

LOE decreased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to lower salt water disposal costs and increased recycling.

Saltwater disposal costs and recycle rates were favorably impacted by increased usage of our internally developed produced water gathering and storage system which was placed into service during the fourth quarter of 2022.

Transmission expense increased on an absolute and per Mcfe basis for the three months ended June 30, 2023 compared to the same period in 2022 due primarily to additional capacity acquired subsequent to June 2022, partly offset by credits received from the Texas Eastern Transmission Pipeline.

LOE decreased on an absolute and per Mcfe basis for the three months ended June 30, 2023 compared to the same period in 2022 due primarily to lower salt water disposal costs and increased recycling.

Saltwater disposal costs and recycle rates were favorably impacted by increased usage of our internally developed produced water gathering and storage system, which was placed in service during the fourth quarter of 2022.

Production taxes.

Production taxes decreased on an absolute and per Mcfe basis for the three months ended June 30, 2023 compared to the same period in 2022 due to lower West Virginia severance taxes and Pennsylvania impact fees, which resulted primarily from lower prices.

Depreciation and depletion.

Production depletion expense decreased on an absolute and per Mcfe basis for the three months ended June 30, 2023 compared to the same period in 2022 due to a lower annual depletion rate and decreased sales volume.

EQT CORPORATION AND SUBSIDIARIES

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

Impairment and expiration of leases.

During the three months ended June 30, 2023 and 2022, we recognized impairment and expiration of leases of $5.3 million and $47.0 million, respectively, related to leases that we no longer expect to extend or develop prior to their expiration based on our development plan.

Other operating expenses .

Other operating expenses increased for the three months ended June 30, 2023 compared to the same period in 2022 due primarily to transaction costs associated with the pending Tug Hill and XcL Midstream Acquisition in 2023, partly offset by decreased environmental and legal reserves, including from settlements.

Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

Six Months Ended June 30,

2023 2022 Change % Change

(Thousands, unless otherwise noted)

Operating expenses:

Gathering $ 625,755 $ 659,629 $ (33,874) (5.1)

Transmission 307,079 296,489 10,590 3.6

Processing 105,312 99,690 5,622 5.6

LOE 64,016 82,643 (18,627) (22.5)

Production taxes 38,962 70,925 (31,963) (45.1)

Production taxes decreased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due to lower West Virginia severance taxes and Pennsylvania impact fees, which resulted primarily from lower prices.

Exploration 2,155 2,513 (358) (14.2)

Selling, general and administrative 112,057 128,372 (16,315) (12.7)

Selling, general and administrative expense decreased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to lower long-term incentive compensation costs as a result of changes in the fair value of awards.

Production depletion $ 772,886 $ 840,860 $ (67,974) (8.1)

Other depreciation and depletion 10,483 10,381 102 1.0

Total depreciation and depletion $ 783,369 $ 851,241 $ (67,872) (8.0)

Per Unit ($/Mcfe):

$ 0.67 $ 0.66 $ 0.01 1.5

0.33 0.30 0.03 10.0

0.11 0.10 0.01 10.0

LOE 0.07 0.08 (0.01) (12.5)

Production taxes

0.04 0.07 (0.03) (42.9)

Selling, general and administrative 0.12 0.13 (0.01) (7.7)

Production depletion 0.83 0.85 (0.02) (2.4)

Operating expenses on a per Mcfe basis for the six months ended June 30, 2023 compared to the same period in 2022 were negatively impacted by decreased sales volume.

Gathering expense decreased on an absolute basis for the six months ended June 30, 2023 compared to the same period in 2022 due primarily to decreased sales volume and lower gathering rates on certain contracts indexed to price.

Transmission.

Transmission expense increased on an absolute and per Mcfe basis for the six months ended June 30, 2023 compared to the same period in 2022 due primarily to additional capacity acquired subsequent to June 2022, partly offset by credits received from the Texas Eastern Transmission Pipeline.

Processing expense increased on an absolute and per Mcfe basis for the six months ended June 30, 2023 compared to the same period in 2022 due primarily to inflation of contracted processing rates.

EQT CORPORATION AND SUBSIDIARIES

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

LOE decreased on an absolute and per Mcfe basis for the six months ended June 30, 2023 compared to the same period in 2022 due primarily to lower salt water disposal costs and increased recycling.

Production taxes.

Production taxes decreased on an absolute and per Mcfe basis for the six months ended June 30, 2023 compared to the same period in 2022 due to lower West Virginia severance taxes and Pennsylvania impact fees, which resulted primarily from lower prices.

Selling, general and administrative.

Selling, general and administrative expense decreased on an absolute and per Mcfe basis for the six months ended June 30, 2023 compared to the same period in 2022 due primarily to lower long-term incentive compensation costs as a result of changes in the fair value of awards.

Long-term incentive compensation may fluctuate with changes in our stock price and performance conditions.

Depreciation and depletion.

Production depletion expense decreased on an absolute and per Mcfe basis for the three months ended March 31, 2023 compared to the same period in 2022 due to a lower annual depletion rate and decreased sales volume.

Production depletion expense decreased on an absolute and per Mcfe basis for the six months ended June 30, 2023 compared to the same period in 2022 due to a lower annual depletion rate and decreased sales volume.

Loss (gain) on sale/exchange of long-lived assets .

During the three months ended March 31, 2023, we recognized a loss on sale/exchange of long-lived assets of $16.5 million related to acreage trade agreements where the carrying value of the acres traded exceeded the fair value of the of the acres received.

During the six months ended June 30, 2023, we recognized a loss on sale/exchange of long-lived assets of $16.3 million related to acreage trade agreements where the carrying value of the acres traded exceeded the fair value of the acres received.

Impairment of contract asset.

During the three months ended March 31, 2022, we recognized impairment of our contract asset of $184.9 million.

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

See Note 8 to the Condensed Consolidated Financial Statements.

Impairment and expiration of leases.

During the three months ended March 31, 2023 and 2022, we recognized impairment and expiration of leases of $10.5 million and $30.0 million, respectively, related to leases that we no longer expect to extend or develop prior to their expiration based on our development plan.

During the six months ended June 30, 2023 and 2022, we recognized impairment and expiration of leases of $15.9 million and $77.0 million, respectively, related to leases that we no longer expect to extend or develop prior to their expiration based on our development plan.

Other operating expenses .

Other operating expenses for the three months ended March 31, 2023 of $19.7 million were attributable primarily to changes in legal and environmental reserves including settlements and transaction costs associated with the pending Tug Hill and XcL Midstream Acquisition.

Other operating expenses for the three months ended March 31, 2022 of $16.3 million were attributable primarily to changes in legal reserves including settlements.

Other operating expenses increased for the six months ended June 30, 2023 compared to the same period in 2022 due primarily to transaction costs associated with the pending Tug Hill and XcL Midstream Acquisition in 2023, partly offset by decreased legal reserves, including from settlements.

Other Income Statement Items

(Income) loss from investments.

For the three months ended March 31, 2023, we recognized income from investments due to a gain on our investment in the Investment Fund (defined in Note 4 to the Condensed Consolidated Financial Statements) and equity earnings on our equity method investments.

For the three months ended March 31, 2022, we recognized a loss from investments due primarily to a loss on our investment in Equitrans Midstream, which resulted from a decrease in Equitrans Midstream's stock price, partly offset by a gain on our investment in the Investment Fund and equity earnings on our equity method investments.

(Gain) loss on debt extinguishment.

During the three months ended March 31, 2023, we recognized a gain on debt extinguishment due to debt repayment and repurchases at a discount to par value.

During the three months ended March 31, 2022, we recognized a loss on debt extinguishment due to debt repayment and repurchases.

For the three months ended June 30, 2023, we recognized income from investments due primarily to equity earnings on our equity method investments.

For the three months ended June 30, 2022, we recognized income from investments due primarily to equity earnings on our equity method investments, partly offset by a loss on our sale of our investment in Equitrans Midstream.

For the six months ended June 30, 2023, we recognized income from investments due to a gain on our investment in the Investment Fund (defined in Note 4 to the Condensed Consolidated Financial Statements) and equity earnings on our equity method investments.

For the six months ended June 30, 2022, we recognized a loss from investments due primarily to a loss on our sale of our investment in Equitrans Midstream, partly offset by a gain on our investment in the Investment Fund and equity earnings on our equity method investments.

Dividend and other income .

Dividend and other income decreased for the three months ended June 30, 2023 compared to the same period in 2022 due primarily to lower dividends received on our investment in the Investment Fund.

Dividend and other income decreased for the six months ended June 30, 2023 compared to the same period in 2022 due primarily to lower dividends received on our investment in the Investment Fund as well as dividends received on our investment in Equitrans Midstream in 2022.

EQT CORPORATION AND SUBSIDIARIES

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

Loss (gain) on debt extinguishment.

During the three months ended June 30, 2023, we recognized a loss on debt extinguishment of $5.5 million due to debt repayment and repurchases at a premium to par value.

During the six months ended June 30, 2023, we recognized a gain on debt extinguishment of $1.1 million due to debt repayment and repurchases at a discount to par value during the first quarter of 2023, partly offset by the loss recognized during the three months ended June 30, 2023.

During the three and six months ended June 30, 2022, we recognized a loss on debt extinguishment of $104.3 million and $111.3 million, respectively, due primarily to the repayment and repurchases of our Convertible Notes (defined and discussed in Note 6 to the Condensed Consolidated Financial Statements).

See Note 6 to the Condensed Consolidated Financial Statements.

Interest expense, net.

Interest expense, net decreased for the three months ended March 31, 2023 compared to the same period in 2022 due primarily to higher interest income earned as well as reduced interest expense due to a reduction of our letters of credit balances.

Income tax expense (benefit).

Interest expense, net decreased for the three and six months ended June 30, 2023 compared to the same periods in 2022 due primarily to higher interest income earned as well as reduced interest expense due to a reduction of our letters of credit balances.

Income tax (benefit) expense.

See Note 5 to the Condensed Consolidated Financial Statements.

2 unchanged sentences

Planned Capital Expenditures and Sales Volume .

In 2023, we expect to spend approximately $1.7 billion to $1.9 billion in total capital expenditures, excluding amounts attributable to noncontrolling interest and amounts attributable to the assets expected to

EQT CORPORATION AND SUBSIDIARIES

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

be acquired in the pending Tug Hill and XcL Midstream Acquisition.

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

Because we are the operator of a high percentage of our developed acreage, the amount and timing of these capital expenditures are largely discretionary.

We could choose to defer a portion of these planned 2023 capital expenditures depending on a variety of factors, including prevailing and anticipated prices for natural gas, NGLs and oil;

Because we are the operator of a high percentage of our developed acreage, the amount and timing of certain of our capital expenditures is largely discretionary.

We could choose to defer a portion of our planned 2023 capital expenditures depending on a variety of factors, including prevailing and anticipated prices for natural gas, NGLs and oil;

the availability of necessary equipment, infrastructure and capital;

3 unchanged sentences

Operating Activities.

Net cash provided by operating activities was $1,663 million for the three months ended March 31, 2023 compared to $1,021 million for the same period in 2022.

The increase was due primarily to net cash settlements received on derivatives in the first quarter of 2023 compared to net cash settlements paid on derivatives in the first quarter of 2022, favorable changes in working capital and lower cash operating expenses, partly offset by lower cash operating revenues.

Net cash provided by operating activities was $2,100 million for the six months ended June 30, 2023 compared to $1,252 million for the same period in 2022.

The increase was due primarily to net cash settlements received on derivatives in 2023 compared to net cash settlements paid on derivatives in 2022, favorable changes in working capital driven by declining accounts receivable and lower margin postings as well as lower cash operating expenses, partly offset by lower cash operating revenues.

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

2 unchanged sentences

Investing Activities.

Net cash used in investing activities was $498 million for the three months ended March 31, 2023 compared to $291 million for the same period in 2022.

The increase was attributable to increased capital expenditures.

Net cash used in investing activities was $984 million for the six months ended June 30, 2023 compared to $508 million for the same period in 2022.

The increase was attributable primarily to increased capital expenditures.

EQT CORPORATION AND SUBSIDIARIES

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

The following table summarizes our capital expenditures.

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Reserve development $ 399 $ 297 $ 792 $ 526

3 unchanged sentences

Other production infrastructure 18 19 32 32

Other 8 2 10 3

Total capital expenditures 473 376 942 686

2 unchanged sentences

Total cash capital expenditures $ 487 $ 393 $ 982 $ 685

(a) Capital expenditures attributable to noncontrolling interest were $5.4 million and $1.9 million for the three months ended March 31, 2023 and 2022, respectively.

(a) Capital expenditures attributable to noncontrolling interest were $3.1 million and $2.5 million for the three months ended June 30, 2023 and 2022, respectively, and $8.5 million and $4.4 million for the six months ended June 30, 2023 and 2022, respectively.

(b) Represents the net impact of non-cash capital expenditures, including the effect of timing of receivables from working interest partners, accrued capital expenditures and capitalized share-based compensation costs.

1 unchanged sentence

Financing Activities.

Net cash used in financing activities was $496 million for the three months ended March 31, 2023 compared to net cash used in financing activities of $827 million for the same period in 2022.

For the three months ended March 31, 2023, the primary uses of financing cash flows were repayment and retirement of debt, repurchase and retirement of EQT Corporation common stock and payment of dividends.

For the three months ended March 31, 2022, the primary use of financing cash flows was repayment and retirement of debt, repurchase and retirement of EQT Corporation common stock and payment of dividends, and the primary source of financing cash flows was net proceeds from credit facility borrowings.

Net cash used in financing activities was $1,359 million for the six months ended June 30, 2023 compared to $814 million for the same period in 2022.

For the six months ended June 30, 2023, the primary uses of financing cash flows were repayment and retirement of debt, repurchase and retirement of EQT Corporation common stock and payment of dividends.

For the six months ended June 30, 2022, the primary uses of financing cash flows were repayment and retirement of debt, repurchase and retirement of EQT Corporation common stock and payment of dividends, and the primary source of financing cash flows was net proceeds from credit facility borrowings.

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

EQT CORPORATION AND SUBSIDIARIES

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

On April 19, 2023, our Board of Directors declared a quarterly cash dividend of $0.15 per share of EQT Corporation common stock, payable on June 1, 2023, to shareholders of record at the close of business on May 10, 2023.

On July 19, 2023, our Board of Directors declared a quarterly cash dividend of $0.15 per share of EQT Corporation common stock, payable on September 1, 2023, to shareholders of record at the close of business on August 9, 2023.

Depending on our actual and anticipated sources and uses of liquidity, prevailing market conditions and other factors, we may from time to time seek to redeem or repurchase our outstanding debt or equity securities through tender offers or other cash purchases in the open market or privately negotiated transactions.

1 unchanged sentence

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

EQT CORPORATION AND SUBSIDIARIES

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

Security Ratings and Financing Triggers

The table below reflects the credit ratings and rating outlooks assigned to our debt instruments as of April 21, 2023.

The table below reflects the credit ratings and rating outlooks assigned to our debt instruments as of July 21, 2023.

Our credit ratings and rating outlooks are subject to revision or withdrawal at any time by the assigning rating agency, and each rating should be evaluated independent from any other rating.

7 unchanged sentences

Margin deposits on our OTC derivative instruments are also subject to factors other than credit rating, such as natural gas prices and credit thresholds set forth in the agreements between us and our hedging counterparties.

As of April 21, 2023, we had sufficient unused borrowing capacity, net of letters of credit, under our credit facility to satisfy any requests for margin deposit or other collateral that our counterparties are permitted to request of us pursuant to our OTC derivative instruments, midstream services contracts and other contracts.

As of April 21, 2023, such assurances could be up to approximately $0.6 billion, inclusive of letters of credit, OTC derivative instrument margin deposits and other collateral posted of approximately $0.2 billion in the aggregate.

As of July 21, 2023, we had sufficient unused borrowing capacity, net of letters of credit, under our credit facility to satisfy any requests for margin deposit or other collateral that our counterparties are permitted to request of us pursuant to our OTC derivative instruments, midstream services contracts and other contracts.

As of July 21, 2023, such assurances could be up to approximately $0.6 billion, inclusive of letters of credit, OTC derivative instrument margin deposits and other collateral posted of approximately $0.2 billion in the aggregate.

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

2 unchanged sentences

Our credit facility and Term Loan Facility contain financial covenants that require us to have a total debt to total capitalization ratio no greater than 65%.

As of March 31, 2023, we were in compliance with all debt provisions and covenants under our debt agreements.

As of June 30, 2023, we were in compliance with all debt provisions and covenants under our debt agreements.

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

As of March 31, 2023, we had not yet borrowed, and thus, had no borrowings, under the Term Loan Facility.

As of June 30, 2023, we had not yet borrowed, and thus, had no borrowings, under the Term Loan Facility.

EQT CORPORATION AND SUBSIDIARIES

4 unchanged sentences

The derivative commodity instruments that we use are primarily swap, collar and option agreements.

The following table summarizes the approximate volume and prices of our NYMEX hedge positions as of April 21, 2023.

The following table summarizes the approximate volume and prices of our NYMEX hedge positions as of July 21, 2023.

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

Q2 2023 (a) Q3 2023 Q4 2023 2024

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

Hedged Volume (MMDth) 299 313 210 175 177 77

17 unchanged sentences

Cash Settlement of Deferred Premiums (millions) $ (70) $ (92) $ (13) $ (4) $ (4) $ —

(a) April 1 through June 30 .

(a) July 1 through September 30 .

We have also entered into derivative instruments to hedge basis.

12 unchanged sentences

See Note 13 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022 for a discussion of our commitments and contingencies, including certain pending legal and regulatory proceedings and other contingent matters.

As of March 31, 2023, there have been no material changes to such matters as disclosed therein.

What changed 10-Q

Item 2. Management’s Discussion and Analysis