8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  September 16, 2022

EQT CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania	001-3551	25-0464690
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania 15222

(Address of principal executive offices, including zip code)

(412) 553-5700

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨       Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨       Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	EQT	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 8.01.  Other Events.

As previously reported, on July 21, 2021, EQT Corporation (EQT) consummated the previously announced acquisition (the Alta Acquisition) of Alta Marcellus Development, LLC and ARD Operating, LLC. EQT is filing this Current Report on Form 8-K to provide certain updated pro forma financial information giving effect to the Alta Acquisition as set forth in Item 9.01 below.

Item 9.01.  Financial Statements and Exhibits.

(d)        Exhibits.

Exhibit No.	Description
99.1	Unaudited pro forma condensed combined statements of operations of EQT Corporation and subsidiaries for the years ended December 31, 2021 and 2020, and the notes related thereto.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EQT CORPORATION
Date:  September 16, 2022	By:	/s/ David M. Khani
	Name:	David M. Khani
	Title:	Chief Financial Officer

EX-99.1

Exhibit 99.1

EQT CORPORATION AND SUBSIDIARIES 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

On July 21, 2021, EQT Corporation and its subsidiaries (“EQT” or the “Company”) acquired all of the issued and outstanding equity interests of Alta Marcellus Development, LLC (“Alta Marcellus”) and ARD Operating, LLC (“ARD”) (the “Acquisition”), which collectively held all of the upstream and midstream assets of Alta Resources Development, LLC (“Alta”), pursuant to the terms of that certain Membership Interest Purchase Agreement, dated May 5, 2021 (the “Purchase Agreement”), by and among EQT, EQT Acquisition HoldCo LLC (a wholly-owned indirect subsidiary of EQT), Alta, Alta Marcellus and ARD.

The following unaudited pro forma condensed combined financial statements (the “pro forma financial statements”) are derived from the historical audited and unaudited financial statements of EQT and the historical combined financial statements of Alta, which includes the accounts of ARD and Alta Marcellus and its wholly-owned subsidiaries, Alta Marcellus Midstream, LLC (“AMM”) and Alta Energy Marketing, LLC (“AEM”) (collectively, the “Alta Entities”).

The pro forma financial statements are provided for informational purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of the Company would have been had the Acquisition occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position. The pro forma financial statements should be read in conjunction with:

• the accompanying notes to the pro forma financial statements;

• the audited consolidated financial statements and accompanying notes of EQT contained in EQT’s Annual Report on Form 10-K for the year ended December 31, 2021, as updated pursuant to the recast of certain financial information as set forth in exhibit 99.1 to EQT's Current Report on Form 8-K filed on April 28, 2022; and

• the audited combined financial statements and accompanying notes of the Alta Entities as of June 30, 2021 and 2020 and for the years then ended as set forth in exhibit 99.1 to EQT's Current Report on Form 8-K filed on September 28, 2021.

EQT Corporation and Subsidiaries 

Unaudited Pro Forma Condensed Combined Statement of Operations 

Year Ended December 31, 2021

	EQT Historical (1)			Alta Entities Historical (2)			Alta Entities Historical Stub Period (2)			Pro Forma Adjustments			Pro Forma Combined
	(Thousands, except per share amounts)
Operating revenues:
Sales of natural gas, natural gas liquids and oil	$	6,804,020		$	389,898		$	54,952		$	—		$	7,248,870
Loss on derivatives not designated as hedges		(3,775,042	)		(116,236	)		(10,798	)		—			(3,902,076	)
Net marketing services and other		35,685			12,101			972			(8,267	)(b)		40,491
Total operating revenues		3,064,663			285,763			45,126			(8,267	)		3,387,285
Operating expenses:
Transportation and processing		1,942,165			71,238			8,414			—			2,021,817
Production		225,279			34,108			3,061			(8,267	)(b)		254,181
Exploration		24,403			—			—			319	(d)		24,722
Selling, general and administrative		196,315			2,372			170			—			198,857
Depreciation and depletion		1,676,702			81,210			8,968			99,782	(e)		1,866,662
Gain on sale/exchange of long-lived assets		(21,124	)		—			—			—			(21,124	)
Impairment and expiration of leases		311,835			—			—			—			311,835
Other operating expenses		70,063			—			—			—			70,063
Total operating expenses		4,425,638			188,928			20,613			91,834			4,727,013
Operating (loss) income		(1,360,975	)		96,835			24,513			(100,101	)		(1,339,728	)
Income from investments		(71,841	)		—			—			—			(71,841	)
Dividend and other income		(19,105	)		(976	)		—			1,412	(a)		(18,669	)
Loss on debt extinguishment		9,756			—			—			—			9,756
Interest expense		289,753			13,290			7,758			(20,999	)(a)		303,338
											13,536	(h)
(Loss) income before income taxes		(1,569,538	)		84,521			16,755			(94,050	)		(1,562,312	)
Income tax (benefit) expense		(428,037	)		—			—			(15,107	)(g)		(443,144	)
Net (loss) income		(1,141,501	)		84,521			16,755			(78,943	)		(1,119,168	)
Less: Net income attributable to noncontrolling interest		1,246			—			—			—			1,246
Net (loss) income attributable to EQT Corporation	$	(1,142,747	)	$	84,521		$	16,755		$	(78,943	)	$	(1,120,414	)
Loss per share of common stock attributable to EQT Corporation:
Basic:
Weighted average common stock outstanding		323,196												323,196
Net loss	$	(3.54	)										$	(3.47	)
Diluted:
Weighted average common stock outstanding		323,196												323,196
Net loss	$	(3.54	)										$	(3.47	)

(1) The Company adopted accounting guidance on January 1, 2022 which changed the amounts historically recorded for the Company's convertible senior notes. The amounts presented herein have been recast to reflect this adoption. See the Company's Current Report on Form 8-K filed on April 28, 2022 for further discussion.

(2) The Alta Entities Historical column includes the results for the period January 1, 2021 through June 30, 2021 and the Alta Entities Historical Stub Period column includes the results for the stub period of July 1, 2021 through July 20, 2021.

See accompanying notes to the unaudited pro forma condensed combined financial information.

EQT Corporation and Subsidiaries 

Unaudited Pro Forma Condensed Combined Statement of Operations 

Year Ended December 31, 2020

	EQT Historical (1)			Alta Entities Historical			Pro Forma Adjustments			Pro Forma Combined
	(Thousands, except per share amounts)
Operating revenues:
Sales of natural gas, natural gas liquids and oil	$	2,650,299		$	442,463		$	—		$	3,092,762
Gain on derivatives not designated as hedges		400,214			101,696			—			501,910
Net marketing services and other		8,330			18,932			(9,525	)(b)		17,737
Total operating revenues		3,058,843			563,091			(9,525	)		3,612,409
Operating expenses:
Transportation and processing		1,710,734			127,391			—			1,838,125
Production		155,403			57,226			(9,525	)(b)		203,104
Exploration		5,484			—			1,734	(d)		7,218
Selling, general and administrative		174,769			7,333			—			182,102
Depreciation and depletion		1,393,465			189,960			76,162	(e)		1,659,587
Amortization of intangible assets		26,006			—			—			26,006
Loss on sale/exchange of long-lived assets		100,729			—			—			100,729
Impairment of other assets		34,694			—			—			34,694
Impairment and expiration of leases		306,688			770,704			(770,704	)(f)		306,688
Other operating expenses		28,537			—			32,000	(c)		60,537
Total operating expenses		3,936,509			1,152,614			(670,333	)		4,418,790
Operating loss		(877,666	)		(589,523	)		660,808			(806,381	)
Gain on Equitrans Share Exchange		(187,223	)		—			—			(187,223	)
Loss from investments		314,468			—			—			314,468
Dividend and other (income) expense		(35,512	)		12,759			(11,876	)(a)		(34,629	)
Loss on debt extinguishment		25,435			—			—			25,435
Interest expense		259,268			30,722			(30,442	)(a)		295,644
								36,096	(h)
Loss before income taxes		(1,254,102	)		(633,004	)		667,030			(1,220,076	)
Income tax (benefit) expense		(295,293	)		—			6,412	(g)		(288,881	)
Net loss		(958,809	)		(633,004	)		660,618			(931,195	)
Less: Net loss attributable to noncontrolling interest		(10	)		—			—			(10	)
Net loss attributable to EQT Corporation	$	(958,799	)	$	(633,004	)	$	660,618		$	(931,185	)
Loss per share of common stock attributable to EQT Corporation:
Basic:
Weighted average common stock outstanding		260,613									260,613
Net loss	$	(3.68	)							$	(3.57	)
Diluted:
Weighted average common stock outstanding		260,613									260,613
Net loss	$	(3.68	)							$	(3.57	)

(1) The Company adopted accounting guidance on January 1, 2022 which changed the amounts historically recorded for the Company's convertible senior notes. The amounts presented herein have been recast to reflect this adoption. See the Company's Current Report on Form 8-K filed on April 28, 2022 for further discussion.

See accompanying notes to the unaudited pro forma condensed combined financial information.

EQT Corporation and Subsidiaries 

Notes to the Unaudited Pro Forma Condensed Combined Financial Information

1.            Basis of Presentation

The pro forma financial statements have been prepared to reflect the effects of the Acquisition on the consolidated financial statements of EQT. The unaudited pro forma condensed combined statements of operations (the “pro forma statements of operations”) for the years ended December 31, 2021 and 2020, are presented as if the Acquisition, the offering and sale in May 2021 of $500 million aggregate principal amount of EQT’s 3.125% senior notes due May 2026 and $500 million aggregate principal amount of EQT’s 3.625% senior notes due May 2013 (collectively, the “Notes Offering”) and the application of the proceeds from the Notes Offering had occurred on January 1, 2020. The historical consolidated financial information has been adjusted to reflect factually supportable items that are directly attributable to the Acquisition.

The Alta Entities’ historical amounts have been derived from the Alta Entities’ audited financial statements and unaudited financial statements, each filed as an exhibit to EQT's Current Report on Form 8-K filed on September 28, 2021. Prior to the Acquisition, the Alta Entities prepared their annual financial statements on a fiscal year basis, and therefore the amounts reflected in the pro forma statement of operations for the years ended December 31, 2021 and 2020 for the Alta Entities have been adjusted to a calendar year end to conform with EQT’s financial presentation. Certain of the Alta Entities’ historical amounts have been reclassified to conform to the financial presentation of EQT.

The pro forma financial statements are provided for informational purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of EQT would have been had the Acquisition occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position. The pro forma adjustments related to the Acquisition are based on available information and certain assumptions that management believes are reasonable. The pro forma adjustments related to the Acquisition are directly attributable to the transaction. In the opinion of management, all adjustments necessary to present fairly the unaudited pro forma condensed combined financial statements have been made. A pro forma condensed combined balance sheet has been omitted from this filing, as a historical balance sheet reflecting the Acquisition has already been filed within the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as updated pursuant to the recast of certain financial information as set forth in exhibit 99.1 to EQT's Current Report on Form 8-K filed on April 28, 2022.

2.            Pro Forma Adjustments and Assumptions

The pro forma adjustments are based on currently available information and certain estimates and assumptions that EQT believes are reasonable. The actual effects of the Acquisition will differ from the pro forma adjustments. A general description of the pro forma adjustments are provided below.

(a) Pro forma adjustments related to the extinguishment of Alta Marcellus’ senior notes and credit facility (the “Alta Entities Debt”), and the elimination of the associated interest rate swaps including:

i. A decrease in dividend and other income of $1.4 million for the year ended December 31, 2021 due to the elimination of the gain on the interest rate hedges.

ii. A decrease in interest expense of $21.0 million for the year ended December 31, 2021 reflecting the elimination of the Alta Entities’ historical interest expense and amortization of deferred financing fees.

iii. An increase in dividend and other income of $11.9 million for the year ended December 31, 2020 due to the elimination of the loss on the interest rate hedges.

iv. A decrease in interest expense of $30.4 million for the year ended December 31, 2020 consisting of the elimination of the Alta Entities’ historical interest expense and amortization of deferred financing fees.

(b) The pro forma reclassification was made to remove certain net marketing services amounts from revenue and expense to conform to EQT’s net presentation.

(c) Pro forma adjustment for estimated transaction costs incurred related to the Acquisition, including underwriting, banking, legal and accounting fees that are not capitalized as part of the Acquisition.

(d) Pro forma adjustments to reflect delay rental lease payments and other exploratory costs capitalized by the Alta Entities under the full cost method of accounting that would have been expensed to exploration expense under the successful efforts method of accounting for oil and gas properties.

(e) The pro forma adjustments increase depreciation and depletion expense due to the following:

i. The increase in the estimated fair value of property, plant and equipment.

ii. The depreciation of gathering pipelines over a 50-year useful life and the depreciation of compression and measurement assets over a 25-year useful life separate from the upstream oil and gas assets.

iii. The increase in accretion expense related to the higher asset retirement obligation liability which was adjusted to reflect EQT’s internal plugging cost estimates, discount rate, and useful life estimates.

(f) Pro forma adjustments to eliminate the Alta Entities’ historical impairment charges recorded under the ceiling test of the full cost method of accounting to conform to EQT’s successful efforts method of accounting for oil and gas properties.

(g) The pro forma income tax adjustments included in the pro forma statements of operations reflect the income tax effects of the Alta Entities’ historical information as well as the income tax effects of the pro forma adjustments presented herein. The pro forma income tax adjustments related to the Alta Entities’ historical information is to conform the Alta Entities’ historical information, which is derived based on a non-taxable corporate structure, with EQT’s taxable corporate structure. The tax rate applied to the pro forma adjustments was the statutory federal and apportioned statutory state tax rate, net of the federal benefit of state taxes, applied to pre-tax income.

(h) The pro forma interest expense adjustments reflect the impact of the Notes Offering, the proceeds of which were used to fund a portion of the cash consideration of the Acquisition.

i. An increase in interest expense of $13.5 million for the year ended December 31, 2021 and $36.1 million for the year ended December 31, 2020 reflecting the additional interest that would have been incurred if the notes issued in the Notes Offering were issued on January 1, 2020.

XML

Cover	Sep. 16, 2022
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 16, 2022
Entity File Number	001-3551
Entity Registrant Name	EQT CORPORATION
Entity Central Index Key	0000033213
Entity Tax Identification Number	25-0464690
Entity Incorporation, State or Country Code	PA
Entity Address, Address Line One	625 Liberty Avenue
Entity Address, Address Line Two	Suite 1700
Entity Address, City or Town	Pittsburgh
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	15222
City Area Code	412
Local Phone Number	553-5700
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	EQT
Security Exchange Name	NYSE
Entity Emerging Growth Company	false