EQT Corp

Previous wording

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto included in this report. Unless the context otherwise indicates, all references in this report to "EQT" are to EQT Corporation and all references in this report to the "Company," "we," "us," or "our" are to EQT Corporation and its consolidated subsidiaries, collectively. For certain industry specific terms used in this Quarterly Report on Form 10-Q, please see "Glossary of Commonly Used Terms, Abbreviations and Measurements" in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the notes thereto included in this report. Unless the context otherwise indicates, all references in this report to "EQT" are to EQT Corporation and all references in this report to the "Company," "we," "us," or "our" are to EQT Corporation and its consolidated subsidiaries, collectively. For certain industry specific terms used in this Quarterly Report on Form 10-Q, please see "Glossary of Commonly Used Terms, Abbreviations and Measurements" in EQT's Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the Securities Act of 1933, as amended (the Securities Act). Statements that do not relate strictly to historical or current facts are forward-looking and are usually identified by the use of words such as "anticipate," "estimate," "could," "would," "will," "may," "forecast," "approximate," "expect," "project," "intend," "plan," "believe" and other words of similar meaning, or the negative thereof. Without limiting the generality of the foregoing, forward-looking statements contained in this Quarterly Report on Form 10-Q include the matters discussed in the section "Trends and Uncertainties" and expectations of our plans, strategies, objectives and growth and anticipated financial and operational performance, including guidance regarding our strategy to develop our reserves; drilling plans and programs, including availability of capital to complete these plans and programs; total resource potential and drilling inventory duration; projected production and sales volume, including liquified natural gas (LNG) volumes and sales; natural gas prices; changes in basis and the impact of commodity prices on our business; potential future impairments of our assets; projected well costs and capital expenditures; infrastructure programs; the cost, capacity and timing of obtaining regulatory approvals; our ability to successfully implement and execute our operational, organizational, technological and environmental, social and governance (ESG) initiatives, and achieve the anticipated results of such initiatives; projected gathering and compression rates; potential divestitures, acquisitions or other strategic transactions, the timing thereof and our ability to achieve the intended operational, financial and strategic benefits from any such transactions or from any recently completed strategic transactions, including the Equitrans Midstream Merger (defined and discussed in Note 12 to the Condensed Consolidated Financial Statements); the amount and timing of any repayments, redemptions or repurchases of our common stock, outstanding debt securities or other debt instruments; our ability to retire our debt and the timing of such retirements, if any; the projected amount and timing of dividends; projected cash flows and free cash flow, and the timing thereof; liquidity and financing requirements, including funding sources and availability; our ability to maintain or improve our credit ratings, leverage levels and financial profile; our hedging strategy and projected margin posting obligations; the effects of litigation, government regulation and tax position; and the expected impact of changes to tax laws.

Current wording

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and Section 27A of the Securities Act of 1933, as amended (the Securities Act). Statements that do not relate strictly to historical or current facts are forward-looking and are usually identified by the use of words such as "anticipate," "estimate," "could," "would," "will," "may," "forecast," "approximate," "expect," "project," "intend," "plan," "believe" and other words of similar meaning, or the negative thereof. Without limiting the generality of the foregoing, forward-looking statements contained in this Quarterly Report on Form 10-Q include the matters discussed in the section "Trends and Uncertainties" and expectations of our plans, strategies, objectives and growth and anticipated financial and operational performance, including guidance regarding our strategy to develop our reserves; drilling plans and programs, including availability of capital to complete these plans and programs; total resource potential and drilling inventory duration; projected production and sales volume, including liquified natural gas (LNG) volumes and sales; natural gas prices; changes in basis and the impact of commodity prices on our business; potential future impairments of our assets; projected well costs and capital expenditures; infrastructure projects; the cost, capacity and timing of obtaining regulatory approvals; our ability to successfully implement and execute our operational, organizational, technological and environmental, social and governance (ESG) initiatives, and achieve the anticipated results of such initiatives; projected gathering and compression rates; potential acquisitions or other strategic transactions, the timing thereof and our ability to achieve the intended operational, financial and strategic benefits from any such transactions or from any recently completed strategic transactions, including the pending Olympus Energy Acquisition; the amount and timing of any repayments, redemptions or repurchases of our common stock, outstanding debt securities or other debt instruments; our ability to retire our debt and the timing of such retirements, if any; the projected amount and timing of dividends; projected cash flows and free cash flow, and the timing thereof; liquidity and financing requirements, including funding sources and availability; our ability to maintain or improve our credit ratings, leverage levels and financial profile; our hedging strategy and projected margin posting obligations; the effects of litigation, government regulation and tax position; and the expected impact of changes to tax laws.

Previous wording

The forward-looking statements included in this Quarterly Report on Form 10-Q involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. We have based these forward-looking statements on current expectations and assumptions about future events, taking into account all information currently known by us. While we consider these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond our control. These risks and uncertainties include, but are not limited to, volatility of commodity prices; the costs and results of drilling and operations; uncertainties about estimates of reserves, identification of drilling locations and the ability to add proved reserves in the future; the assumptions underlying production forecasts; the quality of technical data; our ability to appropriately allocate capital and other resources among our strategic opportunities; access to and cost of capital; our hedging and other financial contracts; inherent hazards and risks normally incidental to drilling for, producing, transporting and storing natural gas, natural gas liquids (NGLs) and oil; operational risks and hazards incidental to the gathering, transmission and storage of natural gas as well as unforeseen interruptions; cyber security risks and acts of sabotage; availability and cost of drilling rigs, completion services, equipment, supplies, personnel, oilfield services and sand and water required to execute our exploration and development plans, including as a result of inflationary pressures; risks associated with operating primarily in the Appalachian Basin; the ability to obtain environmental and other permits and the timing thereof; construction, business, economic, competitive, regulatory, judicial, environmental, political and legal uncertainties related to the development and construction by us or our joint ventures of pipeline and storage facilities and transmission assets and the optimization of such assets; our ability to renew or replace expiring gathering, transmission or storage contracts at favorable rates on a long-term basis or at all; risks relating to our joint venture arrangements; government regulation or action, including regulations pertaining to methane and other greenhouse gas emissions; negative public perception of the fossil fuels industry; increased consumer demand for alternatives to natural gas; environmental and weather risks, including the possible impacts of climate change; risks related to our ability to integrate the operations of Equitrans Midstream Corporation

Current wording

The forward-looking statements included in this Quarterly Report on Form 10-Q involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. We have based these forward-looking statements on current expectations and assumptions about future events, taking into account all information currently known by us. While we consider these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond our control. These risks and uncertainties include, but are not limited to, volatility of commodity prices; the costs and results of drilling and operations; uncertainties about estimates of reserves, identification of drilling locations and the ability to add proved reserves in the future; the assumptions underlying production forecasts; the quality of technical data; our ability to appropriately allocate capital and other resources among our strategic opportunities; access to and cost of capital; our hedging and other financial contracts; inherent hazards and risks normally incidental to drilling for, producing, transporting and storing natural gas, natural gas liquids (NGLs) and oil; operational risks and hazards incidental to the gathering, transmission and storage of natural gas as well as unforeseen interruptions; cyber security risks and acts of sabotage; availability and cost of drilling rigs, completion services, equipment, supplies, personnel, oilfield services and sand and water required to execute our exploration and development plans, including as a result of inflationary pressures or tariffs; risks associated with operating primarily in the Appalachian Basin; the ability to obtain environmental and other permits and the timing thereof; construction, business, economic, competitive, regulatory, judicial, environmental, political and legal uncertainties related to the development and construction by us or our joint ventures of pipeline and storage facilities and transmission assets and the optimization of such assets; our ability to renew or replace expiring gathering, transmission or storage contracts at favorable rates on a long-term basis or at all; risks relating to our joint venture arrangements; government regulation or action, including regulations pertaining to methane and other greenhouse gas emissions; negative public perception of the fossil fuels industry; increased consumer demand for alternatives to natural gas; environmental and weather risks, including the possible impacts of climate change; and disruptions to our business due to recently completed divestitures, acquisitions and other significant strategic transactions, including the pending Olympus Energy Acquisition. These and other risks and uncertainties are des…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Results of operations for the three and nine months ended September 30, 2024 include the results of our operation of assets acquired in the Equitrans Midstream Merger, which closed on July 22, 2024. See Note 12 to the Condensed Consolidated Financial Statements.

Current wording

Results of operations for the three months ended March 31, 2025 include the results of our operation of assets acquired in the Equitrans Midstream Merger (defined in Note 11 to the Condensed Consolidated Financial Statements), which was completed on July 22, 2024. See Note 11 to the Condensed Consolidated Financial Statements.

Previous wording

Continued low natural gas prices may result in further adjustments to our 2024 planned development schedule or the development schedule of non-operated wells in which we have a working interest. Further, we cannot control or otherwise influence the development schedule of non-operated wells in which we have a working interest. Certain operators of wells in which we have a non-operating working interest also curtailed production in 2024. For the three months ended September 30, 2024, we estimate that our total expected sales volume was negatively impacted by approximately 35 Bcfe of curtailments, including our Strategic Curtailment of 25 Bcfe and curtailments by certain operators of wells in which we have a non-operating working interest. For the nine months ended September 30, 2024, we estimate that our total expected sales volume was negatively impacted by approximately 125 to 130 Bcfe of curtailments, including our Strategic Curtailment of 107 Bcfe and curtailments by certain operators of wells in which we have a non-operating working interest. Adjustments to our 2024 planned development schedule or the development schedule of non-operated wells in which we have a working interest, including due to declines in natural gas prices, the pace of well completions, access to sand and water to conduct drilling operations, access to sufficient pipeline takeaway capacity, unscheduled downtime at processing facilities or otherwise, could impact our future sales volume, operating revenues and expenses, per unit metrics and capital expenditures.

Current wording

Low natural gas prices or volatility in the natural gas market may result in adjustments to our 2025 planned development schedule or the development schedule of non-operated wells in which we have a working interest. Further, we cannot control or otherwise influence the development schedule of non-operated wells in which we have a working interest. Adjustments to our 2025 planned development schedule or the development schedule of non-operated wells in which we have a working interest, including due to declines in natural gas prices, the pace of well completions, access to sand and water to conduct drilling operations, access to sufficient pipeline takeaway capacity, unscheduled downtime at processing facilities or otherwise, could impact our future sales volume, operating revenues and expenses, per unit metrics and capital expenditures.

Previous wording

We expect commodity prices to be volatile through 2024 due to macroeconomic uncertainty and geopolitical tensions, including developments pertaining to Russia's invasion of Ukraine and conflicts in the Middle East. Our revenue, profitability, 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.

Current wording

Lastly, we expect commodity prices to be volatile through 2025 due to macroeconomic uncertainty, changes to the regulatory environment and geopolitical tensions, including developments pertaining to Russia's invasion of Ukraine, conflicts in the Middle East and potential further imposition of domestic and foreign tariffs. Our revenue, profitability, 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.

Previous wording

Net loss attributable to EQT Corporation for the nine months ended September 30, 2024 was $187.8 million, $0.39 per diluted share, compared to net income attributable to EQT Corporation of $1,233.2 million, $3.08 per diluted share, for the same period in 2023. The change was attributable primarily to lower gain on derivatives, decreased sales of natural gas, NGLs and oil, increased depreciation, depletion and amortization expense, increased other operating expenses, increased net interest expense and increased production expense, partly offset by recognition of an income tax benefit in 2024 compared to an income tax expense in 2023, the gain on the NEPA Non-Operated Asset Divestiture and increased pipeline revenues, which increased as a result of our operation of assets acquired in the Equitrans Midstream Merger.

Current wording

Net income attributable to EQT Corporation for the three months ended March 31, 2025 was $242.1 million, $0.40 per diluted share, compared to $103.5 million, $0.23 per diluted share, for the same period in 2024. The increase was attributable primarily to increased sales of natural gas, NGLs and oil, increased pipeline revenues, decreased gathering expense and increased net income attributable to noncontrolling interests in the Midstream Joint Venture (defined in Note 9 to the Condensed Consolidated Financial Statements), partly offset by a loss on derivatives recognized in 2025, increased depreciation, depletion and amortization expense, increased transmission expense and increased net interest expense.

Previous wording

See "Average Realized Price Reconciliation" for a discussion and calculation of our average realized price, which is based on Production adjusted operating revenues, a non-GAAP supplemental financial measure that has been reconciled from total operating revenues in "Non-GAAP Financial Measures Reconciliation."

Current wording

See "Average Realized Price Reconciliation" for a discussion and calculation of our average realized price, which is based on our Production segment's adjusted operating revenues (Production adjusted operating revenues), a non-GAAP supplemental financial measure that has been reconciled from total Production operating revenues in "Non-GAAP Financial Measures Reconciliation." See "Business Segment Results of Operations" for a discussion of segment operating revenues and expenses and "Other Income Statement Items" for a discussion of other income statement items. See "Investing Activities" under "Capital Resources and Liquidity" for a discussion of capital expenditures, including by business segment.

Previous wording

The following table presents detailed natural gas and liquids operational information to assist in the understanding of our consolidated operations, including the calculation of our average realized price ($/Mcfe), which is based on Production adjusted operating revenues, a non-GAAP supplemental financial measure. Production adjusted operating revenues is presented because it is an important measure we use to evaluate period-to-period comparisons of earnings trends. Production adjusted operating revenues should not be considered as an alternative to total operating revenues. See "Non-GAAP Financial Measures Reconciliation" for a reconciliation of Production adjusted operating revenues from total operating revenues, the most directly comparable financial measure calculated in accordance with United States generally accepted accounting principles (GAAP).

Current wording

The following table presents detailed natural gas and liquids operational information to assist in the understanding of our consolidated operations, including the calculation of our average realized price ($/Mcfe), which is based on Production adjusted operating revenues, a non-GAAP supplemental financial measure. Production adjusted operating revenues is presented because it is an important measure we use to evaluate period-to-period comparisons of earnings trends. Production adjusted operating revenues should not be considered as an alternative to total Production operating revenues. See "Non-GAAP Financial Measures Reconciliation" for a reconciliation of Production adjusted operating revenues from total Production operating revenues, the most directly comparable financial measure calculated in accordance with United States generally accepted accounting principles (GAAP).

Previous wording

The table below reconciles Production adjusted operating revenues, a non-GAAP supplemental financial measure, from total operating revenues, the most comparable financial measure calculated in accordance with GAAP. See Note 2 to the Condensed Consolidated Financial Statements for a reconciliation of total operating revenues to EQT Corporation operating revenues as reported in the Statements of Condensed Consolidated Operations.

Current wording

The table below reconciles Production adjusted operating revenues, a non-GAAP supplemental financial measure, from total Production operating revenues, the most comparable financial measure calculated in accordance with GAAP. See Note 2 to the Consolidated Financial Statements for a reconciliation of total Production operating revenues to EQT Corporation operating revenues as reported in the Statements of Condensed Consolidated Operations.

Previous wording

Production adjusted operating revenues (also referred to in this report as total natural gas and liquids sales, including cash settled derivatives) is presented because it is an important measure we use to evaluate period-to-period comparisons of earnings trends. Production adjusted operating revenues is defined as total operating revenues, less the revenue impact of changes in the fair value of derivative instruments prior to settlement and pipeline, net marketing services and other revenues. We believe that Production adjusted operating revenues provides useful information to investors regarding our financial condition and results of operations because it helps facilitate comparisons of operating performance and earnings trends across periods. Production adjusted operating revenues reflects only the impact of settled derivative contracts; thus, the measure excludes the often-volatile revenue impact of changes in the fair value of derivative instruments prior to settlement. The measure also excludes pipeline, net marketing services and other revenues, which consists of costs of, and recoveries on, pipeline capacity releases and other revenues, because it is unrelated to the revenue from our natural gas and liquids production.

Current wording

Production adjusted operating revenues (also referred to in this report as total natural gas and liquids sales, including cash settled derivatives) is presented because it is an important measure we use to evaluate period-to-period comparisons of earnings trends. Production adjusted operating revenues is defined as total Production operating revenues, less the revenue impact of changes in the fair value of derivative instruments prior to settlement and Production net marketing services and other revenues. We believe that Production adjusted operating revenues provides useful information to investors regarding our financial condition and results of operations because it helps facilitate comparisons of operating performance and earnings trends across periods. Production adjusted operating revenues reflects only the impact of settled derivative contracts; thus, the measure excludes the often-volatile revenue impact of changes in the fair value of derivative instruments prior to settlement. The measure also excludes Production net marketing services and other revenues, which consists of costs of, and recoveries on, pipeline capacity releases and other revenues.

Previous wording

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

Current wording

(a)For the three months ended March 31, 2025, net cash settlements paid on derivatives was composed of net cash settlements paid on NYMEX natural gas hedge positions of approximately $43 million and net cash settlements paid on basis and liquids hedge positions of approximately $49 million. For the three months ended March 31, 2024, net cash settlements received on derivatives was composed of net cash settlements received on NYMEX natural gas hedge positions of approximately $464 million and net cash settlements paid on basis and liquids hedge positions of approximately $13 million. Net cash settlements (paid) received on derivatives are included in average realized price but may not be included in operating revenues.

Previous wording

Operating segments are revenue-producing components of an entity for which separate financial information is produced internally and reviewed by the chief operating decision maker to allocate resources and measure financial performance.

Current wording

Operating segments are revenue-producing components of an entity for which separate financial information is produced internally and reviewed by the chief operating decision maker to measure financial performance and allocate resources.

Previous wording

Prior to the completion of the Equitrans Midstream Merger, we reported our results of operations as a single consolidated segment. As a result of the completion of the Equitrans Midstream Merger, we adjusted our internal reporting structure and our chief operating decision maker changed the manner in which he allocates resources and measures financial performance to incorporate the gathering and transmission assets we acquired in the Equitrans Midstream Merger. Hence, our operations expanded to comprise three discrete segments reflective of our three lines of business of Production, Gathering and Transmission. Accordingly, the manner in which we report our operations has been changed retrospectively, with certain prior period amounts recast between Production and Gathering.

Current wording

Prior to the completion of the Equitrans Midstream Merger, we reported our results of operations as a single consolidated segment. Thereafter, and as a result thereof, we adjusted our internal reporting structure and our chief operating decision maker changed the manner in which he measures financial performance and allocates resources to incorporate the gathering and transmission assets we acquired in the Equitrans Midstream Merger. Hence, our operations expanded to comprise three discrete segments reflective of our three lines of business of Production, Gathering and Transmission. Accordingly, the manner in which we report our operations has been changed retrospectively, with certain prior period amounts recast between our Production segment and Gathering segment.

Previous wording

Sales of natural gas, NGLs and oil. Sales of natural gas, NGLs and oil increased for the three months ended September 30, 2024 compared to the same period in 2023 due to increased sales volume and higher average realized price.

Current wording

Sales of natural gas, NGLs and oil. Sales of natural gas, NGLs and oil increased for the three months ended March 31, 2025 compared to the same period in 2024 by approximately $941 million composed of approximately $851 million attributable to higher average sales price and approximately $90 million attributable to increased sales volumes. The average sales price increased for the three months ended March 31, 2025 compared to the same period for 2024 due primarily to a higher NYMEX price and favorable basis differentials. Sales volume increased for the three months ended March 31, 2025 compared to the same period for 2024 primarily as a result of sales volume increases from wells turned-in-line since the first quarter of 2024 and from production curtailments in 2024 of 28 Bcfe, partly offset by sales volume decreases of 41 Bcfe, net, from assets exchanged in the NEPA Non-Operated Asset Divestitures. The increase in sales volume had a favorable impact on per unit costs for the three months ended March 31, 2025 compared to the same period for 2024.

Previous wording

Gain on derivatives. For the nine months ended September 30, 2024, we recognized a gain on derivatives of $240.3 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 nine months ended September 30, 2023, we recognized a gain on derivatives of $1,167.1 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 our Production segment's derivative liability related to the Henry Hub Cash Bonus (defined in Note 2 to the Condensed Consolidated Financial Statements).

Current wording

(Loss) gain on derivatives. For the three months ended March 31, 2025, we recognized a loss on derivatives of $678.9 million related primarily to decreases in the fair market value of our NYMEX swaps and options of approximately $783 million due to increases in NYMEX forward prices, partly offset by increases in the fair market value of our basis swaps of approximately $104 million. For the three months ended March 31, 2024, we recognized a gain on derivatives of approximately $106.5 million related primarily to increases in the fair market value of our NYMEX swaps and options of approximately $334 million due to decreases in NYMEX forward prices, partly offset by decreases in the fair market value of our basis swaps of approximately $228 million.

Previous wording

Gathering. Gathering expense decreased on an absolute and per Mcfe basis for the three months ended September 30, 2024 compared to the same period in 2023 due primarily to our Gathering segment's ownership of the gathering assets acquired in the Equitrans Midstream Merger, our Transmission segment's ownership of the transmission and storage assets acquired in the Equitrans Midstream Merger and our Gathering segment's ownership of the additional interest in the NEPA Gathering System acquired in the NEPA Gathering System Acquisition and as consideration for the NEPA Non-Operated Asset Divestiture.

Current wording

Gathering. Gathering expense decreased on an absolute and per Mcfe basis for the three months ended March 31, 2025 compared to the same period in 2024 due primarily to our Gathering segment's ownership of the gathering assets acquired in the Equitrans Midstream Merger, our Transmission segment's ownership of the transmission and storage assets acquired in the Equitrans Midstream Merger and our Gathering segment's ownership of additional interest in the NEPA Gathering System acquired in the second quarter of 2024. In addition, gathering expense decreased due to our divestiture of assets in the NEPA Non-Operated Asset Divestitures, which had incurred $18 million of gathering expense in 2024.

Previous wording

Transmission. Transmission expense increased on an absolute and per Mcfe basis for the three months ended September 30, 2024 compared to the same period in 2023 due primarily to additional contracted capacity, including on the MVP, which commenced long-term firm capacity obligations on July 1, 2024.

Current wording

Transmission. Transmission expense increased on an absolute and per Mcfe basis for the three months ended March 31, 2025 compared to the same period in 2024 due primarily to capacity charges on the MVP of approximately $88 million and additional contracted capacity on the Transco pipeline of approximately $14 million, partly offset by capacity released in connection with the NEPA Non-Operated Asset Divestitures of approximately $23 million.

Previous wording

Transportation and processing to affiliate. Affiliate transportation and processing expense increased on an absolute and per Mcfe basis for the three months ended September 30, 2024 compared to the same period in 2023 due primarily to our Gathering segment's ownership of the gathering assets acquired in the Equitrans Midstream Merger, our Transmission segment's ownership of the transmission and storage assets acquired in the Equitrans Midstream Merger and our Gathering segment's ownership of the additional interest in the NEPA Gathering System acquired in the NEPA Gathering System Acquisition and as consideration for the NEPA Non-Operated Asset Divestiture. In addition, affiliate transportation and processing expense increased on a per Mcfe basis for the three months ended September 30, 2024 compared to the same period in 2023 due to our Gathering segment's ownership of the gathering assets acquired in the Tug Hill and XcL Midstream Acquisition during the third quarter of 2023.

Current wording

Transportation and processing to affiliate. Affiliate transportation and processing expense increased on an absolute and per Mcfe basis for the three months ended March 31, 2025 compared to the same period in 2024 due primarily to our Gathering segment's ownership of the gathering assets acquired in the Equitrans Midstream Merger, our Transmission segment's ownership of the transmission and storage assets acquired in the Equitrans Midstream Merger and our Gathering segment's ownership of additional interest in the NEPA Gathering System acquired in the second quarter of 2024.

Previous wording

Production taxes. Production taxes increased on an absolute and per Mcfe basis for the three months ended September 30, 2024 compared to the same period in 2023 due primarily to increased West Virginia property tax expense from the assets acquired in the Tug Hill and XcL Midstream Acquisition as well as increased severance tax expense from increased sales volume.

Current wording

Production taxes. Production tax expense decreased on an absolute and per Mcfe basis for the three months ended March 31, 2025 compared to the same period in 2024 due to decreased property tax expense of approximately $14 million from lower property tax value using prior year pricing, partly offset by increased severance tax expense of approximately $12 million from increased sales volume and higher sales prices.

Previous wording

(b)For agreements structured with MVCs, includes volumes up to the contractual MVC; volumes in excess of the contractual MVC are reported under volumetric-based services.

Current wording

(a)For agreements structured with MVCs, firm capacity includes volumes up to the contractual MVC and volumetric-based services includes volumes in excess of the contractual MVC.

Previous wording

Gathering revenues and expenses increased for the three months ended September 30, 2024 compared to the same period in 2023 primarily from the gathering assets acquired in the Equitrans Midstream Merger during the third quarter of 2024 and in the Tug Hill and XcL Midstream Acquisition during the third quarter of 2023. Prior to the close of the Equitrans Midstream Merger, we did not own gathering assets that provided firm gathering services.

Current wording

Gathering revenues and expenses increased for the three months ended March 31, 2025 compared to the same period in 2024 primarily from the gathering assets acquired in the Equitrans Midstream Merger. In addition, volumetric-based fee revenues from assets owned prior to the Equitrans Midstream Merger increased by approximately $22 million due to increased volumes gathered. Prior to the completion of the Equitrans Midstream Merger, we did not own gathering assets that provided firm gathering services.

Previous wording

(Income) loss from investments. Income from investments increased for both the three and nine months ended September 30, 2024 compared to the same period in 2023 due primarily to equity earnings from our investment in the MVP Joint Venture, partly offset by a decrease in the fair value of our investment in the Investment Fund (defined in Note 5 to the Condensed Consolidated Financial Statements).

Current wording

Income from investments. Income from investments increased for the three months ended March 31, 2025 compared to the same period in 2024 due primarily to equity earnings from our investment in the MVP Joint Venture of $24.4 million.

Previous wording

Interest expense, net. Interest expense, net increased for the three months ended September 30, 2024 compared to the same periods in 2023 due primarily to interest expense on EQM Midstream Partners, LP's (EQM) senior notes (which we consolidate as a result of the Equitrans Midstream Merger), increased interest expense on our borrowings under EQT's revolving credit facility, interest expense on EQT's 5.750% senior notes issued in January 2024 and lower interest income earned on cash on hand, partly offset by decreased interest expense from our repayment and repurchase of certain of our senior notes, decreased interest expense on the Term Loan Facility due to our partial prepayment in January 2024 as well as higher capitalized interest from the assets acquired in the Tug Hill and XcL Midstream Acquisition.

Current wording

Interest expense, net. Net interest expense increased for the three months ended March 31, 2025 compared to the same period in 2024 due primarily to interest expense on EQM Midstream Partners, LP's (EQM) senior notes, interest expense on Eureka Midstream, LLC's (Eureka) borrowings under its revolving credit facility, increased interest expense on our borrowings under EQT's revolving credit facility and higher capitalized interest from the assets acquired in the Equitrans Midstream Merger, partly offset by decreased interest expense from our repayment and repurchase of certain of EQT's senior notes and prepayment of the Term Loan Facility.

Previous wording

Net income (loss) attributable to noncontrolling interests. During the three and nine months ended September 30, 2024, we recognized net income attributable to noncontrolling interests of Eureka Midstream Holdings, LLC (Eureka Midstream Holdings), a consolidated joint venture in which we acquired an equity interest as a result of the Equitrans Midstream Merger. See Note 1 to the Condensed Consolidated Financial Statements.

Current wording

Net income (loss) attributable to noncontrolling interests. During the three months ended March 31, 2025, we recognized $67.1 million of net income attributable to noncontrolling interests of the Midstream Joint Venture and $6.4 million of net income attributable to noncontrolling interests of Eureka Midstream Holdings, LLC (Eureka Midstream Holdings).

Previous wording

Although we cannot provide any assurance, we believe cash flows from operating activities and availability under EQT's revolving credit facility should be sufficient to meet our cash requirements inclusive of, but not limited to, normal operating needs, debt service obligations, planned capital expenditures and commitments for at least the next twelve months and, based on current expectations, for the long term.

Current wording

Although we cannot provide any assurance, we believe cash flows from operating activities and availability under EQT's revolving credit facility should be sufficient to meet our cash requirements, including, but not limited to, normal operating needs, debt service obligations, planned capital expenditures and commitments for at least the next twelve months and, based on current expectations, for the long term.

Previous wording

Planned Capital Expenditures and Sales Volume. Following the completion of the Equitrans Midstream Merger, we revised our estimated total capital expenditures for the fourth quarter of 2024 to $630 million to $730 million. We expect to fund our capital expenditures with cash generated from operations and, if required, borrowings under EQT's revolving credit facility. 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 2024 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; the receipt and timing of required regulatory permits and approvals; and drilling, completion and acquisition costs. In addition, our gathering and transmission businesses are capital intensive, requiring significant investment to develop new facilities and maintain and upgrade existing operations.

Current wording

Planned Capital Expenditures and Sales Volume. In the second quarter of 2025, we expect to spend approximately $600 million to $700 million on total capital expenditures. We expect to fund our capital expenditures with cash generated from operations and, if required, borrowings under EQT's revolving credit facility. 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 2025 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; the receipt and timing of required regulatory permits and approvals; and drilling, completion and acquisition costs. In addition, our gathering and transmission businesses are capital intensive, requiring significant investment to develop new facilities and maintain and upgrade existing operations. In the second quarter of 2025, we expect our sales volume to be 520 Bcfe to 570 Bcfe.

Previous wording

Material Cash Requirements. We have contractual commitments under our debt agreements, including interest payments and principal repayments. As a result of the Equitrans Midstream Merger, EQM became an indirect wholly-owned subsidiary of EQT. See Note 7 to the Condensed Consolidated Financial Statements for further discussion of EQM's senior notes.

Current wording

Material Cash Requirements. We have contractual commitments under our debt agreements, including interest payments and principal repayments. See Note 7 to the Condensed Consolidated Financial Statements for a summary of such contractual commitments, including maturity dates. In addition, see "Financing Activities" below for a discussion of the Midstream Joint Venture's requirement to make distributions of available cash flow to the Midstream Joint Venture's Class B Unitholder.

Previous wording

Operating Activities. Net cash provided by operating activities was $2,071 million for the nine months ended September 30, 2024 compared to $2,554 million for the same period in 2023. The decrease was due primarily to higher cash operating expenses (including increased transaction costs related to the Equitrans Midstream Merger), unfavorable timing of working capital payments, lower cash operating revenues and higher net interest expense, partly offset by higher net cash settlements received on derivatives and lower net premiums paid on derivatives.

Current wording

Operating Activities. Net cash provided by operating activities was $1,741 million and $1,156 million for the three months ended March 31, 2025 and 2024, respectively. The increase was due primarily to higher cash operating revenues, lower cash operating expenses and distributions from our equity method investments in the MVP Joint Venture of approximately $65.8 million, partly offset by net cash settlements paid on derivatives in 2025 compared to net cash settlements received in 2024, as well as changes in working capital driven by changes in the market price of natural gas and timing of payments.

Previous wording

Our cash flows from operating activities are affected by movements in the market price for commodities. We are unable to predict such movements outside of the current market view as reflected in forward strip pricing. For a discussion of potential commodity market risks, refer to "Risk Factors – Natural gas, NGLs and oil price volatility, or a prolonged period of low natural gas, NGLs and oil prices, may have an adverse effect on our revenue, profitability, future rate of growth, liquidity and financial position" in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

Our cash flows from operating activities, including changes in working capital, are affected by movements in the market price for commodities. We are unable to predict such movements outside of the current market view as reflected in forward strip pricing. For a discussion of potential commodity market risks, refer to Part I, Item 1A., "Risk Factors – Natural gas, NGLs and oil price volatility, or a prolonged period of low natural gas, NGLs and oil prices, may have an adverse effect on our revenue, profitability, future rate of growth, liquidity and financial position" in EQT's Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

Investing Activities. Net cash used in investing activities was $2,162 million for the nine months ended September 30, 2024 compared to $3,774 million for the same period in 2023. The decrease was attributable primarily to lower cash paid for the Equitrans Midstream Merger and the NEPA Gathering System Acquisition in 2024 compared to cash paid for the Tug Hill and XcL Midstream Acquisition in 2023 as well as the proceeds received from the NEPA Non-Operated Asset Divestiture, partly offset by increased capital expenditures.

Current wording

Investing Activities. Net cash used in investing activities was $534 million and $567 million for the three months ended March 31, 2025 and 2024, respectively. The decrease was attributable primarily to decreased capital expenditures.

Previous wording

(a)Capital expenditures for reserve development included capital expenditures for water infrastructure of $28.9 million and $7.7 million for the three months ended September 30, 2024 and 2023, respectively, and $58.7 million and $26.4 million for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

(a)Capital expenditures for reserve development included capital expenditures for water infrastructure of $12.2 million and $15.2 million for the three months ended March 31, 2025 and 2024, respectively.

Previous wording

(d)Represents the net impact of non-cash capital expenditures, including the effect of timing of receivables from working interest partners, accrued capital expenditures, transfers to or from inventory as assets are completed or assigned to a project and capitalized share-based compensation costs. The impact of accrued capital expenditures includes the current period estimate, net of the reversal of the prior period accrual.

Current wording

(b)Represents the net impact of non-cash capital expenditures, including the effect of timing of receivables from working interest partners, accrued capital expenditures, transfers to or from inventory as assets are completed or assigned to a project and capitalized share-based compensation costs. The impact of accrued capital expenditures includes the current period estimate, net of the reversal of the prior period accrual.

Previous wording

Financing Activities. Net cash provided by financing activities was $100 million for the nine months ended September 30, 2024 compared to net cash used in financing activities of $174 million for the same period in 2023. For the nine months ended September 30, 2024, the primary sources of financing cash flows were our net borrowings under EQT's revolving credit facility, proceeds from the issuance of EQT's 5.750% senior notes and proceeds from the net settlement of the Capped Call Transactions (defined in Note 7 to the Condensed Consolidated Financial Statements), and the primary uses of financing cash flows were our repayment and retirement of debt, repayment of EQM's revolving credit facility and payment of dividends. For the nine months ended September 30, 2023, the primary source of financing cash flows was proceeds from the Term Loan Facility borrowings, and the primary uses of financing cash flows were our repayment and retirement of debt, repurchase and retirement of EQT common stock and payment of dividends.

Current wording

Financing Activities. Net cash used in financing activities was $1,127 million and $21 million for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025, the primary uses of financing cash flows were our repayment and retirement of debt, repayment of revolving credit facility borrowings and payment of dividends. For the three months ended March 31, 2024, the primary uses of financing cash flows were our prepayment of a portion of the Term Loan Facility and payment of dividends, and the primary sources of financing cash flows were proceeds from the issuance of EQT's 5.750% senior notes and proceeds from the net settlement of the Capped Call Transactions (defined in Note 7 to the Consolidated Financial Statements).

Previous wording

During the second quarter of 2024, we divested a portion of our non-operated assets in Northeast Pennsylvania (the NEPA Non-Operated Asset Divestiture), as discussed in Note 11 to the Condensed Consolidated Financial Statements. On October 29, 2024, we entered into an agreement to divest the remaining interest in our non-operated assets in Northeast Pennsylvania in exchange for $1.25 billion of cash (the Remaining NEPA Non-Operated Assets Divestiture). We intend to use the proceeds from the Remaining NEPA Non-Operated Assets Divestiture for repayment of our debt. The Remaining NEPA Non-Operated Assets Divestiture is subject to customary closing adjustments, required regulatory approvals and clearances.

Current wording

See Note 7 to the Condensed Consolidated Financial Statements for further discussion of our debt.

Previous wording

Changes in credit ratings may affect our access to the capital markets, the cost of short-term debt through interest rates and fees under EQT's and Eureka's revolving credit facilities, the interest rate on the Term Loan Facility, the interest rate on EQT's senior notes with adjustable rates, the rates available on new long-term debt, our pool of investors and funding sources, the borrowing costs and margin deposit requirements on our over the counter (OTC) derivative instruments and credit assurance requirements, including collateral, in support of our midstream service contracts, joint venture arrangements or construction contracts. 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.

Current wording

Changes in credit ratings may affect our access to the capital markets, the cost of short-term debt through interest rates and fees under our revolving credit facilities, the interest rate on our senior notes with adjustable rates, the rates available on new debt, our pool of investors and funding sources, the borrowing costs and margin deposit requirements on our OTC derivative instruments and credit assurance requirements, including collateral, in support of our midstream service contracts, joint venture arrangements or construction contracts. Margin deposits on our OTC derivative instruments are also subject to factors other than credit rating, such as natural gas prices and credit thresholds set forth in the agreements between us and our hedging counterparties.

Previous wording

Our debt agreements and other financial obligations contain various provisions that, if not complied with, could result in default or event of default under EQT's revolving credit facility, Eureka's revolving credit facility and the Term Loan Facility, mandatory partial or full repayment of amounts outstanding, reduced loan capacity or other similar actions. The most significant covenants and events of default under our debt agreements relate to maintenance of a debt-to-total capitalization ratio, limitations on transactions with affiliates, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of other financial obligations and change of control provisions. EQT's revolving credit facility and the Term Loan Facility contain financial covenants that require us to have a total debt to total capitalization ratio no greater than 65%. As of September 30, 2024, we were in compliance with all EQT, Eureka and EQM debt provisions and covenants under our debt agreements.

Current wording

Our debt agreements and other financial obligations contain various provisions that, if not complied with, could result in default or event of default under EQT's revolving credit facility and Eureka's revolving credit facility, mandatory partial or full repayment of amounts outstanding, reduced loan capacity or other similar actions. The most significant covenants and events of default under our debt agreements relate to maintenance of a debt-to-total capitalization ratio, limitations on transactions with affiliates, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of other financial obligations and change of control provisions. EQT's revolving credit facility contains financial covenants that require us to have a total debt to total capitalization ratio no greater than 65%. As of March 31, 2025, we were in compliance with all EQT, Eureka and EQM debt provisions and covenants under our debt agreements.

Previous wording

See Note 7 to the Condensed Consolidated Financial Statements for a discussion of borrowings under EQT's revolving credit facility, Eureka's revolving credit facility and the Term Loan Facility.

Current wording

See Note 7 to the Condensed Consolidated Financial Statements for a discussion of borrowings under EQT's revolving credit facility and Eureka's revolving credit facility.

Previous wording

See "Quantitative and Qualitative Disclosures About Market Risk" and Note 4 to the Condensed Consolidated Financial Statements for further discussion of our hedging program.

Current wording

See Part I, Item 3., "Quantitative and Qualitative Disclosures About Market Risk" and Note 4 to the Condensed Consolidated Financial Statements for further discussion of our hedging program.

Previous wording

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against us. While the amounts claimed may be substantial, we are unable to predict with certainty the ultimate outcome of such claims and proceedings. We evaluate our legal proceedings, including litigation and regulatory and governmental investigations and inquiries, on a regular basis and accrue a liability for such matters when we believe that a loss is probable and the amount of the loss can be reasonably estimated. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances. In the event we determine that (i) a loss is probable but the amount of the loss cannot be reasonably estimated, or (ii) a loss is less likely than probable but is reasonably possible, then we are required to disclose the matter in our Annual Report on Form 10-K with any update thereto in this Quarterly Report on Form 10-Q, as applicable, although we are not required to accrue such loss.

Current wording

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against us. While the amounts claimed may be substantial, we are unable to predict with certainty the ultimate outcome of such claims and proceedings. We evaluate our legal proceedings, including litigation and regulatory and governmental investigations and inquiries, on a regular basis and accrue a liability for such matters when we believe that a loss is probable and the amount of the loss can be reasonably estimated. Any such accruals are adjusted thereafter as appropriate to reflect changed circumstances. In the event we determine that (i) a loss is probable but the amount of the loss cannot be reasonably estimated, or (ii) a loss is less likely than probable but is reasonably possible, then we are required to disclose the matter in EQT's Annual Report on Form 10-K with any update thereto in this Quarterly Report on Form 10-Q, as applicable, although we are not required to accrue such loss.