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Acquisitions | 12 Months Ended
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Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Acquisitions | Acquisitions Equitrans Midstream Merger On July 22, 2024, the Company completed its acquisition of Equitrans Midstream (Equitrans Midstream Merger) pursuant to the agreement and plan of merger dated March 10, 2024 (the Merger Agreement), by and among EQT, Humpty Merger Sub Inc., an indirect wholly-owned subsidiary of EQT (Merger Sub), Humpty Merger Sub LLC, an indirect wholly-owned subsidiary of EQT (LLC Sub), and Equitrans Midstream. Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub merged with and into Equitrans Midstream (the First Merger), with Equitrans Midstream surviving as an indirect wholly-owned subsidiary of EQT (the First Step Surviving Corporation), and, as the second step in a single integrated transaction with the First Merger, the First Step Surviving Corporation merged with and into LLC Sub (the Second Merger and, together with the First Merger, the Equitrans Midstream Merger), with LLC Sub surviving the Second Merger as an indirect wholly-owned subsidiary of EQT. Upon the closing of the Equitrans Midstream Merger, each share of common stock, no par value, of Equitrans Midstream (Equitrans Midstream common stock) that was issued and outstanding immediately prior to the effective time of the First Merger (other than shares of Equitrans Midstream common stock owned by Equitrans Midstream or its subsidiaries or by the Company) was converted into the right to receive, without interest, 0.3504 shares of EQT common stock, which totaled 152,427,848 shares of EQT common stock with an aggregate value of $5.5 billion, based on an EQT common stock share price of $35.88. In addition, in connection with the closing of the Equitrans Midstream Merger, the Company paid an aggregate of $79.5 million of equity consideration to employees of Equitrans Midstream who did not continue with the Company upon the Equitrans Midstream Merger closing date. Immediately prior to the completion of the Equitrans Midstream Merger, on July 22, 2024, using borrowings under EQT's revolving credit facility, the Company paid $685.3 million to effect the purchase and redemption of all of the issued and outstanding Series A Perpetual Convertible Preferred Shares, no par value, of Equitrans Midstream (the Equitrans Midstream preferred stock). Immediately following the closing of the Equitrans Midstream Merger, on July 22, 2024, EQM repaid all of its outstanding obligations under EQM's revolving credit facility using cash on hand and cash contributions from EQT, and, thereafter, EQM terminated its revolving credit facility. See Note 10. Upon completion of the Equitrans Midstream Merger, the pre-existing contractual relationships between the Company, as producer, and Equitrans Midstream, as gathering and transmission services provider, are treated as intercompany transactions on a consolidated basis and, as such, were effectively settled on July 22, 2024. Likewise, upon completion of the Equitrans Midstream Merger, EQT's note payable to EQM became an intercompany transaction on a consolidated basis and, as such, was effectively settled on July 22, 2024. For the year ended December 31, 2024, the Company recognized $304.8 million of transaction costs related to the Equitrans Midstream Merger in other operating expenses in the Statement of Consolidated Operations. Included in such transaction costs was severance and other termination benefits and stock-based compensation costs of $165.4 million, of which $60.8 million was cash and $104.6 million was non-cash. Allocation of Purchase Price. The Equitrans Midstream Merger was accounted for as a business combination using the acquisition method. The table below summarizes the preliminary purchase price and estimated fair values of assets acquired and liabilities assumed as of July 22, 2024 with the excess of purchase price over estimated fair value of the identified net assets recognized as goodwill. Certain information necessary to complete the purchase price allocation is not yet available, including, but not limited to, final appraisals of assets acquired and liabilities assumed and final income tax computations. The Company expects to complete the purchase price allocation once it has received all necessary information, at which time the value of the assets acquired and liabilities assumed will be revised if necessary.
| Preliminary Purchase Price Allocation
| (Thousands)
Consideration: |
Equity | $ | 5,548,608 |
Cash (paid in lieu of fractional shares) | 29 |
Redemption of Equitrans Midstream preferred stock | 685,337 |
Settlement of pre-existing relationships | (239,741) |
Total consideration | $ | 5,994,233 |
Fair value of assets acquired: |
Cash and cash equivalents | $ | 58,767 |
Accounts receivable, net | 82,072 |
Income tax receivable | 2,142 |
Prepaid expenses and other | 22,048 |
Property, plant and equipment | 9,379,642 |
Investments in unconsolidated entities | 3,363,336 |
Net intangible assets | 200,000 |
Other assets | 249,846 |
Noncontrolling interest in consolidated subsidiaries | (162,993) |
Amount attributable to assets acquired | $ | 13,194,860 |
Fair value of liabilities assumed: |
Current portion of debt | $ | 699,837 |
Accounts payable | 65,006 |
Accrued interest | 47,996 |
Other current liabilities | 70,951 |
Revolving credit facility borrowings | 1,035,000 |
Senior notes | 6,273,941 |
Deferred income taxes | 935,106 |
Other liabilities and credits | 152,271 |
Amount attributable to liabilities assumed | $ | 9,280,108 |
Goodwill | $ | 2,079,481 |
The fair value of Equitrans Midstream's property, plant and equipment, which primarily includes gathering, transmission and storage systems and water infrastructure assets, and Equitrans Midstream's equity method investment in the MVP Joint Venture was measured using a combination of a cost and income approach based on inputs that are not observable in the market and, as such, are Level 3 fair value measurements. Significant inputs to the valuation of Equitrans Midstream's property, plant and equipment and investment in the MVP Joint Venture include replacement costs for similar assets, relative age of the assets, any potential economic or functional obsolescence associated with the assets, future revenue estimates and future operating cost assumptions and estimated weighted average costs of capital. The fair value of the noncontrolling interest in Eureka Midstream Holdings was calculated using the noncontrolling interest ownership percentage and the enterprise value of Eureka Midstream Holdings, which was measured using a combination of a cost and income approach based on inputs that are not observable in the market and, as such, is a Level 3 fair value measurement. Significant inputs to the valuation of the noncontrolling interest in Eureka Midstream Holdings include replacement costs for similar assets, relative age of the assets, any potential economic or functional obsolescence associated with the assets, future revenue estimates, future operating cost assumptions and estimated weighted average cost of capital. As part of the preliminary purchase price allocation, the Company identified intangible assets related to certain of Equitrans Midstream's transmission services contracts. The fair value of the identified intangible assets was determined using the income approach based on inputs that are not observable in the market and, as such, is a Level 3 fair value measurement. Significant inputs to the valuation of the identified intangible assets include future revenue estimates, future cost assumptions, estimated contract renewals, a discount rate assumption and an estimated required rate of return on the assets. The identified intangible assets are amortized over their useful life of 15 years on a straight-line basis, which reflects the pattern in which the Company expects to consume the economic benefits of the assets. The estimated annual amortization expense for the intangible assets is $13.3 million for each of the next 5 years. The fair value of EQM's senior notes was measured using established fair value methodology. Because not all of EQM's senior notes are actively traded, their fair value is a Level 2 fair value measurement. The difference between the fair value and principal amount of the assumed senior notes is amortized over the remaining life of the debt. The unamortized amount is presented as a reduction of debt in the Consolidated Balance Sheet. Because the carrying value of borrowings under EQM's revolving credit facility and Eureka's revolving credit facility approximated their respective fair value (as each facility's interest rate is based on prevailing market rates), the Company considers their fair values to be Level 1 fair value measurements. Goodwill is attributable to the Company's qualitative assumptions of long-term value that the Equitrans Midstream Merger creates for EQT shareholders. Of the total goodwill, the Company attributed $1.2 billion to the vertical integration of the business, including from the elimination of contracted transportation costs with Equitrans Midstream as the Company is unable to recognize intangible assets related to its significant long-term customer contracts with Equitrans Midstream as such contracts became intercompany transactions upon the closing of the Equitrans Midstream Merger. The Company allocated this amount of total goodwill to its Transmission segment. In addition, the Company attributed $0.9 billion of total goodwill to additional deferred tax liabilities that arose from the differences between the fair value and tax bases of preliminary purchase price allocation that carried over from Equitrans Midstream to the Company. Given the income tax characteristics of EQM (the entity that holds the gathering and transmission operations acquired in the Equitrans Midstream Merger) the Company presents this amount of total goodwill as "Other" for segments reporting. See Note 2. Differences between the preliminary purchase price allocation and the final purchase price allocation may change the amount of goodwill recognized. In conjunction with the Equitrans Midstream Merger, as of the Equitrans Midstream Merger closing date, the Company had unamortized carryover tax basis of $647.2 million of tax deductible goodwill. See Note 5 for a description of the fair value hierarchy. Post-Acquisition Operating Results. The table below summarizes amounts contributed by the assets acquired in the Equitrans Midstream Merger, inclusive of intercompany eliminations, to the Company's consolidated results for the period beginning on July 22, 2024 and ending on December 31, 2024.
|  | July 22, 2024 through December 31, 2024
|  | (Thousands)
Loss on derivatives |  | $ | (16,763) |
Pipeline, net marketing services and other |  | 274,646 |
Total operating revenues |  | $ | 257,883 |
Net loss (a) |  | $ | (136,946) |
Less: Net income attributable to noncontrolling interests |  | 12,879 |
Net loss attributable to EQT Corporation |  | $ | (149,825) |
(a)Net loss includes $280.6 million of transaction costs related to the Equitrans Midstream Merger. Unaudited Pro Forma Information. The table below summarizes the Company's results as though the Equitrans Midstream Merger had been completed on January 1, 2023. Certain historical amounts were reclassified to conform to the Company's current financial presentation of operations. Such unaudited pro forma information is provided for informational purposes only and does not represent what consolidated results of operations would have been had the Equitrans Midstream Merger occurred on January 1, 2023 nor are they indicative of future consolidated results of operations.
| Years Ended December 31,
| 2024 |  | 2023
| (Thousands, except per share amounts)
Pro forma operating revenues: |  |  |
Pro forma sales of natural gas, NGLs and oil | $ | 4,934,366 |  |  | $ | 5,044,768 |
Pro forma gain on derivatives | 17,685 |  |  | 1,887,016 |
Pro forma pipeline, net marketing services and other | 621,214 |  |  | 616,245 |
Pro forma total operating revenues | $ | 5,573,265 |  |  | $ | 7,548,029 |
Pro forma net income (a) | $ | 489,503 |  |  | $ | 2,439,515 |
Less: Pro forma net income attributable to noncontrolling interests | 28,303 |  |  | 30,037 |
Pro forma net income attributable to EQT Corporation | $ | 461,200 |  |  | $ | 2,409,478 |
Pro forma income per share of common stock attributable to EQT Corporation: |  |  |
Pro forma net income attributable to EQT Corporation – Basic | $ | 0.78 |  |  | $ | 4.52 |
Pro forma net income attributable to EQT Corporation – Diluted | $ | 0.77 |  |  | $ | 4.27 |
(a)Pro forma net income for the year ended December 31, 2024 includes $304.8 million of transaction costs related to the Equitrans Midstream Merger. NEPA Gathering System Acquisition In 2021, the Company acquired a 50% interest in and became the operator of certain gathering assets located in Northeast Pennsylvania (collectively, the NEPA Gathering System). On April 11, 2024, the Company completed its acquisition of a minority equity partner's 33.75% interest in the NEPA Gathering System for a purchase price of approximately $205 million (the NEPA Gathering System Acquisition), subject to customary post-closing adjustments. The NEPA Gathering System Acquisition was accounted for as an asset acquisition, and, as such, its purchase price was allocated to property, plant and equipment. Tug Hill and XcL Midstream Acquisition On August 22, 2023, the Company completed its acquisition (the Tug Hill and XcL Midstream Acquisition) of the upstream assets from THQ Appalachia I, LLC and the gathering and processing assets from THQ-XcL Holdings I, LLC through the acquisition of all of the issued and outstanding membership interests of each of THQ Appalachia I Midco, LLC and THQ-XcL Holdings I Midco, LLC. The purchase price for the Tug Hill and XcL Midstream Acquisition consisted of 49,599,796 shares of EQT common stock and approximately $2.4 billion in cash, subject to customary post-closing adjustments. The Company accounted for the Tug Hill and XcL Midstream Acquisition as a business combination using the acquisition method. The Company completed the purchase price allocation for the Tug Hill and XcL Midstream Acquisition during the first quarter of 2024. The purchase accounting adjustments recorded in 2024 were not material. For the years ended December 31, 2024 and 2023, the Company recognized $4.4 million and $56.3 million, respectively, of transaction costs related to the Tug Hill and XcL Midstream Acquisition in other operating expenses in the Statements of Consolidated Operations. 2022 Asset Acquisition In the fourth quarter of 2022, the Company completed its acquisition (the 2022 Asset Acquisition) of approximately 4,600 net Marcellus acres in Northeast Pennsylvania for a total purchase price of approximately $56 million. The 2022 Asset Acquisition was accounted for as an asset acquisition, and, as such, the purchase price was allocated to property, plant and equipment.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent + Details
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