EQT Corp (Form: 10-Q, Received: 10/25/2018 16:42:41)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2018



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	FOR THE TRANSITION PERIOD FROM TO

	COMMISSION FILE NUMBER 001-03551

EQT CORPORATION

(Exact name of registrant as specified in its charter)



PENNSYLVANIA		25-0464690
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania		15222
(Address of principal executive offices)		(Zip code)

(412) 553-5700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large Accelerated Filer x	Accelerated Filer ¨	Emerging Growth Company ¨
Non-Accelerated Filer ¨	Smaller Reporting 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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of September 30, 2018 , 254,426 (in thousands) shares of common stock, no par value, of the registrant were outstanding.

Table of Contents

EQT CORPORATION AND SUBSIDIARIES

Index



		Page No.
Part I. Financial Information:

Item 1.	Financial Statements (Unaudited):

	Statements of Consolidated Operations for the Three and Nine Months Ended September 30, 2018 and 2017	3

	Statements of Consolidated Comprehensive Income for the Three and Nine Months Ended September 30, 2018 and 2017	4

	Statements of Condensed Consolidated Cash Flows for the Nine Months Ended September 30, 2018 and 2017	5

	Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	6

	Statements of Condensed Consolidated Equity for the Nine Months Ended September 30, 2018 and 2017	8

	Notes to the Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49

Item 4.	Controls and Procedures	51

Part II. Other Information:

Item 1.	Legal Proceedings	52

Item 1A.	Risk Factors	53

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56

Item 6.	Exhibits	57

Signature		58

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EQT CORPORATION AND SUBSIDIARIES

Statements of Consolidated Operations (Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(Thousands, except per share amounts)
Revenues:
Sales of natural gas, oil and NGLs	$	1,046,989		$	552,953		$	3,264,728		$	1,803,132
Pipeline, water and net marketing services	114,956			70,835			376,776			216,499
(Loss) gain on derivatives not designated as hedges	(3,075		)	35,625			5,620			222,693
Total operating revenues	1,158,870			659,413			3,647,124			2,242,324

Operating expenses:
Transportation and processing	186,407			136,219			576,597			404,743
Operation and maintenance	29,892			19,589			82,218			54,721
Production	42,751			39,513			149,471			129,461
Exploration	15,772			2,436			42,058			9,039
Selling, general and administrative	65,400			66,263			195,828			190,891
Depreciation and depletion	435,311			246,560			1,290,876			719,295
Impairment/loss on sale of long-lived assets	259,279			—			2,706,438			—
Transaction costs	31,506			10,806			93,176			15,044
Amortization of intangible assets	20,728			—			62,185			—
Total operating expenses	1,087,046			521,386			5,198,847			1,523,194

Operating income (loss)	71,824			138,027			(1,551,723		)	719,130

Other income	21,755			6,526			43,092			15,880
Interest expense	93,042			50,377			240,059			137,110
Income (loss) before income taxes	537			94,176			(1,748,690		)	597,900
Income tax (benefit) expense	(62,911		)	(11,281		)	(503,505		)	119,093
Net income (loss)	63,448			105,457			(1,245,185		)	478,807
Less: Net income attributable to noncontrolling interests	103,141			82,117			362,696			250,349
Net (loss) income attributable to EQT Corporation	$	(39,693	)	$	23,340		$	(1,607,881	)	$	228,458

Earnings per share of common stock attributable to EQT Corporation:
Basic:
Weighted average common stock outstanding	259,560			173,476			262,816			173,368
Net (loss) income	$	(0.15	)	$	0.13		$	(6.12	)	$	1.32
Diluted:
Weighted average common stock outstanding	259,560			173,675			262,816			173,572
Net (loss) income	$	(0.15	)	$	0.13		$	(6.12	)	$	1.32
Dividends declared per common share	$	0.03		$	0.03		$	0.09		$	0.09

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

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EQT CORPORATION AND SUBSIDIARIES

Statements of Consolidated Comprehensive (Loss) Income (Unaudited)



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(Thousands)
Net income (loss)	$	63,448		$	105,457		$	(1,245,185	)	$	478,807

Other comprehensive income (loss), net of tax:
Net change in cash flow hedges:
Natural gas, net of tax benefit of $(150), $(955), $(413), and $(2,640)	(430		)	(1,451		)	(1,183		)	(4,011		)
Interest rate, net of tax expense of $10, $26, $54, and $78	52			36			132			108
Other post-retirement benefits liability adjustment, net of tax expense of $29, $49, $89, and $148	86			77			258			230
Other comprehensive loss	(292		)	(1,338		)	(793		)	(3,673		)
Comprehensive income (loss)	63,156			104,119			(1,245,978		)	475,134
Less: Comprehensive income attributable to noncontrolling interests	103,141			82,117			362,696			250,349
Comprehensive (loss) income attributable to EQT Corporation	$	(39,985	)	$	22,002		$	(1,608,674	)	$	224,785

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

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EQT CORPORATION AND SUBSIDIARIES

Statements of Condensed Consolidated Cash Flows (Unaudited)



	Nine Months Ended September 30,
	2018			2017
	(Thousands)
Cash flows from operating activities:
Net (loss) income	$	(1,245,185	)	$	478,807
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Deferred income taxes	(502,853		)	121,704
Depreciation and depletion	1,290,876			719,295
Amortization of intangibles	62,185			—
Amortization of financing costs	9,591			—
Asset and lease impairments	2,742,022			5,053
Provision for (recoveries of) losses on accounts receivable	9			(1,230		)
Other income	(43,092		)	(15,880		)
Stock-based compensation expense	23,137			27,894
Gain on derivatives not designated as hedges	(5,620		)	(222,693		)
Cash settlements paid on derivatives not designated as hedges	(27,401		)	(6,837		)
Changes in other assets and liabilities:
Accounts receivable	(7,713		)	64,057
Accounts payable	205,360			(15,446		)
Other items, net	(55,926		)	56,648
Net cash provided by operating activities	2,445,390			1,211,372

Cash flows from investing activities:
Capital expenditures	(2,854,670		)	(1,152,865		)
Capital expenditures for acquisitions	—			(818,957		)
Proceeds from Huron Divestiture (see Note Q)	523,595			—
Sales of investments in trading securities	—			283,758
Capital contributions to Mountain Valley Pipeline, LLC	(446,049		)	(103,448		)
Proceeds from sale of Permian Basin assets	57,664			—
Net cash used in investing activities	(2,719,460		)	(1,791,512		)

Cash flows from financing activities:
Proceeds from issuance of EQM Midstream Partners, LP (formerly known as EQT Midstream Partners, LP) Senior Notes	2,500,000			—
Increase in borrowings on credit facilities	6,219,500			334,000
Repayment of borrowings on credit facilities	(7,508,500		)	(229,000		)
Dividends paid	(23,736		)	(15,620		)
Distributions to noncontrolling interests	(279,539		)	(172,498		)
Repayments and retirements of Senior Notes	(7,999		)	—
Proceeds from awards under employee compensation plans	1,946			—
Cash paid for taxes related to net settlement of share-based incentive awards	(21,910		)	(18,030		)
Debt discount and issuance costs and revolving credit facility origination fees	(34,249		)	(13,679		)
Acquisition of 25% of Strike Force Midstream LLC	(175,000		)	—
Repurchase and retirement of common stock	(538,876		)	—
Repurchase of common stock	(27		)	(15		)
Net cash provided by (used in) financing activities	131,610			(114,842		)
Net change in cash, cash equivalents and restricted cash	(142,460		)	(694,982		)
Cash, cash equivalents and restricted cash at beginning of period	147,315			1,178,540
Cash and cash equivalents at end of period	$	4,855		$	483,558

Cash paid during the period for:
Interest, net of amount capitalized	$	163,688		$	113,618
Income taxes, net	$	193		$	9,702

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

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EQT CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)



	September 30, 2018		December 31, 2017
	(Thousands)
Assets

Current assets:
Cash and cash equivalents	$	4,855	$	147,315
Accounts receivable (less accumulated provision for doubtful accounts: $8,235 at September 30, 2018 and $8,226 at December 31, 2017)	882,386		725,236
Derivative instruments, at fair value	315,564		241,952
Prepaid expenses and other	31,853		48,552
Total current assets	1,234,658		1,163,055

Property, plant and equipment	28,022,769		30,990,309
Less: accumulated depreciation and depletion	4,892,875		6,105,294
Net property, plant and equipment	23,129,894		24,885,015

Intangible assets, net	674,175		736,360
Goodwill	1,998,726		1,998,726
Investment in nonconsolidated entity	1,300,430		460,546
Other assets	323,446		278,902
Total assets	$	28,661,329	$	29,522,604

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

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EQT CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)



	September 30, 2018			December 31, 2017
	(Thousands)
Liabilities and Shareholders’ Equity

Current liabilities:
Current portion of Senior Notes	$	699,527		$	7,999
Accounts payable	978,757			654,624
Derivative instruments, at fair value	183,677			139,089
Other current liabilities	784,115			430,525
Total current liabilities	2,646,076			1,232,237

Credit facility borrowings	472,000			1,761,000
Senior Notes	7,336,570			5,562,555
Deferred income taxes	1,212,867			1,768,900
Other liabilities and credits	776,424			783,299
Total liabilities	12,443,937			11,107,991

Equity:
Shareholders’ equity:
Common stock, no par value, authorized 320,000 shares, shares issued: 257,225 at September 30, 2018 and 267,871 at December 31, 2017	8,684,169			9,388,903
Treasury stock, shares at cost: 2,799 at September 30, 2018 (including 299 held in rabbi trust) and 3,551 at December 31, 2017 (including 253 held in rabbi trust)	(50,014		)	(63,602		)
Retained earnings	2,369,271			3,996,775
Accumulated other comprehensive loss	(3,251		)	(2,458		)
Total common shareholders’ equity	11,000,175			13,319,618
Noncontrolling interests in consolidated subsidiaries	5,217,217			5,094,995
Total equity	16,217,392			18,414,613
Total liabilities and equity	$	28,661,329		$	29,522,604

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

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EQT CORPORATION AND SUBSIDIARIES

Statements of Condensed Consolidated Equity (Unaudited)



	Common Stock								Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests in Consolidated Subsidiaries
	Shares Outstanding		No Par Value			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests in Consolidated Subsidiaries			Total Equity
	(Thousands)
Balance, January 1, 2017	172,827		$	3,349,166		$	2,509,073		$	2,042		$	3,258,966		$	9,119,247
Comprehensive income (net of tax):
Net income						228,458						250,349			478,807
Net change in cash flow hedges:
Natural gas, net of tax benefit of $(2,640)									(4,011		)				(4,011		)
Interest rate, net of tax expense of $78									108						108
Other post-retirement benefits liability adjustment, net of tax expense of $148									230						230
Dividends ($0.09 per share)						(15,620		)							(15,620		)
Stock-based compensation plans, net	516		18,224									190			18,414
Distributions to noncontrolling interests ($2.675 and $0.578 per common unit from EQM Midstream Partners, LP and EQGP Holdings, LP (formerly known as EQT GP Holdings, LP), respectively)												(172,498		)	(172,498		)
Balance, September 30, 2017	173,343		$	3,367,390		$	2,721,911		$	(1,631	)	$	3,337,007		$	9,424,677

Balance, January 1, 2018	264,320		$	9,325,301		$	3,996,775		$	(2,458	)	$	5,094,995		$	18,414,613
Comprehensive income (net of tax):
Net (loss) income						(1,607,881		)				362,696			(1,245,185		)
Net change in cash flow hedges:
Natural gas, net of tax benefit of $(413)									(1,183		)				(1,183		)
Interest rate, net of tax expense of $54									132						132
Other post-retirement benefit liability adjustment, net of tax expense of $89									258						258
Dividends ($0.09 per share)						(23,736		)							(23,736		)
Stock-based compensation plans, net	752		4,472									953			5,425
Distributions to noncontrolling interests ($3.18, $0.808 and $0.5966 per common unit from EQM Midstream Partners, LP, EQGP Holdings, LP, and RM Partners LP (formerly known as Rice Midstream Partners LP), respectively)												(279,539		)	(279,539		)
Change in accounting principle (a)						4,113									4,113
Repurchase and retirement of common stock	(10,646	)	(538,876		)										(538,876		)
Purchase of Strike Force Midstream LLC noncontrolling interests			1,818									(176,818		)	(175,000		)
Change in ownership of consolidated subsidiaries			(158,560		)							214,930			56,370
Balance, September 30, 2018	254,426		$	8,634,155		$	2,369,271		$	(3,251	)	$	5,217,217		$	16,217,392

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

(a) Related to adoption of ASU No. 2016-01. See Notes K and S for additional information.

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EQT Corporation and Subsidiaries

Notes to the Condensed Consolidated Financial Statements (Unaudited)

A . Financial Statements

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 of the information and footnotes required by United States 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, 2018 and December 31, 2017 , the results of its operations for the three and nine month periods ended September 30, 2018 and 2017 and its cash flows and equity for the nine month periods ended September 30, 2018 and 2017 . Certain previously reported amounts have been reclassified to conform to the current year presentation. In this Quarterly Report on Form 10-Q, references to “we,” “us,” “our,” “EQT,” “EQT Corporation,” and the “Company” refer collectively to EQT Corporation and its consolidated subsidiaries.

The balance sheet at December 31, 2017 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

For further information, refer to the consolidated financial statements and related footnotes as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 .

During the third quarter of 2018, the Company repurchased 9,946,382 shares at an average price of $50.29 pursuant to the Company's previously announced $500 million share repurchase program. This exhausted the Company's share repurchase authorization under such program.

On November 13, 2017, the Company completed its previously announced acquisition of Rice Energy Inc. (Rice) pursuant to the Agreement and Plan of Merger, dated June 19, 2017 (as amended, the Rice Merger Agreement), by and among the Company, Rice and a wholly owned indirect subsidiary of the Company (RE Merger Sub). Pursuant to the terms of the Rice Merger Agreement, on November 13, 2017, RE Merger Sub merged with and into Rice (the Rice Merger) with Rice continuing as the surviving corporation and a wholly owned indirect subsidiary of the Company. Immediately thereafter, Rice merged with and into another wholly owned indirect subsidiary of the Company. As a result of the Rice Merger, the Company also acquired Rice's interests in RM Partners LP (formerly known as Rice Midstream Partners LP) (RMP). See Note E . The purchase price allocation for the Rice Merger remains preliminary as of September 30, 2018 .

Unaudited Pro Forma Information

The following unaudited pro forma combined financial information presents the Company’s results as though the Rice Merger had been completed at January 1, 2017. The pro forma combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the Rice Merger taken place on January 1, 2017; furthermore, the financial information is not intended to be a projection of future results.



(in thousands, except per share data) (unaudited)	Three Months Ended September 30, 2017			Nine Months Ended September 30, 2017
Pro forma operating revenues	$	1,042,363		$	3,491,790
Pro forma net income	$	120,301		$	602,684
Pro forma net income attributable to noncontrolling interests	$	(118,353	)	$	(338,546	)
Pro forma net income attributable to EQT	$	1,948		$	264,138
Pro forma income per share (basic)	$	0.01		$	1.00
Pro forma income per share (diluted)	$	—		$	0.99

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EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

B . Midstream Streamlining Transactions and Financing

In February 2018, the Company's Board of Directors unanimously approved a plan to separate its upstream and midstream businesses, creating a standalone publicly traded corporation, Equitrans Midstream Corporation (Equitrans Midstream), which will focus on midstream operations (the Separation). Equitrans Midstream will own the midstream interests held by EQT. The Separation is intended to qualify as tax-free to EQT shareholders for U.S. federal income tax purposes. Under the Separation plan, EQT shareholders will retain their shares of the Company's stock and receive a pro-rata distribution of 80.1% of the outstanding shares of Equitrans Midstream common stock. In connection with announcing the planned Separation, the Company also announced its plans to pursue (i) a sale of Rice retained midstream assets acquired by EQT in connection with the Rice Merger to EQM Midstream Partners, LP (formerly known as EQT Midstream Partners, LP) (EQM) (NYSE: EQM), (ii) a merger of EQM and RMP, and (iii) a sale of RMP’s incentive distribution rights (RMP IDRs) to EQGP Holdings, LP (formerly known as EQT GP Holdings, LP) (EQGP) (NYSE: EQGP)((i), (ii) and (iii) collectively, the Midstream Streamlining Transactions).

On April 25, 2018, EQT, Rice Midstream Holdings LLC (Rice Midstream), a wholly owned subsidiary of the Company, EQM and EQM Gathering Holdings, LLC (EQM Gathering), a wholly owned subsidiary of EQM, entered into a contribution and sale agreement pursuant to which EQM Gathering agreed to acquire all the outstanding limited liability company interests in each of (i) EQM West Virginia Midstream Holdings LLC (formerly known as Rice West Virginia Midstream LLC) (Rice West Virginia), (ii) EQM Olympus Midstream LLC (formerly known as Rice Olympus Midstream LLC) (Rice Olympus) and (iii) Strike Force Midstream Holdings LLC (Strike Force Holdings), which owns a 75% limited liability company interest in Strike Force Midstream LLC (Strike Force Midstream), in exchange for an aggregate of 5,889,282 EQM common units and cash consideration of $1.15 billion , plus working capital adjustments (the Drop-Down Transaction). The Drop-Down Transaction was completed on May 22, 2018 with an effective date of May 1, 2018. In connection with the Drop-Down Transaction, the Company recorded a $15.5 million gain to additional paid-in-capital, a decrease in noncontrolling interest in consolidated subsidiary of $20.3 million and an increase to deferred tax liability of $4.8 million .

On May 1, 2018, pursuant to the Purchase and Sale Agreement dated April 25, 2018, by and among EQM, EQM Gathering, Gulfport Energy Corporation (Gulfport) and an affiliate of Gulfport, EQM Gathering acquired the remaining 25% limited liability company interest in Strike Force Midstream not owned by Strike Force Holdings for $175 million (the Gulfport Transaction). As a result, EQM has owned 100% of Strike Force Midstream since May 1, 2018.

On May 22, 2018, pursuant to an Incentive Distribution Rights Purchase and Sale Agreement dated April 25, 2018, by and among the Company, Rice Midstream GP Holdings LP (Rice Midstream GP Holdings), a wholly owned subsidiary of the Company that owned the RMP IDRs, and EQGP, EQGP acquired all of the issued and outstanding RMP IDRs in exchange for 36,293,766 EQGP common units (the RMP IDR Purchase). As a result of the RMP IDR Purchase, EQT's percentage ownership of the outstanding EQGP common units increased from approximately 90.1% to approximately 91.3% . In connection with the RMP IDR Purchase, the Company recorded a $35.1 million loss to additional paid-in-capital, an increase in noncontrolling interest in consolidated subsidiary of $46.1 million and a decrease to deferred tax liability of $11.0 million .

On April 25, 2018, EQM entered into an Agreement and Plan of Merger (the Midstream Merger Agreement) with RMP, EQM Midstream Management LLC (formerly known as Rice Midstream Management LLC), the general partner of RMP (the RMP General Partner), EQM Midstream Services, LLC (formerly known as EQT Midstream Services, LLC), the general partner of EQM (the EQM General Partner), EQM Acquisition Sub, LLC, a wholly owned subsidiary of EQM (Merger Sub), EQM GP Acquisition Sub, LLC, a wholly owned subsidiary of EQM (GP Merger Sub), and, solely for certain limited purposes set forth therein, the Company. Pursuant to the Midstream Merger Agreement, on July 23, 2018, Merger Sub and GP Merger Sub merged with and into RMP and the RMP General Partner, respectively, with RMP and the RMP General Partner surviving as wholly owned subsidiaries of EQM (the Midstream Mergers). Pursuant to the Midstream Merger Agreement, each of the RMP common units issued and outstanding immediately prior to the effective time of the Midstream Mergers was converted into the right to receive 0.3319 EQM common units (the Midstream Mergers Consideration), the issued and outstanding RMP IDRs were canceled and each outstanding award of phantom units in respect of RMP common units fully vested and converted into the right to receive the Midstream Mergers Consideration, less applicable tax withholding, in respect of each RMP common unit subject thereto. The aggregate Midstream Mergers Consideration consisted of approximately 34 million EQM common units. Following completion of the Midstream Mergers, RMP's common units ceased to be publicly traded. An indirect wholly owned subsidiary of the Company received 9,554,530 EQM common units as Midstream Mergers Consideration. In connection with the Midstream Mergers, the Company recorded a $138.8 million loss to additional paid-in capital, an increase in noncontrolling interest in consolidated subsidiary of $189.1 million and a decrease to deferred tax liability of approximately $50.3 million .

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EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

Also in connection with the completion of the Midstream Mergers, on July 23, 2018, EQM repaid approximately $260 million of borrowings outstanding under the Credit Agreement, dated as of December 22, 2014, by and among RMP, as parent guarantor, RM Operating LLC (formerly known as Rice Midstream OpCo LLC), a wholly owned subsidiary of RMP (RMP OpCo), as borrower, Wells Fargo Bank, N.A., as administrative agent, and the lenders and other parties from time to time party thereto (the RMP Credit Agreement), and the RMP Credit Agreement was terminated.

On April 25, 2018, EQM entered a $2.5 billion unsecured multi-draw 364-day term loan facility with a syndicate of lenders (the EQM Term Loan Facility). The EQM Term Loan Facility was used to fund the cash consideration for the Drop-Down Transaction, to repay borrowings under EQM’s $1 billion credit facility, and for other general partnership purposes. During the second quarter of 2018, the balance outstanding under the EQM Term Loan Facility was repaid, and the EQM Term Loan Facility was terminated on June 25, 2018 in connection with EQM's issuance of the EQM 2018 Senior Notes (described in the following section).

During the second quarter of 2018, EQM issued 4.75% senior notes due July 15, 2023 in the aggregate principal amount of $1.1 billion , 5.50% senior notes due July 15, 2028 in the aggregate principal amount of $850 million and 6.50% senior notes due July 15, 2048 in the aggregate principal amount of $550 million (collectively, the EQM 2018 Senior Notes). The offering of the EQM 2018 Senior Notes resulted in net proceeds of approximately $2,465.8 million , inclusive of a discount of $11.8 million and estimated debt issuance costs of $22.4 million . The net proceeds were used to repay the balance outstanding under the EQM Term Loan Facility and the RMP Credit Agreement and the remainder is expected to be used for general partnership purposes. The EQM 2018 Senior Notes were issued pursuant to new supplemental indentures to EQM's existing indenture dated August 1, 2014. The EQM 2018 Senior Notes contain covenants that limit EQM's ability to, among other things, incur certain liens securing indebtedness, engage in certain sale and leaseback transactions, and enter into certain consolidations, mergers, conveyances, transfers or leases of substantially all of EQM's assets.

C . EQGP Holdings, LP

In January 2015, the Company formed EQGP to own the Company's partnership interests in EQM. As of September 30, 2018, EQT owns 276,008,766 EQGP common units, which represent a 91.3% limited partner interest, and the entire non-economic general partner interest in EQGP. EQGP owned the following EQM partnership interests as of September 30, 2018 , which represent EQGP’s only cash-generating assets: 21,811,643 EQM common units, representing a 17.9% limited partner interest in EQM; 1,443,015 EQM general partner units, representing a 1.2% general partner interest in EQM; and all of EQM’s incentive distribution rights (IDRs), which entitle EQGP to receive up to 48.0% of all incremental cash distributed in a quarter after $0.5250 has been distributed in respect of each common unit and general partner unit of EQM for that quarter. Through EQGP's general partner interest, limited partner interest and IDRs in EQM, EQGP has a controlling financial interest in EQM; therefore, EQGP consolidates EQM. The Company is the ultimate parent company of EQGP and EQM.

On October 23, 2018, the Board of Directors of EQGP's general partner declared a cash distribution to EQGP’s unitholders for the third quarter of 2018 of $0.315 per common unit, or approximately $95.3 million . The distribution will be paid on November 14, 2018 to unitholders of record, including the Company, at the close of business on November 2, 2018. Based on the EQGP common units outstanding on October 25, 2018 , the cash distributions by EQGP to EQT for the third quarter 2018 will be approximately $87.0 million .

D . EQM Midstream Partners, LP

In January 2012, the Company formed EQM to own, operate, acquire and develop midstream assets in the Appalachian Basin. EQM provides midstream services to the Company and third parties. EQM is consolidated in the Company’s financial statements. The Company records the noncontrolling interest of the EQM public limited partners in its financial statements.

In addition to the EQM common units owned by EQGP, as of September 30, 2018, EQT owned 5,889,282 EQM common units representing an additional 6.7% limited partner interest in EQM.

On October 23, 2018, the Board of Directors of EQM's general partner declared a cash distribution to EQM’s unitholders for the third quarter of 2018 of $1.115 per common unit. The cash distribution will be paid on November 14, 2018 to unitholders of record, including EQGP, as of the close of business on November 2, 2018. Based on the EQM common units outstanding on October 25, 2018 , the cash distributions by EQM to EQGP for the third quarter 2018 will be approximately $97.8 million consisting of: $24.3 million in respect of its limited partner interest, $2.5 million in respect of its general partner interest and $71.0 million in respect of its IDRs. The distribution amounts to EQGP related to its general partner interest and IDRs in EQM are subject to change if EQM issues additional common units on or prior to the record date for the third quarter 2018 distribution. Based on the EQM

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Notes to the Condensed Consolidated Financial Statements (Unaudited)

common units outstanding on October 25, 2018 , the cash distributions by EQM to EQT for the third quarter 2018 will be approximately $17.2 million .

E . RM Partners LP

In connection with the Rice Merger, the Company acquired a 28.1% limited partner interest, all of the IDRs and the entire non-economic general partner interest in RMP. RMP's common units ceased to be publicly traded as a result of the Midstream Mergers. See the discussion of the RMP IDR Purchase and Midstream Mergers in Note B .

F . Revenue from Contracts with Customers

As discussed in Note S , the Company adopted Accounting Standard Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , on January 1, 2018 using the modified retrospective method of adoption. Adoption of the ASU did not require an adjustment to the opening balance of equity and did not materially change the Company's amount and timing of revenues. The Company applied the ASU only to contracts that were not completed as of January 1, 2018. The Company has elected to exclude all taxes from the measurement of transaction price.

For the sale of natural gas, oil and natural gas liquids (NGLs), the Company generally considers the delivery of each unit (MMBtu or Bbl) to be a separate performance obligation that is satisfied upon delivery. These contracts typically require payment within 25 days of the end of the calendar month in which the gas is delivered. A significant number of these contracts contain variable consideration because the payment terms refer to market prices at future delivery dates. In these situations, the Company has not identified a standalone selling price because the terms of the variable payments relate specifically to the Company’s efforts to satisfy the performance obligations. Other contracts contain fixed consideration (i.e. fixed price contracts or contracts with a fixed differential to New York Mercantile Exchange (NYMEX) or index prices). The fixed consideration is allocated to each performance obligation on a relative standalone selling price basis, which requires judgment from management. For these contracts, the Company generally concludes that the fixed price or fixed differentials in the contracts are representative of the standalone selling price.

Based on management’s judgment, the performance obligations for the sale of natural gas, oil and NGLs are satisfied at a point in time because the customer obtains control and legal title of the asset when the natural gas, oil or NGL is delivered to the designated sales point.

The sales of natural gas, oil and NGLs as presented on the Statements of Consolidated Operations represent the Company’s share of revenues net of royalties and excluding revenue interests owned by others. When selling natural gas, oil and NGLs on behalf of royalty owners or working interest owners, the Company is acting as an agent and thus reports the revenue on a net basis.

The Company provides gathering, transmission and storage services in two manners: firm service and interruptible service. Firm service contracts are typically long term and include firm reservation fees, which are fixed, monthly charges for the guaranteed reservation of pipeline or storage capacity. Volumetric based fees under firm contracts include usage fees and charges for actual volumes transported, gathered or stored in excess of firm contracted volume. Interruptible service contracts include volumetric based fees, which are charges for the volume of gas actually gathered, transported or stored and do not guarantee access to the pipeline or storage facility. These contracts can be short or long term. Firm and interruptible contracts are billed at the end of each calendar month, with payment typically due within 21 days.

Based on total projected contractual revenues and including contracts associated with expected future capacity from expansion projects that are not yet fully constructed but for which EQM has entered into firm contracts, EQM's firm gathering contracts and firm transmission and storage contracts had weighted average remaining terms of approximately 8 and 15 years, respectively, as of December 31, 2017.

Under a firm contract, the Company has a stand-ready obligation to provide the service over the life of the contract. The performance obligation for firm reservation fee revenue is satisfied over time as the pipeline capacity is made available to the customer. As such, the Company recognizes firm reservation fee revenue evenly over the contract period, using a time-elapsed output method to measure progress. The performance obligation for volumetric based fees under firm and interruptible contracts is generally satisfied upon the Company's monthly billing to the customer for actual volumes gathered, transported or stored during the month. The amount billed corresponds directly to the value of the Company’s performance to date as the customer obtains value as each volume is gathered, transported or stored.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

Certain of EQM's gas gathering agreements are structured with minimum volume commitments (MVC), which specify minimum quantities for which a customer will be charged regardless of actual quantities gathered under the contract. Revenue is recognized for MVCs when the performance obligation has been met, which is the earlier of when the gas is gathered or when it is remote that the producer will be able to meet its MVC.

Water services revenues primarily represent fees charged by EQM for the delivery of fresh water to a customer at a specified delivery point. All of EQM’s water services revenues are generated pursuant to variable price per volume contracts with customers in the Appalachian Basin. For water services contracts, the only performance obligation in each contract is for EQM to provide water (usually a minimum daily volume) to the customer at any designated delivery point. This performance obligation is generally satisfied upon EQM’s monthly billing to the customer for the volume of water provided during the month. For water services arrangements, the customer is typically invoiced on a monthly basis with payment due 21 days after the receipt of the invoice.

Because the Company's performance obligations have been satisfied and an unconditional right to consideration exists as of the balance sheet date, the Company has recognized amounts due from contracts with customers of $488.7 million as accounts receivable within the Condensed Consolidated Balance Sheet.

The table below provides disaggregated information regarding the Company’s revenues, presented consistently with the Company’s segment reporting. Certain contracts that provide for the release of capacity that is not used to transport the Company’s produced volumes were deemed to be outside the scope of Revenue from Contracts with Customers. The cost of, and recoveries on, that capacity are reported within pipeline and net marketing services at EQT Production. Derivative contracts are also outside the scope of Revenue from Contracts with Customers.



Three Months Ended September 30, 2018	Revenues from contracts with customers			Other sources of revenue			Total
	(Thousands)
Natural gas sales	$	931,976		$	—		$	931,976
NGLs sales	106,621			—			106,621
Oil sales	8,392			—			8,392
Sales of natural gas, oil and NGLs	$	1,046,989		$	—		$	1,046,989

Pipeline and net marketing services at EQT Production	$	2,605		$	3,527		$	6,132
EQM Gathering:
Firm reservation fee revenues	112,598			—			112,598
Volumetric based fee revenues:
Usage fees under firm contracts	8,661			—			8,661
Usage fees under interruptible contracts	131,602			—			131,602
EQM Transmission:
Firm reservation fee revenues	82,669			—			82,669
Volumetric based fee revenues:
Usage fees under firm contracts	5,331			—			5,331
Usage fees under interruptible contracts	1,350			—			1,350
Water services at EQM Water	22,373			—			22,373
Intersegment eliminations	(255,760		)	—			(255,760		)
Pipeline, water and net marketing services	$	111,429		$	3,527		$	114,956

Loss on derivatives not designated as hedges	$	—		$	(3,075	)	$	(3,075	)

Total operating revenues	$	1,158,418		$	452		$	1,158,870

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Notes to Condensed Consolidated Financial Statements (Unaudited)



Nine Months Ended September 30, 2018	Revenues from contracts with customers			Other sources of revenue		Total
	(Thousands)
Natural gas sales	$	2,877,660		$	—	$	2,877,660
NGLs sales	357,746			—		357,746
Oil sales	29,322			—		29,322
Sales of natural gas, oil and NGLs	$	3,264,728		$	—	$	3,264,728

Pipeline and net marketing services at EQT Production	$	14,273		$	28,109	$	42,382
EQM Gathering:
Firm reservation fee revenues	334,233			—		334,233
Volumetric based fee revenues:
Usage fees under firm contracts	30,725			—		30,725
Usage fees under interruptible contracts	366,482			—		366,482
EQM Transmission:
Firm reservation fee revenues	262,666			—		262,666
Volumetric based fee revenues:
Usage fees under firm contracts	13,981			—		13,981
Usage fees under interruptible contracts	8,782			—		8,782
Water services at EQM Water	93,438			—		93,438
Intersegment eliminations	(775,913		)	—		(775,913		)
Pipeline, water and net marketing services	$	348,667		$	28,109	$	376,776

Gain on derivatives not designated as hedges	$	—		$	5,620	$	5,620

Total operating revenues	$	3,613,395		$	33,729	$	3,647,124

The following table includes the transaction price allocated to the Company's remaining performance obligations on all contracts with fixed consideration. The table excludes all contracts that qualified for the exception to the relative standalone selling price method. Gathering firm reservation fees and transmission and storage firm reservation fees include amounts related to affiliate contracts.



	2018 (a)		2019		2020		2021		2022		Thereafter		Total
	(Thousands)
Natural gas sales	$	20,173	$	32,322	$	1,237	$	—	$	—	$	—	$	53,732
Gathering firm reservation fees	$	114,771	$	481,425	$	557,352	$	567,351	$	566,062	$	2,834,111	$	5,121,072
Gathering revenues supported by MVCs	$	—	$	65,700	$	71,370	$	71,175	$	71,175	$	136,875	$	416,295
Transmission and storage firm reservation fees	$	94,077	$	346,893	$	344,328	$	339,588	$	334,522	$	2,477,808	$	3,937,216

(a) October 1 through December 31.

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Notes to Condensed Consolidated Financial Statements (Unaudited)

G . Investment in Nonconsolidated Entity

The Mountain Valley Pipeline, LLC (MVP Joint Venture) is constructing the Mountain Valley Pipeline (MVP), an estimated 300 -mile natural gas interstate pipeline spanning from northern West Virginia to southern Virginia. EQM is the operator of the MVP and owned a 45.5% interest in the MVP Joint Venture as of September 30, 2018 . The MVP Joint Venture is a variable interest entity because it has insufficient equity to finance its activities during the construction stage of the project. EQM is not the primary beneficiary because it does not have the power to direct the activities of the MVP Joint Venture that most significantly impact its economic performance. Certain business decisions require the approval of owners holding more than a 66 2/3% interest in the MVP Joint Venture and no one member owns more than a 66 2/3% interest. The MVP Joint Venture is an equity method investment for accounting purposes as EQM has the ability to exercise significant influence over operating and financial policies of the MVP Joint Venture. As currently designed, the MVP is estimated to cost a total of approximately $4.6 billion , excluding Allowance for Funds Used During Construction (AFUDC), with EQM funding approximately $2.2 billion through capital contributions made to the MVP Joint Venture, which includes approximately $65 million in excess of EQM's ownership interest. In 2018, EQM expects to provide capital contributions of $0.8 billion to $1.0 billion to the MVP Joint Venture.

In September 2018, the MVP Joint Venture issued a capital call notice to MVP Holdco, LLC (MVP Holdco), a direct wholly owned subsidiary of EQM, for $456.0 million , of which $175.2 million was paid as of October 2018, and $280.8 million is expected to be paid in the fourth quarter of 2018. In addition, in September 2018, the MVP Joint Venture issued a capital call notice to MVP Holdco for $7.7 million for funding of the MVP Southgate project that is expected to be paid in the fourth quarter of 2018. The capital contribution payables have been reflected on the Condensed Consolidated Balance Sheet as of September 30, 2018 with corresponding increases to the Company's investment in the MVP Joint Venture.

Equity income is EQM's portion of the MVP Joint Venture's AFUDC on construction of the MVP.

As of September 30, 2018 , EQM had issued a $91 million performance guarantee in favor of the MVP Joint Venture. The guarantee provides performance assurances of MVP Holdco's obligations to fund its proportionate share of the MVP construction budget. As of September 30, 2018 , EQM's maximum financial statement exposure related to the MVP Joint Venture was approximately $1,391 million , which consists of the investment in nonconsolidated entity balance on the Condensed Consolidated Balance Sheet as of September 30, 2018 and amounts that could have become due under EQM's performance guarantee as of that date. Following the completion of the Separation, EQM expects the MVP Joint Venture guarantee will be approximately $345 million based on MVP Holdco's share of the estimated remaining MVP construction budget and terms of the agreement.

In April 2018, the MVP Joint Venture announced the MVP Southgate project, a proposed 70 -mile interstate pipeline that will extend from the MVP at Pittsylvania County, Virginia to new delivery points in Rockingham and Alamance Counties, North Carolina. This MVP Southgate project is anchored by a firm capacity commitment from PSNC Energy. The preliminary MVP Southgate project cost estimate is $350 million to $500 million , which is expected to be spent in 2019 and 2020. As of September 30, 2018 , EQM had a 32.7% ownership interest in the MVP Southgate project and will operate the pipeline. Subject to approval by the FERC, the MVP Southgate project has a targeted in-service date of the fourth quarter 2020.

H. Consolidated Variable Interest Entities

As of September 30, 2018 , the Company determined EQGP and EQM to be variable interest entities. In addition, as of December 31, 2017 , RMP was also a variable interest entity. As discussed in Note B , on July 23, 2018, pursuant to the Midstream Merger Agreement, RMP and RMP's general partner were acquired by EQM and became wholly owned subsidiaries of EQM. Through EQT's ownership and control of EQGP's general partner, EQM's general partner and RMP's general partner, EQT has or had the power to direct the activities that most significantly impact the economic performance of EQGP, EQM and RMP. In addition, through EQT's limited partner interest in EQGP and EQGP's general partner interest, limited partner interest and IDRs in EQM, EQT has the obligation to absorb the losses of EQGP and EQM and the right to receive benefits from EQGP and EQM, in accordance with such interests. Furthermore, through EQT's limited partner interest and IDRs in RMP, EQT had the obligation to absorb the losses of RMP and the right to receive benefits from RMP, in accordance with such interests. As EQT has or had a controlling financial interest in, and is the primary beneficiary of, EQGP, EQM and RMP, EQT consolidates EQGP, EQM and did consolidate RMP. See Note 13 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for additional information related to the consolidated variable interest entities.

The risks associated with the operations of EQGP, EQM and RMP are discussed in their respective Annual Reports on Form 10-K for the year ended December 31, 2017 , as updated by any Quarterly Reports on Form 10-Q. See further discussion of the impact that EQT's ownership and control of EQGP, EQM and RMP have or had on EQT's financial position, results of operations and

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Notes to Condensed Consolidated Financial Statements (Unaudited)

cash flows included in EQT's Annual Report on Form 10-K for the year ended December 31, 2017 , including in the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations." See Notes C , D and E for further discussion of EQGP, EQM and RMP, respectively.

The following table presents amounts included in the Company's Condensed Consolidated Balance Sheets that were for the use or obligation of EQGP or EQM as of September 30, 2018 and December 31, 2017 .



Classification	September 30, 2018		December 31, 2017
	(Thousands)
Assets:
Cash and cash equivalents	$	6,062	$	2,857
Accounts receivable	58,358		28,804
Prepaid expenses and other	4,798		8,470
Property, plant and equipment, net	5,608,358		2,804,059
Goodwill	1,384,872		—
Intangible assets, net	586,500		—
Investment in nonconsolidated entity	1,300,430		460,546
Other assets	23,599		22,458
Liabilities:
Accounts payable	$	134,027	$	47,042
Other current liabilities	526,299		133,531
Credit facility borrowings	22,000		180,000
Senior Notes	3,455,296		987,352
Other liabilities and credits	31,010		20,273

The following table summarizes EQGP's Statements of Consolidated Operations and Cash Flows for the three and nine months ended September 30, 2018 and 2017 .



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(Thousands)
Operating revenues	$	364,584		$	207,193		$	1,110,307		$	609,585
Operating expenses	133,665			62,230			370,880			180,218
Other expenses	23,534			2,556			37,632			6,418
Net income	$	207,385		$	142,407		$	701,795		$	422,949

Net cash provided by operating activities	$	422,938		$	159,911		$	863,009		$	479,566
Net cash used in investing activities	(575,624		)	(117,637		)	(2,252,293		)	(324,936		)
Net cash (used in) provided by financing activities	(536,246		)	(48,128		)	1,340,446			(208,150		)

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Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents amounts included in the Company’s Condensed Consolidated Balance Sheet that is for the use or obligation of RMP as of December 31, 2017 .



Classification	December 31, 2017
	(Thousands)
Assets:
Cash and cash equivalents	$	10,538
Accounts receivable	12,246
Prepaid expenses and other	1,327
Property, plant and equipment, net	1,431,802
Goodwill	1,346,918
Liabilities:
Accounts payable	$	24,634
Other current liabilities	4,200
Credit facility borrowings	286,000
Other liabilities and credits	9,360

I . Financial Information by Business Segment

Prior to the Rice Merger, the Company reported its results of operations through three business segments: EQT Production, EQT Gathering and EQT Transmission. These reporting segments reflected the Company's lines of business and were reported in the same manner in which the Company evaluated its operating performance through September 30, 2017. Following the Rice Merger, the Company adjusted its internal reporting structure to incorporate the newly acquired assets. The Company conducted its business through five business segments: EQT Production, EQM Gathering (formerly known as EQT Gathering), EQM Transmission (formerly known as EQT Transmission), RMP Gathering and RMP Water. On July 23, 2018, pursuant to the Midstream Merger Agreement, RMP and the RMP General Partner each became wholly owned subsidiaries of EQM as a result of the Midstream Mergers. The Company now conducts its business through four business segments: EQT Production, EQM Gathering, EQM Transmission and EQM Water.

Rice Olympus, Strike Force Holdings and Rice West Virginia were businesses and the Drop-Down Transaction was a transaction between entities under common control; therefore, EQM recorded the assets and liabilities of these entities at their carrying amounts to EQT on the effective date of the transaction. EQM also recast its consolidated financial statements to retrospectively reflect the pre-acquisition results as if the entities were owned by EQM from the date of the Rice Merger, November 13, 2017, as that is the date those entities came under the common control of EQT.

In addition, the assets associated with the investment in the MVP Joint Venture were included within the headquarters segment assets balance prior to June 30, 2018. The investment in the MVP Joint Venture is now included in the transmission segment as this segment classification better aligns with the ultimate operations of the MVP. Segment asset balances at December 31, 2017 have been reclassified to conform to this presentation.



Three Months Ended September 30, 2018	EQT Production			EQM Gathering		EQM Transmission		EQM Water		Intersegment Eliminations			EQT Corporation
Revenues:	(Thousands)
Sales of natural gas, oil and NGLs	$	1,046,989		$	—	$	—	$	—	$	—		$	1,046,989
Pipeline, water and net marketing services	6,132			252,861		89,350		22,373		(255,760		)	114,956
Loss on derivatives not designated as hedges	(3,075		)	—		—		—		—			(3,075		)
Total operating revenues	$	1,050,046		$	252,861	$	89,350	$	22,373	$	(255,760	)	$	1,158,870

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Notes to the Condensed Consolidated Financial Statements (Unaudited)



Three Months Ended September 30, 2017	EQT Production		EQM Gathering		EQM Transmission		Intersegment Eliminations			EQT Corporation
Revenues:	(Thousands)
Sales of natural gas, oil and NGLs	$	552,953	$	—	$	—	$	—		$	552,953
Pipeline and net marketing services	9,140		116,522		89,771		(144,598		)	70,835
Gain on derivatives not designated as hedges	35,625		—		—		—			35,625
Total operating revenues	$	597,718	$	116,522	$	89,771	$	(144,598	)	$	659,413




Nine Months Ended September 30, 2018	EQT Production		EQM Gathering		EQM Transmission		EQM Water		Intersegment Eliminations			EQT Corporation
Revenues:	(Thousands)
Sales of natural gas, oil and NGLs	$	3,264,728	$	—	$	—	$	—	$	—		$	3,264,728
Pipeline and net marketing services	42,382		731,440		285,429		93,438		(775,913		)	376,776
Gain on derivatives not designated as hedges	5,620		—		—		—		—			5,620
Total operating revenues	$	3,312,730	$	731,440	$	285,429	$	93,438	$	(775,913	)	$	3,647,124




Nine Months Ended September 30, 2017	EQT Production		EQM Gathering		EQM Transmission		Intersegment Eliminations			EQT Corporation
Revenues:	(Thousands)
Sales of natural gas, oil and NGLs	$	1,803,132	$	—	$	—	$	—		$	1,803,132
Pipeline and net marketing services	31,656		330,996		272,184		(418,337		)	216,499
Gain on derivatives not designated as hedges	222,693		—		—		—			222,693
Total operating revenues	$	2,057,481	$	330,996	$	272,184	$	(418,337	)	$	2,242,324



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(Thousands)
Operating income (loss):
EQT Production (a)	$	(121,678	)	$	12,201		$	(2,127,323	)	$	322,634
EQM Gathering	177,902			85,932			510,755			243,061
EQM Transmission	58,691			59,770			198,784			189,237
EQM Water	(3,093		)	—			35,627			—
Unallocated expenses and intersegment eliminations (b)	(39,998		)	(19,876		)	(169,566		)	(35,802		)
Total operating income (loss)	$	71,824		$	138,027		$	(1,551,723	)	$	719,130


(a)	Impairment of long-lived assets of $0.3 billion and $2.7 billion are included in EQT Production operating income for the three and nine months ended September 30, 2018 , respectively. See Note Q .

(b)

Unallocated expenses consist of compensation expense, administrative costs and the amortization expense related to non-compete agreements with former Rice executives. Administrative costs include transaction costs of $29.3 million and $85.7 million for the three and nine months ended September 30, 2018 , respectively. Amortization expense related to non-compete agreements with former Rice executives was $10.4 million and $31.0 million for the three and nine months ended September 30, 2018 , respectively.

Intersegment eliminations include the elimination of profit on water services that are provided to EQT Production and capitalized as part of development costs of $3.2 million and $50.7 million for the three and nine months ended September 30, 2018 , respectively.

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Notes to the Condensed Consolidated Financial Statements (Unaudited)

Reconciliation of operating income (loss) to net income (loss):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(Thousands)
Total operating income (loss)	$	71,824		$	138,027		$	(1,551,723	)	$	719,130
Other income	21,755			6,526			43,092			15,880
Interest expense	93,042			50,377			240,059			137,110
Income tax (benefit) expense	(62,911		)	(11,281		)	(503,505		)	119,093
Net income (loss)	$	63,448		$	105,457		$	(1,245,185	)	$	478,807



	September 30, 2018		December 31, 2017
	(Thousands)
Segment assets:
EQT Production	$	19,278,308	$	21,015,132
EQM Gathering	5,994,891		5,681,404
EQM Transmission	2,813,644		1,923,427
EQM Water	141,403		185,079
Total operating segments	28,228,246		28,805,042
Headquarters assets, including cash and short-term investments	433,083		717,562
Total assets	$	28,661,329	$	29,522,604



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018			2017
	(Thousands)
Depreciation and depletion: (c)
EQT Production	$	391,083	$	224,103	$	1,161,718		$	654,411
EQM Gathering	25,359		9,983		72,309			28,398
EQM Transmission	12,357		12,261		37,228			35,793
EQM Water	5,851		—		17,420			—
Other	661		213		2,201			693
Total	$	435,311	$	246,560	$	1,290,876		$	719,295

Expenditures for segment assets: (d)
EQT Production (e)	$	855,494	$	449,303	$	2,225,435		$	1,850,482
EQM Gathering	194,477		48,182		515,072			150,728
EQM Transmission	37,626		22,312		84,517			73,679
EQM Water	7,981		—		17,358			—
Other and intersegment eliminations (f)	10,284		2,502		(32,864		)	7,097
Total	$	1,105,862	$	522,299	$	2,809,518		$	2,081,986


(c)	Excludes amortization of intangible assets.

(d)

Includes the capitalized portion of non-cash stock-based compensation costs, non-cash acquisitions and the impact of capital accruals. The impact of accrued capital expenditures includes the reversal of the prior period accrual as well as the current period estimate, both of which are non-cash items. The net impact of these non-cash items was $(51.8) million and $44.3 million for the three months ended September 30, 2018 and 2017 , respectively, and $(45.2) million and $102.7 million for the nine months ended September 30, 2018 and 2017 , respectively. These non-cash items are excluded from capital expenditures on the Statements of Condensed Consolidated Cash Flows. Expenditures for segment assets does not include consideration for the Rice Merger.

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Notes to the Condensed Consolidated Financial Statements (Unaudited)


(e)	The three and nine months ended September 30, 2017 included $7.8 million and $819.0 million of cash capital expenditures, respectively, and the nine months ended September 30, 2017 included $7.5 million of non-cash capital expenditures for the acquisitions discussed in Note P .


(f)	Intersegment eliminations include profit on water services that are provided to EQT Production and capitalized as part of development costs.

J . Derivative Instruments

The Company’s primary market risk exposure is the volatility of future prices for natural gas and NGLs, which can affect the operating results of the Company primarily at EQT Production. The Company’s overall objective in its hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices.

The Company primarily uses over the counter (OTC) derivative commodity instruments, primarily swap, collar and option agreements that are typically placed with financial institutions. The creditworthiness of all counterparties is regularly monitored. Swap agreements involve payments to or receipts from counterparties based on the differential between two prices for the commodity. Collar agreements require the counterparty to pay the Company if the index price falls below the floor price and the Company to pay the counterparty if the index price rises above the cap price. The Company sells call options that require the Company to pay the counterparty if the index price rises above the strike price and purchases call options that require the counterparty to pay the Company if the index price rises above the strike price. The Company engages in basis swaps to protect earnings from undue exposure to the risk of geographic disparities in commodity prices and interest rate swaps to hedge exposure to fluctuations in interest rates. The Company also engages in a limited number of swaptions.

The Company recognizes all derivative instruments as either assets or liabilities at fair value on a gross basis. These derivative instruments are reported as either current assets or current liabilities due to their highly liquid nature. The Company can net settle its derivative instruments at any time.

The Company discontinued cash flow hedge accounting in 2014; therefore, all changes in fair value of the Company’s derivative instruments are recognized within operating revenues in the Statements of Consolidated Operations.

In connection with the Rice Merger, the Company assumed all outstanding derivative commodity instruments held by Rice. The assets and liabilities assumed were recognized at fair value at the closing date and subsequent changes in fair value were recognized within operating revenues in the Statements of Consolidated Operations. The derivative commodity instruments assumed were substantially similar to instruments previously held by the Company.

Contracts which result in physical delivery of a commodity expected to be used or sold by the Company in the normal course of business are designated as normal purchases and sales and are exempt from derivative accounting.

OTC arrangements require settlement in cash. The Company also enters into exchange traded derivative commodity instruments that are generally settled with offsetting positions. Settlements of derivative commodity instruments are reported as a component of cash flows from operations in the accompanying Statements of Condensed Consolidated Cash Flows.

With respect to the derivative commodity instruments held by the Company, the Company hedged portions of expected sales of equity production and portions of its basis exposure covering approximately 3,005 Bcf of natural gas and 2,058 Mbbls of NGLs as of September 30, 2018 , and 2,148 Bcf of natural gas and 1,460 Mbbls of NGLs as of December 31, 2017 . The open positions at September 30, 2018 and December 31, 2017 had maturities extending through December 2024 and December 2022, respectively.

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. The table below reflects the impact of netting agreements and margin deposits on gross derivative assets and liabilities as of September 30, 2018 and December 31, 2017 . The margin deposit within the table as of September 30, 2018 represents funds remitted to a broker for exchange traded derivative commodity instruments.

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EQT Corporation and Subsidiaries

Notes to the Condensed Consolidated Financial Statements (Unaudited)



As of September 30, 2018	Derivative instruments, recorded in the Condensed Consolidated Balance Sheet, gross		Derivative instruments subject to master netting agreements			Margin deposits remitted to counterparties			Derivative instruments, net
	(Thousands)
Asset derivatives:
Derivative instruments, at fair value	$	315,564	$	(104,559	)	$	—		$	211,005
Liability derivatives:
Derivative instruments, at fair value	$	183,677	$	(104,559	)	$	(11,110	)	$	68,008



As of December 31, 2017	Derivative instruments, recorded in the Condensed Consolidated Balance Sheet, gross		Derivative instruments subject to master netting agreements			Margin deposits remitted to counterparties		Derivative instruments, net
	(Thousands)
Asset derivatives:
Derivative instruments, at fair value	$	241,952	$	(86,856	)	$	—	$	155,096
Liability derivatives:
Derivative instruments, at fair value	$	139,089	$	(86,856	)	$	—	$	52,233

Certain of the Company’s OTC derivative instrument contracts provide that if the Company’s credit ratings by Standard & Poor’s Rating Service (S&P) or Moody’s Investors Service (Moody’s) are lowered below investment grade, additional collateral must be deposited with the counterparty if the amounts outstanding on those contracts exceed certain thresholds. The additional collateral can be up to 100% of the derivative liability. As of September 30, 2018 , the aggregate fair value of all derivative instruments with credit risk-related contingent features that were in a net liability position was $109.2 million , for which the Company had no collateral posted on September 30, 2018 . If the Company’s credit rating by S&P or Moody’s had been downgraded below investment grade on September 30, 2018 , the Company would not have been required to post any additional collateral under the agreements with the respective counterparties. The required margin on the Company’s derivative instruments is subject to significant change as a result of factors other than credit rating, such as gas prices and credit thresholds set forth in agreements between the hedging counterparties and the Company. Investment grade refers to the quality of the Company’s credit as assessed by one or more credit rating agencies. The Company’s senior unsecured debt was rated BBB by S&P and Baa3 by Moody’s at September 30, 2018 . In order to be considered investment grade, the Company must be rated BBB- or higher by S&P and Baa3 or higher by Moody’s. Anything below these ratings is considered non-investment grade. See also "Security Ratings and Financing Triggers" under Part I, Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

K . Fair Value Measurements

The Company records its financial instruments, principally derivative instruments, at fair value in its Condensed Consolidated Balance Sheets. The Company estimates the fair value using quoted market prices, where available. If quoted market prices are not available, fair value is based upon models that use market-based parameters as inputs, including forward curves, discount rates, volatilities and nonperformance risk. Nonperformance risk considers the effect of the Company’s credit standing on the fair value of liabilities and the effect of the counterparty’s credit standing on the fair value of assets. 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 of a risk-free instrument and credit default swaps rates where available.

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. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Assets and liabilities in Level 2 primarily include the Company’s swap, collar and option agreements.

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Notes to the Condensed Consolidated Financial Statements (Unaudited)

Exchange traded commodity swaps are included in Level 1. The fair value of the commodity swaps included in Level 2 is based on standard industry income approach models that use significant observable inputs, including but not limited to NYMEX natural gas forward curves, LIBOR-based discount rates, basis forward curves and natural gas liquids forward curves. The Company’s collars, options and swaptions are valued using standard industry income approach option models. The significant observable inputs utilized by the option pricing models include NYMEX forward curves, natural gas volatilities and LIBOR-based discount rates. The NYMEX natural gas forward curves, LIBOR-based discount rates, natural gas volatilities, basis forward curves and NGLs forward curves are validated to external sources at least monthly.

The following assets and liabilities were measured at fair value on a recurring basis during the applicable period:



			Fair value measurements at reporting date using
Description	As of September 30, 2018		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(Thousands)
Assets
Derivative instruments, at fair value	$	315,564	$	7,661	$	307,903	$	—
Liabilities
Derivative instruments, at fair value	$	183,677	$	12,058	$	171,619	$	—



			Fair value measurements at reporting date using
Description	As of December 31, 2017		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
	(Thousands)
Assets
Derivative instruments, at fair value	$	241,952	$	—	$	241,952	$	—
Liabilities
Derivative instruments, at fair value	$	139,089	$	—	$	139,089	$	—

The carrying values of cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term maturity of the instruments. The carrying values of borrowings under the Company's various credit facilities approximate fair value as the interest rates are based on prevailing market rates.

The Company also has an immaterial investment in a fund that invests in companies developing technology and operating solutions for exploration and production companies for which it recognized a cumulative effect of accounting change in the first quarter 2018. The investment is valued using the net asset value as a practical expedient as provided in the financial statements received from fund managers.

The Company estimates the fair value of its Senior Notes using its established fair value methodology. Because not all of the Company’s Senior Notes are actively traded, the fair value of the Company's Senior Notes are a Level 2 fair value measurement. Fair value for the Company's non-traded Senior Notes are estimated using a standard industry income approach model that utilizes a discount rate based on market rates for debt with similar remaining time to maturity and credit risk. The estimated fair value of Senior Notes (including EQM’s Senior Notes) on the Condensed Consolidated Balance Sheets was approximately $8.1 billion at September 30, 2018 and $5.7 billion at December 31, 2017 .

The Company recognizes transfers between Levels as of the actual date of the event or change in circumstances that caused the transfer. There were no transfers between Levels 1, 2 and 3 during the periods presented.

For information on the fair values of assets related to the impairments of proved and unproved oil and gas properties and of other long-lived assets, see Note Q and Note 1 in EQT's Annual Report on Form 10-K for the year ended December 31, 2017 . For information on the assets acquired in the Rice Merger and the assets acquired in other acquisition transactions, see Notes A and P .

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Notes to the Condensed Consolidated Financial Statements (Unaudited)

L. Income Taxes

On December 22, 2017, the U.S. Congress enacted the law known as the Tax Cuts and Jobs Act of 2017 (Tax Reform Legislation), which made significant changes to U.S. federal income tax law, including lowering the federal corporate tax rate to 21% from 35% beginning January 1, 2018. The Company is still analyzing certain aspects of the Tax Reform Legislation and refining calculations, which could potentially impact the measurement of deferred tax balances or potentially give rise to new deferred tax amounts. The Company will refine its estimates to incorporate new or better information as it comes available through the filing date of its 2017 U.S. income tax returns in the fourth quarter of 2018.

For the nine months ended September 30, 2018 and 2017 , the Company calculated the provision for income taxes by applying 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 quarter.

All of EQGP's, RMP’s and Strike Force Midstream’s income is included in the Company's pre-tax income (loss). However, the Company is not required to record income tax expense on income allocated to the noncontrolling public limited partners of EQGP and EQM, or to the noncontrolling public limited partners of RMP prior to the Midstream Mergers or to the portion of Strike Force Midstream’s income allocated to the minority owner prior to the closing of the Gulfport Transaction. The exclusion of this income is allocated to noncontrolling interest from the Company's taxable income which reduces the Company's effective tax rate in periods when the Company has consolidated pre-tax income and increases the Company's effective tax rate in periods when the Company has consolidated pre-tax loss.

The Company recorded income tax benefit at an effective tax rate of 28.8% for the nine months ended September 30, 2018 and income tax expense at an effective tax rate of 19.9% for the nine months ended September 30, 2017 . The Company’s forecasted annual effective tax rate for 2018 was higher than the statutory rate due to the impact of income allocated to non-controlling limited partners on a forecasted consolidated pre-tax loss and the impact of state taxes. The state taxes increased the forecasted annual effective tax rate as compared to the statutory rate as a result of the pre-tax loss on entities with higher state applicable rates and pre-tax income on entities with lower state applicable rates. The Company’s effective tax rate for the nine months ended September 30, 2018 was lower because the amount of benefit recorded for the year-to-date is limited to the amount of benefit forecasted for the entire year.

There were no material changes to the Company’s methodology for determining unrecognized tax benefits during the three months ended September 30, 2018 .

M . Revolving Credit Facilities

The Company has a $2.5 billion revolving credit facility that expires in July 2022. The Company had $0.5 billion in borrowings and no letters of credit outstanding under the credit facility as of September 30, 2018 . The Company had $1.3 billion in borrowings and $159.4 million of letters of credit outstanding under the credit facility as of December 31, 2017 . The maximum amount of outstanding borrowings at any time under the credit facility during the three and nine months ended September 30, 2018 was $0.7 billion and $1.6 billion , respectively, and the average daily balance of borrowings outstanding was approximately $0.3 billion and $0.9 billion , respectively, at a weighted average annual interest rate of approximately 3.6% and 3.3% , respectively. The Company had no borrowings or letters of credit outstanding under its credit facility at any time during the three and nine months ended September 30, 2017 .

EQM has a $1 billion revolving credit facility that expires in July 2022. EQM had $22 million in borrowings and $1 million of letters of credit outstanding under the credit facility as of September 30, 2018 . EQM had $180 million in borrowings and no letters of credit outstanding under the credit facility as of December 31, 2017 . The maximum amount of outstanding borrowings under EQM’s revolving credit facility at any time during the three and nine months ended September 30, 2018 was $74 million and $420 million , respectively, and the average daily balance of borrowings outstanding was approximately $22 million and $147 million , respectively. EQM incurred interest at a weighted average annual interest rate of approximately 3.7% and 3.2% for the three and nine months ended September 30, 2018 , respectively. The maximum amount of outstanding borrowings under EQM's revolving credit facility at any time during each of the three and nine months ended September 30, 2017 was $177 million and the average daily balance of borrowings outstanding was approximately $95 million and $32 million , respectively. EQM incurred interest at a weighted average annual interest rate of approximately 2.7% for both the three and nine months ended September 30, 2017 . Prior to the Separation, EQM intends to increase its borrowing capacity from $1 billion up to $3 billion .

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EQT Corporation and Subsidiaries

Notes to the Condensed Consolidated Financial Statements (Unaudited)

See Note B to the Condensed Consolidated Financial Statements for a discussion of the borrowings on the EQM Term Loan Facility. As a result of the termination of the EQM Term Loan Facility, EQM expensed $3 million of deferred issuance costs. From April 25, 2018 through June 25, 2018, the maximum amount of EQM's outstanding borrowings under the EQM Term Loan Facility at any time was $1,825 million and the average daily balance was approximately $1,231 million . EQM incurred interest at a weighted average annual interest rate of approximately 3.3% for the period from April 25, 2018 through June 25, 2018.

In connection with the completion of the Midstream Mergers discussed in Note B , on July 23, 2018, EQM repaid the approximately $260 million of borrowings outstanding under the RMP Credit Agreement and the RMP Credit Agreement was terminated. RMP OpCo had $286 million in borrowings and $1 million of letters of credit outstanding under the RMP Credit Agreement as of December 31, 2017 . The maximum amount of outstanding borrowings under the RMP Credit Agreement at any time from July 1, 2018 through July 23, 2018 and from January 1, 2018 through July 23, 2018 was $260 million and $375 million , respectively, and the average daily balance of borrowings outstanding during such periods was approximately $249 million and $300 million , respectively, at a weighted average annual interest rate of approximately 4.1% and 3.8% , respectively.

N. Earnings Per Share

In periods when the Company reports a net loss, all options and restricted stock are excluded from the calculation of diluted weighted average shares outstanding because of their anti-dilutive effect on loss per share. As a result, all options and all restricted stock were excluded from the calculation of diluted earnings per share for the three and nine months ended September 30, 2018 . Potentially dilutive securities (options and restricted stock awards) included in the calculation of diluted earnings per share totaled 199,376 and 204,080 for the three and nine months ended September 30, 2017 , respectively. Options to purchase common stock excluded from potentially dilutive securities because they were anti-dilutive totaled 425,100 and 431,190 for the three and nine months ended September 30, 2017 , respectively. The impact of EQM’s and EQGP’s dilutive units did not have a material impact on the Company’s earnings per share calculations for any of the periods presented.

O. Changes in Accumulated Other Comprehensive Income by Component

The following tables explain the changes in accumulated other comprehensive income (OCI) by component during the applicable period:



	Three Months Ended September 30, 2018
	Natural gas cash flow hedges, net of tax				Interest rate cash flow hedges, net of tax				Other post- retirement benefit liability adjustment, net of tax				Accumulated OCI, net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of July 1, 2018	$	3,872			$	(475	)		$	(6,356	)		$	(2,959	)
(Gains) losses reclassified from accumulated OCI, net of tax	(430		)	(a)	52			(a)	86			(b)	(292		)
Accumulated OCI (loss), net of tax, as of September 30, 2018	$	3,442			$	(423	)		$	(6,270	)		$	(3,251	)



	Three Months Ended September 30, 2017
	Natural gas cash flow hedges, net of tax				Interest rate cash flow hedges, net of tax				Other post- retirement benefit liability adjustment, net of tax				Accumulated OCI, net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of July 1, 2017	$	7,047			$	(627	)		$	(6,713	)		$	(293	)
(Gains) losses reclassified from accumulated OCI, net of tax	(1,451		)	(a)	36			(a)	77			(b)	(1,338		)
Accumulated OCI (loss), net of tax, as of September 30, 2017	$	5,596			$	(591	)		$	(6,636	)		$	(1,631	)

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Notes to the Condensed Consolidated Financial Statements (Unaudited)




	Nine Months Ended September 30, 2018
	Natural gas cash flow hedges, net of tax				Interest rate cash flow hedges, net of tax				Other post- retirement benefit liability adjustment, net of tax				Accumulated OCI, net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of January 1, 2018	$	4,625			$	(555	)		$	(6,528	)		$	(2,458	)
(Gains) losses reclassified from accumulated OCI, net of tax	(1,183		)	(a)	132			(a)	258			(b)	(793		)
Accumulated OCI (loss), net of tax, as of September 30, 2018	$	3,442			$	(423	)		$	(6,270	)		$	(3,251	)




	Nine Months Ended September 30, 2017
	Natural gas cash flow hedges, net of tax				Interest rate cash flow hedges, net of tax				Pension and other post- retirement benefits liability adjustment, net of tax				Accumulated OCI, net of tax
	(Thousands)
Accumulated OCI (loss), net of tax, as of January 1, 2017	$	9,607			$	(699	)		$	(6,866	)		$	2,042
(Gains) losses reclassified from accumulated OCI, net of tax	(4,011		)	(a)	108			(a)	230			(b)	(3,673		)
Accumulated OCI (loss), net of tax, as of September 30, 2017	$	5,596			$	(591	)		$	(6,636	)		$	(1,631	)

(a) (Gains) losses reclassified from accumulated OCI, net of tax related to natural gas cash flow hedges were reclassified into operating revenues. Losses from accumulated OCI, net of tax related to interest rate cash flow hedges were reclassified into interest expense.

(b) The accumulated OCI reclassification is attributable to the net actuarial loss and net prior service cost related to the Company’s post-retirement benefit plans. See Note 1 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for additional information.

P . Acquisitions

On February 1, 2017, the Company acquired approximately 14,000 net Marcellus acres located in Marion, Monongalia and Wetzel Counties of West Virginia from a third-party.

On February 27, 2017, the Company acquired approximately 85,000 net Marcellus acres, including drilling rights on approximately 44,000 net Utica acres and current natural gas production of approximately 110 MMcfe per day, from Stone Energy Corporation. The acquired acres are primarily located in Wetzel, Marshall, Tyler and Marion Counties of West Virginia. The acquired assets also included 174 Marcellus wells, 120 of which were producing at the time of the acquisition, and 20 miles of gathering pipeline.

On June 30, 2017, the Company acquired approximately 11,000 net Marcellus acres, and the associated Utica drilling rights from a third-party. The acquired acres are primarily located in Allegheny, Washington and Westmoreland Countries of Pennsylvania.

The Company paid net cash of $740.1 million for the 2017 acquisitions during the nine months ended September 30, 2017 . The preliminary fair value assigned to the acquired property, plant and equipment as of the opening balance sheet dates totaled $750.1 million . In connection with the 2017 acquisitions, the Company assumed approximately $5.3 million of net current liabilities and $4.7 million of non-current liabilities.

Fair Value Measurement

As these acquisitions qualified as business combinations under GAAP, the fair value of the acquired assets was determined using a market approach for the undeveloped acreage and a discounted cash flow model under the income approach for the wells. Significant unobservable inputs used in the analysis included the determination of estimated developed reserves and forward pricing estimates. As a result, valuation of the acquired assets was a Level 3 fair value measurement.

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EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

Q . Divestitures

On June 19, 2018, the Company sold its non-core Permian Basin assets located in Texas for net proceeds of $57.7 million , subject to final purchase price adjustments (the Permian Divestiture). The assets sold in the Permian Divestiture included approximately 970 productive wells with current net production of approximately 20 MMcfe per day, approximately 350 miles of low-pressure gathering lines and 26 compressors.

On July 18, 2018, the Company sold approximately 2.5 million non-core, net acres in the Huron Play for net proceeds of $523.6 million , subject to final purchase price adjustments (the Huron Divestiture). The assets sold in the Huron Divestiture included approximately 12,000 productive wells with current net production of approximately 200 MMcfe per day, approximately 6,400 miles of low-pressure gathering lines and 59 compressor stations. The Company retained the deep drilling rights across the divested acreage.

During the first quarter of 2018 , the Company recorded an impairment of $2.3 billion associated with the production and related midstream assets in the Huron and Permian Plays. The impairment of these properties and related pipeline assets recorded during the first quarter of 2018 was due to the carrying value of the assets exceeding the undiscounted cash flows which were expected to result from the continued use and potential disposition of the underlying assets as well as management’s determination that it no longer intended to develop the associated unproved properties. The first quarter of 2018 impairment reduced these assets to their estimated fair value at that time of approximately $1 billion .

The fair value of the impaired assets, as determined at March 31, 2018, was based on significant inputs that were not observable in the market and as such are considered to be Level 3 fair value measurements. See Note K for a description of the fair value hierarchy and Note 1 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for our policy on impairment of proved and unproved properties. Key assumptions included in the calculation of the fair value of the impaired assets as of March 31, 2018 included (i) reserves, including risk adjustments for probable and possible reserves; (ii) future commodity prices; (iii) to the extent available, market based indicators of fair value including estimated proceeds which could be realized upon a potential disposition; (iv) production rates based on the Company's experience with similar properties in which it operates; (v) estimated future operating and development costs; and (vi) a market-based weighted average cost of capital.

In connection with the Permian Divestiture and the Huron Divestiture, the Company recorded an additional impairment/loss on sale of long-lived assets of $118.1 million during the second quarter of 2018 to write down the carrying value of the disposal groups to the estimated amounts to be received upon the closing of the transactions.

In connection with the closing of the Huron Divestiture, the Company recorded a loss of $259.3 million during the third quarter of 2018 related to certain capacity contracts that the Company no longer has existing production to satisfy and does not plan to utilize in the future. The loss was recorded within operating expenses under the impairment/loss on sale of long-lived assets caption within the Statements of Consolidated Operations.

The fair value of the loss for the initial measurement was based upon significant inputs that were not observable in the market and as such is considered a Level 3 fair value measurement. The key unobservable input in the calculation is the amount, if any, of potential future economic benefit from the contracts.

R . Subsequent Events

On October 24, 2018, the Company’s Board of Directors approved the completion of the Separation by means of a pro-rata distribution (the Distribution) of 80.1% of the outstanding common stock of Equitrans Midstream to the Company’s shareholders of record as of the close of business on November 1, 2018 (the Record Date). Pursuant to the plan of Distribution approved by the Company’s Board of Directors, each Company shareholder will receive 0.80 shares of Equitrans Midstream common stock for every one share of the Company’s common stock held as of the close of business on the Record Date. Shareholders will receive cash in lieu of fractional shares of Equitrans Midstream common stock. After considering that EQT will retain an additional 19.9% of Equitrans Midstream's common stock, total Equitrans Midstream shares outstanding after the Distribution are expected to be approximately 255 million shares.

In connection with the Separation, the Company and its subsidiaries will enter into certain agreements with Equitrans Midstream to implement the legal and structural separation between the two companies, govern the relationship between the Company and Equitrans Midstream after completion of the Separation, and allocate between the Company and Equitrans Midstream, various assets, liabilities and obligations, including, among other things, employee benefits, litigation, contracts, equipment, real property,

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Notes to Condensed Consolidated Financial Statements (Unaudited)

intellectual property and tax-related assets and liabilities. These agreements include a Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, Transition Services Agreement and Shareholder and Registration Rights Agreement, the form of which has been approved by the Company’s Board of Directors.

The accompanying unaudited Condensed Consolidated Financial Statements include the historical results of Equitrans Midstream, as the Distribution is expected to be effective at 11:59 p.m. eastern time on November 12, 2018, which is after the most recent period reported in this Form 10-Q. In future filings, the historical results of the businesses that comprise Equitrans Midstream Corporation will be reported as discontinued operations in the Company’s Consolidated Financial Statements. As a result of the Separation and Distribution, the accompanying unaudited, interim Condensed Consolidated Financial Statements are not indicative of the Company’s future financial position, results of operations or cash flows.

S . Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued ASU No. 2014-09, Revenue from Contracts with Customers . The standard requires an entity to recognize revenue in a manner that depicts the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted this standard on January 1, 2018 using the modified retrospective method of adoption. Adoption of the ASU did not require an adjustment to the opening balance of equity. The Company does not expect the standard to have a significant effect on its results of operations, liquidity or financial position in 2018. The Company implemented processes and controls to ensure new contracts are reviewed for the appropriate accounting treatment and to generate the disclosures required under the new standard in the first quarter of 2018. For the disclosures required by this ASU, see Note F .

In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities . The standard affects accounting for equity investments and financial liabilities under the fair value option, the presentation and disclosure requirements for financial instruments, and eliminates the cost method of accounting for equity investments. The Company adopted this standard in the first quarter of 2018 which resulted in a cumulative effect adjustment of $4.1 million on the Statement of Condensed Consolidated Equity.

In February 2016, the FASB issued ASU No. 2016-02, Leases . The standard requires an entity to record assets and obligations for contracts currently recognized as operating leases. In July 2018, the FASB issued targeted improvements to this ASU in ASU 2018-11. This update provides entities with an optional transition method, which permits an entity to initially apply the new leases standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has elected to utilize the optional transition method. The ASU will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early adoption permitted. The Company is utilizing a lease accounting system to document its current population of contracts classified as leases, which will be updated as the lease population changes. The Company continues to evaluate new business processes and related internal controls and is assessing and documenting the accounting impacts related to the new standard. Although the evaluation is ongoing, the Company expects that the adoption will impact its financial statements as the standard requires recognition on the balance sheet of a right of use asset and corresponding lease liability.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments . This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold in current GAAP and requires an entity to reflect its current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The ASU will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within that reporting period. The Company is currently evaluating the effect this standard will have on its financial statements and related disclosures.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash. This ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts shown on the statement of cash flows. The Company adopted this standard in the first quarter of 2018. The Company had $75 million restricted cash at December 31, 2016. In accordance with ASU 2016-18, restricted cash is included in the beginning of period cash balance and excluded from investing activities on the Statements of Condensed Consolidated Cash Flows for the

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EQT Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

nine months ended September 30, 2017 . The Company had no restricted cash on the Condensed Consolidated Balance Sheet from March 31, 2017 through the current period.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations: Clarifying the Definition of a Business . This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be recorded as acquisitions (or disposals) of assets or businesses. The Company adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test of Goodwill Impairment . This ASU simplifies the quantitative goodwill impairment test requirements by eliminating the requirement to calculate the implied fair value of goodwill. Instead, a company would record an impairment charge based on the excess of a reporting unit’s carrying value over its fair value. The standard’s provisions are to be applied prospectively. The Company adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures.

In March 2017, the FASB issued ASU No. 2017-07, Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . This ASU provides additional guidance on the presentation of net benefit cost in the income statement and on the components eligible for capitalization in assets. The Company adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures.

In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation: Scope of Modification Accounting . This ASU provides guidance regarding which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The Company adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures. This ASU will be applied prospectively to awards modified on or after the adoption date.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU allows companies to reclassify stranded tax effects resulting from the Tax Reform Legislation from accumulated other comprehensive income to retained earnings. The ASU is effective for fiscal years beginning after December 15, 2018 and early adoption is permitted. The reclassification permitted under this ASU should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Reform Legislation is recognized. The Company is currently evaluating the effect this standard will have on its financial statements and related disclosures.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Changes to the Disclosure Requirements for Fair Value Measurement , which makes a number of changes to the hierarchy associated with Level 1, 2 and 3 fair value measurements and the related disclosure requirements. This guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the effect this standard will have on its financial statements and related disclosures but does not expect the adoption of this standard to have a material impact on its financial statements and related disclosures.

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EQT Corporation and Subsidiaries

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

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of financial condition and results of operations in conjunction with the Condensed Consolidated Financial Statements, and the notes thereto, included elsewhere in this report.

CAUTIONARY STATEMENTS

Disclosures in this Quarterly Report on Form 10-Q contain certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Statements that do not relate strictly to historical or current facts are forward-looking and 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, in connection with any discussion of future operating or financial matters. 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 captioned “Outlook” in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of the Company and its subsidiaries, including guidance regarding the Company’s strategy to develop its Marcellus, Utica, Upper Devonian and other reserves; drilling plans and programs (including the number, type, feet of pay, average lateral lengths and location of wells to be drilled and the availability of capital to complete these plans and programs); production sales volumes (including liquids volumes) and growth rates; gathering, transmission and water volumes; infrastructure programs (including the timing, cost and capacity of the gathering, transmission and water expansion projects); the cost, capacity, timing of regulatory approvals and anticipated in-service date of the Mountain Valley Pipeline (MVP) and MVP Southgate projects; the ultimate terms, partners and structure of Mountain Valley Pipeline, LLC (the MVP Joint Venture); monetization transactions, including asset sales, joint ventures or other transactions involving the Company’s assets; acquisition transactions; the impact and outcome of pending and future litigation, whether the separation of the Company’s production and midstream businesses (the Separation) will be completed and the timing and terms of the Separation; the timing and structure of any dispositions of the Company's 19.9% retained common stock of Equitrans Midstream Corporation (Equitrans Midstream) following the Separation and the Company's planned use of the proceeds from any such dispositions; whether EQGP will enter into a transaction to eliminate its incentive distribution rights following the Separation, including the timing and terms of such transaction; the Company’s ability to achieve the anticipated synergies, operational efficiencies and returns from its acquisition of Rice Energy Inc. (Rice) and the Midstream Streamlining Transactions (as defined in Note B to the Condensed Consolidated Financial Statements); natural gas prices, changes in basis and the impact of commodity prices on the Company's business; reserves, including potential future downward adjustments; projected capital expenditures and capital contributions; liquidity and financing requirements, including funding sources and availability and EQM's plan to increase its borrowing capacity to up to $3 billion ; hedging strategy; the effects of government regulation; the expected impact of the Tax Cuts and Jobs Act of 2017; and tax position. 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. The Company has based these forward-looking statements on current expectations and assumptions about future events. While the Company considers 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 the Company’s control. The risks and uncertainties that may affect the operations, performance and results of the Company’s business and forward-looking statements include, but are not limited to, those set forth under Item 1A, “Risk Factors”, and elsewhere in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , as updated by Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q.

Any forward-looking statement speaks only as of the date on which such statement is made, and the Company does not intend to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise.

In reviewing any agreements incorporated by reference in or filed with this Quarterly Report on Form 10-Q, please remember that such agreements are included to provide information regarding the terms of such agreements and are not intended to provide any other factual or disclosure information about the Company. The agreements may contain representations and warranties by the Company, which should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties to such agreements should those statements prove to be inaccurate. The representations and warranties were made only as of the date of the relevant agreement or such other date or dates as may be specified in such agreement and are subject to more recent developments. Accordingly, these representations and warranties alone may not describe the actual state of affairs of the Company or its affiliates as of the date they were made or at any other time.

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EQT Corporation and Subsidiaries

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

CORPORATE OVERVIEW

Three Months Ended September 30, 2018 vs. Three Months Ended September 30, 2017

Net loss attributable to EQT Corporation for the three months ended September 30, 2018 was $39.7 million , a loss of $0.15 per diluted share, compared to net income attributable to EQT Corporation of $23.3 million , $0.13 per diluted share, for the three months ended September 30, 2017 . The decrease was primarily attributable to higher operating costs, including a loss of $259.3 million recorded in the third quarter of 2018 primarily associated with the divestiture of certain non-core production and related pipeline assets in the Huron Play, higher interest expense and higher net income attributable to noncontrolling interests. These expenses were partly offset by higher revenues primarily from an 82.5% increase in production sales volumes, a larger income tax benefit for the three months ended September 30, 2018 compared to the income tax benefit for the three months ended September 30, 2017 , and higher other income.

During the three months ended September 30, 2018 , the Company recorded transaction costs of approximately $31.5 million . Transaction costs include $17.8 million for the Company's sum-of-the-parts review and Midstream Streamlining Transactions and $13.7 million for the Rice Merger (as defined in Note A to the Condensed Consolidated Financial Statements). Transaction costs are reflected in unallocated expenses as they are not allocated to any operating segment.

In connection with the Rice Merger, the Company obtained intangible assets composed of customer relationships and non-compete agreements with former Rice executives. Amortization expense for the three months ended September 30, 2018 related to non-compete agreements with former Rice executives is approximately $10.4 million and is not allocated to any operating segment.

Nine Months Ended September 30, 2018 vs. Nine Months Ended September 30, 2017

Net loss attributable to EQT Corporation for the nine months ended September 30, 2018 was $1,607.9 million , a loss of $6.12 per diluted share, compared to net income attributable to EQT Corporation of $228.5 million , $1.32 per diluted share, for the nine months ended September 30, 2017 . The decrease was primarily due to higher operating expenses, including impairment/loss on sale of $2.7 billion associated with the divestiture of certain non-core production and related pipeline assets in the Huron and Permian Plays, higher net income attributable to noncontrolling interests and higher interest expense. These decreases were partly offset by higher revenues primarily from an 84.4% increase in production sales volumes, an income tax benefit for the nine months ended September 30, 2018 compared to income tax expense for the nine months ended September 30, 2017 , and higher other income.

During the nine months ended September 30, 2018 , the Company recorded transaction costs of $93.2 million . Transaction costs include $55.9 million for the Company's sum-of-the-parts review and Midstream Streamlining Transactions and $37.3 million for the Rice Merger and are reflected in unallocated expenses as they are not allocated to any operating segment.

In connection with the Rice Merger, the Company obtained intangible assets composed of customer relationships and non-compete agreements with former Rice executives. Amortization expense for the nine months ended September 30, 2018 related to non-compete agreements with former Rice executives is approximately $31.0 million and is not allocated to any operating segment.

See “Business Segment Results of Operations” for a discussion of segment operating expenses and revenues.

See “Investing Activities” under the caption “Capital Resources and Liquidity” for a discussion of capital expenditures.

Consolidated Operational Data

The following table presents detailed natural gas and liquids operational information to assist in the understanding of the Company’s consolidated operations, including the calculation of the Company's average realized price ($/Mcfe), which is based on EQT Production adjusted operating revenues, a non-GAAP supplemental financial measure. EQT Production adjusted operating revenues is presented because it is an important measure used by the Company’s management to evaluate period-to-period comparisons of earnings trends. EQT Production adjusted operating revenues should not be considered as an alternative to EQT Production total operating revenues. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of EQT Production adjusted operating revenues to EQT Production total operating revenues and Note I to the Condensed Consolidated Financial Statements for a reconciliation of EQT Production total operating revenues to EQT Corporation total operating revenues.

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EQT Corporation and Subsidiaries

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



	Three Months Ended September 30,								Nine Months Ended September 30,
in thousands (unless noted)	2018 (e)			2017			%		2018 (e)			2017			%
NATURAL GAS
Sales volume (MMcf)	350,297			176,311			98.7		1,013,836			508,457			99.4
NYMEX price ($/MMBtu) (a)	$	2.90		$	3.00		(3.3	)	$	2.89		$	3.16		(8.5	)
Btu uplift	0.17			0.30			(43.3	)	0.19			0.28			(32.1	)
Natural gas price ($/Mcf)	$	3.07		$	3.30		(7.0	)	$	3.08		$	3.44		(10.5	)

Basis ($/Mcf) (b)	$	(0.41	)	$	(0.81	)	(49.4	)	$	(0.24	)	$	(0.53	)	(54.7	)
Cash settled basis swaps (not designated as hedges) ($/Mcf)	(0.06		)	(0.04		)	50.0		(0.07		)	(0.02		)	250.0
Average differential, including cash settled basis swaps ($/Mcf)	$	(0.47	)	$	(0.85	)	(44.7	)	$	(0.31	)	$	(0.55	)	(43.6	)

Average adjusted price ($/Mcf)	$	2.60		$	2.45		6.1		$	2.77		$	2.89		(4.2	)
Cash settled derivatives (cash flow hedges) ($/Mcf)	—			0.01			(100.0	)	—			0.01			(100.0	)
Cash settled derivatives (not designated as hedges) ($/Mcf)	0.03			0.13			(76.9	)	0.05			0.01			400.0
Average natural gas price, including cash settled derivatives ($/Mcf)	$	2.63		$	2.59		1.5		$	2.82		$	2.91		(3.1	)

Natural gas sales, including cash settled derivatives	$	922,974		$	456,347		102.3		$	2,862,582		$	1,484,711		92.8

LIQUIDS
NGLs (excluding ethane):
Sales volume (MMcfe) (c)	13,964			19,054			(26.7	)	51,299			55,089			(6.9	)
Sales volume (Mbbls)	2,328			3,176			(26.7	)	8,550			9,182			(6.9	)
Price ($/Bbl)	$	40.73		$	29.81		36.6		$	37.97		$	28.33		34.0
Cash settled derivatives (not designated as hedges) ($/Bbl)	(2.28		)	(0.44		)	418.2		(1.39		)	(0.43		)	223.3
Average NGLs price, including cash settled derivatives ($/Bbl)	$	38.45		$	29.37		30.9		$	36.58		$	27.90		31.1

NGLs sales	$	89,498		$	93,273		(4.0	)	$	312,768		$	256,123		22.1
Ethane:
Sales volume (MMcfe) (c)	9,002			8,226			9.4		25,413			24,970			1.8
Sales volume (Mbbls)	1,501			1,371			9.5		4,236			4,162			1.8
Price ($/Bbl)	$	7.88		$	5.92		33.1		$	7.82		$	6.45		21.2
Ethane sales	$	11,822		$	8,119		45.6		$	33,108		$	26,858		23.3
Oil:
Sales volume (MMcfe) (c)	974			1,476			(34.0	)	3,234			4,565			(29.2	)
Sales volume (Mbbls)	162			246			(34.1	)	539			761			(29.2	)
Price ($/Bbl)	$	51.73		$	36.86		40.3		$	54.41		$	39.96		36.2
Oil sales	$	8,392		$	9,072		(7.5	)	$	29,322		$	30,198		(2.9	)

Total liquids sales volume (MMcfe) (c)	23,940			28,756			(16.7	)	79,946			84,624			(5.5	)
Total liquids sales volume (Mbbls)	3,991			4,793			(16.7	)	13,325			14,105			(5.5	)

Liquids sales	$	109,712		$	110,464		(0.7	)	$	375,198		$	313,179		19.8

TOTAL PRODUCTION
Total natural gas & liquids sales, including cash settled derivatives (d)	$	1,032,686		$	566,811		82.2		$	3,237,780		$	1,797,890		80.1
Total sales volume (MMcfe)	374,237			205,067			82.5		1,093,782			593,081			84.4

Average realized price ($/Mcfe)	$	2.76		$	2.76		—		$	2.96		$	3.03		(2.3	)


(a)	The Company’s volume weighted NYMEX natural gas price (actual average NYMEX natural gas price ($/MMBtu) was $2.90 and $3.00 for the three months ended September 30, 2018 and 2017 , respectively, and $2.90 and $3.17 for the nine months ended September 30, 2018 and 2017 , respectively).


(b)	Basis represents the difference between the ultimate sales price for natural gas and the NYMEX natural gas price.


(c)	NGLs, ethane and crude oil were converted to Mcfe at the rate of six Mcfe per barrel for all periods.


(d)	Also referred to in this report as EQT Production adjusted operating revenues, a non-GAAP supplemental financial measure.


(e)	EQT Production includes the results of production operations acquired in the Rice Merger, which occurred on November 13, 2017.

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EQT Corporation and Subsidiaries

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

Reconciliation of Non-GAAP Financial Measures

The table below reconciles EQT Production adjusted operating revenues, a non-GAAP supplemental financial measure, to EQT Production total operating revenues reported under EQT Production Results of Operations, its most directly comparable financial measure calculated in accordance with GAAP. See Note I to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for a reconciliation of EQT Production operating revenues to EQT Corporation total operating revenues as reported in the Statements of Consolidated Operations.

EQT Production adjusted operating revenues (also referred to as total natural gas & liquids sales, including cash settled derivatives) is presented because it is an important measure used by the Company’s management to evaluate period-over-period comparisons of earnings trends. EQT Production adjusted operating revenues excludes the revenue impact of changes in the fair value of derivative instruments prior to settlement and the revenue impact of certain pipeline and net marketing services. Management utilizes EQT Production adjusted operating revenues to evaluate earnings trends because the measure reflects only the impact of settled derivative contracts and thus does not impact the revenue from natural gas sales with the often volatile fluctuations in the fair value of derivatives prior to settlement. EQT Production adjusted operating revenues also excludes pipeline and net marketing services because management considers these revenues to be unrelated to the revenues for its natural gas and liquids production. Pipeline and net marketing services primarily includes revenues for gathering services provided to third-parties as well as both the cost of and recoveries on third-party pipeline capacity not used for EQT Production sales volumes. Management further believes that EQT Production adjusted operating revenues as presented provides useful information to investors for evaluating period-over-period earnings trends.



Calculation of EQT Production adjusted operating revenues	Three Months Ended September 30,						Nine Months Ended September 30,
$ in thousands (unless noted)	2018			2017			2018			2017
EQT Production total operating revenues	$	1,050,046		$	597,718		$	3,312,730		$	2,057,481
Add back (deduct):
Loss (gain) on derivatives not designated as hedges	3,075			(35,625		)	(5,620		)	(222,693		)
Net cash settlements (paid) received on derivatives not designated as hedges	(14,285		)	13,321			(27,401		)	(6,837		)
Premiums (paid) received for derivatives that settled during the period	(18		)	537			453			1,595
Pipeline and net marketing services	(6,132		)	(9,140		)	(42,382		)	(31,656		)
EQT Production adjusted operating revenues, a non-GAAP financial measure	$	1,032,686		$	566,811		$	3,237,780		$	1,797,890

Total sales volumes (MMcfe)	374,237			205,067			1,093,782			593,081

Average realized price ($/Mcfe)	$	2.76		$	2.76		$	2.96		$	3.03

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EQT Corporation and Subsidiaries

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

Business Segment Results of Operations

Business segment operating results are presented in the segment discussions and financial tables on the following pages. Operating segments are evaluated on their contribution to the Company’s consolidated results based on operating income. Other income, interest and income taxes are managed on a consolidated basis. Headquarters’ costs are billed to the operating segments based upon a fixed allocation of the headquarters’ annual operating budget. Unallocated expenses incurred in 2018 consist primarily of incentive compensation and administrative costs, which included transaction costs associated with the Company's sum-of-the-parts review, the Midstream Streamlining Transactions and the Rice Merger.

The Company has reported the components of each segment’s operating income and various operational measures in the sections below, and where appropriate, has provided information describing how a measure was derived. EQT’s management believes that presentation of this information provides useful information to management and investors regarding the financial condition, operations and trends of each of EQT’s business segments without being obscured by the financial condition, operations and trends for the other segments or by the effects of corporate allocations of interest, income taxes and other income. In addition, management uses these measures for budget planning purposes. The Company has reconciled each segment’s operating income to the Company’s consolidated operating income and net income in Note I to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Prior to the Rice Merger, the Company reported its results of operations through three business segments: EQT Production, EQT Gathering and EQT Transmission. These reporting segments reflected the Company's lines of business and were reported in the same manner in which the Company evaluated its operating performance through September 30, 2017. Following the Rice Merger, the Company adjusted its internal reporting structure to incorporate the newly acquired assets and conducted its business through five business segments: EQT Production, EQM Gathering (formerly known as EQT Gathering), EQM Transmission (formerly known as EQT Transmission), RMP Gathering and RMP Water. On July 23, 2018, pursuant to the Midstream Merger Agreement, RMP and the RMP General Partner each became wholly owned subsidiaries of EQM as a result of the Midstream Mergers. The Company now conducts its business through four business segments: EQT Production, EQM Gathering, EQM Transmission and EQM Water.

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EQT Corporation and Subsidiaries

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

EQT PRODUCTION

RESULTS OF OPERATIONS



	Three Months Ended September 30,								Nine Months Ended September 30,
	2018 (a)			2017			%		2018 (a)			2017		%
OPERATIONAL DATA

Sales volume detail (MMcfe):
Marcellus (b)	316,740			181,650			74.4		899,642			523,122		72.0
Ohio Utica	52,400			(4		)	(1,310,100.0	)	147,706			247		59,700.0
Other	5,097			23,421			(78.2	)	46,434			69,712		(33.4	)
Total production sales volumes (c)	374,237			205,067			82.5		1,093,782			593,081		84.4

Average daily sales volumes (MMcfe/d)	4,068			2,229			82.5		4,007			2,172		84.5

Average realized price ($/Mcfe)	$	2.76		$	2.76		—		$	2.96		$	3.03	(2.3	)

Gathering to EQM Gathering ($/Mcfe)	$	0.50		$	0.47		6.4		$	0.50		$	0.48	4.2
Transmission to EQM Transmission ($/Mcfe)	$	0.12		$	0.23		(47.8	)	$	0.13		$	0.23	(43.5	)
Third-party gathering and transmission ($/Mcfe)	$	0.40		$	0.45		(11.1	)	$	0.41		$	0.46	(10.9	)
Processing ($/Mcfe)	$	0.10		$	0.22		(54.5	)	$	0.12		$	0.23	(47.8	)
Lease operating expenses (LOE), excluding production taxes ($/Mcfe)	$	0.06		$	0.13		(53.8	)	$	0.08		$	0.13	(38.5	)
Production taxes ($/Mcfe)	$	0.06		$	0.07		(14.3	)	$	0.06		$	0.09	(33.3	)
Production depletion ($/Mcfe)	$	1.03		$	1.03		—		$	1.03		$	1.03	—

Depreciation and depletion (thousands):
Production depletion	$	384,965		$	210,393		83.0		$	1,128,248		$	613,379	83.9
Other depreciation and depletion	6,118			13,710			(55.4	)	33,470			41,032		(18.4	)
Total depreciation and depletion	$	391,083		$	224,103		74.5		$	1,161,718		$	654,411	77.5

Capital expenditures (thousands) (d)	$	855,494		$	449,303		90.4		$	2,225,435		$	1,850,482	20.3

FINANCIAL DATA (thousands)

Revenues:
Sales of natural gas, oil and NGLs	$	1,046,989		$	552,953		89.3		$	3,264,728		$	1,803,132	81.1
Pipeline and net marketing services	6,132			9,140			(32.9	)	42,382			31,656		33.9
(Loss) gain on derivatives not designated as hedges	(3,075		)	35,625			(108.6	)	5,620			222,693		(97.5	)
Total operating revenues	1,050,046			597,718			75.7		3,312,730			2,057,481		61.0

Operating expenses:
Gathering	199,475			116,921			70.6		587,844			334,801		75.6
Transmission	182,932			119,729			52.8		548,106			354,534		54.6
Processing	38,340			44,166			(13.2	)	129,523			133,745		(3.2	)
LOE, excluding production taxes	21,480			26,060			(17.6	)	83,069			77,171		7.6
Production taxes	21,254			13,453			58.0		66,162			52,290		26.5
Exploration	15,772			2,437			547.2		42,058			9,040		365.2
Selling, general and administrative (SG&A)	42,109			38,648			9.0		115,135			118,855		(3.1	)
Depreciation and depletion	391,083			224,103			74.5		1,161,718			654,411		77.5
Impairment/loss on sale of long-lived assets	259,279			—			100.0		2,706,438			—		100.0
Total operating expenses	1,171,724			585,517			100.1		5,440,053			1,734,847		213.6
Operating (loss) income	$	(121,678	)	$	12,201		(1,097.3	)	$	(2,127,323	)	$	322,634	(759.4	)


(a)	Operational data for EQT Production includes results of operations for production operations acquired in the Rice Merger, which occurred on November 13, 2017.


(b)	Includes Upper Devonian wells.


(c)	NGLs, ethane and crude oil were converted to Mcfe at the rate of six Mcfe per barrel for all periods.

(d)

Expenditures for segment assets in the EQT Production segment included $35.7 million and $50.7 million for fill-ins and bolt-ons associated with legacy EQT acreage for the three months ended September 30, 2018 and 2017 , respectively, and $113.8 million and $140.4 million for fill-ins and bolt-ons associated with legacy EQT acreage for the nine months ended September 30, 2018 and 2017 , respectively. The three and nine months ended September 30, 2017 included $7.8 million and $819.0 million of cash capital expenditures, respectively, and the nine months ended September 30, 2017 included $7.5 million of non-cash capital expenditures for the acquisitions discussed in Note P .

Table of Contents

EQT Corporation and Subsidiaries

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

Three Months Ended September 30, 2018 vs. Three Months Ended September 30, 2017

EQT Production’s operating loss was $121.7 million for the three months ended September 30, 2018 compared to operating income of $12.2 million for the three months ended September 30, 2017 . The decrease was primarily due to higher operating costs, including a loss recorded in the third quarter of 2018 associated with certain capacity contracts that the Company will no longer have existing production to satisfy and does not plan to utilize in the future as a result of the Huron Divestiture and a loss on derivatives not designated as hedges compared to a gain on derivatives not designated as hedges in the prior year partly offset by increased sales volumes of produced natural gas. These variances include the impact of operating the assets acquired from Rice for the three months ended September 30, 2018 , as the Rice Merger was completed in the fourth quarter of 2017. These variances also include the impacts of the divestiture of the non-core Permian assets, which was completed in the second quarter of 2018, and the divestiture of the non-core Huron assets, which was completed in the third quarter of 2018 (collectively, the 2018 Divestitures).

Total operating revenues were $1,050.0 million for the three months ended September 30, 2018 compared to $597.7 million for the three months ended September 30, 2017 . Sales of natural gas, oil and NGLs increased as a result of an 82.5% increase in production sales volumes in the current period which was primarily a result of the Rice Merger and increased production from the 2016 and 2017 drilling programs, partly offset by the 2018 Divestitures and the normal production decline in the Company’s producing wells. The average realized price for the three months ended September 30, 2018 was comparable to the average realized price for the three months ended September 30, 2017 . EQT Production paid $14.3 million and received $13.3 million of net cash settlements for derivatives not designated as hedges during the three months ended September 30, 2018 and 2017 , respectively, that are included in the average realized price but are not in GAAP operating revenues.

There was no change in average realized price quarter over quarter as a $0.38 per Mcf improvement in the average natural gas differential was offset by a decrease in the average NYMEX natural gas price net of cash settled derivatives of $0.34 per Mcf and a decrease in higher priced liquids sales as a result of the 2018 Divestitures. The improvement in the average differential related to higher basis in the Appalachian Basin and at certain sales points reached through the Company's transportation portfolio, which increased following the Rice Merger.

Pipeline and net marketing services primarily includes gathering revenues from gathering services provided to third parties and both the cost of, and recoveries on, third-party pipeline capacity not used to transport EQT Production’s produced volumes. The decrease in these revenues primarily related to reduced gathering revenues as a result of the Huron Divestiture.

EQT Production total operating revenues for the three months ended September 30, 2018 included a $3.1 million loss on derivatives not designated as hedges compared to a $35.6 million gain on derivatives not designated as hedges for the three months ended September 30, 2017 . The losses for the three months ended September 30, 2018 primarily related to a decrease in the fair market value of EQT Production’s basis swaps due to an increase in basis prices, partially offset by an increase in the fair market value of EQT Production's NYMEX swaps and NYMEX options due to a decrease in NYMEX prices during the third quarter of 2018 .

Gathering expense increased consistent with production sales volumes, partly offset by a lower gathering rate per unit on gathering capacity acquired in the Rice Merger. Transmission expense increased due to increased third party capacity incurred to move EQT Production’s natural gas out of the Appalachian Basin, primarily due to firm capacity acquired in connection with the Rice Merger as well as the Company's capacity on the Rover pipeline, which started in 2018 , partly offset by reduced firm capacity costs as a result of the Huron Divestiture. Processing expenses decreased primarily as a result of the 2018 Divestitures. On a per unit basis, these costs and other operating costs are lower for the three months ended September 30, 2018 compared to the three months ended September 30, 2017 reflecting the savings achieved through the Rice Merger as well as the 2018 Divestitures.

LOE decreased primarily as a result of the 2018 Divestitures partly offset by higher salt water disposal costs and higher personnel costs due to increased activity in EPC Production's Marcellus and Utica operations. Production taxes increased primarily as a result of increased development activity in Pennsylvania as well as the increased asset base and production volumes in Ohio following the Rice Merger, partly offset by the lower asset base and production volumes in Kentucky, West Virginia, Virginia and Texas following the 2018 Divestitures. Exploration expense increased primarily due to an increase in the number of leases expiring during the third quarter of 2018 and increased delay rentals on leases acquired in the Rice Merger.

Depreciation and depletion expense increased as a result of higher produced volumes in the third quarter of 2018 , partly offset by lower depreciation as a result of the 2018 Divestitures.

Table of Contents

EQT Corporation and Subsidiaries

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

Nine Months Ended September 30, 2018 vs. Nine Months Ended September 30, 2017

EQT Production's operating loss was $2,127.3 million for the nine months ended September 30, 2018 compared to operating income of $322.6 million for the nine months ended September 30, 2017 . The decrease was primarily due to impairment charges recorded in 2018 associated with the 2018 Divestitures, including the third quarter loss associated with related capacity contracts that the Company will no longer have existing production to satisfy and does not plan to utilize in the future. Excluding the impairments, EQT Production's higher operating expenses, lower gains on derivatives not designated as hedges and a lower average realized price were more than offset by the increased sales volumes of produced natural gas. These variances include the impact of operating the assets acquired from Rice for the nine months ended September 30, 2018 , as the Rice Merger was completed in the fourth quarter of 2017. These variances also include the impacts of the 2018 Divestitures which were completed in the second and third quarters of 2018.

Total operating revenues were $3,312.7 million for the nine months ended September 30, 2018 compared to $2,057.5 million for the nine months ended September 30, 2017 . Sales of natural gas, oil and NGLs increased as a result of an 84.4% increase in production sales volumes in the current period which was primarily a result of the Rice Merger and increased production from the 2016 and 2017 drilling programs, partly offset by the 2018 Divestitures and the normal production decline in the Company's producing wells. The increase in production sales volumes was partly offset by a lower average realized price. EQT Production paid $27.4 million and $6.8 million of net cash settlements for derivatives not designated as hedges during the nine months ended September 30, 2018 and 2017 , respectively, that are included in the average realized price but are not in the GAAP operating revenues.

The $0.07 per Mcfe decrease in the average realized price for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 was primarily due to a decrease in the average NYMEX natural gas price net of cash settled derivatives of $0.33 per Mcf, partly offset by a $0.24 per Mcf improvement in the average natural gas differential and higher liquids prices. The increase in the average differential primarily related to higher prices during the first quarter of 2018 at sales points in the United States Northeast where colder weather led to increased demand, higher Appalachian Basin basis as well as increased sales volumes at higher priced Gulf Coast and Midwest markets accessible through the Company's increased transportation portfolio following the Rice Merger.

The increase in pipeline and net marketing services primarily related to favorable price spreads on the Company's Tennessee Gas Pipeline capacity, partly offset by reduced gathering revenues due to the Huron Divestiture.

EQT Production total operating revenues for the nine months ended September 30, 2018 and 2017 included a $5.6 million and $222.7 million gain on derivatives not designated as hedges, respectively. The gains for the nine months ended September 30, 2018 primarily related to an increase in the fair market value of EQT Production's NYMEX swaps and NYMEX options due to a decrease in NYMEX prices, partially offset by a decrease in the fair market value of EQT Production's basis swaps due to an increase in basis prices during the first nine months of 2018 .

Gathering expense increased consistent with production sales volumes, partly offset by a lower gathering rate per unit on gathering capacity acquired in the Rice Merger. Transmission expense increased due to increased third party capacity incurred to move EQT Production’s natural gas out of the Appalachian Basin, primarily due to firm capacity acquired in connection with the Rice Merger as well as the Company’s capacity on the Rover pipeline, which started in 2018 , partly offset by reduced firm capacity costs as a result of the Huron Divestiture. On a per unit basis, these costs and other operating costs were lower for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 reflecting the savings achieved through the Rice Merger as well as the 2018 Divestitures.

On an absolute basis, LOE increased primarily due to increased salt water disposal costs in 2018 related to increased activity from the Rice Merger and higher personnel costs, partly offset by the reduced costs resulting from the 2018 Divestitures. Production taxes increased primarily as a result of increased development activity in Pennsylvania as well as the increased asset base and production volumes in Ohio following the Rice Merger. SG&A expense decreased primarily due to decreased legal reserves, partly offset by higher personnel costs including corporate overhead allocations. Exploration expense increased primarily due to an increase in the number of leases expiring during the first nine months of 2018 and increased delay rentals on leases acquired in the Rice Merger.

Depreciation and depletion expense increased as a result of higher produced volumes in 2018 , partly offset by lower depreciation as a result of the 2018 Divestitures.

See Note Q to the Condensed Consolidated Financial Statements for a discussion of the asset impairment.

Table of Contents

EQT Corporation and Subsidiaries

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

EQM GATHERING

RESULTS OF OPERATIONS



	Three Months Ended September 30,					Nine Months Ended September 30,
	2018 (a)		2017		%	2018 (a)		2017		%
	(Thousands, other than per day amounts)
FINANCIAL DATA
Firm reservation fee revenues	$	112,598	$	104,772	7.5	$	334,233	$	300,901	11.1
Volumetric based fee revenues:
Usage fees under firm contracts (b)	8,661		7,873		10.0	30,725		19,173		60.3
Usage fees under interruptible contracts (c)	131,602		3,877		3,294.4	366,482		10,922		3,255.4
Total volumetric based fee revenues	140,263		11,750		1,093.7	397,207		30,095		1,219.8
Total operating revenues	252,861		116,522		117.0	731,440		330,996		121.0

Operating expenses:
Operating and maintenance	18,850		10,104		86.6	54,551		30,737		77.5
SG&A	20,363		10,503		93.9	62,665		28,800		117.6
Depreciation	25,359		9,983		154.0	72,309		28,398		154.6
Amortization of intangible assets	10,387		—		100.0	31,160		—		100.0
Total operating expenses	74,959		30,590		145.0	220,685		87,935		151.0

Operating income	$	177,902	$	85,932	107.0	$	510,755	$	243,061	110.1

OPERATIONAL DATA
Gathered volumes (BBtu per day)
Firm capacity reservation	2,114		1,838		15.0	2,029		1,783		13.8
Volumetric based services (d)	4,437		370		1,099.2	4,291		292		1,369.5
Total gathered volumes	6,551		2,208		196.7	6,320		2,075		204.6

Capital expenditures	$	194,477	$	48,182	303.6	$	515,072	$	150,728	241.7


(a)	Includes the pre-acquisition results of the Drop-Down Transaction and the Midstream Mergers, which were effective May 1, 2018 and July 23, 2018, respectively. The recast is for the period the acquired businesses were under the common control of EQT, which began on November 13, 2017 as a result of the Rice Merger.


(b)	Includes fees on volumes gathered in excess of firm contracted capacity.


(c)	Includes volumes from contracts under which EQM has agreed to hold capacity available without charging a capacity reservation fee.


(d)	Includes volumes gathered under interruptible contracts and volumes gathered in excess of firm contracted capacity.

Three Months Ended September 30, 2018 vs. Three Months Ended September 30, 2017

Gathering revenues increased by $136.3 million for the three months ended September 30, 2018 compared to the three months ended September 30, 2017 primarily driven by the Midstream Mergers, the Drop-Down Transaction and affiliate and third party production development in the Marcellus and Utica Shales. Firm reservation fee revenues increased primarily as a result of increased affiliate contracted gathering capacity and higher rates on various affiliate wellhead expansion projects in the current period. Usage fees under firm contracts increased due to increased third party volumes gathered in excess of firm contracted capacity. Usage fees under interruptible contracts increased as a result of the Midstream Mergers and the Drop-Down Transaction, which added revenues of $69.7 million and $58.4 million , respectively, for the three months ended September 30, 2018 .

Operating expenses increased by $44.4 million for the three months ended September 30, 2018 compared to the three months ended September 30, 2017 . Operating expenses increased $17.9 million and $24.5 million as a result of RMP and the former Rice assets acquired in the Drop-Down Transaction (the Drop-Down Entities), respectively. In addition, operating and maintenance expense increased due to higher repairs and maintenance expense consistent with the growth of the business. Selling, general and administrative also increased due to transaction costs of $2.2 million . Depreciation expense also increased as a result of additional assets placed in-service. Amortization of intangible assets relates to the customer contract intangible associated with the Drop-Down Entities.

Table of Contents

EQT Corporation and Subsidiaries

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

Nine Months Ended September 30, 2018 vs. Nine Months Ended September 30, 2017

Gathering revenues increased by $400.4 million for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 primarily driven by RMP, the Drop-Down Entities and affiliate and third party production development in the Marcellus and Utica Shales. Firm reservation fee revenues increased primarily as a result of increased affiliate and third party contracted gathering capacity and higher rates on various affiliate wellhead expansion projects in the current period. Usage fees under firm contracts increased due to increased third party and affiliate volumes gathered in excess of firm contracted capacity. Usage fees under interruptible contracts increased as a result of RMP and the Drop-Down Entities, which added revenues of $193.5 million and $161.9 million , respectively, for the nine months ended September 30, 2018 .

Operating expenses increased by $132.8 million for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 . Operating expenses increased $53.2 million and $72.8 million as a result of RMP and the Drop-Down Entities, respectively. In addition, operating and maintenance expense increased due to higher repairs and maintenance expense consistent with the growth of the business. Selling, general and administrative also increased due to transaction costs of $7.5 million . Depreciation expense also increased as a result of additional assets placed in-service, including those associated with the Range Resources header pipeline project and various wellhead gathering expansion projects. Amortization of intangible assets relates to the customer contract intangible associated with the Drop-Down Entities.

Table of Contents

EQT Corporation and Subsidiaries

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

EQM TRANSMISSION

RESULTS OF OPERATIONS



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018		2017		%		2018		2017		%
	(Thousands, other than per day amounts)
FINANCIAL DATA
Firm reservation fee revenues	$	82,669	$	84,438	(2.1	)	$	262,666	$	256,224	2.5
Volumetric based fee revenues:
Usage fees under firm contracts (a)	5,331		3,427		55.6		13,981		9,787		42.9
Usage fees under interruptible contracts	1,350		1,906		(29.2	)	8,782		6,173		42.3
Total volumetric based fee revenues	6,681		5,333		25.3		22,763		15,960		42.6
Total operating revenues	89,350		89,771		(0.5	)	285,429		272,184		4.9

Operating expenses:
Operating and maintenance	10,721		9,485		13.0		27,082		23,984		12.9
SG&A	7,581		8,255		(8.2	)	22,335		23,170		(3.6	)
Depreciation	12,357		12,261		0.8		37,228		35,793		4.0
Total operating expenses	30,659		30,001		2.2		86,645		82,947		4.5

Operating income	$	58,691	$	59,770	(1.8	)	$	198,784	$	189,237	5.0

Equity income	$	16,087	$	6,025	167.0		$	35,836	$	15,413	132.5

OPERATIONAL DATA
Transmission pipeline throughput (BBtu per day)
Firm capacity reservation	2,927		2,517		16.3		2,857		2,288		24.9
Volumetric based services (b)	104		21		395.2		62		22		181.8
Total transmission pipeline throughput	3,031		2,538		19.4		2,919		2,310		26.4

Average contracted firm transmission reservation commitments (BBtu per day)	3,658		3,474		5.3		3,801		3,519		8.0

Capital expenditures	$	37,626	$	22,312	68.6		$	84,517	$	73,679	14.7


(a)	Includes fees on volumes transported in excess of firm contracted capacity as well as usage fees and fees on all volumes transported under firm contracts.


(b)	Includes volumes transported under interruptible contracts and volumes transported in excess of firm contracted capacity.

Three Months Ended September 30, 2018 vs. Three Months Ended September 30, 2017

Transmission and storage revenues decreased by $0.4 million for the three months ended September 30, 2018 compared to the three months ended September 30, 2017 . Firm reservation fee revenues decreased as a result of a third quarter 2017 FERC-approved retroactive negotiated rate adjustment of approximately $3.4 million for the period from October 1, 2016 through June 30, 2017 partially offset by increased affiliate firm capacity and higher contractual rates on existing contracts with third parties in the current period. Usage fees under firm contracts increased primarily due to higher affiliate and third party volumes and increased commodity charges on higher firm contracted volumes. The decrease in usage fees under interruptible contracts primarily relates to lower parking revenue, which does not have associated pipeline throughput.

Operating expenses increased by $0.7 million for the three months ended September 30, 2018 compared to the three months ended September 30, 2017 primarily as a result of higher operating and maintenance personnel costs partly offset by lower selling, general and administrative expenses resulting from lower allocations from EQT and professional fees.

Table of Contents

EQT Corporation and Subsidiaries

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

The increase in equity income of $10.1 million for the three months ended September 30, 2018 compared to the three months ended September 30, 2017 was related to the increase in the MVP Joint Venture's AFUDC on the MVP.

Nine Months Ended September 30, 2018 vs. Nine Months Ended September 30, 2017

Transmission and storage revenues increased by $13.2 million for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 . Firm reservation fee revenues increased due to higher contractual rates on existing contracts with third parties and affiliates in the current period and affiliates contracting for additional firm capacity. Usage fees under firm contracts increased primarily due to increased commodity charges. The increase in usage fees under interruptible contracts primarily relates to higher parking revenue, which does not have associated pipeline throughput.

Operating expenses increased by $3.7 million for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 consistent with the growth of the business.

Equity income increased $20.4 million for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 due to the increase in the MVP Joint Venture's AFUDC on the MVP.

Table of Contents

EQT Corporation and Subsidiaries

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

EQM WATER

RESULTS OF OPERATIONS



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018 (a)			2017		%	2018 (a)		2017		%
FINANCIAL DATA	(Thousands, other than per day amounts)
Water services revenues	$	22,373		$	—	100.0	$	93,438	—		$	100.0

Operating expenses:
Operation and maintenance	18,521			—		100.0	36,901		—		100.0
SG&A	1,094			—		100.0	3,490		—		100.0
Depreciation	5,851			—		100.0	17,420		—		100.0
Total operating expenses	25,466			—		100.0	57,811		—		100.0

Operating (loss) income	$	(3,093	)	$	—	100.0	$	35,627	$	—	100.0

OPERATIONAL DATA
Water services volumes (MMgal)	449			—		100.0	1,740		—		100.0

Capital expenditures	$	7,981		$	—	100.0	$	17,358	$	—	100.0


(a)	This table sets forth selected financial and operational data for RMP Water. The Company acquired the water assets that constitute RMP Water on November 13, 2017 as part of the Rice Merger. On July 23, 2018, following the completion of the Midstream Mergers, RMP Water became EQM Water.

EQM Water provides fresh water for well completions operations in the Marcellus and Utica Shales and collects flowback and produced water for recycling or disposal. Substantially all of EQM Water's services are provided to EQT's Production business. EQM Water offers its water services on a volumetric basis, supported by an acreage dedication from EQT for certain drilling areas. The fee EQM Water charges per gallon of water is tiered and thus is lower on a per gallon basis once certain volumetric thresholds are met. During the three and nine months ended September 30, 2018 , operating expenses were composed of customary expenses for a water services business, including water procurement costs. The operating loss for the three months ended September 30, 2018 was due to timing of costs related to activities on drilling pads.

Table of Contents

EQT Corporation and Subsidiaries

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

Other Income Statement Items

Other Income

For the three months ended September 30, 2018 and 2017 , the Company recorded equity in earnings of nonconsolidated investments of $16.1 million and $6.0 million , respectively, related to EQM's portion of the MVP Joint Venture's AFUDC on the MVP. For the nine months ended September 30, 2018 and 2017 , the Company recorded equity in earnings of nonconsolidated investments of $35.8 million and $15.4 million , respectively, related to EQM's portion of the MVP Joint Venture's AFUDC on the MVP. EQT includes the equity investment in MVP in the EQM Transmission segment.

Other income also includes AFUDC - equity which varies based on EQM's level of spending on regulated projects.

For the nine months ended September 30, 2017 , other income was partly offset by losses on the sale of trading securities. As of March 31, 2017, the Company closed its positions on all trading securities.

Interest Expense

Interest expense increased by $42.7 million for the three months ended September 30, 2018 compared to the three months ended September 30, 2017 , which was primarily driven by $24.8 million of interest incurred on EQT's Senior Notes issued in October 2017, $33.7 million of interest incurred on EQM's Senior Notes issued in June 2018 and $3.3 million of interest incurred on credit facility borrowings partly offset by a $10.7 million decrease due to the early extinguishment of certain EQT Senior Notes and a decrease of $6.8 million related to expense incurred in 2017 on the Company's senior unsecured bridge loans.

Interest expense increased by $102.9 million for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017 , which was primarily driven by $72.9 million of interest incurred on EQT's Senior Notes issued in October 2017, $35.9 million of interest incurred on EQM'S Senior Notes issued in June 2018, $38.9 million of interest incurred on credit facility borrowings and $3.0 million of deferred fees expensed upon termination of the EQM Term Loan Facility partly offset by a $32.1 million decrease due to the early extinguishment of certain EQT Senior Notes and a decrease of $7.6 million related to expense incurred in 2017 on the Company's senior unsecured bridge loans.

Income Tax Expense

See discussion of income tax expense in Note L to the Condensed Consolidated Financial Statements.

Net Income Attributable to Noncontrolling Interests

The increase in net income attributable to noncontrolling interests for the three months and nine months ended September 30, 2018 was the result of higher net income at EQM and noncontrolling interests in RMP and Strike Force Midstream as a result of the Rice Merger on November 13, 2017. As described in Note B to the Condensed Consolidated Financial Statements, Strike Force Midstream and RMP are now wholly owned subsidiaries of EQM following the Gulfport Transaction and the Midstream Mergers, respectively.

Table of Contents

EQT Corporation and Subsidiaries

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

OUTLOOK

On February 21, 2018, the Company announced a plan to separate its upstream and midstream businesses, creating a standalone publicly traded corporation, Equitrans Midstream, that will focus on midstream operations. Following the Separation, Equitrans Midstream will own the midstream interests held by the Company, including the interests in EQGP and EQM. The Separation is intended to qualify as tax-free to the Company’s shareholders for U.S. federal income tax purposes.

On October 24, 2018, the Company’s Board of Directors approved the completion of the Separation by means of a pro-rata distribution (the Distribution) by the Company of 80.1% of the outstanding common stock of Equitrans Midstream to the Company’s shareholders of record as of the close of business on November 1, 2018 (the Record Date). Pursuant to the plan of Distribution approved by the Company’s Board of Directors, each Company shareholder will receive 0.80 shares of Equitrans Midstream common stock for every one share of the Company’s common stock held as of the close of business on the Record Date. Shareholders will receive cash in lieu of fractional shares of Equitrans Midstream common stock. After considering that EQT will retain an additional 19.9% of Equitrans Midstream's common stock, total Equitrans Midstream shares outstanding after the Distribution are expected to be approximately 255 million shares.

In connection with the Separation, the Company and certain of its subsidiaries will enter into agreements with Equitrans Midstream to implement the legal and structural separation between the two companies, govern the relationship between the Company and Equitrans Midstream after completion of the Separation, and allocate between the Company and Equitrans Midstream, various assets, liabilities and obligations, including, among other things, employee benefits, litigation, contracts, equipment, real property, intellectual property and tax-related assets and liabilities. These agreements include a Separation and Distribution Agreement, Tax Matters Agreement, Employee Matters Agreement, Transition Services Agreement and Shareholder and Registration Rights Agreement, the forms of which have been approved by the Company’s Board of Directors and will be filed with the SEC following the Separation.

The Company plans to dispose of all of its retained Equitrans Midstream common stock, which may include dispositions through one or more subsequent exchanges for debt or a sale of its shares for cash. The Company expects to dispose its retained Equitrans Midstream common stock in order to reduce the Company's post Separation debt.

The accompanying Management’s Discussion and Analysis of Financial Condition and Results of Operations is presented on a consolidated basis for the Company, which includes the results of the businesses that comprise Equitrans Midstream, as the Distribution is expected to be effective at 11:59 p.m. eastern time, on November 12, 2018, which is after the most recent period reported in this Form 10-Q. In future filings, the historical results of the businesses that comprise Equitrans Midstream will be presented as discontinued operations. As a result of the Separation and Distribution, Management’s Discussion and Analysis of Financial Condition and Results of Operations is not indicative of the Company’s future financial position, results of operations or cash flows.

The Company is committed to profitably and safely developing its Appalachian Basin natural gas and NGLs reserves through environmentally responsible, cost-effective and technologically advanced horizontal drilling. The Company believes the long-term outlook for its business is favorable due to the Company’s substantial resource base, low cost structure, financial strength, risk management, including its commodity hedging strategy, and disciplined investment of capital. The Company believes the combination of these factors provide it with an opportunity to exploit and develop its positions and maximize efficiency through economies of scale in its strategic operating area.

The Company’s production business strategy is transitioning from one focused on volume growth to one focused on capital efficiency and free cash flow generation. In preparation for the Separation, the Company has been evaluating EQT Production's long-term pace of development in order to achieve the optimal balance between free cash flow generation and volume growth. Based on this evaluation, the Company is currently targeting mid-single digit annual production growth over the next five years. This is expected to result in lower annual drilling and capital expenditures in the future.

EQT Production capital expenditures estimate for 2018 well development increased by $300 million to $2.5 billion. This was driven by inefficiencies resulting from higher activity levels, the learning curve on ultra-long laterals and service cost increases. Estimated sales volumes are expected to be 1,460 - 1,480 Bcfe for 2018. The 2018 capital investment plan for EQT Production is expected to be funded by cash generated from operations and asset sales.

Table of Contents

EQT Corporation and Subsidiaries

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

The Company plans to invest approximately $1.8 billion on midstream infrastructure through EQM in 2018, including capital contributions to the MVP Joint Venture of $0.9 billion, on gathering expansion projects, primarily driven by wellhead and header projects in Pennsylvania, West Virginia and Ohio. This also includes expansion and ongoing maintenance capital expenditures of RMP as a result of the completion of the Midstream Mergers on July 23, 2018 and approximately $150 million on commencing construction activities on the Hammerhead project. The Hammerhead project is a 1.2 Bcf per day gathering header pipeline connecting natural gas produced in Pennsylvania and West Virginia to the MVP primarily for EQT that is expected to cost a total of $555 million and be placed in service in the fourth quarter of 2019. EQM's future capital investments may vary significantly from period to period based on the available investment opportunities and the timing of construction for the MVP. Maintenance related capital expenditures are also expected to vary quarter to quarter. EQM's available sources of liquidity include cash generated from operations, borrowing under EQM's credit facilities, cash on hand, debt offerings and issuance of additional EQM partnership units. EQM is not forecasting any public equity issuance for the foreseeable future.

The Company has also announced that it expects the Equitrans Midstream board of directors will evaluate the possible simplification of the EQM structure by addressing the incentive distribution rights, although the ultimate decision of whether to propose any such changes will be made by the Equitrans Midstream board of directors following the Separation.

The Company’s revenues, earnings, liquidity and ability to grow are substantially dependent on the prices it receives for, and the Company’s ability to develop its reserves of, natural gas and NGLs. Due to the volatility of commodity prices, the Company is unable to predict future potential movements in the market prices for natural gas, including Appalachian and other market point basis, and NGLs and thus cannot predict the ultimate impact of prices on its operations.

Changes in natural gas, NGLs and oil prices could affect, among other things, the Company's development plans, which would increase or decrease the pace of the development and the level of the Company's reserves, as well as the Company's revenues, earnings or liquidity. Lower prices could also result in non-cash impairments in the book value of the Company’s oil and gas properties, goodwill or other long lived intangible assets or downward adjustments to the Company’s estimated proved reserves. Any such impairment and/or downward adjustment to the Company’s estimated reserves could potentially be material to the Company.

See "Impairment of Oil and Gas Properties and Goodwill" and “Critical Accounting Policies and Estimates” included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 for a discussion of the Company’s accounting policies and significant assumptions related to accounting for oil and gas producing activities, and the Company's policies and processes with respect to impairment reviews for proved and unproved property and goodwill. The Company did not identify an impairment indicator related to goodwill during the third quarter of 2018.

CAPITAL RESOURCES AND LIQUIDITY

Operating Activities

Net cash flows provided by operating activities totaled $2,445.4 million for the nine months ended September 30, 2018 compared to $1,211.4 million for the nine months ended September 30, 2017 . The $1,234.0 million increase in cash flows provided by operating activities was primarily the result of higher operating revenues partially offset by increased cash operating expenses.

Investing Activities

Net cash flows used in investing activities totaled $2,719.5 million for the nine months ended September 30, 2018 compared to $1,791.5 million for the nine months ended September 30, 2017 . The $928.0 million increase was primarily due to the Company's capital expenditures and higher contributions to the MVP Joint Venture during the nine months ended September 30, 2018 . These increases were partly offset by proceeds from the 2018 Divestitures and capital expenditures for acquisitions during the nine months ended September 30, 2017 . The Company spud 125 gross wells in the first nine months of 2018 , including 89 horizontal Marcellus wells, five horizontal Upper Devonian wells and 31 horizontal Utica wells. The Company spud 149 gross wells in the first nine months of 2017 , including 100 horizontal Marcellus wells, 48 horizontal Upper Devonian wells and one horizontal Utica well. The Company completed approximately 1,744,000 feet of pay in the first nine months of 2018 , approximately three times the 646,000 feet of pay completed during the same period of 2017 . Gathering capital expenditures increased primarily in support of gathering projects supporting EQT's production development in the Marcellus Shale.

Capital expenditures as reported on the Statements of Condensed Consolidated Cash Flows for the nine months ended September 30, 2018 and 2017 excluded capitalized non-cash stock-based compensation expense and accruals. The impact of accrued capital

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EQT Corporation and Subsidiaries

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

expenditures includes the reversal of the prior period accrual as well as the current period estimate, both of which are non-cash items. The net impact of these non-cash items was $(45.2) million and $102.7 million for the nine months ended September 30, 2018 and 2017 , respectively. There were no non-cash capital expenditures excluded for acquisitions as reported on the Statements of Condensed Consolidated Cash Flows for the nine months ended September 30, 2018 . The Company excluded non-cash capital expenditures as reported on the Statements of Condensed Consolidated Cash Flows of $7.5 million related to the Company's acquisitions for the nine months ended September 30, 2017 .

Financing Activities

Net cash flows provided by financing activities totaled $131.6 million for the nine months ended September 30, 2018 compared to net cash flows used in financing activities of $114.8 million for the nine months ended September 30, 2017 . For the nine months ended September 30, 2018 , the primary source of financing cash flows was net proceeds from the EQM 2018 Senior Notes (as defined in Note B to the Condensed Consolidated Financial Statements) offering net of offering costs, while the primary use of financing cash flows was a net decrease in EQT, EQM and RMP credit facility borrowings, repurchase and retirement of common stock, distributions to noncontrolling interests, EQM's acquisition of the 25% ownership interest in Strike Force Midstream, dividends paid and cash paid for taxes on share-based incentive awards. For the nine months ended September 30, 2017 , the primary financing uses of cash were distributions to noncontrolling interests, cash paid for taxes on share-based incentive awards and dividends paid. The primary financing source of cash was a net increase in EQM credit facility borrowings during the nine months ended September 30, 2017 .

The Company may from time to time seek to repurchase its outstanding debt securities. Such repurchases, if any, will depend on prevailing market conditions, the Company's liquidity requirements, contractual and legal restrictions and other factors. In addition, following completion of the Distribution, the Company plans to dispose of its 19.9% retained shares of Equitrans Midstream’s common stock, which may include dispositions through one or more exchanges for debt or a sale of the retained shares for cash. The Company expects to use the proceeds from the sale of its retained Equitrans Midstream common stock to reduce the Company’s post-Separation debt, which was initially funded by borrowings on the Company's credit facility and cash on hand. The Company has $700 million of debt that matures in 2019; these maturities may be funded by sales of, or exchanges for, the retained interest in Equitrans Midstream common stock, borrowings on the Company's credit facility, cash from operations or a combination thereof.

Refer to Part II, Item 2, "Unregistered Sales of Equity Securities and Use of Proceeds" for discussion of the Company's $500 million share repurchase program.

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EQT Corporation and Subsidiaries

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

Security Ratings and Financing Triggers

The table below reflects the credit ratings for debt instruments of the Company at September 30, 2018 . Changes in credit ratings may affect the interest rates on the Company’s short-term and floating rate long-term debt and the fees it pays under its lines of credit. These ratings may also affect collateral requirements on derivative instruments, pipeline capacity contracts, joint venture arrangements and subsidiary construction contracts, as well as the rates available on new long-term debt and access to the credit markets.



Rating Service	Senior Notes	Outlook
Moody's	Baa3	Stable
S&P	BBB	Negative
Fitch Ratings Service (Fitch)	BBB-	Stable

The table below reflects the credit ratings for debt instruments of EQM at September 30, 2018 . Changes in credit ratings may affect EQM’s cost of short-term debt through interest rates and fees under its lines of credit. These ratings may also affect collateral requirements under joint venture arrangements and subsidiary construction contracts, as well as the rates available on new long-term debt and access to the credit markets.



Rating Service	Senior Notes	Outlook
Moody’s	Ba1	Stable
S&P	BBB-	Stable
Fitch	BBB-	Stable

EQGP has no long-term debt and is not currently rated by Moody’s, S&P or Fitch.

The Company’s and EQM’s credit ratings are subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. The Company and EQM cannot ensure that a rating will remain in effect for any given period of time or that a rating will not be lowered or withdrawn by a credit rating agency if, in its judgment, circumstances so warrant. If any credit rating agency downgrades the ratings, particularly below investment grade, the Company’s or EQM’s access to the capital markets may be limited, borrowing costs and margin deposits on the Company’s derivative contracts would increase, counterparties may request additional assurances, including collateral, and the potential pool of investors and funding sources may decrease. See Note J to the Condensed Consolidated Financial Statements for further discussion on what is deemed investment grade and a discussion of other factors affecting margin deposit requirements.

The Company’s debt agreements and other financial obligations contain various provisions that could result in termination of the agreements, require early payment of amounts outstanding or similar actions in the event of noncompliance. The most significant covenants and events of default under the 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. The Company’s credit facility contains financial covenants that require a total debt-to-total capitalization ratio of no greater than 65%. The calculation of this ratio excludes the effects of accumulated other comprehensive income (OCI). As of September 30, 2018 , the Company was in compliance with all debt provisions and covenants.

EQM’s debt agreements and other financial obligations contain various provisions that could result in termination of the agreements, require early payment of amounts outstanding or similar actions in the event of noncompliance. The most significant covenants and events of default under the debt agreements relate to maintenance of a permitted leverage ratio, limitations on transactions with affiliates, limitations on restricted payments, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of and certain other defaults under other financial obligations and change of control provisions. Under EQM’s $1 billion credit facility, EQM is required to maintain a consolidated leverage ratio of not more than 5.00 to 1.00 (or not more than 5.50 to 1.00 for certain measurement periods following the consummation of certain acquisitions). As of September 30, 2018 , EQM was in compliance with all debt provisions and covenants.

See Note M to the Condensed Consolidated Financial Statements for a discussion of the borrowings on the revolving credit facilities.

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EQT Corporation and Subsidiaries

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

Commodity Risk Management

The substantial majority of the Company’s commodity risk management program is related to hedging sales of the Company’s produced natural gas. The Company’s overall objective in this hedging program is to protect cash flow from undue exposure to the risk of changing commodity prices. The derivative commodity instruments currently utilized by the Company are primarily NYMEX swaps, collars and options.

As of October 23, 2018, the approximate volumes and prices of the Company’s derivative commodity instruments hedging sales of produced gas for 2018 through 2020 were:



NYMEX Swaps	2018 (a)(b)(c)		2019 (b)(c)		2020 (b)
Total Volume (Bcf)	186		600		393
Average Price per Mcf (NYMEX) (d)	$	3.10	$	2.99	$	2.98
Collars
Total Volume (Bcf)	31		73		—
Average Floor Price per Mcf (NYMEX) (d)	$	3.28	$	3.12	$	—
Average Cap Price per Mcf (NYMEX) (d)	$	3.79	$	3.60	$	—
Puts (Long)
Total Volume (Bcf)	1		3		—
Average Floor Price per Mcf (NYMEX)	$	3.02	$	3.15	$	—

(a) October through December 31.

(b) The Company also sold calendar year 2018, 2019 and 2020 calls for approximately 28 Bcf, 145 Bcf and 127 Bcf, respectively, at strike prices of $3.45 per Mcf, $3.41 per Mcf and $3.46 per Mcf, respectively. The Company also purchased calendar year 2018, 2019 and 2020 calls for approximately 16 Bcf, 56 Bcf, and 35 Bcf at strike prices of $3.34 per Mcf, $3.38 per Mcf, and $3.36 per Mcf, respectively.


(c)	The Company sold calendar year 2018 and 2019 puts for approximately 8 and 27 Bcf at strike prices of $2.99 and $2.88 per Mcf, respectively.

(d) The average price is based on a conversion rate of 1.05 MMBtu/Mcf.

The Company also enters into fixed price natural gas sales agreements that can be physically or financially settled. The difference between these sales prices and NYMEX are included in average differential on the Company's price reconciliation under "Consolidated Operational Data". The Company has fixed price natural gas sales agreements for the remainder of 2018, 2019 and 2020 of 50 Bcf, 116 Bcf and 9 Bcf, respectively, at average NYMEX prices of $3.03 per Mcf, $2.99 per Mcf and $2.93 per Mcf, respectively. For 2018, the Company has a natural gas sales agreement for approximately 35 Bcf that includes a NYMEX ceiling price of $4.88 per Mcf. For the remainder of 2018, 2019 and 2020, the Company also has a natural gas sales agreement for approximately 2 Bcf, 7 Bcf and 6 Bcf, respectively, that includes a NYMEX floor price of $2.16 per Mcf and a NYMEX ceiling price of $4.47 per Mcf. Currently, the Company has also entered into derivative instruments to hedge basis and a limited number of contracts to hedge its NGLs exposure. The Company may also use other contractual agreements in implementing its commodity hedging strategy.

See Item 3, “Quantitative and Qualitative Disclosures About Market Risk,” and Note J to the Company’s Condensed Consolidated Financial Statements for further discussion of the Company’s hedging program.

Commitments and Contingencies

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 accrues legal and other direct costs related to loss contingencies when actually incurred. The Company has established reserves it believes to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, the Company believes that the ultimate outcome of any matter currently pending against the Company will not materially affect the Company’s financial position, results of operations or liquidity.

Kay Company, LLC, et al. v. EQT Production Company, et al., United States District Court for the Northern District of West Virginia

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EQT Corporation and Subsidiaries

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

Production Company and a number of related companies, including the Company, EQT Energy, LLC, Equitrans Gathering Holdings, LLC (formerly known as EQT Gathering Holdings, LLC), EQT Investments Holdings, LLC and EQM, have failed to pay royalties on the fair value of the gas produced from the leases and have taken improper post-production deductions from the royalties paid. The plaintiffs seek more than $100,000,000 (according to recently disclosed expert reports) in compensatory damages, punitive damages, and other relief. The Company denies that it underpaid royalties or that it took improper deductions. The Company further refutes that the amount of damages sought is supported by the facts and law and is vigorously defending the case. EQT has reserved approximately $1.5 million related to this case.

On May 31, 2013, the EQT defendants removed the lawsuit to federal court. On September 6, 2017, the district court granted the plaintiffs’ motion to certify the class and granted plaintiffs’ motion for summary judgment, finding that EQT Production Company and its marketing affiliate EQT Energy, LLC are alter egos of one another. The EQT defendants sought immediate appeal of the class certification. On November 30, 2017, the court of appeals declined the request for an immediate review. Trial is scheduled for November 27, 2018. In the event of an adverse judgment, the EQT defendants intend to appeal the class certification, alter ego ruling, and any assessment of liability.

Off-Balance Sheet Arrangements

See Note G to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further discussion of the MVP Joint Venture guarantee.

Dividend

On October 10, 2018, the Board of Directors of the Company declared a regular quarterly cash dividend of three cents per share, payable December 1, 2018, to the Company’s shareholders of record at the close of business on November 9, 2018.

See Notes C , D and E to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for discussion of partnership distributions.

Critical Accounting Policies

The Company’s significant accounting policies are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . Any new accounting policies or updates to existing accounting policies as a result of new accounting pronouncements have been included in the notes to the Company’s Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q. The application of the Company’s critical accounting policies may require management to make judgments and estimates about the amounts reflected in the Condensed Consolidated Financial Statements. Management uses historical experience and all available information to make these estimates and judgments. Different amounts could be reported using different assumptions and estimates.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk and Derivative Instruments

The Company’s primary market risk exposure is the volatility of future prices for natural gas and NGLs. Due to the volatility of commodity prices, the Company is unable to predict future potential movements in the market prices for natural gas, including Appalachian and other market point basis, and NGLs and thus cannot predict the ultimate impact of prices on its operations. Prolonged low, and/or significant or extended declines in, natural gas and NGLs prices could adversely affect, among other things, the Company’s development plans, which would decrease the pace of development and the level of the Company’s proved reserves. Such changes or similar impacts on third-party shippers on the Company's midstream assets could also impact the Company’s revenues, earnings or liquidity and could result in material non-cash impairments to the recorded value of the Company’s property, plant and equipment.

The Company uses derivatives to reduce the effect of commodity price volatility. The Company’s use of derivatives is further described in Note J to the Condensed Consolidated Financial Statements and under the caption “Commodity Risk Management” in the “Capital Resources and Liquidity” section of Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q. The Company uses derivative commodity instruments that are placed primarily with financial institutions and the creditworthiness of these institutions is regularly monitored. The Company primarily enters into derivative instruments to hedge forecasted sales of production. The Company also enters into derivative instruments to hedge basis and exposure to fluctuations in interest rates. The Company’s use of derivative instruments is implemented under a set of policies approved by the Company’s Hedge and Financial Risk Committee and reviewed by the Audit Committee of the Company’s Board of Directors.

For the derivative commodity instruments used to hedge the Company’s forecasted sales of production, most of which are hedged at NYMEX natural gas prices, the Company sets policy limits relative to the expected production and sales levels which are exposed to price risk. The Company has an insignificant amount of financial natural gas derivative commodity instruments for trading purposes.

The derivative commodity instruments currently utilized by the Company are primarily fixed price swap agreements, collar agreements and option agreements which may require payments to or receipt of payments from counterparties based on the differential between two prices for the commodity. The Company may also use other contractual agreements in implementing its commodity hedging strategy.

The Company monitors price and production levels on a continuous basis and makes adjustments to quantities hedged as warranted. The Company’s overall objective in its hedging program is to protect a portion of cash flows from undue exposure to the risk of changing commodity prices.

For information on the quantity of derivative commodity instruments held by the Company, see Note J to the Condensed Consolidated Financial Statements and the “Commodity Risk Management” section in the “Capital Resources and Liquidity” section of Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q for further discussion.

A hypothetical decrease of 10% in the market price of natural gas from the September 30, 2018 and December 31, 2017 levels would have increased the fair value of these natural gas derivative instruments by approximately $413.0 million and $ 386.2 million , respectively. A hypothetical increase of 10% in the market price of natural gas from the September 30, 2018 and December 31, 2017 levels would have decreased the fair value of these natural gas derivative instruments by approximately $418.4 million and $ 384.9 million , respectively. The Company determined the change in the fair value of the derivative commodity instruments using a method similar to its normal determination of fair value as described in Note K to the Condensed Consolidated Financial Statements. The Company assumed a 10% change in the price of natural gas from its levels at September 30, 2018 and December 31, 2017 . The price change was then applied to these natural gas derivative commodity instruments recorded on the Company’s Consolidated Balance Sheets, resulting in the hypothetical change in fair value.

The above analysis of the derivative commodity instruments held by the Company does not include the offsetting impact that the same hypothetical price movement may have on the Company’s physical sales of natural gas. The portfolio of derivative commodity instruments held to hedge the Company’s forecasted produced gas approximates a portion of the Company’s expected physical sales of natural gas. Therefore, an adverse impact to the fair value of the portfolio of derivative commodity instruments held to hedge the Company’s forecasted production associated with the hypothetical changes in commodity prices referenced above should be offset by a favorable impact on the Company’s physical sales of natural gas, assuming the derivative commodity instruments

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are not closed out in advance of their expected term, and the derivative commodity instruments continue to function effectively as hedges of the underlying risk.

If the underlying physical transactions or positions are liquidated prior to the maturity of the derivative commodity instruments, a loss on the financial instruments may occur or the derivative commodity instruments might be worthless as determined by the prevailing market value on their termination or maturity date, whichever comes first.

Interest Rate Risk

Changes in interest rates affect the amount of interest the Company, EQGP and EQM earn on cash, cash equivalents and short-term investments and the interest rates the Company and EQM pay on borrowings under their respective revolving credit facilities and the Company's floating rate notes. All of the Company’s and EQM’s Senior Notes, other than the floating rate notes, are fixed rate and thus do not expose the Company to fluctuations in its results of operations or liquidity from changes in market interest rates. Changes in interest rates do affect the fair value of the Company’s and EQM’s fixed rate debt. See Note M to the Condensed Consolidated Financial Statements for further discussion of the Company’s and EQM’s credit facility borrowings, as applicable, and Note K to the Condensed Consolidated Financial Statements for a discussion of fair value measurements, including the fair value of long-term debt.

Other Market Risks

The Company is exposed to credit loss in the event of nonperformance by counterparties to derivative contracts. This credit exposure is limited to derivative contracts with a positive fair value, which may change as market prices change. The Company’s over-the-counter (OTC) derivative instruments are primarily with financial institutions and, thus, are subject to events that would impact those companies individually as well as that industry as a whole. The Company utilizes various processes and analyses to monitor and evaluate its credit risk exposures. These include closely monitoring current market conditions, counterparty credit fundamentals and credit default swap rates. Credit exposure is controlled through credit approvals and limits based on counterparty credit fundamentals. To manage the level of credit risk, the Company enters into transactions with financial counterparties that are of investment grade, enters into netting agreements whenever possible and may obtain collateral or other security.

Approximately 63% , or $315.6 million , of the Company’s OTC derivative contracts outstanding at September 30, 2018 had a positive fair value. Approximately 63%, or $242.0 million, of the Company’s OTC derivative contracts outstanding at December 31, 2017 had a positive fair value.

As of September 30, 2018 , the Company was not in default under any derivative contracts and had no knowledge of default by any counterparty to its derivative contracts. The Company made no adjustments to the fair value of derivative contracts due to credit related concerns outside of the normal non-performance risk adjustment included in the Company’s established fair value procedure. The Company monitors market conditions that may impact the fair value of derivative contracts reported in the Condensed Consolidated Balance Sheets.

The Company is also exposed to the risk of nonperformance by credit customers on physical sales or transportation of natural gas. A significant amount of revenues and related accounts receivable are generated from the sale of produced natural gas and NGLs to certain marketers, utility and industrial customers located mainly in the Appalachian Basin and in markets available through the Company's current transportation portfolio, which includes markets in the Gulf Coast, Midwest and Northeast United States. The Company also contracts with certain processors to market a portion of NGLs on behalf of the Company. Similarly, revenues and related accounts receivable are generated from the gathering, transmission and storage of natural gas in the Appalachian Basin for independent producers, local distribution companies and marketers.

No one lender of the large group of financial institutions in the syndicates for the EQT and EQM credit facilities holds more than 10% of the respective facility. The large syndicate groups and relatively low percentage of participation by each lender are expected to limit the Company’s and EQM's exposure to disruption or consolidation in the banking industry.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of management, including the Company’s Principal Executive Officer and Principal Financial Officer, an evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), was conducted as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

As noted under Item 9A, “Controls and Procedures,” contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , management’s assessment of, and conclusion on, the effectiveness of internal control over financial reporting did not include the internal controls of the entities acquired in the Rice Merger on November 13, 2017. Under guidelines established by the SEC, companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting for a period of up to one year following an acquisition while integrating the acquired company. The Company is in the process of integrating Rice’s and the Company’s internal controls over financial reporting. As a result of these integration activities, certain controls will be evaluated and may be changed. Except as noted above, there were no changes in the Company’s internal control over financial reporting that occurred during the third quarter of 2018 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal 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 accrues legal and other direct costs related to loss contingencies when actually incurred. The Company has established reserves it believes to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, the Company believes that the ultimate outcome of any matter currently pending against the Company will not materially affect the financial position, results of operations or liquidity of the Company.

Environmental Proceedings

Phoenix S Impoundment, Tioga County, Pennsylvania

In June and August 2012, the Company received three Notices of Violation (NOVs) from the Pennsylvania Department of Environmental Protection (the PADEP). The NOVs alleged violations of the Pennsylvania Oil and Gas Act and Clean Streams Law in connection with the unintentional release in May 2012, by a Company vendor, of water from an impaired water pit at a Company well location in Tioga County, Pennsylvania. Since confirming a release, the Company has cooperated with the PADEP in remediating the affected areas.

During the second quarter of 2014, the Company received a proposed consent assessment of civil penalty from the PADEP that proposed a civil penalty related to the NOVs. On September 19, 2014, the Company filed a declaratory judgment action in the Commonwealth Court of Pennsylvania against the PADEP seeking a court ruling on the PADEP’s legal interpretation of the penalty provisions of the Clean Streams Law, which interpretation the Company believed was legally flawed and unsupportable. On October 7, 2014, based on its interpretation of the penalty provisions, the PADEP filed a complaint against the Company before the Pennsylvania Environmental Hearing Board (the EHB) seeking $4.53 million in civil penalties. In January 2017, the Commonwealth Court ruled in favor of the Company, finding the PADEP’s interpretation of the penalty provisions of the Clean Streams Law erroneous. The PADEP appealed that decision to the Pennsylvania Supreme Court, and the parties made oral arguments in front of the Pennsylvania Supreme Court on November 28, 2017. Following a July 2016 hearing before the EHB, in May 2017, the EHB ruled that the Company should pay $1.1 million in civil penalties. In June 2017, both the Company and the PADEP appealed the EHB’s decision to the Commonwealth Court. In September 2018, the Commonwealth Court upheld the $1.1 million-dollar civil penalty, which the Company will pay. The payment of the civil penalty will not have a material impact on the financial condition, results of operations or liquidity of the Company.

Wilson Creek Water Withdrawals, Tioga County, Pennsylvania

On June 7, 2018, the Company received an NOV from the Susquehanna River Basin Commission (the SRBC). The NOV alleged violations of the Company’s Water Management Plan and its Wilson Creek Docket related to the withdrawal of water from Wilson Creek in Tioga County, Pennsylvania, between March 14, 2018 and April 3, 2018, when the stream flow was below the required flow protection threshold set forth in the Docket. The Company cooperated fully with the SRBC to address the matter. Civil penalty settlement discussions between the Company and the SRBC are ongoing. While the Company expects the SRBC’s claims to result in penalties that exceed $100,000, the Company expects that the resolution of this matter will not have a material impact on the financial condition, results of operations or liquidity of the Company.

Erosion and Sedimentation Best Management Practice BMP Failures, Allegheny County, Pennsylvania

Between November 2017 and March 2018, the Company received multiple NOVs from the PADEP relating to four of the Company’s well pads in Allegheny County, Pennsylvania. During this time period, Pennsylvania experienced unprecedented amounts of rainfall. The NOVs alleged violations of the Oil and Gas Act, and Clean Stream Law in connection with the effects of this rainfall on erosion and sedimentation controls at the Prentice, Fetchen, Oliver East, and Oliver West well pads. The Company has cooperated fully with the PADEP to take appropriate actions to address the erosion and sedimentation control issues. The Company and the PADEP are currently negotiating a civil penalty settlement. While the Company expects the PADEP’s claims to result in penalties that exceed $100,000, the Company expects that the resolution of this matter will not have a material impact on the financial condition, results of operations or liquidity of the Company.

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Other

Kay Company, LLC, et al. v. EQT Production Company, et al., United States District Court for the Northern District of West Virginia

On January 16, 2013, several royalty owners who have entered into leases with EQT Production Company, a subsidiary of the Company, filed a gas royalty class action in the Circuit Court of Doddridge County, West Virginia. The suit alleges that EQT Production Company and a number of related companies, including the Company, EQT Energy, LLC, Equitrans Gathering Holdings, LLC (formerly known as EQT Gathering Holdings, LLC), EQT Investments Holdings, LLC and EQM, have failed to pay royalties on the fair value of the gas produced from the leases and have taken improper post-production deductions from the royalties paid. The plaintiffs seek more than $100,000,000 (according to recently disclosed expert reports) in compensatory damages, punitive damages, and other relief. The Company denies that it underpaid royalties or that it took improper deductions. The Company further refutes that the amount of damages sought is supported by the facts and law and is vigorously defending the case. EQT has reserved approximately $1.5 million related to this case.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, other than those listed in this section.

Our plan to separate into two independent publicly-traded companies is subject to various risks and uncertainties and may not be completed in accordance with the expected plans or anticipated timeline, or at all, and will involve significant time and expense, which could disrupt or adversely affect our business.

On February 21, 2018, we announced plans to separate into two independent publicly-traded companies. Completion of the Separation was approved by our Board of Directors on October 24, 2018; however, the Separation and Distribution remain subject to market, regulatory and certain other conditions. Unanticipated developments, including changes in the competitive conditions of our upstream and midstream businesses, possible delays in obtaining various tax opinions or rulings, regulatory approvals or clearances, the uncertainty of the financial markets and challenges in executing the Separation, could delay or prevent the completion of the proposed Separation, or cause the proposed Separation to occur on terms or conditions that are different or less favorable than expected.

We expect that the process of completing the proposed Separation will be time-consuming and involve significant costs and expenses, which may be significantly higher than what we currently anticipate and may not yield a discernible benefit if the Separation is not completed. Executing the proposed Separation will require significant time and attention from our senior management and employees, which could adversely affect our business, financial results and results of operations. We may also experience increased difficulties in attracting, retaining and motivating employees during the pendency of the Separation and following its completion, which could harm our businesses.

The Separation may not achieve some or all of the anticipated benefits.

We may not realize some or all of the anticipated strategic, financial, operational or other benefits from the Separation. As independent publicly-traded companies, our upstream and midstream businesses will be smaller, less diversified companies with a narrower business focus and may be more vulnerable to changing market conditions, which could materially and adversely affect their respective business, financial condition and results of operations. Further, there can be no assurance that the combined value of the common stock of the two publicly-traded companies will be equal to or greater than what the value of our common stock would have been had the proposed Separation not occurred.

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The Separation and Distribution could result in substantial tax liability.

The Separation will be effected by a pro rata distribution to our shareholders of 80.1% of the outstanding stock of Equitrans Midstream. We have obtained (i) a private letter ruling from the U.S. Internal Revenue Service (the IRS) and intend to obtain (ii) one or more opinions of outside counsel regarding the qualification of the Distribution, together with certain related transactions, as a transaction that is generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the U.S. Internal Revenue Code (the Code) and certain other U.S. federal income tax matters relating to the Distribution and certain related transactions. The IRS private letter ruling and the opinion of counsel will be based upon and rely on, among other things, various facts and assumptions, as well as certain representations, statements and undertakings of us and Equitrans Midstream, including those relating to the past and future conduct of us and Equitrans Midstream. If any of these representations, statements or undertakings is, or becomes, inaccurate or incomplete, or if we or Equitrans Midstream breach any representations or covenants contained in any of the Separation-related agreements and documents or in any documents relating to the IRS private letter ruling and/or the opinion of counsel, the IRS private letter ruling and/or the opinion of counsel may be invalid and the conclusions reached therein could be jeopardized.

Notwithstanding receipt of the IRS private letter ruling and the opinion of counsel, the IRS could determine that the Distribution and/or certain related transactions should be treated as taxable transactions for U.S. federal income tax purposes if it determines that any of the representations, assumptions or undertakings upon which the IRS private letter ruling or the opinion of counsel was based are false or have been violated. In addition, any opinion of counsel will represent the judgment of such counsel and is not binding on the IRS or any court and the IRS or a court may disagree with the conclusions in such opinion of counsel. Accordingly, notwithstanding receipt of the IRS private letter ruling and the opinion of counsel, there can be no assurance that the IRS will not assert that the Distribution and/or certain related transactions do not qualify for the intended tax treatment or that a court would not sustain such a challenge. In the event the IRS were to prevail with such challenge, we, Equitrans Midstream and our shareholders could be subject to material U.S. federal income tax liability.

Even if the Distribution otherwise qualifies as generally tax-free under Section 355 and Section 368(a)(1)(D) of the Code, it would result in a material U.S. federal income tax liability to us (but not to our shareholders) under Section 355(e) of the Code if one or more persons acquire, directly or indirectly, a 50-percent or greater interest (measured by either vote or value) in our stock or in the stock of Equitrans Midstream (excluding, for this purpose, the acquisition of stock of Equitrans Midstream by holders of our stock in the Distribution) as part of a plan or series of related transactions that includes the Distribution. Any acquisition of our stock or stock of Equitrans Midstream (or any predecessor or successor corporation) within two years before or after the Distribution generally would be presumed to be part of a plan that includes the Distribution, although the parties may be able to rebut that presumption under certain circumstances. The process for determining whether an acquisition is part of a plan under these rules is complex, inherently factual in nature and subject to a comprehensive analysis of the facts and circumstances of the particular case. Notwithstanding the IRS private letter ruling or any opinion of counsel described above, we or Equitrans Midstream may cause or permit a change in ownership of our stock or stock of Equitrans Midstream sufficient to result in a material tax liability to us.

In connection with the Distribution and to effect the Separation, we expect to effect certain restructuring transactions that are expected to be taxable to us (but not our shareholders) and to result in a material tax liability, which we expect to be offset in part by certain tax attributes.

We may determine to forgo certain transactions in order to avoid the risk of incurring material tax-related liabilities.

As a result of requirements of Section 355 of the Code and/or other applicable tax laws, we may determine to forgo certain transactions that would otherwise be advantageous. In particular, we may determine to continue to operate certain of our business operations for the foreseeable future even if a sale or discontinuance of such business would otherwise be advantageous. Moreover, in light of the requirements of Section 355(e) of the Code, we may determine to forgo certain transactions, including share repurchases, stock issuances, certain asset dispositions and other strategic transactions, for some period of time following the Separation.

The proposed Separation may result in disruptions to, and negatively impact our relationships with, our customers and other business partners.

Uncertainty related to the proposed Separation may lead customers and other parties with which we currently do business or may do business in the future to terminate or attempt to negotiate changes in existing business relationships, or consider entering into business relationships with parties other than us. These disruptions could have a material and adverse effect on our business,

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financial condition, results of operations and prospects. Further, the effect of such disruptions could be exacerbated by any delays in the completion of the Separation.

The regulatory approval process for the construction of new midstream assets is challenging, and recent decisions by regulatory and judicial authorities in pending proceedings could impact EQM's or the MVP Joint Venture's ability to obtain all approvals and authorizations necessary to complete certain projects on the projected time frame or at all or its ability to achieve the expected investment return on the project.

Certain of EQM’s internal growth projects may require regulatory approval from federal, state and local authorities prior to construction, including any extensions from or additions to our transmission and storage system. The approval process for storage and transportation projects has become increasingly challenging, due in part to state and local concerns related to exploration and production and gathering activities in new production areas, including the Marcellus, Utica and Upper Devonian Shales, and negative public perception regarding the oil and gas industry. Such authorization may not be granted or, if granted, such authorization may include burdensome or expensive conditions.

In addition, any significant delays in the regulatory approval process for the MVP project could increase costs and negatively impact the scheduled in-service date of fourth quarter 2019, which in turn could adversely affect the ability for MVP and its owners, including EQM, to achieve the expected investment return. The MVP project is subject to several challenges that must be resolved before the MVP project can be completed. For example, on October 2, 2018, the Fourth Circuit Court of Appeals vacated the MVP project’s use of U.S. Army Corps of Engineers Nationwide Permit 12 in West Virginia. In related proceedings, the MVP project’s use of Nationwide Permit 12 has also been stayed on other segments of the project.

Although the MVP Joint Venture is actively defending the relevant agency actions and judicial challenges to the project, and is in active dialogue with all of the affected agencies to resolve these issues and restore the affected permits, there is no guarantee as to how long the agency proceedings and judicial challenges will take to resolve, or whether the MVP Joint Venture will ultimately succeed in restoring the permits in their present form or within the MVP Joint Venture's targeted time frame for placing the project in service. This and other similar litigation could adversely affect EQM's business, financial condition, results of operations, liquidity and ability to make quarterly cash distributions to its unitholders, including us and EQGP.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth the Company’s repurchases of equity securities registered under Section 12 of the Exchange Act that have occurred during the three months ended September 30, 2018 :



Period	Total number of shares purchased (a)	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under plans or programs (b)
July 2018 (July 1 – July 31)	436,944	$	49.62	436,944	$	478,322,854
August 2018 (August 1 – August 31)	9,516,164	50.46		9,509,438	—
September 2018 (September 1 – September 30)	21,627	50.53		—	—
Total	9,974,735	$	50.39	9,946,382	—


(a)	Reflects the number of shares withheld by the Company to pay taxes upon vesting of restricted stock plus the number of shares purchased as part of publicly announced plans or programs.

(b)

On July 11, 2018, the Company’s Board of Directors approved a share repurchase authorization to repurchase shares of the Company’s outstanding common stock for an aggregate purchase price of not more than $500 million . Pursuant to the share repurchase authorization, the Company may repurchase shares from time to time in open market or in privately negotiated transactions. The share repurchase authorization does not obligate the Company to acquire any specific number of shares, has no pre-established end date and may be discontinued by the Company at any time. As of September 30, 2018 , the Company had purchased shares for an aggregate purchase price of $500 million under this authorization, and therefore no additional shares may be purchased under this authorization.

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Item 6. Exhibits



Exhibit No.	Description	Method of Filing

10.1	Agreement and Release, dated as of August 13, 2018, between the Company and Jeremiah J. Ashcroft III	Filed herewith as Exhibit 10.1

10.2	Offer letter dated as of August 9, 2018, between the Company and Thomas F. Karam	Filed herewith as Exhibit 10.2

10.3	Confidentiality, Non-Solicitation and Non-Competition Agreement, dated as of August 9, 2018, between the Company and Thomas F. Karam	Filed herewith as Exhibit 10.3

10.4	Amendment to 1999 Directors’ Deferred Compensation Plan (as amended October 2, 2018)	Filed herewith as Exhibit 10.4

10.5	Amendment to 2005 Directors’ Deferred Compensation Plan (as amended October 2, 2018)	Filed herewith as Exhibit 10.5

31.01	Rule 13(a)-14(a) Certification of Principal Executive Officer	Filed herewith as Exhibit 31.01

31.02	Rule 13(a)-14(a) Certification of Principal Financial Officer	Filed herewith as Exhibit 31.02

32	Section 1350 Certification of Principal Executive Officer and Principal Financial Officer	Furnished herewith as Exhibit 32

101	Interactive Data File	Filed herewith as Exhibit 101

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Signature

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 thereunto duly authorized.



		EQT CORPORATION
		(Registrant)


	By:	/s/ Robert J. McNally
		Robert J. McNally
		Senior Vice President and Chief Financial Officer

Date: October 25, 2018

AGREEMENT AND RELEASE

This Agreement and Release (“Agreement”) is entered into between EQT Corporation, including its subsidiaries and affiliates, (“EQT” or the “Company”) and Jeremiah J. Ashcroft, III (“Employee”).

WHEREAS, Employee’s full-time employment with EQT terminated on August 8, 2018; and

WHEREAS, Employee will discontinue full time employment with EQT on August 8, 2018 but will remain employed by EQT pursuant to the Executive Alternative Work Arrangement Employment Agreement (“EAWA Employment Agreement”) (referenced below) in accordance with Section 9 of the Confidentiality, Non-Solicitation and Non-Competition Agreement dated August 7, 2017 (the “Non-Compete Agreement”) (attached hereto as Exhibit B); and

WHEREAS, Employee and EQT have agreed that Employee shall receive certain benefits upon termination of employment in exchange for, among other things, a general release; and

WHEREAS, the parties desire to fully and finally resolve all issues between them including any issues arising out of the employment relationship and the termination of that relationship;

NOW, THEREFORE, in consideration of the respective representations, acknowledgements, covenants and agreements of the parties set forth herein, and intending to be legally bound, the parties agree as follows:

1. Employee acknowledges and agrees that effective at 12:00 p.m. on August 8, 2018, he will discontinue full-time employment with EQT, but he will remain employed by EQT pursuant to the EAWA Employment Agreement. Employee and EQT acknowledge and agree that Employee shall experience a “separation from service” (within the meaning of Section 409A of the Internal Revenue Code) at 12:00 p.m. on August 8, 2018.

2. Effective 12:00 p.m. on August 8, 2018, Employee will, and does hereby, resign his positions as Senior Vice President and President Midstream of EQT Corporation, President and Chief Executive Officer and director of Equitrans Midstream Corporation, President and Chief Executive Officer and director of EQT Midstream Services, LLC, the general partner of EQT Midstream Partners, LP (the “EQM General Partner”) and President and Chief Executive Officer and director of EQT GP Services, LLC, the general partner of EQT GP Holdings, LP (the “EQGP General Partner”) and from any other positions he might hold with EQT and its affiliates.

3. Employee will execute the EAWA Employment Agreement attached hereto as Exhibit A at the time he executes this Agreement and, provided he remains eligible pursuant to the terms of Section 9 of the Non-Compete Agreement and the EAWA Employment Agreement, he will become an EAWA employee of EQT pursuant to the terms of the EAWA Employment Agreement as of August 8, 2018.

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4. Subject to Employee’s execution of this Agreement, and Employee’s compliance with his obligations under this Agreement and the Non-Compete Agreement (collectively, the “Agreement Conditions”), Employee’s participation in, and potential financial rewards under, the long-term incentive programs described below shall continue from and after the date hereof consistent, in each case, with the terms of the applicable program, as the same may be amended from time to time for all participants of such program. Subparagraphs a through e describe the treatment of Employee’s awards under such programs based upon the conditions described therein as supplemented, if at all, by amendments adopted after the date hereof applicable to recipients of such awards generally.


a.	2017 Restricted Stock Grant. Employee was granted 34,430 shares of

restricted stock on August 7, 2017 pursuant to the 2014 Long-Term Incentive Plan and applicable Participant Award Agreement. Subject to Employee’s satisfaction of the Agreement Conditions, he shall be fully vested in 100% of such restricted stock (including shares acquired through the reinvestment of dividends accrued thereon) as of August 8, 2018, which will be payable within 30-days of this Agreement becoming effective.

2018 Incentive Performance Share Unit Program (the “2018 IPSP”). Employee was granted 25,090 Performance Share Units on January 1, 2018, under the 2018 IPSP. Subject to Employee’s satisfaction of the Agreement Conditions, Employee shall be deemed to have fully satisfied the employment condition with respect to 100% of his Performance Share Units, plus any additional Performance Share Units accumulated pursuant to the 2018 IPSP (collectively, the “2018 Retained Units”). Subject to Paragraph 3(f) of the Non-Compete Agreement, the Awarded Value, if any, for the 2018 Retained Units shall be determined based on achievement of the performance criteria set forth in the 2018 IPSP, and shall be paid to Employee at the same time as payment is made to all active participants in the 2018 IPSP, but not later than March 15, 2021.


c.	2018 Stock Options . Employee was granted 41,900 Stock Options on January 1, 2018, under the 2014 Long-Term Incentive Plan. Subject to Employee’s satisfaction of the Agreement Conditions, 100% of such options shall vest.


d.	2018 Restricted Stock Grant. Employee was granted 12,550 shares of

restricted stock on January 1, 2018 pursuant to the 2014 Long-Term Incentive Plan and applicable Participant Award Agreement. Subject to Employee’s satisfaction of the Agreement Conditions, he shall be fully vested in 100% of such restricted stock (including shares acquired through the reinvestment of dividends accrued thereon) as of August 8, 2018, which will be payable within 30-days of this Agreement becoming effective.


e.	2018 Strategic Implementation Performance Share Unit Award (the “2018 SIA”) . Employee was granted 2,020 Performance Share Units on March 15, 2018, under the 2018 SIA. Subject to Employee’s satisfaction of the Agreement Conditions, Employee shall be deemed to have fully satisfied the

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employment condition with respect to 100% of his Performance Share Units, plus any additional Performance Share Units accumulated pursuant to the 2018 SIA, which will be payable within 60-days of this Agreement becoming effective.

Capitalized terms used in this Paragraph 4 and not otherwise defined in this Agreement are used herein as defined in the applicable program award documentation. The payments provided under this Paragraph 4 shall be subject to applicable tax and payroll withholdings. Except as modified by the Non-Compete Agreement, Employee’s financial rewards under the long-term incentive programs referenced above shall remain subject to the terms and conditions of the applicable award program documentation, as they may be amended from time to time. In the event of Employee’s death, employee’s financial rewards under the long-term incentive programs referenced above shall payable to Employee’s estate.

5. Subject to Employee’s satisfaction of the Agreement Conditions, EQT shall provide Employee with the following termination benefits:


a.	Pursuant to the Section 3(a) of the Non-Compete Agreement, a lump sum payment of $1,116,150.24 (i.e., twenty-four (24) months of Employee’s base salary). This lump sum payment will be made on September 19, 2018.

Pursuant to the Section 3(b) of the Non-Compete Agreement, a lump sum payment equal to two times the average annual incentive (bonus) payment earned by the Employee under the Company’s applicable Short-Term Incentive Plan (or any successor plan) for the three (3) full year period prior to Employee’s termination. Since Employee has not been employed for three (3) full years, the average has been calculated by including for each partial calendar year of employment and each calendar during which he was not employed by EQT, the greater of: (i) the Employee’s actual award for such year, and (ii) the Employee’s target annual incentive (bonus) award at the time of termination. A lump sum payment of $1,027,000.00 will be made on September 19, 2018.


c.	Pursuant to the Section 3(c) of the Non-Compete Agreement, a lump sum payment of $18,204.72. This lump sum payment will be made on September 19, 2018.


d.	Pursuant to the Section 3(d) of the Non-Compete Agreement, a lump sum payment of $200,000. This lump sum payment will be made on September 19, 2018.

Pursuant to Section 3 of the Non-Compete Agreement and the EQT Corporation Severance Pay Plan, EQT will provide the following: (i) a lump sum payment of $32,196.64 which will be made on October 31, 2018; and (ii) medical (including prescription drug), dental and vision coverage in accordance with the Employee’s current selected coverage from August 9, 2018 through and including February 9, 2019. Employee’s

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contributory cost for the benefit described in clause (ii) above will be deducted from his lump sum payment described in this subparagraph (e) and such amount will cover Employee’s portion of the health care premium for the time period setforth herein. Employee’s benefit continuation will be provided pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and the applicable EQT COBRA benefit description.

The payments provided in this Paragraph 5 shall be subject to applicable tax and payroll withholding. Employee acknowledges that EQT’s obligation to make the payments above are in exchange for his execution of this Agreement and that absent his execution of this Agreement, he would not be entitled to the payments described above.

6. Employee, upon reasonable notice and at reasonable times, agrees to cooperate with the Company in the defense of litigation and in related investigations of any claims or actions now in existence or that may be threatened or brought in the future relating to events or occurrences that transpired while Employee was employed by the Company. Further, Employee hereby re-affirms the reasonableness of, and his agreement to abide by, his obligations under, and the terms and conditions of, the Non-Compete Agreement.

7. EQT’s obligation to provide the payments set forth in Paragraphs 4 and 5 shall be subject to Employee’s satisfaction of the Agreement Conditions. Further, Employee hereby acknowledges and agrees that the payments set forth in Paragraphs 4 and 5, together with any accrued but unpaid base salary, accrued but unused vacation, any vested account balance that Employee may have under the EQT Employee Savings and Protection Plan and any compensation or benefits to which Employee may become entitled pursuant to the EAWA Employment Agreement, shall be in full satisfaction of all obligations of EQT to Employee under this Agreement, any other compensation or benefit plan, agreement or arrangement or otherwise. Employee acknowledges that Paragraphs 6, 8, 9 and 10 of this Agreement contain material terms and any breach of those terms by Employee shall, in addition to any other remedies EQT may have, entitle EQT to (a) cease payment of the payments contemplated by Paragraphs 4 and 5 to the extent not previously paid or provided; and (b) the prompt return by Employee of any portion of such payments previously paid or provided.

8. In consideration for EQT’s commitments herein, Employee, on behalf of himself, his heirs, representatives, estates, successors and assigns, does hereby voluntarily, irrevocably and unconditionally release and forever discharge EQT, its predecessors, subsidiaries, affiliates, and benefit plans, and their past, present and future officers, directors, trustees, administrators, agents and employees, as well as the heirs, successors and assigns of any such persons or such entities (hereinafter severally and collectively called “Releasees”) from any and all suits, actions, causes of action, damages and claims, known and unknown, that Employee has or may have against any of the Releasees for any acts, practices or events up to and including the date he signs this Agreement, except for the performance of the provisions of this Agreement, it being the intention of Employee to effect a general release of all such claims. This release includes any and all claims under any possible legal, equitable, contract, tort, or statutory theory, including but not limited to any claims under Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Americans With Disabilities Act, the Civil Rights Act of 1991, the

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Genetic Information Nondiscrimination Act, the Pennsylvania Human Relations Act, the City of Pittsburgh Human Relations Ordinance, all as amended, and other federal, state, and local statutes, ordinances, executive orders, regulations and other laws prohibiting discrimination in employment, the federal Employee Retirement Income Security Act of 1974, as amended, and state, federal or local law claims of any other kind whatsoever (including common law tort and contract claims) arising out of or in any way related to Employee’s employment with EQT. Employee also specifically releases all Releasees from any and all claims or causes of action for the fees, costs and expenses of any and all attorneys who have at any time or are now representing him in connection with this Agreement or in connection with any matter released in this Agreement.

The release in the preceding paragraph is intended to be a general release, excluding only claims which Employee is legally barred from releasing. Employee understands that the release does not include: any claims that cannot be released or waived as a matter of law; any claim for or right to vested benefits under the Company's plans; any right to enforce this Agreement; and any claims based on acts or events occurring after Employee signs this Agreement. Nothing in this Agreement prevents a challenge to the validity of the Agreement or prohibits the filing of a charge or complaint with, or testimony, assistance or participation in, any investigation, proceeding or hearing conducted by any federal, state or local governmental agency, including but not limited to the Equal Employment Opportunity Commission.

Nothing in this Agreement or the Non-Compete Agreement prohibits Employee from: (i) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation; or (ii) disclosing confidential information and/or trade secrets when this disclosure is solely for the purpose of: (a) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity; (b) working with legal counsel in order to determine whether possible violations of federal, state, or local law or regulation exist; or (c) filing a complaint or other document in a lawsuit or other proceeding, if such filing is made under seal. Any disclosures of trade secrets must be consistent with 18 U.S.C. §1833.

9. Employee warrants that he has no actions now pending against Releasees in any court of the United States or any State thereof based upon any acts or events arising out of or related to his employment with EQT. Notwithstanding any other language in this Agreement, the parties understand that this agreement does not prohibit Employee from filing an administrative charge of alleged employment discrimination under Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act or the Equal Pay Act. Employee, however, waives his right to monetary or other recovery should any federal, state or local administrative agency pursue any claims on his behalf arising out of or relating to his employment with any of the Releasees. This means that by signing this Agreement, Employee will have waived any right he had to obtain a recovery if an administrative agency pursues a claim on his behalf against any of the Releasees based on any actions taken by any of the Releasees up to the date of the signing of this Agreement and the Supplemental Release, and that Employee will have released the Releasees of any and all claims of any nature arising up to the dates of the signing of this Agreement and the Supplemental Release. However, nothing in this Agreement prevents Employee from making any reports to or receiving any

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awards from the Securities and Exchange Commission or Occupational Safety and Health Administration.

10. Employee agrees that (unless otherwise required by law or legal process or as permitted by Paragraphs 8 and 9 of this Agreement) he will not, directly or indirectly, in any capacity or manner, make, express, transmit, speak, write, verbalize or otherwise communicate in any way any remark, comment, message, information, declaration, communication or other statement of any kind, whether oral or in writing, whether in tangible format, electronic format, or otherwise, that might reasonably be construed to be derogatory, critical, negative or disparaging about EQT (including its business operations and practices), its past or present officers, administrators, managers, directors, trustees or employees and/or detrimental towards EQT’s business reputation or goodwill. Employee likewise shall not cause, assist, solicit or encourage anyone else to engage in any of the foregoing behavior. Employee shall not make any comment or statement to the media in any form regarding EQT, his employment with EQT or his departure from EQT without the express written consent of EQT. EQT agrees to direct all of the Executive Officers of EQT Corporation and all of the employees in its Human Resources Department to not make any negative or disparaging comments about Employee to the media, to any other members of the public or any potential employers.

11. By entering into this Agreement, EQT in no way admits that it or any of the Releasees has treated Employee unlawfully or wrongfully in any way. Neither this Agreement nor the implementation thereof shall be construed to be, or shall be admissible in any proceedings as, evidence of any admission by EQT or any of the Releasees of any violation of or failure to comply with any federal, state, or local law, ordinance, agreement, rule, regulation or order.

12. The provisions of this Agreement are severable. To the extent that any provision of this Agreement is deemed unenforceable in any court of law, the parties intend that such provision be construed by such court in a manner to make it enforceable.

13. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company.

14. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without regard to conflict of law principles.

15. Except (i) as provided in the second sentence of this paragraph; (ii) for the Indemnification Agreement made as of August 7, 2017 between EQT and the Employee; (iii) for the Indemnification Agreement made as of March 15, 2018 between EQT GP Holdings, LP, EQT GP Services, LLC and the Employee; (iv) for the Indemnification Agreement made as of August 7, 2017 between EQT Midstream Partners, LP, EQT Midstream Services, LLC and the Employee; (v) EAWA Employment Agreement; and (vi) as otherwise expressly set forth in this Agreement, this Agreement, including the Exhibits attached hereto, contain the entire agreement between the parties and it supersedes all prior agreements and understandings between EQT and Employee (oral or written). Notwithstanding the foregoing, Employee’s covenants, obligations and acknowledgements, and EQT’s rights and remedies, set forth in the Non-Compete Agreement, remain in full force and effect.

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16. This Agreement may not be changed, amended, or modified except by a written instrument signed by both parties.

17. EMPLOYEE ACKNOWLEDGES THAT HE HAS CAREFULLY READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS AGREEMENT, AND THAT HE IS VOLUNTARILY EXECUTING AND ENTERING INTO THIS AGREEMENT, WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND INTENDING TO BE LEGALLY BOUND BY IT.

IN WITNESS WHEREOF , the parties have executed this Agreement on the dates set forth below.



EQT CORPORATION By: /s/ Charlene Petrelli Charlene Petrelli Vice President and Chief Human Resources Officer 8/13/2018 Date		/s/ Jeremiah J. Ashcroft III Jeremiah J. Ashcroft, III 8/8/2018 Date

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EXHIBIT A

EXECUTIVE ALTERNATIVE WORK ARRANGEMENT EMPLOYMENT AGREEMENT

This is an Executive Alternative Work Arrangement Employment Agreement (“Agreement”) entered into between EQT Corporation (together with its subsidiaries, “EQT” or the “Company”) and Jeremiah J. Ashcroft, III (“Employee”).

WHEREAS, Employee is an executive officer of EQT who desires to relinquish that status and discontinue full-time employment with EQT but continue employment with EQT on a part-time basis; and

WHEREAS, EQT is interested in continuing to retain the services of Employee on a part-time basis for at least 100 (but no more than 400) hours per year; and

WHEREAS, Employee has elected to modify his/her employment status to Executive Alternative Work Arrangement;

NOW, THEREFORE, in consideration of the respective representations, acknowledgements, and agreements of the parties set forth herein, and intending to be legally bound, the parties agree as follows:


1.	The term of this Agreement is for the one-year period commencing on the day after

Employee’s full-time status with EQT ceases. During that period, Employee will hold the position of an Executive Alternative Work Arrangement employee of EQT. Employee’s status as Executive Alternative Work Arrangement (and this one-year Agreement) will automatically renew annually unless either party terminates this Agreement by written notice to the other not less than 30 days prior to the renewal date. The automatic annual renewals of this Agreement will cease, however, at the end of five years of Executive Alternative Work Arrangement employment status.

2. During each one‑year period in Executive Alternative Work Arrangement employment status, Employee is required to provide no less than 100 hours of service to EQT. During each one-year period, Employee will also make himself/herself available for up to 300 additional hours of service upon request from the Company. All such hours of service will occur during the Company’s regularly scheduled business hours (unless otherwise agreed by the parties), and no more than fifty (50) hours will be scheduled per month (unless otherwise agreed by the parties).

3. Employee shall be paid an hourly rate for Employee’s actual services provided under this Agreement. The hourly rate shall be Employee’s annual base salary in effect immediately prior to Employee’s change in employee classification to Executive Alternative Work Arrangement employment status divided by 2080. Employee shall submit monthly time sheets in a form agreed upon by the parties, and Employee will be paid on regularly scheduled payroll dates in accordance with the Company’s standard payroll practices following submission of his/her time sheets. Notwithstanding the foregoing, in the event that during any one-year period in Executive Alternative Work Arrangement employment status, EQT requests Employee

to provide less than 100 hours of service, EQT shall pay Employee for a minimum of 100 hours of service (regardless of the actual number of hours of service), with any remaining amount owed payable on the next regularly scheduled payroll date following the end of the applicable one-year period. If either party terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof, no additional compensation will be paid to Employee pursuant to this Section 3.

4. Employee shall be eligible to continue to participate in the group medical (including prescription drug), dental and vision programs in which Employee participated immediately before the classification change to Executive Alternative Work Arrangement (as such plans might be modified by the Company from time-to-time), but Employee will be required to pay 100% of the Company’s premium (or premium equivalent) rates to the carriers (the full active employee premium rates – both the employee portion and the employer portion - as adjusted year-to-year) for participation in such group insurance programs. If Employee completes five years of Executive Alternative Work Arrangement employment status or if the Company terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof other than pursuant to paragraph 17 hereof, Employee will be allowed to participate in such group insurance programs at 102% of the then-applicable full active employee premium rates (both the employee portion and the employer portion) until the earlier of: (i) Employee becomes eligible to receive Medicare benefits and (ii) Employee reaches age 70, even though Employee is no longer employed by EQT. Employee acknowledges that, to the extent, if at all, the Company’s cost to include Employee in the group insurance programs pursuant to this paragraph exceeds the cost paid by the Employee, the benefits provided hereunder may result in taxable income to the Employee. All amounts required to be paid by Employee pursuant to this paragraph shall be due not later than 30 days after written notice thereof is sent by the Company. Company may terminate the benefits provided under this Agreement upon 30 days written notice of any failure by Employee to timely perform his/her payment obligation hereunder, unless such failure is earlier cured.

5. During the term of this Agreement, Employee will continue to receive service credit for purposes of calculating the value of the Medical Spending Account.

6. Employee shall not be eligible to participate in the Company’s life insurance and disability insurance programs, 401(k) Plan, ESPP, or any other retirement or welfare benefit programs or perquisites of the Company. Likewise, Employee shall not receive any paid vacation, paid holidays or car allowance.

7. Employee is not eligible to receive bonus payments under any short-term incentive plans of EQT, and is not eligible to receive any new grants under EQT’s long-term incentive plans, programs or arrangements.

8. Employee’s rights in respect of awards granted to him under the long-term incentive programs of EQT shall be determined in accordance with the Agreement and Release, executed by Employee on August __, 2018 (the “Release Agreement”).

level) and related health and wellness services for Employee and Employee’s spouse (up to a maximum annual benefit of $15,000), in each case during the term of this Agreement or, if the Company terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof other than pursuant to paragraph 17 hereof, through the fifth anniversary hereof in accordance with and on the dates specified in the Company’s policies; provided, however, that no such payments or reimbursements shall be made until the first day following the six-month anniversary of Employee’s separation from service if Employee is a specified employee at the time of separation from service, all within the meaning of Section 409A of the Code; provided, further, that to the extent reimbursed or paid, all reimbursements and payments with respect to expenses incurred within a particular year shall be made no later than the end of Employee’s taxable year following the taxable year in which the expense was incurred. The amount of payments or reimbursable expenses incurred in one taxable year of Employee shall not affect the amount of reimbursable expenses in a different taxable year, and such payments or reimbursement shall not be subject to liquidation or exchange for another benefit.

10. Employee shall continue to have mobile telephone service and reasonable access to the Company’s Help Desk during the term of this Agreement or, if the Company terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof other than pursuant to paragraph 17 hereof, through the fifth anniversary hereof; provided, however, if the provision of such service will result in taxable income to Employee, then no such taxable service shall be provided until the first day following the six-month anniversary of Employee’s separation from service if Employee is a specified employee at the time of separation from service, all within the meaning of Section 409A of the Code.

11. Employee shall receive tax, estate and financial planning services from providers approved in advance by the Company during the term of this Agreement or, if the Company terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof other than pursuant to paragraph 17 hereof, through the fifth anniversary hereof, in amount not to exceed $15,000 per calendar year, to be paid directly by the Company in accordance with and on the dates specified in the Company’s policies; provided, however, that no such payments or reimbursements shall be made until the first day following the six-month anniversary of Employee’s separation from service if Employee is a specified employee at the time of separation from service, all within the meaning of Section 409A of Code; provided, further, that to the extent reimbursed or paid, all reimbursements and payments with respect to expenses incurred within a particular year shall be made no later than the end of Employee’s taxable year following the taxable year in which the expense was incurred. The amount of payments or reimbursable expenses incurred in one taxable year of Employee shall not affect the amount of payments or reimbursable expenses in a different taxable year, and such payments or reimbursement shall not be subject to liquidation or exchange for another benefit.

12. During the term of this Agreement, Employee shall maintain an ownership level of Company stock equal to not less than one-half of the value last required as a full-time Employee. In the event that at any time during the term of this Agreement Employee does not maintain the required ownership level, Employee shall promptly notify the Company and increase his or her ownership to at least the required level. Any failure of Employee to maintain at least the required ownership level for more than three months during the term of this Agreement shall constitute and be deemed to be an immediate termination by Employee of his or her Executive Alternative Work Arrangement.

13. This Agreement sets forth all of the payments, benefits, perquisites and entitlements to which Employee shall be entitled upon assuming Executive Alternative Work Arrangement employment status. Employee shall not be entitled to receive any gross-up payments for any taxes or other amounts with respect to amounts payable under this Agreement.

14. Nothing in this Agreement shall prevent or prohibit the Company from modifying any of its employee benefits plans, programs, or policies.

15. Non-Competition and Non-Solicitation . The covenants as to non-competition and non-solicitation contained in Section 1, and as to notification of subsequent employment in Section 12, in each case of the Non-Competition Agreement shall remain in effect throughout Employee’s employment with EQT in Executive Alternative Work Arrangement employment status and for a period of twenty-four (24) months, in the case of non-competition covenants; twenty-four (24), in the case of non-solicitation covenants relating to customers and prospective customers; and thirty-six (36) months, in the case of non-solicitation covenants relating to employees, consultants, vendors or independent contractors, in each case after the termination of Employee’s employment as an Executive Alternative Work Arrangement employee. It is understood and agreed that if Employee’s employment as an Executive Alternative Work Arrangement employee terminates for any reason in the midst of any one-year term period as provided under this Agreement (including, without limitation, a termination pursuant to Sections 4, 12 or 17 of this Agreement), the covenants as to non-competition and non-solicitation contained in the Non-Competition Agreement shall remain in effect throughout the remainder of that one-year term and for a period of twenty-four (24) months, in the case of non-competition covenants, and thirty-six (36) months, in the case of non-solicitation covenants, thereafter.

16. Confidential Information and Non-Disclosure . Employee acknowledges and agrees that Employee’s employment by the Company necessarily involves Employee’s knowledge of and access to confidential and proprietary information pertaining to the business of the Company. Accordingly, Employee agrees that at all times during the term of this Agreement and for as long as the information remains confidential after the termination of Employee's employment, Employee will not, directly or indirectly, without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of Employee, any person, corporation or other entity other than the Company, (i) any information concerning any financial matters, employees of the Company, customer relationships, competitive status, supplier matters, internal organizational matters, current or future plans, or other business affairs of or relating to the Company, (ii) any management, operational, trade, technical or other secrets or any other proprietary information or other data of the Company, or (iii) any other information related to the Company which has not been published and is not generally known outside of the Company. Employee acknowledges that all of the foregoing constitutes confidential and proprietary information, which is the exclusive property of the Company . Nothing in this Section 16 prohibits Employee from reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation.

17. EQT may terminate this Agreement and Employee’s employment at any time for Cause. Solely for purposes of this Agreement, “Cause” shall mean: (i) Employee’s conviction of a felony, a crime of moral turpitude or fraud or Employee having committed fraud, misappropriation or embezzlement in connection with the performance of his/her duties; (ii) Employee’s willful and repeated failures to substantially perform assigned duties; or (iii) Employee’s violation of any provision of this Agreement or express significant policies of the Company. If the Company terminates Employee’s employment for Cause, the Company shall give Employee written notice setting forth the reason for his/her termination not later than 30 days after such termination.

18. Except as otherwise provided herein, in the event of any controversy, dispute or claim arising out of, or relating to this Agreement, or the breach thereof, or arising out of any other matter relating to the Employee's employment with EQT or the termination of such employment, EQT may seek recourse for injunctive relief to the courts having jurisdiction thereof and if any relief other than injunctive relief is sought, EQT and the Employee agree that such underlying controversy, dispute or claim shall be settled by arbitration conducted in Pittsburgh, Pennsylvania in accordance with this Section 18 of this Agreement and the Commercial Arbitration Rules of the American Arbitration Association (“AAA”). The matter shall be heard and decided, and awards, if any, rendered by a panel of three (3) arbitrators (the “Arbitration Panel”). EQT and the Employee shall each select one arbitrator from the AAA National Panel of Commercial Arbitrators (the “Commercial Panel”) and AAA shall select a third arbitrator from the Commercial Panel. Any award rendered by the Arbitration Panel shall be final, binding and confidential as between the parties hereto and their heirs, executors, administrators, successors and assigns, and judgment on the award may be entered by any court having jurisdiction thereof.

19. EQT shall have the authority and the right to deduct or withhold, or require Employee to remit to EQT, an amount sufficient to satisfy federal, state, and local taxes (including Employee’s FICA obligation) required by law to be withheld with respect to any payment or benefit provided pursuant to this Agreement. The obligations of EQT under this Agreement will be conditioned on such payment or arrangements and EQT will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to Employee.

20. It is understood and agreed that upon Employee’s discontinuation of full-time employment and transition to Executive Alternative Work Arrangement employment status hereunder, Employee has no continuing rights under Section 3 of the Non-Competition Agreement and such section shall have no further force or effect.

21. The provisions of this Agreement are severable. To the extent that any provision of this Agreement is deemed unenforceable in any court of law, the parties intend that such provision be construed by such court in a manner to make it enforceable.

22. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company.

23. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without regard to conflict of law principles.

24. This Agreement and the Release Agreement (and subject to Paragraph 18 of the Release Agreement) supersedes all prior agreements and understandings between EQT and Employee with respect to the subject matter hereof (oral or written), including but not limited to Section 3 of the Non-Competition Agreement. For the avoidance of doubt, it is understood and agreed that the covenants as to non-competition, non-solicitation, confidentiality and nondisclosure contained in Sections 1 and 2 of the Non-Competition Agreement remain in effect as modified herein, along with the provisions in Sections 4, 5, 6, 7, 8, 10, 11 and 12 of the Non-Competition Agreement.

25. This Agreement may not be changed, amended, or modified except by a written instrument signed by both parties, provided that the Company may amend this Agreement from time to time without Employee’s consent to the extent deemed necessary or appropriate, in its sole discretion, to effect compliance with Section 409A of the Code, including regulations and interpretations thereunder, which amendments may result in a reduction of benefits provided hereunder and/or other unfavorable changes to Employee.

(Signatures on following page)

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below.



EQT CORPORATION By: /s/ Charlene Petrelli Vice President and Chief Human Resources Officer Title 8/13/2018 Date		EMPLOYEE /s/ Jeremiah J. Ashcroft III Name: 8/8/2018 Date

EXHIBIT B

CONFIDENTIALITY, NON‑SOLICITATION and

NON‑COMPETITION AGREEMENT

This CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETITION AGREEMENT (this “Agreement”) is entered into and effective as of August 7, 2017, by and between EQT Corporation, a Pennsylvania corporation (EQT Corporation and its subsidiary companies are hereinafter collectively referred to as the “Company”), and Jeremiah J. Ashcroft III (the “Employee”).

WITNESSETH:

WHEREAS, the Company desires to procure the services of Employee, and Employee is willing to enter into employment with the Company, subject to the terms and subject to the conditions set forth below; and

WHEREAS, during the course of Employee’s employment with the Company, the Company will impart to Employee proprietary and/or confidential information and/or trade secrets of the Company; and

WHEREAS, in order to protect the business and goodwill of the Company, the Company desires to obtain certain confidentiality, non-competition and non‑solicitation covenants from the Employee; and

WHEREAS, the Employee is willing to agree to these confidentiality, non-competition and non-solicitation covenants by entering into this Agreement, in exchange for the Company’s employment of Employee and the Company’s agreement to pay the severance benefits described in Section 3 below in the event that Employee’s employment with the Company is terminated in certain circumstances; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:

1. Restrictions on Competition and Solicitation . While the Employee is employed by the Company and for a period of twenty-four (24) months after the date of Employee's termination of employment with the Company for any reason Employee will not, directly or indirectly, expressly or tacitly, for himself/herself or on behalf of any entity conducting business anywhere in the Restricted Territory (as defined below): (i) act in any capacity for any business in which his duties at or for such business include oversight of or actual involvement in providing services which are competitive with the services or products being provided or which are being produced or developed by the Company, or were under investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company, (ii) recruit investors on behalf of an entity which engages in activities which are competitive with the services or products being provided or which are being produced or developed by the Company,

or were under investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company, or (iii) become employed by such an entity in any

capacity which would require Employee to carry out, in whole or in part, the duties Employee has performed for the Company which are competitive with the services or products being provided or which are being produced or developed by the Company, or were under active investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company. Notwithstanding the foregoing, the Employee may purchase or otherwise acquire up to (but not more than) 1% of any class of securities of any enterprise (but without otherwise participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been registered under Section 12(g) of the Securities Exchange Act of 1934. This covenant shall apply to any services, products or businesses under investigation by the Company within the last two (2) years prior to the end of Employee's employment with the Company only to the extent that Employee acquired or was privy to confidential information regarding such services, products or businesses. Employee acknowledges that this restriction will prevent Employee from acting in any of the foregoing capacities for any competing entity operating or conducting business within the Restricted Territory and that this scope is reasonable in light of the business of the Company.

Restricted Territory shall mean: (i) the entire geographic location of any natural gas and oil play in which the Company owns, operates or has contractual rights to purchase natural gas-related assets (other than commodity trading rights and pipeline capacity contracts on non-affiliated or third-party pipelines), including but not limited to, storage facilities, interstate pipelines, intrastate pipelines, intrastate distribution facilities, liquefied natural gas facilities, propane-air facilities or other peaking facilities, and/or processing or fractionation facilities; or (ii) the entire geographic location of any natural gas and oil play in which the Company owns proved, developed and/or undeveloped natural gas and/or oil reserves and/or conducts natural gas or oil exploration and production activities of any kind; or (iii) the entire geographic location of any natural gas and oil play in which the Company has decided to make or has made an offer to purchase or lease assets for the purpose of conducting any of the business activities described in subparagraphs (i) and (ii) above within the six (6) month period immediately preceding the end of the Employee’s employment with the Company provided that Employee had actual knowledge of the offer or decision to make an offer prior to Employee’s separation from the Company. For geographic locations of natural gas and oil plays, refer to the maps produced by the United States Energy Information Administration located at www.eia.gov/maps .

confidential or proprietary information about while employed by the Company within the one (1) year period preceding Employee's separation from the Company, for purposes of marketing, selling and/or attempting to market or sell products and services which are the same as or similar to any product or service the Company offers within the last two (2) years prior to the end of Employee's employment with the Company, and/or, which are the same as or similar to any product or service the Company has in process over the last two (2) years prior to the end of Employee's employment with the Company to be offered in the future.

While Employee is employed by the Company and for a period of thirty-six (36) months after the date of Employee's termination of employment with the Company for any reason, Employee shall not (directly or indirectly) on his own behalf or on behalf of any other person or entity solicit or induce, or cause any other person or entity to solicit or induce, or attempt to solicit or induce, any employee, consultant, vendor or independent contractor to leave the employ of or engagement by the Company or its successors, assigns or affiliates, or to violate the terms of their contracts with the Company.

2. Confidentiality of Information and Nondisclosure . Employee acknowledges and agrees that his employment by the Company necessarily involves his/her knowledge of and access to confidential and proprietary information pertaining to the business of the Company. Accordingly, Employee agrees that at all times during the term of this Agreement and for as long as the information remains confidential after the termination of Employee's employment, he will not, directly or indirectly, without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of himself/herself, any person, corporation or other entity other than the Company, (i) any information concerning any financial matters, employees of the Company, customer relationships, competitive status, supplier matters, internal organizational matters, current or future plans, or other business affairs of or relating to the Company, (ii) any management, operational, trade, technical or other secrets or any other proprietary information or other data of the Company, or (iii) any other information related to the Company which has not been published and is not generally known outside of the Company. Employee acknowledges that all of the foregoing, constitutes confidential and proprietary information, which is the exclusive property of the Company. Nothing in this Agreement prohibits Employee from: (i) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures (including of confidential information) that are protected under the whistleblower provisions of federal, state, or local law or regulation; or (ii) disclosing trade secrets when the disclosure is solely for the purpose of: (a) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity; (b) working with legal counsel in order to determine whether possible violations of federal, state, or local law or regulation exist; or (c) filing a complaint or other document in a lawsuit or other proceeding, if such filing is made under seal. Any disclosures of trade secrets must be consistent with 18 U.S.C. §1833.

3. Severance Benefit . If the Employee’s employment is terminated by the Company for any reason other than Cause (as defined below) or if the Employee terminates his

employment for Good Reason (as defined below), the Company shall provide Employee with the following:

(a) A lump sum payment payable within 60 days following Employee’s termination date equal to twenty-four (24) months of Employee’s base salary in effect at the time of such termination, or immediately prior to the event that serves as the basis for termination for Good Reason;

(b) A lump sum payment payable within 60 days following Employee’s termination date equal to two times the average annual incentive (bonus) payment earned by the Employee under the Company’s applicable Short-Term Incentive Plan (or any successor plan) for the three (3) full years prior to Employee’s termination date; provided that if such termination of employment occurs prior to Employee having been employed by the Company for three full calendar years and through the determination and payment, if any, of the annual incentive for the third such year, then such average shall be calculated by including, for each partial calendar year of employment and each calendar year during which such individual was not employed by the Company, the greater of (i) the Employee’s actual award for such year, and (ii) the Employee’s target annual incentive (bonus) award at time of termination;

(c) A lump sum payment payable within 60 days following Employee’s termination date equal to the product of (i) twelve (12) and (ii) 100% of the then-current Consolidated Omnibus Budget Reconciliation Act of 1985 monthly rate for family coverage;

(d) A lump sum payment payable within 60 days following Employee’s termination date equal to $200,000;

(e) Subject to Section 14 of this Agreement, all stock options, restricted stock, restricted stock units and other time-vesting equity awards granted to Employee under the EQT Corporation 2014 Long-Term Incentive Plan (as amended from time to time, and including any successor plan thereto, the “2014 LTIP”), the EQT Midstream Services, LLC 2012 Long-Term Incentive Plan (as amended from time to time, and including any successor plan thereto, the “2012 LTIP”), the EQT GP Services, LLC 2015 Long-Term Incentive Plan (as amended from time to time, and including any successor plan thereto, the “2015 LTIP”), and any other long-term incentive plan of the Company (the 2014 LTIP, the 2012 LTIP, the 2015 LTIP and any other long-term incentive plan of the Company are, collectively, the “LTIPs”) shall immediately become vested and exercisable in full and/or all restrictions on such awards shall lapse (for avoidance of doubt, this provision shall supersede any provision to the contrary contained in any award agreement or program); and

(f) Subject to Section 14 of this Agreement, all performance-based equity awards granted to Employee by the Company under the LTIPs shall remain outstanding and shall be earned, if at all, based on actual performance through the end of the performance period as if Employee’s employment had not been terminated (for avoidance of doubt, this provision shall supersede any provision to the contrary contained in any award agreement or program).

The payments provided under this Section 3 shall be subject to applicable tax and payroll withholdings, and shall be in addition to any payments and/or benefits to which the Employee would otherwise be entitled under the EQT Corporation Severance Pay Plan (as amended from time to time). The Company’s obligation to provide the payments and benefits under this Section 3 shall be contingent upon the following:

(a) Employee’s execution of a release of claims in a form acceptable to the Company; and

(b) Employee’s compliance with his obligations hereunder, including, but not limited to, Employee’s obligations set forth in Sections 1 and 2 (the “Restrictive Covenants”).

Solely for purposes of this Agreement, “Cause” as a reason for the Employee’s termination of employment shall mean: (i) Employee’s conviction of a felony, a crime of moral turpitude or fraud or Employee having committed fraud, misappropriation or embezzlement in connection with the performance of his duties; (ii) Employee’s willful and repeated failures to substantially perform assigned duties; or (iii) Employee’s violation of any provision of a written employment-related agreement between Employee and the Company or express significant policies of the Company. If the Company terminates Employee’s employment for Cause, the Company shall give Employee written notice setting forth the reason for his termination not later than 30 days after such termination.

Solely for purposes of this Agreement, “Good Reason” shall mean Employee’s resignation within 90 days after: (i) a reduction in Employee’s base salary of 10% or more (unless the reduction is applicable to all similarly situated employees); (ii) a reduction in Employee’s annual short-term bonus target of 10% or more (unless the reduction is applicable to all similarly situated employees); (iii) a significant diminution in Employee’s job responsibilities, duties or authority; (iv) a change in the geographic location of Employee’s primary reporting location of more than 50 miles; and/or (v) any other action or inaction that constitutes a material breach by the Company of this Agreement. A termination by Employee shall not constitute termination for Good Reason unless Employee first delivers to the General Counsel of the Company written notice: (i) stating that Employee intends to resign for Good Reason pursuant to this Agreement; and (ii) setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 90 days after the initial occurrence of such event). The Company shall have a reasonable period of time (not less than 30 days after receipt of Employee’s written notice that Employee is resigning for Good Reason) to take action to correct, rescind or substantially reverse the occurrence supporting termination for Good Reason as identified by Employee. Failure by the Company to act or respond to the written notice shall not be deemed to be an admission that Good Reason exists.

any part or provision of any of the Restrictive Covenants be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of the Company’s legitimate business interests and may be enforced by the Company to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.

5. Reasonable and Necessary Agreement . The Employee acknowledges and agrees that: (i) this Agreement is necessary for the protection of the legitimate business interests of the Company; (ii) the restrictions contained in this Agreement are reasonable; (iii) the Employee has no intention of competing with the Company within the limitations set forth above; (iv) the Employee acknowledges and warrants that Employee believes that Employee will be fully able to earn an adequate livelihood for Employee and Employee’s dependents if the covenant not to compete contained in this Agreement is enforced against the Employee; and (v) the Employee has received adequate and valuable consideration for entering into this Agreement.

6. Injunctive Relief and Attorneys’ Fees . The Employee stipulates and agrees that any breach of the Restrictive Covenants by the Employee will result in immediate and irreparable harm to the Company, the amount of which will be extremely difficult to ascertain, and that the Company could not be reasonably or adequately compensated by damages in an action at law. For these reasons, the Company shall have the right, without the need to post bond or prove actual damages, to obtain such preliminary, temporary or permanent injunctions, orders or decrees as may be necessary to protect the Company against, or on account of, any breach by the Employee of the Restrictive Covenants. In the event the Company obtains any such injunction, order, decree or other relief, in law or in equity, the duration of any violation of Section 1 shall be added to the applicable restricted period specified in Section 1. Employee understands and agrees that, if the parties become involved in a lawsuit regarding the enforcement of the Restrictive Covenants and if the Company prevails in such legal action, the Company will be entitled, in addition to any other remedy, to recover from Employee its reasonable costs and attorneys’ fees incurred in enforcing such covenants. The Company’s ability to enforce its rights under the Restrictive Covenants or applicable law against Employee shall not be impaired in any way by the existence of a claim or cause of action on the part of Employee based on, or arising out of, this Agreement or any other event or transaction arising out of the employment relationship.

7. Binding Agreement . This Agreement (including the Restrictive Covenants) shall be binding upon and inure to the benefit of the successors and assigns of the Company.

8. Employment at Will . Employee shall be employed at‑will and for no definite term. This means that either party may terminate the employment relationship at any time for any or no reason.

9. Executive Alternative Work Arrangement Employment Status . As a board-designated executive officer of the Company, Employee has the opportunity to participate in the Executive Alternative Work Arrangement upon discontinuing full-time status. The terms and conditions of Executive Alternative Work Arrangement Employment Status are described in the form of Executive Alternative Work Arrangement Employment Agreement attached hereto as Exhibit A. Set forth below the signature lines to this Agreement is an election form regarding participation in the Executive Alternative Work Arrangement. Employee must complete and sign such form indicating whether or not he desires to participate in Executive Alternative Work Arrangement Status. Any failure to make an election at the time of execution of this Agreement shall be deemed to be an election not to participate. If Employee elects to participate, the Executive Alternative Work Arrangement classification will be automatically assigned to Employee if and when Employee incurs a termination of employment that meets each of the following conditions (an "Eligible Termination”): (a) Employee’s employment is terminated by the Company for any reason other than Cause or Employee gives the Company (delivered to the Vice President and Chief Human Resources Officer) at least 90 days’ advance written notice of Employee’s intention to discontinue employment, (b) Employee is a board-designated executive officer in good standing with EQT Corporation as of the time of his termination of employment, and (c) Employee’s employment shall not have been terminated by Employee for Good Reason. By electing to participate in the Executive Alternative Work Arrangement, Employee hereby agrees to execute an Executive Alternative Work Arrangement Employment Agreement, in a form substantially similar to the one attached hereto as Exhibit A, within 90 days prior to Employee’s relinquishment of full-time status, which agreement will become effective automatically on the day following Employee’s Eligible Termination. Without limiting the foregoing, Employee agrees that he will not be eligible for the Executive Alternative Work Arrangement, including the post-employment benefits described therein, if Employee’s termination of employment is not an Eligible Termination.

10. Applicable Law; Exclusive Forum Selection; Consent to Jurisdiction . The Company and Employee agree that this Agreement shall be governed by and construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to its conflicts of law principles. Except to the extent that a dispute is required to be submitted to arbitration as set forth in Section 11 below, Employee agrees that the exclusive forum for any action to enforce this Agreement, as well as any action relating to or arising out of this Agreement, shall be the state courts of Allegheny County, Pennsylvania or the United States District Court for the Western District of Pennsylvania, Pittsburgh Division. With respect to any such court action, Employee hereby (a) irrevocably submits to the personal jurisdiction of such courts; (b) consents to service of process; (c) consents to venue; and (d) waives any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction, service of process, or venue. Both parties hereto further agree that such courts are convenient forums for any dispute that may arise herefrom and that neither party shall raise as a defense that such courts are not convenient forums.

11. Agreement to Arbitrate . Employee and the Company agree that any controversy, claim, or dispute between Employee and the Company arising out of or relating to this

Agreement or the breach thereof, or arising out of any matter relating to the Employee’s employment with the Company or the termination thereof, shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”), and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The arbitration shall be governed by the Federal Arbitration Act, shall be held in Pittsburgh, Pennsylvania, and shall be conducted before a panel of three (3) arbitrators (the “Arbitration Panel”). The Company and Employee shall each select one arbitrator from the AAA National Panel of Commercial Arbitrators (the “Commercial Panel”), and the AAA shall select a third arbitrator from the Commercial Panel. The Arbitration Panel shall render a reasoned opinion in writing in support of its decision. Any award rendered by the Arbitration Panel shall be final, binding, and confidential as between the parties. Notwithstanding this agreement to arbitrate, in the event that Employee breaches or threatens to breach any of Employee’s obligations under the Restrictive Covenants, the Company shall have the right to file an action in one of the courts specified in Section 10 above seeking temporary, preliminary or permanent injunctive relief to enforce Employee’s obligations under the Restrictive Covenants.

12. Notification of Subsequent Employment . Employee shall upon termination of his employment with the Company, as soon as practicable and for the length of the non-competition period described in Section 1 above, notify the Company: (i) of the name, address and nature of the business of his new employer; (ii) if self-employed, of the name, address and nature of his new business; (iii) that he/she has not yet secured new employment; and (iv) each time his employment status changes. In addition, Employee shall notify any prospective employer that this Agreement exists and shall provide a copy of this Agreement to the prospective employer prior to beginning employment with that prospective employer. Any notice provided under this Section (or otherwise under this Agreement) shall be in writing directed to the General Counsel, EQT Corporation, 625 Liberty Avenue, Suite 1700, Pittsburgh, PA 15222-3111.

13. Mandatory Reduction of Payments in Certain Events .

then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the change in control transaction, as determined by the Determination Firm (as defined in Section 13(b) below). For purposes of this Section 13, present value shall be determined in accordance with Section 280G(d)(4) of the Code. For purposes of this Section 13, the “Parachute Value” of a Payment means the present value as of the date of the change in control transaction of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

(b) All determinations required to be made under this Section 13, including whether an Excise Tax would otherwise be imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at such determinations, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually acceptable to the Company and the Employee (the “Determination Firm”) which shall provide detailed supporting calculations both to the Company and the Employee within 15 business days after the receipt of notice from the Employee that a Payment is due to be made, or such earlier time as is requested by the Company. All fees and expenses of the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the Company and the Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder, it is possible that Payments which the Employee was entitled to, but did not receive pursuant to Section 13(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Employee but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.

(c) In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 13 shall be of no further force or effect.

14. Internal Revenue Code Section 409A .

(a) General . This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed. Neither the Company nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by Employee as a result of the application of Section 409A of the Code.

(b) Separation from Service . For purposes of the Agreement, the term “termination,” when used in the context of a condition to, or the timing of, a payment hereunder, shall be interpreted to mean a “separation from service” as such term is used in Section 409A of the Code.

(c) Six-Month Delay in Certain Circumstances . Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable under this Agreement by reason of Employee’s separation from service during a period in which Employee is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):

(i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following Employee’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following Employee’s separation from service (or, if Employee dies during such period, within thirty (30) days after Employee’s death) (in either case, the “Required Delay Period”); and

(ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder.

(d) Timing of Release of Claims . Whenever in this Agreement a payment or benefit is conditioned on Employee’s execution of a release of claims, such release must be executed and all revocation periods shall have expired within sixty (60) days after the date of termination; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, and if such 60-day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the release becomes irrevocable in the first such calendar year. In other words, Employee is not permitted to influence the calendar year of payment based on the timing of his signing of the release.

15. Entire Agreement . This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements (with the exception of the Relocation Expense Reimbursement Agreement and the Offer of Employment Letter dated July 26, 2017) and understandings, oral or written. This Agreement may not be changed, amended, or modified, except by a written instrument signed by the parties; provided, however, that the Company may amend this Agreement from time to time without Employee’s consent to the extent deemed necessary or appropriate, in its sole discretion, to effect compliance with Section 409A of the Code, including regulations and interpretations thereunder,

which amendments may result in a reduction of benefits provided hereunder and/or other unfavorable changes to Employee.

IN WITNESS WHEREOF , the Company has caused this Agreement to be executed by its officers thereunto duly authorized, and the Employee has hereunto set his hand, all as of the day and year first above written.

EQT CORPORATION EMPLOYEE

By: /s/ Charlene Petrelli _______________ /s/ Jeremiah J. Ashcroft III _____________

Name: Charlene Petrelli Jeremiah J. Ashcroft III

Title: Vice President and Chief Human

Resources Officer

ELECTION TO PARTICIPATE IN

EXECUTIVE ALTERNATIVE WORK ARRANGEMENT CLASSIFICATION

[X] I hereby elect to participate in the Executive Alternative Work Arrangement Classification as described in paragraph 9 of the above Confidentiality, Non-Solicitation and Non-Competition Agreement. I hereby agree to execute an Executive Alternative Work Arrangement Employment Agreement in a form substantially similar to the one attached hereto as Exhibit A, within 90 days prior to my relinquishment of full-time status, which agreement will become effective automatically on the day following my Eligible Termination. I understand that I will not be eligible for the Executive Alternative Work Arrangement, including the post-employment benefits described therein if my termination from employment is not an Eligible Termination.

[ ] I hereby decline to participate in the Executive Alternative Work Arrangement Classification as described in paragraph 9 of the above Confidentiality, Non-Solicitation and Non-Competition Agreement.

J. J. Ashcroft __________________

Employee Name Printed

/s/ Jeremiah J. Ashcroft III ________

Employee Signature

7/26/17 _______________________

Date

EXHIBIT A

EXECUTIVE ALTERNATIVE WORK ARRANGEMENT EMPLOYMENT AGREEMENT

WHEREAS, Employee is an executive officer of EQT who desires to relinquish that status and discontinue full-time employment with EQT but continue employment with EQT on a part-time basis; and

WHEREAS, EQT is interested in continuing to retain the services of Employee on a part-time basis for at least 100 (but no more than 400) hours per year; and

WHEREAS, Employee has elected to modify his/her employment status to Executive Alternative Work Arrangement;

NOW, THEREFORE, in consideration of the respective representations, acknowledgements, and agreements of the parties set forth herein, and intending to be legally bound, the parties agree as follows:

1. The term of this Agreement is for the one-year period commencing on the day after Employee’s full-time status with EQT ceases. During that period, Employee will hold the position of an Executive Alternative Work Arrangement employee of EQT. Employee’s status as Executive Alternative Work Arrangement (and this one-year Agreement) will automatically renew annually unless either party terminates this Agreement by written notice to the other not less than 30 days prior to the renewal date. The automatic annual renewals of this Agreement will cease, however, at the end of five years of Executive Alternative Work Arrangement employment status.

payroll dates in accordance with the Company’s standard payroll practices following submission of his/her time sheets. Notwithstanding the foregoing, in the event that during any one-year period in Executive Alternative Work Arrangement employment status, EQT requests Employee to provide less than 100 hours of service, EQT shall pay Employee for a minimum of 100 hours of service (regardless of the actual number of hours of service), with any remaining amount owed payable on the next regularly scheduled payroll date following the end of the applicable one-year period. If either party terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof, no additional compensation will be paid to Employee pursuant to this Section 3.

5. During the term of this Agreement, Employee will continue to receive service credit for purposes of calculating the value of the Medical Spending Account.

8. Effective not later than the commencement of this Executive Alternative Work Arrangement, Employee shall be deemed to have retired for purposes of measuring vesting and/or post‑termination exercise periods of all forms of long term incentive awards. The timing of any payments for such awards will be as provided in the underlying plans, programs or arrangements and is subject to any required six-month delay in payment if Employee is a “specified employee” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) at the time of Employee’s separation from service, with respect to payments made by reason of Employee’s separation from service. Nothing in this paragraph 8, or in paragraph 7, shall prevent (a) the continued vesting of previously granted long-term incentive awards to the extent the award agreement therefore expressly contemplates continued vesting while the recipient serves as a member of the Board of Directors of the Company or an affiliate or (b) grants of non-employee director awards to an individual solely because such individual serves on the Board of Directors of the Company or an affiliate. Notwithstanding anything contained herein to the contrary, any special vesting and/or payment provisions applicable to Employee’s long-term incentive awards pursuant to that certain Confidentiality, Non-Solicitation and Non-Competition Agreement between EQT and Employee dated _____________, 2017 (as amended from time to time, the “Non-Competition Agreement”) shall apply and be given effect.

9. The Company shall either pay on behalf of Employee or reimburse Employee for the cost of (i) monthly dues for one country club and one dining club (such clubs to be approved by the Company’s Chief Executive Officer), and (ii) executive level physicals (currently “gold” level) and related health and wellness services for Employee and Employee’s spouse (up to a maximum annual benefit of $15,000), in each case during the term of this Agreement or, if the Company terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof other than pursuant to paragraph 17 hereof, through the fifth anniversary hereof in accordance with and on the dates specified in the Company’s policies; provided, however, that no such payments or reimbursements shall be made until the first day following the six-month anniversary of Employee’s separation from service if Employee is a specified employee at the time of separation from service, all within the meaning of Section 409A of the Code; provided, further, that to the extent reimbursed or paid, all reimbursements and payments with respect to expenses incurred within a particular year shall be made no later than the end of Employee’s taxable year following the taxable year in which the expense was incurred. The amount of payments or reimbursable expenses incurred in one taxable year of Employee shall not affect the amount of reimbursable expenses in a different taxable year, and such payments or reimbursement shall not be subject to liquidation or exchange for another benefit.

14. Nothing in this Agreement shall prevent or prohibit the Company from modifying any of its employee benefits plans, programs, or policies.

4, 12 or 17 of this Agreement), the covenants as to non-competition and non-solicitation contained in the Non-Competition Agreement shall remain in effect throughout the remainder of that one-year term and for a period of twenty-four (24) months, in the case of non-competition covenants, and thirty-six (36) months, in the case of non-solicitation covenants, months thereafter.

16. Confidential Information and Non-Disclosure . Employee acknowledges and agrees that Employee’s employment by the Company necessarily involves Employee’s knowledge of and access to confidential and proprietary information pertaining to the business of the Company. Accordingly, Employee agrees that at all times during the term of this Agreement and for as long as the information remains confidential after the termination of Employee's employment, Employee will not, directly or indirectly, without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of Employee, any person, corporation or other entity other than the Company, (i) any information concerning any financial matters, employees of the Company, customer relationships, competitive status, supplier matters, internal organizational matters, current or future plans, or other business affairs of or relating to the Company, (ii) any management, operational, trade, technical or other secrets or any other proprietary information or other data of the Company, or (iii) any other information related to the Company which has not been published and is not generally known outside of the Company. Employee acknowledges that all of the foregoing constitutes confidential and proprietary information, which is the exclusive property of the Company. Nothing in this Section 16 prohibits Employee from reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures that are protected under the whistleblower provisions of federal, state, or local law or regulation.

shall be heard and decided, and awards, if any, rendered by a panel of three (3) arbitrators (the “Arbitration Panel”). EQT and the Employee shall each select one arbitrator from the AAA National Panel of Commercial Arbitrators (the “Commercial Panel”) and AAA shall select a third arbitrator from the Commercial Panel. Any award rendered by the Arbitration Panel shall be final, binding and confidential as between the parties hereto and their heirs, executors, administrators, successors and assigns, and judgment on the award may be entered by any court having jurisdiction thereof.

22. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company.

23. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without regard to conflict of law principles.

24. This Agreement supersedes all prior agreements and understandings between EQT and Employee with respect to the subject matter hereof (oral or written), including but not limited to Section 3 of the Non-Competition Agreement. It is understood and agreed, however, that the covenants as to non-competition, non-solicitation, confidentiality and nondisclosure contained in Sections 1 and 2 of the Non-Competition Agreement remain in effect as modified herein, along with the provisions in Sections 4, 5, 6, 7, 8, 11 and 12 of the Non-Competition Agreement.

(Signatures on following page)

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below.



EQT CORPORATION By: Title Date		EMPLOYEE Name: Jeremiah J. Ashcroft III Date

Mr. Thomas F. Karam

August 9, 2018

CONFIDENTIAL

August 9, 2018

Mr. Thomas F. Karam

VIA E-MAIL

Dear Mr. Karam:

Please accept this letter as a personal invitation to join our team and an official offer of at-will employment as a Senior Vice President and President, Midstream in our Pittsburgh office, reporting to David L. Porges, Interim President and Chief Executive Officer. The Board of Directors of the applicable companies have already elected you to the following positions: Senior Vice President and President, Midstream of EQT Corporation, President and Chief Executive Officer of EQT Midstream Services, LLC, and President and Chief Executive Officer of EQT GP Services, LLC.

Please carefully review the following sections of this letter, as they delineate the conditions of our offer. This offer is contingent upon the completion of a mandatory drug screen, and execution and delivery of the Non-Compete Agreement referenced below. If you have questions about these pre-employment evaluations, please contact me at 412.553.5712.

Base Salary

Your beginning base salary will be $23,076.93, paid bi-weekly. This is equivalent to $600,000.00 annually. Future adjustments in base salary, if any, are generally made by the Management Development and Compensation Committee (“the MDCC”) of the EQT Corporation Board of Directors in conjunction with our annual performance review process.

Car Allowance

You will be provided a car allowance in the amount of $348.46, paid bi-weekly. This is equivalent to $9,060 annually, and is intended to cover the annual cost of acquiring, maintaining and insuring a car.

Short-Term (or Annual) Incentive Compensation

In addition to your base salary, EQT Corporation (“EQT” or “Company”) offers incentive compensation under the EQT Corporation Executive Short-Term Incentive Plan (“ESTIP”).

Your 2018 target for the ESTIP will be 75% of the midpoint of your position, prorated based on full months worked during the calendar year in which you were hired. For calculation purposes, the proration will begin on the first calendar day of the first full month following your hire date. Your ESTIP target for future years will be established by the MDCC.

EQT Corporation | EQT Plaza | 625 Liberty Avenue | Suite 1700 | Pittsburgh, PA 15222

T 412.553.5712 | F 412.553.5722 | www. eqt.com

Mr. Thomas F. Karam

August 9, 2018

Long-Term Incentive Plan

You are eligible for a 2018 long-term incentive award consisting of time-based restricted awards valued at $3,000,000.00, determined on a basis consistent with the Company’s practice. The awards will be granted on the date you commence employment or as soon thereafter as is practical. They will be governed by the EQT Corporation 2014 Long-Term Incentive Plan and the related Program documents and participant award agreements. The actual number of shares granted will be determined using the closing price of EQT stock on the grant date, rounded up to the next 10 shares. Your long-term incentive award for future years will be established by the MDCC.

Equity Ownership Guidelines

Consistent with the goal of driving long-term value creation for shareholders, the Company’s equity ownership guidelines require significant equity ownership by our executive officers. Qualifying holdings include EQT stock, EQT GP Holdings, LP (EQGP) units and EQT Midstream Partners, LP (EQM) units owned directly, EQT shares held in the Company’s 401(k) plan, time-based restricted stock and units, and performance-based awards for which only a service condition remains, but do not include other performance-based awards or options. Although mandatory, there is no deadline for achieving the ownership guidelines and executives are not required to purchase EQT stock, EQGP units or EQM units. The net shares or units acquired through incentive compensation plans (through the exercise of options, the vesting of restricted stock or similar) must be retained if an executive has not satisfied his target. An executive’s failure to meet the equity ownership guidelines may influence an executive’s mix of cash and non-cash compensation. Executives are not permitted to pledge their EQT equity, or EQGP equity if they are also directors or executive officers of EQGP’s general partner or EQM equity if they are also directors or executive officers of EQM’s general partner. Executives are not permitted to hedge or otherwise invest in derivatives involving EQT stock, EQGP units or EQM units.

All executive officers, other than the CEO, currently have a three times base salary guideline.

Confidentiality, Non-Solicitation and Non-Competition Agreement

This offer is conditioned upon you executing the enclosed Confidentiality, Non-Solicitation and Non-Competition Agreement (“Non-Compete Agreement”).

Executive Alternative Work Arrangement

You have the option at this time of electing to participate in Executive Alternative Work Arrangement status following your cessation of full-time employment with EQT. If you desire to participate, you must make an election at this time in conjunction with the execution of your Non-Compete Agreement. See “Executive Alternative Work Arrangement Employment Agreement” attached as Exhibit A to the Non-Compete Agreement and the election form that immediately precedes Exhibit A to the Non-Compete Agreement.

Work Schedule Options

In order to provide employees with a way to maintain work/life balance, EQT has two work schedule options – a 9/80 work schedule and a traditional 8-hour day/5 days per week option. Under the 9/80 work schedule, during the standard 80-hour pay period employees work eight 9-hour days (Monday through Thursday) and one 8-hour day (Friday), with a tenth day off (alternate Friday).

Initially, you will work the traditional work schedule until you make a selection and discuss it with your supervisor. Detailed information on these work schedule options, holidays and vacation will be covered in orientation. You will have 31 days to make your schedule selection.

Mr. Thomas F. Karam

August 9, 2018

Employee Benefits

You will have the opportunity to participate in such group medical, dental, life and disability insurance plans, retirement and savings plans and other fringe benefit programs as are available generally to employees of the Company, and as may be amended from time-to-time.

Additional Retirement Benefit

Once 401(k) contributions for executive officers reach the maximum level permitted under the 401(k) plan or by regulation, Company contributions are continued on an after-tax basis under the 2006 Payroll Deduction and Contribution Program through an annuity program offered by Fidelity Investments Life Insurance Co. Each year, the Company also contributes an amount equal to 11% of each executive officer’s annual incentive award to such program.

Perquisites

See “2018 Executive Officer Perquisites” document attached.

Vacation and Holidays

Your annual vacation entitlement will be 240 hours, which will be prorated for the first year based upon full months worked. Additionally, EQT presently observes certain paid holidays.

Relocation Benefits

You will be eligible to receive Tier IV relocation benefits, provided that you sign and return the enclosed Relocation Agreement to onboarding@eqt.com :


•	Miscellaneous Allowance in the amount of $10,000. The Miscellaneous Allowance is not tax assisted.


•	Lump Sum Allowance that is intended to cover 90 days of temporary lodging. The Lump Sum Allowance is tax assisted (grossed up).

Contingency Matters

This offer and your continued employment with EQT are contingent upon the following:


•	In accordance with the Federal Immigration Reform and Control Act of 1986, you are required to provide EQT with verification of your identity and eligibility to work in the United States; and


•	Submitting to and successfully completing all pre-employment assessments including a drug screen, and execution and delivery of the Non-Compete Agreement.

The benefits and perquisites described above are subject to review and modification by the MDCC or, if applicable to all employees, by EQT from time to time.

Your starting date will be August 9, 2017.

Please understand that employment with EQT is at-will, which means that either you or the Company can terminate the employment relationship at any time, with or without cause. This employment-at-will

Mr. Thomas F. Karam

August 9, 2018

relationship cannot be changed except by a written agreement approved by the MDCC and signed by an authorized officer of the Company.

If you have any questions regarding this offer, please contact me at 412.553.5712. Should you accept, you must also complete and return the attached Non-Compete Agreement to me via fax at 412.553.5722 or via e-mail in the form of a .pdf to cpetrelli@eqt.com .

With your acceptance, you confirm that you are not currently bound by or subject to any confidentiality or non-competition agreement with a previous employer that you have not previously disclosed to us and, if in writing, provided a copy to us.

EQT's onboarding process is administered through an online application called Taleo Onboard. Once we receive your signed offer letter, you will receive an e-mail from Taleo Onboard with details to set up your username and password. Please log-on to Taleo Onboard immediately to complete your profile and post-offer employment questionnaire. Until these forms have been completed, we cannot initiate your mandatory pre-employment assessments. If you experience any problems using Taleo Onboard, please contact John Orfanopoulos, Director, Talent Acquisition at 412.395.2634 or jorfanopoulos@eqt.com or contact me.

This offer expires seven days from the date of this letter .

Confidentiality

This letter is confidential, and its contents are intended solely for review by you and your counsel. You should not disclose, and you will advise your counsel not to disclose, this letter’s contents or the fact of its existence to any third party without our prior written consent. Except as may be required by law or stock exchange rule, the disclosure of this offer and your acceptance, if any, to any third party other than your counsel and our representatives subject to an appropriate confidentiality obligation, will be mutually agreed upon and coordinated.

Please return one copy of this letter with your signature indicating your acceptance or rejection of this offer, and the terms and conditions contained herein, to me. If you have any questions, please contact me directly.

Sincerely,

/s/ Charlene Petrelli

Charlene Petrelli

Vice President and Chief Human Resources Officer

Mr. Thomas F. Karam

August 9, 2018

I [Accept] / Reject (circle) the Company’s offer of employment and the terms and conditions set forth herein:

/s/ Thomas F. Karam 8-10-18

Thomas F. Karam Date

CONFIDENTIALITY, NON‑SOLICITATION and

NON‑COMPETITION AGREEMENT

This CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETITION AGREEMENT (this “Agreement”) is entered into and effective as of August 9, 2018, by and between EQT Corporation, a Pennsylvania corporation (EQT Corporation and its subsidiary companies are hereinafter collectively referred to as the “Company”), and Thomas F. Karam (the “Employee”).

WITNESSETH:

WHEREAS, during the course of Employee’s employment with the Company, the Company will impart to Employee proprietary and/or confidential information and/or trade secrets of the Company; and

WHEREAS, in order to protect the business and goodwill of the Company, the Company desires to obtain certain confidentiality, non-competition and non‑solicitation covenants from the Employee; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:

Employee agrees that for a period of twenty-four (24) months following the termination of Employee's employment with the Company for any reason, including without limitation termination for cause or without cause, Employee shall not, directly or indirectly, solicit the business of, or do business with: (i) any customer that Employee approached, solicited or accepted business from on behalf of the Company, and/or was provided confidential or proprietary information about while employed by the Company within the one (1) year period preceding Employee's separation from the Company; and (ii) any prospective customer of the Company who was identified to or by the Employee and/or who Employee was provided confidential or proprietary information about while employed by the Company within the one (1) year period preceding Employee's separation from the Company, for purposes of marketing, selling and/or attempting to market or sell products and services which are the same as or similar to any product or service the Company offers within the last two (2) years prior to the end of

Employee's employment with the Company, and/or, which are the same as or similar to any product or service the Company has in process over the last two (2) years prior to the end of Employee's employment with the Company to be offered in the future.

3. Severance Benefit . If the Employee’s employment is terminated by the Company for any reason other than Cause (as defined below) or if the Employee terminates his employment for Good Reason (as defined below), the Company shall provide Employee with the following:

(a) A lump sum payment payable within 60 days following Employee’s termination date equal to twenty-four (24) months of Employee’s base salary in effect at the time

of such termination, or immediately prior to the event that serves as the basis for termination for Good Reason;

(d) A lump sum payment payable within 60 days following Employee’s termination date equal to $200,000;

The payments provided under this Section 3 shall be subject to applicable tax and payroll withholdings, and shall be in lieu of any payments and/or benefits to which the Employee would otherwise be entitled under the EQT Corporation Severance Pay Plan (as amended from time to time). The Company’s obligation to provide the payments and benefits under this Section 3 shall be contingent upon the following:

(a) Employee’s execution of a release of claims in a form acceptable to the Company; and

(b) Employee’s compliance with his obligations hereunder, including, but not limited to, Employee’s obligations set forth in Sections 1 and 2 (the “Restrictive Covenants”).

4. Severability and Modification of Covenants . Employee acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The parties agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable

protection of the Company’s legitimate business interests and may be enforced by the Company to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.

7. Binding Agreement . This Agreement (including the Restrictive Covenants) shall be binding upon and inure to the benefit of the successors and assigns of the Company.

8. Employment at Will . Employee shall be employed at‑will and for no definite term. This means that either party may terminate the employment relationship at any time for any or no reason.

such form indicating whether or not he desires to participate in Executive Alternative Work Arrangement Status. Any failure to make an election at the time of execution of this Agreement shall be deemed to be an election not to participate. If Employee elects to participate, the Executive Alternative Work Arrangement classification will be automatically assigned to Employee if and when Employee incurs a termination of employment that meets each of the following conditions (an "Eligible Termination”): (a) Employee’s employment is terminated by the Company for any reason other than Cause or Employee gives the Company (delivered to the Vice President and Chief Human Resources Officer) at least 90 days’ advance written notice of Employee’s intention to discontinue employment, (b) Employee is a board-designated executive officer in good standing with EQT Corporation as of the time of his termination of employment, and (c) Employee’s employment shall not have been terminated by Employee for Good Reason. By electing to participate in the Executive Alternative Work Arrangement, Employee hereby agrees to execute an Executive Alternative Work Arrangement Employment Agreement, in a form substantially similar to the one attached hereto as Exhibit A, within 90 days prior to Employee’s relinquishment of full-time status, which agreement will become effective automatically on the day following Employee’s Eligible Termination. Without limiting the foregoing, Employee agrees that he will not be eligible for the Executive Alternative Work Arrangement, including the post-employment benefits described therein, if Employee’s termination of employment is not an Eligible Termination.

11. Agreement to Arbitrate . Employee and the Company agree that any controversy, claim, or dispute between Employee and the Company arising out of or relating to this Agreement or the breach thereof, or arising out of any matter relating to the Employee’s employment with the Company or the termination thereof, shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (“AAA”), and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The arbitration shall be governed by the Federal Arbitration Act, shall be held in Pittsburgh, Pennsylvania, and shall be conducted before a panel of three (3) arbitrators (the “Arbitration Panel”). The Company and Employee shall each select one arbitrator from the AAA National Panel of Commercial Arbitrators (the “Commercial Panel”),

and the AAA shall select a third arbitrator from the Commercial Panel. The Arbitration Panel shall render a reasoned opinion in writing in support of its decision. Any award rendered by the Arbitration Panel shall be final, binding, and confidential as between the parties. Notwithstanding this agreement to arbitrate, in the event that Employee breaches or threatens to breach any of Employee’s obligations under the Restrictive Covenants, the Company shall have the right to file an action in one of the courts specified in Section 10 above seeking temporary, preliminary or permanent injunctive relief to enforce Employee’s obligations under the Restrictive Covenants.

13. Mandatory Reduction of Payments in Certain Events .

(a) Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as “Payments”) would, if paid, be subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then, prior to the making of any Payments to the Employee, a calculation shall be made comparing (i) the net after-tax benefit to the Employee of the Payments after payment by the Employee of the Excise Tax, to (ii) the net after-tax benefit to the Employee if the Payments had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the change in control transaction, as determined by the Determination Firm (as defined in Section 13(b) below). For purposes of this Section 13, present value shall be determined in accordance with Section 280G(d)(4) of the Code. For purposes of this Section 13, the “Parachute Value” of a Payment means the present value as of the date of the change in control transaction of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment.

(c) In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without succession, this Section 13 shall be of no further force or effect.

14. Internal Revenue Code Section 409A .

under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):

(ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder.

15. Entire Agreement . This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements (with the exception of the Offer of Employment Letter dated August 8, 2018) and understandings, oral or written. This Agreement may not be changed, amended, or modified, except by a written instrument signed by the parties; provided, however, that the Company may amend this Agreement from time to time without Employee’s consent to the extent deemed necessary or appropriate, in its sole discretion, to effect compliance with Section 409A of the Code, including regulations and interpretations thereunder, which amendments may result in a reduction of benefits provided hereunder and/or other unfavorable changes to Employee.

EQT CORPORATION EMPLOYEE

By:_ /s/ Charlene Petrelli _______________ /s/ Thomas F. Karam __________________

Name: Charlene Petrelli Thomas F. Karam

Title: Vice President and Chief Human

Resources Officer

ELECTION TO PARTICIPATE IN

EXECUTIVE ALTERNATIVE WORK ARRANGEMENT CLASSIFICATION

Thomas F. Karam _______________

Employee Name Printed

/s/ Thomas F. Karam _____________

Employee Signature

8/10/18 ________________________

Date

EXHIBIT A

EXECUTIVE ALTERNATIVE WORK ARRANGEMENT EMPLOYMENT AGREEMENT

WHEREAS, Employee is an executive officer of EQT who desires to relinquish that status and discontinue full-time employment with EQT but continue employment with EQT on a part-time basis; and

WHEREAS, EQT is interested in continuing to retain the services of Employee on a part-time basis for at least 100 (but no more than 400) hours per year; and

WHEREAS, Employee has elected to modify his/her employment status to Executive Alternative Work Arrangement;

NOW, THEREFORE, in consideration of the respective representations, acknowledgements, and agreements of the parties set forth herein, and intending to be legally bound, the parties agree as follows:


1.	The term of this Agreement is for the one-year period commencing on the day after

sheets in a form agreed upon by the parties, and Employee will be paid on regularly scheduled payroll dates in accordance with the Company’s standard payroll practices following submission of his/her time sheets. Notwithstanding the foregoing, in the event that during any one-year period in Executive Alternative Work Arrangement employment status, EQT requests Employee to provide less than 100 hours of service, EQT shall pay Employee for a minimum of 100 hours of service (regardless of the actual number of hours of service), with any remaining amount owed payable on the next regularly scheduled payroll date following the end of the applicable one-year period. If either party terminates the Executive Alternative Work Arrangement prior to the fifth anniversary hereof, no additional compensation will be paid to Employee pursuant to this Section 3.

5. During the term of this Agreement, Employee will continue to receive service credit for purposes of calculating the value of the Medical Spending Account.

8. Effective not later than the commencement of this Executive Alternative Work Arrangement, Employee shall be deemed to have retired for purposes of measuring vesting and/or post‑termination exercise periods of all forms of long term incentive awards. The timing of any payments for such awards will be as provided in the underlying plans, programs or arrangements and is subject to any required six-month delay in payment if Employee is a “specified employee” under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) at the time of Employee’s separation from service, with respect to payments made by reason of Employee’s separation from service. Nothing in this paragraph 8, or in paragraph 7, shall prevent (a) the continued vesting of previously granted long-term incentive awards to the extent the award agreement therefore expressly contemplates continued vesting while the recipient serves as a member of the Board of Directors of the Company or an affiliate or (b) grants of non-employee director awards to an individual solely because such individual serves on the Board of Directors of the Company or an affiliate. Notwithstanding anything contained herein to the contrary, any special vesting and/or payment provisions applicable to Employee’s long-term incentive awards pursuant to that certain Confidentiality, Non-Solicitation and Non-Competition Agreement between EQT and Employee dated August 9, 2018 (as amended from time to time, the “Non-Competition Agreement”) shall apply and be given effect.

14. Nothing in this Agreement shall prevent or prohibit the Company from modifying any of its employee benefits plans, programs, or policies.

“Arbitration Panel”). EQT and the Employee shall each select one arbitrator from the AAA National Panel of Commercial Arbitrators (the “Commercial Panel”) and AAA shall select a third arbitrator from the Commercial Panel. Any award rendered by the Arbitration Panel shall be final, binding and confidential as between the parties hereto and their heirs, executors, administrators, successors and assigns, and judgment on the award may be entered by any court having jurisdiction thereof.

22. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company.

23. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without regard to conflict of law principles.

24. This Agreement supersedes all prior agreements and understandings between EQT and Employee with respect to the subject matter hereof (oral or written), including but not limited to Section 3 of the Non-Competition Agreement. It is understood and agreed, however, that the covenants contained in the Agreement and Release and the covenants as to non-competition, non-solicitation, confidentiality and nondisclosure contained in Sections 1 and 2 of the Non-Competition Agreement remain in effect as modified herein, along with the provisions in Sections 4, 5, 6, 7, 8, 11 and 12 of the Non-Competition Agreement.

(Signatures on following page)

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below.



EQT CORPORATION By: Title Date		EMPLOYEE Name: Date

Amendment to

EQT Corporation

1999 Directors’ Deferred Compensation Plan

This Amendment (this “ Amendment ”) to the EQT Corporation 1999 Directors’ Deferred Compensation Plan (the “ Plan ”) is approved by the Board this 2 ^nd day of October 2018 (the “ Amendment Date ”). Capitalized terms used herein and not otherwise defined have the meanings given to such terms in the Plan.

1. Effective Time . This Amendment shall become effective as of the Amendment Date. Except as expressly set forth herein, the Plan shall remain in full force and effect in accordance with its terms.

2. Phantom Stock Award . Section 4.1 of the Plan is hereby amended and restated in its entirety as follows:

(a) As of May 26, 1999, the Phantom Stock Account of a Participant eligible for an award of Phantom Stock pursuant to Section 3.1(i) of the Plan was credited with an award of Phantom Stock in the number of shares specified in Exhibit A to the Plan. The Company shall contribute shares of Company common stock to the Irrevocable Trust in an amount equal to the aggregate number of shares of Phantom Stock credited to all Phantom Stock Accounts under the Plan from such awards. Any such contributions to an Irrevocable Trust and related investments shall be solely to assist the Company in satisfying its obligations under this Plan, and no Participant shall have any right, title or interest whatsoever in any such contributions or investments.

(b) As of the date of any Phantom Stock award pursuant to the terms of the NEDSIP prior to the Freeze Date, the Phantom Stock Account of a Participant receiving such award was credited with the number of Phantom Stock units as specified in such award. Separate subaccounts shall be maintained to accommodate different forms and media of payment applicable to specific Phantom Stock Agreements. Except as provided in Section 10.1 of the Plan, the Company shall not be required to contribute any shares or other property to an Irrevocable Trust for such awards.

3. Investment Direction . Section 5.3 of the Plan is hereby amended and restated in its entirety as follows:

A Participant could direct that amounts originally deferred pursuant to his or her Enrollment Form prior to the Freeze Date (and/or, as the context so requires, amounts deferred under the Prior Plan which were transferred to this Plan in accordance with an election made pursuant to Section 5.2) be deemed to be invested in one or more of the Investment Options (a “ New Money Election ”) and credited with shares or units in each such Investment Option in the same manner as equivalent contributions would be invested under the same investment options available under the EQT 401(k) Plan. Except as otherwise provided below, a Participant may direct that amounts previously credited to his or her Deferral Account and/or Transferred Amounts Account be transferred between and among the then available Investment Options (a “ Reallocation Election ”). Reallocation Elections may not direct that amounts previously credited to a Participant’s Company Stock Fund be transferred out of such Fund and into another Investment Option or that amounts previously credited to another Investment Option be transferred out of such . Reallocation Elections from other Investment Option s and into the Company Stock Fund are permitted .

Except as otherwise provided with respect to the Company common stock, regardless of whether the investment direction is a New Money Election or a Reallocation Election, a Participant’s Deferral Account and/or Transferred Amounts Account shall only be deemed to be invested in Investment Options for purposes of crediting investment gain or loss under Section 5.5 of the Plan, and the Company shall not be required to actually invest, on behalf of any Participant, in any Investment Option. The Company may, but shall not be required to, make contributions to an Irrevocable Trust in an amount equal to the amounts deferred by Participants and actually invest such contributions in the Investment Options elected by a particular Participant; provided, however, that the Company shall contribute shares of Company common stock to the Irrevocable Trust in an amount equal to the aggregate number of shares of Company common stock represented by the Participant investment directions to the Company Stock Fund . Any such contributions by the Company to an Irrevocable Trust and related investments shall be solely to assist the Company in satisfying its obligations under this Plan, and no Participant shall have any right, title or interest whatsoever in any such contributions or investments.

Participant investment elections with respect to Deferral Accounts and/or Transferred Amounts Accounts shall be made by written notice to the Committee in accordance with procedures established by the Committee; provided, however, that investment directions to an Investment Option must be in multiples of whole percentage points (1%). Any such investment election shall be effective no later than three business days following the date on which the written notice is received and shall remain in effect until changed by the Participant. In the event that a Participant fails to direct the investment of his or her account, the Committee shall direct such Participant’s Deferral Account and/or Transferred Amounts Account to an Investment Option that corresponds with the investment option under the EQT 401(k) Plan that is then designated by the Company’s Benefits Investment Committee (the “ BIC ”) as the default investment option under the EQT 401(k) Plan.

4. Investment Options and Changes to Investment Options . Section 5.4 of the Plan is hereby amended and restated in its entirety as follows:

Except as otherwise determined in the sole discretion of the BIC, the Investment Options under the Plan shall be the same investment options available under the 401(k) Plan from time to time. Any change to any investment options available under the 401(k) Plan as determined in the sole discretion of the BIC shall, unless otherwise determined by the BIC, be a change to the Investment Options available under the Plan. No such action shall require an amendment to the Plan. Prior to the change or elimination of any Investment Option under the Plan, the Committee shall provide written notice to each Participant with respect to whom a Deferral Account and/or Transferred Amounts Account is maintained under the Plan, and any Participant who has directed any part of his or her Deferral Account and/or Transferred Amounts Account to such Investment Option shall be permitted to redirect such portion of his or her Deferral Account and/or Transferred Amounts Account to another Investment Option offered under the Plan , except that Reallocation Elections may not direct that amounts invested in the Company Stock Fund be transferred out of such Fund and into another Investment Option .

5. In‑Service Distribution of Deferral Account and/or Transferred Amounts Account . Section 6.3 of the Plan is hereby amended and restated in its entirety as follows:

A Participant was permitted to make an irrevocable election to receive a distribution of all or a specified dollar amount of his or her Deferral Account and/or Transferred Amounts Account on a date certain in the future prior to the termination of his or her membership on the Board (an “ In‑Service Distribution ”); provided that such In-Service Distribution was subject to any income tax withholding required under applicable law. Such election was required to be made in writing at the time the Participant first elected to participate in this Plan by filing an Enrollment Form with the Committee.

For purposes of reducing a Participant’s Deferral Account and/or Transferred Amounts Account and adjusting the balances in the various Investment Options in which such reduced Deferral Account and/or Transferred Amounts Account were deemed to be invested to reflect such In-Service Distribution, amounts represented by such In-Service Distribution were deemed to have been withdrawn first , on a pro rata basis, from each of the Investment Options in which that portion of his or her Deferral Account and/or Transferred Amounts Account is deemed to be invested in Investment Options other than the Company Stock Fund (the “Non Stock Investments”) and, second, to the extent the In-Service Distribution was not fully satisfied by a deemed withdrawal of the Non Stock Investments, from the portion deemed to be invested in the Company Stock Fund .

Any such In-Service Distribution was required to be made in one lump sum cash payment. Notwithstanding the preceding sentence, to the extent the Participant had directed that any portion of his or her Deferral Account and/or Transferred Amounts Account be invested in the Company Stock Fund, the Company was required to distribute such portion in such number of shares of Company common stock as would have been represented by an equal amount invested in the 401(k) Stock Fund

6. Funding . Section 10.1 of the Plan is hereby amended and restated in its entirety as follows:

The Company’s obligation to pay benefits under the Plan shall be merely an unfunded and unsecured promise of the Company to pay money in the future. Except as otherwise provided in Sections 4.1(a) and 5.3, p P rior to the occurrence of a Change in Control, the Company, in its sole discretion, may make contributions to an Irrevocable Trust to assist the Company in satisfying all or any portion of its obligations under the Plan. Regardless of whether the Company contributes to an Irrevocable Trust, Participants, their Beneficiaries, and their respective heirs, successors and assigns, shall have no secured interest or right, title or claim in any property or assets of the Company.

Notwithstanding the foregoing, upon the occurrence of a Change in Control, the Company shall make a contribution to an Irrevocable Trust in an amount which, when added to the then value of any amounts previously contributed to an Irrevocable Trust to assist the Company in satisfying all or any portion of its obligations under the Plan, shall be sufficient to bring the total value of assets held in the Irrevocable Trust to an amount not less than the total value of all Participants’ Accounts under the Plan as of the Valuation Date immediately preceding the Change in Control; provided that any such funds contributed to an Irrevocable Trust pursuant to this Section 10.1 shall remain subject to the claims of the Company’s general creditors and provided, further, that such contribution shall reflect any Conversion Event described in Section 4.3 of the Plan. Upon the occurrence of the Change in Control of the Company, any adjustments required by Section 4.3 of the Plan shall be made, and the Company shall provide to the trustee of the Irrevocable Trust all Plan records and other information necessary for the trustee to make payments to Participants under the Plan in accordance with the terms of the Plan.

Amendment to
EQT Corporation
2005 Directors’ Deferred Compensation Plan

This Amendment (this “ Amendment ”) to the EQT Corporation 2005 Directors’ Deferred Compensation Plan, as amended and restated through December 3, 2014 (the “ Plan ”), is approved by the Board of Directors of EQT Corporation as of this 2 ^nd day of October 2018 (the “ Amendment Date ”). Capitalized terms used herein and not otherwise defined have the meanings given to such terms in the Plan.

1. Effective Time . This Amendment shall become effective as of the Amendment Date. Except as expressly set forth herein, the Plan shall remain in full force and effect in accordance with its terms.

2. Phantom Stock Award . Section 4.1 of the Plan is hereby amended and restated in its entirety as follows:

As of the date of any Phantom Stock award pursuant to the terms of an Awarding Plan, the Phantom Stock Account of a Participant receiving such award shall be credited with the number of Phantom Stock units as specified in such award. Separate subaccounts shall be maintained to accommodate different forms and media of payment applicable to specific Phantom Stock Agreements. Except as provided in Section 10.1 of the 2005 Plan, the Company shall not be required to contribute any shares or other property to an Irrevocable Trust for such awards.

3. Investment Direction . Section 5.2 of the Plan is hereby amended and restated in its entirety as follows:

A Participant may direct that amounts deferred pursuant to his or her Enrollment Form be deemed to be invested in one or more of the Investment Options (a “ New Money Election ”) and credited with shares or units in each such Investment Option in the same manner as equivalent contributions would be invested under the same investment options available under the EQT 401(k) Plan. Except as otherwise provided below, a A Participant may direct that amounts previously credited to his or her Deferral Account be transferred between and among the then available Investment Options (a “ Reallocation Election ”). A Participant may make a New Money Election to invest in the Company Stock Fund or to cease future investments in such Fund in the same manner as any other Investment Option. Reallocation Elections , however, may not direct that amounts previously credited to a Participant’s Company Stock Fund be transferred out of such Fund and into another Investment Option or that amounts previously credited to another Investment Option be transferred out of such . Reallocation Elections from other Investment Option s and into the Company Stock Fund are permitted .

A Participant’s Deferral Account shall only be deemed to be invested in Investment Options for purposes of crediting investment gain or loss under Section 5.4 of the Plan, and the Company shall not be required to actually invest, on behalf of any Participant, in any Investment Option. The Company may, but shall not be required to, make contributions to an Irrevocable Trust in an amount equal to the amounts deferred by Participants and actually invest such contributions in the Investment Options elected by a particular Participant; provided, however, that the Company shall contribute shares of Company common stock to the Irrevocable Trust in an amount equal to the aggregate number of shares of Company common stock represented by Participant investment directions to the Company Stock Fund . Any such contributions by the Company to an Irrevocable Trust and related investments shall be solely to assist the Company in satisfying its obligations under this Plan, and no Participant shall have any right, title or interest whatsoever in any such contributions or investments.

Participant investment elections with respect to Deferral Accounts shall be made by written notice to the Committee in accordance with procedures established by the Committee; provided, however, that investment directions to an Investment Option must be in multiples of whole percentage points (1%). Any such investment election shall be effective no later than three business days following the date on which the written notice is received and shall remain in effect until changed by the Participant. In the event that a Participant fails to direct the investment of his or her Deferral Account, the Committee shall direct such Participant’s Deferral Account to the Investment Option that corresponds with the investment option under the EQT 401(k) Plan that is then designated by the Company’s Benefits Investment Committee (the “ BIC ”) as the default investment option under the EQT 401(k) Plan.

4. Investment Options and Changes to Investment Options . Section 5.3 of the Plan is hereby amended and restated in its entirety as follows:

Except as otherwise determined in the sole discretion of the BIC, the Investment Options under the 2005 Plan shall be the same investment options available under the 401(k) Plan from time to time. Any change to any investment options available under the 401(k) Plan as determined in the sole discretion of the BIC shall, unless otherwise determined by the BIC, be a change to the Investment Options available under the 2005 Plan. No such action shall require an amendment to the 2005 Plan. Prior to the change or elimination of any Investment Option under the 2005 Plan, the Committee shall provide written notice to each Participant with respect to whom a Deferral Account is maintained under the 2005 Plan, and any Participant who has directed any part of his or her Deferral Account to such Investment Option shall be permitted to redirect such portion of his or her Deferral Account to another Investment Option offered under the 2005 Plan , except that Reallocation Elections may not direct that amounts invested in the Company Stock Fund be transferred out of such Fund and into another Investment Option .

5. Hardship Withdrawal from Deferral Account. . Section 6.3 of the Plan is hereby amended and restated in its entirety as follows:

In the event that the Committee, in its sole discretion, determines upon the written request of a Participant in accordance with procedures established from time to time by the Committee, that the Participant has suffered an unforeseeable emergency, the Company may pay to the Participant in a lump sum, as soon as administratively feasible following such determination, an amount necessary to meet the emergency, but not exceeding the aggregate balance of such Participant’s Deferral Account as of the date of such payment (a “ Hardship Withdrawal ”). Any such Hardship Withdrawal shall be subject to any income tax withholding required under applicable law. The Participant shall provide to the Committee such evidence as the Committee may require to demonstrate that such emergency exists and financial hardship would occur if the withdrawal were not permitted.

For purposes of this Section 6.3, an “unforeseeable emergency” shall mean a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary or the Participant’s dependent (as defined in Section 152 of the Code, without regard to Section 152(b)(1), (b)(2) and (d)(1)(B)), loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, or as otherwise defined in Section 409A of the Code from time to time. The amount of a Hardship Withdrawal may not exceed the amount the Committee reasonably determines to be necessary to meet such emergency needs (including taxes incurred by reason of a taxable distribution) after taking into account the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by the cessation of future deferrals under the 2005 Plan.

The form of payment of the Hardship Withdrawal shall be a lump sum cash payment. For purposes of reducing a Participant’s Deferral Account and adjusting the balances in the various Investment Options in which such reduced Deferral Account is deemed to be invested to reflect such Hardship Withdrawal, amounts represented by such Hardship Withdrawal shall be deemed to have been withdrawn first , on a pro rata basis, from each of the Investment Options in which that portion of his or her Deferral Account is deemed to be invested in Investment Options other than the Company Stock Fund (the “Non-Stock Investments”) and, second, to the extent the Hardship Withdrawal cannot be fully satisfied by a deemed withdrawal of the Non-Stock Investments, from the portion deemed to be invested in the Company Stock Fund .

Notwithstanding the preceding, t T o the extent the Participant had directed that any portion of his or her Deferral Account be invested in the Company Stock Fund, the Company shall distribute such portion in such number of shares of Company common stock based on the value at the date of distribution.

6. Funding . Section 10.1 of the Plan is hereby amended and restated in its entirety as follows:

The Company’s obligation to pay benefits under the 2005 Plan shall be merely an unfunded and unsecured promise of the Company to pay money in the future. Except as provided in Section 5.2, p P rior to the occurrence of a Change in Control, the Company, in its sole discretion, may make contributions to an Irrevocable Trust to assist the Company in satisfying all or any portion of its obligations under the 2005 Plan. Regardless of whether the Company contributes to an Irrevocable Trust, Participants, their Beneficiaries and their respective heirs, successors and assigns, shall have no secured interest or right, title or claim in any property or assets of the Company.

Notwithstanding the foregoing, upon the occurrence of a Change in Control, the Company shall make a contribution to an Irrevocable Trust in an amount which, when added to the then value of any amounts previously contributed to an Irrevocable Trust to assist the Company in satisfying all or any portion of its obligations under the 2005 Plan, shall be sufficient to bring the total value of assets held in the Irrevocable Trust to an amount not less than the total value of all Participants’ Accounts under the 2005 Plan as of the Valuation Date immediately preceding the Change in Control; provided that any such funds contributed to an Irrevocable Trust pursuant to this Section 10.1 shall remain subject to the claims of the Company’s general creditors and provided, further, that such contribution shall reflect any Conversion Event described in Section 4.3 of the 2005 Plan. Upon the occurrence of the Change in Control, any adjustments required by Section 4.3 of the 2005 Plan shall be made, and the Company shall provide to the trustee of the Irrevocable Trust all 2005 Plan records and other information necessary for the trustee to make payments to Participants under the 2005 Plan in accordance with the terms of the 2005 Plan.

Exhibit 31.01

CERTIFICATION

I, David L. Porges, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of EQT Corporation;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditor and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:	October 25, 2018
		/s/ David L. Porges
		David L. Porges
		Interim President and Chief Executive Officer

Exhibit 31.02

CERTIFICATION

I, Robert J. McNally, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of EQT Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditor and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date:	October 25, 2018

		/s/ Robert J. McNally
		Robert J. McNally
		Senior Vice President and Chief Financial Officer

Exhibit 32

CERTIFICATION

In connection with the Quarterly Report of EQT Corporation (“EQT”) on Form 10-Q for the period ended September 30, 2018 , as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:


(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of EQT.



/s/ David L. Porges		October 25, 2018
David L. Porges
Interim President and Chief Executive Officer


/s/ Robert J. McNally		October 25, 2018
Robert J. McNally
Senior Vice President and Chief Financial Officer