Financial Statements

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States generally accepted accounting principles (GAAP) for interim financial information and with the requirements of Form 10-Q and Article 10 of Regulation S-X. 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 September 30, 2022 and December 31, 2021, the results of its operations and equity for the three and nine month periods ended September 30, 2022 and 2021 and its cash flows for the nine month periods ended September 30, 2022 and 2021. Certain previously reported amounts have been reclassified to conform to the current year presentation. In this Quarterly Report on Form 10-Q, references to "EQT," "EQT Corporation" and "the Company" refer collectively to EQT Corporation and its consolidated subsidiaries.

These financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Recently Issued Accounting Standards

In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) 2020-06, Debt with Conversion and Other Options and Derivatives and Hedging: Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. This ASU simplifies accounting for convertible instruments by removing certain separation models for convertible instruments. For convertible instruments with conversion features that are not accounted for as derivatives under Accounting Standards Codification 815 or that do not result in substantial premiums accounted for as paid-in capital, the convertible instrument's embedded conversion features are no longer separated from the host contract. Consequently, and as long as no other feature requires bifurcation and recognition as a derivative, the convertible instrument is accounted for as a single liability measured at its amortized cost. Under ASU 2020-06, entities are required to use the if-converted method to calculate the impact of convertible instruments on diluted earnings per share (EPS). The if-converted method assumes share settlement of the instrument, which increases the number of potentially dilutive securities used to calculate diluted EPS. This ASU also adds several new disclosure requirements.

The Company adopted this ASU effective as of January 1, 2022 using the full retrospective method of adoption. The following tables present the impact of the adoption of ASU 2020-06 on the Company's previously reported historical results. See Note 6 for discussion of the Convertible Notes (defined in Note 6).


	Three Months Ended September 30, 2021
	As Reported		ASU 2020-06 Adoption Adjustment		As Adjusted

	(Thousands, except per share amounts)
Interest expense	$	80,349	$	(4,840)	$	75,509
Income tax benefit	(662,915)		1,535		(661,380)

Net loss	(1,979,516)		3,305		(1,976,211)
Less: Net income attributable to noncontrolling interest	601		—		601
Net loss attributable to EQT Corporation	$	(1,980,117)	$	3,305	$	(1,976,812)

Basic and diluted:
Weighted average common stock outstanding (a)	356,792		—		356,792
Loss per share of common stock attributable to EQT Corporation	$	(5.55)	$	0.01	$	(5.54)

(a)For the three months ended September 30, 2021, diluted weighted average common stock outstanding did not change because the potentially dilutive securities had an anti-dilutive effect on loss per share.


	Nine Months Ended September 30, 2021
	As Reported		ASU 2020-06 Adoption Adjustment		As Adjusted

	(Thousands, except per share amounts)
Interest expense	$	232,434	$	(14,198)	$	218,236
Income tax benefit	(1,025,255)		4,605		(1,020,650)

Net loss	(2,957,067)		9,593		(2,947,474)
Less: Net income attributable to noncontrolling interest	25		—		25
Net loss attributable to EQT Corporation	$	(2,957,092)	$	9,593	$	(2,947,499)

Basic and diluted:
Weighted average common stock outstanding (a)	304,961		—		304,961
Loss per share of common stock attributable to EQT Corporation	$	(9.70)	$	0.03	$	(9.67)

(a)For the nine months ended September 30, 2021, diluted weighted average common stock outstanding did not change because the potentially dilutive securities had an anti-dilutive effect on loss per share.


	December 31, 2021
	As Reported		ASU 2020-06 Adoption Adjustment		As Adjusted

	(Thousands)
Current portion of debt (a)	$	954,900	$	106,070	$	1,060,970
Deferred income taxes	938,612		(31,306)		907,306
Common stock, no par value	10,167,963		(96,143)		10,071,820
Accumulated deficit	(115,779)		21,379		(94,400)

(a)Pursuant to the terms of the Convertible Notes indenture, a sale price condition for conversion of the Convertible Notes was satisfied as of December 31, 2021, and, accordingly, holders of the Convertible Notes were permitted to convert any of their Convertible Notes at their option at any time during the three months ended March 31, 2022, subject to all terms and conditions set forth in the Convertible Notes indenture. Therefore, as of December 31, 2021, the net carrying value of the Convertible Notes was included in current portion of debt in the Consolidated Balance Sheet.

Certain line items in the Statement of Condensed Consolidated Cash Flows for the nine months ended September 30, 2021 were adjusted to reflect the impact of the adoption of ASU 2020-06; however, the adoption did not impact cash and did not change net cash provided by operating, investing or financing activities.

Supplemental Cash Flow Information. 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.


	Nine Months Ended September 30,
	2022		2021

	(Thousands)
Cash paid during the period for:
Interest, net of amount capitalized	$	208,239	$	220,430
Income taxes, net	10,529		22,263

Non-cash activity during the period for:
Increase in asset retirement costs and obligations	$	14,102	$	2,709
Capitalization of non-cash equity share-based compensation	3,923		3,728
Increase in right-of-use assets and lease liabilities, net	1,651		1,091
Issuance of common stock for Convertible Notes settlements (Note 6)	48		—
Equity issued as consideration for acquisition (Note 9)	—		1,925,405