EQT CORPORATION (Exact Name of Registrant As Specified in Its Charter)
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or 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) Registrant's telephone number, including area code: (412) 553-5700 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock, no par value EQT New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ 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 ☒ 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 ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The aggregate market value of common stock held by non-affiliates of the registrant as of June 30, 2019: $4.0 billion The number of shares (in thousands) of common stock outstanding as of February 18, 2020: 255,454 DOCUMENTS INCORPORATED BY REFERENCE The Company's definitive proxy statement relating to the 2020 annual meeting of shareholders will be filed with the Securities and Exchange Commission within 120 days after the close of the Company's fiscal year ended December 31, 2019 and is incorporated by reference in Part III to the extent described therein. Table of Contents Table of Contents Page No. Glossary of Commonly Used Terms, Abbreviations and Measurements 3 Cautionary Statements 6 PART I Item 1. Business 7 Item 1A. Risk Factors 20 Item 1B. Unresolved Staff Comments 36 Item 2. Properties 37 Item 3. Legal Proceedings 37 Item 4. Mine Safety Disclosures 38 Executive Officers of the Registrant 39 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 40 Item 6. Selected Financial Data 42 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 43 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 56 Item 8. Financial Statements and Supplementary Data 58 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 106 Item 9A. Controls and Procedures 106 Item 9B. Other Information 107 PART III Item 10. Directors, Executive Officers and Corporate Governance 108 Item 11. Executive Compensation 108 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 108 Item 13. Certain Relationships and Related Transactions, and Director Independence 110 Item 14. Principal Accounting Fees and Services 110 PART IV Item 15. Exhibits and Financial Statement Schedules 112 Item 16. Form 10-K Summary 119 Signatures 120 2 Table of Contents Glossary of Commonly Used Terms, Abbreviations and Measurements Commonly Used Terms Appalachian Basin – the area of the United States composed of those portions of West Virginia, Pennsylvania, Ohio, Maryland, Kentucky and Virginia that lie in the Appalachian Mountains. basis – when referring to commodity pricing, the difference between the futures price for a commodity and the corresponding sales price at various regional sales points. The differential commonly is related to factors such as product quality, location, transportation capacity availability and contract pricing. British thermal unit – a measure of the amount of energy required to raise the temperature of one pound of water by one degree Fahrenheit. collar – a financial arrangement that effectively establishes a price range for the underlying commodity. The producer bears the risk and benefit of fluctuation between the minimum (floor) price and the maximum (ceiling) price. continuous accumulations – natural gas and oil resources that are pervasive throughout large areas, have ill-defined boundaries and typically lack, or are unaffected by, hydrocarbon-water contacts near the base of the accumulation. development well – a well drilled within the proved area of an oil or gas reservoir to the depth of a stratigraphic horizon known to be productive. exploratory well – a well drilled to find a new field or new reservoir in a field previously found to be productive of oil or gas in another reservoir. Generally, an exploratory well is any well that is not a development well, an extension well, a service well or a stratigraphic test well. extension well – a well drilled to extend the limits of a known reservoir. gas – all references to "gas" in this report refer to natural gas. gross – "gross" natural gas and oil wells or "gross" acres equal the total number of wells or acres in which the Company has a working interest. hedging – the use of derivative commodity and interest rate instruments to reduce financial exposure to commodity price and interest rate volatility. horizontal drilling – drilling that ultimately is horizontal or near horizontal to increase the length of the well bore penetrating the target formation. horizontal wells – wells that are drilled horizontal or near horizontal to increase the length of the well bore penetrating the target formation. natural gas liquids (NGLs) – those hydrocarbons in natural gas that are separated from the gas as liquids through the process of absorption, condensation or other methods in gas processing plants. Natural gas liquids include primarily ethane, propane, butane and isobutane. net – "net" natural gas and oil wells or "net" acres are determined by adding the fractional ownership working interests the Company has in gross wells or acres. net revenue interest – the interest retained by the Company in the revenues from a well or property after giving effect to all third-party interests (equal to 100% minus all royalties on a well or property). option – a contract that gives the buyer the right, but not the obligation, to buy or sell a specified quantity of a commodity or other instrument at a specific price within a specified period of time. play – a proven geological formation that contains commercial amounts of hydrocarbons. 3 Table of Contents productive well – a well that is producing oil or gas or that is capable of production. proved reserves – quantities of natural gas, NGLs and oil, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs and under existing economic conditions, operating methods and government regulations, prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. proved developed reserves – proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. proved undeveloped reserves (PUDs) – proved reserves that can be estimated with reasonable certainty to be recovered from new wells on undrilled proved acreage or from existing wells where a relatively major expenditure is required for completion. reservoir – a porous and permeable underground formation containing a natural accumulation of producible natural gas and/or oil that is confined by impermeable rock or water barriers and is separate from other reservoirs. service well – a well drilled or completed for the purpose of supporting production in an existing field. Specific purposes of service wells include, among other things, gas injection, water injection and salt-water disposal. stratigraphic test well – a hole drilled for the sole purpose of gaining structural or stratigraphic information to aid in exploring for oil and gas. well pad – an area of land that has been cleared and leveled to enable a drilling rig to operate in the exploration and development of a natural gas or oil well. working interest – an interest that gives the owner the right to drill, produce and conduct operating activities on a property and receive a share of any production. Abbreviations CFTC – Commodity Futures Trading Commission EPA – U.S. Environmental Protection Agency FERC – Federal Energy Regulatory Commission GAAP – U.S.