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Debt | 12 Months Ended
--- | ---
Dec. 31, 2023
Debt Disclosure [Abstract] |
Debt | Debt The table below summarizes the Company's outstanding debt.
| December 31, 2023 |  | December 31, 2022
| Principal Value |  | Carrying Value (a) |  | Fair Value (b) |  | Principal Value |  | Carrying Value (a) |  | Fair Value (b)
| (Thousands)
Term Loan Facility due June 30, 2025 (b) (c) (d) | $ | 1,250,000 |  |  | $ | 1,244,265 |  |  | $ | 1,244,265 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Senior notes: |  |  |  |  |  |  |  |  |  |  |
7.42% series B notes due 2023 | — |  |  | — |  |  | — |  |  | 10,000 |  |  | 10,000 |  |  | 10,110 |
6.125% notes due February 1, 2025 (d) | 601,521 |  |  | 600,389 |  |  | 605,082 |  |  | 911,467 |  |  | 908,168 |  |  | 915,833 |
5.678% notes due October 1, 2025 | — |  |  | — |  |  | — |  |  | 500,000 |  |  | 496,578 |  |  | 500,370 |
1.75% convertible notes due May 1, 2026 | 290,177 |  |  | 286,185 |  |  | 768,554 |  |  | 414,832 |  |  | 406,796 |  |  | 967,728 |
3.125% notes due May 15, 2026 | 392,915 |  |  | 389,978 |  |  | 373,261 |  |  | 440,857 |  |  | 436,198 |  |  | 408,454 |
7.75% debentures due July 15, 2026 | 115,000 |  |  | 113,716 |  |  | 121,590 |  |  | 115,000 |  |  | 113,218 |  |  | 124,874 |
3.90% notes due October 1, 2027 | 1,169,503 |  |  | 1,165,439 |  |  | 1,121,027 |  |  | 1,233,008 |  |  | 1,227,582 |  |  | 1,152,875 |
5.700% notes due April 1, 2028 | 500,000 |  |  | 490,376 |  |  | 509,280 |  |  | 500,000 |  |  | 493,941 |  |  | 505,325 |
5.00% notes due January 15, 2029 | 318,494 |  |  | 315,121 |  |  | 316,784 |  |  | 327,101 |  |  | 322,956 |  |  | 313,173 |
7.000% notes due February 1, 2030 (d) | 674,800 |  |  | 671,020 |  |  | 726,645 |  |  | 714,800 |  |  | 710,138 |  |  | 752,670 |
3.625% notes due May 15, 2031 | 435,165 |  |  | 430,141 |  |  | 389,925 |  |  | 465,165 |  |  | 459,070 |  |  | 406,205 |
Note payable to EQM | 88,483 |  |  | 88,483 |  |  | 91,063 |  |  | 94,320 |  |  | 94,320 |  |  | 95,667 |
Total debt | 5,836,058 |  |  | 5,795,113 |  |  | 6,267,476 |  |  | 5,726,550 |  |  | 5,678,965 |  |  | 6,153,284 |
Less: Current portion of debt (e) | 296,424 |  |  | 292,432 |  |  | 774,983 |  |  | 430,668 |  |  | 422,632 |  |  | 983,758 |
Long-term debt | $ | 5,539,634 |  |  | $ | 5,502,681 |  |  | $ | 5,492,493 |  |  | $ | 5,295,882 |  |  | $ | 5,256,333 |  |  | $ | 5,169,526 |
(a)For the Company's note payable to EQM, the principal value represents the carrying value. For all other debt, the principal value less the unamortized debt issuance costs and debt discounts represents the carrying value. (b)The carrying value of borrowings under the Term Loan Facility approximates fair value as its interest rate is based on prevailing market rates; therefore, the Company considers the fair value of the Term Loan Facility to be a Level 1 fair value measurement. The Company measures the fair value of its note payable to EQM using Level 3 inputs. For all other debt, fair value is measured using Level 2 inputs. See Note 4 for a description of the fair value hierarchy. (c)In January 2024, the Company amended the Term Loan Facility to, among other things, extend the maturity date from June 30, 2025 to June 30, 2026. See below for further discussion of such amendment. (d)Interest rates for the Term Loan Facility, the Company's senior notes due February 1, 2025 and the Company's senior notes due February 1, 2030 fluctuate based on changes to the credit ratings assigned to the Company's senior notes by Moody's, S&P and Fitch. Interest rates for the Company's other outstanding debt do not fluctuate. (e)As of December 31, 2023, the current portion of debt included the 1.75% convertible notes and a portion of the note payable to EQM. As of December 31, 2022, the current portion of debt included the 7.42% series B notes, the 1.75% convertible notes and a portion of the note payable to EQM. Debt Repayments. The table below summarizes the Company's redemptions or repurchases of debt during the year ended December 31, 2023.
Debt Tranche |  | Principal |  | Premiums/(Discounts) (a) |  | Accrued but Unpaid Interest |  | Total Cost
|  | (Thousands)
6.125% notes due February 1, 2025 |  | $ | 309,946 |  |  | $ | 1,832 |  |  | $ | 6,801 |  |  | $ | 318,579 |
5.678% notes due October 1, 2025 |  | 500,000 |  |  | — |  |  | 6,940 |  |  | 506,940 |
3.125% notes due May 15, 2026 |  | 47,942 |  |  | (3,042) |  |  | 296 |  |  | 45,196 |
3.90% notes due October 1, 2027 |  | 63,505 |  |  | (3,534) |  |  | 781 |  |  | 60,752 |
5.00% notes due January 15, 2029 |  | 8,607 |  |  | (309) |  |  | 137 |  |  | 8,435 |
7.000% notes due February 1, 2030 |  | 40,000 |  |  | 2,736 |  |  | 1,313 |  |  | 44,049 |
3.625% notes due May 15, 2031 |  | 30,000 |  |  | (4,011) |  |  | 167 |  |  | 26,156 |
Total |  | $ | 1,000,000 |  |  | $ | (6,328) |  |  | $ | 16,435 |  |  | $ | 1,010,107 |
(a)Includes third-party costs and fees paid to dealer managers and brokers. Revolving Credit Facility. The Company has a $2.5 billion revolving credit facility that expires on June 28, 2027. On June 28, 2022, the Company entered into the Third Amended and Restated Credit Agreement (the Third Amendment) with the lenders party thereto and PNC Bank, National Association, as administrative agent, swing line lender and L/C issuer, amending and restating the Second Amended and Restated Credit Agreement, dated as of July 31, 2017 (the Credit Agreement). The Third Amendment, among other things, (i) extends the maturity date of the commitments and loans under the Credit Agreement to June 28, 2027 and provides, at the Company's option, two one-year extensions thereafter, subject to the approval of the lenders, (ii) allows for commitment increases of up to $500 million, subject to the agreement of the Company and new or existing lenders and (iii) allows for Base Rate Loans, Term SOFR Rate Loans, Daily Simple SOFR Loans and Swing Line Loans (each defined in the Third Amendment). Base Rate Loans bear interest at a Base Rate (as defined in the Third Amendment) plus a margin based on the Company's then current credit ratings. The Company's revolving credit facility may be used for working capital, capital expenditures, share repurchases and any other lawful corporate purposes. The Company's revolving credit facility is underwritten by a syndicate of a large group of financial institutions, each of which is obligated to fund its pro-rata portion of any borrowings by the Company. No one lender of the large group of financial institutions in the syndicate for the Company's revolving credit facility holds more than 10% of the financial commitments under such facility. The large syndicate group and relatively low percentage of participation by each lender are expected to limit the Company's exposure to disruption or consolidation in the banking industry. The Company is not required to maintain compensating bank balances. The Company's debt issuer credit ratings, as determined by Moody's, S&P or Fitch on its non-credit-enhanced, senior unsecured long-term debt, determine the level of fees associated with the Company's revolving credit facility in addition to the interest rate charged by the lenders on any amounts borrowed against the Company's revolving credit facility; the lower the Company's debt credit rating, the higher the level of fees and borrowing rate. The Company's revolving credit facility contains various provisions that, if not complied with, could result in termination of the Company's revolving credit facility, require early payment of amounts outstanding or similar actions. The most significant covenants and events of default under the Company's revolving credit facility are the maintenance of a debt-to-total capitalization ratio and limitations on transactions with affiliates. The Company's revolving credit facility contains financial covenants that require a total debt-to-total capitalization ratio of no greater than 65%. As of December 31, 2023, the Company was in compliance with all debt provisions and covenants. As of December 31, 2023 and 2022, the Company had approximately $15 million and $25 million, respectively, of letters of credit outstanding under its revolving credit facility Under the Company's revolving credit facility, for the years ended December 31, 2023, 2022 and 2021, the maximum amount of outstanding borrowings was $269 million, $1.3 billion and $1.7 billion, respectively, the average daily balance was approximately $40 million, $466 million and $609 million, respectively, and interest was incurred at a weighted average annual interest rate of 6.9%, 2.8% and 1.9%, respectively. For the years ended December 31, 2023, 2022 and 2021, the Company incurred commitment fees of approximately 20, 20 and 28 basis points, respectively, on the undrawn portion of its revolving credit facility to maintain credit availability. Term Loan Facility. On November 9, 2022, the Company entered into a Credit Agreement (as amended, the Term Loan Agreement) with PNC Bank, National Association, as administrative agent, and the other lenders party thereto, under which such lenders agreed to make to the Company unsecured term loans in a single draw in an aggregate principal amount of up to $1.25 billion (the Term Loan Facility) to partly fund the Tug Hill and XcL Midstream Acquisition. On August 21, 2023, the Company borrowed $1.25 billion under the Term Loan Facility, receiving proceeds, net of $7.1 million of debt issuance costs, of $1,242.9 million. Prior to its draw on the Term Loan Facility, the Company incurred commitment fees of approximately 20 basis points on the undrawn portion of the Term Loan Facility to maintain credit availability. At the Company's election, the term loans outstanding under the Term Loan Facility bear interest at a Term SOFR Rate plus the SOFR Adjustment or Base Rate (all terms defined in the Term Loan Agreement), each plus a margin based on the Company's credit ratings. The Company may voluntarily prepay, in whole or in part, borrowings under the Term Loan Facility without premium or penalty but subject to reimbursement of funding losses with respect to prepayment of loans that bear interest based on the Term SOFR Rate. Borrowings under the Term Loan Facility that are repaid may not be re-borrowed. During the period from August 21, 2023 through December 31, 2023, under the Term Loan Facility, interest was incurred at a weighted average annual interest rate of 6.9%. The Term Loan Agreement contains certain representations and warranties and various affirmative and negative covenants and events of default, including (i) a restriction on the ability of the Company and certain of its subsidiaries to incur or permit liens on assets, subject to certain significant exceptions, (ii) a restriction on the ability of certain of the Company's subsidiaries to incur debt, subject to certain significant exceptions, (iii) the establishment of a maximum consolidated debt-to-total capital ratio of the Company and its subsidiaries of 65%, (iv) a limitation on certain changes to the Company's business and (v) certain restrictions related to mergers and sales of all or substantially all of the Company's assets. On January 16, 2024, the Company entered into a third amendment to the Term Loan Agreement to, among other things, extend the maturity date of the Term Loan Agreement from June 30, 2025 to June 30, 2026. The third amendment to the Term Loan Agreement became effective on January 19, 2024 upon the Company's prepayment of $750 million principal amount of the term loans outstanding under the Term Loan Facility, as funded by the proceeds from the Company's 5.750% senior notes issuance and cash on hand. Senior Notes. The indentures governing the Company's long-term indebtedness contain certain restrictive financial and operating covenants, including covenants that restrict, among other things, the Company's ability to incur, as applicable, indebtedness, incur liens, enter into sale and leaseback transactions, complete acquisitions, merge, sell assets and perform certain other corporate actions. Certain of the Company's senior notes also include an offer to repurchase provision applicable upon the occurrence of certain change of control events specified in the applicable indentures. Interest rates for the Company's senior notes due February 1, 2025 and senior notes due February 1, 2030 fluctuate based on changes to the credit ratings assigned to the Company's senior notes by Moody's, S&P and Fitch. Interest rates for the Company's other outstanding senior notes do not fluctuate. As of December 31, 2023, aggregate maturities for the Company's senior notes were zero in 2024, $602 million in 2025, $798 million in 2026, $1,170 million in 2027, $500 million in 2028 and $1,428 million thereafter. 5.700% Senior Notes. On October 4, 2022, the Company issued $500 million aggregate principal amount of 5.700% senior notes to partly fund the Tug Hill and XcL Midstream Acquisition. On May 10, 2023, following the receipt of the requisite consents of holders of a majority of the aggregate principal amount of the Company's 5.700% senior notes, the Company amended the mandatory redemption provision of the indenture governing the Company's outstanding 5.700% senior notes. Under the terms set forth in the consent solicitation statement, the Company paid consent fees of $5.3 million in the aggregate to holders of outstanding 5.700% senior notes who delivered valid consents. 5.750% Senior Notes. On January 19, 2024, the Company issued $750 million aggregate principal amount of 5.750% senior notes due February 1, 2034. The Company used the proceeds, net of $8.2 million of debt issuance costs and underwriters' discount, of $741.8 million to prepay a portion of the term loans outstanding under the Term Loan Facility. Note Payable to EQM. EQM owns a preferred interest in EQT Energy Supply, LLC, a subsidiary of the Company, that is accounted for as a note payable due to the terms of the operating agreement of EQT Energy Supply, LLC. Principal amounts due for the note payable to EQM are $6.2 million in 2024, $6.5 million in 2025, $6.9 million in 2026, $7.3 million in 2027, $7.8 million in 2028 and $53.8 million thereafter. Surety Bonds. As of December 31, 2022, the Company had approximately $180 million of surety bonds outstanding, which were issued pursuant to contractual requirements as a result of the Company's then-assigned credit ratings by Moody's, S&P and Fitch. The Company had no surety bonds outstanding as of December 31, 2023. Convertible Notes. In April 2020, the Company issued $500 million aggregate principal amount of 1.75% convertible senior notes (the Convertible Notes). On January 2, 2024, in accordance with the indenture governing the Convertible Notes (the Convertible Notes Indenture), the Company issued an irrevocable notice of redemption (the Redemption Notice) for all of the outstanding Convertible Notes and announced that it would redeem any of the Convertible Notes outstanding on January 17, 2024 in cash for 100% of the principal amount, plus accrued and unpaid interest on such Convertible Notes to, but excluding, such redemption date (the Redemption Price). Pursuant to the Convertible Notes Indenture and Redemption Notice, in lieu of surrendering their Convertible Notes for redemption, certain holders of the Convertible Notes exercised their right to convert their Convertible Notes prior to the conversion deadline of 5:00 p.m., New York City time, on January 12, 2024 (the Conversion Deadline). Between January 2, 2024 and the Conversion Deadline, Convertible Notes with an aggregate principal amount of $289.6 million were validly surrendered for conversion and 19,992,482 shares of EQT Corporation common stock were issued to the holders of such Convertible Notes. The remaining $0.6 million in outstanding principal amount of Convertible Notes was redeemed (the Redemption) on January 17, 2024 in cash for the Redemption Price. Prior to the Redemption, holders of the Convertible Notes had the right to convert their Convertible Notes at their option under the following circumstances: •during any quarter as long as the last reported price of EQT Corporation common stock for at least 20 trading days (consecutive or otherwise) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding quarter is greater than or equal to 130% of the conversion price on each such trading day (the Sale Price Condition); •during the five-business-day period after any five-consecutive-trading-day period (the measurement period) in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period is less than 98% of the product of the last reported price of EQT Corporation common stock and the conversion rate for the Convertible Notes on each such trading day; •if the Company calls any or all of the Convertible Notes for redemption at any time prior to the close of business on the second scheduled trading day immediately preceding such redemption date; and •upon the occurrence of certain corporate events set forth in the Convertible Notes Indenture. As a result of the Sale Price Condition for conversion of the Convertible Notes being satisfied as of December 31, 2023 and the delivery of the Redemption Notice, holders of the Convertible Notes were permitted to convert their Convertible Notes at their option during the period of January 1, 2024 through the Conversion Deadline, subject to the terms and conditions set forth in the Convertible Notes Indenture and Redemption Notice. In addition, the Sale Price Condition for conversion of the Convertible Notes was satisfied as of December 31, 2022, and, accordingly, holders of the Convertible Notes were permitted to convert their Convertible Notes at their option at any time during the first quarter of 2023, subject to the terms and conditions set forth in the Convertible Notes Indenture. Therefore, as of December 31, 2023 and 2022, the net carrying value of the Convertible Notes was included in current portion of debt in the Consolidated Balance Sheets. The table below summarizes adjustments made to the conversion rate for the Convertible Notes as a result of cash dividends paid by the Company on EQT Corporation common stock during 2023.
Dividend Paid |  | Effective Date of Adjustment to Conversion Rate |  | Conversion Shares of EQT Corporation Common Stock per $1,000 Principal Amount
First Quarter of 2023 |  | February 17, 2023 |  | 68.0740
Second Quarter of 2023 |  | May 9, 2023 |  | 68.3917
Third Quarter of 2023 |  | August 8, 2023 |  | 68.6360
Fourth Quarter of 2023 |  | November 7, 2023 |  | 68.8912
In addition, as a result of the delivery of the Redemption Notice, during the period of January 2, 2024 through the Conversion Deadline, the conversion rate was further adjusted to 69.0364 shares of EQT Corporation common stock per $1,000 principal amount of Convertible Notes. The table below summarizes settlements of Convertible Notes conversion right exercises for the year ended December 31, 2023 and the period from January 1, 2024 through the Conversion Deadline. The Company settled all such conversions in shares of EQT Corporation common stock. Convertible Notes conversion right exercises are accrued in the period received.
Settlement Month |  | Principal Converted |  | Shares Issued |  | Average Conversion Price
|  | (Thousands) |  |  |  |
January 2023 |  | $ | 7 |  |  | 473 |  |  | $ | 33.70 |
February 2023 |  | 8 |  |  | 541 |  |  | 30.77 |
March 2023 |  | 6 |  |  | 408 |  |  | 31.46 |
April 2023 |  | 58 |  |  | 3,948 |  |  | 32.01 |
June 2023 |  | 4 |  |  | 272 |  |  | 39.06 |
July 2023 |  | 10 |  |  | 682 |  |  | 40.92 |
September 2023 |  | 6 |  |  | 411 |  |  | 42.35 |
October 2023 |  | 8 |  |  | 547 |  |  | 40.52 |
November 2023 |  | 111,650 |  |  | 7,668,374 |  |  | 43.16 |
December 2023 |  | 12,264 |  |  | 844,878 |  |  | 38.04 |
January 2024 (a) |  | 290,235 |  |  | 20,036,639 |  |  | 38.03 |
(a)Includes settlements of Convertible Notes conversion right exercises that were exercised in December 2023 but settled in January 2024. The table below summarizes the components of interest expense related to the Convertible Notes. The effective interest rate for the Convertible Notes is 2.4%.
| Years Ended December 31,
| 2023 |  | 2022 |  | 2021
| (Thousands)
Contractual interest expense | $ | 6,947 |  |  | $ | 8,006 |  |  | $ | 8,750 |
Amortization of issuance costs | 2,220 |  |  | 2,522 |  |  | 2,695 |
Total Convertible Notes interest expense | $ | 9,167 |  |  | $ | 10,528 |  |  | $ | 11,445 |
Capped Call Transactions. In connection with, but separate from, the issuance of the Convertible Notes, the Company entered into capped call transactions (the Capped Call Transactions) with certain financial institutions (the Capped Call Counterparties) to reduce the potential dilution to EQT Corporation common stock upon any conversion of Convertible Notes at maturity and/or offset any cash payments that the Company is required to make in excess of the principal amount of such converted notes. The Capped Call Transactions had an initial strike price of $15.00 per share of EQT Corporation common stock and an initial cap price of $18.75 per share of EQT Corporation common stock, each of which were subject to certain customary adjustments, including adjustments as a result of the Company paying dividends on its common stock, and were set to expire in April 2026. The Company recorded the cost to purchase the Capped Call Transactions of $32.5 million as a reduction to shareholders' equity. On January 18, 2024, the Company entered into separate termination agreements with each of the Capped Call Counterparties, pursuant to which the Capped Call Counterparties paid the Company an aggregate $93.3 million (the Termination Payment), and the Capped Call Transactions were terminated. The Company received the Termination Payment on January 22, 2024. The Termination Payment was recorded as an increase to shareholders' equity.

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