x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
¨
|
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
|
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)
|
Large Accelerated Filer
x
|
|
Accelerated Filer
¨
|
|
Emerging Growth Company
¨
|
Non-Accelerated Filer
¨
|
|
Smaller Reporting Company
¨
|
|
|
Page No.
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
|
|
|
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Thousands, except per share amounts)
|
||||||
Operating revenues:
|
|
|
|
||||
Sales of natural gas, oil and NGLs
|
$
|
1,271,613
|
|
|
$
|
1,226,374
|
|
(Loss) gain on derivatives not designated as hedges
|
(131,996
|
)
|
|
62,592
|
|
||
Net marketing services and other
|
3,556
|
|
|
23,070
|
|
||
Total operating revenues
|
1,143,173
|
|
|
1,312,036
|
|
||
Operating expenses:
|
|
|
|
|
|
||
Transportation and processing
|
439,246
|
|
|
416,657
|
|
||
Production
|
43,408
|
|
|
58,634
|
|
||
Exploration
|
1,007
|
|
|
1,225
|
|
||
Selling, general and administrative
|
48,978
|
|
|
39,815
|
|
||
Depreciation and depletion
|
391,113
|
|
|
392,693
|
|
||
Impairment/loss on sale of long-lived assets
|
—
|
|
|
2,329,045
|
|
||
Lease impairments and expirations
|
29,534
|
|
|
3,879
|
|
||
Proxy and transaction costs
|
4,089
|
|
|
10,078
|
|
||
Amortization of intangible assets
|
10,342
|
|
|
10,342
|
|
||
Total operating expenses
|
967,717
|
|
|
3,262,368
|
|
||
Operating income (loss)
|
175,456
|
|
|
(1,950,332
|
)
|
||
Unrealized gain on investment in Equitrans Midstream Corporation
|
89,055
|
|
|
—
|
|
||
Dividend and other income (expense)
|
20,987
|
|
|
(130
|
)
|
||
Interest expense
|
56,573
|
|
|
57,911
|
|
||
Income (loss) from continuing operations before income taxes
|
228,925
|
|
|
(2,008,373
|
)
|
||
Income tax expense (benefit)
|
38,234
|
|
|
(429,840
|
)
|
||
Income (loss) from continuing operations
|
190,691
|
|
|
(1,578,533
|
)
|
||
Income from discontinued operations, net of tax
|
—
|
|
|
133,554
|
|
||
Net income (loss)
|
190,691
|
|
|
(1,444,979
|
)
|
||
Less: Net income from discontinued operations attributable to noncontrolling interests
|
—
|
|
|
141,015
|
|
||
Net income (loss) attributable to EQT Corporation
|
$
|
190,691
|
|
|
$
|
(1,585,994
|
)
|
|
|
|
|
||||
Amounts attributable to EQT Corporation:
|
|
|
|
||||
Income (loss) from continuing operations
|
$
|
190,691
|
|
|
$
|
(1,578,533
|
)
|
(Loss) from discontinued operations, net of tax
|
—
|
|
|
(7,461
|
)
|
||
Net income (loss) attributable to EQT Corporation
|
$
|
190,691
|
|
|
$
|
(1,585,994
|
)
|
|
|
|
|
||||
Earnings per share of common stock attributable to EQT Corporation:
|
|
|
|
|
|
||
Basic:
|
|
|
|
|
|
||
Weighted average common stock outstanding
|
255,046
|
|
|
264,877
|
|
||
Income (loss) from continuing operations
|
$
|
0.75
|
|
|
$
|
(5.96
|
)
|
(Loss) from discontinued operations
|
—
|
|
|
(0.03
|
)
|
||
Net income (loss)
|
$
|
0.75
|
|
|
$
|
(5.99
|
)
|
Diluted:
|
|
|
|
|
|
||
Weighted average common stock outstanding
|
255,387
|
|
|
264,877
|
|
||
Income (loss) from continuing operations
|
$
|
0.75
|
|
|
$
|
(5.96
|
)
|
(Loss) from discontinued operations
|
—
|
|
|
(0.03
|
)
|
||
Net income (loss)
|
$
|
0.75
|
|
|
$
|
(5.99
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Thousands)
|
||||||
Net income (loss)
|
$
|
190,691
|
|
|
$
|
(1,444,979
|
)
|
|
|
|
|
||||
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||
Net change in cash flow hedges:
|
|
|
|
|
|
||
Natural gas, net of tax benefit of $(100)
|
—
|
|
|
(287
|
)
|
||
Interest rate, net of tax expense of $10 and $18
|
42
|
|
|
44
|
|
||
Other post-retirement benefits liability adjustment, net of tax expense of $26 and $30
|
76
|
|
|
86
|
|
||
Change in accounting principle (a)
|
(496
|
)
|
|
—
|
|
||
Other comprehensive (loss)
|
(378
|
)
|
|
(157
|
)
|
||
Comprehensive income (loss)
|
190,313
|
|
|
(1,445,136
|
)
|
||
Less: Comprehensive income from discontinued operations attributable to noncontrolling interests
|
—
|
|
|
141,015
|
|
||
Comprehensive income (loss) attributable to EQT Corporation
|
$
|
190,313
|
|
|
$
|
(1,586,151
|
)
|
(a)
|
Related to adoption of Accounting Standard Update (ASU) 2018-02. See Note
1
for additional information.
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Thousands)
|
||||||
Cash flows from operating activities:
|
|
||||||
Net income (loss)
|
$
|
190,691
|
|
|
$
|
(1,444,979
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||
Deferred income tax expense (benefit)
|
37,889
|
|
|
(338,734
|
)
|
||
Depreciation and depletion
|
391,113
|
|
|
437,893
|
|
||
Amortization of intangible assets
|
10,342
|
|
|
20,728
|
|
||
Amortization of financing costs and accretion expense
|
5,300
|
|
|
2,872
|
|
||
Asset and lease impairments
|
29,534
|
|
|
2,332,924
|
|
||
Unrealized gain on investment in Equitrans Midstream Corporation
|
(89,055
|
)
|
|
—
|
|
||
Non-cash other income
|
(676
|
)
|
|
(10,723
|
)
|
||
Share-based compensation expense
|
3,853
|
|
|
5,892
|
|
||
Loss (gain) on derivatives not designated as hedges
|
131,996
|
|
|
(62,592
|
)
|
||
Net cash settlements paid on derivatives not designated as hedges
|
(63,634
|
)
|
|
(38,629
|
)
|
||
Changes in other assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
342,465
|
|
|
62,423
|
|
||
Accounts payable
|
(149,487
|
)
|
|
307
|
|
||
Other items, net
|
30,956
|
|
|
(62,970
|
)
|
||
Net cash provided by operating activities
|
871,287
|
|
|
904,412
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Capital expenditures
|
(371,028
|
)
|
|
(558,738
|
)
|
||
Capital expenditures for discontinued operations (a)
|
—
|
|
|
(170,589
|
)
|
||
Capital contributions to Mountain Valley Pipeline, LLC (a)
|
—
|
|
|
(117,019
|
)
|
||
Other investing activities
|
697
|
|
|
(3,090
|
)
|
||
Net cash used in investing activities
|
(370,331
|
)
|
|
(849,436
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Increase in borrowings on credit facilities
|
820,000
|
|
|
913,500
|
|
||
Repayment of borrowings on credit facilities
|
(1,270,000
|
)
|
|
(958,500
|
)
|
||
Increase in borrowings on EQM Midstream Partners, LP credit facilities (a)
|
—
|
|
|
304,000
|
|
||
Repayment of borrowings on EQM Midstream Partners, LP credit facilities (a)
|
—
|
|
|
(128,000
|
)
|
||
Dividends paid
|
(7,652
|
)
|
|
(7,942
|
)
|
||
Distributions to noncontrolling interests (a)
|
—
|
|
|
(88,896
|
)
|
||
Repayments and retirements of debt
|
(1,141
|
)
|
|
(7,999
|
)
|
||
Proceeds from awards under employee compensation plans
|
—
|
|
|
1,946
|
|
||
Cash paid for taxes related to net settlement of share-based incentive awards
|
(4,804
|
)
|
|
(20,009
|
)
|
||
Repurchase of common stock
|
—
|
|
|
(9
|
)
|
||
Net cash (used in) provided by financing activities
|
(463,597
|
)
|
|
8,091
|
|
||
Net change in cash, cash equivalents and restricted cash
|
37,359
|
|
|
63,067
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
3,487
|
|
|
147,315
|
|
||
Cash and cash equivalents at end of period
|
$
|
40,846
|
|
|
$
|
210,382
|
|
|
|
|
|
||||
Cash paid (received) during the period for:
|
|
|
|
|
|
||
Interest, net of amount capitalized
|
$
|
13,749
|
|
|
$
|
27,519
|
|
Income taxes, net
|
$
|
23
|
|
|
$
|
(9
|
)
|
|
|
|
|
||||
Non-cash activity during the period for:
|
|
|
|
||||
Increase in right-of-use lease assets and lease liabilities
|
$
|
89,021
|
|
|
$
|
—
|
|
Increase in asset retirement costs and obligations
|
$
|
1,285
|
|
|
$
|
1,856
|
|
(a)
|
Amounts related to discontinued operations as described in Note
2
to the Condensed Consolidated Financial Statements.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(Thousands)
|
||||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
40,846
|
|
|
$
|
3,487
|
|
Accounts receivable (less provision for doubtful accounts: $6,333 at March 31, 2019 and $8,648 at December 31, 2018)
|
817,535
|
|
|
1,241,843
|
|
||
Derivative instruments, at fair value
|
370,254
|
|
|
481,654
|
|
||
Tax receivable
|
130,567
|
|
|
131,573
|
|
||
Prepaid expenses and other
|
20,839
|
|
|
111,107
|
|
||
Total current assets
|
1,380,041
|
|
|
1,969,664
|
|
||
|
|
|
|
||||
Property, plant and equipment
|
22,592,376
|
|
|
22,148,012
|
|
||
Less: accumulated depreciation and depletion
|
5,139,164
|
|
|
4,755,505
|
|
||
Net property, plant and equipment
|
17,453,212
|
|
|
17,392,507
|
|
||
|
|
|
|
||||
Intangible assets, net
|
66,991
|
|
|
77,333
|
|
||
Investment in Equitrans Midstream Corporation
|
1,102,057
|
|
|
1,013,002
|
|
||
Other assets
|
337,384
|
|
|
268,838
|
|
||
Total assets
|
$
|
20,339,685
|
|
|
$
|
20,721,344
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Current portion of debt
|
$
|
704,677
|
|
|
$
|
704,390
|
|
Accounts payable
|
877,498
|
|
|
1,059,873
|
|
||
Derivative instruments, at fair value
|
308,607
|
|
|
336,051
|
|
||
Other current liabilities
|
294,708
|
|
|
254,687
|
|
||
Total current liabilities
|
2,185,490
|
|
|
2,355,001
|
|
||
|
|
|
|
||||
Credit facility borrowings
|
350,000
|
|
|
800,000
|
|
||
Senior Notes
|
3,884,591
|
|
|
3,882,932
|
|
||
Note payable to EQM Midstream Partners, LP
|
108,835
|
|
|
110,059
|
|
||
Deferred income taxes
|
1,859,578
|
|
|
1,823,381
|
|
||
Other liabilities
|
811,603
|
|
|
791,742
|
|
||
Total liabilities
|
9,200,097
|
|
|
9,763,115
|
|
||
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
|
|
||
Common stock, no par value, authorized 320,000 shares, shares issued: 257,225 at March 31, 2019 and December 31, 2018
|
7,817,227
|
|
|
7,828,554
|
|
||
Treasury stock, shares at cost: 2,226 at March 31, 2019 and 2,753 at December 31, 2018
|
(39,665
|
)
|
|
(49,194
|
)
|
||
Retained earnings
|
3,367,810
|
|
|
3,184,275
|
|
||
Accumulated other comprehensive loss
|
(5,784
|
)
|
|
(5,406
|
)
|
||
Total equity
|
11,139,588
|
|
|
10,958,229
|
|
||
Total liabilities and equity
|
$
|
20,339,685
|
|
|
$
|
20,721,344
|
|
|
Common Stock
|
|
|
|
|
|
Accumulated Other Comprehensive (Loss) Income
|
|
Noncontrolling Interests in Consolidated Subsidiaries
|
|
|
|||||||||||||||
|
Shares
|
|
No
Par Value |
|
Treasury Stock
|
|
Retained
Earnings |
|
|
|
Total
Equity |
|||||||||||||||
|
(Thousands, except per share or unit amounts)
|
|||||||||||||||||||||||||
Balance at January 1, 2018
|
264,320
|
|
|
$
|
9,388,903
|
|
|
$
|
(63,602
|
)
|
|
$
|
3,996,775
|
|
|
$
|
(2,458
|
)
|
|
$
|
5,094,995
|
|
|
$
|
18,414,613
|
|
Comprehensive income (net of tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net (loss) income
|
|
|
|
|
|
|
|
|
(1,585,994
|
)
|
|
|
|
|
141,015
|
|
|
(1,444,979
|
)
|
|||||||
Net change in cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Natural gas (a)
|
|
|
|
|
|
|
|
|
(287
|
)
|
|
|
|
(287
|
)
|
|||||||||||
Interest rate (b)
|
|
|
|
|
|
|
|
|
44
|
|
|
|
|
44
|
|
|||||||||||
Other post-retirement benefits liability adjustment (c)
|
|
|
|
|
|
|
|
|
86
|
|
|
|
|
86
|
|
|||||||||||
Dividends (d)
|
|
|
|
|
|
|
|
|
(7,942
|
)
|
|
|
|
|
|
|
|
(7,942
|
)
|
|||||||
Share-based compensation plans
|
680
|
|
|
(25,663
|
)
|
|
12,298
|
|
|
|
|
|
|
|
|
390
|
|
|
(12,975
|
)
|
||||||
Distributions to noncontrolling interests (e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(88,896
|
)
|
|
(88,896
|
)
|
|||||||
Change in accounting principle
|
|
|
|
|
|
|
4,113
|
|
|
|
|
|
|
4,113
|
|
|||||||||||
Changes in ownership of consolidated subsidiaries
|
|
|
49
|
|
|
|
|
|
|
|
|
|
(64
|
)
|
|
(15
|
)
|
|||||||||
Balance at March 31, 2018
|
265,000
|
|
|
$
|
9,363,289
|
|
|
$
|
(51,304
|
)
|
|
$
|
2,406,952
|
|
|
$
|
(2,615
|
)
|
|
$
|
5,147,440
|
|
|
$
|
16,863,762
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at January 1, 2019
|
254,472
|
|
|
$
|
7,828,554
|
|
|
$
|
(49,194
|
)
|
|
$
|
3,184,275
|
|
|
$
|
(5,406
|
)
|
|
$
|
—
|
|
|
$
|
10,958,229
|
|
Comprehensive income (net of tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income
|
|
|
|
|
|
|
|
|
190,691
|
|
|
|
|
|
|
|
190,691
|
|
||||||||
Net change in interest rate cash flow hedges (b)
|
|
|
|
|
|
|
|
|
42
|
|
|
|
|
42
|
|
|||||||||||
Other post-retirement benefit liability adjustment (c)
|
|
|
|
|
|
|
|
|
76
|
|
|
|
|
76
|
|
|||||||||||
Dividends (d)
|
|
|
|
|
|
|
|
|
(7,652
|
)
|
|
|
|
|
|
|
|
(7,652
|
)
|
|||||||
Share-based compensation plans
|
527
|
|
|
(11,327
|
)
|
|
9,529
|
|
|
|
|
|
|
|
|
|
|
|
(1,798
|
)
|
||||||
Change in accounting principle (f)
|
|
|
|
|
|
|
496
|
|
|
(496
|
)
|
|
|
|
—
|
|
||||||||||
Balance at March 31, 2019
|
254,999
|
|
|
$
|
7,817,227
|
|
|
$
|
(39,665
|
)
|
|
$
|
3,367,810
|
|
|
$
|
(5,784
|
)
|
|
$
|
—
|
|
|
$
|
11,139,588
|
|
(a)
|
Net of tax benefit of
$(100)
.
|
(b)
|
Net of tax expense of
$18
for the three months ended March 31, 2018 and
$10
for the three months ended March 31, 2019.
|
(c)
|
Net of tax expense of
$30
for the three months ended March 31, 2018 and
$26
for the three months ended March 31, 2019.
|
(d)
|
Dividends were
$0.03
per share for both periods.
|
(e)
|
Distributions to noncontrolling interests were
$1.025
,
$0.244
, and
$0.2917
per common unit from EQM Midstream Partners, LP (EQM), EQGP Holdings, LP, and Rice Midstream Partners LP, respectively.
|
(f)
|
Related to adoption of ASU 2018-02. See Note
1
for additional information.
|
|
|
Three Months Ended
March 31, 2018 |
||
|
|
(Thousands)
|
||
Operating revenues
|
|
$
|
121,547
|
|
Transportation and processing
|
|
(226,517
|
)
|
|
Operation and maintenance
|
|
27,229
|
|
|
Selling, general and administrative
|
|
12,800
|
|
|
Depreciation
|
|
45,200
|
|
|
Transaction costs
|
|
25,633
|
|
|
Amortization of intangible assets
|
|
10,386
|
|
|
Other income
|
|
9,715
|
|
|
Interest expense
|
|
12,102
|
|
|
Income from discontinued operations before income taxes
|
|
224,429
|
|
|
Income tax expense
|
|
90,875
|
|
|
Income from discontinued operations after income taxes
|
|
133,554
|
|
|
Less: Net income from discontinued operations attributable to noncontrolling interests
|
|
141,015
|
|
|
Net (loss) from discontinued operations
|
|
$
|
(7,461
|
)
|
|
|
Three Months Ended
March 31, 2018 |
||
|
|
(Thousands)
|
||
Operating activities:
|
|
|
||
Deferred income tax expense
|
|
$
|
27,964
|
|
Depreciation
|
|
45,200
|
|
|
Amortization of intangibles
|
|
10,386
|
|
|
Other income
|
|
(9,715
|
)
|
|
Share-based compensation expense
|
|
$
|
707
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
(Thousands)
|
||||||
Revenues from contracts with customers:
|
|
|
|
|
||||
Natural gas sales
|
|
$
|
1,193,849
|
|
|
$
|
1,089,760
|
|
NGLs sales
|
|
69,604
|
|
|
125,468
|
|
||
Oil sales
|
|
8,160
|
|
|
11,146
|
|
||
Net marketing services and other
|
|
—
|
|
|
2,277
|
|
||
Total revenues from contracts with customers
|
|
$
|
1,271,613
|
|
|
$
|
1,228,651
|
|
|
|
|
|
|
||||
Other sources of revenue:
|
|
|
|
|
||||
Net marketing services and other
|
|
3,556
|
|
|
20,793
|
|
||
(Loss) gain on derivatives not designated as hedges
|
|
(131,996
|
)
|
|
62,592
|
|
||
Total operating revenues
|
|
$
|
1,143,173
|
|
|
$
|
1,312,036
|
|
|
2019
|
|
2020
|
|
2021
|
|
Total
|
||||||||
|
(Thousands)
|
||||||||||||||
Natural gas sales
|
$
|
28,032
|
|
|
$
|
28,582
|
|
|
$
|
2,315
|
|
|
$
|
58,929
|
|
|
|
Gross derivative instruments, recorded in the Condensed Consolidated Balance Sheets
|
|
Derivative instruments subject to master netting agreements
|
|
Margin deposits remitted to counterparties
|
|
Derivative instruments, net
|
||||||||
|
|
(Thousands)
|
||||||||||||||
As of March 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
Asset derivative instruments, at fair value
|
|
$
|
370,254
|
|
|
$
|
(200,252
|
)
|
|
$
|
—
|
|
|
$
|
170,002
|
|
Liability derivative instruments, at fair value
|
|
$
|
308,607
|
|
|
$
|
(200,252
|
)
|
|
$
|
(7,917
|
)
|
|
$
|
100,438
|
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Asset derivative instruments, at fair value
|
|
$
|
481,654
|
|
|
$
|
(256,087
|
)
|
|
$
|
—
|
|
|
$
|
225,567
|
|
Liability derivative instruments, at fair value
|
|
$
|
336,051
|
|
|
$
|
(256,087
|
)
|
|
$
|
(40,283
|
)
|
|
$
|
39,681
|
|
|
|
Gross derivative instruments, recorded in the Condensed Consolidated Balance Sheets
|
|
Fair value measurements at reporting date using
|
||||||||||||
|
|
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
|
Significant
other observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
|||||||||
|
|
(Thousands)
|
||||||||||||||
As of March 31, 2019
|
|
|
|
|
|
|
|
|
||||||||
Asset derivative instruments, at fair value
|
|
$
|
370,254
|
|
|
$
|
82,300
|
|
|
$
|
287,954
|
|
|
$
|
—
|
|
Liability derivative instruments, at fair value
|
|
$
|
308,607
|
|
|
$
|
45,697
|
|
|
$
|
262,910
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2018
|
|
|
|
|
|
|
|
|
||||||||
Asset derivative instruments, at fair value
|
|
$
|
481,654
|
|
|
$
|
112,107
|
|
|
$
|
369,547
|
|
|
$
|
—
|
|
Liability derivative instruments, at fair value
|
|
$
|
336,051
|
|
|
$
|
126,582
|
|
|
$
|
209,469
|
|
|
$
|
—
|
|
|
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 (loss), net of tax
|
||||||||
|
(Thousands)
|
||||||||||||||
As of January 1, 2019
|
$
|
—
|
|
|
$
|
(387
|
)
|
|
$
|
(5,019
|
)
|
|
$
|
(5,406
|
)
|
Losses reclassified from accumulated OCI, net of tax
|
—
|
|
|
42
|
|
(a)
|
76
|
|
(b)
|
118
|
|
||||
Change in accounting principle
|
—
|
|
|
—
|
|
|
(496
|
)
|
(c)
|
(496
|
)
|
||||
As of March 31, 2019
|
$
|
—
|
|
|
$
|
(345
|
)
|
|
$
|
(5,439
|
)
|
|
$
|
(5,784
|
)
|
|
|
|
|
|
|
|
|
||||||||
As of January 1, 2018
|
$
|
4,625
|
|
|
$
|
(555
|
)
|
|
$
|
(6,528
|
)
|
|
$
|
(2,458
|
)
|
(Gains) losses reclassified from accumulated OCI, net of tax
|
(287
|
)
|
(a)
|
44
|
|
(a)
|
86
|
|
(b)
|
(157
|
)
|
||||
As of March 31, 2018
|
$
|
4,338
|
|
|
$
|
(511
|
)
|
|
$
|
(6,442
|
)
|
|
$
|
(2,615
|
)
|
(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)
|
This accumulated OCI reclassification is attributable to the net actuarial loss and net prior service cost related to the Company’s defined benefit pension plans and other 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, 2018
for additional information.
|
(c)
|
Related to adoption of ASU 2018-02. See Note
1
for additional information.
|
|
|
Three Months Ended
March 31, 2019 |
||
|
|
(Thousands)
|
||
Operating lease costs
|
|
$
|
19,284
|
|
Variable lease costs
|
|
3,255
|
|
|
Total lease costs (a)
|
|
$
|
22,539
|
|
(a)
|
Includes
$18.6 million
capitalized to property, plant and equipment on the Condensed Consolidated Balance Sheet primarily for drilling rigs, of which
$16.8 million
relates to operating lease costs. Also includes short-term lease costs which were immaterial.
|
|
As of March 31, 2019
|
||
|
(Thousands)
|
||
2019 (April - December)
|
$
|
41,229
|
|
2020
|
8,418
|
|
|
2021
|
8,456
|
|
|
2022
|
8,437
|
|
|
2023
|
8,417
|
|
|
2024+
|
6,013
|
|
|
Total lease payments
|
80,970
|
|
|
Less: Interest
|
4,772
|
|
|
Present value of lease liabilities
|
$
|
76,198
|
|
|
Three Months Ended March 31,
|
|||||||||
|
2019
|
|
2018
|
|
%
|
|||||
|
(Thousands, unless noted)
|
|||||||||
NATURAL GAS
|
|
|
|
|
|
|
||||
Sales volume (MMcf)
|
363,717
|
|
|
329,404
|
|
|
10.4
|
|
||
NYMEX price ($/MMBtu) (a)
|
$
|
3.15
|
|
|
$
|
2.98
|
|
|
5.7
|
|
Btu uplift
|
0.15
|
|
|
0.20
|
|
|
(25.0
|
)
|
||
Natural gas price ($/Mcf)
|
$
|
3.30
|
|
|
$
|
3.18
|
|
|
3.8
|
|
|
|
|
|
|
|
|||||
Basis ($/Mcf) (b)
|
$
|
(0.02
|
)
|
|
$
|
0.13
|
|
|
(115.4
|
)
|
Cash settled basis swaps (not designated as hedges) ($/Mcf)
|
(0.12
|
)
|
|
(0.15
|
)
|
|
(20.0
|
)
|
||
Average differential, including cash settled basis swaps ($/Mcf)
|
$
|
(0.14
|
)
|
|
$
|
(0.02
|
)
|
|
600.0
|
|
|
|
|
|
|
|
|||||
Average adjusted price ($/Mcf)
|
$
|
3.16
|
|
|
$
|
3.16
|
|
|
—
|
|
Cash settled derivatives (not designated as hedges) ($/Mcf)
|
(0.06
|
)
|
|
0.04
|
|
|
(250.0
|
)
|
||
Average natural gas price, including cash settled derivatives ($/Mcf)
|
$
|
3.10
|
|
|
$
|
3.20
|
|
|
(3.1
|
)
|
|
|
|
|
|
|
|||||
Natural gas sales, including cash settled derivatives
|
$
|
1,129,201
|
|
|
$
|
1,055,065
|
|
|
7.0
|
|
|
|
|
|
|
|
|||||
LIQUIDS
|
|
|
|
|
|
|
||||
NGLs (excluding ethane):
|
|
|
|
|
|
|
||||
Sales volume (MMcfe) (c)
|
12,549
|
|
|
18,391
|
|
|
(31.8
|
)
|
||
Sales volume (Mbbls)
|
2,091
|
|
|
3,065
|
|
|
(31.8
|
)
|
||
Price ($/Bbl)
|
$
|
29.86
|
|
|
$
|
37.50
|
|
|
(20.4
|
)
|
Cash settled derivatives (not designated as hedges) ($/Bbl)
|
1.65
|
|
|
(1.21
|
)
|
|
(236.4
|
)
|
||
Average NGLs price, including cash settled derivatives ($/Bbl)
|
$
|
31.51
|
|
|
$
|
36.29
|
|
|
(13.2
|
)
|
NGLs sales
|
$
|
65,903
|
|
|
$
|
111,236
|
|
|
(40.8
|
)
|
Ethane:
|
|
|
|
|
|
|||||
Sales volume (MMcfe) (c)
|
5,938
|
|
|
7,997
|
|
|
(25.7
|
)
|
||
Sales volume (Mbbls)
|
990
|
|
|
1,333
|
|
|
(25.7
|
)
|
||
Price ($/Bbl)
|
$
|
7.23
|
|
|
$
|
7.90
|
|
|
(8.5
|
)
|
Ethane sales
|
$
|
7,152
|
|
|
$
|
10,532
|
|
|
(32.1
|
)
|
Oil:
|
|
|
|
|
|
|
||||
Sales volume (MMcfe) (c)
|
1,266
|
|
|
1,213
|
|
|
4.4
|
|
||
Sales volume (Mbbls)
|
211
|
|
|
202
|
|
|
4.5
|
|
||
Price ($/Bbl)
|
$
|
38.67
|
|
|
$
|
55.15
|
|
|
(29.9
|
)
|
Oil sales
|
$
|
8,160
|
|
|
$
|
11,146
|
|
|
(26.8
|
)
|
|
|
|
|
|
|
|||||
Total liquids sales volume (MMcfe) (c)
|
19,753
|
|
|
27,601
|
|
|
(28.4
|
)
|
||
Total liquids sales volume (Mbbls)
|
3,292
|
|
|
4,600
|
|
|
(28.4
|
)
|
||
|
|
|
|
|
|
|||||
Liquids sales
|
$
|
81,215
|
|
|
$
|
132,914
|
|
|
(38.9
|
)
|
|
|
|
|
|
|
|||||
TOTAL PRODUCTION
|
|
|
|
|
|
|||||
Total natural gas & liquids sales, including cash settled derivatives (d)
|
$
|
1,210,416
|
|
|
$
|
1,187,979
|
|
|
1.9
|
|
Total sales volume (MMcfe)
|
383,470
|
|
|
357,005
|
|
|
7.4
|
|
||
Average realized price ($/Mcfe)
|
$
|
3.16
|
|
|
$
|
3.33
|
|
|
(5.1
|
)
|
(a)
|
The Company’s volume weighted New York Mercantile Exchange (NYMEX) natural gas price (actual average NYMEX natural gas price ($/MMBtu)) was
$3.15
and
$3.00
for the
three months ended March 31, 2019
and
2018
, 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 adjusted operating revenues, a non-GAAP supplemental financial measure.
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Thousands, unless noted)
|
||||||
Total operating revenues
|
$
|
1,143,173
|
|
|
$
|
1,312,036
|
|
Add back (deduct):
|
|
|
|
||||
Loss (gain) on derivatives not designated as hedges
|
131,996
|
|
|
(62,592
|
)
|
||
Net cash settlements paid on derivatives not designated as hedges
|
(63,634
|
)
|
|
(38,629
|
)
|
||
Premiums received for derivatives that settled during the period
|
2,437
|
|
|
234
|
|
||
Net marketing services and other
|
(3,556
|
)
|
|
(23,070
|
)
|
||
Adjusted operating revenues, a non-GAAP financial measure
|
$
|
1,210,416
|
|
|
$
|
1,187,979
|
|
Total sales volumes (MMcfe)
|
383,470
|
|
|
357,005
|
|
||
Average realized price ($/Mcfe)
|
$
|
3.16
|
|
|
$
|
3.33
|
|
|
Three Months Ended March 31,
|
|||||||||
|
2019
|
|
2018
|
|
%
|
|||||
Sales volume detail (MMcfe):
|
|
|
|
|
|
|
|
|
||
Marcellus (a)
|
327,085
|
|
|
288,773
|
|
|
13.3
|
|
||
Ohio Utica
|
54,625
|
|
|
47,510
|
|
|
15.0
|
|
||
Other
|
1,760
|
|
|
20,722
|
|
|
(91.5
|
)
|
||
Total sales volumes (b)
|
383,470
|
|
|
357,005
|
|
|
7.4
|
|
||
|
|
|
|
|
|
|||||
Average daily sales volumes (MMcfe/d)
|
4,261
|
|
|
3,967
|
|
|
7.4
|
|
||
|
|
|
|
|
|
|||||
Operating revenues (thousands):
|
|
|
|
|
|
|||||
Sales of natural gas, oil and NGLs
|
$
|
1,271,613
|
|
|
$
|
1,226,374
|
|
|
3.7
|
|
(Loss) gain on derivatives not designated as hedges
|
(131,996
|
)
|
|
62,592
|
|
|
(310.9
|
)
|
||
Net marketing services and other
|
3,556
|
|
|
23,070
|
|
|
(84.6
|
)
|
||
Total operating revenues
|
$
|
1,143,173
|
|
|
$
|
1,312,036
|
|
|
(12.9
|
)
|
(a)
|
Includes Upper Devonian wells.
|
(b)
|
NGLs, ethane and crude oil were converted to Mcfe at the rate of six Mcfe per barrel for all periods.
|
|
Three Months Ended March 31,
|
|||||||||
|
2019
|
|
2018
|
|
%
|
|||||
|
(Thousands, except per unit)
|
|||||||||
Per Unit ($/Mcfe)
|
|
|
|
|
|
|||||
Gathering
|
$
|
0.56
|
|
|
$
|
0.54
|
|
|
3.7
|
|
Transmission
|
0.50
|
|
|
0.50
|
|
|
—
|
|
||
Processing
|
0.08
|
|
|
0.13
|
|
|
(38.5
|
)
|
||
Lease operating expenses (LOE), excluding production taxes
|
0.06
|
|
|
0.10
|
|
|
(40.0
|
)
|
||
Production taxes
|
0.05
|
|
|
0.07
|
|
|
(28.6
|
)
|
||
Exploration
|
—
|
|
|
—
|
|
|
—
|
|
||
Selling, general and administrative
|
0.13
|
|
|
0.11
|
|
|
18.2
|
|
||
Production depletion
|
$
|
1.01
|
|
|
$
|
1.07
|
|
|
(5.6
|
)
|
|
|
|
|
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||
Gathering
|
$
|
214,601
|
|
|
$
|
193,618
|
|
|
10.8
|
|
Transmission
|
192,306
|
|
|
178,016
|
|
|
8.0
|
|
||
Processing
|
32,339
|
|
|
45,023
|
|
|
(28.2
|
)
|
||
LOE, excluding production taxes
|
23,072
|
|
|
34,132
|
|
|
(32.4
|
)
|
||
Production taxes
|
20,336
|
|
|
24,502
|
|
|
(17.0
|
)
|
||
Exploration
|
1,007
|
|
|
1,225
|
|
|
(17.8
|
)
|
||
Selling, general and administrative
|
$
|
48,978
|
|
|
$
|
39,815
|
|
|
23.0
|
|
|
|
|
|
|
|
|||||
Depreciation and depletion:
|
|
|
|
|
|
|||||
Production depletion
|
$
|
387,414
|
|
|
$
|
380,525
|
|
|
1.8
|
|
Other depreciation and depletion
|
3,699
|
|
|
12,168
|
|
|
(69.6
|
)
|
||
Total depreciation and depletion
|
$
|
391,113
|
|
|
$
|
392,693
|
|
|
(0.4
|
)
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
|
(Millions)
|
||||||
Reserve development
|
$
|
401
|
|
|
$
|
490
|
|
Land and lease
|
45
|
|
|
60
|
|
||
Capitalized overhead
|
17
|
|
|
29
|
|
||
Capitalized interest
|
7
|
|
|
7
|
|
||
Other production infrastructure
|
6
|
|
|
10
|
|
||
Property acquisitions
|
—
|
|
|
14
|
|
||
Other corporate items
|
—
|
|
|
—
|
|
||
Total capital expenditures from continuing operations
|
$
|
476
|
|
|
$
|
610
|
|
Midstream infrastructure (a)
|
—
|
|
|
171
|
|
||
Total capital expenditures
|
$
|
476
|
|
|
$
|
781
|
|
Add (deduct) non-cash items (b)
|
(105
|
)
|
|
(52
|
)
|
||
Total cash capital expenditures
|
$
|
371
|
|
|
$
|
729
|
|
(a)
|
Capital expenditures related to midstream infrastructure are presented as discontinued operations as described in Note
2
to the Condensed Consolidated Financial Statements.
|
(b)
|
Represents the net impact of non-cash capital expenditures including capitalized share-based compensation costs as well as the impact of timing of receivables from working interest partners and accrued capital expenditures.
|
Rating Service
|
|
Senior Notes
|
|
Outlook
|
Moody’s
|
|
Baa3
|
|
Stable
|
S&P
|
|
BBB-
|
|
Stable
|
Fitch Ratings Service (Fitch)
|
|
BBB-
|
|
Stable
|
|
|
2019 (a)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||
Swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Volume (MMDth)
|
|
591
|
|
|
553
|
|
|
306
|
|
|
136
|
|
|
61
|
|
|||||
Average Price($/Dth)
|
|
$
|
2.91
|
|
|
$
|
2.82
|
|
|
$
|
2.78
|
|
|
$
|
2.75
|
|
|
$
|
2.74
|
|
Calls - Net Short
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Volume (MMDth)
|
|
261
|
|
|
187
|
|
|
37
|
|
|
22
|
|
|
7
|
|
|||||
Average Short Strike Price ($/Dth)
|
|
$
|
3.11
|
|
|
$
|
3.15
|
|
|
$
|
3.25
|
|
|
$
|
3.20
|
|
|
$
|
3.18
|
|
Puts - Net (Short) Long
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Volume (MMDth)
|
|
(36
|
)
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|||||
Average Long Strike Price ($/Dth)
|
|
$
|
2.97
|
|
|
$
|
—
|
|
|
$
|
2.71
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Fixed Price Sales (b)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Volume (MMDth)
|
|
59
|
|
|
12
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|||||
Average Price ($/Dth)
|
|
$
|
2.83
|
|
|
$
|
2.77
|
|
|
$
|
2.77
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
April 1 through December 31.
|
(b)
|
The difference between the fixed price and NYMEX are included in average differential on the Company’s price reconciliation under "Consolidated Results of Operations." The fixed price natural gas sales agreements can be physically or financially settled.
|
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
|
||||||
January 1 – January 31, 2019
|
|
3,621
|
|
|
$
|
20.19
|
|
|
—
|
|
|
$
|
—
|
|
February 1 – February 28, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
March 1 – March 31, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
|
3,621
|
|
|
$
|
20.19
|
|
|
—
|
|
|
—
|
|
(a)
|
Reflects the number of shares withheld by the Company to pay taxes upon vesting of restricted stock.
|
Exhibit No.
|
|
Document Description
|
|
Method of Filing
|
|
|
|
Offer Letter, dated March 4, 2019, by and between the Company and Gary E. Gould.
|
|
Incorporated by reference to Exhibit 10.1 to Form 8-K (#001-3551) filed on March 7, 2019.
|
|
|
|
Confidentiality, Non-Solicitation and Non-Competition Agreement, dated as of March 6, 2019, between the Company and Gary E. Gould.
|
|
Filed herewith as Exhibit 10.02
|
|
|
|
Rule 13(a)-14(a) Certification of Principal Executive Officer
|
|
Filed herewith as Exhibit 31.01
|
|
|
|
Rule 13(a)-14(a) Certification of Principal Financial Officer
|
|
Filed herewith as Exhibit 31.02
|
|
|
|
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
|
|
|
EQT CORPORATION
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Jimmi Sue Smith
|
|
|
|
Jimmi Sue Smith
|
|
|
|
Senior Vice President and Chief Financial Officer
|
By:
/s/ David J. Smith
|
/s/ Gary E. Gould
|
Name: David J. Smith
|
GARY E. GOULD
|
o
|
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.
|
EQT CORPORATION
By:
_____________________________
__________________________________
Title
__________________________________
Date
|
|
EMPLOYEE
_________________________________
Name: GARY E. GOULD
_________________________________
Date
|
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:
|
April 25, 2019
|
|
|
|
/s/ Robert J. McNally
|
|
|
Robert J. McNally
|
|
|
President and Chief Executive Officer
|
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:
|
Date:
|
April 25, 2019
|
|
|
|
|
|
|
/s/ Jimmi Sue Smith
|
|
|
Jimmi Sue Smith
|
|
|
Senior Vice President and Chief Financial Officer
|
(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/ Robert J. McNally
|
April 25, 2019
|
|
Robert J. McNally
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
|
/s/ Jimmi Sue Smith
|
April 25, 2019
|
|
Jimmi Sue Smith
|
|
|
Senior Vice President and Chief Financial Officer
|
|