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Item 1. Financial Statements

2024-07-24 compared with 2024-04-24 · 217 added, 98 removed, 375 unchanged (46% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(Thousands, except per share amounts)

10 unchanged sentences

Depreciation and depletion 465,982 395,684 952,732 783,369

Loss on sale/exchange of long-lived assets 147 16,528

(Gain) loss on sale/exchange of long-lived assets ( 320,129 ) ( 225 ) ( 319,982 ) 16,303

Impairment and expiration of leases 37,659 5,325 46,868 15,871

1 unchanged sentence

Total operating expenses 949,541 1,053,744 2,179,089 2,103,935

Operating income 182,720 1,610,880

Operating income (loss) 2,971 ( 34,993 ) 185,691 1,575,887

Income from investments ( 172 ) ( 1,092 ) ( 2,432 ) ( 5,856 )

2 unchanged sentences

Interest expense, net 55,720 39,883 110,091 86,429

Income before income taxes 127,365 1,575,879

Income tax expense 24,302 356,646

Net income 103,063 1,219,233

(Loss) income before income taxes ( 34,983 ) ( 78,684 ) 92,382 1,497,195

Income tax (benefit) expense ( 44,222 ) ( 11,818 ) ( 19,920 ) 344,828

Net income (loss) 9,239 ( 66,866 ) 112,302 1,152,367

Net (loss) income attributable to noncontrolling interests ( 278 ) ( 240 ) ( 703 ) 445

Net income attributable to EQT Corporation $ 103,488 $ 1,218,548

Income per share of common stock attributable to EQT Corporation:

Net income (loss) attributable to EQT Corporation $ 9,517 $ ( 66,626 ) $ 113,005 $ 1,151,922

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

Weighted average common stock outstanding 441,968 361,982 440,714 361,721

Net income attributable to EQT Corporation $ 0.24 $ 3.37

Net income (loss) attributable to EQT Corporation $ 0.02 $ ( 0.18 ) $ 0.26 $ 3.18

Diluted (Note 7):

Weighted average common stock outstanding 444,921 361,982 444,893 393,435

Net income attributable to EQT Corporation $ 0.23 $ 3.10

Net income (loss) attributable to EQT Corporation $ 0.02 $ ( 0.18 ) $ 0.25 $ 2.94

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

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED)

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

Three Months Ended

Net income $ 103,063 $ 1,219,233

June 30, Six Months Ended

2024 2023 2024 2023

Net income (loss) $ 9,239 $ ( 66,866 ) $ 112,302 $ 1,152,367

Other comprehensive income, net of tax:

1 unchanged sentence

$ 13 , $ 14 , $ 26 and $ 29

Comprehensive income 103,106 1,219,397

Comprehensive income (loss) 9,282 ( 66,817 ) 112,388 1,152,580

Comprehensive (loss) income attributable to noncontrolling interests ( 278 ) ( 240 ) ( 703 ) 445

Comprehensive income attributable to EQT Corporation $ 103,531 $ 1,218,712

Comprehensive income (loss) attributable to EQT Corporation $ 9,560 $ ( 66,577 ) $ 113,091 $ 1,152,135

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

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

19 unchanged sentences

Total current liabilities 1,685,568 2,036,840

Revolving credit facility borrowings 47,000 —

Term Loan Facility borrowings 497,680 1,244,265

18 unchanged sentences

STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS (UNAUDITED)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

1 unchanged sentence

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

Deferred income tax expense 23,394 356,618

Deferred income tax (benefit) expense ( 22,583 ) 353,912

Depreciation and depletion 952,732 783,369

Impairments and loss/gain on sale/exchange of long-lived assets 9,356 27,074

Gain/loss on sale/exchange of long-lived assets and impairments ( 273,114 ) 32,174

Income from investments ( 2,432 ) ( 5,856 )

15 unchanged sentences

Cash paid for acquisitions ( 237,755 ) —

Proceeds from sale of assets 453,864 —

Other investing activities ( 2,688 ) ( 2,036 )

7 unchanged sentences

Repayment and retirement of debt ( 1,355,183 ) ( 1,012,877 )

Discounts received on debt extinguishment — 7,981

(Premiums paid) discounts received on debt extinguishment ( 1,178 ) 6,402

Dividends paid ( 138,963 ) ( 108,318 )

14 unchanged sentences

(Thousands, except per share amounts)

Balance at April 1, 2023 361,586 $ 9,776,392 $ 2,338,572 $ ( 2,830 ) $ 41,454 $ 12,153,588

Comprehensive loss, net of tax:

Net loss ( 66,626 ) ( 240 ) ( 66,866 )

Other postretirement benefits liability adjustment, net of tax:

Dividends ($ 0.15 per share)

( 54,248 ) ( 54,248 )

Share-based compensation plans 64 14,451 14,451

Convertible Notes settlements 4 12 12

Distribution to noncontrolling interest ( 1,958 ) ( 1,958 )

Balance at June 30, 2023 361,654 $ 9,790,855 $ 2,217,698 $ ( 2,781 ) $ 39,256 $ 12,045,028

Balance at April 1, 2024 441,558 $ 12,450,876 $ 2,715,974 $ ( 2,641 ) $ 7,192 $ 15,171,401

Comprehensive income, net of tax:

Net income (loss) 9,517 ( 278 ) 9,239

Other postretirement benefits liability adjustment, net of tax:

Dividends ($ 0.1575 per share)

( 69,551 ) ( 69,551 )

Share-based compensation plans 39 13,616 13,616

Balance at June 30, 2024 441,597 $ 12,464,492 $ 2,655,940 $ ( 2,598 ) $ 6,914 $ 15,124,748

Common shares authorized (in thousands):

Preferred shares authorized (in thousands):

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 Condensed Consolidated Financial Statements.

EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONDENSED CONSOLIDATED EQUITY (UNAUDITED)

Shares Amount Retained Earnings Accumulated Other

Comprehensive Loss (a) Noncontrolling Interest in

Consolidated Subsidiaries Total Equity

(Thousands, except per share amounts)

Balance at January 1, 2023 365,363 $ 9,891,890 $ 1,283,578 $ ( 2,994 ) $ 40,854 $ 11,213,328

9 unchanged sentences

Contribution from noncontrolling interest 3,750 3,750

Balance at March 31, 2023 361,586 $ 9,776,392 $ 2,338,572 $ ( 2,830 ) $ 41,454 $ 12,153,588

Balance at June 30, 2023 361,654 $ 9,790,855 $ 2,217,698 $ ( 2,781 ) $ 39,256 $ 12,045,028

Balance at January 1, 2024 419,896 $ 12,093,986 $ 2,681,898 $ ( 2,684 ) $ 7,617 $ 14,780,817

7 unchanged sentences

Net settlement of Capped Call Transactions 93,290 93,290

Balance at March 31, 2024 441,558 $ 12,450,876 $ 2,715,974 $ ( 2,641 ) $ 7,192 $ 15,171,401

Balance at June 30, 2024 441,597 $ 12,464,492 $ 2,655,940 $ ( 2,598 ) $ 6,914 $ 15,124,748

Common shares authorized (in thousands):

8 unchanged sentences

Accordingly, they do not include all information and notes required by GAAP for complete financial statements.

In the opinion of management, these statements include all adjustments (consisting of only normal recurring accruals, unless otherwise disclosed in this Quarterly Report on Form 10-Q) necessary for a fair presentation of the financial position of EQT Corporation and subsidiaries as of March 31, 2024 and December 31, 2023 and the results of its operations, equity and cash flows for the three month periods ended March 31, 2024 and 2023.

In the opinion of management, these statements include all adjustments (consisting of only normal recurring accruals, unless otherwise disclosed in this Quarterly Report on Form 10-Q) necessary for a fair presentation of the financial position of EQT Corporation and subsidiaries as of June 30, 2024 and December 31, 2023, the results of its operations and equity for the three and six month periods ended June 30, 2024 and 2023 and its cash flows for the six month periods ended June 30, 2024 and 2023.

Certain previously reported amounts have been reclassified to conform to the current year presentation.

4 unchanged sentences

The following table summarizes net cash paid for interest and income taxes and non-cash activity included in the Statements of Condensed Consolidated Cash Flows.

Three Months Ended March 31,

Six Months Ended June 30,

Cash paid during the period for:

3 unchanged sentences

Issuance of EQT Corporation common stock for Convertible Notes settlement $ 285,608 $ 82

Increase in asset retirement costs and obligations 6,918 2,686

NEPA Non-Operated Asset Divestiture (Note 9) 155,383 —

Increase in right-of-use assets and lease liabilities, net 8,283 507

Investment in nonconsolidated entity 2,375 —

Capitalization of non-cash equity share-based compensation 3,371 2,997

Increase in asset retirement costs and obligations 3,313 3,631

Investment in nonconsolidated entity 2,375 —

Common Stock.

On July 18, 2024, following approval by the shareholders of EQT Corporation, the Company amended its Restated Articles of Incorporation to increase the authorized number of shares of EQT Corporation common stock from 640,000,000 shares to 1,280,000,000 shares.

Recently Issued Accounting Standards

2 unchanged sentences

In addition, this ASU enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss and provides new segment disclosure requirements for entities with a single reportable segment.

This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted.

The Company does not expect adoption of ASU 2023-07 to have a material impact on its financial statements and related disclosures.

This ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company is evaluating the effect its adoption of ASU 2023-07 will have on its financial statements and related disclosures.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

In December 2023, the FASB issued ASU 2023-09, Income Taxes:

1 unchanged sentence

Under this ASU, public business entities must annually (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold.

This ASU is effective for fiscal years beginning after December 15, 2024, and early adoption is permitted.

This ASU is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company does not expect adoption of ASU 2023-09 to have a material impact on its financial statements and related disclosures.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Revenue from Contracts with Customers

9 unchanged sentences

When selling natural gas, NGLs and oil on behalf of royalty or working interest owners, the Company acts as an agent and, thus, reports the revenue on a net basis.

For contracts with customers where the Company's performance obligations had been satisfied and an unconditional right to consideration existed as of the balance sheet date, the Company recorded amounts due from contracts with customers of $ 307.2 million and $ 584.8 million in accounts receivable in the Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023, respectively.

For contracts with customers where the Company's performance obligations had been satisfied and an unconditional right to consideration existed as of the balance sheet date, the Company recorded amounts due from contracts with customers of $ 446.8 million and $ 584.8 million in accounts receivable in the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, respectively.

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

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Revenues from contracts with customers:

7 unchanged sentences

Total operating revenues $ 952,512 $ 1,018,751 $ 2,364,780 $ 3,679,822

As of March 31, 2024, the Company had no remaining performance obligations on its natural gas sales contracts with fixed consideration.

As of June 30, 2024, the Company had no remaining performance obligations on its natural gas sales contracts with fixed consideration.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Derivative Instruments

2 unchanged sentences

The overall objective of the Company's hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

The derivative commodity instruments used by the Company are primarily swap, collar and option agreements.

13 unchanged sentences

Settlements of derivative commodity instruments are reported as a component of cash flows from operating activities in the Statements of Condensed Consolidated Cash Flows.

With respect to the derivative commodity instruments held by the Company, the Company hedged portions of its expected sales of production and portions of its basis exposure covering approximately 2,072 billion cubic feet (Bcf) of natural gas and 3,300 thousand barrels (Mbbl) of NGLs as of March 31, 2024 and 2,045 Bcf of natural gas and 1,049 Mbbl of NGLs as of December 31, 2023.

The open positions at both March 31, 2024 and December 31, 2023 had maturities extending through December 2027.

With respect to the derivative commodity instruments held by the Company, the Company hedged portions of its expected sales of production and portions of its basis exposure covering approximately 2,402 billion cubic feet (Bcf) of natural gas and 2,568 thousand barrels (Mbbl) of NGLs as of June 30, 2024 and 2,045 Bcf of natural gas and 1,049 Mbbl of NGLs as of December 31, 2023.

The open positions at both June 30, 2024 and December 31, 2023 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.

5 unchanged sentences

Anything below these ratings is considered non-investment grade.

As of March 31, 2024, the Company's senior notes were rated "Baa3" by Moody's, "BBB–" by S&P and "BBB–" by Fitch.

As of June 30, 2024, the Company's senior notes were rated "Baa3" by Moody's, "BBB–" by S&P and "BBB–" by Fitch.

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

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

As of March 31, 2024, none of the Company's OTC derivative instruments with credit rating risk-related contingent features were in a net liability position.

As of December 31, 2023, the aggregate fair value of the Company's OTC derivative instruments with credit rating risk-related contingent features that were in a net liability position was $ 6.4 million, for which no deposits were required or recorded in the Condensed Consolidated Balance Sheet.

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

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

As of both March 31, 2024 and December 31, 2023, there were no such deposits recorded in the Condensed Consolidated Balance Sheets.

As of June 30, 2024 and December 31, 2023, the aggregate fair value of the Company's OTC derivative instruments with credit rating risk-related contingent features that were in a net liability position was $ 0.2 million and $ 6.4 million, respectively, for which no deposits were required or recorded in the Condensed Consolidated Balance Sheets.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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

As of both June 30, 2024 and December 31, 2023, there were no such deposits recorded in the Condensed Consolidated Balance Sheets.

When the Company enters into exchange traded natural gas contracts, exchanges may require the Company to remit funds to the corresponding broker as good-faith deposits to guard against the risks associated with changing market conditions.

5 unchanged sentences

The margin requirements are subject to change at the exchanges' discretion.

As of March 31, 2024 and December 31, 2023, the Company recorded $ 69.3 million and $ 13.0 million, respectively, of such deposits as current assets in the Condensed Consolidated Balance Sheets.

As of June 30, 2024 and December 31, 2023, the Company recorded $ 67.6 million and $ 13.0 million, respectively, of such deposits as current assets in the Condensed Consolidated Balance Sheets.

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.

2 unchanged sentences

master netting agreements Margin requirements with counterparties Net derivative instruments

March 31, 2024

June 30, 2024

Asset derivative instruments, at fair value $ 424,362 $ ( 135,133 ) $ — $ 289,229

4 unchanged sentences

Henry Hub Cash Bonus.

The consolidated gas gathering and compression agreement, dated February 26, 2020, between the Company and an affiliate of Equitrans Midstream Corporation (Equitrans Midstream) provides for cash bonus payments (the Henry Hub Cash Bonus) payable by the Company during the period beginning on the first day of the quarter in which the Mountain Valley Pipeline is placed in service and ending on the earlier of 36 months thereafter or December 31, 2024.

The consolidated gas gathering and compression agreement, dated February 26, 2020 (the Consolidated GGA), between the Company and an affiliate of Equitrans Midstream Corporation (Equitrans Midstream) provides for cash bonus payments (the Henry Hub Cash Bonus) payable by the Company during each quarter beginning with the first day of the quarter in which the MVP In-Service Date (as defined within the Consolidated GGA) occurs 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 March 31, 2024 and December 31, 2023, the derivative liability related to the Henry Hub Cash Bonus had a fair value of approximately $ 29 million and $ 48 million, respectively.

Following receipt of authorization from the Federal Energy Regulatory Commission, the Mountain Valley Pipeline entered into service on June 14, 2024.

Upon commencement of long-term firm capacity obligations, the MVP In-Service Date occurred on July 1, 2024.

As of June 30, 2024 and December 31, 2023, the derivative liability related to the Henry Hub Cash Bonus had a fair value of approximately $ 33 million and $ 48 million, respectively.

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

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

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Fair Value Measurements

4 unchanged sentences

The Company estimates nonperformance risk by analyzing publicly available market information, including a comparison of the yield on debt instruments with credit ratings similar to the Company's or counterparty's credit rating and the yield on a risk-free instrument.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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.

11 unchanged sentences

(Level 2) Significant unobservable inputs

March 31, 2024

June 30, 2024

Asset derivative instruments, at fair value $ 424,362 $ 41,942 $ 382,420 $ —

8 unchanged sentences

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

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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

Because not all of the Company's senior notes are actively traded, their fair value is a Level 2 fair value measurement.

The Company's senior notes had a fair value of approximately $ 4.9 billion as of both March 31, 2024 and December 31, 2023 and a carrying value of approximately $ 4.9 billion and $ 4.5 billion as of March 31, 2024 and December 31, 2023, respectively, inclusive of any current portion.

The fair value of the Company's note payable to EQM Midstream Partners, LP (EQM), a wholly-owned subsidiary of Equitrans Midstream, is estimated using an income approach model with a market-based discount rate and is a Level 3 fair value measurement.

As of March 31, 2024 and December 31, 2023, the Company's note payable to EQM had a fair value of approximately $ 88 million and $ 91 million, respectively, and a carrying value of approximately $ 87 million and $ 88 million, respectively, inclusive of any current portion.

As of June 30, 2024 and December 31, 2023, the Company's senior notes had a fair value of approximately $ 4.3 billion and $ 4.9 billion, respectively, and a carrying value of approximately $ 4.3 billion and $ 4.5 billion, respectively, inclusive of any current portion.

The fair value of the Company's note payable to EQM Midstream Partners, LP (EQM), a wholly-owned subsidiary of Equitrans Midstream as of June 30, 2024 and December 31, 2023, is estimated using an income approach model with a market-based discount rate and is a Level 3 fair value measurement.

As of June 30, 2024 and December 31, 2023, the Company's note payable to EQM had a fair value of approximately $ 86 million and $ 91 million, respectively, and a carrying value of approximately $ 85 million and $ 88 million, respectively, inclusive of any current portion.

See Note 6 for further discussion of the Company's debt.

2 unchanged sentences

See Note 3 for a discussion of the fair value measurement of the Henry Hub Cash Bonus.

See Note 9 for a discussion of the fair value measurement of the NEPA Non-Operated Asset Divestiture (defined therein).

See Note 1 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of the fair value measurement and any subsequent impairments of the Company's oil and gas properties and other long-lived assets, including impairment and expiration of leases.

Historically, the Company has calculated the provision for income taxes for interim periods by applying an estimate of the annual effective tax rate for the full fiscal year to "ordinary" income or loss (pre-tax income or loss excluding unusual or infrequently occurring items) for the period.

However, because fluctuations in estimated ordinary income can result in significant changes in the estimated annual effective tax rate, the Company determined that this method does not provide a reliable estimate for the six months ended June 30, 2024.

As such, the Company instead used a discrete effective tax rate method to calculate taxes for the six months ended June 30, 2024.

There were no material changes to the Company's methodology for determining unrecognized tax benefits during the six months ended June 30, 2024.

For the six months ended June 30, 2023, the Company calculated the provision for income taxes by applying an estimate of the annual effective tax rate for the full fiscal year to ordinary income for the period.

For the six months ended June 30, 2024 and 2023, the Company recorded income tax (benefit) expense at an effective tax rate of ( 21.6 )% and 23.0 %, respectively.

The Company's effective tax rate for the six months ended June 30, 2024 was lower compared to the U.S.

federal statutory rate primarily as a result of the Company's utilization of some of its capital loss carryforwards with the capital gain generated from the NEPA Non-Operated Asset Divestiture, which results in the release of the associated valuation allowance, as well as from excess tax benefits from share-based payments.

The Company's effective tax rate for the six months ended June 30, 2023 was higher compared to the U.S.

federal statutory rate due primarily to state taxes, including valuation allowances limiting certain state tax benefits.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the three months ended March 31, 2024 and 2023, the Company calculated the provision for income taxes for interim periods by applying an estimate of the annual effective tax rate for the full fiscal year to "ordinary" income or loss (pre-tax income or loss excluding unusual or infrequently occurring items) for the period.

There were no material changes to the Company's methodology for determining unrecognized tax benefits during the three months ended March 31, 2024.

For the three months ended March 31, 2024 and 2023, the Company recorded income tax expense at an effective tax rate of 19.1 % and 22.6 %, respectively.

The Company's effective tax rate for the three months ended March 31, 2024 was lower compared to the U.S.

federal statutory rate primarily as a result of excess tax benefits from share-based payments partly offset by state taxes.

The Company's effective tax rate for the three months ended March 31, 2023 was higher compared to the U.S.

federal statutory rate due primarily to state taxes, including valuation allowances limiting certain state tax benefits.

The table below summarizes the Company's outstanding debt.

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Principal Value Carrying Value (a) Principal Value Carrying Value (a)

Revolving credit facility maturing July 23, 2029 $ 47,000 $ 47,000 $ — $ —

Term Loan Facility due June 30, 2026 (b) 500,000 497,680 1,250,000 1,244,265

24 unchanged sentences

Long-term debt $ 4,981,893 $ 4,945,398 $ 5,539,634 $ 5,502,681

(a) For the Company's note payable to EQM, the principal value represents the carrying value.

(a) For the Company's revolving credit facility and note payable to EQM, the principal value represents the carrying value.

For all other debt, the principal value less the unamortized debt issuance costs and debt discounts represents the carrying value.

(b) Interest rates for the Term Loan Facility, the Company's 6.125 % senior notes and the Company's 7.000 % senior notes fluctuate based on changes to the credit ratings assigned to the Company's senior notes by Moody's, S&P and Fitch.

(b) Interest rates for the Term Loan Facility and the Company's 7.000 % senior notes fluctuate based on changes to the credit ratings assigned to the Company's senior notes by Moody's, S&P and Fitch.

Prior to the Company's redemption of all of its outstanding 6.125 % senior notes, interest rates for the Company's 6.125 % senior notes fluctuated based on changes to the credit ratings assigned to the Company's senior notes by Moody's, S&P and Fitch.

Interest rates for the Company's other outstanding debt do not fluctuate.

(c) As of December 31, 2023, the fair value of the Company's 1.75 % convertible notes was $ 768.6 million and was a Level 2 fair value measurement.

(d) As of March 31, 2024, the current portion of debt included the Company's 6.125 % senior notes and a portion of the note payable to EQM.

(d) As of June 30, 2024, the current portion of debt included a portion of the note payable to EQM.

As of December 31, 2023, the current portion of debt included the Company's 1.75 % convertible notes and a portion of the note payable to EQM.

Revolving Credit Facility.

The Company has a $ 2.5 billion revolving credit facility that matures on June 28, 2027.

As of both March 31, 2024 and December 31, 2023, the Company had approximately $ 15 million of letters of credit outstanding under its revolving credit facility.

Debt Repayments .

The Company repaid, redeemed or repurchased the following debt during the six months ended June 30, 2024.

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

6.125 % notes due February 1, 2025

$ 601,521 $ 1,178 $ 13,612 $ 616,311

Term Loan Facility due June 30, 2026 750,000 — — 750,000

1.75 % convertible notes due May 1, 2026

Total $ 1,352,104 $ 1,178 $ 13,612 $ 1,366,894

(a) Includes third-party costs and fees paid to dealer managers and brokers.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Under the Company's revolving credit facility, for the three months ended March 31, 2024, the maximum amount of outstanding borrowings was $ 107 million, the average daily balance was approximately $ 11 million and interest was incurred at a weighted average annual interest rate of 6.9 %.

For the three months ended March 31, 2023, there were no borrowings under the Company's revolving credit facility.

Revolving Credit Facility.

As of June 30, 2024, the Company had a $ 2.5 billion revolving credit facility.

On July 22, 2024, the Company entered into the Fourth Amended and Restated Credit Agreement (the Fourth A&R Credit Agreement) with PNC Bank National Association, as administrative agent, swing line lender and L/C Issuer, and the other lenders party thereto, amending and restating the Third Amended and Restated Credit Agreement, dated June 28, 2022 (the Credit Agreement), under which such lenders agreed to make to the Company unsecured revolving loans in an aggregate principal amount of up to $ 3.5 billion.

The Fourth A&R Credit Agreement, among other things, (i) extends the maturity date of the commitments and loans under the Credit Agreement to July 23, 2029 and provides, at the Company's option, two one-year extensions thereafter, subject to satisfaction of certain conditions, and (ii) allows for additional commitment increases up to $ 1 billion, subject to the agreement of the Company and new or existing lenders.

The Company can obtain Base Rate Loans (as defined in the Fourth A&R Credit Agreement) or Term SOFR Rate Loans (as defined in the Fourth A&R Credit Agreement).

Base Rate Loans are denominated in dollars and bear interest at a Base Rate (as defined in the Fourth A&R Credit Agreement) plus a margin ranging from 12.5 basis points to 100 basis points determined on the basis of the Company's then current credit ratings.

Term SOFR Rate Loans bear interest at a Term SOFR Rate (as defined in the Fourth A&R Credit Agreement) plus an additional 10 basis point credit spread adjustment plus a margin ranging from 112.5 basis points to 200 basis points determined on the basis of the Company's then current credit ratings.

As of June 30, 2024, the Company had no letters of credit outstanding under its revolving credit facility.

As of December 31, 2023, the Company had approximately $ 15 million letters of credit outstanding under its revolving credit facility.

Under the Company's revolving credit facility, for both the three and six months ended June 30, 2024, the maximum amount of outstanding borrowings was $ 207 million and interest was incurred at a weighted average annual interest rate of 6.9 %.

For the three and six months ended June 30, 2024, the average daily balance was approximately $ 24 million and $ 17 million, respectively.

For the three and six months ended June 30, 2023, there were no borrowings under the Company's revolving credit facility.

Term Loan Facility .

On November 9, 2022, the Company entered into a Credit Agreement (as amended o n December 23, 2022 and April 25, 2023, the Term Loan Agreement) with PNC Bank, National Association, as administrative agent, and the other lenders party thereto, under which such lenders agreed to make to the Company unsecured term loans in a single draw in an aggregate principal amount of up to $ 1.25 billion (the Term Loan Facility) to partly fund the Tug Hill and XcL Midstream Acquisition (defined in Note 9).

On November 9, 2022, the Company entered into a Credit Agreement (as amended o n December 23, 2022, April 25, 2023, January 16, 2024 and July 22, 2024, the Term Loan Agreement) with PNC Bank, National Association, as administrative agent, and the other lenders party thereto, under which such lenders agreed to make to the Company unsecured term loans in a single draw in an aggregate principal amount of up to $ 1.25 billion (the Term Loan Facility) to partly fund the Tug Hill and XcL Midstream Acquisition (defined in Note 9).

On August 21, 2023, the Company borrowed $ 1.25 billion under the Term Loan Facility, receiving net proceeds of $ 1,242.9 million.

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The third amendment to the Term Loan Agreement became effective on January 19, 2024 upon the Company's prepayment of $ 750 million principal amount of the term loans outstanding under the Term Loan Facility (funded with the net proceeds from the issuance of the Company's 5.750 % senior notes and cash on hand) and the satisfaction of other closing conditions.

On July 22, 2024, the Company entered into a fourth amendment to the Term Loan Agreement to, among other things, make certain conforming changes to the Term Loan Agreement in alignment with the Fourth A&R Credit Agreement.

Pursuant to the Term Loan Agreement, the Company may voluntarily prepay, in whole or in part, borrowings under the Term Loan Facility without premium or penalty but subject to reimbursement of funding losses with respect to prepayment of loans that bear interest based on the Term SOFR Rate (as defined in the Term Loan Agreement).

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At the Company's election, the term loans outstanding under the Term Loan Facility bear interest at a Term SOFR Rate plus the SOFR Adjustment or Base Rate (all terms defined in the Term Loan Agreement), each plus a margin based on the Company's credit ratings.

For the three months ended March 31, 2024, interest was incurred under the Term Loan Facility at a weighted average annual interest rate of 6.9 %.

For both the three and six months ended June 30, 2024, interest was incurred under the Term Loan Facility at a weighted average annual interest rate of 6.9 %.

5.750 % Senior Notes.

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

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

On January 2, 2024, in accordance with the indenture governing the Convertible Notes (the Convertible Notes Indenture), the Company issued an irrevocable notice of redemption for all of the outstanding Convertible Notes and announced that the Company would redeem any of the Convertible Notes outstanding on January 17, 2024 in cash for 100 % of the principal amount, plus accrued and unpaid interest on such Convertible Notes to, but excluding, such redemption date (the Redemption Price).

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The remaining $ 0.6 million in outstanding principal amount of Convertible Notes was redeemed on January 17, 2024 in cash for the Redemption Price.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Inclusive of January 2024 settlements of Convertible Notes conversion right exercises that were exercised in December 2023, during January 2024, the Company settled $ 290.2 million aggregate principal amount of Convertible Notes conversion right exercises by issuing an aggregate 20,036,639 shares of EQT Corporation common stock to the converting holders at an average conversion price of $ 38.03 .

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The Termination Payments were recorded as an increase to shareholders' equity.

Income Per Share

The table below provides the computation for basic and diluted income per share.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Income (Loss) Per Share

The table below provides the computation for basic and diluted income (loss) per share.

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

(Thousands, except per share amounts)

Net income attributable to EQT Corporation – Basic income available to shareholders $ 103,488 $ 1,218,548

Interest expense on Convertible Notes, net of tax 76 1,854

Diluted income available to shareholders $ 103,564 $ 1,220,402

Net income (loss) attributable to EQT Corporation – Basic income (loss) available to shareholders $ 9,517 $ ( 66,626 ) $ 113,005 $ 1,151,922

Interest expense on Convertible Notes, net of tax (a) — — 114 3,691

Diluted income (loss) available to shareholders $ 9,517 $ ( 66,626 ) $ 113,119 $ 1,155,613

Weighted average common stock outstanding – Basic 441,968 361,982 440,714 361,721

Options, restricted stock, performance awards and stock appreciation rights 4,026 4,226

Convertible Notes 1,482 28,195

Options, restricted stock, performance awards and stock appreciation rights (a) 2,953 — 3,438 3,455

Convertible Notes (a) — — 741 28,259

Weighted average common stock outstanding – Diluted 444,921 361,982 444,893 393,435

Income per share of common stock attributable to EQT Corporation:

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

Basic $ 0.02 $ ( 0.18 ) $ 0.26 $ 3.18

Diluted $ 0.02 $ ( 0.18 ) $ 0.25 $ 2.94

(a) 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 three months ended June 30, 2023, all such securities of 4.7 million were excluded from potentially dilutive securities because of their anti-dilutive effect on loss per share.

In addition, prior to the Company's redemption of the Convertible Notes, the Company used the if-converted method to calculate the impact of the Convertible Notes on diluted income (loss) per share.

For the three months ended June 30, 2023, such if-converted securities of approximately 28.3 million as well as the related add back of interest expense on the Convertible Notes, net of tax, were excluded from potentially dilutive securities because of their anti-dilutive effect on loss per share.

Stock-based Compensation

In 2024, the Management Development and Compensation Committee of the Company's Board of Directors (the Compensation Committee) adopted the 2024 Incentive Performance Share Unit Program (2024 Incentive PSU Program) under the 2020 Long-Term Incentive Plan.

During the three months ended March 31, 2024, a total of 371,500 share units were granted under the 2024 Incentive PSU Program.

During the six months ended June 30, 2024, a total of 371,500 share units were granted under the 2024 Incentive PSU Program.

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, 2024 through December 31, 2026.

During the six months ended June 30, 2024, the Compensation Committee granted 982,990 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 employees.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

During the three months ended March 31, 2024, the Compensation Committee granted 976,270 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 employees.

Acquisitions and Divestiture

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The Company operates and has historically owned a 50 % interest in gathering assets located in northeast Pennsylvania (collectively, the NEPA Gathering System).

On April 11, 2024, the Company completed its acquisition of a minority equity partner's 33.75 % interest in the NEPA Gathering System (increasing the Company's interest in the NEPA Gathering System to approximately 83.75 %) for a purchase price of approximately $ 205 million (the NEPA Gathering System Acquisition), subject to customary post-closing adjustments.

On April 11, 2024, the Company completed its acquisition of a minority equity partner's 33.75 % interest in the NEPA Gathering System for a purchase price of approximately $ 205 million (the NEPA Gathering System Acquisition), subject to customary post-closing adjustments.

The NEPA Gathering System Acquisition was accounted for as an asset acquisition and, as such, its purchase price was allocated to property, plant and equipment.

NEPA Non-Operated Asset Divestiture.

On April 12, 2024, the Company entered into an agreement with Equinor USA Onshore Properties Inc.

and its affiliates (collectively, the Equinor Parties), pursuant to which the Company agreed to sell to the Equinor Parties an undivided 40 % interest in the Company's non-operated natural gas assets in Northeast Pennsylvania.

In exchange, the Company will receive from the Equinor Parties $ 500 million of cash, certain operated upstream assets and the remaining 16.25 % equity interest in the NEPA Gathering System.

The transaction (the NEPA Non-Operated Asset Divestiture) is subject to customary closing adjustments, required regulatory approvals and clearances.

In addition, the Company has agreed with the Equinor Parties to, upon consummation of the NEPA Non-Operated Asset Divestiture, enter into a gas buy-back agreement with respect to the assets to be received by the Company in the NEPA Non-Operated Asset Divestiture, whereby the Equinor Parties will purchase a specified amount of natural gas from the Company at a premium to in-basin pricing through the first quarter of 2028.

Following the completion of the NEPA Non-Operated Asset Divestiture, the Company will own 100 % of the NEPA Gathering System.

On May 31, 2024, the Company completed the divestiture (the NEPA Non-Operated Asset Divestiture) of an undivided 40 % interest in the Company's non-operated natural gas assets in northeast Pennsylvania with a carrying amount of approximately $ 522 million to Equinor USA Onshore Properties Inc.

and its affiliates (collectively, the Equinor Parties).

The carrying value was composed of approximately $ 549 million of property, plant and equipment, approximately $ 7 million of other current liabilities and approximately $ 20 million of other liabilities and credits.

In exchange, as consideration, the Company received from the Equinor Parties cash of $ 500 million, subject to customary post-closing purchase price adjustments, certain upstream assets and the remaining 16.25 % equity interest in the NEPA Gathering System.

The total fair value of consideration received, net of liabilities assumed, was approximately $ 851 million, subject to customary post-closing purchase price adjustments, and included $ 412 million of property, plant and equipment.

As a result of the NEPA Non-Operated Asset Divestiture, the Company recognized a gain of approximately $ 320 million in (gain) loss on sale/exchange of long-lived assets in the Statements of Condensed Consolidated Operations, which was calculated as the carrying value of divested assets less the fair value of consideration received, net of liabilities assumed and divestiture costs incurred of approximately $ 9 million.

Cash proceeds from the NEPA Non-Operated Asset Divestiture were used to partly fund the Company's redemption of its 6.125 % senior notes.

The fair values of the natural gas properties received as consideration for the NEPA Non-Operated Asset Divestiture were measured using discounted cash flow valuation techniques based on inputs that are not observable in the market and, as such, is a Level 3 fair value measurement.

Significant inputs include future commodity prices, projections of estimated quantities of reserves, estimated future rates of production, projected reserve recovery factors, timing and amount of future development and operating costs and a weighted average cost of capital.

The fair value of the undeveloped properties received as consideration for the NEPA Non-Operated Asset Divestiture were measured using the guideline transaction method based on inputs that are not observable in the market and, as such, is a Level 3 fair value measurement.

Significant inputs include future development plans from a market participant perspective.

The fair value of the interest in the NEPA Gathering System received as consideration for the NEPA Non-Operated Asset Divestiture was measured using the cost approach based on inputs that are not observable in the market and, as such, is a Level 3 fair value measurement.

Significant inputs include replacement cost for similar assets, relative age of the assets and potential economic or functional obsolescence.

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

In addition, subsequent to the completion of the NEPA Non-Operated Asset Divestiture, the Company and the Equinor Parties entered into a gas buy-back agreement with respect to the assets received by the Company as consideration for the NEPA Non-Operated Asset Divestiture, whereby the Equinor Parties agreed to purchase a specified amount of natural gas from the Company through the first quarter of 2028.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

Equitrans Midstream Merger

On March 10, 2024, EQT Corporation, Humpty Merger Sub Inc., an indirect wholly owned subsidiary of EQT Corporation (Merger Sub), and Humpty Merger Sub LLC, an indirect wholly owned subsidiary of EQT Corporation (LLC Sub), entered into an agreement and plan of merger (the Merger Agreement) with Equitrans Midstream.

Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Equitrans Midstream (the First Merger), with Equitrans Midstream surviving as an indirect wholly owned subsidiary of EQT Corporation (the First Step Surviving Corporation), and, as the second step in a single integrated transaction with the First Merger, the First Step Surviving Corporation will merge with and into LLC Sub (the Second Merger and, together with the First Merger, the Equitrans Midstream Merger), with LLC Sub surviving the Second Merger as an indirect wholly owned subsidiary of EQT Corporation.

On July 22, 2024, the Company completed the Equitrans Midstream Merger pursuant to the agreement and plan of merger dated March 10, 2024 (the Merger Agreement) entered into by EQT Corporation, Humpty Merger Sub Inc., an indirect wholly owned subsidiary of EQT Corporation (Merger Sub), and Humpty Merger Sub LLC, an indirect wholly owned subsidiary of EQT Corporation (LLC Sub) with Equitrans Midstream.

Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub merged with and into Equitrans Midstream (the First Merger), with Equitrans Midstream surviving as an indirect wholly owned subsidiary of EQT Corporation (the First Step Surviving Corporation), and, as the second step in a single integrated transaction with the First Merger, the First Step Surviving Corporation merged with and into LLC Sub (the Second Merger and, together with the First Merger, the Equitrans Midstream Merger), with LLC Sub surviving the Second Merger as an indirect wholly owned subsidiary of EQT Corporation.

Upon closing of the Equitrans Midstream Merger, each share of common stock, no par value, of Equitrans Midstream (Equitrans Midstream common stock) that was issued and outstanding immediately prior to the effective time of the First Merger (other than shares of Equitrans Midstream common stock owned by Equitrans Midstream or its subsidiaries or by the Company) was converted into the right to receive, without interest, 0.3504 shares of EQT Corporation common stock, with cash in lieu of fractional shares.

Upon closing of the Equitrans Midstream Merger, EQT Corporation's preexisting shareholders owned approximately 74 % of the combined company and Equitrans Midstream's common shareholders owned approximately 26 % of the combined company.

Also upon closing of the Equitrans Midstream Merger, three representatives from Equitrans Midstream joined EQT Corporation's Board of Directors.

In addition, on June 25, 2024, the Company delivered to Equitrans Midstream a written election exercising the Company's right under the Merger Agreement to cause Equitrans Midstream to purchase and redeem, prior to the completion of the Equitrans Midstream Merger, all of the issued and outstanding Series A Perpetual Convertible Preferred Shares, no par value, of Equitrans Midstream (the Equitrans Midstream Preferred Stock).

On July 22, 2024, prior to the closing of the Equitrans Midstream Merger, using borrowings under the Company's revolving credit facility, the Company paid $ 685.3 million to effect such purchase and redemption.

Immediately following the closing of the Equitrans Midstream Merger, on July 22, 2024, EQM, which became an indirect wholly-owned subsidiary of the Company upon closing of the Equitrans Midstream Merger, repaid outstanding obligations under that certain Third Amended and Restated Credit Agreement, dated October 31, 2018, by and among EQM, Wells Fargo Bank, National Association, as administrative agent, swing line lender and L/C issuer, and the other financial institutions from time to time party thereto (as amended, supplemented or otherwise modified, the EQM Facility) for principal of $ 705 million and interest and fees of $ 4.5 million using cash on hand and borrowings under the Company's revolving credit facility and thereafter terminated the EQM Credit Facility.

Commitments and Contingencies

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 loss for such matters when the Company believes that it is probable a liability has been incurred and the amount of the loss can be reasonably estimated.

In such cases, if some amount within a range of loss appears to be a better estimate than any other amount within the range, that amount is accrued;

however, when no amount within the range is a better estimate than any other amount, the minimum amount in the range is accrued.

Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances.

In the event the Company determines that (i) it is probable a liability has been incurred but the amount of the loss cannot be reasonably estimated, or (ii) it less likely than probable but is reasonably possible that a liability has been incurred, then the Company is required to disclose the matter in its Annual Report on Form 10-K with any update thereto in this Quarterly Report on Form 10-Q, as applicable, although the Company is not required to accrue such loss.

EQT CORPORATION AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements (Unaudited)

As a result of the Equitrans Midstream Merger, except as otherwise provided in the Merger Agreement, among other things, each share of common stock, no par value, of Equitrans Midstream (Equitrans Midstream common stock) that is issued and outstanding immediately prior to the effective time of the First Merger (other than shares of Equitrans Midstream common stock owned by Equitrans Midstream or its subsidiaries or by the Company) will be converted into the right to receive, without interest, 0.3504 shares of EQT Corporation common stock (with cash in lieu of fractional shares).

It is currently expected that, upon closing of the Equitrans Midstream Merger, EQT Corporation's existing shareholders will own approximately 74 % of the combined company and Equitrans Midstream's shareholders will own approximately 26 % of the combined company.

Also upon closing of the Equitrans Midstream Merger, three representatives from Equitrans Midstream will join EQT Corporation's Board of Directors.

The transaction is currently expected to close during the fourth quarter of 2024 and is subject to the satisfaction or waiver of certain closing conditions, including (i) the approval of the Merger Agreement and the Equitrans Midstream Merger by the holders of a majority of the outstanding shares of Equitrans Midstream common stock and Series A Perpetual Convertible Preferred Shares, no par value per share, of Equitrans Midstream (on an as-converted basis) voting as a single class, (ii) the approval of the issuance of the shares of EQT Corporation common stock in connection with the First Merger and an amendment to the Restated Articles of Incorporation of EQT Corporation to increase the number of shares of EQT Corporation common stock authorized thereunder, in each case by a majority of the votes cast at the special meeting of shareholders of EQT Corporation to be held in connection with the Equitrans Midstream Merger, (iii) there being no law, injunction, order or decree prohibiting consummation of the transaction and (iv) the expiration or termination of (a) all waiting periods (and any extensions thereof) applicable to the transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (b) any commitment to, or any agreement with, any governmental entity to delay the consummation of the transaction or to not consummate the transaction (such condition, the HSR Act Condition).

The obligation of EQT Corporation to consummate the First Merger is also conditioned on (but which may be waived by EQT Corporation), among other things, Mountain Valley Pipeline, LLC having received authorization from the Federal Energy Regulatory Commission to place the Mountain Valley Pipeline Facilities (as defined in the Merger Agreement) into service and such authorization being in full force and effect as of the closing date of the Equitrans Midstream Merger without any material limitations, modifications or conditions that would prevent the Mountain Valley Pipeline Facilities from commencing full service.

The Merger Agreement contains certain termination rights for both EQT Corporation and Equitrans Midstream, including the right of either party, subject to certain limitations specified therein, to terminate the Merger Agreement if the First Merger is not consummated on or prior to March 10, 2025, which date will be automatically extended until September 10, 2025 if all of the conditions to closing, other than the condition relating to the absence of law, injunction, order or decree prohibiting consummation of the Equitrans Midstream Merger or the HSR Act Condition, have been satisfied.

Upon termination of the Merger Agreement under certain circumstances specified therein, (i) Equitrans Midstream will be required to pay EQT Corporation a termination fee equal to $ 191 million or (ii) EQT Corporation will be required to pay Equitrans Midstream a termination fee equal to $ 176 million or $ 545 million, depending on the circumstances which led to the termination.

When able, the Company determines an estimate of reasonably possible losses or ranges of reasonably possible losses, whether in excess of any related accrued loss or where there is no accrued loss, 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 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 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.

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.

Following the commencement of the Securities Class Action, the parties engaged in fact and expert discovery.

In June 2024, the discovery phase of the Securities Class Action was completed.

On June 27, 2024, the parties to the Securities Class Action participated in a mediation (the Mediation), which did not result in resolution.

A trial date for the Securities Class Action has not been determined.

In the second quarter of 2024, the Company recorded an accrual for estimated loss contingencies associated with the Securities Class Action in an amount equal to the settlement offer the Company tendered at the Mediation.

Due to the inherent subjectivity of the assessments and unpredictability of outcomes of legal proceedings, the amount accrued for estimated losses associated with the Securities Class Action may not represent the ultimate loss to the Company, and the Company's exposure and ultimate losses may be higher, and possibly significantly so, than the amounts accrued or estimated.

The amount accrued for such estimated losses is based on the Company's analysis of currently available information and is subject to significant judgment and a variety of assumptions and uncertainties and may change as new information is obtained.

While the parties have completed discovery, various motions, including dispositive motions, have not yet been presented or heard, 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.

Given these uncertainties, the Company is unable at this time to reasonably estimate the range of possible additional losses above the amount accrued.

The Company disputes the claims asserted in the Securities Class Action and related litigation and believes it has meritorious defenses, but unpredictability is inherent in litigation and the Company cannot predict the outcomes with any certainty.

See Note 11 to the Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 for additional discussion of the Company's commitments and contingencies, including certain other pending legal and regulatory proceedings and other contingent matters.

As of June 30, 2024, except as disclosed herein, there have been no material changes to such matters disclose therein.

EQT CORPORATION AND SUBSIDIARIES

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

What changed 10-Q

Item 1. Financial Statements