01—Abstract
Summary
Summary of the 10-K/A filed April 29, 2019. Cited figures are marked; the original filing is the authoritative source.
EQT Corporation's Form 10-K/A for the year ended December 31, 2018, highlights a pivotal year characterized by significant corporate transformation.
The company successfully executed the spin-off of its midstream business, establishing itself as a pure-play upstream natural gas producer with a strong asset base in the Appalachia region. This strategic move aimed to unlock shareholder value by creating a more focused and financially robust entity. The report also details leadership changes, including the appointment of Robert J.
McNally as President and Chief Executive Officer, and board refreshment with new independent directors. The company emphasizes its commitment to operational excellence, safety, and community engagement, while aligning executive compensation with performance and shareholder interests.
02—Key points
Key Highlights
- EQT Corporation completed the spin-off of its midstream business, transitioning into a pure-play upstream natural gas producer.
- Robert J. McNally was appointed as President and Chief Executive Officer, driving a vision for efficiency and free cash flow generation.
- The company achieved record annual sales volumes of 1,488 Bcfe in 2018.
- Divestitures of non-core assets in the Huron Play and Permian Basin were completed, focusing operations on core areas.
- Proved reserves saw a 2% increase, or 11% when adjusted for divestitures.
- Significant efforts were made to enhance safety, with a 39% drop in OSHA recordable incident rate compared to 2017.
- EQT joined the ONE Future Coalition to reduce methane emissions, underscoring its commitment to environmental stewardship.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2018, Eqt lost $0.48.
- Revenue$4.71B100.0%
- Cost of revenue−$1.70B36.0%
- Gross profit$3.01B64.0%
- Operating costs−$5.80B123.1%
- Operating income−$2.78B59.1%
- Interest, other & tax$538.6M11.4%
- Net income−$2.24B47.7%
04—Financials
Financial Highlights
Figures from 10-K/AFY2018filed April 29, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $4.71B$3.09B | +52.4% |
| Cost of Revenue | $1.70B$1.16B | +45.7% |
| Gross Profit | $3.01B$1.93B | +56.4% |
| SG&A Expenses | $232.54M$208.99M | +11.3% |
| Operating Expenses | $7.34B$2.71B | +171.0% |
| Operating Income | -$2.78B$382.21M | −828.2% |
| Interest Expense | $228.96M$167.97M | +36.3% |
| Net Income | -$2.24B$1.51B | −248.8% |
| EPS (Basic) | $-8.60$8.05 | −206.8% |
| EPS (Diluted) | $-8.60$8.04 | −207.0% |
| Shares Outstanding (Basic) | 260.93M187.38M | +39.3% |
| Shares Outstanding (Diluted) | 260.93M187.73M | +39.0% |
05—Questions
Frequently Asked Questions
What were the major strategic changes for EQT Corporation in 2018?
The most significant strategic change was the spin-off of EQT's midstream business into a separate, publicly traded company. This transformation aimed to establish EQT as a pure-play upstream natural gas producer, simplifying its structure and focusing on its core Appalachian assets.
Who is the current CEO, and what is their focus?
Robert J. McNally was appointed President and Chief Executive Officer in November 2018. His vision focuses on unlocking the value of EQT's asset base through increased operational efficiency, cost reduction, and maximizing free cash flow generation, all while maintaining high standards for safety and environmental sustainability.
How did EQT address safety and environmental concerns in 2018?
EQT made substantial efforts in safety, launching initiatives like the 'Zero is Possible – Today' program, which led to a 39% reduction in its OSHA recordable incident rate compared to 2017. Environmentally, the company became a founding partner of the Center for Responsible Shale Development and joined the ONE Future Coalition, focusing on reducing methane emissions.
How was executive compensation structured and reviewed in 2018?
Executive compensation was heavily weighted towards performance-based, 'at-risk' components, including annual and long-term incentives. The Management Development and Compensation Committee reviewed compensation against a defined peer group, aiming for competitive market positioning. Compensation decisions were influenced by company performance, including the successful completion of the midstream spin-off and operational results, with downward adjustments made in instances where performance fell short of expectations.
06—Continue