10-KPeriod: FY2013

EQT Corp Annual Report, Year Ended Dec 31, 2013

Filed February 20, 2014For Securities:EQT

Summary

EQT Corporation's 2013 10-K filing highlights significant operational growth and strategic transactions. The company achieved record production volumes, with a notable 43% increase in total sales volumes and an 82% surge in Marcellus sales volumes, driven by expanded drilling programs. Key strategic moves included the IPO of EQT Midstream Partners, LP, which raised substantial capital, and the divestiture of its Distribution segment (Equitable Gas and Equitable Homeworks) to PNG Companies, strengthening its focus on its core EQT Production and EQT Midstream businesses. Financially, the company demonstrated strong performance in 2013, with income from continuing operations increasing substantially compared to 2012. EQT Production saw increased operating income due to higher sales volumes and slightly improved prices, while EQT Midstream benefited from increased gathering and transmission revenues. The company's outlook for 2014 indicated continued investment in well development and midstream infrastructure, funded by operations and asset sales, signaling a commitment to profitable growth and shareholder value.

Financial Highlights

46 data points
Beta

Net Income

$390.57M

EPS (Diluted)

$2.57

Total Assets

$9.77B

Cash & Equivalents

$845.64M

Free Cash Flow

$1.05B

Financial Statements
Beta
SG&A Expenses$200.85M
Operating Expenses$1.23B
Operating Income$654.60M
Interest Expense$142.69M
Net Income$390.57M
EPS (Basic)$2.59
EPS (Diluted)$2.57
Shares Outstanding (Basic)150.57M
Shares Outstanding (Diluted)151.79M

Key Highlights

  • 1Record Production Growth: EQT Corporation reported a 43% year-over-year increase in total production sales volumes to 378.2 Bcfe, with Marcellus sales volume growing by 82% to 275.0 Bcfe.
  • 2Midstream Segment Expansion: The EQT Midstream business experienced a 39% increase in gathered volumes and a 88.5% increase in transmission pipeline throughput, supported by significant capital investments in infrastructure.
  • 3Strategic Divestiture: The company completed the Equitable Gas Transaction, divesting its Distribution segment, which comprised Equitable Gas and Equitable Homeworks, to PNG Companies for cash and select midstream assets.
  • 4Midstream Partnership IPO: EQT Midstream Partners, LP completed an underwritten public offering of common units, raising $529.4 million in net proceeds and strengthening EQT's capital structure.
  • 5Reserve Growth: Proved reserves increased by 39% to 8.3 Tcfe, with the Marcellus play accounting for approximately 6.2 Tcfe of total reserves.
  • 6Increased Capital Expenditures: Capital expenditures for well development significantly increased by 43.5% to $1.42 billion in 2013, supporting an expanded drilling program.
  • 7Strong Financial Performance: Income from continuing operations attributable to EQT Corporation more than doubled to $298.7 million in 2013, compared to $135.9 million in 2012, reflecting operational improvements and strategic transactions.

Frequently Asked Questions

EQT Corporation reported a significant increase in income from continuing operations, reaching $298.7 million ($1.97 per diluted share) in 2013, a substantial rise from $135.9 million ($0.90 per diluted share) in 2012. This improvement was driven by a 43% increase in natural gas volumes sold, higher midstream revenues, and the impact of strategic transactions, partially offset by increased depreciation, depletion, and amortization (DD&A) expenses.

In 2013, EQT executed two major strategic transactions: the IPO of EQT Midstream Partners, LP, which provided capital and enhanced the midstream business's profile, and the divestiture of its Distribution segment (Equitable Gas and Equitable Homeworks). This divestiture allowed EQT to focus on its core natural gas production and midstream infrastructure assets.

EQT Production demonstrated strong growth in 2013, with total production sales volumes increasing by 43% to 378.2 Bcfe. Marcellus sales volumes saw an even more significant rise of 82% to 275.0 Bcfe. This growth was supported by increased drilling activity, particularly in the Marcellus shale, and the company's technological leadership in horizontal drilling.

EQT projected total capital expenditures of approximately $2.5 billion for 2014, with $1.9 billion allocated to well development (drilling approximately 357 wells) and $0.61 billion for midstream infrastructure expansion. The company anticipated sales volumes to grow by 24% in 2014, supported by these investments, and expected funding to come from cash flow from operations, cash on hand, and midstream asset sales.