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FORM10-K

EQT Corp - EQT

Filed: February 21, 2013 (period: December 31, 2012)

Annual report with a comprehensive overview of the company

The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user

assumes all risks for any damages or losses arising from any use of this information, except to the extent such damages or losses cannot be

limited or excluded by applicable law. Past financial performance is no guarantee of future results.
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2012

or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO 

COMMISSION FILE NUMBER 1-3551

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 15222

Pittsburgh, Pennsylvania (Zip Code)

(Address of principal executive offices)

Registrant’s telephone number, including area code: (412) 553-5700

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered

Common Stock, no par value 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 X 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 X 

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 X No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File

required to be submitted and posted 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 and post such files).

Yes X No 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein,

and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this

Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer X Accelerated filer 

Non-accelerated filer Smaller reporting company 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes No X

The aggregate market value of voting stock held by non-affiliates of the registrant

as of June 30, 2012: $8.0 billion

The number of shares of common stock outstanding

as of January 31, 2013: 150,347,211

DOCUMENTS INCORPORATED BY REFERENCE

The Company’s definitive proxy statement relating to the annual meeting of shareholders (to be held April 17, 2013) will be filed with the

Commission within 120 days after the close of the Company’s fiscal year ended December 31, 2012 and is incorporated by reference in Part III to the extent

described therein.

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
TABLE OF CONTENTS

Glossary of Commonly Used Terms, Abbreviations and Measurements 3

Cautionary Statements 6

PART I

Item 1 Business 7

Item 1A Risk Factors 18

Item 1B Unresolved Staff Comments 23

Item 2 Properties 23

Item 3 Legal Proceedings 28

Item 4 Mine Safety and Health Administration Data 28

Executive Officers of the Registrant 29

PART II

Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 30

Item 6 Selected Financial Data 32

Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 32

Item 7A Quantitative and Qualitative Disclosures About Market Risk 56

Item 8 Financial Statements and Supplementary Data 59

Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 113

Item 9A Controls and Procedures 113

Item 9B Other Information 113

PART III

Item 10 Directors, Executive Officers and Corporate Governance 114

Item 11 Executive Compensation 114

Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 115

Item 13 Certain Relationships and Related Transactions and Director Independence 116

Item 14 Principal Accounting Fees and Services 116

PART IV

Item 15 Exhibits and Financial Statement Schedules 117

Index to Financial Statements Covered by Report of Independent Registered Public Accounting Firm 117

Index to Exhibits 119

Signatures 126

2

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Glossary of Commonly Used Terms, Abbreviations and Measurements

Commonly Used Terms

AFUDC – Allowance for Funds Used During Construction – c arrying costs for the construction of certain long-term assets are capitalized and amortized over

the related assets’ estimated useful lives. The capitalized amount for construction of regulated assets includes interest cost and a designated cost of equity for

financing the construction of these regulated assets.

Appalachian Basin – the area of the United States comprised of those portions of West Virginia, Pennsylvania, Ohio, Maryland, Kentucky and Virginia

that lie in the Appalachian Mountains.

basis – when referring to natural gas, 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 one degree Fahrenheit.

cash flow hedge – a derivative instrument that is used to reduce the exposure to variability in cash flows from the forecasted underlying transaction whereby

the gains (losses) on the derivative are anticipated to offset the losses (gains) on the forecasted underlying transaction.

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 to find a 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.

farm tap – natural gas supply service in which the customer is served directly from a well or a gathering pipeline.

feet of pay – footage penetrated by the drill bit into the target formation.

futures contract – an exchange-traded contract to buy or sell a standard quantity and quality of a commodity at a specified future date and price.

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.

heating degree days – measure used to assess weather’s impact on natural gas usage calculated by adding the difference between 65 degrees Fahrenheit and

the average temperature of each day in the period (if less than 65 degrees Fahrenheit). Each degree of temperature by which the average temperature falls below

65 degrees Fahrenheit represents one heating degree day. For example, a day with an average temperature of 50 degrees Fahrenheit will have 15 heating degree

days.

3

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Glossary of Commonly Used Terms, Abbreviations and Measurements

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.

margin call – a demand for additional margin deposits when forward prices move adversely to a derivative holder’s position.

margin deposits – funds or good faith deposits posted during the trading life of a futures contract to guarantee fulfillment of contract obligations.

NGL – natural gas liquids – those hydrocarbons in natural gas that are separated from the gas as liquids through the process of absorption, condensation,

adsorption or other methods in gas processing plants. Natural gas liquids include primarily propane, butane, ethane and iso-butane.

net – “net” gas and oil wells or “net” acres are determined by summing 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 royalty interests (equal

to 100% minus all royalties on a well or property).

proved reserves – quantities of oil and gas 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 which 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.

royalty interest – the land owner’s share of oil or gas production, typically 1/8, 1/6 or 1/4.

throughput – total volumes of natural gas sold or transported by an entity.

transportation – moving gas through pipelines on a contract basis for others.

working gas – the volume of natural gas in the storage reservoir that can be extracted during the normal operation of the storage facility.

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.

4

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Glossary of Commonly Used Terms, Abbreviations and Measurements

Abbreviations

ASC – Accounting Standards Codification

CBM – Coalbed Methane

CFTC – Commodity Futures Trading Commission

EPA – U.S. Environmental Protection Agency

FASB – Financial Accounting Standards Board

FERC – Federal Energy Regulatory Commission

IPO – initial public offering

IRS – Internal Revenue Service

KY PSC – Kentucky Public Service Commission

NYMEX – New York Mercantile Exchange

OTC – over the counter

PA PUC – Pennsylvania Public Utility Commission

SEC – Securities and Exchange Commission

WV PSC – West Virginia Public Service Commission

Measurements

Bbl = barrel

Btu = one British thermal unit

BBtu = billion British thermal units

Bcf = billion cubic feet

Bcfe = billion cubic feet of natural gas

equivalents, with one barrel of oil being

equivalent to 6,000 cubic feet of gas

Dth = million British thermal units

Mcf = thousand cubic feet

Mcfe = thousand cubic feet of natural gas

equivalents, with one barrel of oil being

equivalent to 6,000 cubic feet of gas

Mgal = thousand gallons

Mbbl = thousand barrels

MMBtu = million British thermal units

MMcf = million cubic feet

MMcfe = million cubic feet of natural gas

equivalents, with one barrel of oil being

equivalent to 6,000 cubic feet of gas

Tcfe = trillion cubic feet of natural gas

equivalents, with one barrel of oil being

equivalent to 6,000 cubic feet of gas

5

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Cautionary Statements

Disclosures in this Annual Report on Form 10-K contain certain forward-looking statements within the meaning of Section 21E of the Securities

Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Statements that do not relate strictly to historical or current

facts are forward-looking and usually identified by the use of words such as “anticipate,” “estimate,” “could,” “would,” “will,” “may,” “forecast,”

“approximate,” “expect,” “project,” “intend,” “plan,” “believe” and other words of similar meaning in connection with any discussion of future operating or

financial matters. Without limiting the generality of the foregoing, forward-looking statements contained in this Annual Report include the matters discussed

in the sections captioned “Strategy” in “Business” and “Outlook” in “Management’s Discussion and Analysis of Financial Condition and Results of

Operations,” and the expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of the Company and its

subsidiaries, including the Company’s strategy to develop its Marcellus and other reserves; drilling plans and programs (including the number, type, feet of

pay and location of wells to be drilled, the conversion of drilling rigs to utilize natural gas and the availability of capital to complete these plans and

programs); the expiration of leasehold terms before production can be established and the Company’s ability to pool lease acreage; production and sales

volumes and growth rates; gathering and transmission growth and volumes (including the subscription of additional capacity related to the expiration of

Equitrans, LP firm transportation contracts); infrastructure programs (including the transmission and gathering expansion projects); technology (including

drilling techniques); monetization transactions, including midstream asset sales (dropdowns) to EQT Midstream Partners, LP, the Company’s publiclytraded master limited partnership formed in 2012 (the Partnership) and other asset sales, the proposed transfer of Equitable Gas Company, LLC (Equitable

Gas) to PNG Companies LLC, joint ventures or other transactions involving the Company’s assets); the timing of receipt of required approvals for the

proposed Equitable Gas transaction; natural gas prices; reserves; capital expenditures, including funding sources and availability; financing requirements

and availability; hedging strategy; the effects of government regulation and pending and future litigation; and tax position. The forward-looking statements in

this Annual Report on Form 10-K involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly,

investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company has based these forward-looking

statements on current expectations and assumptions about future events. While the Company considers these expectations and assumptions to be reasonable,

they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict

and many of which are beyond the Company’s control. With respect to the proposed Equitable Gas transaction, these risks and uncertainties include, among

others, the ability to obtain regulatory approvals for the transaction on the proposed terms and schedule; disruption to the Company’s business, including

customer, employee and supplier relationships resulting from the transaction; and risks that the conditions to closing may not be satisfied. The risks and

uncertainties that may affect the operations, performance and results of the Company’s business and forward-looking statements include, but are not limited

to, those set forth under Item 1A, “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company does not intend to correct or update any

forward-looking statement, whether as a result of new information, future events or otherwise.

In reviewing any agreements incorporated by reference in or filed with this Annual Report on Form 10-K, please remember such agreements are included

to provide information regarding the terms of such agreements and are not intended to provide any other factual or disclosure information about the Company.

The agreements may contain representations and warranties by the Company, which should not in all instances be treated as categorical statements of fact, but

rather as a way of allocating the risk to one of the parties should those statements prove to be inaccurate. The representations and warranties were made only as

of the date of the relevant agreement or such other date or dates as may be specified in such agreement and are subject to more recent developments. 

Accordingly, these representations and warranties alone may not describe the actual state of affairs as of the date they were made or at any other time.

6

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
PART I

Item 1. Business

General

EQT Corporation (EQT or the Company) conducts its business through three business segments: EQT Production, EQT Midstream and

Distribution. EQT Production is one of the largest natural gas producers in the Appalachian Basin with 6.0 Tcfe of proved natural gas and crude oil reserves

across approximately 3.5 million gross acres, including approximately 540,000 gross acres in the Marcellus play, as of December 31, 2012. EQT Midstream

provides gathering, transmission and storage services for the Company’s produced gas, as well as for independent third parties across the Appalachian

Basin. The Distribution segment distributes and sells natural gas to residential, commercial and industrial customers through the Company’s regulated

distribution subsidiary, Equitable Gas Company, LLC (Equitable Gas). As a local distribution company, Equitable Gas has customers in southwestern

Pennsylvania, West Virginia and eastern Kentucky. Equitable Gas also operates a small gathering system in Pennsylvania, and provides off-system sales

activities that include the purchase and delivery of natural gas.

Key Events in 2012

In January 2012, EQT announced it would indefinitely suspend development of its Huron assets in favor of investing in its higher return Marcellus

play. The decision was based on lower commodity pricing of natural gas, which resulted in a reduction in projected cash flow. A similar decision was made in

December 2010, when the Company suspended the development of its CBM play in Virginia. The Company includes only proved developed reserves in these

fields in its determination of proved reserves. The Company expects to continue to produce from existing wells in the Huron and CBM plays; however,

contributions to the Company’s total production sales volumes will gradually decline as the Company focuses the majority of its future drilling program in the

Marcellus play. The Huron and CBM plays accounted for approximately 42% of production sales volumes in 2012 and are expected to account for

approximately 27% of production sales volumes in 2013.

On February 13, 2012, EQT filed a registration statement with the SEC for an IPO of common units in a master limited partnership known as EQT

Midstream Partners, LP (the Partnership). EQT pursued this strategy as a means of raising capital to further enhance and accelerate its economically

attractive drilling and development programs, as well as to provide EQT Midstream with capital to continue pursuing additional opportunities. On July 2,

2012, the Partnership completed its underwritten IPO of 14,375,000 common units at $21.00 per unit (NYSE: EQM). EQT received net cash proceeds of

approximately $231 million upon closing of the IPO, and retained a 57.4% limited partner interest and a 2% general partner interest in the Partnership. Prior to

the IPO, the Company contributed to the Partnership 100% of Equitrans, LP (Equitrans), the Company’s FERC-regulated transmission, storage and gathering

subsidiary. An indirect wholly-owned subsidiary of EQT serves as the general partner of the Partnership and the Company continues to operate the Equitrans

business pursuant to contractual arrangements signed in conjunction with the IPO. EQT records the non-controlling interest of the public limited partners in

EQT’s financial statements.

On December 19, 2012, EQT and its direct wholly-owned subsidiary, Distribution Holdco, LLC (Holdco), executed a Master Purchase Agreement

with PNG Companies LLC (PNG Companies), the parent company of Peoples Natural Gas Company LLC (Peoples), to transfer 100% ownership of

Equitable Gas and Equitable Homeworks, LLC (Homeworks) to PNG Companies. As part of the transfer, EQT will receive cash proceeds of $720 million,

subject to adjustment, select midstream assets and commercial arrangements with PNG Companies and its affiliates. Homeworks and Equitable Gas are

direct wholly-owned subsidiaries of Holdco. Peoples is a portfolio company of SteelRiver Infrastructure Partners. The transaction is subject to various

conditions, including receipt of the approval of the PA PUC, the WV PSC, the KY PSC and the FERC. The transaction is also subject to review under the

Hart-Scott-Rodino Antitrust Improvement Act. The agreements provide that such approvals and review must be complete by December 19, 2013, subject to

certain extension rights. These approvals and review may not be received or completed within the time allowed.

7

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
EQT Production Business Segment

EQT believes that it is a technology leader in extended lateral horizontal drilling in the Appalachian Basin and continues to improve its operations

through the use of new drilling and completion technology which increases lateral length drilled and reserves per foot of pay. The Company’s strategy is to

maximize value by maintaining an industry leading cost structure and profitably developing its undeveloped Marcellus reserves. EQT’s proved reserves

increased by 12% in 2012, to a total of 6.0 Tcfe primarily across the Marcellus and Huron shale plays, and including CBM and other vertical wells. The

Company’s Marcellus assets contribute approximately 4.3 Tcfe in total proved reserves.

The following illustrations depict the southwestern portion of the Marcellus Shale formation (top left), while the larger map highlights EQT’s acreage

position within the Marcellus:

8

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
As of December 31, 2012, the Company’s proved reserves are as follows:

(Bcfe) Marcellus Huron * CBM Total

Proved Developed 1,072 1,585 141 2,798

Proved Undeveloped 3,206 – – 3,206

Total Proved Reserves 4,278 1,585 141 6,004

* Includes the Lower Huron, Cleveland, Berea sandstone and other Devonian age formations. Also included in the Huron play is 620 Bcfe of reserves from

non-shale formations accessed through vertical wells.

The Company’s natural gas wells are generally low-risk with long lives and low development and production costs. Assuming that future annual

production from these reserves is consistent with 2012, the remaining reserve life of the Company’s total proved reserves as calculated by dividing total proved

reserves by 2012 produced volumes is 23 years.

The Company invested approximately $857 million on well development in 2012 and production sales volumes increased 33% compared to 2011. 

Capital spending for EQT Production is expected to be approximately $1.15 billion in 2013, the majority of which will be used to support the drilling of

approximately 172 gross wells, including 153 Marcellus wells, 11 Upper Devonian wells and eight wells in the Utica Shale of Ohio. Production sales

volumes are expected to be approximately 31% higher for 2013, with a range expected between 335 and 340 Bcfe, including 3,900 – 4,000 Mbbls of NGL

production. Over the past three years, the Company’s wells drilled and related capital expenditures for well development were:

Years Ended December 31,

Gross wells drilled: 2012 2011 2010

Horizontal Marcellus 127 105 90

Horizontal Huron 7 115 236

Horizontal Utica 1 – –

Total horizontal 135 220 326

Other – 2 163

Total 135 222 489

Capital expenditures for well development:

 (in millions):

Horizontal Marcellus $ 810 $ 686 $ 436

Horizontal Huron 22 226 346

Horizontal Utica 4 – –

Total horizontal 836 912 782

Other 21 26 106

Total $ 857 $ 938 $ 888

EQT Midstream Business Segment

During 2012, the Company completed various gathering line expansion projects and had a year-end gathering capacity of 1,115 MMcf per day, an

increase of approximately 455 MMcf per day from 2011. With approximately 10,300 miles of gathering lines, EQT has Marcellus gathering capacity of 765

MMcf per day in Pennsylvania and 350 MMcf per day in West Virginia. To support the growth of production in the Marcellus play, EQT Midstream plans

to add approximately 400 MMcf per day of incremental

9

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gathering capacity in 2013, all in Pennsylvania. See the map below (left) for a depiction of EQT’s gathering lines, and compressor stations, in relationship to

the overall Marcellus Shale formation.

The Company’s transmission and storage system includes a FERC-regulated interstate pipeline system of approximately 700 miles that connects to five

interstate pipelines and multiple distribution companies and is supported by 14 associated natural gas storage reservoirs with approximately 400 MMcf per

day of peak delivery capability and 32 Bcf of working gas capacity. The map below (right) is a depiction of EQT’s transmission lines, storage pools and

compressor stations in relationship to the overall Marcellus Shale formation. Equitrans includes, among other things, the 2010 Marcellus Expansion Project

completed in December 2010 and the Sunrise Pipeline which Equitrans operates under a lease from an EQT affiliate. EQT’s storage reservoirs are clustered in

two geographic areas connected to its Equitrans pipeline, with eight in northern West Virginia and six in southwestern Pennsylvania. During 2012, the

Company completed construction of the Sunrise Pipeline, Blacksville compressor station and Braden Run interconnect projects resulting in 700 MMcf per

day of increased transmission capacity. During 2013, EQT Midstream expects to add approximately 450 MMcf per day of incremental transmission capacity

through the Morris III interconnect expansion and the Low Pressure East uprate projects for a total of 2,150 MMcf per day by the end of 2013.

In 2012, the Partnership was formed by EQT Corporation to own, operate, acquire and develop midstream assets in the Appalachian Basin. The

Partnership provides midstream services to EQT and other third-party companies through its two primary assets: its transmission and storage system and its

gathering system. The Partnership owns the approximately 700 mile FERC-regulated, interstate pipeline system, as well as approximately 2,000 miles of

FERC-regulated, low-pressure gathering lines. EQT retained a 57.4% limited partner interest and a 2% general partner interest in the Partnership, whose results

are consolidated in the Company’s financial results.

10

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
EQT also has a gas marketing subsidiary, EQT Energy, LLC (EQT Energy), which provides optimization of capacity and storage assets, NGL sales

and gas sales to commercial and industrial customers within its operational footprint through 4.9 Bcf of leased storage-related assets and approximately

1,100,000 Dth per day of third-party contractual pipeline capacity.

Strategy

EQT’s strategy is to maximize shareholder value by maintaining an industry leading cost structure, profitably developing its undeveloped Marcellus

reserves, and effectively and efficiently utilizing its extensive gathering and transmission assets that are uniquely positioned in the Marcellus Shale and in

close proximity to the northeastern United States markets.

The Company continues to improve its use of technology by increasing lateral lengths, reducing cluster spacing and developing multi-well pads. EQT

expects to continue increasing the average lateral lengths over time; however, lateral lengths will be limited by lease boundaries in the Marcellus play unless the

Company is able to pool acreage with neighboring leaseholders. Because substantially all of the Company’s acreage is held by production or in fee, EQT

Production is able to develop its acreage in the most economical manner through the use of longer laterals and multi-well pads, as opposed to being required to

drill less-economical wells in order to retain acreage. The use of longer laterals and multi-well pads has the additional benefit of reducing the surface

environmental footprint of the Company’s drilling.

11

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
The Company believes the location of its midstream assets across a wide area of the Marcellus play in southwestern Pennsylvania and northern West

Virginia is a competitive advantage which uniquely positions it for growth. In light of the growth of EQT Production and other producers in the Marcellus

play, EQT Midstream intends to capitalize on the growing need for gathering and transmission infrastructure in the region, especially the need for midstream

header connectivity to interstate pipelines in Pennsylvania and West Virginia. The 2013 gathering and transmission investments are expected to provide a

platform for growth, mitigate curtailments and increase the flexibility and reliability of the Company’s gathering and transmission systems.

In July 2012, the Company formed the Partnership, which is a growth-oriented master limited partnership designed to own, operate, acquire and

develop midstream assets in the Appalachian Basin. Through pursuing accretive acquisitions from the Company, capitalizing on economically attractive

organic growth opportunities and attracting additional third-party volumes, the Partnership is expected to provide an ongoing source of capital to the Company.

The Company is also helping to build additional demand for natural gas. With the assistance of a $700,000 grant received from the Pennsylvania

Department of Environmental Protection, the Company opened a public-access natural gas fueling station in Pittsburgh, Pennsylvania during 2011. 

Investment break-even is expected during 2013 and plans are underway for an expansion of the station. In conjunction with this project, the Company is

promoting the use of natural gas fleet vehicles, including its own. EQT plans to operate 14% of its vehicle fleet, more than 200 vehicles, on natural gas by the

end of 2013. In addition, the Company converted two drilling rigs to utilize natural gas in 2012, with an additional two to three expected by the end of 2013.

See “Capital Resources and Liquidity” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-

K for details regarding the Company’s capital expenditures.

Markets and Customers

No single customer accounted for more than 10% of revenues in 2012, 2011 or 2010.

Natural Gas Sales: EQT’s produced natural gas is sold to marketers, utilities and industrial customers located mainly in the Appalachian area. 

Natural gas is a commodity and therefore the Company receives market-based pricing. The market price for natural gas can be volatile as demonstrated by

significant declines in late 2011 and early 2012. Changes in the market price for natural gas impact the Company’s revenues, earnings and liquidity. The

Company is unable to predict potential future movements in the market price for natural gas and thus cannot predict the ultimate impact of prices on its

operations; however, the Company monitors the market for natural gas and adjusts strategy and operations as deemed appropriate. In order to protect cash

flow from undue exposure to the risk of changing commodity prices, the Company hedges a portion of its forecasted natural gas production. The Company’s

hedging strategy and information regarding its derivative instruments is set forth in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,”

and in Notes 1 and 4 to the Consolidated Financial Statements.

NGL Sales: The Company sells NGLs from its own production through the EQT Production segment and from gas marketed for third parties by

EQT Midstream. Until February 2011, when the Company sold its Langley natural gas processing complex (Langley), the Company processed natural gas

in order to extract heavier liquid hydrocarbons (propane, iso-butane, normal butane and natural gasoline) from the natural gas stream, primarily from EQT

Production’s produced gas. NGLs were recovered at Langley and transported to a fractionation plant owned by a third party for separation into commercial

components. The third party marketed these components for a fee. The Company also had contractual processing arrangements whereby the Company sold

gas to a third-party processor at a weighted average liquids component price. Subsequent to the closing of the sale of Langley to MarkWest Energy Partners,

L.P. in February 2011, the processing of the Company’s produced natural gas has been performed by a third-party vendor.

The following table presents the wellhead sales price on an average Mcfe basis to EQT Corporation for sales of produced natural gas, NGLs and oil,

with and without hedges, for the years ended December 31:

2012 2011 2010

Average wellhead sales price per Mcfe sold (including hedges) $ 4.26 $ 5.37 $ 5.62

Average wellhead sales price per Mcfe sold (excluding hedges) $ 3.14 $ 4.85 $ 5.12

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Natural Gas Gathering: EQT Midstream derives gathering revenues from charges to customers for use of its gathering system in the Appalachian

Basin. The gathering system volumes are transported to four major interstate pipelines: Columbia Gas Transmission, East Tennessee Natural Gas Company,

Dominion Transmission and Tennessee Gas Pipeline Company. The gathering system also maintains interconnects with Equitrans. Maintaining these

interconnects provides the Company with access to geographically diverse markets.

Gathering system transportation volumes for 2012 totaled 335.4 BBtu, of which approximately 77% related to gathering for EQT Production, 13%

related to third-party volumes and 10% related to volumes for other affiliates of the Company. Revenues from EQT Production and other affiliates accounted

for approximately 88% of 2012 gathering revenues.

Natural Gas Transmission, Storage and Marketing: Services offered by EQT include commodity procurement, sales, delivery, risk management

and other services. These operations are executed using Company owned and operated transmission and underground storage facilities as well as other

contractual capacity arrangements with major pipeline and storage service providers in the eastern United States. EQT Energy uses leased storage capacity

and firm transportation capacity to take advantage of price differentials and arbitrage opportunities when available. EQT Energy also engages in risk

management and energy trading activities, the objective of which is to limit the Company’s exposure to shifts in market prices and to optimize the use of the

Company’s assets.

Customers of EQT Midstream’s gas transportation, storage, risk management and related services are affiliates and third parties in the northeastern

United States, including, but not limited to, Dominion Resources, Inc., Keyspan Corporation, NiSource, Inc., PECO Energy Company and UGI Energy

Services, Inc. EQT Energy’s commodity procurement, sales, delivery, risk management and other services are offered to natural gas producers and energy

consumers, including large industrial, utility, commercial and institutional end-users.

Equitrans’ firm transportation contracts expire between 2013 and 2023. The Company anticipates that the capacity associated with these expiring

contracts will be remarketed or used by affiliates such that the capacity will remain fully subscribed. In 2012, approximately 84% of transportation volumes

and 81% of revenues were from affiliates.

Natural Gas Distribution: The Company’s Distribution segment provides natural gas distribution services to approximately 277,400 customers,

consisting of 258,500 residential customers and 18,900 commercial and industrial customers in southwestern Pennsylvania, municipalities in northern West

Virginia and field line sales, also referred to as farm tap service, in eastern Kentucky and West Virginia. Distribution’s service areas have a rather static

population and economy.

Equitable Gas purchases gas through contracts with various sources including major and independent producers in the Appalachian area and gas

marketers (including an affiliate). The gas purchase contracts contain various pricing mechanisms, ranging from fixed prices to several different index-related

prices. The cost of purchased gas is Equitable Gas’ largest operating expense and is passed through to customers utilizing mechanisms approved by the PA

PUC, WV PSC and KY PSC. Equitable Gas is not permitted to profit from fluctuations in gas costs and does not purchase gas produced by EQT

Production in order to maintain certain federal tax benefits for EQT.

Because most of its customers use natural gas for heating purposes, Equitable Gas’ revenues are seasonal, with approximately 67% of calendar year

2012 revenues occurring during the winter heating season (the months of January, February, March, November and December). Significant quantities of

purchased natural gas are placed in underground storage inventory during the off-peak season to accommodate higher demand during the winter heating

season.

Competition

Natural gas producers compete in the acquisition of properties, the search for and development of reserves, the production and sale of natural gas and

the securing of labor and equipment required to conduct operations. Competitors include independent oil and gas companies, major oil and gas companies and

individual producers and

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operators. Key competitors for new gathering systems include independent gas gatherers and integrated energy companies. EQT competes with numerous

other companies offering the natural gas marketing services. Some of these competitors are affiliates of companies with extensive pipeline systems that are used

for transportation from producers to end-users. As a regulated utility, Equitable Gas’ distribution operation experiences only limited competition with other

local distribution companies in its operating area, but experiences usage pressures as a result of alternative fuels and conservation.

Regulation

Regulation of the Company’s Operations

EQT Production’s exploration and production operations are subject to various types of federal, state and local laws and regulations, including

regulations related to the location of wells; the method of drilling, well construction and casing design; water withdrawal and procurement for well stimulation

purposes; well production; spill prevention plans; the use, transportation, storage and disposal of fluids and materials incidental to oil and gas operations;

surface usage and the reclamation of properties upon which wells or other facilities have been located; the plugging and abandoning of wells; the calculation,

reporting and disbursement of taxes; and the gathering of production in certain circumstances. These regulations may affect the costs and timing of

developing the Company’s natural gas resources.

EQT Production’s operations are also subject to conservation and correlative rights regulations, including the regulation of the size of drilling and

spacing units or field rule units; the number of wells that may be drilled in a unit or in close proximity to other wells; drilling in the vicinity of coal mining

operations and certain other structures; and the unitization or pooling of natural gas properties. Both Kentucky and Virginia allow the statutory pooling or

integration of tracts to facilitate development and exploration, while in West Virginia and Pennsylvania it is necessary to rely on voluntary pooling of lands and

leases. In addition, state conservation and oil and gas laws generally limit the venting or flaring of natural gas.

EQT Midstream’s transmission and gathering operations are subject to various types of federal and state environmental laws and local zoning

ordinances, including air permitting requirements for compressor station and dehydration units; erosion and sediment control requirements for compressor

station and pipeline construction projects; waste management requirements and spill prevention plans for compressor stations; various recordkeeping and

reporting requirements for air permits and waste management practices; compliance with safety regulations; and siting and noise regulations for compressor

stations. These regulations may affect the costs of or increase the time of developing new or expanded pipelines and compressor stations.

EQT Midstream has both non-regulated and regulated operations. The interstate natural gas transmission systems and storage operations are regulated

by the FERC, and certain gathering lines are also subject to rate regulation by the FERC. For instance, the FERC approves tariffs that establish Equitrans’

rates, cost recovery mechanisms and other terms and conditions of service to Equitrans’ customers. The fees or rates established under Equitrans’ tariffs are a

function of its costs of providing services to customers, including a reasonable return on invested capital. The FERC’s authority over transmission and

gathering also extends to: storage and related services; certification and construction of new facilities; extension or abandonment of services and facilities;

maintenance of accounts and records; relationships between pipelines and certain affiliates; terms and conditions of service; depreciation and amortization

policies; acquisition and disposition of facilities; the safety of pipelines; and initiation and discontinuation of services.

EQT Production and EQT Midstream each engage in natural gas hedging activities, which include swaps and other derivatives that are regulated by,

among others, the CFTC. In July 2010, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) that, among

other things, established federal oversight and regulation of swaps and certain entities that participate in swap markets. The Dodd-Frank Act authorized the

CFTC to develop comprehensive regulation for types of swaps the Company may use. Among the most significant provisions of the Dodd-Frank Act are:

mandatory clearing of swaps through regulated central clearing organizations and mandatory trading of such swaps on regulated exchanges or swap execution

facilities (in each case, subject to certain key exceptions). The Dodd-Frank Act also required the registration and comprehensive oversight of swap dealers,

which may act as swap counterparties to EQT Production and EQT Midstream.

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In October 2012, joint rules of the CFTC and the SEC defining “swap” became effective and enabled the CFTC to begin implementing the new

regulatory framework for swaps. As of the date of this report, the CFTC has adopted many final rules that will impose regulatory obligations on all market

participants, including EQT Production and EQT Midstream. Compliance with many of these new rules will be phased in throughout 2013 and into at least

2014. The new rules may be directly applicable to EQT Production and EQT Midstream or may have an indirect effect where the rules apply to EQT

Production and EQT Midstream’s counterparties, which may include registered swap dealers. Other CFTC rules that may be relevant to EQT Production

and EQT Midstream have yet to be finalized. Because many CFTC final rules do not have final compliance dates and other rules are still at the proposal

stage, it is not possible at this time to predict the extent of the impact of the Dodd-Frank Act and new regulations on the Company’s hedging program or

regulatory compliance obligations. The Company anticipates, however, increased compliance costs and significant changes to current market practices as

participants adapt to a new regulatory environment.

Equitable Gas’ distribution rates, terms of service and certain contracts with affiliates are subject to comprehensive regulation by the PA PUC and the

WV PSC. The field line sales rates in Kentucky are subject to rate regulation by the KY PSC.

Equitable Gas must usually seek the approval of one or more of its regulators prior to changing its rates. Currently, Equitable Gas passes through to

its regulated customers the cost of its purchased gas and transportation activities. Equitable Gas is provided an opportunity to recover a return in addition to

the costs of its distribution and gathering delivery activities. However, Equitable Gas’ regulators do not guarantee recovery and may require that certain costs

of operation be recovered over an extended term.

As required by Pennsylvania law, Equitable Gas has a customer assistance program that assists low-income customers with paying their gas bills. The

cost of this program is recovered through rates charged to other residential customers.

Regulators periodically audit the Company’s compliance with applicable regulatory requirements. The Company anticipates that compliance with

existing laws and regulations governing current operations will not have a material adverse effect upon its capital expenditures, earnings or competitive

position. Additional proposals that affect the oil and gas industry are regularly considered by the U.S. Congress, the states, regulatory agencies and the

courts. The Company cannot predict when or whether any such proposals may become effective.

Environmental, Health and Safety Regulation

The business operations of the Company are also subject to various federal, state and local environmental, health and safety laws and regulations

pertaining to, among other things, the release, emission or discharge of materials into the environment; the generation, storage, transportation, handling and

disposal of materials (including solid and hazardous wastes); the safety of employees and the general public; and the pollution, preservation, remediation or

protection of human health and safety, natural resources, wildlife or the environment. The Company must take into account environmental, health and safety

regulations in, among other things, planning, designing, constructing (including drilling), operating and abandoning wells, pipelines and related facilities. In

most instances, the regulatory frameworks relate to the handling of drilling, production and processing materials and emissions, the disposal of drilling,

production and processing wastes, the protection of water and air and the protection of people and aquatic life.

The Company has established procedures for ongoing evaluation of its operations to identify potential environmental exposures and to assure

compliance with regulatory policies and procedures. Ongoing expenditures for compliance with environmental laws and regulations, including investments in

plant and facilities to meet environmental requirements, have not been material to the Company’s financial position, results of operations or liquidity.

Vast quantities of natural gas deposits exist in shale and other formations. It is customary in the Company’s industry to recover natural gas from these

shale formations through the use of hydraulic fracturing, combined with sophisticated horizontal drilling. Hydraulic fracturing is the process of creating or

expanding cracks, or fractures, in

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formations underground where water, sand and other additives are pumped under high pressure into a shale gas formation. These deeper formations are

geologically separated and isolated from fresh ground water supplies by overlying rock layers. The Company’s well construction practices include installation

of multiple layers of protective steel casing surrounded by cement that are specifically designed and installed to protect freshwater aquifers. To assess water

sources near our drilling locations, we conduct baseline and post-drilling water testing at all water wells within at least 2,500 feet of our drilling pads.

Legislative and regulatory efforts at the federal level and in some states have sought to render more stringent permitting and compliance requirements for

hydraulic fracturing. If passed into law, the additional permitting requirements for hydraulic fracturing may increase the cost to or limit the Company’s ability

to obtain permits to construct wells.

Climate Change

Legislative and regulatory measures to address climate change and greenhouse gas emissions are in various phases of discussion or implementation.

Effective January 1, 2011, the EPA began regulating greenhouse gas emissions by subjecting new facilities and major modifications to existing facilities that

emit large amounts of greenhouse gases to the permitting requirements of the federal Clean Air Act. In addition, the U.S. Congress has been considering bills

that would establish a cap-and-trade program to reduce emissions of greenhouse gases. Legislation or regulation that restricts carbon emissions could increase

the Company’s cost of environmental compliance by requiring the Company to install new equipment to reduce emissions from larger facilities and/or

purchase emission allowances. Climate change and greenhouse gas legislation or regulation could also delay or otherwise negatively affect efforts to obtain

permits and other regulatory approvals with regard to existing and new facilities, or impose additional monitoring and reporting requirements. Conversely,

legislation or regulation that sets a price on or otherwise restricts carbon emissions could also benefit the Company by increasing demand for natural gas,

because the combustion of natural gas results in substantially fewer carbon emissions per Btu of heat generated than other fuels, such as coal. The effect on

the Company of any new legislative or regulatory measures will depend on the particular provisions that are ultimately adopted.

Employees

The Company and its subsidiaries had 1,873 employees at the end of 2012. As of December 31, 2012, approximately 10% of the Company’s

workforce was subject to collective bargaining agreements. The collective bargaining agreement which covers approximately 8% of the Company’s workforce

will expire on July 8, 2015. The collective bargaining agreement which covers approximately 2% of the Company’s workforce was extended in the fourth

quarter of 2012 to January 22, 2016.

Availability of Reports

The Company makes certain filings with the SEC, including its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on

Form 8-K and all amendments and exhibits to those reports, available free of charge through its website, http://www.eqt.com, as soon as reasonably

practicable after the date they are filed with, or furnished to, the SEC. The filings are also available at the SEC’s Public Reference Room at 100 F Street, N.E.,

Washington, D.C. 20549 or by calling 1-800-SEC-0330. These filings are also available on the internet at http://www.sec.gov. The Company’s press releases

and recent analyst presentations are also available on the Company’s website.

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Composition of Segment Operating Revenues

Presented below are operating revenues as a percentage of total operating revenues for each class of products and services representing greater than 10%

of total operating revenues.

For the year ended December 31,

2012 2011 2010

EQT Production:

Natural gas sales 47% 41% 27%

EQT Midstream:

Gathering revenue 17% 14% 13%

Distribution:

Residential natural gas sales 12% 15% 20%

Financial Information about Segments

See Note 3 to the Consolidated Financial Statements for financial information by business segment including, but not limited to, revenues from external

customers, operating income and total assets.

Jurisdiction and Year of Formation

The Company is a Pennsylvania corporation formed in 2008 in connection with a holding company reorganization of the former Equitable

Resources, Inc.

Financial Information about Geographic Areas

Substantially all of the Company’s assets and operations are located in the continental United States.

Environmental

See Note 18 to the Consolidated Financial Statements for information regarding environmental matters.

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Item 1A. Risk Factors

Risks Relating to Our Business

In addition to the other information contained in this Form 10-K, the following risk factors should be considered in evaluating our business and future

prospects. Please note that additional risks not presently known to us or that are currently considered immaterial may also have a negative impact on our

business and operations. If any of the events or circumstances described below actually occurs, our business, financial condition or results of operations

could suffer and the trading price of our common stock could decline.

Natural gas price volatility may have an adverse effect upon our revenue, profitability, future rate of growth and liquidity.

Our revenue, profitability, future rate of growth and liquidity depend upon the price for natural gas. The markets for natural gas are volatile and

fluctuations in prices will affect our financial results. Natural gas prices are affected by a number of factors beyond our control, which include: weather

conditions; the supply of and demand for natural gas; national and worldwide economic and political conditions; the price and availability of alternative

fuels; the availability, proximity and capacity of pipelines, other transportation facilities, and gathering, processing and storage facilities; and government

regulations, such as regulation of natural gas transportation and price controls.

Lower natural gas prices may result in decreases in the revenue, margin and cash flow for each of our businesses, a reduction in drilling activity and

the construction of new transportation capacity and downward adjustments to the value of oil and gas properties which may cause us to incur non-cash

charges to earnings. Moreover, if we fail to control our operating costs during periods of lower natural gas prices, we could further reduce our margin. A

reduction in margin or cash flow will reduce our funds available for capital expenditures and, correspondingly, our opportunities for growth. We are also

exposed to the risk of non-performance by our hedge counterparties in the event that changes, positive or negative, in natural gas prices result in derivative

contracts with a positive fair value.

Increases in natural gas prices may be accompanied by or result in increased well drilling costs, increased deferral of purchased gas costs for our

distribution operations, increased production taxes, increased lease operating expenses, increased exposure to credit losses resulting from potential increases in

uncollectible accounts receivable from our distribution customers, increased volatility in seasonal gas price spreads for our storage assets and increased

customer conservation or conversion to alternative fuels. Significant price increases may subject us to margin calls on our commodity price derivative

contracts (hedging arrangements, including futures contracts, swap, collar and option agreements and exchange-traded instruments) which would potentially

require us to post significant amounts of cash collateral with our hedge counterparties. The cash collateral, which is interest-bearing, provided to our hedge

counterparties, is returned to us in whole or in part upon a reduction in forward market prices, depending on the amount of such reduction, or in whole upon

settlement of the related hedged transaction. In addition, to the extent we have hedged our current production at prices below the current market price, we are

unable to benefit fully from an increase in the price of natural gas.

We are subject to risks associated with the operation of our wells, pipelines and facilities.

Our business operations are subject to all of the inherent hazards and risks normally incidental to the production, transportation, storage and

distribution of natural gas and NGLs, such as well site blowouts, cratering and explosions, pipe and other equipment and system failures, uncontrolled flows

of natural gas or well fluids, fires, formations with abnormal pressures, pollution and environmental risks and natural disasters. We also face various

security risks, including cyber security threats to gain unauthorized access to sensitive information or render data or systems unusable, and threats to the

security of our or third parties’ facilities and infrastructure, such as processing plants and pipelines. These risks could result in substantial losses due to

personal injury and/or loss of life, severe damage to and destruction of property and equipment, pollution or other environmental damage and loss of sensitive

confidential information. Moreover, in the event that one or more of these hazards occur, there can be no assurance that a response will be adequate to limit or

reduce damage. As a result of these risks, we are also sometimes a defendant in legal proceedings and litigation arising in the ordinary course of business. 

There can be no assurance

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that the insurance policies we maintain to limit our liability for such losses will be adequate to protect us from all material expenses related to potential future

claims for personal injury and property damage or that such levels of insurance will be available in the future at economical prices or to cover all risks.

Our failure to develop, obtain or maintain the necessary infrastructure to successfully deliver gas to market may adversely affect our

earnings, cash flows and results of operations.

Our delivery of gas depends upon the availability, proximity and capacity of pipelines, other transportation facilities and gathering and processing

facilities. In the Marcellus play, the capacity of transportation, gathering and processing facilities may be insufficient to accommodate potential production

from existing and new wells. Competition for pipeline infrastructure within the region is intense, and many of our competitors have substantially greater

financial resources than we do, which could affect our competitive position. The Company’s investment in midstream infrastructure is intended to address a

lack of capacity on, and access to, existing gathering and transportation pipelines as well as curtailments on such pipelines. Our infrastructure development

and maintenance programs can involve significant risks, including those related to timing, cost overruns and operational efficiency, and these risks can be

affected by the availability of capital, materials and qualified contractors and work force, as well as weather conditions, gas price volatility, government

approvals, title and property access problems, geology, compliance by third parties with their contractual obligations to us and other factors. We also deliver

to and are served by third-party gas transportation, gathering, processing and storage facilities which are limited in number, geographically concentrated and

subject to the same risks identified above with respect to our infrastructure development and maintenance programs. Because we do not own these third-party

pipelines or facilities, their continuing operation is not within our control. An extended interruption of access to or service from our or third-party pipelines and

facilities could result in adverse consequences to us, such as delays in producing and selling our natural gas. In such event, we might have to shut in our

wells awaiting a pipeline connection or capacity and/or sell natural gas production at significantly lower prices than those quoted on NYMEX or than we

currently project. In addition, some of our third-party contracts may involve significant long-term financial commitments on our part. Moreover, our usage of

third parties for transportation, gathering and processing services subjects us to the credit and performance risk of such third parties and may make us

dependent upon those third parties to get our produced natural gas to market.

Also, our producing properties and operations are limited to the Appalachian Basin, making us vulnerable to risks associated with operating in limited

geographic areas. As a result, we may be disproportionately exposed to the impact of delays or interruptions of production caused by transportation capacity

constraints, curtailment of production, availability of equipment, facilities, personnel or services, significant governmental regulation, natural disasters,

adverse weather conditions, plant closures for scheduled maintenance or interruption of transportation of gas produced from this area.

Strategic determinations, including the allocation of capital and other resources to strategic opportunities, are challenging, and our failure

to appropriately allocate capital and resources among our strategic opportunities may adversely affect our financial condition and reduce our

growth rate.

Our future growth prospects are dependent upon our ability to identify optimal strategies for our business. In developing our 2013 business plan, we

considered allocating capital and other resources to various aspects of our businesses, including well development (primarily drilling), reserve acquisitions,

exploratory activities, midstream infrastructure, distribution infrastructure, corporate items and other alternatives. We also considered our likely sources of

capital. Notwithstanding the determinations made in the development of our 2013 plan, business opportunities not previously identified periodically come to

our attention, including possible acquisitions and dispositions. If we fail to identify optimal business strategies, including the appropriate rate of reserve

development, or fail to optimize our capital investment and capital raising opportunities and the use of our other resources in furtherance of our business

strategies, our financial condition and growth rate may be adversely affected. Moreover economic or other circumstances may change from those contemplated

by our 2013 plan, and our failure to recognize or respond to those changes may limit our ability to achieve our objectives.

On December 19, 2012, we signed an agreement to transfer Equitable Gas Company to PNG Companies in exchange for $720 million in cash, subject

to adjustment, and select midstream assets and commercial arrangements. Acquisitions, dispositions and other strategic transactions involve various inherent

risks, such as our

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ability to obtain the necessary regulatory approvals; the timing of and conditions imposed upon us by regulators in connection with such approvals; and our

ability to achieve benefits anticipated to result from acquisition or disposition of the assets. In addition, various factors including prevailing market

conditions could negatively impact the benefits we receive from transactions. Our inability to complete a transaction or to achieve our strategic or financial

goals in any transaction could have significant adverse effects on our earnings, cash flows and results of operations.

Our need to comply with comprehensive, complex and sometimes unpredictable government regulations may increase our costs and limit

our revenue growth, which may result in reduced earnings.

Our operations are regulated extensively at the federal, state and local levels. Laws, regulations and other legal requirements have increased the cost to

plan, design, drill, install, operate and abandon wells, gathering systems, pipelines and distribution systems. Environmental, health and safety legal

requirements govern discharges of substances into the air and water; the management and disposal of hazardous substances and wastes; the clean-up of

contaminated sites; groundwater quality and availability; plant and wildlife protection; locations available for drilling and pipeline construction;

environmental impact studies and assessments prior to permitting; restoration of drilling properties after drilling is completed; pipeline safety (including

replacement requirements); and work practices related to employee health and safety. Compliance with the laws, regulations and other legal requirements

applicable to our businesses may increase our cost of doing business or result in delays due to the need to obtain additional or more detailed governmental

approvals and permits. These requirements could also subject us to claims for personal injuries, property damage and other damages. Our failure to comply

with the laws, regulations and other legal requirements applicable to our businesses, even if as a result of factors beyond our control, could result in the

suspension or termination of our operations and subject us to administrative, civil and criminal penalties and damages.

The rates charged to customers by our gathering, transportation, storage and distribution businesses are, in many cases, subject to state or federal

regulation. The agencies that regulate our rates may prohibit us from realizing a level of return which we believe is appropriate. These restrictions may take

the form of imputed revenue credits, cost disallowances (including purchased gas cost recoveries) and/or expense deferrals. Additionally, we may be required

to provide additional assistance to low income residential customers to help pay their bills without the ability to recover some or all of the additional assistance

in rates.

Laws, regulations and other legal requirements are constantly changing, and implementation of compliant processes in response to such changes could

be costly and time consuming. For instance, several initiatives aimed at greenhouse gas emissions and air pollution have recently been enacted or are being

considered. On January 1, 2011, the EPA began regulating greenhouse gas emissions by subjecting new facilities and major modifications to existing facilities

that emit large emissions of greenhouse gas emissions to the permitting requirements of the federal Clean Air Act.

Moreover, the U.S. Congress and various states have been evaluating climate-related legislation and other regulatory initiatives that would restrict

emissions of greenhouse gases, including methane (a primary component of natural gas) and carbon dioxide (a byproduct of burning natural gas). Such

restrictions may result in additional compliance obligations with respect to, or taxes on the release, capture and use of, greenhouse gases that could have an

adverse effect on our operations.

Additionally, on April 7, 2012, the EPA issued final rules that subject all oil and gas operations (production, processing, transmission, storage and

distribution) to regulation under the New Source Performance Standards (NSPS) and National Emissions Standards for Hazardous Air Pollutants (NESHAP)

programs. The EPA’s rules also include NSPS standards for the completions of hydraulically fractured gas wells, applicable to newly drilled and fractured

wells as well as existing wells that are refractured. The rules under NESHAP include maximum achievable control technology standards for certain equipment

not currently subject to such standards. Compliance with these initiatives and rules could result in an increase to our costs or require changes that reduce our

production.

Another area of potential regulation is hydraulic fracturing, which we utilize to complete most of our natural gas wells. Certain environmental and other

groups have suggested that additional laws and regulations

20

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may be needed to more closely regulate the hydraulic fracturing process, and legislation has been proposed or is under discussion at the federal and state

levels. We cannot predict whether any such federal or state legislation or regulation will be enacted and, if enacted, how it may impact our operations, but

enactment of additional laws or regulations could increase our operating costs.

Recent discussions regarding the federal budget have included proposals which could potentially increase and accelerate the payment of federal and

collaterally state income taxes of independent producers with the potential repeal of the ability to expense intangible drilling costs having the most significant

potential future impact to us. These changes, if enacted, will make it more costly for us to explore for and develop our natural gas resources.

The rates of federal, state and local taxes applicable to the industries in which we operate, including production taxes paid by EQT Production, which

often fluctuate, could be increased by the various taxing authorities. In addition, the tax laws, rules and regulations that affect our business, such as the

imposition of a new severance tax (a tax on the extraction of natural resources) in states in which we produce gas, could change. Any such increase or change

could adversely impact our cash flows and profitability.

In July 2010, Congress enacted the Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) that, among other things, authorized the

CFTC to develop comprehensive regulation for the swap markets. The Dodd-Frank Act created a new structure for trading OTC swaps, a market in which

we are currently a market participant. Among other things, the Dodd-Frank Act established mandatory clearing of certain standardized swaps through

regulated central clearing organizations and mandatory trade execution of those swaps on regulated exchanges or swap execution facilities (in each case, subject

to certain key exceptions). The CFTC’s new regulatory regime requires the registration and comprehensive oversight of swap dealers. The CFTC has

finalized new rules directly applicable to EQT Production and EQT Midstream. In addition, the CFTC’s finalized new rules may have an indirect effect on

EQT Production and EQT Midstream’s counterparties, which may include registered swap dealers. As of the date of this report, certain CFTC rules that may

be relevant to EQT Production and EQT Midstream remain in the proposal stage. Furthermore, there is ongoing regulatory uncertainty regarding compliance

dates for finalized CFTC rules. Throughout 2012 the CFTC repeatedly delayed compliance dates for numerous new rules. Other CFTC rules have also been

challenged by industry groups in federal court, further adding to regulatory uncertainty.

We anticipate that the CFTC rules will increase regulatory compliance costs for EQT Production and EQT Midstream. Additionally, any

counterparties of EQT Production or EQT Midstream that register as swap dealers will be required to comply with substantial and burdensome new

regulatory obligations. Compliance costs incurred by these swap dealers may make it more expensive for entities that hedge, such as EQT Production and

EQT Midstream, to hedge their risks with swaps. Accordingly, it is not possible at this time to predict the extent of the impact of the Dodd-Frank Act and new

regulatory regime on our hedging program. It is possible, however, that the Dodd-Frank Act and regulatory regime for swaps will make hedging more

expensive, uneconomic or unavailable, which could lead to increased costs or commodity price volatility or a combination of both.

We have substantial capital requirements, and we may not be able to obtain needed financing on satisfactory terms, if at all.

We rely upon access to both short-term bank and money markets and longer-term capital markets as sources of liquidity for any capital requirements

not satisfied by the cash flow from operations or other sources. Future challenges in the global financial system, including the capital markets, may adversely

affect our business and our financial condition. Our ability to access the capital markets may be restricted at a time when we desire, or need, to raise capital,

which could have an impact on our flexibility to react to changing economic and business conditions. Adverse economic and market conditions could

adversely affect the collectability of our trade receivables and cause our commodity hedging counterparties to be unable to perform their obligations or to seek

bankruptcy protection. Future challenges in the economy could also lead to reduced demand for natural gas which could have a negative impact on our

revenues and our credit ratings.

Any downgrade of our credit ratings may increase the cost of borrowing or adversely affect our ability to raise capital through the issuance of debt or

equity securities or other borrowing arrangements, which could adversely affect our business, results of operations and liquidity. We cannot be sure that our

current ratings will

21

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remain in effect for any given period of time or that our rating will not be lowered or withdrawn entirely by a rating agency. An increase in the level of our

indebtedness in the future may result in a downgrade in the ratings that are assigned to our debt. Any downgrade in our ratings could result in an increase in

our borrowing costs, which would diminish financial results.

Our failure to assess production opportunities based on market conditions could negatively impact our long-term growth prospects for our

production business.

Our goal of sustaining long-term growth for our production business is contingent upon our ability to identify production opportunities based on

market conditions. Our decision to drill a well is subject to a number of factors which may alter our drilling schedule or our plans to drill at all. We may have

difficulty drilling all of the wells before the lease term expires which could result in the loss of certain leasehold rights or we could drill wells in locations where

we do not have the necessary infrastructure to deliver the gas to market. Successfully identifying production opportunities involves a high degree of business

experience, knowledge and careful evaluation of potential opportunities, along with subjective judgments and assumptions which may prove to be incorrect. In

addition, any exploration projects increase the risks inherent in our natural gas activities. Specifically, seismic data is subject to interpretation and may not

accurately identify the presence of natural gas or other hydrocarbons, which could adversely affect the results of our operations. Because we have a limited

operating history in certain areas, our future operating results may be difficult to forecast, and our failure to sustain high growth rates in the future could

adversely affect the market price of our common stock.

The amount and timing of actual future gas production is difficult to predict and may vary significantly from our estimates, which may

reduce our earnings.

Our future success depends upon our ability to develop additional gas reserves that are economically recoverable and to optimize existing well

production, and our failure to do so may reduce our earnings. Our drilling and subsequent maintenance of wells can involve significant risks, including

those related to timing, cost overruns and operational efficiency, and these risks can be affected by the availability of capital, leases, rigs, equipment and a

qualified work force, as well as weather conditions, gas price volatility, government approvals, title and property access problems, geology, equipment failure

or accidents and other factors. Drilling for natural gas can be unprofitable, not only from dry wells, but from productive wells that do not produce sufficient

revenues to return a profit. Additionally, a failure to effectively and efficiently operate existing wells may cause production volumes to fall short of our

projections. Without continued successful development or acquisition activities, together with effective operation of existing wells, our reserves and revenues

will decline as a result of our current reserves being depleted by production.

We also rely on third parties for certain construction, drilling and completion services, materials and supplies. Delays or failures to perform by such

third parties could adversely impact our operations.

Negative public perception regarding us and/or our industry could have an adverse effect on our operations.

Negative public perception regarding us and/or our industry resulting from, among other things, oil spills, the explosion of natural gas transmission

lines and concerns raised by advocacy groups about hydraulic fracturing, may lead to increased regulatory scrutiny which may, in turn, lead to new local,

state and federal safety and environmental laws, regulations, guidelines and enforcement interpretations. These actions may cause operational delays or

restrictions, increased operating costs, additional regulatory burdens and increased risk of litigation. Moreover, governmental authorities exercise considerable

discretion in the timing and scope of permit issuance and the public may engage in the permitting process, including through intervention in the courts.

Negative public perception could cause the permits we need to conduct our operations to be withheld, delayed or burdened by requirements that restrict our

ability to profitably conduct our business.

22

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
The loss of key personnel could adversely affect our ability to execute our strategic, operational and financial plans.

Our operations are dependent upon key management and technical personnel, and one or more of these individuals could leave our employment. The

unexpected loss of the services of one or more of these individuals could have a detrimental effect on us. In addition, the success of our operations will depend,

in part, on our ability to attract, develop and retain experienced personnel. There is competition within our industry for experienced technical personnel and

certain other professionals, which could increase the costs associated with attracting and retaining such personnel. If we cannot attract, develop and retain our

technical and professional personnel or attract additional experienced technical and professional personnel, our ability to compete could be harmed.

The standardized measure of discounted future net cash flows from our proved reserves will not be the same as the current market value

of our estimated natural gas and oil reserves.

You should not assume that the standardized measure of discounted future net cash flows from our proved reserves is the current market value of our

estimated natural gas and oil reserves. In accordance with SEC requirements, we based the discounted future net cash flows from our proved reserves on the

12-month unweighted arithmetic average of the first-day-of-the-month price for the preceding twelve months without giving effect to derivative transactions.

Actual future net cash flows from our properties will be affected by factors such as the actual prices we receive for natural gas, NGLs and oil and the amount,

timing and cost of actual production. In addition, the 10% discount factor we use when calculating standardized measure may not be the most appropriate

discount factor based on interest rates in effect from time to time and risks associated with us or the natural gas, NGL and oil industry in general.

Our proved reserves are estimates that are based upon many assumptions that may prove to be inaccurate. Any significant change in

these underlying assumptions will greatly affect the quantities and present value of our reserves.

Reserve engineering is a subjective process involving estimates of underground accumulations of natural gas, NGLs and oil and assumptions

concerning future prices, production levels and operating and development costs. These estimates and assumptions are inherently imprecise. As a result,

estimated quantities of proved reserves and projections of future production rates and the timing of development expenditures may prove to be inaccurate. Any

significant variance from our assumptions could greatly affect our estimates of reserves, the economically recoverable quantities of natural gas, NGLs and oil,

the classifications of reserves based on risk of recovery and estimates of the future net cash flows. Numerous changes over time to the assumptions on which

our reserve estimates are based, as described above, often result in the actual quantities of natural gas, NGLs and oil we ultimately recover being different

from our reserve estimates.

See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” for further discussion regarding the Company’s exposure

to market risks, including the risks associated with our use of derivative contracts to hedge commodity prices.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Principal facilities are owned or, in the case of certain office locations, warehouse buildings and equipment, leased, by the Company’s business

segments. The majority of the Company’s properties are located on or under (i) private properties owned in fee, held by lease or occupied under perpetual

easements or other rights acquired for the most part without warranty of underlying land titles or (ii) public highways under franchises or permits from

various governmental authorities. The Company’s facilities are generally well maintained and, where appropriate, are replaced or expanded to meet operating

requirements.

23

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EQT Production: EQT Production’s properties are located primarily in Pennsylvania, West Virginia, Kentucky and Virginia. This segment has

approximately 3.5 million gross acres (approximately 62% of which are considered undeveloped), which encompass substantially all of the Company’s

acreage of proved developed and undeveloped natural gas and oil production properties. Approximately 540,000 of these gross acres are located in the

Marcellus play. Although most of its wells are drilled to relatively shallow depths (2,000 to 8,000 feet below the surface), the Company retains what are

normally considered “deep rights” on the majority of its acreage. As of December 31, 2012, the Company estimated its total proved reserves to be 6,004 Bcfe,

consisting of proved developed producing reserves of 2,735 Bcfe, proved developed non-producing reserves of 63 Bcfe and proved undeveloped reserves of

3,206 Bcfe. Substantially all of the Company’s reserves reside in continuous accumulations.

The Company’s estimate of proved natural gas and oil reserves are prepared by Company engineers. The engineer primarily responsible for preparing

the reserve report and the technical aspects of the reserves audit received a bachelor’s degree in Petroleum and Natural Gas Engineering from the Pennsylvania

State University and has 24 years of experience in the oil and gas industry. To ensure that the reserves are materially accurate, management reviews the price,

heat content conversion rate and cost assumptions used in the economic model to determine the reserves. Additionally, division of interest and production

volumes are reconciled between the system used to calculate the reserves and other accounting/measurement systems and the reserve reconciliation between

prior year reserves and current year reserves is reviewed by senior management.

The Company’s estimate of proved natural gas and oil reserves is audited by the independent consulting firm of Ryder Scott Company, L.P. (Ryder

Scott), which is hired by the Company’s management. Since 1937, Ryder Scott has evaluated oil and gas properties and independently certified petroleum

reserves quantities in the United States and internationally. Ryder Scott reviewed 100% of the total net gas and liquid hydrocarbon proved reserves attributable

to the Company’s interests as of December 31, 2012. Ryder Scott conducted a detailed, well by well, audit of the Company’s largest properties. This audit

covered 80% of the Company’s proved reserves. Ryder Scott’s audit of the remaining 20% of the Company’s properties consisted of an audit of aggregated

groups not exceeding 200 wells per group. Ryder Scott’s audit report has been filed herewith as Exhibit 99.01.

No report has been filed with any federal authority or agency reflecting a 5% or more difference from the Company’s estimated total reserves. 

Additional information relating to the Company’s estimates of natural gas and crude oil reserves and future net cash flows is provided in Note 21 (unaudited)

to the Consolidated Financial Statements.

In 2012, the Company commenced drilling operations (“spud” or “drilled”) on 127 gross horizontal wells with an aggregate of approximately 700,000

feet of pay in the Marcellus play. Total proved reserves in the Marcellus play increased 25% to 4.3 Tcfe in 2012 primarily as a result of the Company’s 2012

drilling program. In the Huron play, the Company drilled 7 gross horizontal wells during 2012 with an aggregate of approximately 37,000 feet of pay. Total

proved reserves in the Huron play (including vertical non-shale formations) decreased approximately 11% to 1.6 Tcfe, as the Company has indefinitely ceased

development in the Huron play and plans to focus its capital expenditures during the next five years on developing the Marcellus play. The Company did not

drill any gross CBM wells in 2012. The CBM play had total proved reserves of 0.1 Tcfe at December 31, 2012, slightly down from 2011. Natural gas

production sales volumes in 2012 from the Marcellus, Huron and CBM plays were 150.5 Bcfe, 94.9 Bcfe and 13.1 Bcfe, respectively. Over the past three

years, the Company has experienced a 99% developmental drilling success rate.

24

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Natural gas, BTU premium, NGL and crude oil production and pricing:

For the Year Ended December 31,

2012 2011 2010

Natural Gas:

Average wellhead sales price to EQT Corporation per Mcf (including hedges) $ 3.64 $ 4.40 $ 4.59

BTU Premium (ethane sold as natural gas):

Average sales price per Btu $ 2.83 $ 4.04 $ 4.35

NGLs:

Average sales price per Bbl $ 44.75 $ 60.42 $ 48.76

Crude Oil:

Average sales price per Bbl $ 83.95 $ 81.58 $ 70.42

For additional information on production and pricing, see “Consolidated Operational Data” in “Management’s Discussion and Analysis of Financial

Condition and Results of Operations.”

The Company’s average per unit production cost, excluding production taxes, of natural gas and crude oil during 2012, 2011 and 2010 was $0.18,

$0.20 and $0.24 per Mcfe, respectively. At December 31, 2012, the Company had approximately 51 multiple completion wells.

Natural Gas Oil

Total productive wells at December 31, 2012:

Total gross productive wells 14,661 5

Total net productive wells 12,777 5

Total in-process wells at December 31, 2012:

Total gross in-process wells 103 –

Total net in-process wells 9 9 –

Summary of proved oil and gas reserves as of December 31, 2012 based on average fiscal year prices:

(MMcf) (Mbbls)

Developed 2,779,187 3,199

Undeveloped 3,206,571 –

Total proved reserves 5,985,758 3,199

Total acreage at December 31, 2012:

Total gross productive acres 1,317,724

Total net productive acres 1,145,728

Total gross undeveloped acres 2,196,037

Total net undeveloped acres 1,909,401

As of December 31, 2012, the Company did not have any reserves that have been classified as proved undeveloped reserves for more than five years.

Certain lease and acquisition agreements require the Company to drill a specific number of wells in 2013. A drilling obligation exists to drill 2 wells in

the Lower Huron formation and approximately 20,000 gross undeveloped acres could expire if this obligation is not met. Within the Marcellus formation, the

Company is required to drill 5 wells in 2013 and could incur the potential loss of approximately 14,000 gross undeveloped acres if this obligation is not met. 

The Company intends to satisfy such requirements either directly through its 2013 development program or indirectly by contracting with a third party to do

so, including through an assignment of the lease, farmout or other arrangement.

25

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As of December 31, 2012, leases associated with approximately 20,000 gross undeveloped acres expire in 2013 if they are not renewed. This acreage is

in addition to the acreage that may be lost if drilling obligations are not met. The Company, however, has an active lease renewal program in areas targeted for

development.

Number of net productive and dry exploratory and development wells drilled:

For the year ended December 31,

2012 2011 2010

Exploratory wells:

Productive – – –

Dry – – –

Development wells:

Productive 128.5 211.2 392.1

Dry 1.0 2.0 3.0

Selected data by state (at December 31, 2012 unless otherwise noted):

Kentucky

West

Virginia Virginia Pennsylvania Ohio Total

Natural gas and oil production (MMcfe) –

2012 59,891 81,534 23,438 96,100 – 260,963

Natural gas and oil production (MMcfe) –

2011 61,402 53,742 25,581 58,096 – 198,821

Natural gas and oil production (MMcfe) –

2010 58,592 35,199 25,985 19,245 – 139,021

Average net revenue interest (%) 95.5% 88.0% 49.9% 82.4% – 81.9%

Total gross productive wells 5,586 4,973 3,253 854 – 14,666

Total net productive wells 5,274 4,714 1,949 845 – 12,782

Total gross productive acreage 544,160 424,084 274,640 74,760 80 1,317,724

Total gross undeveloped acreage 933,358 782,515 269,877 197,652 12,635 2,196,037

Total gross acreage 1,477,518 1,206,599 544,517 272,412 12,715 3,513,761

Total net productive acreage 473,125 368,734 231,337 72,452 80 1,145,728

Total net undeveloped acreage 923,856 657,808 120,670 194,968 12,099 1,909,401

Total net acreage 1,396,981 1,026,542 352,007 267,420 12,179 3,055,129

Proved developed producing reserves

(Bcfe) 1,036 802 264 633 – 2,735

Proved developed non-producing reserves

(Bcfe) 2 22 – 39 – 63

Proved undeveloped reserves (Bcfe) – 1,121 – 2,085 – 3,206

Proved developed and undeveloped

reserves (Bcfe) 1,038 1,945 264 2,757 – 6,004

Gross proved undeveloped drilling

locations – 237 – 315 – 552

Net proved undeveloped drilling locations – 237 – 311 – 548

26

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Capital expenditures at EQT Production totaled $991.8 million during 2012, including $134.6 million for the acquisition of undeveloped property. 

The Company invested approximately $607 million during 2012 converting undeveloped reserves to developed reserves and $250 million on wells still in

progress at year end. During the year, the Company converted 159 Bcfe of proved undeveloped reserves to proved developed reserves. The Company had

additions to proved developed reserves of 214 Bcfe, the majority of which were from wells drilled that had not previously been classified as proved. 

Downward revisions of 171 Bcfe in proved developed reserves were spread across all areas and all plays. New proved undeveloped reserves of 1,442 Bcfe

were added during 2012. These reserve extensions and discoveries were mainly due to decreased lateral spacing in one of the Company’s Greene County,

Pennsylvania fields and additional proved locations in the Company’s Wetzel and Doddridge County, West Virginia development areas. This increase was

partially offset by negative revisions of 475 Bcfe. This reduction was primarily due to the decrease in the average NYMEX natural gas price for the year and

caused certain existing proved undeveloped reserves to become uneconomical in accordance with SEC pricing requirements. As of December 31, 2012, the

Company’s proved undeveloped reserves totaled 3.2 Tcfe and all were associated with the development of the Marcellus play. All proved undeveloped drilling

locations are expected to be drilled within five years.

Proved developed non-producing reserves decreased 401 Bcfe during 2012 as compared to 2011. During 2012, the Company incurred a higher

percentage of its costs on the well completion phase compared to the drilling phase because of longer laterals, reduced cluster spacing and multi-well pads. As

a result, the Company changed its methodology for classifying wells as proved developed non-producing reserves until only after the fracturing process has

been completed.

The Company’s 2012 extensions, discoveries and other additions resulting from extensions of the proved acreage of previously discovered reservoirs

through additional drilling in periods subsequent to discovery of 1,656 Bcfe exceeded the 2012 production of 261 Bcfe.

Wells located in Kentucky are primarily in Huron formations with depths ranging from 2,500 feet to 6,000 feet. Wells located in West Virginia are

primarily in Huron and Marcellus formations with depths ranging from 2,500 feet to 6,500 feet. Wells located in Virginia are primarily in CBM formations

with depths ranging from 2,000 feet to 3,000 feet. Wells located in Pennsylvania are primarily in Marcellus formations with depths ranging from 5,000 feet to

8,000 feet.

EQT Production owns and leases office space in Pennsylvania, West Virginia, Virginia and Kentucky.

EQT Midstream: EQT Midstream owns or operates approximately 10,300 miles of gathering lines and 244 compressor units with approximately

285,000 horsepower of installed capacity, as well as other general property and equipment.

Kentucky

West

Virginia Virginia Pennsylvania Total

Approximate miles of gathering lines 3,550 4,200 1,700 850 10,300

Substantially all of the gathering operation’s sales volumes are delivered to several large interstate pipelines on which the Company and other customers

lease capacity. These pipelines are subject to periodic curtailments for maintenance and repairs.

EQT Midstream also owns and operates a FERC-regulated transmission and storage system. These operations consist of an approximately 700 mile

FERC-regulated interstate pipeline system that connects to five interstate pipelines and multiple distribution companies. The system is supported by 14

associated natural gas storage reservoirs with approximately 400 MMcf per day of peak delivery capability and 32 Bcf of working gas capacity. The

transmission and storage system stretches throughout north central West Virginia and southwestern Pennsylvania.

EQT Midstream owns and leases office space in Pennsylvania, West Virginia, Virginia and Kentucky.

Distribution: This segment owns and operates natural gas distribution and gathering facilities as well as other general property and equipment in

western Pennsylvania, West Virginia and Kentucky. The distribution operations consist of approximately 4,000 miles of pipe in Pennsylvania, West Virginia

and Kentucky.

27

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Headquarters: The corporate headquarters and other operations are located in leased office space in Pittsburgh, Pennsylvania.

See “Capital Resources and Liquidity” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion

of capital expenditures.

Item 3. Legal Proceedings

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against the Company and its

subsidiaries. While the amounts claimed may be substantial, the Company is unable to predict with certainty the ultimate outcome of such claims and

proceedings. The Company accrues legal or other direct costs related to loss contingencies when actually incurred. The Company has established reserves it

believes to be appropriate for pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, the Company

believes that the ultimate outcome of any matter currently pending against the Company will not materially affect the financial position, results of operations or

liquidity of the Company.

The Company has received a number of Notices of Violation (NOVs) from the Pennsylvania Department of Environmental Protection (PA DEP), which

primarily allege violations of the Pennsylvania Oil and Gas Act, the Pennsylvania Solid Waste Management Act and/or the Pennsylvania Clean Streams Law,

and the rules and regulations thereunder. The Company has responded to these NOVs and has generally corrected or remediated the areas in question. The

Company disputes a number of the alleged NOVs and cannot predict with certainty whether any or all of these NOVs will result in penalties. If penalties are

imposed, an individual penalty or the aggregate of these penalties could result in monetary sanctions in excess of $100,000.

Item 4. Mine Safety and Health Administration Data

Not Applicable.

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Executive Officers of the Registrant (as of February 21, 2013)

Name and Age Current Title (Year Initially Business Experience

Elected an Executive Officer)

Theresa Z. Bone (49) Vice President and Corporate

Controller (2007)

Elected to present position July 2007. Ms. Bone is also Vice President and

Principal Accounting Officer of EQT Midstream Services, LLC, the general

partner of the Partnership, the Company’s publicly-traded master limited

partnership, since January 2012.

Philip P. Conti (53) Senior Vice President and Chief

Financial Officer (2000)

Elected to present position February 2007. Mr. Conti is also Senior Vice

President, Chief Financial Officer and a Director of EQT Midstream

Services, LLC, the general partner of the Partnership, since January 2012.

Randall L. Crawford (50) Senior Vice President and President,

Midstream, Distribution and

Commercial (2003)

Elected to present position April 2010; Senior Vice President and President,

Midstream and Distribution from January 2008 to April 2010. Mr. Crawford

is also Executive Vice President and a Director of EQT Midstream Services,

LLC, the general partner of the Partnership, since January 2012.

Martin A. Fritz (48) Vice President and President,

Midstream Operations (2006)

Elected to present position April 2010; Vice President and President

Midstream from January 2008 to April 2010.

Lewis B. Gardner (55) General Counsel and Vice President,

External Affairs (2008)

Elected to present position March 2008; Managing Director External Affairs

and Labor Relations from January 2008 to March 2008. Mr. Gardner is also a

Director of EQT Midstream Services, LLC, the general partner of the

Partnership, since January 2012.

M. Elise Hyland (53) Vice President and President,

Commercial Operations (2008)

Elected to present position April 2010; Vice President and President, Equitable

Gas from February 2008 to April 2010; President Equitable Gas from

November 2007 to February 2008.

Charlene Petrelli (52) Vice President and Chief Human

Resources Officer (2003)

Elected to present position February 2007.

David L. Porges (55) Chairman, President and Chief

Executive Officer (1998)

Elected to present position May 2011; President, Chief Executive Officer and

Director from April 2010 to May 2011; President, Chief Operating Officer

and Director from February 2007 to April 2010. Mr. Porges is also Chairman,

President and Chief Executive Officer of EQT Midstream Services, LLC, the

general partner of the Partnership, since January 2012.

Steven T. Schlotterbeck (47) Senior Vice President and President,

Exploration and Production (2008)

Elected to present position April 2010; Vice President and President,

Production from January 2008 to April 2010.

All executive officers have executed agreements with the Company and serve at the pleasure of the Company’s Board of Directors. Officers are elected

annually to serve during the ensuing year or until their successors are chosen and qualified.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Company’s common stock is listed on the New York Stock Exchange. The high and low sales prices reflected in the New York Stock Exchange

Composite Transactions, and the dividends declared and paid per share, for 2012 and 2011 are summarized as follows (in U.S. dollars per share):

2012 2011

High Low Dividend High Low Dividend

1 Quarter $ 56.56 $ 46.04 $ 0.22 $ 49.99 $ 43.18 $ 0.22

2 Quarter 55.20 43.69 0.22 54.25 45.68 0.22

3 Quarter 59.46 52.20 0.22 65.97 47.86 0.22

4 Quarter 62.74 56.45 0.22 73.10 49.54 0.22

As of January 31, 2013, there were 3,056 shareholders of record of the Company’s common stock.

The amount and timing of dividends is subject to the discretion of the Board of Directors and depends upon business conditions, such as the

Company’s lines of business, result of operations and financial conditions, strategic direction and other factors. During the period reported above, the

Company paid a dividend at an annual rate of $0.88 per share. In December 2012, concurrent with the announcement of entering into a definitive agreement to

transfer Equitable Gas to PNG Companies, the Company announced a new annual dividend rate, effective January 2013, of $0.12 per share which the

Company believes better reflects the blend of the Company’s core businesses remaining after giving effect to the pending transaction – a dividend supporting

midstream business and a capital-intensive, rapidly growing production business. The Board of Directors has the discretion to change this new annual

dividend rate at any time for the reasons described above.

The following table sets forth the Company’s repurchases of equity securities registered under Section 12 of the Securities Exchange Act of 1934, as

amended, that have occurred in the three months ended December 31, 2012:

Period

Total

number of

shares (or

units)

purchased

(a)

Average

price

paid per

share (or

unit)

Total number of

shares (or units)

purchased as

part of publicly

announced

plans or

programs

Maximum number

(or approximate

dollar value) of

shares (or units) that

may yet be purchased

under the plans or

programs

October 2012 (October 1 – October 31) – – – –

November 2012 (November 1 – November 30) 274.00 $ 59.87 – –

December 2012 (December 1 – December 31) 1.00 $ 60.20 – –

Total 275.00 $ 59.87 – –

(a) Reflects shares withheld by the Company to pay taxes upon vesting of restricted stock.

30

st

nd

rd

th

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Stock Performance Graph

The following graph compares the most recent five-year cumulative total return attained by holders of the Company’s common stock with the

cumulative total returns of the S&P 500 index and a customized peer group of 25 companies (the Self-Constructed Peer Group), whose individual companies

are listed in footnote (a) below. An investment of $100 (with reinvestment of all dividends) is assumed to have been made at the close of business on

December 31, 2007 in the Company’s common stock, in the S&P 500 index and in the Self-Constructed Peer Group. Relative performance is tracked through

December 31, 2012.

12/07 12/08 12/09 12/10 12/11 12/12

EQT Corporation 100.00 64.12 85.87 89.61 111.27 121.76

S&P 500 100.00 63.00 79.67 91.67 93.61 108.59

Self-Constructed Peer Group 100.00 58.74 90.68 99.17 104.45 109.98

(a) The Self-Constructed Peer Group includes 25 companies, which are: Cabot Oil & Gas Corporation, Chesapeake Energy Corporation, Cimarex

Energy Co., CONSOL Energy Inc., Energen Corporation, EOG Resources, Inc., EXCO Resources, Inc., MarkWest Energy Partners, L.P., MDU

Resources Group, Inc., National Fuel Gas Company, NSTAR, ONEOK, Inc., Penn Virginia Corporation, Pioneer Natural Resources Company,

Plains Exploration & Production Company, Questar Corporation, Quicksilver Resources Inc., Range Resources Corporation, Sempra Energy,

SM Energy Company, Southwestern Energy Company, Spectra Energy Corp, Ultra Petroleum Corp., Whiting Petroleum Corporation and The

Williams Companies, Inc. NSTAR was acquired during 2012 and is included in the calculation from December 31, 2007 through December 31,

2011, at which time it was removed from the peer group calculation.

See Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters” for information relating to

compensation plans under which the Company’s securities are authorized for issuance.

31

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Item 6. Selected Financial Data

As of and for the years ended December 31,

2012 2011 2010 2009 2008

(Thousands, except per share amounts)

Operating revenues $ 1,641,608 $ 1,639,934 $ 1,374,395 $ 1,311,356 $ 1,609,384

Net income attributable to EQT Corporation $ 183,395 $ 479,769 $ 227,700 $ 156,929 $ 255,604

Earnings per share:

Basic $ 1.23 $ 3.21 $ 1.58 $ 1.20 $ 2.01

Diluted $ 1.22 $ 3.19 $ 1.57 $ 1.19 $ 2.00

Total assets $ 8,849,862 $ 8,772,719 $ 7,098,438 $ 5,957,257 $ 5,329,662

Long-term debt $ 2,526,173 $ 2,746,942 $ 1,949,200 $ 1,949,200 $ 1,249,200

Cash dividends declared per share of common stock $ 0.88 $ 0.88 $ 0.88 $ 0.88 $ 0.88

See Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Notes 2, 3,

6 and 7 to the Consolidated Financial Statements for a discussion of an adjustment to operating revenues for all periods and other matters that affect the

comparability of the selected financial data as well as uncertainties that might affect the Company’s future financial condition.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Consolidated Results of Operations

In 2012, EQT highlights included the following:

· Record annual production sales volumes of 258.5 Bcfe, 33% higher than 2011

· Record Marcellus sales volumes of 150.6 Bcfe, 85% higher than 2011

· Record gathered volumes of 335.4 TBtu, 30% higher than 2011

· Increased proved reserves by 12% to 6.0 Tcfe

· Completed the Partnership’s IPO

· Announced an agreement to sell Equitable Gas

Net income attributable to EQT Corporation for 2012 was $183.4 million, $1.22 per diluted share, compared with $479.8 million, $3.19 per diluted

share, in 2011. In 2011, the Company recorded $202.9 million of pre-tax gains on dispositions related to the sales of the Big Sandy Pipeline (Big Sandy) and

Langley. The Company was negatively impacted in 2012 by lower realized sales prices for production sales volumes, higher depreciation, depletion and

amortization (DD&A) and higher interest expense partially offset by increases in both production and gathered volumes and lower income tax expense.

Operating income was $470.5 million in 2012 compared to $861.3 million in 2011, a decrease of $390.8 million. In addition to the $202.9 million

gain in 2011 on the dispositions of Big Sandy and Langley, the decrease from 2011 was a result of approximately 25% lower realized sales prices for

production sales volumes, a 23% higher production depletion rate and higher other operating expenses, partially offset by a 33% increase in production

volumes, a 30% increase in gathering volumes and higher transmission revenues.

Production sales volumes increased primarily as a result of increased production from the 2011 and 2012 drilling programs in the Marcellus play

acreage. This increase was partially offset by the normal production decline in the Company’s producing wells. The average wellhead sales price to EQT

Corporation including the effect of the Company’s hedging program was $4.26 per Mcfe in 2012 compared to $5.37 per Mcfe in 2011. Hedging activities

resulted in an increase in the average natural gas sales price of $1.19 per Mcf in 2012 and $0.55 per Mcf in 2011. Gathering net operating revenues increased

due to a 30% increase in gathered volumes, partially offset by a 7% decrease in the average gathering fee. The gathered volume increase was driven by higher

volumes gathered for EQT Production in the Marcellus play.

32

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Operating expenses for 2012 were $1,171.1 million compared to $981.5 million in 2011, an increase of $189.6 million. This increase was primarily

attributable to higher DD&A charges from higher production volumes at a production depletion rate of $1.54/Mcfe compared to $1.25/Mcfe in 2011 and

higher production-related and selling, general and administrative (SG&A) costs consistent with the growth in produced volumes and midstream throughput.

On July 2, 2012, the Partnership, a subsidiary of the Company, completed its IPO of 14,375,000 common units representing limited partner interests

in the Partnership, which represented 40.6% of the Partnership’s outstanding equity. The Company retained a 59.4% equity interest in the Partnership,

including 2,964,718 common units, 17,339,718 subordinated units and a 2% general partner interest. The Company continues to consolidate the results of

the Partnership. EQT records the noncontrolling interest of the public limited partners in EQT’s financial statements.

EQT’s consolidated net income for 2011 was $479.8 million, $3.19 per diluted share, compared with $227.7 million, $1.57 per diluted share, for

2010. In 2011, the Company recorded $128.3 million of after-tax gains on dispositions related to the sales of Langley and Big Sandy.

Operating income increased to $861.3 million in 2011 from $470.5 million in 2010. In addition to the $202.9 million gain on the dispositions of Big

Sandy and Langley and the absence of revenues and expenses associated with these assets, operating income was favorably impacted by increased production

sales volumes and higher gathering and transmission revenues which more than offset the increase in operating expenses associated with higher volumes, lower

storage and marketing net operating revenues and a lower average wellhead sales price to EQT Corporation.

Production sales volumes increased more than 44% in 2011 from 2010, largely associated with the Marcellus play, as a result of increased production

from the 2010 and 2011 drilling programs partially offset by the normal production decline in the Company’s producing wells. Gathered revenues increased

as a result of a 32% increase in gathered volumes primarily related to the Company’s production growth. Transmission net revenues increased as a result of

higher firm transportation activity and capacity from the Equitrans 2010 Marcellus expansion project. The average wellhead sales price to EQT Corporation

including the effect of the Company’s hedging program was $5.37 per Mcfe in 2011 compared to $5.62 per Mcfe in 2010. Hedging activities resulted in an

increase in the average natural gas sales price of $0.55 per Mcf in both 2011 and 2010.

Operating expenses for 2011 increased $77.6 million compared to 2010 primarily as a result of increased production depletion and expenses on higher

produced volumes as well as higher selling, general and administrative expenses consistent with the growth of the business. These increases were partially

offset by the absence of expenses associated with Big Sandy and Langley, primarily operating and maintenance expenses, and favorable adjustments for

certain non-income tax matters.

See “Other Income Statement Items” for a discussion of other income, interest expense and income taxes and “Investing Activities” in “Capital

Resources and Liquidity” for a discussion of capital expenditures.

Consolidated Operational Data

EQT Production’s average wellhead sales price is calculated by allocating some of its revenues to EQT Midstream for the gathering and transportation

of produced gas. The following operational information presents detailed gross liquid and natural gas operational information as well as midstream deductions

to assist the understanding of the Company’s consolidated operations.

33

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Years Ended

December 31,

in thousands (unless noted) 2012 2011 2010

LIQUIDS

NGLs:

Sales Volume (MMcfe) 13,052 11,579 10,454

Sales Volume (Mbbls) 3,484 3,076 2,712

Gross Price ($/Mbbls) $ 44.75 $ 60.42 $ 48.76

Gross NGL Revenue $ 155,926 $ 185,845 $ 132,244

BTU Premium (Ethane sold as natural gas):

Sales Volume (MMbtu) 22,494 16,124 11,404

Price ($/MMbtu) $ 2.83 $ 4.04 $ 4.35

BTU Premium Revenue $ 63,668 $ 65,168 $ 49,622

Oil:

Sales Volume (MMcfe) 1,587 1,248 718

Sales Volume (Mbbls) 264 208 120

Net Price ($/Mbbls) $ 83.95 $ 81.58 $ 70.42

Net Oil Revenue $ 22,161 $ 16,968 $ 8,428

Total Liquids Revenue $ 241,755 $ 267,981 $ 190,294

GAS

Sales Volume (MMcf) 243,886 181,566 123,442

NYMEX Price ($/Mcf) (a) $ 2.83 $ 4.04 $ 4.35

Gas Revenues $ 690,293 $ 733,814 $ 537,150

Basis (960) 24,047 17,527

Gross Gas Revenue (unhedged) $ 689,333 $ 757,861 $ 554,677

Total Gross Gas & Liquids Revenue (unhedged) $ 931,088 $ 1,025,842 $ 744,972

Hedge impact 290,557 101,047 67,449

Total Gross Gas & Liquid Revenue $ 1,221,645 $ 1,126,889 $ 812,421

Total Sales Volume (MMcfe) 258,525 194,393 134,614

Average hedge adjusted price ($/Mcfe) $ 4.72 $ 5.80 $ 6.04

Midstream Revenue Deductions ($ / Mcfe)

Gathering to EQT Midstream $ (1.02) $ (1.11) $ (1.32)

Transmission to EQT Midstream (0.19) (0.22) (0.37)

Third-party gathering and transmission* (0.36) (0.31) (0.42)

Third-party processing (0.10) (0.12) -

Total midstream revenue deductions (1.67) (1.76) (2.11)

Average wellhead sales price to EQT Production $ 3.05 $ 4.04 $ 3.93

EQT Revenue ($ / Mcfe)

Revenues to EQT Midstream $ 1.21 $ 1.33 $ 1.69

Revenues to EQT Production 3.05 4.04 3.93

Average wellhead sales price to EQT Corporation $ 4.26 $ 5.37 $ 5.62

(a) The Company’s annual volume weighted NYMEX price (average NYMEX natural gas price ($/Mcf) was $2.79, $4.04 and $4.39 in the years ended December 31,

2012, 2011 and 2010, respectively).

* Due to the sale of unused capacity on the El Paso 300 line that was not under long-term resale agreements at prices below the capacity charge, third-party gathering and

transmission rates increased by $0.04 per Mcfe for the year ended 2012. In 2011, the unused capacity on the El Paso 300 line not under long-term resale agreements was sold at

prices above the capacity charge,

34

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decreasing third-party gathering and transmission rates by $0.03 per Mcfe for the year ended 2011. The El Paso 300 line came online in 2011 and thus, there was no unused

capacity sold in the year ended 2010.

Business Segment Results

Business segment operating results are presented in the segment discussions and financial tables on the following pages. Operating segments are

evaluated on their contribution to the Company’s consolidated results based on operating income. Other income, interest and income taxes are managed on a

consolidated basis. Headquarters’ costs are billed to the operating segments based upon a fixed allocation of the headquarters’ annual operating budget. 

Differences between budget and actual headquarters expenses totaling $23.3 million, $29.3 million and $15.1 million were not allocated to the operating

segments for the years ended December 31, 2012, 2011 and 2010, respectively. As part of the 2012 budgeting process, the Company allocated additional

corporate overhead charges to the operating segments.

The Company has reported the components of each segment’s operating income and various operational measures in the sections below, and where

appropriate, has provided information describing how a measure was derived. EQT’s management believes that presentation of this information provides

useful information to management and investors regarding the financial condition, operations and trends of each of EQT’s business segments without being

obscured by the financial condition, operations and trends for the other segments or by the effects of corporate allocations of interest, income taxes and other

income. In addition, management uses these measures for budget planning purposes. The Company’s management reviews and reports the EQT Production

segment results for operating revenues and purchased gas costs with transportation costs reflected as a deduction from operating revenues as management

believes this presentation provides a more useful view of net wellhead price and is consistent with industry practices. Third-party transportation costs are

reported as a component of purchased gas costs in the consolidated results. The Company has reconciled each segment’s operating income to the Company’s

consolidated operating income and net income in Note 3 to the Consolidated Financial Statements.

35

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EQT Production

Results of Operations

Years Ended December 31,

2012 2011

%

change

2012 -

2011

2010

%

change

2011 -

2010

OPERATIONAL DATA

Natural gas, NGL and crude oil production (MMcfe)

(a) 260,963 198,821 31.3 139,021 43.0

Company usage, line loss (MMcfe) (2,438) (4,428) (44.9) (4,407) 0.5

Total production sales volumes (MMcfe) 258,525 194,393 33.0 134,614 44.4

Average daily sales volumes (MMcfe/d) 706 533 32.5 369 44.4

Sales volume detail (MMcfe):

Horizontal Marcellus Play 150,552 81,602 84.5 25,474 220.3

Horizontal Huron Play 36,934 40,081 (7.9) 38,816 3.3

CBM Play 13,084 13,682 (4.4) 13,493 1.4

Other (vertical non-CBM) 57,955 59,028 (1.8) 56,831 3.9

Total production sales volumes 258,525 194,393 33.0 134,614 44.4

Average wellhead sales price to EQT Production

($/Mcfe) $ 3.05 $ 4.04 (24.5) $ 3.93 2.8

Lease operating expenses, excluding production taxes

(LOE) ($/Mcfe) $ 0.18 $ 0.20 (10.0) $ 0.24 (16.7)

Production taxes ($/Mcfe) (b) $ 0.16 $ 0.20 (20.0) $ 0.24 (16.7)

Production depletion ($/Mcfe) $ 1.54 $ 1.25 23.2 $ 1.26 (0.8)

Depreciation, depletion and amortization (DD&A)

(thousands):

Production depletion $ 401,456 $ 248,286 61.7 $ 175,629 41.4

Other DD&A 8,172 8,858 (7.7) 8,070 9.8

Total DD&A (thousands) $ 409,628 $ 257,144 59.3 $ 183,699 40.0

Capital expenditures (thousands) (c) $ 991,775 $ 1,087,840 (8.8) $ 1,245,914 (12.7)

36

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Years Ended December 31,

2012 2011

%

change

2012 -

2011

2010

%

change

2011 -

2010

FINANCIAL DATA (thousands)

Total net operating revenues $ 793,773 $ 791,285 0.3 $ 537,657 47.2

Operating expenses:

LOE, excluding production taxes 46,212 40,369 14.5 33,784 19.5

Production taxes (b) 49,943 40,542 23.2 33,630 20.6

Exploration expense 10,370 4,932 110.3 5,368 (8.1)

Selling, general and administrative (SG&A) 89,707 61,200 46.6 57,689 6.1

DD&A 409,628 257,144 59.3 183,699 40.0

Total operating expenses 605,860 404,187 49.9 314,170 28.7

Operating income $ 187,913 $ 387,098 (51.5) $ 223,487 73.2

(a) Natural gas, NGL and oil production represents the Company’s interest in natural gas, NGL and oil production measured at the wellhead. It is

equal to the sum of total sales volumes and Company usage and line loss.

(b) Production taxes include severance and production-related ad valorem and other property taxes. In 2012, production taxes also include the

Pennsylvania impact fee of $15.3 million. The production taxes unit rate for 2012 excludes the impact of $6.7 million paid upon enactment in

that year for pre-2012 Marcellus wells.

(c) Capital expenditures in the EQT Production segment include $92.6 million of liabilities assumed in exchange for producing properties as part of

the ANPI transaction in 2011 and $230.7 million of undeveloped property which was acquired with EQT common stock in 2010.

Year Ended December 31, 2012 vs. December 31, 2011

EQT Production’s operating income totaled $187.9 million for 2012 compared to $387.1 million for 2011. The $199.2 million decrease in operating

income was primarily due to a lower average wellhead sales price and an increase in operating expenses partially offset by increased sales of produced natural

gas and NGLs.

Total operating revenues were $793.8 million for 2012 compared to $791.3 million for 2011. The $2.5 million increase in operating revenues was

primarily due to a 33% increase in production sales volumes which offset a 25% decrease in the average wellhead sales price to EQT Production. The increase

in production sales volumes was primarily the result of increased production from the 2011 and 2012 drilling programs in the Marcellus play, as well as the

acquisition of producing properties associated with the ANPI transaction in May 2011 which added 2.6 Bcfe of sales volumes in 2012. This increase was

partially offset by the normal production decline in the Company’s producing wells. The $0.99 per Mcfe decrease in the average wellhead sales price to EQT

Production was primarily due to a 31% decrease in the average NYMEX gas price as well as lower basis and NGL prices, partially offset by higher hedging

gains and lower affiliated gathering rates compared to 2011. The average wellhead sales price was also impacted unfavorably in 2012 by $0.03 per Mcfe as a

result of an $8.2 million adjustment to recognize financial instrument put premiums which should have been recorded ratably over 2010 and 2011 and by

$0.04 per Mcfe for the cost of transmission capacity on the El Paso 300 line, including long-term resale agreements. Management evaluated the size and nature

of the put premium adjustment and concluded that the adjustment was not material to the financial statements.

Operating expenses totaled $605.9 million for 2012 compared to $404.2 million for 2011. The increase in operating expenses was the result of increases

in DD&A, SG&A, production taxes, LOE and exploration expense.

37

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Depletion expense increased as a result of a higher overall depletion rate and higher produced volumes in 2012. The increase in the depletion rate was primarily

due to an increase in costs to complete wells, higher capitalized overhead and interest costs and the removal of proved reserves due to lower natural gas prices

and the suspension of drilling activity in the Huron play. The increase in SG&A was primarily a result of higher corporate overhead and commercial services

allocations of $22.0 million, increased labor and relocation expenses of $4.0 million associated with increased Marcellus drilling and an increase in franchise

taxes of $1.9 million.

In February 2012, the Commonwealth of Pennsylvania passed legislation imposing a natural gas impact fee. The legislation, which covers a

significant portion of EQT’s Marcellus Shale acreage, imposes an annual fee for a period of fifteen years on each well drilled in Pennsylvania. The impact fee

adjusts annually based on three factors: age of the well, changes in the Consumer Price Index and the average monthly NYMEX gas price. Production taxes

increased primarily due to the Pennsylvania impact fee in 2012 of $15.3 million, of which $6.7 million represents the retroactive fee for pre-2012 Marcellus

wells, as well as an increase in property taxes partially offset by a decrease in severance taxes due to the decrease in average wellhead sales price in 2012.

The increase in LOE was mainly a result of increased Marcellus activity in 2012 primarily related to a $3.0 million increase in salt water disposal

expenses and a $2.1 million increase in labor expenses, as well as the elimination of $2.3 million of third-party operating expense reimbursements, as part of

the ANPI transaction. Exploration expense increased in 2012 primarily due to increased impairments of unproved lease acreage of $3.0 million and also an

increase in geophysical activity in 2012 related to the Ohio Utica formation.

Year Ended December 31, 2011 vs. December 31, 2010

EQT Production’s operating income totaled $387.1 million for 2011 compared to $223.5 million for 2010, an increase of $163.6 million between

years, primarily due to increased production sales volumes and higher wellhead sales prices to EQT Production, partially offset by an increase in DD&A and

other operating costs resulting from higher volumes.

Total net operating revenues were $791.3 million for 2011 compared to $537.7 million for 2010. The $253.6 million increase in operating revenues

was primarily due to a 44% increase in production sales volumes as well as a 3% increase in the average wellhead sales price to EQT Production. The increase

in sales volumes was the result of increased production from the 2010 and 2011 drilling programs, primarily in the Marcellus play, as well as the acquisition

of producing properties associated with acquiring the Class A interest in a trust thereby acquiring 100% of the net profits interest associated with the producing

properties (the ANPI transaction), as described in Note 7 to the Consolidated Financial Statements in May 2011 which added 5.5 Bcfe of sales volumes in

2011. This increase was partially offset by the normal production decline in the Company’s producing wells. The $0.11 per Mcfe increase in the average

wellhead sales price to EQT Production was primarily due to lower gathering rates and higher sales prices for NGLs and oil in 2011 partially offset by an 8%

decrease in the average NYMEX price compared to 2010. The average wellhead sales price was also impacted favorably from selling excess transmission

capacity on the Tennessee Gas Pipeline 300-Line in the fourth quarter of 2011.

Operating expenses totaled $404.2 million for 2011 compared to $314.2 million for 2010. The 29% increase in operating expenses was primarily the

result of increased DD&A, production taxes and LOE. The depletion expense increased as a result of higher volumes in 2011 partially offset by a slightly

lower overall depletion rate. Production taxes increased due to higher revenues and increased assessments in certain jurisdictions that impose these taxes in the

year of production. The increase in LOE was primarily the result of increased activity in 2011 as well as the elimination, as part of the ANPI transaction, of

certain operating expense reimbursement agreements. Lower costs for road and location maintenance due to less severe weather in 2011 partly offset these

increases. SG&A increased due to higher overhead and commercial services costs associated with the growth of the company and higher franchise tax

expense. These increases were partially mitigated by a charge in 2010 related to the buy-out of excess contractual capacity for water treatment and lower

professional services, hiring and relocation costs in 2011.

38

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EQT Midstream

Results of Operations

Years Ended December 31,

2012 2011

%

change

2012 -

2011

2010

%

change

2011 –

2010

OPERATIONAL DATA

Gathered volumes (BBtu) 335,407 258,179 29.9 195,642 32.0

Average gathering fee ($/MMBtu) $ 0.90 $ 0.97 (7.2) $ 1.11 (12.6)

Gathering and compression expense ($/MMBtu) (a) $ 0.24 $ 0.30 (20.0) $ 0.37 (18.9)

Transmission pipeline throughput (BBtu) 221,944 159,384 39.3 109,165 46.0

Net operating revenues (thousands):

Gathering $ 302,255 $ 249,607 21.1 $ 212,170 17.6

Transmission 104,501 90,405 15.6 84,190 7.4

Storage, marketing and other 42,693 64,614 (33.9) 100,097 (35.4)

Total net operating revenues $ 449,449 $ 404,626 11.1 $ 396,457 2.1

Unrealized losses on derivatives and inventory

(thousands) (b) $ 9,225 $ 755 1,121.9 $ 379 99.2

Capital expenditures (thousands) $ 375,731 $ 242,886 54.7 $ 193,128 25.8

FINANCIAL DATA (thousands)

Total operating revenues $ 505,498 $ 525,345 (3.8) $ 580,698 (9.5)

Purchased gas costs 56,049 120,719 (53.6) 184,241 (34.5)

Total net operating revenues 449,449 404,626 11.1 396,457 2.1

Operating expenses:

Operating and maintenance (O&M) 97,400 83,907 16.1 107,601 (22.0)

SG&A 49,943 49,901 0.1 48,127 3.7

DD&A 64,782 57,135 13.4 61,863 (7.6)

Total operating expenses 212,125 190,943 11.1 217,591 (12.2)

Gain on dispositions – 202,928 (100.0) – 100.0

Operating income $ 237,324 $ 416,611 (43.0) $ 178,866 132.9

(a) Gathering and compression expense for the full year 2011 excludes $7.1 million of favorable adjustments for certain non-income tax reserves.

(b) Included in storage, marketing and other net operating revenues.

39

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Year Ended December 31, 2012 vs. December 31, 2011

EQT Midstream’s operating income totaled $237.3 million for 2012 compared to $416.6 million for 2011. The decrease in operating income was

primarily the result of the $202.9 million pre-tax gain on the sales of Langley and Big Sandy in 2011 and increased operating expenses in 2012 partly offset

by an increase in 2012 net operating revenues.

Total net operating revenues were $449.4 million for 2012 compared to $404.6 million for 2011. The increase in total net operating revenues was due to

a $52.6 million increase in gathering net operating revenues and a $14.1 million increase in transmission net operating revenues, partly offset by a $21.9

million decrease in storage, marketing and other net operating revenues.

Gathering net operating revenues increased due to a 30% increase in gathered volumes, partly offset by a 7% decrease in the average gathering fee. The

gathered volume increase was driven by higher volumes gathered for EQT Production in the Marcellus play. The average gathering fee decreased due to the

mix of gathered volumes as Marcellus volumes increased while Huron and other volumes, which have a higher gathering fee, decreased.

Transmission net operating revenues in 2012 increased from the prior year primarily as a result of $15.8 million of increased capacity reservation

revenues resulting from the Sunrise Pipeline project and the Equitrans 2010 Marcellus expansion project and higher firm transportation activity from affiliated

shippers due to increased Marcellus volumes. These revenues were negatively impacted year over year by the absence of $16.0 million of revenues recorded

on Big Sandy in the first half of 2011.

Storage, marketing and other net operating revenues decreased from the prior year primarily as a result of unrealized losses on derivatives and

inventory, lower margins and activity due to lower price spreads and volatility, and a $4.3 million decrease in net operating revenue from NGLs marketed for

non-affiliated producers primarily as a result of lower liquids pricing.

Total operating revenues decreased $19.8 million primarily as a result of lower sales prices on decreased commercial activity and a lower gathering rate

partly offset by an increase in gathered volumes and increased transmission revenue. Total purchased gas costs decreased $64.7 million primarily as a result

of lower commodity prices on decreased commercial activity.

Operating expenses totaled $212.1 million for 2012 compared to $190.9 million for 2011. The increase in O&M was primarily the result of a $13.3

million decrease in non-income taxes largely as a result of favorable property tax settlements recorded in 2011 combined with increases in 2012 in line with the

growth of the business. In addition, personnel cost increases in 2012 were partly offset by the absence of $2.8 million in operating costs for Langley and Big

Sandy in 2011. SG&A was flat year over year as the EQT Midstream segment recovered approximately $2.9 million from the Lehman Brothers

bankruptcy, reversed $2.5 million in reserves for the recovery of a long-term, volume-based regulatory asset and allocated $5.2 million more in expenses to

affiliates, offsetting increases in personnel costs and $1.2 million of increased expenses related to the Partnership’s IPO and subsequent operation as a public

company. DD&A increased as a result of higher assets placed in service.

Year Ended December 31, 2011 vs. December 31, 2010

EQT Midstream’s operating income totaled $416.6 million for 2011, including gains on the dispositions of Langley and Big Sandy of $202.9

million, compared to $178.9 million for 2010. In addition to the gains, operating income increased as a result of increased gathering and transmission

volumes combined with lower operating expenses. These favorable variances were partially offset by decreased storage, marketing and other net operating

revenues and a lower average gathering fee.

Total net operating revenues were $404.6 million for 2011 compared to $396.5 million for 2010. The increase in total net operating revenues was due

to a $37.4 million increase in gathering net operating revenues and a $6.2 million increase in transmission net operating revenues, partly offset by a $35.5

million decrease in storage, marketing and other net operating revenues.

40

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Gathering net operating revenues increased due to a 32% increase in gathered volumes, partially offset by a 13% decrease in the average gathering fee. 

This increase in gathered volumes was driven primarily by higher produced natural gas volumes gathered for EQT Production in the Marcellus play. The

decrease in the average gathering fee was a result of lower gathering rates charged to affiliates and other shippers in the Marcellus play.

Transmission net operating revenues increased in 2011 as a result of higher firm transportation activity from affiliated shippers due to the increased

Marcellus volumes and increased capacity from the Equitrans 2010 Marcellus expansion project, partly offset by the absence of revenues from the sale of Big

Sandy.

Storage, marketing and other net operating revenue decreased from the prior year primarily as a result of a decrease in natural gas volumes marketed for

third parties utilizing pipeline capacity, lower net revenue from NGLs marketed for non-affiliated producers, lower margins due to reduced commodity prices

and lower price spreads and volatility. Higher NGL prices were more than offset by the loss of processing fees associated with the sale of Langley.

Total operating revenues decreased in 2011 by $55.4 million primarily as a result of lower sales prices on decreased commercial activity and a lower

gathering rate partially offset by an increase in gathered volumes and increased transmission revenue. Total purchased gas costs decreased as a result of

decreased commercial activity.

Operating expenses totaled $190.9 million for 2011 compared to $217.6 million for 2010. The decrease in operating expenses was primarily due to

decreases of $23.7 million in O&M and $4.7 million in DD&A. The decrease in O&M was primarily due to the absence of operating expenses associated

with Langley and Big Sandy and reductions in certain non-income property tax reserves partly offset by increased compensation costs. The decrease in

DD&A was primarily due to the sales of Big Sandy and Langley, partly offset by increased depreciation on increased investment in gathering and

compression infrastructure.

41

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Distribution

Results of Operations

Years Ended December 31,

2012 2011

%

change

2012 -

2011

2010

%

change

2011 –

2010

OPERATIONAL DATA

Heating degree days (30-year average = 5,710) 4,693 5,189 (9.6) 5,516 (5.9)

Residential sales and transportation volume (MMcf) 19,326 22,333 (13.5) 23,132 (3.5)

Commercial and industrial volume (MMcf) 27,651 28,752 (3.8) 27,124 6.0

 Total throughput (MMcf) 46,977 51,085 (8.0) 50,256 1.6

Net operating revenues (thousands):

Residential $ 105,382 $ 115,912 (9.1) $ 117,418 (1.3)

Commercial and industrial 45,084 48,968 (7.9) 48,614 0.7

Off-system and energy services 19,557 22,672 (13.7) 21,365 6.1

Total net operating revenues $ 170,023 $ 187,552 (9.3) $ 187,397 0.1

Capital expenditures (thousands) $ 28,745 $ 31,313 (8.2) $ 36,619 (14.5)

FINANCIAL DATA (thousands)

Total operating revenues $ 313,990 $ 419,678 (25.2) $ 474,143 (11.5)

Purchased gas costs 143,967 232,126 (38.0) 286,746 (19.0)

Net operating revenues 170,023 187,552 (9.3) 187,397 0.1

Operating expenses:

O&M 42,838 43,383 (1.3) 44,047 (1.5)

SG&A 34,117 31,524 8.2 35,994 (12.4)

DD&A 24,454 25,747 (5.0) 24,174 6.5

Total operating expenses 101,409 100,654 0.8 104,215 (3.4)

Operating income $ 68,614 $ 86,898 (21.0) $ 83,182 4.5

Year Ended December 31, 2012 vs. December 31, 2011

Distribution’s operating income totaled $68.6 million for 2012 compared to $86.9 million for 2011. The decrease in operating income was primarily

due to record warm weather during 2012.

Net operating revenues were $170.0 million for 2012 compared to $187.6 million for 2011. Net operating revenues from residential customers

decreased $10.5 million as a result of weather and related customer usage patterns. Weather was 10% warmer in 2012 as compared to 2011 and 18% warmer

than the 30-year National Oceanic and Atmospheric Administration (NOAA) average for the Company’s service territory. According to NOAA, it was the

warmest twelve-month calendar period on record in the Company’s service territory. Commercial and industrial net operating revenues also decreased by $3.9

million primarily due to warmer weather and related customer usage patterns of $3.0 million and lower revenue associated with competitive contract renewals

in 2012. Off-system and energy services net operating revenues decreased $3.1 million primarily due to a $2.4 million favorable change in estimated

recoverable costs in 2011 and $2.0 million in fewer asset optimization opportunities realized during 2012 as compared to 2011. These declines were partially

offset by higher revenues from gathering activities resulting from increased rates.

42

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Decreases in total operating revenues and purchased gas costs were primarily due to lower customer throughput as a result of warmer weather during

2012, a decrease in the commodity component of tariff rates and a decrease in asset optimization off-system and energy services revenues.

Operating expenses totaled $101.4 million for 2012 compared to $100.7 million for 2011, as a $2.6 million increase in SG&A expenses was partly

offset by a decrease in DD&A and O&M expenses. The increase in SG&A expenses was primarily due to a $3.0 million reduction of certain non-income tax

reserves in 2011 as a result of settlements with tax authorities partly offset by lower bad debt expense of $0.9 million, which was primarily the result of a

lower commodity component of residential tariff rates in 2012 and the Company’s favorable collections experience. The Company will continue to closely

monitor its collection rates and adjust its reserve for uncollectible accounts as necessary. The decrease in DD&A was primarily due to a change in the

assumptions used in valuing the segment’s asset retirement obligation.

Year Ended December 31, 2011 vs. December 31, 2010

Distribution’s operating income totaled $86.9 million for 2011 compared to $83.2 million for 2010. The increase in operating income was primarily

the result of an increase in estimated recoverable costs in 2011, an increase in the Company’s West Virginia base rates and lower operating expenses. These

increases were partly offset by warmer weather in 2011.

Net operating revenues were $187.6 million for 2011 compared to $187.4 million for 2010 as an increase in estimated recoverable costs in 2011 was

substantially offset by a decrease in residential net operating revenues. Net operating revenues from residential customers decreased $1.5 million as a result of

warmer weather partially offset by the full year impact of the Company’s West Virginia base rate increase, which was approved in August 2010. The weather

in Distribution’s service territory in 2011 was 6% warmer than 2010 and 9% warmer than the territory’s 30-year NOAA average. Commercial and industrial

net operating revenues increased $0.4 million primarily as a result of an increase in usage by one industrial customer. The high volume sales to this industrial

customer had low unit margins and did not ratably impact total net operating revenues. Off-system and energy services net operating revenues were higher as a

result of a change in estimated recoverable costs in 2011 offset by fewer asset optimization opportunities realized in 2011. A decrease in the commodity

component of residential tariff rates and fewer asset optimization transactions resulted in a decrease in both total operating revenues and purchased gas costs.

Operating expenses totaled $100.7 million for 2011 compared to $104.2 million for 2010. The decrease in operating expenses was primarily the result

of lower bad debt expense and the reduction of certain non-income tax reserves resulting from settlements with tax authorities. These decreases were partially

offset by an increase in other compensation related costs and depreciation expense in 2011. The decrease in bad debt expense was primarily the result of a

decrease in the commodity component of residential tariff rates and the Company’s favorable collections experience.

Other Income Statement Items

Other Income

Years Ended December 31,

2012 2011 2010

(Thousands)

Other income $ 15,965 $ 34,138 $ 12,898

Other income includes equity in earnings of nonconsolidated investments, primarily the Company’s investments in Nora Gathering, LLC of $6.1

million, $7.2 million and $9.7 million for the years ended December 31, 2012, 2011 and 2010, respectively.

Other income for the year ended December 31, 2012 also included $6.9 million of AFUDC compared to $4.0 million in 2011, a $2.9 million increase

as a result of further construction on the Equitrans Sunrise Pipeline project, which was placed into service during 2012.

43

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Other income increased in 2011 compared to 2010 as a result of the $10.1 million pre-tax gain on the ANPI transaction, an $8.5 million gain on sales

of available-for-sale securities and an increase in the equity portion of AFUDC as a result of construction on the Equitrans Sunrise Pipeline project.

Other income for the year ended December 31, 2010 also included a $2.1 million gain on sales of available-for-sale securities.

Interest Expense

Years Ended December 31,

2012 2011 2010

(Thousands)

Interest expense $ 184,786 $ 136,328 $ 128,157

Interest expense increased $48.5 million from 2011 to 2012 as a result of additional expense from the Company’s November 2011 issuance of $750

million 4.875% notes due in 2021 and a $23.3 million payment to close a forward-starting interest rate swap settled in 2012. This increase was partially offset

by higher capitalized interest on increased Marcellus well development and midstream pipeline construction in 2012.

During the third quarter of 2011, the Company entered into an interest rate hedge in anticipation of refinancing $200 million of long-term debt

scheduled to mature in November 2012. Given the Company’s strong liquidity position, the Company retired the debt using cash on hand and recognized a

$23.3 million expense in the year ended December 31, 2012 to close the interest rate hedge.

Interest expense increased by $8.2 million from 2010 to 2011 as a result of the Company’s increased debt to fund its continued investment in drilling

and midstream infrastructure during the year. The increase in interest from the Company’s November 2011 issuance of $750 million 4.875% notes and the

debt assumed in the May 2011 ANPI transaction was partially offset by higher capitalized interest on increased Marcellus well development. The Company

also paid higher commitment fees under the terms of its $1.5 billion revolving credit facility entered into on December 8, 2010 than under the previous facility.

Weighted average annual interest rates on the Company’s long-term debt were 6.4%, 6.8% and 6.8% for 2012, 2011 and 2010, respectively. Weighted

average annual interest rates on the Company’s short-term debt were 1.8% and 0.7% for 2011 and 2010, respectively. The Company had no short-term debt in

2012.

Income Taxes

Years Ended December 31,

2012 2011 2010

(Thousands)

Income taxes $ 105,296 $ 279,360 $ 127,520

Income tax expense decreased by $174.1 million from 2011 to 2012 as a result of lower pre-tax income and a decrease in the Company’s effective

income tax rate from 36.8% to 34.9%. The decrease in the rate from 2011 to 2012 was primarily due to a reduction in pre-tax book income on state tax paying

entities and the impact of the Partnership’s IPO. The effective tax rate is impacted by the recent IPO which modified the Midstream ownership structure and

now reflects Partnership earnings for which the noncontrolling public limited partners are directly responsible for the related income taxes. The Company

consolidates the pre-tax income related to the noncontrolling public limited partners’ share of partnership earnings but excludes the related tax provision. Other

rate reconciling items had a larger percentage impact on the effective tax rate in 2012 than 2011 due to significantly higher pre-tax income in 2011.

Income tax expense increased by $151.8 million from 2010 to 2011 as a result of higher pre-tax income and an increase in the Company’s effective

income tax rate from 35.9% to 36.8%. The Company’s regulated business accounts for tax deductible repair costs as a permanent difference, as the related

deferred taxes are recoverable in rates. The increase in the effective tax rate in 2011 was primarily the result of the tax benefit for these repair costs being higher

in 2010 than in 2011. State income taxes were also higher in 2011 due to a shift in the Company’s non-regulated business to states with higher income tax

rates. Other rate reconciling items had a larger percentage impact on the effective tax rate in 2010 than 2011 due to significantly higher pre-tax income in 2011.

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The Company was in an overall federal tax net operating loss (NOL) position for 2012, 2011 and 2010. For federal income tax purposes, the

Company deducts approximately 83% of drilling costs as intangible drilling costs (IDC) in the year incurred. The primary reasons for the Company’s net

operating loss positions are the IDC deduction resulting from the Company’s drilling program and the accelerated tax deprecation for expansion of gathering

infrastructure which provide tax deductions in excess of book deductions. IDCs, however, are sometimes limited for purposes of the alternative minimum tax

(AMT) and can result in the Company paying AMT even when generating a regular tax NOL. See Note 8 to the Consolidated Financial Statements for further

discussion of the Company’s income taxes.

Net Income Attributable to Noncontrolling Interests

As a result of the Partnership’s IPO in 2012, net income attributable to noncontrolling interests was $13.0 million for the year ended December 31,

2012.

Outlook

The Company is committed to profitably developing its Marcellus reserves through environmentally responsible, cost-effective and technologically

advanced horizontal drilling. The market price for natural gas can be volatile, as demonstrated by significant declines in late 2011 and early 2012, and these

fluctuations can impact the Company’s revenues, earnings and liquidity. The Company is unable to predict future movements in the market price for natural

gas and thus cannot predict the ultimate impact of prices on its operations; however, the Company monitors the market for natural gas and adjusts its strategy

and operations appropriately.

Capital spending for well development (primarily drilling) in 2013 is expected to be approximately $1.15 billion to support the drilling of approximately

172 gross wells, including 153 Marcellus wells, 11 Upper Devonian wells and eight wells in the Utica Shale of Ohio. Sales volumes are expected to be

between 335 and 340 Bcfe for an anticipated production sales volume growth of approximately 31% in 2013.

In addition, the Company plans to spend $400 million on midstream infrastructure in 2013 to support its production growth and expects gathering and

transmission volumes to increase as a result of this expansion. EQT Midstream expects to add approximately 400 MMcf per day of incremental gathering

capacity and approximately 450 MMcf per day of transmission capacity in 2013. The 2013 capital spending plan is expected to be funded by cash on hand,

cash flow generated from operations and proceeds from expected midstream asset sales (dropdowns) to the Partnership.

On December 19, 2012, the Company and its direct wholly-owned subsidiary Holdco executed the Master Purchase Agreement with PNG Companies,

pursuant to which EQT and Holdco will transfer 100% of their ownership interests of Equitable Gas and Homeworks to PNG Companies in exchange for

cash and select midstream assets of, and new commercial arrangements with, PNG Companies and its affiliates. Homeworks and Equitable Gas are direct

wholly-owned subsidiaries of Holdco. Peoples is a portfolio company of SteelRiver Infrastructure Partners. The transaction (or portions thereof) requires the

approval of the PA PUC, the WV PSC, the KY PSC and the FERC. In addition, the transaction is subject to review under the Hart-Scott-Rodino Act. The

agreements provide that such approvals and review must be complete by December 19, 2013, subject to certain extension rights. These approvals and review

may not be received or completed within the time allowed.

We continue to focus on achieving our objective of maximizing shareholder value via an overarching strategy of economically accelerating the

monetization of our asset base and prudent pursuit of investment opportunities, all while maintaining a strong balance sheet with solid cash flow. While the

tactics continue to evolve based on market conditions, the Company is considering arrangements, including asset sales to the Partnership or others and joint

ventures, to monetize the value of mature assets for the re-deployment into higher-growth Marcellus Shale development.

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Capital Resources and Liquidity

The Company’s primary sources of cash for 2012 were cash flows from operating activities and a cash distribution from the Partnership in connection

with the Partnership’s issuance of common units in the IPO. The Company’s primary use of cash in 2012 was for capital expenditures and repayments of

long-term debt.

Operating Activities

The Company’s net cash provided by operating activities decreased $94.4 million from $915.3 million in 2011 to $820.9 million in 2012. The

decline in operating receipts was a result of several factors, including a 25% decline in average wellhead sales prices of natural gas, higher cash payments for

interest of $58.4 million, a decrease in dividends received from Nora Gathering, LLC of $10.8 million, record warm weather and higher operating expenses.

This decrease was partially offset by a 33% increase in the production of natural gas, a 30% increase in gathered volumes and a $19.6 million decrease in

cash payments for income taxes.

The Company’s net cash provided by operating activities during 2011 was $915.3 million compared to $789.7 million for the same period of 2010. 

The increase in cash flows provided by operating activities was primarily attributable to higher operating receipts as a result of increased production in 2011,

which more than offset the negative cash flow impact of paying $47.2 million in taxes in 2011 compared to receiving tax refunds of $129.5 million in 2010.

Investing Activities

Cash flows used in investing activities totaled $1,394.5 million for 2012 as compared to $624.3 million for 2011. The $770.2 million increase in

cash flows used was attributable to reduced proceeds received from the sale of assets in 2012 compared to the $620 million proceeds received for the sales of

Langley and Big Sandy and $29.9 million received for the sales of available-for-sale securities, all in 2011. Additionally, as described below, the Company

increased capital expenditures by $125.1 million from 2011 to 2012.

Cash flows used in investing activities totaled $624.3 million for 2011 as compared to $1,239.4 million for 2010. The decrease in cash flows used in

investing activities was primarily attributable to 2011 proceeds from the sales of Big Sandy, Langley and available-for-sale securities. Capital expenditures

increased $27.3 million to $1,274.3 million in 2011. See the discussion of capital expenditures below.

Capital Expenditures

2013 Forecast 2012 Actual 2011 Actual 2010 Actual

Well development

(primarily drilling) $ 1,150 million $ 857 million $ 938 million $ 888 million

Property acquisitions* – $ 135 million $ 150 million $ 358 million

Midstream infrastructure $ 400 million $ 376 million $ 243 million $ 193 million

Distribution infrastructure and

other corporate items $ 45 million $ 31 million $ 36 million $ 39 million

Total $ 1,595 million $ 1,399 million $ 1,367 million $ 1,478 million

Less: non-cash – – $ 93 million $ 231 million

Total cash capital expenditures $ 1,595 million $ 1,399 million $ 1,274 million $ 1,247 million

* The Company does not forecast property acquisitions within its capital spending plan.

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Capital expenditures for drilling and development totaled $857 million and $938 million during 2012 and 2011, respectively. The Company drilled

135 gross wells (129 net wells) in 2012, including 127 horizontal Marcellus wells with approximately 700,000 feet of pay, 7 horizontal Huron wells with

approximately 37,000 feet of pay and 1 horizontal Utica well with approximately 5,000 feet of pay, compared to 222 gross wells (213 net wells) in 2011,

including 105 horizontal Marcellus wells with approximately 500,000 feet of pay and 115 horizontal Huron wells with approximately 550,000 feet of pay. The

$81 million decrease in capital expenditures for well development was primarily due to the suspension of drilling wells in the Huron play in 2012. This was

partially offset by additional development of the Marcellus play at a lower average cost per well in 2012 when compared to 2011 as a result of drilling

efficiencies and lower service company costs. Capital expenditures for 2012 also included approximately $135 million for undeveloped property acquisitions,

including $78 million within the Utica play and $57 million within the Marcellus play.

Capital expenditures for the midstream operations totaled $376 million for 2012. During the year, EQT Midstream turned in-line approximately 89

miles of pipeline and 36,000 horse power of compression primarily in the Marcellus play. EQT Midstream also added 455 MMcfe per day of incremental

gathering capacity and 700 MMcfe per day of transmission capacity in 2012. During 2011, midstream capital expenditures were $243 million. EQT

Midstream turned in-line 46 miles of pipeline and 20,000 horse power of compression primarily within the Marcellus play in 2011.

Capital expenditures at Distribution totaled $29 million and $31 million during 2012 and 2011, respectively, principally for pipeline replacement.

Capital expenditures for drilling and development totaled $938 million and $888 million during 2011 and 2010, respectively. The Company drilled

222 gross wells (213 net wells) in 2011, including 105 horizontal Marcellus wells with approximately 500,000 feet of pay and 115 horizontal Huron wells

with approximately 550,000 feet of pay, compared to 489 gross wells (395 net wells) in 2010, including 90 horizontal Marcellus wells with approximately

300,000 feet of pay and 236 horizontal Huron wells with approximately 1.0 million feet of pay. Capital expenditures for 2011 also included $57 million for

undeveloped property acquisitions, primarily within the Marcellus play and $93 million of liabilities assumed in exchange for producing properties in the

ANPI transaction. Capital expenditures for 2010 included $358 million for undeveloped property acquisitions, $231 million of which was non-cash.

Capital expenditures for the midstream operations totaled $243 million for 2011. During the year, EQT Midstream turned in-line 46 miles of pipeline

and 20,000 horse power of compression primarily in the Marcellus play. During 2010, midstream capital expenditures were $193 million. EQT Midstream

turned in-line 132 miles of pipeline and 21,000 horse power of compression primarily within the Huron play in 2010.

Capital expenditures at Distribution totaled $31 million and $37 million during 2011 and 2010, respectively, principally for pipeline replacement.

Financing Activities

Cash flows used in financing activities totaled $75.5 million for 2012 as compared to cash flows provided by financing activities of $540.3 million in

2011. In 2012, the Company received $276.8 million in connection with the Partnership’s issuance of common units, repaid maturing long-term debt of

$219.3 million and paid the initial distribution to the Partnership’s noncontrolling interests of $5.0 million. In 2011, the Company issued $750 million of

4.875% Senior Notes due November 15, 2021 and repaid short-term loans of $53.7 million.

Cash flows provided by financing activities totaled $540.3 million for 2011 as compared to $449.7 million for 2010. During 2011, the Company

issued $750 million of 4.875% Senior Notes due November 15, 2021. The proceeds of these notes are to be used for general corporate purposes. The

Company also repaid short-term loans of $53.7 million. In 2010, the Company received $537.2 million from a common stock offering.

In December 2012, in connection with its announcement of its definitive agreement to transfer Equitable Gas to PNG Companies, the Company

announced its intent to reduce its annual dividend rate, effective January 2013, to $0.12 per share, which the Company believes better reflects the blend of the

Company’s core businesses remaining

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after giving effect to the pending transaction – a dividend supporting midstream business and a capital-intensive, rapidly growing production business. The

Company expects the favorable impact on cash provided by financing activities of the decline in the dividend rate to be partly offset by distributions to

noncontrolling interests of the Partnership.

Short-term Borrowings

EQT primarily utilizes short-term borrowings to fund capital expenditures in excess of cash flow from operating activities until they can be

permanently financed, to ensure sufficient levels of inventory and to fund required margin deposits on derivative commodity instruments. The amount of

short-term borrowings used for inventory transactions is driven by the seasonal nature of the Company’s natural gas distribution and marketing operations.

Margin deposit requirements vary based on natural gas commodity prices, our credit ratings and the amount and type of derivative commodity instruments.

The Company has a $1.5 billion revolving credit facility that expires on December 8, 2016. The Company may request two one-year extensions of the

expiration date subject to satisfaction of certain conditions.

The revolving credit facility may be used for working capital, capital expenditures, share repurchases and any other lawful corporate purposes. The

credit facility is underwritten by a syndicate of 16 financial institutions, each of which is obligated to fund its pro-rata portion of any borrowings by the

Company.

Under the terms of the revolving credit facility, the Company may obtain base rate loans or fixed period Eurodollar rate loans. Base rate loans are

denominated in dollars and bear interest at a base rate plus a margin based on the Company’s then current credit rating. Fixed period Eurodollar rate loans

bear interest at a Eurodollar rate plus a margin based on the Company’s then current credit rating.

The Company had no loans or letters of credit outstanding under its revolving credit facility as of December 31, 2012 and 2011. For the years ended

December 31, 2012 and 2011, the Company incurred commitment fees averaging approximately 25 basis points and 30 basis points, respectively, to maintain

credit availability under the revolving credit facility.

There were no short-term loans outstanding at any time during 2012. The maximum amount of outstanding short-term loans at any time during the year

ended December 31, 2011 was $104.0 million. The average daily balance of short-term loans outstanding during the year ended December 31, 2011 was

approximately $5.5 million at a weighted average annual interest rate of 1.81%.

The Company’s short-term borrowings generally have original maturities of three months or less.

In connection with the IPO, the Partnership entered into a $350 million revolving credit facility that expires on July 2, 2017. The credit facility is

available to fund working capital requirements and capital expenditures, to purchase assets, to pay distributions and repurchase units and for general

partnership purposes. The credit facility is underwritten by a syndicate of 13 financial institutions, each of which is obligated to fund its pro-rata portion of

any borrowings by the Partnership. The Company is not a guarantor of the Partnership’s obligations under the credit facility. The Partnership’s obligations

under the revolving portion of the credit facility are unsecured.

The Partnership, which was formed in 2012, had no letters of credit and no loans outstanding under the revolving credit facility at any time during the

year ended December 31, 2012. For the year ended December 31, 2012, the Partnership incurred commitment fees averaging approximately 25 basis points to

maintain credit availability under the revolving credit facility.

48

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Security Ratings and Financing Triggers

The table below reflects the credit ratings for debt instruments of the Company at December 31, 2012. Changes in credit ratings may affect the

Company’s cost of short-term and long-term debt (including interest rates and fees under its lines of credit), collateral requirements under derivative

instruments and its access to the credit markets.

Rating Service

Senior

Notes

Short-Term

Rating Outlook

Moody’s Investors Service (Moody’s) Baa2 P-2 Ratings under review

Standard & Poor’s Ratings Services (S&P) BBB A-2 Stable

Fitch Ratings (Fitch) BBB- F3 Stable

In response to the Company’s announcement of the Master Purchase Agreement with PNG Companies on December 20, 2012, the ratings agencies took

the following actions:

· Moody’s placed EQT’s ratings of Baa2 and P-2 under review for downgrade;

· S&P confirmed EQT’s ratings of BBB, A-2 with a stable outlook; and

· Fitch downgraded EQT’s ratings to BBB-/F3 from BBB/F2.

The Company’s credit ratings may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be

evaluated independently of any other rating. The Company cannot ensure that a rating will remain in effect for any given period of time or that a rating will

not be lowered or withdrawn entirely by a credit rating agency if, in its judgment, circumstances so warrant. If the credit rating agencies downgrade the

Company’s ratings, particularly below investment grade, the Company’s access to the capital markets may be limited, borrowing costs and margin deposits

on derivative contracts would increase, counterparties may request additional assurances and the potential pool of investors and funding sources may

decrease. The required margin on derivative instruments is also subject to significant change as a result of factors other than credit rating, such as gas prices

and credit thresholds set forth in agreements between the hedging counterparties and the Company.

The Company’s debt instruments and other financial obligations include provisions that, if not complied with, could require early payment, additional

collateral support or similar actions. The most significant default events include maintaining covenants with respect to maximum debt-to-total capitalization

ratio, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of other financial obligations and change of control provisions.

The Company’s current credit facility contains financial covenants that require a total debt-to-total capitalization ratio of no greater than 65%. The calculation

of this ratio excludes the effects of accumulated other comprehensive income. As of December 31, 2012, the Company was in compliance with all debt

provisions and covenants.

The Partnership’s credit facility contains various covenants and restrictive provisions that, if not complied with, could require early payment or

similar action, including a requirement to maintain a consolidated leverage ratio of not more than 5.00 to 1.00 (or, after the Partnership obtains an investment

grade rating, not more than 5.50 to 1.00 for certain measurement periods following the consummation of certain acquisitions) and, until the Partnership

obtains an investment grade rating, a consolidated interest coverage ratio of not less than 3.00 to 1.00. As of December 31, 2012, the Partnership was in

compliance with all debt provisions and covenants.

Commodity Risk Management

The substantial majority of the Company’s commodity risk management program is related to hedging sales of the Company’s produced natural gas. 

The Company’s overall objective in this hedging program is to protect cash flow from undue exposure to the risk of changing commodity prices. The

Company’s risk management program may include the use of exchange-traded natural gas futures contracts and options and OTC natural gas swap

agreements and options (collectively, derivative commodity instruments) to hedge exposures to fluctuations in natural gas prices. The derivative commodity

instruments currently utilized by the Company are primarily fixed price swaps, collars and futures.

49

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
As of January 24, 2013, the approximate volumes and prices of the Company’s hedge position for 2013 through 2015 production were:

2013 2014 2015

Swaps

Total Volume (Bcf) 121 79 6 5

Average Price per Mcf (NYMEX)* $ 4.70 $ 4.53 $ 4.60

Collars

Total Volume (Bcf) 25 24 23

Average Floor Price per Mcf (NYMEX)* $ 4.95 $ 5.05 $ 5.03

Average Cap Price per Mcf (NYMEX)* $ 9.09 $ 8.85 $ 8.97

* The average price is based on a conversion rate of 1.05 MMBtu/Mcf.

See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” and Note 4 to the Company’s Consolidated Financial Statements for

further discussion of the Company’s hedging program.

Other Items

Off-Balance Sheet Arrangements

In connection with the sale of its NORESCO domestic operations in December 2005, the Company agreed to maintain in place guarantees of certain

warranty obligations of NORESCO. The savings guarantees provided that once the energy-efficiency construction was completed by NORESCO, the

customer would experience a certain dollar amount of energy savings over a period of years. The undiscounted maximum aggregate payments that may be due

related to these guarantees were approximately $192 million as of December 31, 2012, extending at a decreasing amount for approximately 15 years.

In exchange for the Company’s agreement to maintain these guarantee obligations, the purchaser of the NORESCO business and NORESCO agreed,

among other things, that NORESCO would fully perform its obligations under each underlying agreement and agreed to reimburse the Company for any loss

under the guarantee obligations, provided that the purchaser’s reimbursement obligation will not exceed $6 million in the aggregate and will expire on

November 18, 2014. In 2008, the original purchaser of NORESCO sold its interest in NORESCO and transferred its obligations to a third party. In

connection with that event, the new owner delivered to the Company a $1 million letter of credit supporting its obligations.

The NORESCO guarantees are exempt from FASB ASC Topic 460, Guarantees. The Company has determined that the likelihood it will be required to

perform on these arrangements is remote and any potential payments are expected to be immaterial to the Company’s financial position, results of operations

and liquidity. As such, the Company has not recorded any liabilities in its Consolidated Balance Sheets related to these guarantees.

Rate Regulation

As described under “Regulation” in Item 1, “Business,” the Company’s distribution operations, transmission and storage operations and a portion of

its gathering operations are subject to various forms of regulation. As described in Notes 1 and 11 to the Consolidated Financial Statements, regulatory

accounting allows the Company to defer expenses and income as regulatory assets and liabilities which reflect future collections or payments through the

regulatory process. The Company believes that it will continue to be subject to rate regulation that will provide for the recovery of the deferred costs.

50

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Schedule of Contractual Obligations

Total 2013 2014-2015 2016-2017 2018+

(Thousands)

Purchase obligations $ 2,032,766 $ 239,392 $ 330,363 $ 286,659 $ 1,176,352

Long-term debt 2,521,570 23,204 177,173 2,993 2,318,200

Interest payments 1,098,071 160,268 315,774 299,407 322,622

Operating leases 165,366 39,677 48,524 22,796 54,369

Pension and other post-retirement

benefits 150,115 9,812 18,739 17,102 104,462

Total contractual obligations $ 5,967,888 $ 472,353 $ 890,573 $ 628,957 $ 3,976,005

Purchase obligations are commitments for demand charges under existing long-term contracts and binding precedent agreements with various pipelines,

some of which extend up to approximately 15 years. The Company has entered into agreements to release some of its capacity to various third parties. 

Amounts included in the above table for capacity released under long-term agreements approximate $75.0 million and $27.4 million in 2013 and 2014,

respectively.

Operating leases are primarily entered into for various office locations and warehouse buildings, as well as dedicated drilling rigs in support of the

Company’s drilling program. The obligations for the Company’s various office locations and warehouse buildings totaled approximately $99.9 million as of

December 31, 2012. The Company has subleased some of these facilities. Sublease payments to the Company total $28.1 million and are not netted from the

amounts presented in the above table. The Company has agreements with Savanna Drilling, LLC, Pioneer Drilling Company and Patterson Drilling

Company to provide drilling equipment and services to the Company over the next four years. These obligations totaled approximately $65.4 million as of

December 31, 2012.

As discussed in Note 8 to the Consolidated Financial Statements, the Company had a total reserve for unrecognized tax benefits at December 31, 2012

of $18.4 million, of which $14.6 million would primarily reduce the net operating loss carryover and thus is offset against deferred tax assets. The Company

is currently unable to make reasonably reliable estimates of the period of cash settlement of these potential liabilities with taxing authorities; therefore, this

amount has been excluded from the schedule of contractual obligations.

Commitments and Contingencies

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against the Company. While the

amounts claimed may be substantial, the Company is unable to predict with certainty the ultimate outcome of such claims and proceedings. The Company

accrues legal or other direct costs related to loss contingencies when actually incurred. The Company has established reserves it believes to be appropriate for

pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, the Company believes that the ultimate

outcome of any matter currently pending against the Company will not materially affect the financial position, results of operations or liquidity of the

Company.

See Note 18 to the Consolidated Financial Statements for further discussion of the Company’s commitments and contingencies.

Critical Accounting Policies Involving Significant Estimates

The Company’s significant accounting policies are described in Note 1 to the Consolidated Financial Statements. The discussion and analysis of the

Consolidated Financial Statements and results of operations are based upon EQT’s Consolidated Financial Statements, which have been prepared in

accordance with U.S. generally accepted accounting principles. The preparation of these Consolidated Financial Statements requires management to make

estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and

liabilities. The following critical accounting policies, which were reviewed by the Company’s Audit Committee, relate to the Company’s more significant

judgments and estimates used in the preparation of its Consolidated Financial Statements. Actual results could differ from those estimates.

51

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Accounting for Oil and Gas Producing Activities: The Company uses the successful efforts method of accounting for its oil and gas production

activities. Under this method, all property acquisition costs and costs of exploratory and development wells are capitalized when incurred, pending

determination of whether the property has proved reserves. If an exploratory well does not result in proved reserves, the costs of drilling the well are charged to

expense and included within cash flows from investing activities in the Consolidated Statements of Cash Flows. The costs of development wells are capitalized

whether productive or nonproductive. Depletion is calculated based on the annual actual production multiplied by the depletion rate per unit. The depletion rate

is derived by dividing the total costs capitalized over the number of units expected to be produced over the life of the reserves.

The carrying values of the Company’s proved oil and gas properties are reviewed for indications of impairment whenever events or circumstances

indicate that the remaining carrying value may not be recoverable. In order to determine whether impairment has occurred, the Company estimates the expected

future cash flows (on an undiscounted basis) from its proved oil and gas properties and compares those future cash flows to the carrying values of the

applicable properties. The estimated future cash flows used to test properties for recoverability are based on proved reserves, utilizing assumptions about the

use of the asset, market prices for oil and gas and future operating costs. Proved oil and gas properties that have carrying amounts in excess of estimated

future cash flows would be deemed unrecoverable. Those properties would be written down to fair value, which would be estimated by discounting the

estimated future cash flows using discount rate assumptions that marketplace participants would use in their estimates of fair value.

Capitalized costs of unproved properties are evaluated at least annually for recoverability on a prospective basis. Indicators of potential impairment

include changes brought about by economic factors, potential shifts in business strategy employed by management and historical experience. If it is

determined that the properties will not yield proved reserves, the related costs are expensed in the period in which that determination is made. Unproved

properties had a net book value of $385.6 million, $358.8 million and $445.9 million in 2012, 2011 and 2010, respectively.

The Company believes that the accounting estimate related to the accounting for oil and gas producing activities is a “critical accounting estimate”

because the Company must assess the remaining recoverable proved reserves, a process which can be significantly impacted by management’s expectations

regarding proved undeveloped drilling locations and its future development plans. Should the Company begin to develop new producing regions or begin more

significant exploration activities, future results of operations for any particular quarterly or annual period could be materially affected by changes in the

Company’s assumptions.

Oil and Gas Reserves: Proved oil and gas reserves, as defined by SEC Regulation S-X Rule 4-10, are those quantities of oil and gas, 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.

The Company’s estimates of proved reserves are made and reassessed annually using geological and reservoir data as well as production performance

data. Reserve estimates are prepared and updated by the Company’s engineers and audited by the Company’s independent engineers. Revisions may result

from changes in, among other things, reservoir performance, development plans, prices, economic conditions and governmental restrictions. Decreases in

prices, for example, may cause a reduction in some proved reserves due to reaching economic limits sooner. A material change in the estimated volumes of

reserves could have an impact on the depletion rate calculation and the financial statements.

The Company estimates future net cash flows from natural gas and oil reserves based on selling prices and costs using a 12-month average price,

calculated as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period. Operating costs, production

and ad valorem taxes and future development costs are based on current costs with no escalation. Income tax expense is computed using expected future tax

rates and giving effect to tax deductions and credits available under current laws and which relate to oil and gas producing activities.

52

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
The Company believes that the accounting estimate related to oil and gas reserves is a “critical accounting estimate” because the Company must

periodically reevaluate proved reserves along with estimates of future production and the estimated timing of development expenditures. Future results of

operations for any particular quarterly or annual period could be materially affected by changes in the Company’s assumptions.

Income Taxes: The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in

the Company’s Consolidated Financial Statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences

between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to

reverse.

The Company has recorded deferred tax assets principally resulting from federal and state net operating loss carryforwards, an alternative minimum

tax credit carryforward, incentive compensation and deferred compensation plans and pension and other post-retirement benefits recorded in other

comprehensive income. The Company has established a valuation allowance against a portion of the deferred tax assets related to the state net operating loss

carryforwards, as it is believed that it is more likely than not that these deferred tax assets will not all be realized. No other significant valuation allowances

have been established, as it is believed that future sources of taxable income, reversing temporary differences and other tax planning strategies will be sufficient

to realize these deferred tax assets. Any determination to change the valuation allowance would impact the Company’s income tax expense and net income in

the period in which such a determination is made.

The Company estimates the amount of financial statement benefit to record for uncertain tax positions by first determining whether it is more likely

than not that a tax position in a tax return will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the

technical merits of the position. If this step is satisfied, then the Company must measure the tax position. The tax position is measured at the largest amount

of benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. See Note 8 to the Company’s Consolidated Financial Statements

for further discussion.

The Company believes that accounting estimates related to income taxes are “critical accounting estimates” because the Company must assess the

likelihood that deferred tax assets will be recovered from future taxable income and exercise judgment regarding the amount of financial statement benefit to

record for uncertain tax positions. When evaluating whether or not a valuation allowance must be established on deferred tax assets, the Company exercises

judgment in determining whether it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be

realized. The Company considers all available evidence, both positive and negative, to determine whether, based on the weight of the evidence, a valuation

allowance is needed, including carrybacks, tax planning strategies, reversal of deferred tax assets and liabilities and forecasted future taxable income. In

making the determination related to uncertain tax positions, the Company considers the amounts and probabilities of the outcomes that could be realized upon

ultimate settlement of an uncertain tax position using the facts, circumstances and information available at the reporting date to establish the appropriate

amount of financial statement benefit. To the extent that an uncertain tax position or valuation allowance is established or increased or decreased during a

period, the Company must include an expense or benefit within tax expense in the income statement. Future results of operations for any particular quarterly

or annual period could be materially affected by changes in the Company’s assumptions.

Derivative Instruments: The Company enters into derivative commodity instrument contracts primarily to mitigate exposure to commodity price risk

associated with future natural gas production. The Company also enters into derivative instruments to hedge other forecasted natural gas purchases and sales,

to hedge natural gas inventory and to hedge exposure to fluctuations in interest rates. Energy trading contracts are also utilized to leverage assets and limit

exposure to shifts in market prices. Derivative instruments are required to be recorded on the balance sheet as either an asset or a liability measured at fair

value. If the derivative qualifies and is designated for cash flow hedge accounting, the change in fair value of the derivative is recognized in accumulated other

comprehensive income (a component of equity) to the extent that the hedge is effective and in the income statement to the extent it is ineffective. If the derivative

is designated as a fair value hedge, does not qualify as a hedge or is not designated as a hedge, the change in fair value of the derivative is recognized currently

in earnings. For fair value hedges, the Company also records the change in the fair value of the hedged item (inventory) in the Statements of Consolidated

Income. See “Commodity Risk Management” above, Item 7A, “Quantitative and Qualitative Disclosures About

53

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Market Risk” and Note 4 to the Consolidated Financial Statements for additional information regarding hedging activities.

The Company estimates the fair value of all derivative instruments using quoted market prices, where available. If quoted market prices are not

available, fair value is based upon models that use as inputs market-based parameters, including but not limited to forward curves, discount rates, broker

quotes, volatilities and nonperformance risk. Nonperformance risk considers the effect of the Company’s credit standing on the fair value of liabilities and

the effect of the counterparty’s credit standing on the fair value of assets. The Company estimates nonperformance risk by analyzing publicly available

market information, including a comparison of the yield on debt instruments with credit ratings similar to the Company’s or counterparty’s credit rating and

the yield of a risk-free instrument and credit default swap rates where available. The values reported in the financial statements change as these estimates are

revised to reflect actual results, changes in market conditions or other factors, many of which are beyond the Company’s control.

A substantial majority of the Company’s derivative financial instruments are designated as cash flow hedges. Should these instruments fail to meet the

criteria for hedge accounting or be de-designated, the subsequent changes in fair value of the instruments would be recorded in earnings, which could

materially impact the results of operations. One of the requirements for cash flow hedge accounting is that a derivative instrument be highly effective at

offsetting the changes in cash flows of the transaction being hedged. Effectiveness may be impacted by counterparty credit rating as it must be probable that

the counterparty will perform in order for the hedge to be effective. The Company monitors counterparty credit quality by reviewing counterparty credit

fundamentals, credit ratings, credit default swap rates and market activity.

In addition, the derivative commodity instruments used to mitigate exposure to commodity price risk associated with future natural gas production may

limit the benefit the Company would receive from increases in the prices for oil and natural gas and may expose the Company to margin requirements. Given

the Company’s price risk management position and price volatility, the Company may be required from time to time to deposit cash with or provide letters of

credit to its counterparties in order to satisfy these margin requirements.

The Company believes that the accounting estimates related to derivative commodity instruments are “critical accounting estimates” because the

Company’s financial condition, results of operations and liquidity can be significantly impacted by changes in the market value of the Company’s derivative

instruments due to the volatility of natural gas prices, by changes in the effectiveness of cash flow hedges due to changes in estimates of non-performance risk

and by changes in margin requirements. Future results of operations for any particular quarterly or annual period could be materially affected by changes in

the Company’s assumptions.

Contingencies and Asset Retirement Obligations: The Company is involved in various regulatory and legal proceedings that arise in the ordinary

course of business. The Company records a liability for contingencies based upon its assessment that a loss is probable and the amount of the loss can be

reasonably estimated. The Company considers many factors in making these assessments, including history and specifics of each matter. Estimates are

developed in consultation with legal counsel and are based upon an analysis of potential results.

The Company also accrues a liability for legal asset retirement obligations based on an estimate of the timing and amount of their settlement. For oil

and gas wells, the fair value of the Company’s plugging and abandonment obligations is required to be recorded at the time the obligations are incurred, which

is typically at the time the wells are drilled. Upon initial recognition of an asset retirement obligation, the Company increases the carrying amount of the longlived asset by the same amount as the liability. Over time, the liabilities are accreted for the change in their present value, through charges to depreciation,

depletion and amortization, and the initial capitalized costs are depleted over the useful lives of the related assets.

The Company is required to operate and maintain its natural gas pipeline and storage systems, and intends to do so as long as supply and demand for

natural gas exists, which the Company expects for the foreseeable future. Therefore, the Company believes that the substantial majority of its natural gas

pipeline and storage system assets have indeterminate lives.

54

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
The Company believes that the accounting estimates related to contingencies and asset retirement obligations are “critical accounting estimates” because

the Company must assess the probability of loss related to contingencies and the expected amount and timing of asset retirement obligations. In addition, the

Company must determine the estimated present value of future liabilities. Future results of operations for any particular quarterly or annual period could be

materially affected by changes in the Company’s assumptions.

Share-Based Compensation: The Company awards share-based compensation in connection with specific programs established under the 1999 and

2009 Long-Term Incentive Plans. Awards to employees are typically made in the form of performance-based awards, time-based restricted stock and stock

options. Awards to directors are typically made in the form of phantom units.

Performance-based awards expected to be satisfied in cash are treated as liability awards. Awards under the 2011 Value Driver Award program (2011

VDA), which were paid out in cash on December 31, 2012, were treated as liability awards. Phantom units (which vest upon grant) expected to be satisfied in

cash are also treated as liability awards. For liability awards, the Company is required to estimate, on grant date and on each reporting date thereafter until

vesting and payment, the fair value of the ultimate payout based upon the expected performance through, and value of the Company’s common stock on, the

vesting date. The Company then recognizes a proportionate amount of the expense for each period in the Company’s financial statements over the vesting

period of the award, in the case of a performance-based award, and until payment, in the case of phantom units. The Company reviews its assumptions

regarding performance and common stock value on a quarterly basis and adjusts its accrual when changes in these assumptions result in a material change in

the fair value of the ultimate payouts.

Performance-based awards expected to be satisfied in Company common stock or Partnership units are treated as equity awards. Awards under the

2010 Executive Performance Incentive Program (2010 EPIP), the July 2010 Executive Performance Incentive Program (July 2010 EPIP) and the 2010 Stock

Incentive Award program (2010 SIA), which were paid out in Company common stock on December 31, 2012, were treated as equity awards. Awards under

the 2011 Volume and Efficiency Program (2011 VEP), the 2012 Executive Performance Incentive Program (2012 EPIP), the 2012 Value Driver Award program

(2012 VDA) and the EQM TR Program, which remain outstanding at December 31, 2012, are treated as equity awards. For equity awards, the Company is

required to determine the grant date fair value of the awards, which is then recognized as expense in the Company’s financial statements over the vesting period

of the award. Determination of the grant date fair value of the awards requires judgments and estimates regarding, among other things, the appropriate

methodologies to follow in valuing the awards and the related inputs required by those valuation methodologies. Most often, the Company is required to obtain

a valuation based upon assumptions regarding risk-free rates of return, dividend yields, expected volatilities and the expected term of the award. The risk-free

rate is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is based on the historical dividend yield of the Company’s

common stock and any changes expected thereto, and, where applicable, of the common stock of the peer group members at the time of grant. Expected

volatilities are based on historical volatility of the Company’s common stock and, where applicable, the common stock of the peer group members at the time

of grant. The expected term represents the period of time elapsing during the applicable performance period.

For time-based restricted stock awards, the grant date fair value of the awards is recognized as expense in the Company’s financial statements over the

vesting period, typically three years. For phantom units (which vest on date of grant) expected to be satisfied in equity, the grant date fair value of the awards

is recognized as an expense in the Company’s financial statements in the year of grant. The grant date fair value, in both cases, is determined based upon the

closing price of the Company’s common stock on the date of the grant.

For non-qualified stock options, the grant date fair value is recognized as expense in the Company’s financial statements over the vesting period,

typically two years. The Company utilizes the Black-Scholes option pricing model to measure the fair value of stock options, which includes assumptions

for a risk-free interest rate, dividend yield, volatility factor and expected term. The risk-free rate for periods within the contractual life of the option is based on

the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is based on the historical dividend yield of the Company’s stock at the time of

grant. The expected volatility is based on historical volatility of the Company’s stock at the time of grant. The expected term represents the period of time that

options granted are expected to be outstanding based on historical option exercise experience at the time of grant.

5 5

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
The Company believes that the accounting estimates related to share-based compensation are “critical accounting estimates” because they may change

from period to period based on changes in assumptions about factors affecting the ultimate payout of awards, including the number of awards to ultimately

vest and the market price and volatility of the Company’s shares. Future results of operations for any particular quarterly or annual period could be

materially affected by changes in the Company’s assumptions. See Note 16 to the Consolidated Financial Statements for additional information regarding the

Company’s share-based compensation.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Derivative Instruments

The Company’s primary market risk exposure is the volatility of future prices for natural gas and NGLs, which can affect the operating results of the

Company primarily through EQT Production and the storage, marketing and other activities at EQT Midstream. The Company’s use of derivatives to reduce

the effect of this volatility is described in Notes 1 and 4 to the Consolidated Financial Statements and under the caption “Commodity Risk Management” in

Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The Company uses derivative commodity instruments

that are placed with major financial institutions whose creditworthiness is regularly monitored. The Company also enters into derivative instruments to hedge

other forecasted natural gas purchases and sales, to hedge natural gas inventory and to hedge exposure to fluctuations in interest rates. The Company’s use of

derivative instruments is implemented under a set of policies approved by the Company’s Corporate Risk Committee and reviewed by the Audit Committee of

the Board of Directors.

Commodity Price Risk

For the derivative commodity instruments used to hedge the Company’s forecasted production, the Company sets policy limits relative to the expected

production and sales levels which are exposed to price risk. For the derivative commodity instruments used to hedge forecasted natural gas purchases and

sales which are exposed to price risk and to hedge natural gas inventory which is exposed to changes in fair value, the Company sets limits related to

acceptable exposure levels.

The financial instruments currently utilized by the Company are primarily futures contracts, swap agreements and collar agreements which may

require payments to or receipt of payments from counterparties based on the differential between two prices for the commodity. The Company also considers

other contractual agreements in implementing its commodity hedging strategy.

The Company monitors price and production levels on a continuous basis and makes adjustments to quantities hedged as warranted. The Company’s

overall objective in its hedging program is to protect cash flow from undue exposure to the risk of changing commodity prices.

With respect to the derivative commodity instruments held by the Company for purposes other than trading as of December 31, 2012 and 2011, the

Company hedged portions of expected equity production, portions of forecasted purchases and sales and portions of natural gas inventory by utilizing futures

contracts, swap agreements and collar agreements covering approximately 356 Bcf and 347 Bcf of natural gas, respectively. See the “Commodity Risk

Management” section in the “Capital Resources and Liquidity” section of Item 7, “Management’s Discussion and Analysis of Financial Condition and Results

of Operations.”

A hypothetical decrease of 10% in the market price of natural gas from the December 31, 2012 and 2011 levels would increase the fair value of nontrading natural gas derivative instruments by approximately $131.0 million and $129.1 million, respectively. A hypothetical increase of 10% in the market

price of natural gas from the December 31, 2012 and 2011 levels would decrease the fair value of non-trading natural gas derivative instruments by

approximately $130.2 million and $128.1 million, respectively.

The Company determined the change in the fair value of the derivative commodity instruments using a method similar to its normal determination of

fair value as described in Note 1 to the Consolidated Financial Statements. The Company assumed a 10% change in the price of natural gas from its levels at

December 31, 2012.

5 6

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The price change was then applied to the non-trading natural gas derivative commodity instruments recorded on the Company’s Consolidated Balance Sheets,

resulting in the change in fair value.

The above analysis of the derivative commodity instruments held by the Company for purposes other than trading does not include the offsetting

impact that the same hypothetical price movement may have on the Company’s physical sales of natural gas. The portfolio of derivative commodity

instruments held for risk management purposes approximates the notional quantity of a portion of the expected or committed transaction volume of physical

commodities with commodity price risk for the same time periods. Furthermore, the derivative commodity instrument portfolio is managed to complement the

physical transaction portfolio, reducing overall risks within limits. Therefore, an adverse impact to the fair value of the portfolio of derivative commodity

instruments held for risk management purposes associated with the hypothetical changes in commodity prices referenced above should be offset by a

favorable impact on the underlying hedged physical transactions, assuming the derivative commodity instruments are not closed out in advance of their

expected term, the derivative commodity instruments continue to function effectively as hedges of the underlying risk and the anticipated transactions occur as

expected.

If the underlying physical transactions or positions are liquidated prior to the maturity of the derivative commodity instruments, a loss on the financial

instruments may occur or the derivative commodity instruments might be worthless as determined by the prevailing market value on their termination or

maturity date, whichever comes first.

Interest Rate Risk

Changes in interest rates affect the amount of interest the Company and the Partnership earn on cash, cash equivalents and short-term investments and

the interest rates the Company and the Partnership pay on borrowings under their respective revolving credit facilities. All of the Company’s long-term

borrowings are fixed rate and thus do not expose the Company to fluctuations in its results of operations or liquidity from changes in market interest rates. 

Changes in interest rates do affect the fair value of the Company’s fixed rate debt. See Notes 12 and 13 to the Consolidated Financial Statements for further

discussion of the Company’s borrowings and Note 5 to the Consolidated Financial Statements for a discussion of fair value measurements, including the fair

value of long-term debt.

Other Market Risks

The Company is exposed to credit loss in the event of nonperformance by counterparties to derivative contracts. This credit exposure is limited to

derivative contracts with a positive fair value, which may change as market prices change. The Company believes that NYMEX-traded futures contracts

have limited credit risk because the CFTC regulations are in place to protect exchange participants, including the Company, from potential financial instability

of the exchange members. The Company’s OTC swap, collar and option derivative instruments are primarily with financial institutions and, thus, are subject

to events that would impact those companies individually as well as that industry as a whole.

The Company utilizes various processes and analyses to monitor and evaluate its credit risk exposures. This includes monitoring market conditions,

counterparty credit fundamentals and credit default swap rates. Credit exposure is controlled through credit approvals and limits. To manage the level of

credit risk, the Company enters into transactions with financial counterparties that are of investment grade, enters into netting agreements whenever possible

and may obtain collateral or other security.

Approximately 80%, or $303.0 million, of the Company’s OTC derivative contracts outstanding at December 31, 2012 had a positive fair value. 

Approximately 81%, or $508.5 million of the Company’s OTC derivative contracts at December 31, 2011 had a positive fair value.

As of December 31, 2012, the Company was not in default under any derivative contracts and has no knowledge of default by any counterparty to

derivative contracts. During 2012, the Company made no adjustments to the fair value of derivative contracts due to credit related concerns outside of the

normal non-performance risk adjustment included in the Company’s established fair value procedure. The Company will continue to monitor market

conditions that may impact the fair value of derivative contracts reported in the Consolidated Balance Sheets.

57

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
The Company is also exposed to the risk of nonperformance by credit customers on physical sales of natural gas. A significant amount of revenues

and related accounts receivable from EQT Production are generated from the sale of produced natural gas, NGLs and crude oil to certain marketers, utility

and industrial customers located mainly in the Appalachian area and a gas processor in Kentucky. Additionally, a significant amount of revenues and related

accounts receivable from EQT Midstream are generated from the gathering of natural gas in Kentucky, Virginia, Pennsylvania and West Virginia.

The Company has a $1.5 billion revolving credit facility that expires on December 8, 2016. The credit facility is underwritten by a syndicate of

financial institutions, each of which is obligated to fund its pro-rata portion of any borrowings by the Company. As of December 31, 2012, the Company had

no loans or letters of credit outstanding under the facility. No one lender of the large group of financial institutions in the syndicate holds more than 10% of the

facility. The Company’s large syndicate group and relatively low percentage of participation by each lender is expected to limit the Company’s exposure to

problems or consolidation in the banking industry.

The Partnership has a $350 million revolving credit facility that expires on July 2, 2017. The credit facility is underwritten by a syndicate of financial

institutions, each of which is obligated to fund its pro-rata portion of any borrowing by the Partnership. As of December 31, 2012, the Partnership had no

letters of credit and no loans outstanding under the revolving credit facility. No one lender of the large group of financial institutions in the syndicate holds

more than 10% of the facility. The Partnership’s large syndicate group and relatively low percentage of participation by each lender is expected to limit the

Partnership’s exposure to problems or consolidation in the banking industry.

58

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Item 8. Financial Statements and Supplementary Data

Page Reference

Reports of Independent Registered Public Accounting Firm 60

Statements of Consolidated Income for each of the three years in the period ended

December 31, 2012 62

Statements of Consolidated Comprehensive Income for each of the three years in the period ended

December 31, 2012 63

Statements of Consolidated Cash Flows for each of the three years in the period ended 

December 31, 2012 64

Consolidated Balance Sheets as of December 31, 2012 and 2011 6 5

Statements of Consolidated Equity for each of the three years in the period ended 

December 31, 2012 67

Notes to Consolidated Financial Statements 68

5 9

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

EQT Corporation

We have audited the accompanying consolidated balance sheets of EQT Corporation and Subsidiaries as of December 31, 2012 and 2011, and the

related statements of consolidated income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended

December 31, 2012. Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the

responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards

require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit

includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the

accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that

our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of EQT Corporation

and Subsidiaries at December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for each of the three years in the period

ended December 31, 2012 in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule,

when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of EQT

Corporation and Subsidiaries’ internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control — Integrated

Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2013, expressed an

unqualified opinion thereon.

Pittsburgh, Pennsylvania

February 21, 2013

60

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

EQT Corporation

We have audited EQT Corporation and Subsidiaries’ internal control over financial reporting as of December 31, 2012, based on criteria established in

Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). EQT

Corporation and Subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the

effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our

responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards

require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all

material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness

exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we

considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal

control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and

fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to

permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are

being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or

timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation

of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance

with the policies or procedures may deteriorate.

In our opinion, EQT Corporation and Subsidiaries maintained, in all material respects, effective internal control over financial reporting as of

December 31, 2012, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance

sheets of EQT Corporation and Subsidiaries as of December 31, 2012 and 2011, and the related statements of consolidated income, comprehensive income,

stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2012 and our report dated February 21, 2013 expressed an

unqualified opinion thereon.

Pittsburgh, Pennsylvania

February 21, 2013

61

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EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED INCOME

YEARS ENDED DECEMBER 31,

2012 2011 2010

(Thousands except per share amounts)

Operating revenues $ 1,641,608 $ 1,639,934 $ 1,374,395

Operating expenses:

Purchased gas costs 228,405 256,467 252,884

Operation and maintenance 141,935 127,642 152,414

Production 96,155 80,911 67,414

Exploration 10,370 4,932 5,368

Selling, general and administrative 195,097 172,294 155,551

Depreciation, depletion and amortization 499,118 339,297 270,285

Total operating expenses 1,171,080 981,543 903,916

Gain on dispositions – 202,928 –

Operating income 470,528 861,319 470,479

Other income 15,965 34,138 12,898

Interest expense 184,786 136,328 128,157

Income before income taxes 301,707 759,129 355,220

Income taxes 105,296 279,360 127,520

Net income 196,411 479,769 227,700

Less: Net income attributable to noncontrolling interests 13,016 – –

Net income attributable to EQT Corporation $ 183,395 $ 479,769 $ 227,700

Earnings per share of common stock attributable to EQT Corporation:

Basic:

Net income $ 1.23 $ 3.21 $ 1.58

Diluted:

Net income $ 1.22 $ 3.19 $ 1.57

See notes to consolidated financial statements.

62

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EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31,

2012 2011 2010

(Thousands)

Net income $ 196,411 $ 479,769 $ 227,700

Other comprehensive (loss) income, net of tax:

Net change in cash flow hedges:

Natural gas, net of tax (benefit) expense of ($61,757), $110,186 and $30,047 (93,878) 166,840 49,601

Interest rate, net of tax expense (benefit) of $4,833, ($5,720) and $0 6,369 (7,433) 116

Unrealized (loss) gain on available-for-sale securities – (4,896) 806

Pension and other post-retirement benefits liability adjustment, net of tax (benefit) expense of

($1,992), ($2,752) and $1,331 (1,085) (4,474) 2,021

Other comprehensive (loss) income (88,594) 150,037 52,544

Comprehensive income 107,817 629,806 280,244

Less: Comprehensive income attributable to noncontrolling interests 13,016 – –

Comprehensive income attributable to EQT Corporation $ 94,801 $ 629,806 $ 280,244

See notes to consolidated financial statements.

63

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EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED CASH FLOWS

YEARS ENDED DECEMBER 31,

2012 2011 2010

(Thousands)

Cash flows from operating activities:

Net income $ 196,411 $ 479,769 $ 227,700

Adjustments to reconcile net income to net cash provided by operating activities:

Deferred income taxes 95,185 234,019 153,912

Depreciation, depletion and amortization 499,118 339,297 270,285

Gain on dispositions – (202,928) –

(Recoveries of) provisions for losses on accounts receivable (1,235) 1,581 5,134

Other income (15,965) (34,138) (12,898)

Stock-based compensation expense 40,230 20,080 14,104

Unrealized losses (gains) on derivatives and inventory 7,182 (1,497) (4,702)

Lease impairment 5,543 2,587 263

Noncash financial instrument put premium 8,227 – –

Storage reserve adjustment (2,508) – –

Reimbursements for tenant improvements – – 4,053

Changes in other assets and liabilities:

Dividend from Nora Gathering, LLC 12,750 23,500 –

Accounts receivable and unbilled revenues (48,364) 14,317 (6,330)

Inventory 43,277 1,117 45,104

Prepaid expenses and other (17,404) 22,812 126,042

Accounts payable 32,275 42,262 (36,853)

Other current liabilities (22,864) (15,054) (2,963)

Other items, net (10,991) (12,460) 6,889

Net cash provided by operating activities 820,867 915,264 789,740

Cash flows from investing activities:

Capital expenditures (1,399,385) (1,274,280) (1,246,932)

Tenant improvements – – (4,053)

Proceeds from sale of available-for-sale securities – 29,947 12,306

Proceeds from sale of assets 4,842 619,999 –

Investment in available-for-sale securities – – (750)

Net cash used in investing activities (1,394,543) (624,334) (1,239,429)

Cash flows from financing activities:

Proceeds from the issuance of common units of EQT Midstream Partners, LP, net of

issuance costs 276,780 – –

Dividends paid (131,803) (131,625) (127,292)

Distributions to noncontrolling interests (5,031) – –

Proceeds from issuance of common stock – – 537,206

Proceeds from issuance of long-term debt – 750,000 –

Debt issuance costs and revolving credit facility origination fees (4,022) (11,738) (10,962)

(Decrease) increase in short-term loans – (53,650) 48,650

Repayments and retirements of long-term debt (219,315) (15,457) –

Proceeds and tax benefits from exercises under employee compensation plans 7,871 2,791 2,087

Net cash (used in) provided by financing activities (75,520) 540,321 449,689

Net change in cash and cash equivalents (649,196) 831,251 –

Cash and cash equivalents at beginning of year 831,251 – –

Cash and cash equivalents at end of year $ 182,055 $ 831,251 $ –

Cash paid (received) during the year for:

Interest, net of amount capitalized $ 187,884 $ 129,486 $ 127,904

Income taxes, net $ 27,605 $ 47,242 $ (129,495)

See notes to consolidated financial statements.

64

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EQT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31,

2012 2011

(Thousands)

Assets

Current assets:

Cash and cash equivalents $ 182,055 $ 831,251

Accounts receivable (less accumulated provision for doubtful accounts: $12,586 in 2012; $16,371 in

2011) 205,479 153,321

Unbilled revenues 27,699 30,257

Inventory 76,787 123,960

Derivative instruments, at fair value 304,237 512,161

Prepaid expenses and other 56,588 39,184

Total current assets 852,845 1,690,134

Equity in nonconsolidated investments 130,368 136,972

Property, plant and equipment 10,139,903 8,768,713

Less: accumulated depreciation and depletion 2,424,605 1,962,404

Net property, plant and equipment 7,715,298 6,806,309

Regulatory assets 111,915 94,095

Other assets 39,436 45,209

Total assets $ 8,849,862 $ 8,772,719

See notes to consolidated financial statements.

6 5

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EQT CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31,

2012 2011

(Thousands)

Liabilities and Stockholders’ Equity

Current liabilities:

Current portion of long-term debt $ 23,204 $ 219,315

Accounts payable 289,032 256,757

Derivative instruments, at fair value 75,562 123,306

Other current liabilities 182,667 205,532

Total current liabilities 570,465 804,910

Long-term debt 2,502,969 2,527,627

Deferred income taxes and investment tax credits 1,666,029 1,618,944

Pension and other post-retirement benefits 49,023 47,589

Other credits 172,574 179,819

Total liabilities 4,961,060 5,178,889

Equity:

Stockholders’ equity

Common stock, no par value, authorized 320,000 shares, shares issued: 175,684 in 2012 and 2011 1,770,545 1,734,994

Treasury stock, shares at cost: 25,575 in 2012 and 26,207 in 2011 (461,774) (473,215)

Retained earnings 2,195,502 2,143,910

Accumulated other comprehensive income 99,547 188,141

Total common stockholders’ equity 3,603,820 3,593,830

Noncontrolling interests in consolidated subsidiaries 284,982 –

Total equity 3,888,802 3,593,830

Total liabilities and equity $ 8,849,862 $ 8,772,719

See notes to consolidated financial statements.

6 6

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EQT CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED EQUITY

YEARS ENDED DECEMBER 31, 2012, 2011 and 2010

Common Stock

Shares

Outstanding

No

Par Value

Retained

Earnings

Accumulated 

Other

Comprehensive

(Loss) Income

Noncontrolling

Interests in 

Consolidated

Subsidiaries

Total 

Equity

(Thousands)

Balance, December 31, 2009 130,931 $ 470,112 $ 1,695,358 $ (14,440) $ – $ 2,151,030

Comprehensive income (net of tax):

Net income 227,700 227,700

Net change in cash flow hedges:

Natural gas, net of tax of $30,047 49,601 49,601

Interest rate 116 116

Unrealized loss on available-for-sale securities 806 806

Pension and other post-retirement benefits liability

adjustment, net of tax of $1,331 2,021 2,021

Dividends ($0.88 per share) (127,292) (127,292)

Stock-based compensation plans, net 168 6,822 6,822

Issuance of common shares 18,054 767,892 767,892

Balance, December 31, 2010 149,153 $ 1,244,826 $ 1,795,766 $ 38,104 – $ 3,078,696

Comprehensive income (net of tax):

Net income 479,769 479,769

Net change in cash flow hedges:

Natural gas, net of tax of $110,186 166,840 166,840

Interest rate, net of tax of ($5,720) (7,433) (7,433)

Unrealized gain on available-for-sale securities (4,896) (4,896)

Pension and other post-retirement benefits liability

adjustment, net of tax of ($2,752) (4,474) (4,474)

Dividends ($0.88 per share) (131,625) (131,625)

Stock-based compensation plans, net 324 16,953 16,953

Balance, December 31, 2011 149,477 $ 1,261,779 $ 2,143,910 $ 188,141 – $ 3,593,830

Comprehensive income (net of tax):

Net income 183,395 13,016 196,411

Net change in cash flow hedges:

Natural gas, net of tax of ($61,757) (93,878) (93,878)

Interest rate, net of tax of $4,833 6,369 6,369

Pension and other post-retirement benefits liability

adjustment, net of tax of ($1,992) (1,085) (1,085)

Dividends ($0.88 per share) (131,803) (131,803)

Stock-based compensation plans, net 632 41,621 217 41,838

Distributions to noncontrolling interests ($0.35 per common

unit) (5,031) (5,031)

Issuance of common units of EQT Midstream Partners, LP 276,780 276,780

Deferred taxes related to IPO of EQT Midstream Partners,

LP 5,371 5,371

Balance, December 31, 2012 150,109 $ 1,308,771 $ 2,195,502 $ 99,547 $ 284,982 $ 3,888,802

Common shares authorized: 320,000,000 shares. Preferred shares authorized: 3,000,000 shares. There are no preferred shares issued or outstanding.

See notes to consolidated financial statements.

67

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

1. Summary of Significant Accounting Policies

Principles of Consolidation: The Consolidated Financial Statements include the accounts of EQT Corporation and all subsidiaries, ventures and

partnerships in which a controlling interest is held (EQT or the Company). All significant intercompany accounts and transactions have been eliminated in

consolidation. EQT utilizes the equity method of accounting for companies where its ownership is less than or equal to 50% and significant influence exists.

EQT owns a 2.0% general partner interest, all incentive distribution rights and a 57.4% limited partner interest in the EQT Midstream Partners, LP (the

Partnership) (NYSE: EQM). The Partnership is consolidated in EQT’s consolidated financial statements. EQT records the noncontrolling interest of the

public limited partners in EQT’s financial statements.

Segments: Operating segments are revenue-producing components of the enterprise for which separate financial information is produced internally and

which are subject to evaluation by the Company’s chief operating decision maker in deciding how to allocate resources.

The Company reports its operations in three segments, which reflect its lines of business. The EQT Production segment includes the Company’s

exploration for, and development and production of, natural gas, natural gas liquids (NGLs) and a limited amount of crude oil in the Appalachian Basin. 

EQT Midstream’s operations include the natural gas gathering, transportation, storage and marketing activities of the Company, including ownership and

operation of the Partnership. Distribution’s operations primarily comprise the state-regulated natural gas distribution activities of the Company.

Substantially all of the Company’s operating revenues, income from operations and assets are generated or located in the United States.

Reclassification: Certain previously reported amounts have been reclassified to conform to the current year presentation.

Use of Estimates: The preparation of financial statements in conformity with United States generally accepted accounting principles (GAAP) requires

management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual

results could differ from those estimates.

Cash Equivalents: The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash

equivalents. These investments are accounted for at cost. Interest earned on cash equivalents is included as a reduction of interest expense.

Inventories: Generally, the Company’s inventory balance consists of natural gas stored underground or in pipelines and materials and supplies

recorded at the lower of average cost or market. For inventory hedged under cash flow hedges, the Company reclassifies unrealized hedge amounts deferred in

accumulated other comprehensive income into earnings in the same period as the related inventory is sold or a lower of cost or market adjustment is applied. 

For hedged inventory subject to fair value hedges, the Company adjusts the average cost for the change in natural gas spot prices from the date the inventory is

hedged until settlement. These fair value adjustments become part of the average cost of the inventory. During the years ended December 31, 2012, 2011 and

2010, the Company recorded losses for lower of cost or market adjustments of $7.0 million, $7.2 million and $1.3 million, respectively, which became part

of the average cost of the inventory.

68

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

Property, Plant and Equipment: The Company’s property, plant and equipment consist of the following:

December 31,

2012 2011

(Thousands)

Oil and gas producing properties, successful efforts method $ 6,750,343 $ 5,772,083

Accumulated depletion (1,572,775) (1,177,526)

Net oil and gas producing properties 5,177,568 4,594,557

Midstream plant 2,308,362 1,924,685

Accumulated depreciation and amortization (483,358) (424,963)

Net midstream plant 1,825,004 1,499,722

Distribution plant 986,470 980,793

Accumulated depreciation and amortization (328,859) (325,836)

Net distribution plant 657,611 654,957

Other properties, at cost less accumulated depreciation 55,115 57,073

Net property, plant and equipment $ 7,715,298 $ 6,806,309

Oil and gas producing properties use the successful efforts method of accounting for production activities. Under this method, the cost of productive

wells, including mineral interests, wells and related equipment, development dry holes, as well as productive acreage, are capitalized and depleted using the

unit-of-production method. These capitalized costs include salaries, benefits and other internal costs directly attributable to these activities. The Company

capitalized internal costs of $72.1 million, $69.3 million and $56.8 million in 2012, 2011 and 2010, respectively. The Company capitalized $15.6

million, $13.3 million and $7.6 million of interest relative to Marcellus well development in 2012, 2011 and 2010, respectively. Depletion expense is

calculated based on the actual production multiplied by the applicable depletion rate per unit. The depletion rates are derived by dividing the costs capitalized

by the number of units expected to be produced over the life of the reserves for lease costs and well costs separately. Costs of exploratory dry holes, geological

and geophysical activities, delay rentals and other property carrying costs are charged to expense. The majority of the Company’s oil and natural gas

producing properties consist of gas producing properties which were depleted at an overall average rate of $1.54/Mcfe, $1.25/Mcfe and $1.26/Mcfe produced

for the years ended December 31, 2012, 2011 and 2010, respectively.

The carrying values of the Company’s proved oil and gas properties are reviewed for indications of impairment when events or circumstances indicate

that the remaining carrying value may not be recoverable. In order to determine whether impairment has occurred, the Company estimates the expected future

cash flows (on an undiscounted basis) from its proved oil and gas properties and compares these estimates to the carrying values of the properties. The

estimated future cash flows used to test those properties for recoverability are based on proved reserves, utilizing assumptions about the use of the asset,

market prices for oil and gas and future operating costs. Proved oil and gas properties that have carrying amounts in excess of estimated future cash flows

would be deemed to be unrecoverable. Those properties would be written down to fair value, which would be estimated by discounting the estimated future

cash flows using discount rate assumptions that marketplace participants would use in their estimates of fair value. For the years ended December 31, 2012,

2011 and 2010, the Company did not recognize impairment charges on proved oil and gas properties.

Capitalized costs of unproved properties are evaluated for recoverability on a prospect basis. Indicators of potential impairment include changes

brought about by economic factors, potential shifts in business strategy employed by management and historical experience. If it is determined that the

properties will not yield proved reserves, the related costs are expensed in the period in which that determination is made. Unproved properties had a net book

value of $385.6 million and $358.8 million at December 31, 2012 and 2011, respectively. Unproved property impairments primarily as a result of lease

expirations prior to drilling of $5.5 million, $2.6 million and $0.3 million are included in exploration expense for the years ended December 31, 2012, 2011

and 2010, respectively.

6 9

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

The Company had capitalized exploratory well costs pending the determination of proved reserves of $6.9 million on an exploratory Utica well in

Pennsylvania at December 31, 2008. During 2009, the Company incurred $1.0 million on this well and then made the decision to plug back the well and

convert it to a horizontal Marcellus well in 2010. As a result, the Company wrote-off $2.9 million of incremental costs related to drilling in the Utica formation

in 2010. At December 31, 2012 and 2011, the Company had no capitalized exploratory well costs.

Midstream property, plant and equipment is carried at cost. Depreciation is calculated using the straight-line method based on estimated service lives. 

Midstream property consists largely of gathering and transmission systems (25-60 year estimated service life), buildings (35 year estimated service life),

office equipment (3-7 year estimated service life), vehicles (5 year estimated service life), and computer and telecommunications equipment and systems (3-7

year estimated service life).

Distribution property, plant and equipment, all regulated property, is carried at cost. Depreciation is recorded using composite rates on a straight-line

basis. The overall rate of depreciation for the years ended December 31, 2012 and 2011 was approximately 4%.

Major maintenance projects that do not increase the overall life of the related assets are expensed. When major maintenance materially increases the life

or value of the underlying asset, the cost is capitalized.

Sales and Retirements Policies: No gain or loss is recognized on the partial sale of proved developed oil and gas reserves unless non-recognition

would significantly alter the relationship between capitalized costs and remaining proved reserves for the affected amortization base. When gain or loss is not

recognized, the amortization base is reduced by the amount of the proceeds.

Regulatory Accounting: EQT Midstream’s regulated operations consist of interstate pipeline operations subject to regulation by the Federal Energy

Regulatory Commission (FERC) and certain FERC-regulated and state-regulated gathering operations. The Distribution segment’s rates, terms of service and

contracts with affiliates are subject to comprehensive regulation by the Pennsylvania Public Utility Commission (PA PUC) and the West Virginia Public

Service Commission (WV PSC). The issuance of securities by Equitable Gas Company, LLC, the Company’s gas distribution subsidiary, is also subject to

regulation by the PA PUC and WV PSC. Distribution also provides field line service, also referred to as “farm tap” service, in Kentucky, which is subject

only to rate regulation by the Kentucky Public Service Commission (KY PSC). The application of regulatory accounting allows the Company to defer

expenses and income on its Consolidated Balance Sheets as regulatory assets and liabilities when it is probable that those expenses and income will be allowed

in the rate setting process in a period different from the period in which they would have been reflected in the Statements of Consolidated Income for a nonregulated company. The deferred regulatory assets and liabilities are then recognized in the Statements of Consolidated Income in the period in which the same

amounts are reflected in rates.

Where permitted by regulatory authority under purchased natural gas adjustment clauses or similar tariff provisions, Distribution defers the difference

between its purchased natural gas cost, less refunds, and the billing of such cost. The deferred amount is amortized over subsequent periods in which billings

either recover or refund such amounts. Such amounts are reflected in the Company’s Consolidated Balance Sheets as other current assets or liabilities. For

further information regarding regulatory assets, see Note 11.

70

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

The following table presents the total regulated net revenues and operating expenses of the Company:

Years Ended December 31,

2012 2011 2010

(Thousands)

Distribution revenues $ 301,260 $ 380,960 $ 411,978

Midstream revenues 136,995 125,872 124,958

Total regulated revenues $ 438,255 $ 506,832 $ 536,936

Distribution purchased gas costs $ 136,029 $ 199,381 $ 231,407

Midstream purchased gas costs 3,784 6,303 4,930

Total regulated purchased gas costs $ 139,813 $ 205,684 $ 236,337

Distribution net revenues $ 165,231 $ 181,579 $ 180,571

Midstream net revenues 133,211 119,569 120,028

Total regulated net revenues $ 298,442 $ 301,148 $ 300,599

Distribution operating expenses $ 100,790 $ 100,205 $ 103,915

Midstream operating expenses 66,839 69,944 65,029

Total regulated operating expenses $ 167,629 $ 170,149 $ 168,944

The following table presents the regulated net property, plant and equipment of the Company:

As of December 31,

2012 2011

(Thousands)

Distribution property, plant & equipment $ 986,470 $ 980,793

Accumulated depreciation and amortization (328,859) (325,836)

Net Distribution property, plant & equipment 657,611 654,957

Midstream property, plant & equipment 795,498 604,867

Accumulated depreciation and amortization (148,212) (137,339)

Net Midstream property, plant & equipment 647,286 467,528

Total net regulated property, plant & equipment $ 1,304,897 $ 1,122,485

Derivative Instruments: Derivatives are held as part of a formally documented risk management program. The Company’s risk management

activities are subject to the management, direction and control of the Company’s Corporate Risk Committee (CRC). The CRC reports to the Audit Committee

of the Board of Directors and is comprised of the president and chief executive officer, the chief financial officer and other officers and employees.

The Company’s risk management program includes the consideration and, when appropriate, the use of (i) exchange-traded natural gas futures

contracts and options and over-the-counter (OTC) natural gas swap agreements and options (collectively, derivative commodity instruments) to hedge

exposures to fluctuations in natural gas prices and for trading purposes and (ii) interest rate swap agreements to hedge exposures to fluctuations in interest

rates. At contract inception, the Company designates its derivative instruments as hedging or trading activities.

The Company recognizes all derivative instruments as either current assets or current liabilities at fair value due to their highly liquid nature. The

Company can net settle its derivative instruments at any time. The measurement of fair value is based upon actively quoted market prices when available. In

the absence of actively quoted market prices, the Company seeks indicative price information from external sources, including broker

71

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

quotes and industry publications. If pricing information from external sources is not available, measurement involves judgment and estimates. These

estimates are based upon valuation methodologies deemed appropriate by the Company’s CRC.

The accounting for the changes in fair value of the Company’s derivative instruments depends on the use of the derivative instruments. To the extent

that a derivative instrument has been designated and qualifies as a cash flow hedge, the effective portion of the change in fair value of the derivative instrument

is reported as a component of accumulated other comprehensive income, net of tax, and is subsequently reclassified into earnings in the same period or periods

during which the hedged forecasted transaction affects earnings. The Company assesses the effectiveness of hedging relationships, as determined by the

degree that the gain (loss) for the hedging instrument offsets the loss (gain) on the hedged item, both at the inception of the hedge and on an on-going basis. If

the gain (loss) for the hedging instrument is greater than the loss (gain) on the hedged item, the ineffective portion of the cash flow hedge is immediately

recognized in operating revenues in the Statements of Consolidated Income.

For a derivative instrument that has been designated and qualifies as a fair value hedge, the change in the fair value for the instrument is recognized as a

portion of operating revenues in the Statements of Consolidated Income each period. In addition, the change in the fair value of the hedged item (natural gas

inventory) is recognized as a portion of operating revenues in the Statements of Consolidated Income. The Company has elected to exclude the spot/forward

differential from the assessment of effectiveness of the fair value hedges.

Any changes in fair value of derivative instruments that have not been designated as hedges are recognized in the Statements of Consolidated Income

each period.

If a cash flow hedge is terminated or de-designated as a hedge before the settlement date of the hedged item, the amount of accumulated other

comprehensive income recorded up to that date remains accrued, provided that the forecasted transaction remains probable of occurring. Subsequent changes

in fair value of a de-designated derivative instrument are recorded in earnings. The amount recorded in accumulated other comprehensive income is primarily

related to instruments which are currently designated as cash flow hedges.

The Company reports all gains and losses on its energy trading contracts net as operating revenues on its Statements of Consolidated Income.

Allowance for Funds Used During Construction (AFUDC): Carrying costs for the construction of certain long-term assets are capitalized by the

Company and amortized over the related assets’ estimated useful lives. The capitalized amount for construction of regulated assets includes interest cost and a

designated cost of equity for financing the construction of these assets which are subject to regulation by the PA PUC, the WV PSC or the FERC.

The debt portion of AFUDC is calculated based on the average cost of debt and is included as a reduction of interest expense in the Statements of

Consolidated Income. AFUDC interest costs capitalized were $3.9 million, $2.2 million and $1.1 million for the years ended December 31, 2012, 2011 and

2010, respectively.

The equity portion of AFUDC is calculated using the most recent equity rate of return approved by the applicable regulator. Equity amounts capitalized

are included in other income in the Statements of Consolidated Income. The AFUDC equity amounts capitalized were $6.9 million, $4.0 million and $0.3

million for the years ended December 31, 2012, 2011 and 2010, respectively.

Capitalized Interest: Interest costs for the construction of certain long-term assets in unregulated Company businesses are capitalized and amortized

over the related assets’ estimated useful lives. The Company capitalized interest costs of $15.7 million, $13.3 million and $8.2 million during 2012, 2011

and 2010, respectively, as a portion of the cost of the related long-term assets.

Impairment of Long-Lived Assets: When events or changes in circumstances indicate that the carrying amount of long-lived assets may not be

recoverable, the Company reviews its long-lived assets for impairment by first comparing the carrying value of the assets to the sum of the undiscounted cash

flows expected to result from the use and eventual disposition of the assets. If the carrying value exceeds the sum of the assets’ undiscounted cash

72

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

flows, the Company records an impairment loss equal to the difference between the carrying value and fair value of the assets.

Other Current Liabilities: Other current liabilities as of December 31, 2012 and 2011 are detailed below.

December 31,

2012 2011

(Thousands)

Incentive compensation $ 52,291 $ 84,771

Taxes other than income 37,048 22,075

Accrued customer credits 32,376 31,857

Accrued interest payable 29,878 32,976

All other accrued liabilities 31,074 33,853

Total other current liabilities $ 182,667 $ 205,532

Revenue Recognition: Revenue is recognized for production and gathering activities when deliveries of natural gas, NGLs and crude oil are made.

Revenues from natural gas transportation and storage activities are recognized in the period the service is provided. Reservation revenues on firm contracted

capacity are recognized over the contract period based on the contracted volume regardless of the amount of natural gas that is transported. Sales of natural gas

to Distribution customers are billed on a monthly cycle basis; however, the billing cycles for certain customers do not coincide with accounting periods used

for financial reporting purposes. The Company follows the revenue accrual method of accounting for Distribution segment revenue whereby revenues

applicable to gas delivered to customers but not yet billed under the cycle billing method are estimated and accrued and the related costs are charged to expense.

The Company reports revenue from all energy trading contracts net in the income statement, regardless of whether the contracts are physically or financially

settled. Contracts which result in physical delivery of a commodity expected to be used or sold by the Company in the normal course of business are

considered normal purchases and sales and are not subject to mark-to-market accounting. Revenues from these contracts are recognized at contract value when

delivered. Revenues associated with energy trading contracts that do not result in physical delivery of an energy commodity are classified as derivative

instruments and are recorded using mark-to-market accounting. Revenues associated with the Company’s natural gas advance sales contracts are recognized

as natural gas is gathered and delivered. The Company accounts for gas-balancing arrangements under the entitlement method. The Company uses the gross

method to account for overhead cost reimbursements from joint operating partners. During periods in which rates are subject to refund as a result of a pending

rate case, the Company records revenue at the rates which are pending approval but reserves these revenues to the level of previously approved rates until the

final settlement of the rate case.

Investments: Investments in companies in which the Company has the ability to exert significant influence over operating and financial policies

(generally 20% to 50% ownership) are accounted for using the equity method. Under the equity method, investments are initially recorded at cost and adjusted

for dividends and undistributed earnings and losses. These investments are classified as equity in nonconsolidated investments on the Consolidated Balance

Sheets. The Company recognizes a loss in the value of an equity method investment that is other than a temporary decline. The Company analyzes its equity

method investments based on its share of estimated future cash flows from the investment to determine whether the carrying amount will be recoverable.

Other investments in equity securities which are generally under 20% ownership and where the Company does not exert significant influence over

operating and financial policies are accounted for as available-for-sale and are classified as investments, available-for-sale on the Consolidated Balance Sheets. 

Available-for-sale securities are required to be carried at fair value, with any unrealized gains and losses reported on the Consolidated Balance Sheets within a

separate component of equity, accumulated other comprehensive income. The Company utilizes the average cost method to determine the cost of the securities.

The Company regularly reviews its available-for-sale securities to determine whether a decline in fair value below the cost basis is other than temporary. If the

decline in fair value is judged to be other than temporary, the cost basis of the security is written down to fair value and the amount of the write-down is

included in the Statements of Consolidated Income.

73

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

Purchased Gas Costs: Purchased gas costs in the Statements of Consolidated Income include natural gas wellhead purchases, natural gas field line

purchases, natural gas transmission line purchases, purchased gas cost adjustments, natural gas withdrawn from storage, gas used for product extraction

and other gas supply expenses, including pipeline demand charges and transportation costs.

Income Taxes: The Company files a consolidated federal income tax return and utilizes the asset and liability method to account for income taxes. 

The provision for income taxes represents amounts paid or estimated to be payable, net of amounts refunded or estimated to be refunded, for the current year

and the change in deferred taxes, exclusive of amounts recorded in other comprehensive income. Any refinements to prior years’ taxes made due to subsequent

information are reflected as adjustments in the current period. Separate income taxes are calculated for income from continuing operations and items charged

or credited directly to stockholders’ equity.

Deferred income tax assets and liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and

liabilities and are recognized using enacted tax rates for the effect of such temporary differences. Deferred tax assets are reduced by a valuation allowance if it

is more likely than not that some portion or all of the deferred tax asset will not be realized. Where deferred tax liabilities will be passed through to customers

in regulated rates, the Company establishes a corresponding regulatory asset for the increase in future revenues that will result when the temporary differences

reverse.

Investment tax credits realized in prior years were deferred and are being amortized over the estimated service lives of the related properties where

required by ratemaking rules.

In accounting for uncertainty in income taxes of a tax position taken or expected to be taken in a tax return, the Company utilizes a recognition threshold

and measurement attribute for the financial statement recognition and measurement. The recognition threshold requires the Company to determine whether it is

more likely than not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the

technical merits of the position in order to record any financial statement benefit. If it is more likely than not that a tax position will be sustained, then the

Company must measure the tax position to determine the amount of benefit to recognize in financial statements. The tax position is measured at the largest

amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company recognizes interest and penalties accrued related to

unrecognized tax benefits in income tax expense.

Provision for Doubtful Accounts: Judgment is required to assess the ultimate realization of the Company’s accounts receivable, including assessing

the probability of collection and the credit worthiness of certain customers. Reserves for uncollectible accounts are recorded as part of selling, general and

administrative expense on the Statements of Consolidated Income. The reserves are based on historical experience, current and expected economic trends and

specific information about customer accounts. Accordingly, actual results may differ from these estimates under different assumptions or conditions.

Earnings Per Share (EPS): Basic EPS are computed by dividing net income attributable to EQT Corporation by the weighted average number of

common shares outstanding during the period, without considering any dilutive items. Diluted EPS are computed by dividing net income attributable to EQT

Corporation by the weighted average number of common shares and potentially dilutive securities, net of shares assumed to be repurchased using the treasury

stock method. Purchases of treasury shares are calculated using the average share price for the Company’s common stock during the period. Potentially

dilutive securities arise from the assumed conversion of outstanding stock options and other share-based awards. See Note 15.

Asset Retirement Obligations: The Company accrues a liability for legal asset retirement obligations based on an estimate of the timing and amount of

settlement. For oil and gas wells, the fair value of the Company’s plugging and abandonment obligations is required to be recorded at the time the obligations

are incurred, which is typically at the time the wells are drilled. Upon initial recognition of an asset retirement obligation, the Company increases the carrying

amount of the long-lived asset by the same amount as the liability. Over time, the liabilities are accreted for the change in their present value, through charges

to depreciation, depletion and amortization, and the initial capitalized costs are depleted over the useful lives of the related assets.

74

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

The Company is required to operate and maintain its natural gas pipeline and storage systems, and intends to do so as long as supply and demand for

natural gas exists, which the Company expects for the foreseeable future. Therefore, the Company believes that the substantial majority of its natural gas

pipeline and storage system assets have indeterminate lives.

The following table presents a reconciliation of the beginning and ending carrying amounts of the Company’s asset retirement obligations which are

included in other credits in the Consolidated Balance Sheets. The Company does not have any assets that are legally restricted for purposes of settling these

obligations.

Years Ended December 31,

2012 2011

(Thousands)

Asset retirement obligation as of beginning of period $ 104,760 $ 66,315

Accretion expense 7,716 5,032

Liabilities incurred 1,141 878

Liabilities settled (2,408) (1,316)

Revisions in estimated cash flows (430) 33,851

Asset retirement obligation as of end of period $ 110,779 $ 104,760

In 2011, EQT Production performed a review of the assumptions used to calculate its current asset retirement obligation and increased the obligation

primarily as a result of an increase in the assumed inflation rate.

Self-Insurance: The Company is self-insured for certain losses related to workers’ compensation and maintains a self-insured retention for general

liability, automobile liability, environmental liability and other casualty coverage. The Company maintains stop loss coverage with third-party insurers to

limit the total exposure for general liability, automobile liability, environmental liability and workers’ compensation. The recorded reserves represent estimates

of the ultimate cost of claims incurred as of the balance sheet date. The estimated liabilities are based on analyses of historical data and actuarial estimates and

are not discounted. The liabilities are reviewed by management quarterly and by independent actuaries annually to ensure that they are appropriate. While the

Company believes these estimates are reasonable based on the information available, financial results could be impacted if actual trends, including the severity

or frequency of claims or fluctuations in premiums, differ from estimates.

Accumulated other comprehensive income: The components of accumulated other comprehensive income, net of tax, are as follows:

December 31,

2012 2011

(Thousands)

Net unrealized gain from natural gas hedging transactions $ 138,188 $ 232,066

Net unrealized loss from interest rate swaps (1,276) (7,645)

Pension and other post-retirement benefits liability adjustment (37,365) (36,280)

Accumulated other comprehensive income $ 99,547 $ 188,141

Noncontrolling interest: Noncontrolling interests represent third-party equity ownership in certain of our consolidated subsidiaries and are presented

as a component of equity. See Note 2 for further discussion of noncontrolling interests related to the Partnership.

75

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

Recently Issued Accounting Standards:

Disclosures about Offsetting Assets and Liabilities

In December 2011, the Financial Accounting Standards Board (FASB) issued a standard update intended to enhance disclosures required by requiring

additional information about financial instruments and derivative instruments that are either offset in the statement of financial position or subject to an

enforceable master netting arrangement or similar agreement. The update is to be applied prospectively and is effective for annual reporting periods beginning

on or after January 1, 2013. The Company is currently evaluating the impact this standard will have on its financial statement disclosures.

Subsequent Events: The Company has evaluated subsequent events through the date of the financial statement issuance.

2. EQT Midstream Partners, LP

On July 2, 2012, the Partnership, a subsidiary of the Company, completed an underwritten initial public offering (IPO) of 14,375,000 common units

representing limited partner interests in the Partnership, which represented 40.6% of the Partnership’s outstanding equity. The Company retained a 59.4%

equity interest in the Partnership, including 2,964,718 common units, 17,339,718 subordinated units and a 2% general partner interest. Prior to the IPO, the

Company contributed to the Partnership 100% of Equitrans, LP (Equitrans, the Company’s FERC-regulated transmission, storage and gathering subsidiary). 

An indirect wholly-owned subsidiary of EQT serves as the general partner of the Partnership, and the Company continues to operate the Equitrans business

pursuant to the contractual arrangements set forth below. The Company continues to consolidate the results of the Partnership but records an income tax

provision only as to its ownership percentage. EQT records the noncontrolling interest of the public limited partners in EQT’s financial statements.

Also, in connection with the closing of the IPO:

· The Partnership, its general partner and EQT entered into an Omnibus Agreement (Omnibus Agreement), pursuant to which, among other things,

EQT agreed to provide the Partnership with general and administrative services and a license to use the name “EQT” and related marks in

connection with the Partnership’s business. The Omnibus Agreement also provides for certain indemnification and reimbursement obligations

between EQT and the Partnership.

· EQT’s subsidiary, EQT Gathering, LLC (EQT Gathering), and the Partnership entered into an operation and management services agreement

(Services Agreement), pursuant to which EQT Gathering provides the Partnership’s pipelines and storage facilities with certain operational and

management services. The Services Agreement also provides for certain indemnification and reimbursement obligations between the Partnership and

EQT Gathering.

· The Partnership entered into a $350 million revolving credit facility with Wells Fargo Bank, National Association, as administrative agent, and a

syndicate of lenders, which will expire on July 2, 2017. The credit facility is available to fund working capital requirements and capital

expenditures, to purchase assets, to pay distributions and repurchase units and for general partnership purposes. The Company is not a guarantor of

the Partnership’s obligations under the credit facility.

· As a result of the IPO, the Company reversed $5.4 million of net deferred tax liability related to temporary differences between book and tax basis

that will no longer impact the Company.

· The Company and the Partnership granted certain EQT employees, including executive officers of the Company and the Partnership’s general

partner, performance awards representing 146,490 common units of the Partnership. The Company accounted for these awards as equity awards

using the grant date fair value. Additionally, the Partnership’s general partner granted each of its independent directors 4,780 share76

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

based phantom units of the Partnership, which units vested upon grant. The value of the phantom units will be paid in common units of the

Partnership on the earlier of the director’s death or retirement from the general partner’s Board of Directors. The Company accounts for these awards

as equity awards and, as such, recorded compensation expense for the fair value of the awards at the grant date fair value.

The Partnership received cash proceeds, net of issuance costs, of approximately $277 million upon closing of the IPO, which increased the

noncontrolling interest component of total equity. Approximately $231 million of the proceeds were distributed to EQT, $12 million was retained by the

Partnership to replenish amounts distributed by Equitrans to EQT prior to the IPO, $32 million was retained by the Partnership to pre-fund certain

maintenance capital expenditures and $2 million was used by the Partnership to pay revolving credit facility origination fees associated with the revolving

credit agreement entered into by the Partnership at the closing of the IPO.

The Partnership paid distributions of $5.0 million to noncontrolling interests at $0.35 per common unit during 2012.

3. Financial Information by Business Segment

Operating segments are evaluated on their contribution to the Company’s consolidated results based on operating income. Other income, interest and

income taxes are managed on a consolidated basis. Headquarters’ costs are billed to the operating segments based upon an allocation of the headquarters’

annual operating budget. Differences between budget and actual headquarters’ expenses are not allocated to the operating segments. As part of the 2012

budgeting process, the Company allocated additional corporate overhead charges to the operating segments.

The Company’s management reviews and reports the EQT Production segment results with third-party transportation costs reflected as a deduction

from operating revenues. During 2011, because of increased materiality of these costs, the Company determined that consolidated results are required to be

reported on a gross basis with third-party transportation costs recorded as a portion of purchased gas costs in the Consolidated Statement of Income. The

consolidated operating revenues, purchased gas costs and total operating expenses for all periods presented have been adjusted to reflect this gross presentation.

This adjustment had no impact on consolidated net income, consolidated operating income or the segment results for any period presented. Management

believes this adjustment is not material to the overall financial statement presentation.

Years Ended December 31,

2012 2011 2010

(Thousands)

Revenues from external customers:

EQT Production $ 793,773 $ 791,285 $ 537,657

EQT Midstream 505,498 525,345 580,698

Distribution 313,990 419,678 474,143

Third-party transportation costs (a) 126,783 87,034 51,687

Less intersegment revenues, net (b) (98,436) (183,408) (269,790)

Total $ 1,641,608 $ 1,639,934 $ 1,374,395

Operating income:

EQT Production $ 187,913 $ 387,098 $ 223,487

EQT Midstream (c) 237,324 416,611 178,866

Distribution 68,614 86,898 83,182

Unallocated expenses (d) (23,323) (29,288) (15,056)

Total operating income $ 470,528 $ 861,319 $ 470,479

77

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

Reconciliation of operating income to net income:

Other income $ 15,965 $ 34,138 $ 12,898

Interest expense 184,786 136,328 128,157

Income taxes 105,296 279,360 127,520

Net income $ 196,411 $ 479,769 $ 227,700

As of December 31,

2012 2011

(Thousands)

Segment assets:

EQT Production $ 5,675,534 $ 5,256,645

EQT Midstream 2,046,558 1,785,089

Distribution 860,029 850,414

Total operating segments 8,582,121 7,892,148

Headquarters assets, including cash and short-term investments 267,741 880,571

Total assets $ 8,849,862 $ 8,772,719

(a) This amount reflects the reclassification of third-party transportation costs from operating revenues to purchased gas costs at the consolidated

level.

(b) Includes entries to eliminate intercompany natural gas sales from EQT Production to EQT Midstream and transportation activities between

EQT Midstream and both EQT Production and Distribution. Reduced activity between segments and lower prices caused the changes from

2012 to 2011 and 2011 to 2010.

(c) Gains on dispositions of $202.9 million are included in EQT Midstream operating income for 2011. See Note 6.

(d) Unallocated expenses consist primarily of incentive compensation, administrative costs and $4.5 million of expenses related to the pending

sale of Equitable Gas and Homeworks that are not allocated to the operating segments.

Years Ended December 31,

2012 2011 2010

(Thousands)

Depreciation, depletion and amortization:

EQT Production $ 409,628 $ 257,144 $ 183,699

EQT Midstream 64,782 57,135 61,863

Distribution 24,454 25,747 24,174

Other 254 (729) 549

Total $ 499,118 $ 339,297 $ 270,285

Expenditures for segment assets:

EQT Production (e) $ 991,775 $ 1,087,840 $ 1,245,914

EQT Midstream 375,731 242,886 193,128

Distribution 28,745 31,313 36,619

Other 3,134 4,855 1,958

Total $ 1,399,385 $ 1,366,894 $ 1,477,619

(e) Expenditures for segment assets in the EQT Production segment include $134.6 million, $57.2 million and $357.7 million for undeveloped

property acquisitions in 2012, 2011 and 2010, respectively. Expenditures for segment assets in the EQT Production segment also include

$92.6 million of liabilities assumed in exchange for producing properties as part of the ANPI transaction, as discussed in Note 7, in 2011 and

$230.7 million of undeveloped property which was acquired with EQT common stock in 2010.

78

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

4. Derivative Instruments

The Company’s primary market risk exposure is the volatility of future prices for natural gas and NGLs, which can affect the operating results of the

Company primarily through EQT Production and the storage, marketing and other activities at EQT Midstream. The Company’s overall objective in its

hedging program is to protect cash flows from undue exposure to the risk of changing commodity prices.

The Company uses derivative commodity instruments that are purchased from or placed with major financial institutions whose creditworthiness is

regularly monitored. Futures contracts obligate the Company to buy or sell a designated commodity at a future date for a specified price and quantity at a

specified location. Swap agreements involve payments to or receipts from counterparties based on the differential between two prices for the commodity. Collar

agreements require the counterparty to pay the Company if the index price falls below the floor price and the Company to pay the counterparty if the index

price rises above the cap price. The Company also engages in a limited number of basis swaps to protect earnings from undue exposure to the risk of

geographic disparities in commodity prices and interest rate swaps to hedge exposure to interest rate fluctuations on potential debt issuances.

The Company recognizes all derivative instruments as either assets or liabilities at fair value on a gross basis. The accounting for the changes in fair

value of the Company’s derivative instruments depends on the use of the derivative instruments. To the extent that a derivative instrument has been designated

and qualifies as a cash flow hedge, the effective portion of the change in fair value of the derivative instrument is reported as a component of accumulated other

comprehensive income, net of tax, and is subsequently reclassified into the Statements of Consolidated Income in the same period or periods during which the

forecasted transaction affects earnings.

For a derivative instrument that has been designated and qualifies as a fair value hedge, the change in the fair value of the instrument is recognized as a

portion of operating revenues in the Statements of Consolidated Income each period. In addition, the change in the fair value of the hedged item (natural gas

inventory) is recognized as a portion of operating revenues in the Statements of Consolidated Income. The Company has elected to exclude the spot/forward

differential for the assessment of effectiveness of the fair value hedges. Any hedging ineffectiveness and any change in fair value of derivative instruments that

have not been designated as hedges are recognized in the Statements of Consolidated Income each period.

Exchange-traded instruments are generally settled with offsetting positions. OTC arrangements require settlement in cash. Settlements of derivative

commodity instruments are reported as a component of cash flows from operations in the accompanying Statements of Consolidated Cash Flows.

Some of the derivative commodity instruments used by the Company to hedge its exposure to variability in expected future cash flows associated with

the fluctuations in the price of natural gas related to the Company’s forecasted sale of equity production and forecasted natural gas purchases and sales have

been designated and qualify as cash flow hedges. Some of the derivative commodity instruments used by the Company to hedge its exposure to adverse

changes in the market price of natural gas stored in the ground have been designated and qualify as fair value hedges.

In addition, the Company enters into a limited number of energy trading contracts to leverage its assets and limit its exposure to shifts in market prices

and has a limited number of other derivative instruments not designated as hedges. In 2008 and 2011, the Company effectively settled certain derivative

commodity swaps scheduled to mature during the period 2010 through 2013 by de-designating the instruments and entering into directly counteractive

instruments. These transactions resulted in offsetting positions which are the majority of the derivative asset and liability balances not designated as hedging

instruments.

All derivative instrument assets and liabilities are reported in the Consolidated Balance Sheets as derivative instruments at fair value. These derivative

instruments are reported as either current assets or current liabilities due to their highly liquid nature. The Company can net settle its derivative instruments at

any time.

79

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

Years Ended December 31,

2012 2011 2010

(Thousands)

Commodity derivatives designated as cash flow hedges

Amount of gain recognized in other comprehensive income (OCI) (effective

portion), net of tax $ 86,259 $ 239,019 $ 113,320

Amount of gain reclassified from accumulated OCI into operating revenues

(effective portion), net of tax 180,137 72,179 63,719

Amount of (loss) gain recognized in operating revenues (ineffective portion) (a) (75) (181) 3,046

Interest rate derivatives designated as cash flow hedges

Amount of loss recognized in OCI (effective portion), net of tax $ (7,138) $ (7,573) $ –

Amount of loss reclassified from accumulated OCI, net of tax, into interest

expense due to forecasted transactions no longer being probable (13,266) – –

Amount of loss reclassified from accumulated OCI, net of tax, into interest

expense (effective portion) (241) (140) (116)

Commodity derivatives designated as fair value hedges (b)

Amount of gain recognized in operating revenues for fair value commodity

contracts $ 3,878 $ 12,263 $ –

Fair value gain (loss) recognized in operating revenues for inventory designated as

hedged item 3,292 (6,059) –

Derivatives not designated as hedging instruments

Amount of gain recognized in operating revenues $ 2,176 $ 4,209 $ 369

(a) No amounts have been excluded from effectiveness testing of cash flow hedges.

(b) For the year ended December 31, 2012, the net impact on operating revenues consisted of a $7.6 million gain due to the exclusion of the

spot/forward differential from the assessment of effectiveness and a $0.4 million loss due to changes in basis. For the year ended December 31,

2011, the net impact on operating revenues consisted of a $7.6 million gain due to the exclusion of the spot/forward differential from the assessment

of effectiveness and a $1.4 million loss due to changes in basis.

December 31,

2012 2011

(Thousands)

Asset derivatives

Commodity derivatives designated as hedging instruments $ 259,459 $ 412,626

Commodity derivatives not designated as hedging instruments 44,778 99,535

Total asset derivatives $ 304,237 $ 512,161

Liability derivatives

Commodity derivatives designated as hedging instruments $ 27,946 $ 3,681

Interest rate derivatives designated as hedging instruments – 10,861

Commodity derivatives not designated as hedging instruments 47,616 108,764

Total liability derivatives $ 75,562 $ 123,306

80

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

During 2011, the Company entered into two forward-starting interest rate swaps to mitigate the risk of rising interest rates. As of December 31, 2011,

one swap had settled and a related loss of $1.4 million, net of tax, was recorded in accumulated OCI, net of tax, to be recognized over the ten year term of the

related debt issuance. The other interest rate swap was in a liability position at December 31, 2011, with $6.2 million included in accumulated OCI, net of

tax, on that date. During 2012, the Company deferred an additional $7.1 million in accumulated OCI, net of tax, related to this forward-starting interest rate

swap which settled in November 2012. As of December 31, 2012, the related forecasted debt issuance was no longer probable and the entire liability related to

this swap of $23.3 million, pre-tax, was recognized in interest expense in the Statements of Consolidated Income. This resulted in the reversal of $13.3 million

which had previously been deferred in accumulated OCI, net of tax. The forecasted debt issuance was no longer probable given the strong liquidity position at

December 31, 2012.

The net fair value of commodity derivative instruments changed during 2012 primarily as a result of settlements and increased commodity prices. The

absolute quantities of the Company’s derivative commodity instruments that have been designated and qualify as cash flow hedges totaled 365 Bcf and 349

Bcf as of December 31, 2012 and December 31, 2011, respectively, and are primarily related to natural gas swaps and collars. The open positions at

December 31, 2012 had maturities extending through December 2017. The absolute quantities of the Company’s derivative commodity instruments that have

been designated and qualify as fair value hedges totaled 8 Bcf and 9 Bcf as of December 31, 2012 and December 31, 2011, respectively.

The Company deferred net gains of $138.2 million and $232.1 million in accumulated OCI, net of tax, as of December 31, 2012 and 2011,

respectively, associated with the effective portion of the change in fair value of its derivative commodity instruments designated as cash flow hedges. 

Assuming no change in price or new transactions, the Company estimates that approximately $87.5 million of net unrealized gains on its derivative

commodity instruments reflected in accumulated other comprehensive income, net of tax, as of December 31, 2012 will be recognized in earnings during the

next twelve months due to the settlement of hedged transactions. During the year ended December 31, 2012, the Company identified an error related to the

accounting for a derivative instrument put premium which should have been recognized during 2010 and 2011 in conjunction with the settlements of the

related financial positions. The Company evaluated materiality in accordance with Securities and Exchange Commission (SEC) Staff Accounting Bulletins

Topics 1.M and 1.N and considered relevant qualitative and quantitative factors. Based on this analysis, the Company corrected the error in the second

quarter of 2012 through the reduction of EQT Production segment operating revenue by $8.2 million, the increase of accumulated other comprehensive income

by $5.1 million and the decrease of deferred tax expense by $3.1 million. The Company concluded that this error is not material to any prior periods, the

annual results of 2012 or the trend in earnings over the affected periods. The error had no effect on cash flows or debt covenant compliance.

The Company is exposed to credit loss in the event of nonperformance by counterparties to derivative contracts. This credit exposure is limited to

derivative contracts with a positive fair value, which may change as market prices change. The Company believes that New York Mercantile Exchange

(NYMEX) traded futures contracts have reduced credit risk because Commodity Futures Trading Commission regulations are in place to protect exchange

participants, including the Company, from potential financial instability of the exchange members. The Company’s OTC swap and collar derivative

instruments are primarily with financial institutions and thus are subject to events that would impact those companies individually as well as that industry as

a whole.

The Company utilizes various processes and analysis to monitor and evaluate its credit risk exposures. These include closely monitoring current

market conditions and credit default swap rates. Credit exposure is controlled through credit approvals and limits based on counterparty credit fundamentals.

To manage the level of credit risk, the Company deals with financial counterparties that are of investment grade or better, enters into netting agreements

whenever possible and may obtain collateral or other security.

When the net fair value of any of the Company’s swap agreements represents a liability to the Company which is in excess of the agreed-upon threshold

between the Company and the financial institution acting as counterparty, the counterparty requires the Company to remit funds to the counterparty as a

margin deposit for the derivative liability which is in excess of the threshold amount. The Company records these deposits as a current asset. When the net

fair value of any of the Company’s swap agreements represents an asset to the Company which

81

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

is in excess of the agreed-upon threshold between the Company and the financial institution acting as counterparty, the Company requires the counterparty to

remit funds as margin deposits in an amount equal to the portion of the derivative asset which is in excess of the threshold amount. The Company records a

current liability for such amounts received. The Company had no such deposits in its Consolidated Balance Sheets as of December 31, 2012 and 2011.

When the Company enters into exchange-traded natural gas contracts, exchanges may require the Company to remit funds to the corresponding broker

as good-faith deposits to guard against the risks associated with changing market conditions. Participants must make such deposits based on an established

initial margin requirement as well as the net liability position, if any, of the fair value of the associated contracts. The Company records these deposits as a

current asset in the Consolidated Balance Sheets. In the case where the fair value of such contracts is in a net asset position, the broker may remit funds to the

Company, in which case the Company records a current liability for such amounts received. The initial margin requirements are established by the exchanges

based on the price, volatility and the time to expiration of the related contract. The margin requirements are subject to change at the exchanges’ discretion. The

Company recorded a current asset of $0.7 million as of December 31, 2012 and a current asset of $0.1 million as of December 31, 2011 for such deposits in

its Consolidated Balance Sheets.

Certain of the Company’s derivative instrument contracts provide that if the Company’s credit ratings by Standard & Poor’s Rating Services (S&P) or

Moody’s Investor Services (Moody’s) are lowered below investment grade, additional collateral must be deposited with the counterparty. The additional

collateral can be up to 100% of the derivative liability. As of December 31, 2012, the aggregate fair value of all derivative instruments with credit-risk-related

contingent features that were in a net liability position was $4.0 million, for which the Company had no collateral posted on December 31, 2012. If the

Company’s credit rating by S&P or Moody’s had been downgraded below investment grade on December 31, 2012, the Company would have been required to

post additional collateral of $1.4 million in respect of the liability position. Investment grade refers to the quality of the Company’s credit as assessed by one

or more credit rating agencies. The Company’s senior unsecured debt was rated BBB by S&P and Baa2 by Moody’s at December 31, 2012. In order to be

considered investment grade, the Company must be rated BBB- or higher by S&P and Baa3 or higher by Moody’s. Anything below these ratings is

considered non-investment grade.

5. Fair Value Measurements

The Company records its financial instruments, principally derivative instruments, at fair value in its Consolidated Balance Sheets. The Company

has an established process for determining fair value which is based on quoted market prices, where available. If quoted market prices are not available, fair

value is based upon models that use as inputs market-based parameters, including but not limited to forward curves, discount rates, volatilities and

nonperformance risk. Nonperformance risk considers the effect of the Company’s credit standing on the fair value of liabilities and the effect of the

counterparty’s credit standing on the fair value of assets. The Company estimates nonperformance risk by analyzing publicly available market information,

including a comparison of the yield on debt instruments with credit ratings similar to the Company’s or counterparty’s credit rating and the yield of a risk-free

instrument. The Company also considers credit default swaps rates where applicable.

The Company has categorized its assets and liabilities recorded at fair value into a three-level fair value hierarchy, based on the priority of the inputs to

the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and

the lowest priority to unobservable inputs (Level 3). Assets and liabilities included in Level 1 include the Company’s futures contracts. Assets and liabilities

in Level 2 include the majority of the Company’s swap agreements. Assets and liabilities in Level 3 include the Company’s collars and a limited number of the

Company’s swap agreements. Since the adoption of fair value accounting, the Company has not made any changes to its classification of assets and

liabilities in each category.

The fair value of assets and liabilities included in Level 2 is based on standard industry income approach models that use significant observable

inputs, including NYMEX forward curves and LIBOR-based discount rates. Collars included in Level 3 are valued using standard industry income

approach models. The primary significant unobservable input to the valuation of assets and liabilities in Level 3 is the volatility assumption to the option

82

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

pricing model used to value commodity collars. The Corporate Risk Control Group (CRCG), which reports to the Chief Financial Officer, is responsible for

calculating the volatilities. The CRCG considers current market information about option trading and historical averages. The Company prepares an

analytical review of all derivative instruments for reasonableness on at least a quarterly basis. At December 31, 2012, the range of Company derived market

volatilities used to value Level 3 assets and liabilities was 24 – 37%. The fair value of the collar agreements is sensitive to changes in the volatility

assumption. Significant changes in this assumption might result in significantly higher or lower fair values for these assets and liabilities. As of December 31,

2012, an increase in the volatility assumption would increase the value of the derivative asset and a decrease in the volatility assumption would decrease the

value of the derivative asset. The Company uses NYMEX forward curves to value futures, commodity swaps and collars. The NYMEX forward curves and

LIBOR-based discount rates are validated to external sources at least monthly.

The following assets and liabilities were measured at fair value on a recurring basis during the period:

Fair value measurements at reporting date using

 Description

December 31,

2012

Quoted 

prices in 

active 

markets for

identical 

assets

(Level 1)

Significant 

other 

observable 

inputs

(Level 2)

Significant

unobservable

inputs

(Level 3)

(Thousands)

 Assets

 Derivative instruments, at fair value $ 304,237 $ 1,228 $ 204,592 $ 98,417

 Liabilities

 Derivative instruments, at fair value $ 75,562 $ 1,609 $ 66,250 $ 7,703

Fair value measurements at reporting date using

 Description

December 31,

2011

Quoted 

prices in 

active 

markets for

identical 

assets

(Level 1)

Significant 

other 

observable 

inputs

(Level 2)

Significant 

unobservable 

inputs

(Level 3)

(Thousands)

 Assets

 Derivative instruments, at fair value $ 512,161 $ 3,612 $ 365,238 $ 143,311

 Liabilities

 Derivative instruments, at fair value $ 123,306 $ 2,727 $ 120,528 $ 51

83

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

Fair value measurements using significant

unobservable inputs

(Level 3)

Derivative instruments, at fair value, net 

Years Ended December 31,

2012 2011

(Thousands)

Balance at January 1 $ 143,260 $ 116,672

 Total gains or losses:

Included in earnings (615) 14

Included in other comprehensive income 23,386 81,825

 Purchases (933) –

 Settlements (74,384) (55,251)

 Transfers in and/or out of Level 3 – –

Balance at December 31 $ 90,714 $ 143,260

There are no material gains or losses included in earnings for the periods in the table above attributable to the changes in unrealized gains or losses

relating to assets and liabilities still held as of December 31, 2012 and 2011.

The carrying value of cash equivalents approximates fair value due to the short-term maturity of the instruments; these are considered Level 1 fair

values.

The Company estimates the fair value of its debt using its established fair value methodology. Because not all of the Company’s debt is actively

traded, the fair value of the debt is a Level 2 fair value. Fair value for non-traded debt obligations is estimated using a standard industry income approach

model which utilizes a discount rate based on market rates for debt with similar remaining time to maturity and credit risk. The estimated fair value of longterm debt on the Consolidated Balance Sheets at December 31, 2012 and 2011 was approximately $2.9 billion and $3.0 billion, respectively.

For information on the fair value of the defined benefit pension plan assets, see Note 14.

6. Proposed Sale of Properties and Sales of Properties

On December 19, 2012, the Company and its direct wholly-owned subsidiary, Distribution Holdco, LLC (Holdco), executed a definitive agreement (the

Master Purchase Agreement) with PNG Companies LLC (PNG Companies), the parent company of Peoples Natural Gas Company LLC (Peoples), pursuant

to which EQT and Holdco will transfer 100% of their ownership interests of Equitable Gas Company, LLC (Equitable Gas) and Equitable Homeworks, LLC

(Homeworks) to PNG Companies in exchange for cash and other assets of, and new commercial arrangements with, PNG Companies and its affiliates. 

Homeworks and Equitable Gas are direct wholly-owned subsidiaries of Holdco. Peoples is a portfolio company of SteelRiver Infrastructure Partners. The

transaction (or portions thereof) requires the approval of the PA PUC, the WV PSC, the KY PSC and the FERC. In addition, the transaction is subject to

review under the Hart-Scott-Rodino Act. The agreements provide that such approvals and review must be complete by December 19, 2013, subject to certain

extension rights. These approvals and review may not be received or completed within the time allowed. As a result, the Company has not classified

Equitable Gas and Homeworks as held for sale in its financial statements as of December 31, 2012 and will not do so until the Company makes satisfactory

progress in the regulatory process.

In connection with this transaction, EQT will receive the following assets from, and will enter into the following commercial arrangements with, PNG

Companies, Peoples and Peoples TWP LLC:

· Cash. PNG Companies will pay $720 million in cash to EQT at the closing of the transaction, subject to certain closing and post-closing

adjustments.

· Assets. At the closing of the transaction, Peoples will transfer certain natural gas midstream assets (the Midstream Assets) to EQT, including

certain equipment upgrades to be completed by Peoples prior to closing. The parties intend to treat this transaction as a like-kind exchange for U.S.

federal income tax purposes in accordance with Section 1031 of the Internal Revenue Code.

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

· Commercial arrangements. Simultaneously with the execution of the Master Purchase Agreement, EQT (or, where applicable, affiliates of EQT)

and Peoples (or, where applicable, affiliates of Peoples) entered or agreed to enter into a suite of commercial agreements, including, but not limited to,

gas transportation agreements, gas transportation and storage agreements and a gas purchase and sales agreement, pursuant to which EQT will

provide gas transmission and storage services and supply natural gas to Peoples. At the closing of the transaction, EQT (or, where applicable,

affiliates of EQT) and Peoples (or, where applicable, affiliates of Peoples) will, among other things, (i) enter into a gas purchase and sales agreement

pursuant to which EQT will supply natural gas to Equitable Gas, (ii) extend the term of existing gas transportation and storage agreements pursuant

to which EQT provides gas transportation and storage services to Equitable Gas and (iii) enter into a transition services agreement.

The Company incurred $4.5 million in expenses related to the pending sale of Equitable Gas and Homeworks in 2012.

On February 1, 2011, the Company sold its natural gas processing complex in Langley, Kentucky and the associated natural gas liquids pipeline

(Langley) for $230 million. In conjunction with this transaction, the Company realized a pre-tax gain of $22.8 million.

On July 1, 2011, the Company sold the Big Sandy Pipeline (Big Sandy) for $390 million. Big Sandy is a natural gas pipeline regulated by the

FERC. In conjunction with this transaction, the Company realized a pre-tax gain of $180.1 million.

During the years ended December 31, 2012 and 2011, the Company sold leases relating to approximately 2,900 gross acres in Lycoming County,

Pennsylvania. The Company received proceeds of $2.7 million and realized a pre-tax gain of $2.0 million in the year ended December 31, 2012. The

Company received proceeds of $6.0 million and realized a pre-tax gain of $3.9 million in the year ended December 31, 2011. The gains on these dispositions

are recorded in other income in the Statements of Consolidated Income.

7. Acquisitions

In December 2000, the Company sold a net profits interest (NPI) in certain producing properties located in the Appalachian Basin to a trust in exchange

for approximately $298 million. The NPI entitled the trust to receive 100% of the net profits received from the sale of natural gas and oil from the producing

properties until cumulative production from such properties reached a specified amount. The Company owned the Class B interest in the trust, entitling it to

specified percentages of any available cash from the trust over time. An unrelated party, Appalachian NPI, LLC (ANPI), owned the Class A interest in the

trust.

Effective May 4, 2011, the Company, through EQT Production Company, acquired the Class A interest in the trust thereby acquiring 100% of the NPI

associated with the producing properties (the ANPI transaction). As part of the consideration for the acquired assets, the Company entered into a discounted

natural gas sales agreement with ANPI and assumed a swap held by ANPI on the trust’s sales of natural gas.

In addition, the Company assumed 7.76% Guaranteed Senior Notes due August 31, 2011 through February 28, 2016 in the aggregate principal

amount of $57.1 million. At the time of the transaction, the notes had a fair value of $64.2 million.

Under GAAP, the ANPI transaction was a business combination achieved in stages because EQT owned an equity interest in the trust prior to the

transaction. As required by the relevant accounting standard, the Company

85

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

revalued its existing equity investment in the trust at fair value on the date of the acquisition and recorded a pre-tax gain of $10.1 million which was included

in other income in the second quarter of 2011 on the Statements of Consolidated Income. The fair value was determined using an internal model; significant

inputs to the calculation included publicly available forward price curves, expected production volumes and operating costs, as well as Company-determined

risk adjusted discount rates which were based on publicly available debt and equity risk premiums.

As a result of this transaction, the Company recorded an increase in oil and gas properties of $140.6 million resulting from the removal of the postrevaluation $48.0 million equity investment in the trust from its books and a net $92.6 million increase in liabilities consisting of: $64.2 million of long-term

debt, a $16.4 million discounted sales agreement and a $12.7 million swap liability offset by various working capital balances.

This transaction also resulted in the elimination of certain previously disclosed relationships including the Company’s non-controlling interest in the

trust, the Company’s liquidity reserve guarantee to ANPI, the Company’s agreement with the trust to provide gathering and operating services to deliver its gas

to market and the marketing fee the Company received for the sale of the trust’s gas based on the net revenue for gas delivered.

8. Income Taxes

Income tax expense (benefit) is summarized as follows:

Years Ended December 31,

2012 2011 2010

(Thousands)

Current:

Federal $ 10,895 $ 39,867 $ (25,377)

State (310) 6,076 (388)

Subtotal 10,585 45,943 (25,765)

Deferred:

Federal 77,232 202,392 132,161

State 17,953 31,627 21,751

Subtotal 95,185 234,019 153,912

Amortization of deferred investment tax credit (474) (602) (627)

Total $ 105,296 $ 279,360 $ 127,520

The current income tax expense recorded in 2012 primarily related to alternative minimum tax (AMT) as a result of the tax gain generated from the

proceeds received relating to the Partnership’s IPO. The current tax expense recorded in 2011 primarily related to AMT and state taxes due as a result of the

Company’s sales of Langley and Big Sandy. The current federal tax benefit recorded in 2010 primarily related to additional cash refunds received related to

the 2009 tax net operating loss carrybacks.

The American Taxpayer Relief Act of 2012 was enacted on January 2, 2013 and retroactively extended the research and experimentation (R&E) tax

credit (with modifications) for 2012 and 2013 and extended 50% bonus depreciation for property placed in service after December 31, 2012 and before

January 1, 2014.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Tax Relief Act) extended the R&E tax credit for 2010

and 2011 and increased bonus depreciation from 50% to 100% for qualified investments made after September 8, 2010 and before January 1, 2012. The

2010 Tax Relief Act also extended the 50% bonus depreciation for property placed in service after December 31, 2011 and before January 1, 2013.

The Company carried back its 2009 tax net operating loss under 2009 legislation allowing a five-year carryback of net operating losses, and received a

refund of $123.4 million in 2010. The Company generated net operating losses for federal tax purposes from 2009 to 2012, primarily as a result of intangible

drilling costs (IDCs), which are deducted for tax purposes but capitalized for financial statement purposes, and from accelerated and bonus tax depreciation

associated with the expansion of the Company’s midstream business. For federal income tax

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

purposes, the Company deducts approximately 83% of drilling costs as IDCs in the year incurred. The Company expects to continue to generate tax losses

over the next several years as it continues its drilling program in Appalachia. IDC’s, however, are sometimes limited for AMT purposes which can result in

the Company paying AMT even when generating a regular tax NOL.

Income tax expense differs from amounts computed at the federal statutory rate of 35% on pre-tax income as follows:

Years Ended December 31,

2012 2011 2010

(Thousands)

Tax at statutory rate $ 105,597 $ 265,695 $ 124,327

State income taxes 9,269 25,416 14,585

Federal tax credits and incentives (439) (660) (600)

Regulatory basis differences (779) (1,251) (2,713)

Permanent basis differences (3,160) (2,411) (1,258)

Noncontrolling partners' share of Partnership earnings (4,571) — —

Other (621) (7,429) (6,821)

Income tax expense $ 105,296 $ 279,360 $ 127,520

Effective tax rate 34.9% 36.8% 35.9%

The Company’s effective tax rate for the year ended December 31, 2012 was 34.9% compared to 36.8% for the year ended December 31, 2011. The

decrease in the rate from 2011 to 2012 was primarily due to a reduction in pre-tax book income on state tax paying entities and the impact of the Partnership’s

IPO. The effective tax rate is impacted by the recent IPO which modified the Midstream ownership structure and now reflects Partnership earnings for which

the noncontrolling public limited partners are directly responsible for the related income taxes. The Company consolidates the pre-tax income related to the

noncontrolling public limited partners’ share of partnership earnings but excludes the related tax provision. Other rate reconciling items had a larger percentage

impact on the effective tax rate in 2012 than 2011 due to significantly higher pre-tax income in 2011.

The Company’s effective tax rate for the year ended December 31, 2011 was 36.8% compared to 35.9% for the year ended December 31, 2010. The

increase in the rate from 2010 to 2011 was partly a result of a higher tax benefit for repair costs in 2010 than in 2011. In addition, state income taxes were

higher due to a shift in the Company’s non-regulated business to states with higher income tax rates. Other rate reconciling items had a larger percentage

impact on the effective tax rate in 2010 than 2011 due to significantly higher pre-tax income in 2011.

In December 2011, the Internal Revenue Service (IRS) issued temporary and proposed regulations related to costs incurred in years beginning after 2011

for the repair or replacement of tangible personal property. Additional guidance is expected from the IRS regarding the implementation of these regulations. 

Adoption of these regulations should not have a material impact on the Company’s financial statements.

The following table reconciles the beginning and ending amount of reserve for uncertain tax positions (excluding interest and penalties):

2012 2011 2010

(Thousands)

Balance at January 1 $ 30,730 $ 37,943 $ 40,726

Additions based on tax positions related to current year 2,165 1,245 2,524

Additions for tax positions of prior years 2,320 184 3,391

Settlements – – –

Reductions for tax positions of prior years (12,235) (7,886) (4,618)

Lapse of statute of limitations (5,122) (756) (4,080)

Balance at December 31 $ 17,858 $ 30,730 $ 37,943

Included in the tabular reconciliation above at December 31, 2012, 2011 and 2010 are $6.4 million, $15.9 million and $21.2 million, respectively, for

tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of tax deductions. Because of the impact

of deferred tax accounting,

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective tax rate but would accelerate the

payment of cash taxes to an earlier period. Uncertain tax positions of $14.6 million and $19.4 million for the periods ending December 31, 2012 and 2011,

respectively, are recorded in the Consolidated Balance Sheets as a reduction of the deferred tax asset for net operating loss and R&E tax credit carryforwards

rather than as a portion of uncertain tax positions.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. The Company reversed approximately $1.8

million and $9.7 million of previously recorded interest expense in 2012 and 2011, respectively, and recognized approximately $3.9 million of interest expense

for the year ended December 31, 2010. Interest and penalties of $0.5 million, $2.3 million and $12.0 million was included in the balance sheet reserve at

December 31, 2012, 2011 and 2010, respectively.

The total amount of unrecognized tax benefits, inclusive of interest and penalties, was $18.4 million, $33.0 million and $49.9 million as of

December 31, 2012, 2011 and 2010, respectively. The total amount of unrecognized tax benefits (excluding interest and penalties) that, if recognized, would

affect the effective tax rate was $5.3 million, $5.2 million and $8.9 million as of December 31, 2012, 2011 and 2010, respectively.

As of December 31, 2012, it was reasonably possible that the total amount of unrecognized tax benefits could decrease by up to $7.1 million within the

next 12 months due to potential settlements with taxing authorities, legal or administrative guidance by relevant taxing authorities or the lapse of applicable

statutes of limitation.

There were no material changes to the Company’s methodology for unrecognized tax benefits during 2012. Because the Company is in a net operating

loss position, the Company did not create unrecognized tax benefits for certain tax positions in 2012 and 2011; such amounts instead, reduce the net operating

loss carryforward for those periods. Decreases to the unrecognized tax benefit balance during 2012 and 2011 were primarily attributable to the reversal of

certain prior year tax positions related to timing differences and the related interest expense as well as the lapse of applicable statutes of limitations.

The consolidated federal income tax liability of the Company has been settled with the IRS through 2009. The Company also is the subject of various

state income tax examinations. The Company believes that it is appropriately reserved for any uncertain tax positions.

88

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

The following table summarizes the source and tax effects of temporary differences between financial reporting and tax bases of assets and liabilities:

December 31,

2012 2011

(Thousands)

Deferred income taxes:

Total deferred income tax assets $ (635,902) $ (449,888)

Total deferred income tax liabilities 2,283,670 2,038,225

Total net deferred income tax liabilities 1,647,768 1,588,337

Total deferred income tax liabilities (assets)

Tax depreciation in excess of book depreciation 1,154,333 1,037,691

Drilling and development costs expensed for income tax reporting 934,495 836,219

Investment in Partnership 68,908 –

Accumulated other comprehensive income 62,632 120,295

Regulatory temporary differences 41,256 43,005

Deferred purchased gas cost 7,198 1,015

Investment tax credit (1,043) (1,467)

Uncollectible accounts (3,768) (3,953)

Post-retirement benefits (7,510) (8,140)

Incentive compensation (12,104) (1,324)

Deferred compensation plans (17,850) (10,814)

Alternative minimum tax credit carryforward (69,901) (65,509)

Net operating loss carryforwards (523,726) (337,921)

Other 14,848 (20,760)

Total (including amounts classified as current (assets) of ($15,828) and ($26,867), respectively) $ 1,647,768 $ 1,588,337

The net deferred tax liability relating to the Company’s accumulated other comprehensive income balance as of December 31, 2012 was comprised of

an $88.0 million deferred tax liability related to the Company’s net unrealized gain from hedging transactions, an $8.7 million deferred tax asset related to

other post-retirement benefits, a $17.2 million deferred tax asset related to the Company’s pension plans and a $0.9 million deferred tax asset related to interest

rate swaps. The net deferred tax liability relating to the Company’s accumulated other comprehensive income balance as of December 31, 2011 was comprised

of a $149.8 million deferred tax liability related to the Company’s net unrealized gain from hedging transactions, a $7.8 million deferred tax asset related to

other post-retirement benefits, a $15.9 million deferred tax asset related to the Company’s pension plans and a $5.7 million deferred tax asset related to interest

rate swaps.

The Company also has a total deferred tax asset of $447.9 million at December 31, 2012 related to the federal net operating loss carryforward created in

2012, 2011 and 2010 of $169.2 million, $49.6 million and $229.1 million, respectively. The deferred tax asset has been reduced for uncertain tax positions

of approximately $3.7 million and $7.5 million as of December 31, 2012 and 2011, respectively. The federal net operating loss carryforward period is 20

years and, if unused, the loss carryforward for 2012, 2011 and 2010 will expire in 2032, 2031 and 2030, respectively.

The Company is subject to the AMT if the computed AMT liability exceeds the regular tax liability for the year. As a result of certain AMT preference

items related to intangible drilling costs, the Company has generated AMT carryforwards totaling $69.9 million. Because AMT taxes paid can be credited

against regular tax and have an indefinite carryforward period, this item is reflected as a deferred tax asset on the Company’s Consolidated Balance Sheets.

As of December 31, 2012, the Company had a deferred tax asset of $86.0 million, net of valuation allowances of $0.8 million, related to tax benefits

from state net operating loss carryforwards with various expiration dates ranging from 2013 to 2032. As of December 31, 2011, the Company had a deferred

tax asset of $59.1 million, net

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

of valuation allowances of $0.8 million, related to tax benefits from state net operating loss carryforwards with various expiration dates ranging from 2012 to

2031. The deferred tax asset has been reduced for uncertain tax positions of approximately $6.5 million and $8.8 million and state-specific statutory

limitations of approximately $59.5 million and $61.6 million as of December 31, 2012 and 2011, respectively.

During the years ended December 31, 2012 and 2011, share-based payment arrangements paid in stock generated an $8.1 million and $6.6 million

excess tax benefit, respectively, which was not recorded in the financial statements as an addition to common stockholders’ equity due to the Company’s net

operating loss position.

9. Equity in Nonconsolidated Investments

The Company has ownership interests in nonconsolidated investments that are accounted for under the equity method of accounting. The following

table summarizes the Company’s equity in the nonconsolidated investments:

Interest

Ownership

as of

December December 31,

Investees Location Type 31, 2012 2012 2011

(Thousands)

 Nora Gathering, LLC (Nora LLC) USA Joint 50% $ 130,368 $ 136,972

The Company’s ownership share of the earnings for 2012, 2011 and 2010 related to the total investments accounted for under the equity method was

$6.1 million, $7.2 million and $9.7 million, respectively, reported in other income on the Company’s Statements of Consolidated Income. Also included in

its ownership share of the earnings of equity method investments for the years ended 2011 and 2010 was the Company’s equity earnings related to its equity

investment in Appalachian Natural Gas Trust (ANGT), which no longer exists due to the ANPI transaction. See Note 7 for further details.

EQT Midstream’s equity investment in Nora LLC represents a 50% ownership interest which was obtained during 2007 through a series of

transactions with Pine Mountain Oil and Gas, Inc., a subsidiary of Range Resources Corporation, by contributing Nora area gathering property in exchange

for the ownership interest. EQT Midstream made no additional equity investments in Nora LLC during 2011 or 2012. EQT Midstream’s investment in

Nora LLC totaled $130.4 million and $137.0 million as of December 31, 2012 and 2011, respectively.

The following tables summarize the unaudited condensed financial statements for nonconsolidated investments accounted for under the equity method

of accounting for the periods noted:

Summarized Balance Sheets

As of December 31,

2012 2011

(Thousands)

Current assets $ 15,966 $ 18,838

Noncurrent assets 249,347 260,286

Total assets $ 265,313 $ 279,124

Current liabilities $ 4,476 $ 5,210

Stockholders’ equity 260,837 273,914

Total liabilities and stockholders’ equity $ 265,313 $ 279,124

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

Summarized Statements of Income

Years Ended December 31,

2012 2011 2010

(Thousands)

Revenues $ 47,888 $ 49,772 $ 62,618

Operating expenses 35,596 35,520 41,693

Net income $ 12,292 $ 14,252 $ 20,925

10. Investments, Available-For-Sale

During 2011 and 2010, the Company sold available-for-sale securities for proceeds of $29.9 million and $12.3 million, respectively. These sales

resulted in gross realized gains of $8.5 million and $2.1 million in 2011 and 2010, respectively, of which $4.9 million and $1.4 million were reclassified

from accumulated other comprehensive income.

The Company did not hold any available-for-sale securities at December 31, 2012 and 2011.

11. Regulatory Assets

The following table summarizes the Company’s regulatory assets, net of amortization, as of December 31, 2012 and 2011. The Company believes that

it will continue to be subject to rate regulation that will provide for the recovery of its regulatory assets.

December 31,

Description 2012 2011

(Thousands)

Deferred taxes $ 108,429 $ 89,224

Deferred purchased gas costs 16,812 3,132

Other post-retirement benefits other than pensions 3,236 4,168

Other recoverable costs 250 703

Total regulatory assets 128,727 97,227

Amounts classified as other current assets 16,812 3,132

Total long-term regulatory assets $ 111,915 $ 94,095

The regulatory asset associated with deferred taxes primarily represents deferred income taxes recoverable through future rates once the taxes become

current. Deferred purchased gas costs are included in prepaid expenses and other in the Consolidated Balance Sheets.

The Company recognizes expenses for on-going post-retirement benefits other than pensions which are subject to recovery in approved rates. The

regulatory asset for other post-retirement benefits other than pensions is expected to be recovered in rates within approximately 6 years.

As of December 31, 2012, the Company also had a regulatory liability of $2.3 million included in other current liabilities in the Consolidated Balance

Sheets related to the over-recovery of costs associated with the Company’s program to assist low-income customers.

The regulatory assets for deferred taxes and other post-retirement benefits do not earn a return on investment.

12. Short-Term Loans

The Company has a $1.5 billion revolving credit facility that expires on December 8, 2016. The Company may request two one-year extensions of the

expiration date subject to satisfaction of certain conditions.

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

The revolving credit facility may be used for working capital, capital expenditures, share repurchases and any other lawful corporate purposes. 

Subject to certain terms and conditions, the Company may, on a one-time basis, request that the lenders’ commitments be increased to an aggregate amount up

to $2.0 billion. Each lender in the facility may decide if it will increase its commitment. The credit facility is underwritten by a syndicate of 16 financial

institutions, each of which is obligated to fund its pro-rata portion of any borrowings by the Company. The Company’s obligations under the credit facility

are unsecured.

The Company is not required to maintain compensating bank balances. The Company’s debt issuer credit ratings, as determined by S&P, Moody’s

or Fitch Ratings Service on its non-credit-enhanced, senior unsecured long-term debt, determine the level of fees associated with its lines of credit in addition to

the interest rate charged by the counterparties on any amounts borrowed against the lines of credit; the lower the Company’s debt credit rating, the higher the

level of fees and borrowing rate.

In connection with its IPO, the Partnership entered into a $350 million revolving credit facility with Wells Fargo Bank, National Association, as

administrative agent, and a syndicate of lenders, which will expire on July 2, 2017. The credit facility is available to fund working capital requirements and

capital expenditures, to purchase assets, to pay distributions and repurchase units and for general partnership purposes. The Company is not a guarantor of

the Partnership’s obligations under the credit facility. The Partnership’s obligations under the revolving portion of the credit facility are unsecured.

As of December 31, 2012 and 2011, neither the Company nor the Partnership had loans or letters of credit outstanding under their respective revolving

credit facilities. Commitment fees averaging approximately 25 basis points for the year ended December 31, 2012 and 30 basis points for the year ended

December 31, 2011 were incurred to maintain credit availability under the Company’s revolving credit facility. The Partnership incurred commitment fees

averaging approximately 25 basis points for the year ended December 31, 2012 to maintain credit availability under its revolving credit facility.

Neither the Company nor the Partnership had any short-term loans outstanding at any time during the year ended December 31, 2012. The maximum

amount of outstanding short-term loans at any time for the Company during the year ended 2011 was $104.0 million. The average daily balance of short-term

loans outstanding for the Company during the year ended December 31, 2011 was approximately $5.5 million at a weighted average annual interest rate of

1.81%.

The Company’s debt instruments and other financial obligations include provisions that, if not complied with, could require early payment, additional

collateral support or similar actions. The most significant default events include maintaining covenants with respect to maximum debt-to-total capitalization

ratio, insolvency events, nonpayment of scheduled principal or interest payments, acceleration of other financial obligations and change of control provisions. 

The Company’s current credit facility contains financial covenants that require a total debt-to-total capitalization ratio of no greater than 65%. The calculation

of this ratio excludes the effects of accumulated other comprehensive income. As of December 31, 2012, the Company was in compliance with all debt

covenants.

The Partnership’s credit facility contains various covenants and restrictive provisions that, if not complied with, could require early payment or

similar action, including a requirement to maintain a consolidated leverage ratio of not more than 5.00 to 1.00 (or, after the Partnership obtains an investment

grade rating, not more than 5.50 to 1.00 for certain measurement periods following the consummation of certain acquisitions) and, until the Partnership

obtains an investment grade rating, a consolidated interest coverage ratio of not less than 3.00 to 1.00. As of December 31, 2012, the Partnership was in

compliance with all debt provisions and covenants.

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

13. Long-Term Debt

December 31,

2012 2011

(Thousands)

7.76% notes, due 2012 thru 2016 $ 32,973 $ 53,742

5.15% notes, due November 15, 2012 – 200,000

5.00% notes, due October 1, 2015 150,000 150,000

5.15% notes, due March 1, 2018 200,000 200,000

6.50% notes, due April 1, 2018 500,000 500,000

8.13% notes, due June 1, 2019 700,000 700,000

4.88% notes, due November 15, 2021 750,000 750,000

7.75% debentures, due July 15, 2026 115,000 115,000

Medium-term notes:

8.7% to 9.0% Series A, due 2014 thru 2021 40,200 40,200

7.3% to 7.6% Series B, due 2013 thru 2023 30,000 30,000

7.6% Series C, due 2018 8,000 8,000

2,526,173 2,746,942

Less debt payable within one year 23,204 219,315

Total long-term debt $ 2,502,969 $ 2,527,627

During the fourth quarter of 2012, the Company repaid the principal balance on its 5.15% maturing notes with available cash on hand.

During the second quarter of 2011, the Company assumed 7.76% Guaranteed Senior Notes due August 31, 2011 through February 28, 2016 in the

aggregate principal amount of $57.1 million in a non-cash transaction. The premium recorded on this debt was $4.6 million and $6.1 million as of

December 31, 2012 and 2011, respectively.

During the fourth quarter of 2011, the Company issued 4.88% Guaranteed Senior Notes due November 15, 2021 in the aggregate principal amount of

$750 million.

The indentures and other agreements governing the Company’s indebtedness contain certain restrictive financial and operating covenants including

covenants that restrict the Company’s ability to incur indebtedness, incur liens, enter into sale and leaseback transactions, complete acquisitions, merge, sell

assets and perform certain other corporate actions. The covenants do not contain a rating trigger. Therefore, a change in the Company’s debt rating would not

trigger a default under the indentures and other agreements governing the Company’s indebtedness.

Aggregate maturities of long-term debt are $23.2 million in 2013, $11.2 million in 2014, $166.0 million in 2015, $3.0 million in 2016 and zero in

2017.

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

14. Pension and Other Post-Retirement Benefit Plans

The following table sets forth the defined benefit pension and other post-retirement benefit plans’ funded status and amounts recognized for those plans

in the Company’s Consolidated Balance Sheets:

For the Years Ended December 31,

2012 2011 2012 2011

Pension Benefits Other Benefits

(Thousands)

Change in benefit obligation:

Benefit obligation at beginning of year $ 61,885 $ 61,452 $ 35,293 $ 34,706

Service cost 500 500 737 620

Interest cost 2,448 3,115 1,427 1,771

Amendments (126) – – –

Actuarial loss 5,733 3,842 2,656 1,602

Benefits paid (5,571) (5,776) (3,858) (3,406)

Expenses paid (511) (440) – –

Settlements (1,088) (808) – –

Benefit obligation at end of year $ 63,270 $ 61,885 $ 36,255 $ 35,293

Change in plan assets:

Fair value of plan assets at beginning of year $ 45,951 $ 48,083 $ 19 $ –

Actual gain on plan assets 5,346 599 – –

Contributions 2,857 4,293 146 19

Benefits paid (5,571) (5,776) – –

Expenses paid (511) (440) – –

Settlements (1,088) (808) – –

Fair value of plan assets at end of year $ 46,984 $ 45,951 $ 165 $ 19

Funded status at end of year $ (16,286) $ (15,934) $ (36,090) $ (35,274)

Amounts recognized in the statement of financial position consist

of:

Current liabilities $ – $ – $ (3,353) $ (3,619)

Noncurrent liabilities (16,286) (15,934) (32,737) (31,655)

Net amounts recognized $ (16,286) $ (15,934) $ (36,090) $ (35,274)

Amounts recognized in accumulated other comprehensive income,

net of tax, consist of:

Net loss $ 24,634 $ 24,373 $ 14,291 $ 13,797

Net prior service (credit) – – (1,560) (1,890)

Net amount recognized $ 24,634 $ 24,373 $ 12,731 $ 11,907

The accumulated benefit obligation for all defined benefit pension plans was $63.3 million and $61.9 million at December 31, 2012 and 2011,

respectively. The Company uses a December 31 measurement date for its defined benefit pension and other post-retirement plans.

The Company’s costs related to its defined benefit pension and other post-retirement benefit plans were as follows:

94

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

For the Years Ended December 31,

2012 2011 2010 2012 2011 2010

Pension Benefits Other Benefits

(Thousands)

Components of net periodic benefit cost:

Service cost $ 500 $ 500 $ 600 $ 737 $ 620 $ 616

Interest cost 2,448 3,115 3,390 1,427 1,771 1,974

Expected return on plan assets (3,712) (4,070) (4,289) – – –

Amortization of prior service cost – – – (845) (902) (902)

Recognized net actuarial loss 1,880 1,471 1,323 1,671 1,605 1,652

Settlement loss and special termination benefits 725 530 569 – – –

Net periodic benefit cost $ 1,841 $ 1,546 $ 1,593 $ 2,990 $ 3,094 $ 3,340

Under the 2006 Equitrans rate case settlement, the Company amortized post-retirement benefits other than pensions previously deferred over a fiveyear period ending in 2010. Currently, the Company recognizes expense for on-going post-retirement benefits other than pensions, which are subject to

recovery in the approved rates. The Company amortized post-retirement benefits other than pensions previously deferred of approximately $0.7 million for the

year ended December 31, 2010.

For the Years Ended December 31,

2012 2011 2010 2012 2011 2010

Pension Benefits Other Benefits

(Thousands)

Other changes in plan assets and benefit obligations

recognized in other comprehensive income, net of

tax:

Net loss (gain) $ 261 $3,378 $(1,056) $ 494 $ 181 $ (1,246)

Net prior service cost – – – 330 915 281

Total recognized in other comprehensive income, net

of tax $ 261 $3,378 $(1,056) $ 824 $ 1,096 $ (965)

Total recognized in net periodic benefit cost and other

comprehensive income, net of tax $ 2,102 $4,924 $ 537 $ 3,814 $ 4,190 $ 2,375

The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income, net of tax, into net

periodic benefit cost during 2013 is $1.3 million. The estimated net loss and net prior service (credit) for the other post-retirement benefit plans that will be

amortized from accumulated other comprehensive income, net of tax, into net periodic benefit cost during 2013 are $0.9 million and $(0.5) million,

respectively.

The following weighted average assumptions were used to determine the benefit obligations for the Company’s defined benefit pension and other postretirement benefit plans:

December 31,

2012 2011 2012 2011

Pension Benefits Other Benefits

Discount rate 3.25% 4.25% 3.25% 4.25%

Rate of compensation increase N/A N/A N/A N/A

9 5

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

The following weighted average assumptions were used to determine the net periodic benefit cost for the Company’s defined benefit pension and other

post-retirement benefit plans:

For the Years Ended December 31,

2012 2011 2012 2011

Pension Benefits Other Benefits

Discount rate 4.25% 5.50% 4.25% 5.50%

Expected return on plan assets 7.75% 8.00% N/A N/A

Rate of compensation increase N/A N/A N/A N/A

The expected rate of return is established at the beginning of the fiscal year to which it relates based upon information available to the Company at that

time, including the plans’ investment mix and the forecasted rates of return on the types of securities held. The Company considered the historical rates of

return earned on plan assets, an expected return percentage by asset class based upon a survey of investment managers and the Company’s actual and targeted

investment mix. Any differences between actual experience and assumed experience are deferred as an unrecognized actuarial gain or loss. The unrecognized

actuarial gains or losses are amortized into the Company’s net periodic benefit cost. The expected rate of return determined as of January 1, 2013 is 7.75%. 

This assumption will be used to derive the Company’s 2013 net periodic benefit cost. The rate of compensation increase is not applicable in determining

future benefit obligations as a result of plan design. Pension expense increases as the expected rate of return decreases or if the discount rate is lowered.

For measurement purposes, the annual rate of increase in the per capita cost of covered health care benefits in 2012 was 7.50% for both the Pre-65 and

Post-65 medical charges. The rates were assumed to decrease gradually to ultimate rates of 5.00% in 2018.

Assumed health care cost trend rates have an effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health

care cost trend rates would have had the following effects:

One-Percentage-Point

Increase

One-Percentage-Point

Decrease

2012 2011 2010 2012 2011 2010

(Thousands)

Increase (decrease) to total of service and interest cost

components $ 32 $ 40 $ 47 $ (32) $ (39) $ (46)

Increase (decrease) to post-retirement benefit obligation $ 711 $ 730 $ 756 $ (688) $ (702) $ (723)

The Company’s pension asset allocation at December 31, 2012 and 2011 and target allocation for 2013 by asset category are as follows:

Percentage of Plan Assets

Target at December 31,

Asset Category Allocation 2013 2012 2011

Domestic broadly diversified equity securities 40% - 60% 53% 48%

Fixed income securities 20% - 50% 32% 35%

International broadly diversified equity securities 5% - 15% 10% 9%

Alternative fixed income securities 0% - 10% 4% 4%

Cash and equivalent investments 0% - 15% 1% 4%

100% 100%

The investment activities of the Company’s pension plan are supervised and monitored by the Benefits Investment Committee (BIC). The BIC reports

to the Management Development and Compensation Committee (the Compensation Committee) of the Board of Directors and is comprised of the Chief

Financial Officer and other

9 6

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

officers and employees of the Company. The BIC has developed an investment strategy that focuses on asset allocation, diversification and quality

guidelines. The investment goals of the BIC are to minimize high levels of risk at the total pension investment fund level. The BIC monitors the asset

allocation on a quarterly basis and adjustments are made, as needed, to rebalance the assets within the prescribed target ranges. Comparative market and peer

group benchmarks are utilized to ensure that each of the firm’s investment managers is performing satisfactorily.

The Company made cash contributions of approximately $2.9 million, $4.3 million and $1.3 million to its pension plan during 2012, 2011 and 2010,

respectively, to meet certain funding targets. The Company expects to make cash payments of at least $1.8 million related to its pensions during 2013, which

will meet minimum required contributions and the 80% funding obligation on the pension plan. Pension plan cash contributions are designed to at least meet

requirements of the 80% funding level. The dollar amount of a cash contribution made in any particular year will vary as a result of gains or losses sustained

by the pension plan during the year due to market conditions. The Company does not expect these variations to have a significant effect on its financial

position, results of operations or liquidity.

The following pension benefit payments, which reflect expected future service, are expected to be paid by the plan during each of the next five years and

the five years thereafter: $6.2 million in 2013; $6.1 million in 2014; $5.6 million in 2015; $5.3 million in 2016; $5.4 million in 2017; and $22.4 million

in the five years thereafter.

The following benefit payments for post-retirement benefits other than pensions, which reflect expected future service, are expected to be paid by the

Company during each of the next five years and the five years thereafter: $3.6 million in 2013; $3.5 million in 2014; $3.4 million in 2015; $3.3 million in

2016; $3.2 million in 2017; and $13.9 million in the five years thereafter.

Expense recognized by the Company related to its defined contribution plans totaled $12.0 million in 2012, $10.1 million in 2011 and $10.4 million in

2010.

The Company reports defined benefit plan assets at fair value which is defined as the exchange price that would be received for an asset or paid to

transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The disclosure below categorizes the assets by

a fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The

three levels of the hierarchy are defined as follows:

Level 1 – Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Observable inputs, other than those included in Level 1, based on quoted prices for similar assets or liabilities in active markets or quoted

prices for identical assets and liabilities in inactive markets.

Level 3 – Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or

liability based on the best information available in the circumstances.

Defined benefit plan asset investments include mutual funds with a fair value of $8.8 million and $20.0 million as of December 31, 2012 and 2011,

respectively. These investments are based upon daily unadjusted quoted prices and therefore are considered Level 1.

Defined benefit plan asset investments also include common/collective trusts with a fair value of $38.2 million and $25.9 million as of December 31,

2012 and 2011, respectively. These investments are valued at current market value of the underlying assets of the fund and therefore are considered Level 2.

Assets classified as Level 1 transferred to Level 2 during the year ended December 31, 2012 were $9.8 million due to the plan severing its investment

in a bond mutual fund and investing in a bond portfolio. This change provided the ability to manage these investments by individual performance. There

were no changes in risk, exposure or asset allocation.

97

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

As of December 31, 2012 and 2011, the defined benefit plan did not hold any assets whose fair value was determined using unobservable inputs and

therefore would be considered Level 3.

15. Common Stock and Earnings Per Share

At December 31, 2012, shares of EQT’s authorized and unissued common stock were reserved as follows:

(Thousands)

Possible future acquisitions 20,457

Stock compensation plans 10,048

Total 30,505

Earnings Per Share

The computation of basic and diluted earnings per share of common stock attributable to EQT Corporation is shown in the table below:

Years Ended December 31,

2012 2011 2010

(Thousands except per share amounts)

Basic earnings per common share:

Net income attributable to EQT Corporation $ 183,395 $ 479,769 $ 227,700

Average common shares outstanding 149,619 149,392 144,458

Basic earnings per common share $ 1.23 $ 3.21 $ 1.58

Diluted earnings per common share:

Net income attributable to EQT Corporation $ 183,395 $ 479,769 $ 227,700

Average common shares outstanding 149,619 149,392 144,458

Potentially dilutive securities:

Stock options and awards (a) 887 817 774

Total 150,506 150,209 145,232

Diluted earnings per common share $ 1.22 $ 3.19 $ 1.57

(a) Options to purchase 281,528, 6,480 and 1,229,109 shares of common stock were not included in the computation of diluted earnings per common

share for 2012, 2011 and 2010, respectively, because the options’ exercise prices were greater than the average market price of the common shares in

the applicable year. The impact of the Partnership’s diluted units did not have a material impact to the Company’s earnings per share calculations

for any of the periods presented.

98

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

16. Share-Based Compensation Plans

Share-based compensation expense recorded by the Company was as follows:

Years Ended December 31,

2012 2011 2010

(Thousands)

2008 Executive Performance Incentive Program $ – $ 923 $ 316

2010 Executive Performance Incentive Programs 1,940 2,118 2,905

2012 Executive Performance Incentive Program 10,633 – –

2007 Supply Long-Term Incentive Program – 198 6,763

2010 Stock Incentive Award Program 4,022 4,241 4,134

2011 Value Driver Award Program 3,033 15,807 –

2012 Value Driver Award Program 11,557 – –

2011 Volume and Efficiency Program 5,286 5,384 –

Restricted stock awards 2,677 2,281 3,020

Non-qualified stock options 3,580 6,057 4,045

Non-employee directors’ share-based awards 2,558 3,320 1,196

EQM Long-Term Incentive Plan awards 535 – –

Total share-based compensation expense $ 45,821 $ 40,329 $ 22,379

The Company typically uses treasury stock to fund awards that are paid in stock. When an award has graduated vesting, the Company records the

expense equal to the vesting percentage on the vesting date. A portion of the expense related to share-based compensation plans is included as an unallocated

expense in deriving total operating income for segment reporting purposes. See Note 3.

Cash received from exercises under all share-based payment arrangements for employees and directors for the years ended December 31, 2012, 2011

and 2010, was $7.9 million, $3.1 million and $2.2 million, respectively. During the years ended December 31, 2012, 2011 and 2010, share-based payment

arrangements paid in stock generated tax benefits of $15.1 million, $8.1 million and $6.0 million, respectively. As a result of the Company’s net operating

loss position, excess tax benefits of $8.1 million in 2012, $6.6 million in 2011 and $5.0 million in 2010 were not recorded in the financial statements as an

addition to common stockholders’ equity. For share-based payment arrangements paid in cash, the Company recognizes tax benefits at the effective tax rate,

except as limited by Section 162(m) of the Internal Revenue Code.

Executive Performance Incentive Programs

In 2008, the Compensation Committee of the Board of Directors adopted the 2008 Executive Performance Incentive Program (2008 Program) under the

1999 Long-Term Incentive Plan. The 2008 Program was established to provide additional long-term incentive opportunities to key executives to further align

their interests with those of the Company’s shareholders and with the strategic objectives of the Company. The vesting of the stock units granted under the

2008 Program occurred on December 31, 2011, after the ordinary close of the performance period. The vesting resulted in approximately 44,400 units (75% of

the award) with a value of approximately $2.5 million being distributed in cash on December 31, 2011. The Company accounted for these awards as liability

awards and as such recorded compensation expense for the remeasurement of the fair value of the awards at the end of each reporting period. The 2008

Program expense was classified as selling, general and administrative expense in the Statements of Consolidated Income.

9 9

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

The peer companies for the 2008 Program were as follows:

Atlas Energy Resources, LLC MarkWest Energy Partners, L.P. Sempra Energy

Cabot Oil & Gas Corp. MDU Resources Group, Inc. Southern Union Company

Chesapeake Energy Corp. National Fuel Gas Company Southwestern Energy Company

CNX Gas Corp. ONEOK, Inc. Spectra Energy Corp

El Paso Corp. Penn Virginia Corp. TransCanada Corp.

Enbridge Inc. Questar Corp. The Williams Companies, Inc.

Energen Corp. Range Resources Corp.

In 2009, the Compensation Committee of the Board of Directors adopted the 2010 Executive Performance Incentive Program (2010 Program) and the

2010 July Executive Performance Incentive Program (the 2010 July Program, and together with the 2010 Program, the 2010 Programs) under the 2009 LongTerm Incentive Plan. The 2010 Programs was established to provide additional long-term incentive opportunities to key employees to further align their

interests with those of the Company’s shareholders and with the strategic objectives of the Company. A total of 154,260 units were outstanding at the

beginning of 2012. The vesting of the units under the 2010 Program occurred on December 31, 2012, after the ordinary close of the respective performance

periods. Awards granted were earned based on a combination of the level of total shareholder return relative to the respective peer groups over the period

January 1, 2010 (July 1, 2010 for the 2010 July Program) through December 31, 2012 and the level of production sales revenues over the period January 1,

2010 (July 1, 2010 for the 2010 July Program) through September 30, 2012. The Company accounted for these awards as equity awards using the $60.09

grant date fair value as determined using a Monte Carlo simulation. The Monte Carlo simulation projected the share price, for the Company and its peers, at

the ending point of the performance periods. The prices were generated using each company’s annual volatility for the expected term and the commensurate 3-

year risk-free rate of 1.69%. Based on the Company’s performance relative to the conditions discussed above, 115,590 shares of common stock, valued at

$6.9 million based on the Monte Carlo value on the grant date, were distributed on December 31, 2012.

The peer companies for the 2010 Program (the 2010 Peer Group) were as follows:

Cabot Oil & Gas Corp. MarkWest Energy Partners, L.P. REX Energy Corp.

Chesapeake Energy Corp. MDU Resources Group, Inc. Sempra Energy

CNX Gas Corp. National Fuel Gas Company Southern Union Company

El Paso Corp. ONEOK, Inc. Southwestern Energy Company

Enbridge Inc. Penn Virginia Corp. Spectra Energy Corp

Energen Corp. Petroleum Development Corp. TransCanada Corp.

EOG Resources, Inc. Questar Corp. The Williams Companies, Inc.

EXCO Resources, Inc. Range Resources Corp. XTO Energy, Inc.

The peer companies for the 2010 July Program were the same as the 2010 Peer Group except for the exclusion of CNX Gas Corp., Questar Corp. and

XTO Energy, Inc.

In 2012, the Compensation Committee of the Board of Directors adopted the 2012 Executive Performance Incentive Plan (2012 Program) under the 2009

Long-Term Incentive Plan. The 2012 Program was established to provide additional long-term incentive opportunities to key employees to further align their

interests with those of the Company’s shareholders and with the strategic objectives of the Company. A total of 377,250 units were granted in 2012 and no

additional units may be granted. Adjusting for 25,770 forfeitures, there were 351,480 outstanding units as of December 31, 2012. The vesting of the units

under the 2012 Program will occur upon payment after the end of the performance period on December 31, 2014. The payout factor will vary between zero

and 300% of the number of units granted contingent upon a combination of the level of total shareholder return relative to a predefined peer group and the level

of cumulative operating cash flow per share over the period January 1, 2012 through December 31, 2014. The Company accounted for these awards as equity

awards using the grant date fair value as determined using a Monte Carlo simulation. The Monte Carlo simulation projected the share price, for the Company

and its peers, at the ending point of the performance period. The prices were generated using each company’s annual volatility for the expected term and the

commensurate 3-year risk-free rate of 0.36%. As the program includes a performance condition that affects the number of shares that will ultimately vest

(cumulative

100

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

cash flow per share performance condition), in accordance with Accounting Standards Codification (ASC) Topic 718, the Monte Carlo simulation computed

a grant date fair value for each possible performance condition outcome on the grant date. The Company reevaluates the probable outcome at each reporting

period, in order to record expense at the probable outcome grant date fair value. As of December 31, 2012, the compensation expense was recorded using a

grant date fair value of $108.85, which was the specific grant date fair value computed for the outcome which management estimated to be most probable. As

of December 31, 2012, there was $25.5 million of total unrecognized compensation expense related to the 2012 Program which is expected to be recognized

over the next two years.

The peer companies for the 2012 Program are as follows:

Cabot Oil & Gas Corp. National Fuel Gas Company Sempra Energy

Chesapeake Energy Corp. NStar Electric Co. SM Energy Company

Cimarex Energy Co. ONEOK, Inc. Southwestern Energy Company

CONSOL Energy Inc. Penn Virginia Corp. Spectra Energy Corp

Energen Corp Pioneer Natural Resources Company Ultra Petroleum Corp.

EOG Resources, Inc. Plains Exploration & Production Co. Whiting Petroleum Corp.

EXCO Resources, Inc. Questar Corp. The Williams Companies, Inc.

MarkWest Energy Partners, L.P. Quicksilver Resources Inc.

MDU Resources Group, Inc. Range Resources Corp.

2007 Supply Long-Term Incentive Program

Effective in 2007, the Compensation Committee of the Board of Directors established the 2007 Supply Long-Term Incentive Program (2007 Supply

Program) to provide a long-term incentive compensation opportunity to key employees in the EQT Production and EQT Midstream segments. Awards granted

were earned by achieving pre-determined total sales and efficiency targets and by satisfying certain applicable employment requirements. The awards paid out

at three times the initial award based upon achievement of the predetermined performance levels. The vesting of the awards under the 2007 Supply Program

occurred on December 31, 2010, after the ordinary close of the performance period. The vesting resulted in approximately 0.8 million awards (300% of the

award) with a value of approximately $36 million being distributed in cash during the first quarter of 2011. The Company accounted for these awards as

liability awards and as such recorded compensation expense for the fair value of the awards at the end of each reporting period.

2010 Stock Incentive Award Program

Effective in 2010, the Compensation Committee of the Board of Directors adopted the 2010 Stock Incentive Award program (2010 SIA) under the 2009

Long-Term Incentive Plan. The 2010 SIA was established to provide additional long-term incentive opportunities to key employees to further align their

interests with those of the Company’s shareholders and with the strategic objectives of the Company. The vesting of the awards under the 2010 SIA occurred

on December 31, 2012. The payout opportunity with respect to the performance awards was contingent upon adjusted 2010 earnings before interest, taxes,

depreciation and amortization performance as compared to the Company’s annual business plan and individual, business unit and Company value driver

performance over the period January 1, 2010 through December 31, 2010. Adjusting for the performance multiplier, 295,635 awards were outstanding as of

the beginning of 2012 and, after accruing dividends, 294,925 awards, valued at $12.6 million based on the grant date fair value, vested as of December 31,

2012. The performance awards were distributed in Company common stock on December 31, 2012.

Value Driver Award Programs

Effective in 2011, the Compensation Committee of the Board of Directors adopted the 2011 Value Driver Award program (2011 VDA) under the 2009

Long-Term Incentive Plan. The 2011 VDA was established to align the interests of key employees with the interests of shareholders and customers and the

strategic objectives of the Company. Under the 2011 VDA, 50% of the units confirmed vested upon payment following the first anniversary of the grant date;

the remaining 50% of the units confirmed vested on December 31, 2012. The payment was contingent upon adjusted 2011 earnings before interest, taxes,

depreciation and amortization performance as

101

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

compared to the Company’s annual business plan and individual, business unit and Company value driver performance over the period January 1, 2011

through December 31, 2011. Adjusting for the performance multiplier, 523,347 awards were outstanding as of the beginning of 2012. The two tranches of

awards vested and were distributed in cash payouts of $14.6 million in February 2012 and $15.3 million on December 31, 2012. The Company accounted

for these awards as liability awards and as such, recorded compensation expense for the remeasurement of the fair value of the awards at the end of each

reporting period. Due to the graded vesting of the award, the Company recognized compensation cost over the requisite service period for each separately

vesting tranche of the award as though the award were, in substance, multiple awards. The total liability recorded for the 2011 VDA was $24.1 million as of

December 31, 2011. As the second tranche of the awards was paid out on December 31, 2012, there was no liability recorded as of December 31, 2012.

Effective in 2012, the Compensation Committee of the Board of Directors adopted the 2012 Value Driver Award program (2012 VDA) under the 2009

Long-Term Incentive Plan. The 2012 VDA was established to align the interests of key employees with the interests of shareholders and customers and the

strategic objectives of the Company. Under the 2012 VDA, 50% of the units confirmed vest upon payment following the first anniversary of the grant date;

the remaining 50% of the units confirmed will vest upon the payment date following the second anniversary of the grant date. The payment was contingent

upon adjusted 2012 earnings before interest, taxes, depreciation and amortization (EBITDA) performance as compared to the Company’s annual business

plan and individual, business unit and Company value driver performance over the period January 1, 2012 through December 31, 2012. As of December 31,

2012, 409,357 awards including accrued dividends were outstanding under the 2012 VDA. The first tranche of the confirmed awards vested and were

distributed in Company stock in January 2013. The remainder of the confirmed awards is expected to vest and be paid in Company stock in the first quarter

of 2014. The Company accounts for these awards as equity awards using the $54.79 grant date fair value which was equal to the Company’s stock price on

the date prior to the date of grant. Due to the graded vesting of the award, the Company recognizes compensation cost over the requisite service period for each

separately vesting tranche of the award as though the award were, in substance, multiple awards. The total compensation cost capitalized was $5.0 million in

2012. As of December 31, 2012, there was $5.7 million of total unrecognized compensation expense related to the 2012 VDA which is expected to be fully

recognized by December 31, 2013.

2011 Volume and Efficiency Program

Effective in 2011, the Compensation Committee of the Board of Directors adopted the 2011 Volume and Efficiency Program (2011 VEP) under the

2009 Long-Term Incentive Plan. The 2011 VEP was established to align the interests of key employees with the interests of shareholders and customers and

the strategic objectives of the Company. The payout opportunity with respect to the target awards will range from zero to 300% the initial award based on the

achievement of predetermined specified performance measures. Payment of the awards is expected to be distributed in Company stock after the end of the

performance period, December 31, 2013. The Company accounts for these awards as equity awards using the $48.06 grant date fair value which was equal

to the Company’s stock price on the grant date. 244,780 awards were outstanding as of the beginning of 2012, with 228,640 outstanding as of December 31,

2012. The total compensation cost capitalized was $2.5 million and $1.9 million in 2012 and 2011, respectively. As of December 31, 2012, there was $8.2

million of total unrecognized compensation expense related to the 2011 VEP which is expected to be fully recognized by December 31, 2013.

Restricted Stock Awards

The Company granted 103,730, 65,390 and 85,720 restricted stock awards during the years ended December 31, 2012, 2011 and 2010, respectively,

to key employees of the Company. The restricted shares granted will be fully vested at the end of the three-year period commencing with the date of grant,

assuming continued employment. The weighted average fair value of these restricted stock grants, based on the grant date fair value of the Company’s stock,

was approximately $54, $52 and $43 for the years ended December 31, 2012, 2011 and 2010, respectively. The total fair value of restricted stock awards

vested during the years ended December 31, 2012, 2011 and 2010 was $1.6 million, $5.1 million and $2.9 million, respectively.

102

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

As of December 31, 2012, there was $5.3 million of total unrecognized compensation cost related to nonvested restricted stock awards, which is

expected to be recognized over a remaining weighted average vesting term of approximately 18 months.

A summary of restricted stock activity as of December 31, 2012, and changes during the year then ended, is presented below:

Restricted Stock

NonVested

Shares

Weighted 

Average 

Fair Value

Aggregate

Fair Value

Outstanding at January 1, 2012 180,950 $ 43.10 $ 7,798,194

Granted 103,730 $ 53.50 5,550,057

Vested (46,452) $ 34.31 (1,593,612)

Forfeited (34,110) $ 46.25 (1,577,709)

Outstanding at December 31, 2012 204,118 $ 49.86 $ 10,176,930

Non-Qualified Stock Options

The fair value of the Company’s option grants was estimated at the dates of grant using a Black-Scholes option-pricing model with the assumptions

indicated in the table below for the years ended December 31, 2012, 2011 and 2010. The risk-free rate for periods within the contractual life of the option is

based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is based on the historical dividend yield of the Company’s stock. 

Expected volatilities are based on historical volatility of the Company’s stock. The expected term of options granted represents the period of time that options

granted are expected to be outstanding based on historical option exercise experience.

Years Ended December 31,

2012 2011 2010

Risk-free interest rate 0.89% 2.02% 1.60% - 2.50%

Dividend yield 1.64% 2.19% 2.10% - 2.34%

Volatility factor 0.31 0.29 0.28

Expected term 5 years 5 years 5 years

The Company granted 278,300, 229,100 and 409,100 stock options during the years ended December 31, 2012, 2011 and 2010, respectively. The

weighted average grant date fair value of the options was $13.19, $10.06 and $9.31 for the years ended December 31, 2012, 2011 and 2010, respectively. 

The total intrinsic value of options exercised during the years ended December 31, 2012, 2011 and 2010 was $11.8 million, $18.3 million and $7.5 million,

respectively.

As of December 31, 2012, there was $1.8 million of total unrecognized compensation cost related to outstanding nonvested stock options which will be

recognized by December 31, 2013.

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

A summary of option activity as of December 31, 2012, and changes during the year then ended, is presented below:

Non-qualified Stock Options Shares

Weighted

Average

Exercise

Price

Weighted

Average

Remaining

Contractual

Term

Aggregate

Intrinsic

Value

Outstanding at January 1, 2012 1,946,787 $ 40.51

Granted 278,300 $ 54.79

Exercised (325,035) $ 20.70

Forfeited (46,577) $ 45.93

Outstanding at December 31, 2012 1,853,475 $ 45.99 4.0 years $ 22,291,945

Exercisable at December 31, 2012 1,460,625 $ 44.41 2.9 years $ 19,883,267

Non-employee Directors’ Share-Based Awards

The Company has historically granted to non-employee directors share-based awards which vest upon award. The value of the share-based awards

will be paid in cash or Company stock on the earlier of the director’s death or retirement from the Company’s Board of Directors. The Company accounts for

these awards as liability awards and as such records compensation expense for the remeasurement of the fair value of the awards at the end of each reporting

period. A total of 153,861 non-employee director share-based awards were outstanding as of December 31, 2012. A total of 28,140, 22,140 and 28,348

share-based awards were granted to non-employee directors during the years ended December 31, 2012, 2011 and 2010, respectively. The weighted average

fair value of these grants, based on the grant date fair value of the Company’s stock, was $53.47, $44.84 and $38.74 for the years ended December 31, 2012,

2011 and 2010, respectively.

EQM Long-Term Incentive Plan Awards

At the closing of the Partnership’s IPO on July 2, 2012, the Company and the general partner of the Partnership granted certain key EQT employees

performance awards representing 146,490 common units of the Partnership. The performance condition related to the performance awards will be satisfied on

December 31, 2015 if the total unitholder return realized on the Company’s common units from the date of grant is at least 10%. If the unitholder return

measure is not achieved as of December 31, 2015, the performance condition will nonetheless be satisfied if the 10% unitholder return threshold is satisfied as

of the end of any calendar quarter ending after December 31, 2015 and on or before December 31, 2017. If earned, the units are expected to be distributed in

Partnership common units.

The Company accounted for these awards as equity awards using the $20.02 grant date fair value as determined using a fair value model. The model

projected the unit price for Partnership common units at the ending point of the performance period. The price was generated using annual historical volatility

of peer group companies for the expected term of the awards, which was based upon the performance period. The range of expected volatilities calculated by

the valuation model was 27% - 72%, and the weighted-average expected volatility was approximately 38%. Additional assumptions included the risk-free rate

for periods within the contractual life of the awards based on the U.S. Treasury yield curve in effect at the time of grant and an expected Partnership

distribution growth rate of 10%. As of December 31, 2012, there were 146,490 performance awards outstanding. As of December 31, 2012, there was $2.5

million of total unrecognized compensation cost related to nonvested performance awards; which is expected to be recognized over a period of 3 years.

Additionally, the general partner of the Partnership granted 4,780 share-based phantom units to its independent directors, which awards vested upon

grant. The value of the phantom units will be paid in Partnership common units on the earlier of the director’s death or retirement from the general partner’s

Board of Directors. The Company accounts for these awards as equity awards and as such recorded compensation expense for the fair value of the awards at

the grant date fair value.

104

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

2013 Value Driver Award Program and 2013 Executive Performance Incentive Plan

Effective 2013, the Compensation Committee of the Board of Directors adopted the 2013 Value Driver Award program (2013 VDA) and the 2013

Executive Performance Incentive Program (2013 EPIP) under the 2009 Long-Term Incentive Plan. The 2013 VDA and 2013 EPIP were established to align the

interests of key employees with the interests of shareholders and customers and the strategic objectives of the Company.

A total of 270,030 units were granted under the 2013 VDA. Fifty percent of the units confirmed under the 2013 VDA will vest upon the payment date

following the first anniversary of the grant date; the remaining 50% of the confirmed units under the 2013 VDA will vest upon the payment date following the

second anniversary of the grant date. The payout will vary between zero and 300% of the number of units granted contingent upon adjusted 2013 earnings

before interest, taxes, depreciation and amortization performance as compared to the Company’s annual business plan and individual, business unit and

Company value driver performance over the period January 1, 2013 through December 31, 2013. If earned, the 2013 VDA units are expected to be paid in

Company stock. The Company has not recorded any obligation or expense related to the 2013 VDA as of December 31, 2012.

A total of 307,250 units were granted under the 2013 EPIP. The vesting of the units under the 2013 EPIP will occur upon payment after the end of the

3-year performance period. The payout will vary between zero and 300% of the number of units granted contingent upon a combination of the level of total

shareholder return relative to a predefined peer group and the level of cumulative operating cash flow per share over the period January 1, 2013 through

December 31, 2015. If earned, the 2013 Program units are expected to be distributed in Company stock. The Company has not recorded any obligation or

expense related to the 2013 EPIP as of December 31, 2012.

2013 Stock Options

Effective January 1, 2013, the Compensation Committee of the Board of Directors granted non-qualified stock options to key employees of the

Company. The 2013 options are ten-year options, with an exercise price of $58.98 and a vesting schedule as follows: 50% on January 1, 2014 and 50% on

January 1, 2015, contingent upon continued employment with the Company on such dates. The Company has not recorded any obligation or expense related

to 2013 stock options as of December 31, 2012.

17. Concentrations of Credit Risk

Revenues and related accounts receivable from the EQT Production segment’s operations are generated primarily from the sale of produced natural gas,

NGLs and limited amounts of crude oil to marketers, utility and industrial customers located mainly in the Appalachian area and a gas processor in

Kentucky. No single customer accounted for more than 10% of revenues in 2012, 2011 or 2010.

Approximately 75% and 66% of the Company’s accounts receivable balance as of December 31, 2012 and 2011, respectively, represent amounts due

from marketers. The Company manages the credit risk of sales to marketers by limiting its dealings to those marketers who meet the Company’s criteria for

credit and liquidity strength and by regularly monitoring these accounts. The Company may require letters of credit, guarantees, performance bonds or other

credit enhancements from a marketer in order for that marketer to meet the Company’s credit criteria. As a result, the Company did not experience any

significant defaults on sales of natural gas to marketers during the years ended December 31, 2012, 2011 or 2010.

The transmission and storage operations of EQT Midstream include FERC-regulated interstate pipeline transportation and storage service for the

Distribution segment, as well as other utility and end-user customers located in the northeastern United States. EQT Midstream also provides commodity

procurement and delivery, physical natural gas management operations and control and customer support services to energy consumers including large

industrial, utility, commercial and institutional consumers and certain marketers primarily in the Appalachian and mid-Atlantic regions.

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

Distribution’s operating revenues and related accounts receivable are generated primarily from state-regulated distribution natural gas sales and

transportation to approximately 277,400 residential, commercial and industrial customers located in southwestern Pennsylvania, northern West Virginia and

eastern Kentucky. Distribution continues to monitor and analyze various customer-related metrics and their impact on accounts receivable. The Company

employs a firm collections strategy which is comprised of various collection tactics including outreach to low income customers to provide information

regarding energy assistance programs and, if necessary, termination of service. The outreach to low income customers includes enrolling customers into the

customer assistance program which is an affordable payment plan for low income customers based on a percentage of total household income. This program

is managed by the Company and recovered through rates charged to other residential customers.

The Company is exposed to credit loss in the event of nonperformance by counterparties to derivative contracts. This credit exposure is limited to

derivative contracts with a positive fair value, which may change as market prices change. The Company believes that NYMEX-traded future contracts have

limited credit risk because Commodity Futures Trading Commission regulations are in place to protect exchange participants, including the Company, from

any potential financial instability of the exchange members. The Company’s OTC swap, collar and option derivative instruments are primarily with financial

institutions and, thus, are subject to events that would impact those companies individually as well as that industry as a whole.

The Company utilizes various processes and analyses to monitor and evaluate its credit risk exposure to financial counterparties. This includes

monitoring market conditions, counterparty credit fundamentals and credit default swap rates. Credit exposure is controlled through credit approvals and

limits. To manage the level of credit risk, the Company deals with financial counterparties that are of investment grade or better, enters into netting agreements

whenever possible and may obtain collateral or other security.

As of December 31, 2012, the Company was not in default under any derivative contracts and has no knowledge of default by any counterparty to

derivative contracts. The Company monitors market conditions that may impact the fair value of derivative contracts reported in the Consolidated Balance

Sheets.

The Company and its subsidiaries had 1,873 employees at the end of 2012. As of December 31, 2012, approximately 10% of the Company’s

workforce was subject to collective bargaining agreements. The collective bargaining agreement which covers approximately 8% of the Company’s workforce

will expire on July 8, 2015. The collective bargaining agreement which covers approximately 2% of the Company’s workforce was extended in the fourth

quarter of 2012 to January 22, 2016.

18. Commitments and Contingencies

The Company has commitments for demand charges under existing long-term contracts and binding precedent agreements with various pipelines. 

Future payments for these items as of December 31, 2012 totaled $2,032.9 million (2013 - $239.4 million, 2014 - $177.8 million, 2015 - $152.6 million,

2016 - $145.4 million, 2017 - $141.3 million and thereafter - $1,176.4 million). The Company has entered into agreements to release some of its capacity to

various third parties. Included in the amounts above is capacity released to third parties under long-term agreements as of December 31, 2012 totaling $129.8

million (2013 - $75.0 million, 2014 - $27.4 million, zero in 2015, 2016 and 2017 and $27.4 million thereafter).

The Company has agreements with drilling contractors to provide drilling equipment and services to the Company. These obligations totaled

approximately $65.4 million as of December 31, 2012. Operating lease rentals for drilling contractors, office locations and warehouse buildings, as well as a

limited amount of equipment, amounted to approximately $47.3 million in 2012, $76.9 million in 2011 and $97.4 million in 2010. Future lease payments

under non-cancelable operating leases as of December 31, 2012 totaled $165.4 million (2013 - $39.7 million, 2014 - $29.4 million, 2015 - $19.1 million,

2016 - $14.2 million, 2017 - $8.6 million and thereafter - $54.4 million). The Company has subleased three floors of its previous corporate headquarters

building. The Company will receive future lease payments under the non-cancelable subleases totaling approximately $28.3 million as of December 31, 2012

(2013 - $2.2 million, 2014 - $2.2 million, 2015 - $2.2 million, 2016 - $2.2 million, 2017 - $2.2 million and thereafter - $17.3 million).

106

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

The Company is subject to various federal, state and local environmental and environmentally-related laws and regulations. These laws and

regulations, which are constantly changing, can require expenditures for remediation and may in certain instances result in assessment of fines. The

Company has established procedures for ongoing evaluation of its operations to identify potential environmental exposures and to assure compliance with

regulatory policies and procedures. The estimated costs associated with identified situations that require remedial action are accrued. However, certain costs

are deferred as regulatory assets when recoverable through regulated rates. Ongoing expenditures for compliance with environmental laws and regulations,

including investments in plant and facilities to meet environmental requirements, have not been material. Management believes that any such required

expenditures will not be significantly different in either their nature or amount in the future and does not know of any environmental liabilities that will have a

material effect on the Company’s financial position, results of operations or liquidity. The Company has identified situations that require remedial action for

which approximately $2.2 million is included in other credits in the Consolidated Balance Sheets as of December 31, 2012.

In the ordinary course of business, various legal and regulatory claims and proceedings are pending or threatened against the Company. While the

amounts claimed may be substantial, the Company is unable to predict with certainty the ultimate outcome of such claims and proceedings. The Company

accrues legal or other direct costs related to loss contingencies when actually incurred. The Company has established reserves it believes to be appropriate for

pending matters and, after consultation with counsel and giving appropriate consideration to available insurance, the Company believes that the ultimate

outcome of any matter currently pending against the Company will not materially affect the financial position, results of operations or liquidity of the

Company.

19. Guarantees

In connection with the sale of its NORESCO domestic operations in December 2005, the Company agreed to maintain in place guarantees of certain

warranty obligations of NORESCO. The savings guarantees provided that once the energy-efficiency construction was completed by NORESCO, the

customer would experience a certain dollar amount of energy savings over a period of years. The undiscounted maximum aggregate payments that may be due

related to these guarantees are approximately $192 million as of December 31, 2012, extending at a decreasing amount for approximately 15 years.

In exchange for the Company’s agreement to maintain these guarantee obligations, the purchaser of the NORESCO business and NORESCO agreed,

among other things, that NORESCO would fully perform its obligations under each underlying agreement and agreed to reimburse the Company for any loss

under the guarantee obligations, provided that the purchaser’s reimbursement obligation will not exceed $6 million in the aggregate and will expire on

November 18, 2014. In 2008, the original purchaser of NORESCO sold its interest in NORESCO and transferred its obligations to a third party. In

connection with that event, the new owner delivered to the Company a $1 million letter of credit supporting its obligations.

The NORESCO guarantees are exempt from FASB ASC Topic 460, Guarantees. The Company has determined that the likelihood it will be required to

perform on these arrangements is remote and any potential payments are expected to be immaterial to the Company’s financial position, results of operations

and liquidity. As such, the Company has not recorded any liabilities in its Consolidated Balance Sheets related to these guarantees.

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

20. Interim Financial Information (Unaudited)

The following quarterly summary of operating results reflects variations due primarily to the seasonal nature of the Company’s distribution and storage

businesses and volatility of natural gas commodity prices.

Three Months Ended

March 31 June 30 September 30 December 31

(Thousands, except per share amounts)

2012 (a)

Operating revenues $ 449,960 $ 337,804 $ 364,057 $ 489,787

Operating income 152,186 81,404 85,948 150,990

Net income attributable to EQT Corporation 72,035 31,446 31,873 48,041

Earnings per share of common stock:

Net income

Basic $ 0.48 $ 0.21 $ 0.21 $ 0.32

Diluted $ 0.48 $ 0.21 $ 0.21 $ 0.32

2011 (a)

Operating revenues $ 472,695 $ 367,791 $ 362,644 $ 436,804

Operating income 220,412 153,170 314,984 172,753

Net income 122,255 87,754 178,914 90,846

Earnings per share of common stock:

Net income

Basic $ 0.82 $ 0.59 $ 1.20 $ 0.61

Diluted $ 0.82 $ 0.58 $ 1.19 $ 0.60

(a) The sum of the quarterly data in some cases may not equal the yearly total due to rounding.

Differences between operating revenues in the above table and those previously reported in the Company’s 2011 Form 10-Qs is the result of the

adjustment to operating revenues and purchased gas costs to reflect third-party transportation charges as a component of purchased gas costs rather than as a

deduction from operating revenues. See discussion in Note 3.

Differences between operating income in the above table and those previously reported in the Company’s Form 10-Qs for the three months ended

March 31, 2011 and September 30, 2011 reflect the reclassification of the gains on the dispositions of Langley and Big Sandy described in Note 6 into

operating income from other income.

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

21. Natural Gas Producing Activities (Unaudited)

The supplementary information summarized below presents the results of natural gas and oil activities for the EQT Production segment in accordance

with the successful efforts method of accounting for production activities.

Production Costs

The following table presents the costs incurred relating to natural gas and oil production activities (a):

For the Years Ended December 31,

2012 2011 2010

(Thousands)

At December 31:

Capitalized costs $ 6,750,343 $ 5,772,083 $ 4,655,217

Accumulated depreciation and depletion 1,572,775 1,177,526 967,473

Net capitalized costs $ 5,177,568 $ 4,594,557 $ 3,687,744

Costs incurred for the years ended December 31:

Property acquisition:

Proved properties (b) $ 16,965 $ 108,717 $ 15,359

Unproved properties 117,654 41,085 342,372

Exploration (c) 4,827 2,344 5,105

Development 850,854 928,294 881,331

(a) Amounts exclude capital expenditures for facilities and information technology.

(b) Amount includes $92.6 million of liabilities assumed in exchange for proved developed properties as part of the ANPI transaction in 2011.

(c) Amounts include capitalizable exploratory costs and exploration expense, excluding impairments.

Results of Operations for Producing Activities

The following table presents the results of operations related to natural gas and oil production.

For the Years Ended December 31,

2012 2011 2010

(Thousands)

Revenues:

Affiliated $ 3,433 $ 6,225 $ 7,371

Nonaffiliated 790,340 785,060 530,286

Production costs 96,155 80,911 67,414

Exploration costs 10,370 4,932 5,368

Depreciation, depletion and accretion 409,628 257,144 183,699

Income tax expense 109,660 174,835 106,847

Results of operations from producing activities

(excluding corporate overhead) $ 167,960 $ 273,463 $ 174,329

Reserve Information

The information presented below represents estimates of proved natural gas and oil reserves prepared by Company engineers. The engineer primarily

responsible for preparing the reserve report and the technical aspects of the reserves audit received a bachelor’s degree in Petroleum and Natural Gas

Engineering from the Pennsylvania State University and has 24 years of experience in the oil and gas industry. To ensure that the reserves are materially

accurate, management reviews the price, heat content conversion rate and cost assumptions used in the economic model to determine the reserves; division of

interest and production volumes are reconciled between the system used to calculate the reserves and other accounting/measurement systems; the reserve

reconciliation between

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

prior year reserves and current year reserves is reviewed by senior management; and the estimates of proved natural gas and oil reserves are audited by the

independent consulting firm of Ryder Scott Company, L.P. (Ryder Scott), who is hired by the Company’s management. Since 1937, Ryder Scott has

evaluated oil and gas properties and independently certified petroleum reserves quantities in the United States and internationally.

Proved developed reserves represent only those reserves expected to be recovered from existing wells and support equipment. There were no differences

between the internally prepared and externally audited estimates. Proved undeveloped reserves represent proved reserves expected to be recovered from new

wells after substantial development costs are incurred. Ryder Scott reviewed 100% of the total net gas and liquid hydrocarbon proved reserves attributable to

the Company’s interests as of December 31, 2012. Ryder Scott conducted a detailed, well by well, audit of the Company’s largest properties. This audit

covered 80% of the Company’s proved reserves. Ryder Scott’s audit of the remaining 20% of the Company’s properties consisted of an audit of aggregated

groups not exceeding 200 wells per group. The audit utilized the performance method and the analogy method. Where historical reserve or production data

was definitive, the performance method, which extrapolates historical data, was utilized. In other cases the analogy method, which calculates reserves based

on correlations to comparable surrounding wells, was utilized. All of the Company’s proved reserves are located in the United States.

Years Ended December 31, 

2012 2011 2010

(Millions of Cubic Feet)

Natural Gas

Proved developed and undeveloped reserves:

Beginning of year 5,347,386 5,205,692 4,056,059

Revision of previous estimates (755,788) (393,129) (606,308)

Purchase of natural gas in place – 39,436 2,536

Sale of natural gas in place (694) (1,223) (1,679)

Extensions, discoveries and other additions 1,654,228 694,180 1,893,387

Production (259,374) (197,570) (138,303)

End of year 5,985,758 5,347,386 5,205,692

Proved developed reserves:

Beginning of year 2,948,546 2,520,569 2,061,353

End of year 2,779,187 2,948,546 2,520,569

Years Ended December 31,

2012 2011 2010

(Thousands of Bbls)

Oil (a)

Proved developed and undeveloped reserves:

Beginning of year 2,931 2,307 2,016

Revision of previous estimates 265 781 411

Purchase of oil in place – 51 –

Sale of oil in place – – –

Extensions, discoveries and other additions 268 – –

Production (265) (208) (120)

End of year 3,199 2,931 2,307

Proved developed reserves:

Beginning of year 2,931 2,307 2,016

End of year 3,199 2,931 2,307

(a) One thousand Bbl equals approximately 6 million cubic feet (MMcf).

As discussed in Note 7, the Company acquired the Class A interest in ANGT in May 2011. Prior to this acquisition, the Company held a 1% equity

interest in ANGT which was accounted for under the equity method. The Company’s share of these reserves and the impact on the standard measure of

discounted future cash flow was

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

not considered material and therefore was excluded from these measures prior to the acquisition. This acquisition added 39.7 Bcfe of proved developed

reserves.

During 2012, the Company recorded downward revisions of 754.2 Bcfe to the December 31, 2011 estimates of its reserves primarily due to the

decrease in the average NYMEX gas price for the year causing the existing reserves to become uneconomic in accordance with SEC pricing requirements. The

Company’s 2012 extensions, discoveries and other additions, resulting from extension of the proved acreage of previously discovered reservoirs through

additional drilling in periods subsequent to discovery, of 1,655.8 Bcfe exceeded the 2012 production of 261.0 Bcfe. These reserve extensions and discoveries

were mainly due to decreased lateral spacing in one of the Company’s Greene County, Pennsylvania fields and additional proved locations in the Company’s

Wetzel and Doddridge County, West Virginia development areas.

Proved developed non-producing reserves decreased 401 Bcfe during 2012 as compared to 2011. During 2012, the Company incurred a higher

percentage of its costs on the well completion phase compared to the drilling phase because of longer laterals, reduced cluster spacing and multi-well pads. As

a result, the Company changed its methodology for classifying wells as proved developed non-producing reserves until only after the fracturing process has

been completed.

During 2011, the Company recorded downward revisions of 388.4 Bcfe to the December 31, 2010 estimates of its reserves primarily due to removing

proved undeveloped reserves in the Huron play in order to focus capital and resources in the Marcellus play over the five-year time horizon included in the

proved undeveloped reserves development plan. The Company’s 2011 extensions, discoveries and other additions, resulting from extension of the proved

acreage of previously discovered reservoirs through additional drilling in periods subsequent to discovery of 694.2 Bcfe exceeded the 2011 production of

198.8 Bcfe.

During 2010, the Company recorded downward revisions of 603.8 Bcfe to the December 31, 2009 estimates of its reserves primarily due to removing

proved undeveloped reserves in the Huron play in order to focus more capital and resources in the Marcellus play over the five-year time horizon included in

the proved undeveloped reserves development plan, partially offset by increased prices. The Company’s 2010 extensions, discoveries and other additions,

resulting from extensions of the proved acreage of previously discovered reservoirs through additional drilling in periods subsequent to discovery, of 1,893.4

Bcfe exceeded the 2010 production of 139.0 Bcfe.

As of December 31, 2012, the Company did not have any reserves that have been classified as proved undeveloped reserves for more than five years.

Standard Measure of Discounted Future Cash Flow

Management cautions that the standard measure of discounted future cash flows should not be viewed as an indication of the fair market value of

natural gas and oil producing properties, nor of the future cash flows expected to be generated therefrom. The information presented does not give recognition

to future changes in estimated reserves, selling prices or costs and has been discounted at a rate of 10%.

Estimated future net cash flows from natural gas and oil reserves are as follows at December 31:

2012 2011 2010

(Thousands)

Future cash inflows (a) $ 15,250,019 $ 22,145,953 $ 20,037,125

Future production costs (3,070,957) (3,435,200) (3,313,378)

Future development costs (3,082,053) (2,600,982) (2,497,312)

Future income tax expenses (3,324,472) (6,075,539) (8,756,630)

Future net cash flow 5,772,537 10,034,232 5,469,805

10% annual discount for estimated timing of cash flows (3,617,378) (6,101,408) (2,411,593)

Standardized measure of discounted future net cash flows $ 2,155,159 $ 3,932,824 $ 3,058,212

(a) The majority of the Company’s production is sold through liquid trading points on interstate pipelines. For 2012, the reserves were computed

using unweighted arithmetic averages of the closing prices on the first day of each month during 2012 of $82.90 per Bbl of oil (first day of each

month closing price for WTI less Appalachian Basin adjustment), $2.793 per Dth for Columbia Gas

111

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EQT CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012 (Continued)

Transmission Corp., $2.785 per Dth for Dominion Transmission, Inc., $2.769 per Dth for the East Tennessee Natural Gas Pipeline, $2.782

per Dth for Texas Eastern Transmission Corp., $2.403 per Dth for the Tennessee, zone 4-300 Leg of Tennessee Gas Pipeline Company and $2.878

per Dth for the Tennessee LA 500 Leg of Tennessee Gas Pipeline Company. For 2012, the West Virginia Marcellus reserves from Doddridge and

Ritchie Counties were computed using an additional $0.591 and reserves from Wetzel County were computed using an additional $0.398 for

revenues earned on NGLs that are produced from those reserves. Revenues earned on NGLs that are produced from certain Kentucky reserves

were computed using an additional $0.764.

For 2011, the reserves were computed using unweighted arithmetic averages of the closing prices on the first day of each month during 2011 of

$92.84 per Bbl of oil (first day of each month closing price for WTI less Appalachian Basin adjustment), $4.198 per Dth for Columbia Gas

Transmission Corp., $4.243 per Dth for Dominion Transmission, Inc., $4.159 per Dth for the East Tennessee Natural Gas Pipeline and $4.172

per Dth for the Tennessee LA 500 Leg of Tennessee Gas Pipeline Company. The Company sold Langley on February 1, 2011. As a result of that

sale, management determined that the revenue received from the fractionation of NGLs which were extracted from the Company’s produced natural

gas would be reported in EQT Production rather than EQT Midstream. For 2011, the West Virginia Marcellus reserves and certain Kentucky

reserves were computed using an additional $1.139 and $2.149, respectively, for revenues earned on NGLs that are produced from those reserves.

For 2010, the reserves were computed using unweighted arithmetic averages of the closing prices on the first day of each month during 2010 of

$76.68 per Bbl of oil (first day of each month closing price for WTI less Appalachian Basin adjustment), $4.502 per Dth for Columbia Gas

Transmission Corp., $4.563 per Dth for Dominion Transmission, Inc., $4.407 per Dth for the East Tennessee Natural Gas Pipeline and $4.422

per Dth for the Tennessee LA 500 Leg of Tennessee Gas Pipeline Company.

Holding production and development costs constant, a change in price of $1 per Dth for natural gas and $10 per barrel for oil would result in a change

in the December 31, 2012 discounted future net cash flows before income taxes of the Company’s proved reserves of approximately $1.7 billion and $10.6

million, respectively.

Summary of changes in the standardized measure of discounted future net cash flows for the years ended December 31:

2012 2011 2010

(Thousands)

Sales and transfers of natural gas and oil produced – net $ (697,618) $ (710,373) $ (470,243)

Net changes in prices, production and development costs (3,530,086) 52,057 807,971

Extensions, discoveries and improved recovery, less related costs 917,986 806,597 1,739,308

Development costs incurred 548,852 498,175 310,557

Purchase of minerals in place – net - 46,178 2,330

Sale of minerals in place – net (807) (1,124) (532)

Revisions of previous quantity estimates (876,336) (356,830) (191,336)

Accretion of discount 622,072 478,165 128,741

Net change in income taxes 1,127,272 (560,360) (1,239,035)

Timing and other (a) 111,000 622,127 1,171,697

Net (decrease) increase (1,777,665) 874,612 2,259,458

Beginning of year 3,932,824 3,058,212 798,754

End of year $ 2,155,159 $ 3,932,824 $ 3,058,212

(a) The change in the Company’s future drilling plans to include a higher percentage of wells drilled from the Marcellus play resulted in an

increase during the years ended December 31, 2011 and 2010 in discounted future net cash flows due to the higher initial production rates and

lower development costs per Mcfe from these wells.

112

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not Applicable.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of management, including the Company’s Principal Executive Officer and Principal Financial

Officer, an evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as

amended (Exchange Act)), was conducted as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and

Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that occurred

during the fourth quarter of 2012 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial

reporting.

Management’s Report on Internal Control over Financial Reporting

The management of EQT is responsible for establishing and maintaining adequate internal control over financial reporting. EQT’s internal control

system is designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the reliability of financial reporting and

the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. All internal control systems, no

matter how well designed, have inherent limitations. Accordingly, even effective controls can provide only reasonable assurance with respect to financial

statement preparation and presentation.

EQT’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2012. In making this

assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal

Control-Integrated Framework. Based on this assessment, management concluded that the Company maintained effective internal control over financial

reporting as of December 31, 2012.

Ernst & Young LLP (Ernst & Young), the independent registered public accounting firm that audited the Company’s Consolidated Financial

Statements, has issued an attestation report on the Company’s internal control over financial reporting. Ernst & Young’s attestation report on the Company’s

internal control over financial reporting appears in Part II, Item 8 of this Annual Report on Form 10-K and is incorporated by reference herein.

Item 9B. Other Information

Not Applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The following information is incorporated herein by reference from the Company’s definitive proxy statement relating to the annual meeting of the

shareholders to be held on April 17, 2013, which will be filed with the SEC within 120 days after the close of the Company’s fiscal year ended December 31,

2012:

· Information required by Item 401 of Regulation S-K with respect to directors is incorporated herein by reference from the sections captioned “Item

No. 1 – Election of Directors,” “Nominees to Serve for a Three-Year Term Expiring in 2016,” “Directors Whose Terms Expire in 2014,” “Directors

Whose Terms Expire in 2015” and “Corporate Governance and Board Matters” in the Company’s definitive proxy statement;

· Information required by Item 405 of Regulation S-K with respect to compliance with Section 16(a) of the Exchange Act is incorporated herein by

reference from the section captioned “Stock Ownership – Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s definitive

proxy statement;

· Information required by Item 407(d)(4) of Regulation S-K with respect to disclosure of the existence of the Company’s separately-designated standing

Audit Committee and the identification of the members of the Audit Committee is incorporated herein by reference from the section captioned

“Corporate Governance and Board Matters – Meetings of the Board of Directors and Committee Membership – Audit Committee” in the Company’s

definitive proxy statement; and

· Information required by Item 407(d)(5) of Regulation S-K with respect to disclosure of the Company’s audit committee financial expert is

incorporated herein by reference from the section captioned “Corporate Governance and Board Matters – Meetings of the Board of Directors and

Committee Membership – Audit Committee” in the Company’s definitive proxy statement.

Information required by Item 401 of Regulation S-K with respect to executive officers is included after Item 4 at the end of Part I of this Form 10-K

under the caption “Executive Officers of the Registrant (as of February 21, 2013),” and is incorporated herein by reference.

The Company has adopted a code of ethics applicable to all directors and employees, including the principal executive officer, principal financial

officer and principal accounting officer. The code of ethics is posted on the Company’s website, http://www.eqt.com (accessible under the “Corporate

Governance” caption of the “Investors” page), and a printed copy will be delivered free of charge on request by writing to the corporate secretary at EQT

Corporation, c/o Corporate Secretary, 625 Liberty Avenue, Suite 1700, Pittsburgh, Pennsylvania 15222. The Company intends to satisfy the disclosure

requirement regarding certain amendments to, or waivers from, provisions of its code of ethics by posting such information on the Company’s website.

Item 11. Executive Compensation

The following information is incorporated herein by reference from the Company’s definitive proxy statement relating to the annual meeting of the

shareholders to be held on April 17, 2013, which will be filed with the SEC within 120 days after the close of the Company’s fiscal year ended December 31,

2012:

· Information required by Item 402 of Regulation S-K with respect to executive and director compensation is incorporated herein by reference from the

sections captioned “Corporate Governance and Board Matters – Compensation Policies and Practices and Risk Management,” “Executive

Compensation” and “Directors’ Compensation” in the Company’s definitive proxy statement; and

· Information required by paragraphs (e)(4) and (e)(5) of Item 407 of Regulation S-K with respect to certain matters related to the Management

Development and Compensation Committee is incorporated herein by reference from the sections captioned “Corporate Governance and Board

Matters – Compensation

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Committee Interlocks and Insider Participation” and “Executive Compensation – Report of the Management Development and Compensation

Committee” in the Company’s definitive proxy statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information required by Item 403 of Regulation S-K with respect to stock ownership of significant shareholders, directors and executive officers is

incorporated herein by reference to the sections captioned “Stock Ownership – Stock Ownership of Significant Shareholders” and “Stock Ownership – Stock

Ownership of Directors and Executive Officers” in the Company’s definitive proxy statement relating to the annual meeting of shareholders to be held on

April 17, 2013, which will be filed with the SEC within 120 days after the close of the Company’s fiscal year ended December 31, 2012.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information as of December 31, 2012 with respect to shares of the Company’s common stock that may be issued under

the Company’s existing equity compensation plans, including the 2009 Long-Term Incentive Plan (2009 LTIP), the 1999 Long-Term Incentive Plan (1999

LTIP), the 1999 Non-Employee Directors’ Stock Incentive Plan (1999 NEDSIP), the Directors’ Deferred Compensation Plan, the 2005 Directors’ Deferred

Compensation Plan and the 2008 Employee Stock Purchase Plan (2008 ESPP).

Plan Category

Number Of

Securities To

Be

Issued Upon

Exercise Of

Outstanding

Options,

Warrants

and Rights

(A)

Weighted

Average

Exercise Price Of

Outstanding

Options,

Warrants and

Rights

(B)

Number Of 

Securities

Remaining

Available For

Future Issuance

Under

Equity

Compensation

Plans (Excluding

Securities

Reflected In

Column A)

(C)

Equity Compensation Plans Approved

by Shareholders (1) 4,355,346 $ 45.99 3,180,405

Equity Compensation Plans Not Approved

by Shareholders (2) 22,608 N/A 122,753

Total 4,377,954 $ 45.99 3,303,158

 Includes the 2009 LTIP, including performance share awards and dividend reinvestments thereon under the 2012 EPIP, the 2012 VDA and the 2011 VEP

and deferred stock units and dividend reinvestments thereon; the 1999 LTIP; the 1999 NEDSIP, including the deferred stock units and dividend

reinvestments thereon; and the 2008 ESPP.

Includes shares issuable under the Directors’ Deferred Compensation Plan and the 2005 Directors’ Deferred Compensation Plan (collectively, the Director

Deferral Plans). The Director Deferral Plans are described below.

The weighted-average exercise price is calculated solely based upon outstanding stock options and excludes deferred stock units under the 1999 NEDSIP

and the 2009 LTIP and performance awards under the 2012 EPIP, the 2012 VDA and the 2011 VEP.

115

(3) (4)

(5)

(5) (3) (4)

(1)

(2) 

(3) 

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797,021 shares remain available for issuance under the 2008 ESPP and 3,561 shares were subject to purchase at December 31, 2012.

Shares issuable under the Director Deferral Plans consist of 22,608 shares representing fees deferred by directors and including dividends thereon.

2005 Directors’ Deferred Compensation Plan

The 2005 Directors’ Deferred Compensation Plan was adopted by the Management Development and Compensation Committee of the Board of

Directors, effective January 1, 2005. The plan has been amended to allow the plan to continue into 2006 and thereafter and to comply with the documentation

requirements of Section 409A of the Internal Revenue Code. Neither the original adoption of the plan nor its amendments required approval by shareholders. 

The plan allows non-employee directors to defer all or a portion of their directors’ fees and retainers. Amounts deferred are payable upon retirement from the

Board unless an early payment is authorized after the director suffers an unforeseeable financial emergency. In addition to deferred directors’ fees and

retainers, the deferred stock units granted to directors on or after January 1, 2005 under the 1999 Non-Employee Directors’ Stock Incentive Plan and the

2009 Long-Term Incentive Plan are administered under this plan.

Directors’ Deferred Compensation Plan

The Directors’ Deferred Compensation Plan was suspended as of December 31, 2004. The Directors’ Deferred Compensation Plan continues to operate

for the sole purpose of administering vested amounts deferred under the plan on or prior to December 31, 2004. Deferred amounts are generally payable upon

retirement from the Board, but may be payable earlier if an early payment is authorized after a director suffers an unforeseeable financial emergency. In

addition to deferred directors’ fees and retainers and a one-time grant of deferred shares in 1999, the deferred stock units granted to directors and vested prior

to January 1, 2005 under the 1999 Non-Employee Directors’ Stock Incentive Plan are administered under this plan.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information required by Items 404 and 407(a) of Regulation S-K with respect to director independence and related person transactions is incorporated

herein by reference to the sections captioned “Corporate Governance and Board Matters – Director Independence,” “Corporate Governance and Board Matters –

Review, Approval or Ratification of Transactions with Related Persons” and “Corporate Governance and Board Matters – Transactions with Related Persons”

in the Company’s definitive proxy statement relating to the annual meeting of shareholders to be held on April 17, 2013, which will be filed with the SEC

within 120 days after the close of the Company’s fiscal year ended December 31, 2012.

Item 14. Principal Accounting Fees and Services

Information required by Item 9(e) of Schedule 14A is incorporated herein by reference to the section captioned “Item No. 2 – Ratification of

Appointment of Independent Registered Public Accounting Firm” in the Company’s definitive proxy statement relating to the annual meeting of stockholders to

be held on April 17, 2013, which will be filed with the Commission within 120 days after the close of the Company’s fiscal year ended December 31, 2012.

116

(4) 

(5) 

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) 1. Financial Statements

The financial statements listed in the accompanying index to financial statements are filed as part of this Annual Report on Form 10-K.

2. Financial Statement Schedule

The financial statement schedule listed in the accompanying index to financial statements and financial schedule is filed as part of this Annual

Report on Form 10-K.

3. Exhibits

The exhibits listed on the accompanying index to exhibits (pages 119 through 124) are filed as part of this Annual Report on Form 10-K.

EQT CORPORATION

INDEX TO FINANCIAL STATEMENTS COVERED

BY REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

1. The following Consolidated Financial Statements of EQT Corporation and Subsidiaries are included in Item 8:

Page Reference

Statements of Consolidated Income for each of the three years in the period ended December 31, 2012 62

Statements of Consolidated Comprehensive Income for each of the three years in the period ended December 31, 2012 63

Statements of Consolidated Cash Flows for each of the three years in the period ended December 31, 2012 64

Consolidated Balance Sheets as of December 31, 2012 and 2011 6 5

Statements of Consolidated Equity for each of the three years in the period ended December 31, 2012 67

Notes to Consolidated Financial Statements 68

2. Schedule for the Three Years Ended December 31, 2012 included in Part IV:

II — Valuation and Qualifying Accounts and Reserves 118

All other schedules are omitted since the subject matter thereof is either not present or is not present in amounts sufficient to require submission of the

schedules.

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EQT CORPORATION AND SUBSIDIARIES

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

FOR THE THREE YEARS ENDED DECEMBER 31, 2012

Column A Column B Column C Column D Column E

Description

Balance at

Beginning

of Period

(Deductions)

Additions

Charged to

Costs and

Expenses

Additions

Charged to

Other

Accounts

Deductions

(a)

Balance at

End of

Period

(Thousands)

Allowance for doubtful accounts:

2012 $ 16,371 $ (1,235) $ -- $ 2,550 $ 12,586

2011 $ 18,335 $ 1,581 $ -- $ 3,545 $ 16,371

2010 $ 16,792 $ 5,134 $ -- $ 3,591 $ 18,335

Note:

(a) Amount represents customer accounts written off, less recoveries.

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INDEX TO EXHIBITS

Exhibits Description Method of Filing

2.01 Master Purchase Agreement dated as of December 19, 2012

among the Company, Distribution Holdco, LLC and PNG

Companies LLC

Filed as Exhibit 2.1 to Form 8-K filed on December 20, 2012

2.02 Asset Exchange Agreement dated as of December 19, 2012

between the Company and PNG Companies LLC

Filed as Exhibit 2.2 to Form 8-K filed on December 20, 2012

3.01 Restated Articles of Incorporation of EQT Corporation (amended

through May 10, 2011)

Filed as Exhibit 3.1 to Form 8-K filed on May 10, 2011

3.02 Amended and Restated By-Laws of EQT Corporation (amended

through May 10, 2011)

Filed as Exhibit 3.2 to Form 8-K filed on May 10, 2011

4.01(a) Indenture dated as of April 1, 1983 between the Company and

Pittsburgh National Bank, as Trustee

Filed as Exhibit 4.01(a) to Form 10-K for the year ended

December 31, 2007

4.01(b) Instrument appointing Bankers Trust Company as successor

trustee to Pittsburgh National Bank

Filed as Exhibit 4.01(b) to Form 10-K for the year ended

December 31, 1998

4.01(c) 1991 Supplemental Indenture dated as of March 15, 1991

between the Company and Bankers Trust Company, as Trustee,

eliminating limitations on liens and additional funded debt

Filed as Exhibit 4.01(f) to Form 10-K for the year ended

December 31, 1996

4.01(d) Resolution adopted August 19, 1991 by the Ad Hoc Finance

Committee of the Board of Directors of the Company and

Addenda Nos. 1 through 27, establishing the terms and

provisions of the Series A Medium-Term Notes

Filed as Exhibit 4.01(g) to Form 10-K for the year ended

December 31, 1996

4.01(e) Resolutions adopted July 6, 1992 and February 19, 1993 by the

Ad Hoc Finance Committee of the Board of Directors of the

Company and Addenda Nos. 1 through 8, establishing the terms

and provisions of the Series B Medium-Term Notes

Filed as Exhibit 4.01(h) to Form 10-K for the year ended

December 31, 1997

4.01(f) Resolution adopted July 14, 1994 by the Ad Hoc Finance

Committee of the Board of Directors of the Company and

Addenda Nos. 1 and 2, establishing the terms and provisions of

the Series C Medium-Term Notes

Filed as Exhibit 4.01 to Form 10-K for the year ended

December 31, 1995

4.01(g) Second Supplemental Indenture dated as of June 30, 2008 between

the Company and Deutsche Bank Trust Company Americas, as

Trustee, pursuant to which EQT Corporation assumed the

obligations of Equitable Resources, Inc. under the related

Indenture

Filed as Exhibit 4.01(g) to Form 8-K filed on July 1, 2008

Each management contract and compensatory arrangement in which any director or any named executive officer participates has been marked with

an asterisk (*)

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INDEX TO EXHIBITS

Exhibits Description Method of Filing

4.02(a) Indenture dated as of July 1, 1996 between the Company and

with The Bank of New York, as successor to Bank of Montreal

Trust Company, as Trustee dated as of July 1, 1996

Filed as Exhibit 4.01(a) to Form S-4 Registration Statement

(#333-103178) filed on February 13, 2003

4.02(b) Resolution adopted January 18 and July 18, 1996 by the Board

of Directors of the Company and Resolutions adopted July 18,

1996 by the Executive Committee of the Board of Directors of the

Company, establishing the terms and provisions of the 7.75%

Debentures issued July 29, 1996

Filed as Exhibit 4.01(j) to Form 10-K for the year ended

December 31, 1996

4.02(c) Officer’s Declaration dated as of February 20, 2003 establishing

the terms of the issuance and sale of the Notes of the Company in

an aggregate amount of up to $200,000,000

Filed as Exhibit 4.01(c) to Form S-4 Registration Statement

(#333-104392) filed on April 8, 2003

4.02(d) Officer’s Declaration dated as of November 7, 2002 establishing

the terms of the issuance and sale of the Notes of the Company in

an aggregate amount of up to $200,000,000

Filed as Exhibit 4.01(c) to Form S-4/A Registration Statement

(#333-103178) filed on March 12, 2003

4.02(e) Officer’s Declaration dated as of September 27, 2005 establishing

the terms of the issuance and sale of the Notes of the Company in

an aggregate amount of $150,000,000

Filed as Exhibit 4.01(b) to Form S-4 Registration Statement

(#333-104392) filed on October 28, 2005

4.02(f) Supplemental Indenture dated as of June 30, 2008 between the

Company and The Bank of New York, as Trustee, pursuant to

which EQT Corporation assumed the obligations of Equitable

Resources, Inc. under the related Indenture

Filed as Exhibit 4.02(f) to Form 8-K filed on July 1, 2008

4.03(a) Indenture dated as of March 18, 2008 between the Company and

The Bank of New York, as Trustee

Filed as Exhibit 4.1 to Form 8-K filed on March 18, 2008

4.03(b) First Supplemental Indenture (including the form of senior note)

dated as of March 18, 2008 between the Company and The Bank

of New York, as Trustee, pursuant to which the 6.5% Senior

Notes due 2018 were issued

Filed as Exhibit 4.2 to Form 8-K filed on March 18, 2008

4.03(c) Second Supplemental Indenture dated as of June 30, 2008 between

the Company and The Bank of New York, as Trustee, pursuant

to which EQT Corporation assumed the obligations of Equitable

Resources, Inc. under the related Indenture

Filed as Exhibit 4.03(c) to Form 8-K filed on July 1, 2008

Each management contract and compensatory arrangement in which any director or any named executive officer participates has been marked with

an asterisk (*)

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INDEX TO EXHIBITS

Exhibits Description Method of Filing

4.03(d) Third Supplemental Indenture dated as of May 15, 2009 between

the Company and The Bank of New York, as Trustee, pursuant

to which the 8.125% Senior Notes due 2019 were issued

Filed as Exhibit 4.1 to Form 8-K filed on May 15, 2009

4.03(e) Fourth Supplemental Indenture dated as of November 7, 2011

between the Company and The Bank of New York Mellon, as

Trustee, pursuant to which the 4.875% Senior Notes due 2021

were issued

Filed as Exhibit 4.2 to Form 8-K filed on November 7, 2011

* 10.01(a) 1999 Long-Term Incentive Plan (as amended and restated

July 11, 2012)

Filed as Exhibit 10.1 to Form 10-Q for the quarter ended

June 30, 2012

* 10.01(b) Form of Participant Award Agreement (Stock Option) under 1999

Long-Term Incentive Plan (pre-2007)

Filed as Exhibit 10.3 to Form 10-Q for the quarter ended

September 30, 2004

* 10.01(c) Form of Participant Award Agreement (Stock Option) under 1999

Long-Term Incentive Plan (2007 and later)

Filed as Exhibit 10.3 to Form 10-Q for the quarter ended

September 30, 2008

* 10.01(d) 2007 Supply Long-Term Incentive Program (as amended and

restated March 5, 2009)

Filed as Exhibit 10.4 to Form 10-Q for the quarter ended

March 31, 2009

* 10.01(e) Form of Participant Award Agreement under 2007 Supply LongTerm Incentive ProgramFiled as Exhibit 10.01(i) to Form 10-K for the year ended

December 31, 2008

* 10.01(f) 2008 Executive Performance Incentive Program Filed as Exhibit 10.6 to Form 10-Q for the quarter ended

March 31, 2009

* 10.01(g) Form of Participant Award Agreement under 2008 Executive

Performance Incentive Program

Filed as Exhibit 10.2 to Form 10-Q for the quarter ended

September 30, 2008

* 10.02(a) 2009 Long-Term Incentive Plan (as amended and restated July 11,

2012)

Filed as Exhibit 10.2 to Form 10-Q for the quarter ended

June 30, 2012

* 10.02(b) Form of Participant Award Agreement (Phantom Stock Unit

Awards) under 2009 Long-Term Incentive Plan (pre-2013)

Filed herewith as Exhibit 10.02(b)

* 10.02(c) Form of Participant Award Agreement (Stock Option) under 2009

Long-Term Incentive Plan (pre-2012)

Filed as Exhibit 10.01(q) to Form 10-K for the year ended

December 31, 2010

* 10.02(d) 2010 Executive Performance Incentive Program Filed as Exhibit 10.01(r) to Form 10-K for the year ended

December 31, 2009

* 10.02(e) Form of Participant Award Agreement under 2010 Executive

Performance Incentive Program

Filed as Exhibit 10.01(s) to Form 10-K for the year ended

December 31, 2009

* 10.02(f) Form of 2010 Stock Incentive Award Agreement Filed as Exhibit 10.01(t) to Form 10-K for the year ended

December 31, 2009

Each management contract and compensatory arrangement in which any director or any named executive officer participates has been marked with

an asterisk (*)

121

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
INDEX TO EXHIBITS

Exhibits Description Method of Filing

* 10.02(g) Form of Amendment to 2010 Stock Incentive Award Agreement Filed as Exhibit 10.01(u) to Form 10-K for the year ended

December 31, 2010

* 10.02(h) 2010 July Executive Performance Incentive Program Filed as Exhibit 10.1 to Form 10-Q for the quarter ended

September 30, 2010

* 10.02(i) Form of 2011 Value Driver Performance Award Agreement Filed as Exhibit 10.01(w) to Form 10-K for the year ended

December 31, 2010

* 10.02(j) Form of Amendment to 2011 Value Driver Performance Award

Agreement

Filed as Exhibit 10.02(k) to Form 10-K for the year ended

December 31, 2011

* 10.02(k) 2011 Volume and Efficiency Program Filed as Exhibit 10.2 to Form 10-Q for the quarter ended

March 31, 2011

* 10.02(l) Form of Participant Award Agreement under 2011 Volume and

Efficiency Program

Filed as Exhibit 10.1 to Form 10-Q for the quarter ended

March 31, 2011

* 10.02(m) Form of Amendment to Stock Option Award Agreements Filed as Exhibit 10.3 to Form 10-Q for the quarter ended

June 30, 2011

* 10.02(n) Form of Participant Award Agreement (Stock Option) under 2009

Long-Term Incentive Plan (2012 grants)

Filed as Exhibit 10.02(n) to Form 10-K for the year ended

December 31, 2011

10.02(o) Form of 2012 Value Driver Performance Award Agreement Filed as Exhibit 10.02(p) to Form 10-K for the year ended

December 31, 2011

* 10.02(p) 2012 Executive Performance Incentive Program Filed as Exhibit 10.02(q) to Form 10-K for the year ended

December 31, 2011

* 10.02(q) Form of Participant Award Agreement under 2012 Executive

Performance Incentive Program

Filed as Exhibit 10.02(r) to Form 10-K for the year ended

December 31, 2011

* 10.02(r) Form of EQM TSR Performance Award Agreement under 2009

Long-Term Incentive Plan and EQT Midstream Services, LLC

2012 Long-Term Incentive Plan

Filed herewith as Exhibit 10.02(r)

* 10.02(s) Form of Participant Award Agreement (Phantom Stock Unit

Awards) under 2009 Long-Term Incentive Plan (2013 grants)

Filed herewith as Exhibit 10.02(s)

* 10.02(t) Form of Participant Award Agreement (Stock Option) under 2009

Long-Term Incentive Plan (2013 grants)

Filed herewith as Exhibit 10.02(t)

* 10.02(u) 2013 Executive Performance Incentive Program Filed herewith as Exhibit 10.02(u)

Each management contract and compensatory arrangement in which any director or any named executive officer participates has been marked with

an asterisk (*)

122

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
INDEX TO EXHIBITS

Exhibits Description Method of Filing

* 10.02(v) Form of Participant Award Agreement under 2013 Executive

Performance Incentive Program

Filed herewith as Exhibit 10.02(v)

10.02(w) Form of 2013 Value Driver Performance Award Agreement Filed herewith as Exhibit 10.02(w)

* 10.03 EQT Midstream Services, LLC 2012 Long-Term Incentive Plan Filed herewith as Exhibit 10.03

* 10.04(a) 1999 Non-Employee Directors’ Stock Incentive Plan (as

amended and restated December 3, 2008)

Filed as Exhibit 10.02(a) to Form 10-K for the year ended

December 31, 2008

* 10.04(b) Form of Participant Award Agreement (Stock Option) under 1999

Non-Employee Directors’ Stock Incentive Plan

Filed as Exhibit 10.04(b) to Form 10-K for the year ended

December 31, 2006

* 10.04(c) Form of Participant Award Agreement (Phantom Units Award)

under 1999 Non-Employee Directors’ Stock Incentive Plan

Filed as Exhibit 10.04(c) to Form 10-K for the year ended

December 31, 2006

* 10.05 Executive Short-Term Incentive Plan (as amended and restated

December 3, 2008)

Filed as Exhibit 10.03 to Form 10-K for the year ended

December 31, 2008

* 10.06 2011 Executive Short-Term Incentive Plan Filed as Exhibit 10.2 to Form 8-K filed on May 10, 2011

* 10.07 2006 Payroll Deduction and Contribution Program (as amended

and restated February 19, 2013)

Filed herewith as Exhibit 10.07

* 10.08 Directors’ Deferred Compensation Plan (as amended and restated

May 15, 2003)

Filed as Exhibit 10.10 to Form 10-Q for the quarter ended

June 30, 2003

* 10.09 2005 Directors’ Deferred Compensation Plan (as amended and

restated December 2, 2009)

Filed as Exhibit 10.06 to Form 10-K for the year ended

December 31, 2009

* 10.10(a) Confidentiality, Non-Solicitation and Non-Competition Agreement

dated as of September 8, 2008 between the Company and David

L. Porges

Filed as Exhibit 10.8 to Form 10-Q for the quarter ended

September 30, 2008

* 10.10(b) Amended and Restated Change of Control Agreement dated as of

February 19, 2013 between the Company and David L. Porges

Filed herewith as Exhibit 10.10(b)

* 10.11(a) Confidentiality, Non-Solicitation and Non-Competition Agreement

dated as of September 8, 2008 between the Company and Philip

P. Conti

Filed as Exhibit 10.10 to Form 10-Q for the quarter ended

September 30, 2008

Each management contract and compensatory arrangement in which any director or any named executive officer participates has been marked with

an asterisk (*)

123

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
INDEX TO EXHIBITS

Exhibits Description Method of Filing

* 10.11(b) Amended and Restated Change of Control Agreement dated as of

February 19, 2013 between the Company and Philip P. Conti

Filed herewith as Exhibit 10.11(b)

* 10.12(a) Confidentiality, Non-Solicitation and Non-Competition Agreement

dated as of September 8, 2008 between the Company and Randall

L. Crawford

Filed as Exhibit 10.01 to Form 10-Q for the quarter ended

March 31, 2012

* 10.12(b) Amended and Restated Change of Control Agreement dated as of

February 19, 2013 between the Company and Randall L.

Crawford

Filed herewith as Exhibit 10.12(b)

* 10.13(a) Confidentiality, Non-Solicitation and Non-Competition Agreement

dated as of September 8, 2008 between the Company and Lewis

B. Gardner

Filed as Exhibit 10.13(a) to Form 10-K for the year ended

December 31, 2008

* 10.13(b) Amended and Restated Change of Control Agreement dated as of

February 19, 2013 between the Company and Lewis B. Gardner

Filed herewith as Exhibit 10.13(b)

* 10.14(a) Confidentiality, Non-Solicitation and Non-Competition Agreement

dated as of September 8, 2008 between the Company and Steven

T. Schlotterbeck

Filed as Exhibit 10.16(a) to Form 10-K for the year ended

December 31, 2008

* 10.14(b) Amended and Restated Change of Control Agreement dated as of

February 19, 2013 between the Company and Steven T.

Schlotterbeck

Filed herewith as Exhibit 10.14(b)

* 10.15 Form of Indemnification Agreement between the Company and

each executive officer and each outside director

Filed as Exhibit 10.18 to Form 10-K for the year ended

December 31, 2008

 10.16(a) Revolving Credit Agreement, dated as of December 8, 2010 among

the Company, PNC Bank, National Association, as

Administrative Agent, Swing Line Lender and an L/C Issuer,

JPMorgan Chase Bank, N.A., Bank of America, N.A., and

Wells Fargo Bank, N.A., as Co-Syndication Agents and L/C

Issuers, Barclays Bank PLC, as Documentation Agent and an

L/C Issuer, and other lender parties thereto

Filed as Exhibit 10.1 to Form 8-K filed on December 9, 2010

 10.16(b) Amendment No. 1 to Revolving Credit Agreement dated as of

May 8, 2012 among the Company, PNC Bank National

Association, as Administrative Agent, Swing Ling Lender and a

lender, and other lender parties thereto

Filed as Exhibit 10.1 to Form 8-K filed on May 8, 2012

Each management contract and compensatory arrangement in which any director or any named executive officer participates has been marked with

an asterisk (*)

124

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
INDEX TO EXHIBITS

Exhibits Description Method of Filing

21 Schedule of Subsidiaries Filed herewith as Exhibit 21

23.01 Consent of Independent Registered Public Accounting Firm Filed herewith as Exhibit 23.01

23.02 Consent of Independent Petroleum Engineers Filed herewith as Exhibit 23.02

31.01 Rule 13(a)-14(a) Certification of Principal Executive Officer Filed herewith as Exhibit 31.01

31.02 Rule 13(a)-14(a) Certification of Principal Financial Officer Filed herewith as Exhibit 31.02

32 Section 1350 Certification of Principal Executive Officer and

Principal Financial Officer

Furnished herewith as Exhibit 32

99.01 Independent Petroleum Engineers’ Audit Report Filed herewith as Exhibit 99.01

101 Interactive Data File Filed herewith as Exhibit 101

The Company agrees to furnish to the SEC, upon request, copies of instruments with respect to long-term debt, which have not previously been filed.

Each management contract and compensatory arrangement in which any director or any named executive officer participates has been marked with

an asterisk (*)

125

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf

by the undersigned, thereunto duly authorized.

EQT CORPORATION

By: /s/ DAVID L. PORGES

David L. Porges

Chairman, President and Chief Executive Officer

February 21, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and

in the capacities and on the dates indicated.

/s/ DAVID L. PORGES Chairman, President, February 21, 2013

David L. Porges Chief Executive Officer

(Principal Executive Officer) and Director

/s/ PHILIP P. CONTI Senior Vice President February 21, 2013

Philip P. Conti and Chief Financial Officer

(Principal Financial Officer)

/s/ THERESA Z. BONE Vice President February 21, 2013

Theresa Z. Bone and Corporate Controller

(Principal Accounting Officer)

/s/ VICKY A. BAILEY Director February 21, 2013

Vicky A. Bailey

/s/ PHILIP G. BEHRMAN Director February 21, 2013

Philip G. Behrman

/s/ KENNETH M. BURKE Director February 21, 2013

Kenneth M. Burke

/s/ A. BRAY CARY JR. Director February 21, 2013

A. Bray Cary Jr.

/s/ MARGARET K. DORMAN Director February 21, 2013

Margaret K. Dorman

/s/ GEORGE L. MILES, JR. Director February 21, 2013

George L. Miles, Jr.

/s/ JAMES E. ROHR Director February 21, 2013

James E. Rohr

/s/ DAVID S. SHAPIRA Director February 21, 2013

David S. Shapira

126

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
/s/ STEPHEN A. THORINGTON Director February 21, 2013

Stephen A. Thorington

/s/ LEE T. TODD, JR. Director February 21, 2013

Lee T. Todd, Jr.

127

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 10.02(b)

PARTICIPANT AWARD AGREEMENT

[Date]

[Name]

[Street Address]

[City, State, Zip Code]

Re: 20[__] Phantom Stock Award

Dear [Name],

On [________], you were awarded [__] fully-vested stock units under the EQT Corporation 2009 Long-Term Incentive Plan (the

“LTIP”), which have been credited to your Phantom Stock Account under Article IV of the 2005 Directors’ Deferred Compensation

Plan (the “Deferred Compensation Plan”). Capitalized terms used herein and not otherwise defined have the meanings given such term

in the LTIP and/or the Deferred Compensation Plan (the “Plans”), as appropriate.

Each stock unit (referred to in the Deferred Compensation Plan as a share of “Phantom Stock”) has the value of one share of Common

Stock of the Company, as it may change from time to time, calculated as provided in Section 4.2 of the Deferred Compensation Plan. 

Dividend equivalents on the Phantom Stock shall be credited and reinvested as additional shares of Phantom Stock as provided in

Section 4.2 of the Deferred Compensation Plan.

In accordance with the Deferred Compensation Plan, the value of your Phantom Stock Account, including reinvested dividend

equivalents, will be paid to you (or your Beneficiary in the case of your death) in a lump sum in cash within 60 days following your

termination of membership on the Board which constitutes a “separation from service” as defined in Section 409A of the Code and

applicable regulations. You are not provided any election with respect to the taxable year of payment.

The terms contained in the Plans are hereby incorporated into and made a part of this Participant Award Agreement and this Participant

Award Agreement shall be governed by and construed in accordance with the Plans. In the event of any actual or alleged conflict

between the provisions of the Plans and the provisions of this Participant Award Agreement, the provisions of the Plans shall be

controlling and determinative.

Copies of the Plans and Plan Prospectuses are available on BoardVantage in the “Directors Resource Book” folder. Please refer to

“E. Director Compensation and Benefits” under the “Table of Contents” for direct links to these documents. Paper copies of such

documents are available upon request made to the Company’s Corporate Secretary.

If you have any questions, please call me at [Number].

Very truly yours,

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Exhibit 10.02(r) 

EQT CORPORATION

EQM TSR PERFORMANCE AWARD AGREEMENT

Non-transferable

G R A N T T O

_______________________________

(“Grantee”)

by EQT Corporation (the “Company”) and EQT Midstream Services, LLC (“EQM Services”) of Performance Awards (the “Performance

Awards”), representing the right to earn, on a one-for-one basis, common units of limited partner interests (“Common Units”) in EQT Midstream

Partners, LP (“EQM”), an affiliate of the Company. The Performance Awards are granted pursuant to and subject to the provisions of the EQT

Corporation 2009 Long-Term Incentive Plan, as amended (the “EQT Plan”), the EQT Midstream Services, LLC 2012 Long-Term Incentive Plan

(the “EQM Plan”) and the terms and conditions set forth on the following pages of this award agreement (this “Agreement”).

The original target number of Performance Awards subject to this award is ____________ (as more fully described herein, the “Target Award”). 

Depending on the level of EQM TSR for the Performance Period, and Grantee’s continued employment with the Company or its Affiliates through

the applicable Vesting Date, Grantee may earn and vest in the Target Award plus any additional Performance Awards accumulated pursuant to

Section 4 of this Agreement, in accordance with Exhibit A and the terms of this Agreement.

By accepting this award, Grantee shall be deemed to have agreed to the terms and conditions of this Agreement, the EQT Plan and the EQM Plan.

The Performance Awards under this Agreement shall not be effective unless Grantee returns fully executed originals of this Agreement and, to the

extent Grantee is not already subject to a confidentiality, non-solicitation and non-competition agreement with the Company, an agreement containing

such provisions acceptable to the Company, by _____________.

IN WITNESS WHEREOF, EQT Corporation and EQM Services each has caused this Agreement to be executed as of the grant date indicated

below (the “Grant Date”).

EQT CORPORATION

EQT MIDSTREAM SERVICES, LLC

________________________

Kimberly L. Sachse

For the Compensation Committee of EQT

Corporation and the Board of Directors of EQT

Midstream Services, LLC

Grant Date: __________________

Accepted by Grantee:

*SAMPLE DOCUMENT* 

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
TERMS AND CONDITIONS

1. Defined Terms. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the EQT Plan or the

EQM Plan. In addition, and notwithstanding any contrary definition in the EQT Plan or the EQM Plan, for purposes of this Agreement:

(a) “Company” means EQT Corporation, the indirect parent of EQM and EQM Services.

(b) “Common Units” means common units of limited partner interests in EQM.

(c) “Confirmation Date” means the date of the EQT Compensation Committee’s determination and certification of EQM TSR for the

Performance Period (including any Quarterly Extension of the Performance Period) in accordance with Exhibit A hereto. The first

Confirmation Date (the “First Confirmation Date”) shall be no later than March 16, 2016, or, if earlier, within 30 days after the occurrence of

an EQT Change of Control, an EQM Change of Control or a Unit Delisting Event (or, in the case of an EQM Change of Control or Unit

Delisting Event occurring before the First Anniversary, within 30 days after the First Anniversary). Each additional Confirmation Date, if

necessary, shall be within 60 days following the end of the Performance Period, as extended pursuant to Exhibit A.

(d) “Confirmed Performance Awards” means the Performance Awards that have been earned based on the achievement of EQM TSR targets for

the Performance Period, as determined by the EQT Compensation Committee in accordance with Exhibit A. Confirmed Performance Awards

are subject to additional employment service conditions as provided in Section 2 of this Agreement.

(e) “EQM” means EQT Midstream Partners, LP, an indirect subsidiary of the Company.

(f) “EQM Change of Control” means a Change of Control of EQM, as defined in the EQM Plan.

(g) “EQM Plan” means the EQT Midstream Services, LLC 2012 Long-Term Incentive Plan, as amended from time to time.

(h) “EQM Services” means EQT Midstream Services, LLC, an indirect subsidiary of the Company and the general partner of EQM.

(i) “EQM TSR” means the percentage change in the value of the Common Units over the Performance Period, including reinvested distributions,

as determined in accordance with Exhibit A.

(j) “EQT Change of Control” means a Change of Control of the Company, as defined in the EQT Plan.

(k) “EQT Compensation Committee” means the Compensation Committee of the Board of Directors of EQT.

(l) “EQT Plan” means the EQT Corporation 2009 Long-Term Incentive Plan, as amended from time to time.

(m) “First Anniversary” means the first anniversary of the first day of the Performance Period.

- 2 -

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
(n) “Nationally Recognized Reporting Service” means either the print or electronic version of a nationally recognized publication that reports the

daily closing stock prices of New York Stock Exchange listed companies.

(o) “Payment Date” is defined in Section 3 of this Agreement.

(p) “Performance Period” means the period beginning on the first date that the Common Units are open for trading on the New York Stock

Exchange and ending at 5:00 p.m. Eastern Time on the earliest of (i) December 31, 2015, (ii) the occurrence of an EQT Change of Control,

or (iii) the later of (A) the date of the occurrence of an EQM Change of Control or Unit Delisting Event, or (B) the First Anniversary. 

Notwithstanding the forgoing sentence, the Performance Period may be extended for sequential quarterly periods (not to extend beyond

December 31, 2017) in accordance with Exhibit A hereto. If so extended, the end of the Performance Period shall be 5:00 p.m. Eastern Time

on the earliest of (i) the last day of such Quarterly Extension, (ii) the date of an EQT Change of Control, or (iii) the date of a Unit Delisting

Event.

(q) “Pro Rata Amount” is defined in Section 2(c)(ii) of this Agreement.

(r) “Qualifying Termination” is defined in Section 2(c)(ii) of this Agreement.

(s) “Quarterly Extension” is defined in Exhibit A to this Agreement.

(t) “Target Award” means the number of Performance Awards indicated on the cover page hereof as being the original Target Award.

(u) “Unit Delisting Event” means the date on which the Common Units cease to be publicly traded on an established securities market.

(v) “Vesting Date” is defined in Section 2 of this Agreement.

2. Earning and Vesting of Performance Awards.

(a) General. The Performance Awards have been credited to a bookkeeping account on behalf of Grantee and do not represent actual Common

Units. Grantee shall have no right to exchange the Performance Awards for cash, property, or any other benefit and shall be a mere unsecured

creditor of the Company with respect to such Performance Awards and any future rights to benefits. The Performance Awards represent the

right to earn and vest in the Target Award plus any additional Performance Awards accumulated pursuant to Section 4 of this Agreement,

depending on (i) the level of EQM TSR for the Performance Period determined in accordance with Exhibit A, and (ii) except as provided in

Section 2(c), Grantee’s continued employment with the Company, its Affiliates, and/or its Subsidiaries through the Vesting Date. Any

Performance Awards that do not become Confirmed Performance Awards will immediately be forfeited to the Company without further

consideration or any act or action by Grantee.

(b) Vesting Date. Confirmed Performance Awards, if any, will vest and become non-forfeitable as follows (as applicable, the “Vesting Date”):

(i) EQT Change of Control. In the case of an EQT Change of Control, any Confirmed Performance Awards will be vested on the date

of the EQT Change of Control; provided Grantee has continued in the employment of the Company, its Affiliates, and/or its

- 3 -

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Subsidiaries through such date (or, with respect to the Pro Rata Amount only, has previously incurred a Qualifying Termination in

accordance with Section 2(c)(ii) below).

(ii) EQM Change of Control or Unit Delisting Event . In the case of an EQM Change of Control or Unit Delisting Event, any Confirmed

Performance Awards will be vested on the Payment Date on or following (i) December 31, 2015, or (ii) the end of the then-current

Quarterly Extension, if applicable; provided Grantee has continued in the employment of the Company, its Affiliates, and/or its

Subsidiaries through such Payment Date (or, with respect to the Pro Rata Amount only, has previously incurred a Qualifying

Termination in accordance with Section 2(c)(ii) below).

(iii) Other. In any other case, any Confirmed Performance Awards will be vested on the Payment Date on or following the end of the

Performance Period; provided Grantee has continued in the employment of the Company, its Affiliates, and/or its Subsidiaries through

such Payment Date (or, with respect to the Pro Rata Amount only, has previously incurred a Qualifying Termination in accordance

with Section 2(c)(ii) below).

(c) Termination of Employment. Except as provided in the next sentence, in the event Grantee’s employment terminates for any reason, including

retirement, at any time prior to the Vesting Date, all of Grantee’s Performance Awards will immediately be forfeited to the Company without

further consideration or any act or action by Grantee. Notwithstanding anything to the contrary in this Section 2:

(i) If Grantee’s employment is terminated voluntarily or involuntarily without fault on Grantee’s part (including retirement) and Grantee

remains on the Board of Directors of the Company or the Board of Managers of the General Partner of EQM following such

termination of employment, then notwithstanding any prior agreement to the contrary (including an agreement to enter into a form of

an executive alternative work arrangement) Grantee’s Performance Awards shall not be forfeited but shall continue to vest in

accordance with the above provisions for as long as Grantee remains on such board, in which case any references herein and on

Exhibit A to Grantee’s employment shall be deemed to include his or her continued service on such board. Termination of such

board service shall be deemed a termination of employment for purposes of this Agreement.

(ii) If Grantee’s employment is terminated involuntarily and without fault on Grantee’s part, including without limitation termination

resulting from death or Disability (a “Qualifying Termination”), then depending on the date of such Qualifying Termination, the

employment service condition (but not the EQM TSR performance condition) with respect to the following percentage of

Grantee’s Performance Awards (the “Pro Rata Amount”) shall be waived:

Termination Date _ _

Pro Rata

Amount

Prior to January 1, 2014 0%

January 1, 2014 through December 31, 2014 25%

January 1, 2015 and thereafter 50%

- 4 -

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Therefore, if the Qualifying Termination occurs prior to the end of the Performance Period, Grantees’ Performance Awards in excess

of the Pro Rata Amount shall be forfeited as of the date of the Qualifying Termination, but the Pro Rata Amount shall remain

outstanding and eligible to become Confirmed Performance Awards, or not, in accordance with Exhibit A. If the Qualifying

Termination occurs after the end of the Performance Period (other than a Performance Period which ends as a result of an EQT

Change of Control), Grantees’ Confirmed Performance Awards in excess of the Pro Rata Amount shall be forfeited as of the date of

the Qualifying Termination, but the Pro Rata Amount of Grantee’s Confirmed Performance Awards, if any, shall become vested as

provided in Section 2(b), and paid as provided in Section 3.

3. Time and Form of Payment. Confirmed Performance Awards shall be payable as provided in this Section 3:

(a) EQT Change of Control. The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(b)(i) shall be a date

selected by the Company that is no later than 60 days after the date of the EQT Change of Control.

(b) EQM Change of Control or Unit Delisting Event . The Payment Date for Confirmed Performance Awards vesting pursuant to

Section 2(b)(ii) shall be a date selected by the Company that is no later than 60 days after (i) December 31, 2015, or (ii) the end of thencurrent Quarterly Extension, if applicable. Notwithstanding the foregoing, if Grantee incurs a Qualifying Termination after an EQM

Change of Control or Unit Delisting Event and before the scheduled Payment Date, the Payment Date with respect to the Pro Rata Amount

shall be a date selected by the Company that is no later than 60 days after such Qualifying Termination, and any excess Confirmed

Performance Awards over the Pro Rata Amount shall be forfeited as of the date of the Qualifying Termination.

(c) Other. The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(b)(iii) shall be a date selected by the

Company that is no later than 60 days after the end of the Performance Period.

(d) Form of Payment. Confirmed Performance Awards shall be paid on the Payment Date in Common Units, on the basis of one Common

Unit for each Confirmed Performance Award (rounded to the nearest whole Common Unit). Notwithstanding the foregoing, in the event

of an EQT Change of Control, an EQM Change of Control, or a Unit Delisting Event, the Company may elect to pay the Confirmed

Performance Awards on the Payment Date in cash, in an amount equal to the number of Common Units otherwise payable multiplied by the

Fair Market Value of the Common Units as of the end of the Performance Period.

4. Distribution Equivalents. If and when distributions are paid with respect to the Common Units while the Performance Awards are outstanding,

the dollar amount or fair market value of such distributions with respect to the number of Common Units then underlying the Performance Awards

shall be converted into additional Performance Awards in Grantee’s name, based on the Fair Market Value of the Common Units as of the date such

distributions were payable, and such additional Performance Awards shall be subject to the same performance and time-vesting conditions and transfer

restrictions as apply to the Performance Awards with respect to which they relate.

5. Restrictions on Transfer and Pledge. No right or interest of Grantee in the Performance Awards may be pledged, encumbered, or hypothecated

or be made subject to any lien, obligation, or liability of

- 5 -

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

 Document ResearchSM

The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Grantee to any other party other than the Company or an Affiliate or Subsidiary. Except as provided in the EQT Plan, the Performance Awards may

not be sold, assigned, transferred or otherwise disposed of by Grantee other than by will or the laws of descent and distribution. The designation of a

beneficiary shall not constitute a transfer.

6. Limitation of Rights. The Performance Awards do not confer to Grantee or Grantee’s beneficiary, executors or administrators any rights of a

unitholder of EQM until Common Units are issued to Grantee upon settlement of the Performance Awards. Grantee shall not have voting or any other

rights as a unitholder of EQM with respect to the Performance Awards.

7. Payment of Taxes. The Company or any Affiliate or Subsidiary employing Grantee has the authority and the right to deduct or withhold, or

require Grantee to remit to the employer, an amount sufficient to satisfy federal, state, and local taxes (including Grantee’s FICA obligation) required

by law to be withheld with respect to any taxable event arising as a result of the Performance Awards. With respect to withholding required upon any

taxable event arising as a result of the Performance Awards, the employer may satisfy the tax withholding required by withholding Common Units

having a Fair Market Value as of the date that the amount of tax to be withheld is to be determined as nearly equal as possible to (but no more than) the

total minimum statutory tax required to be withheld. The obligations of the Company and EQM Services under this Agreement will be conditional on

such payment or arrangements, and the Company, and, where applicable, its Affiliates or Subsidiaries will, to the extent permitted by law, have the

right to deduct any such taxes from any payment of any kind otherwise due to Grantee.

8. EQT Plan Controls. This Agreement and Grantee’s rights hereunder are subject to all the terms and conditions of the EQT Plan and the EQM

Plan, as the same may be amended from time to time, as well as to such rules and regulations as may be adopted for administration of the EQT Plan

and the EQM Plan. Notwithstanding anything to the contrary in the EQT Plan or the EQM Plan, it is expressly understood that only the EQT

Compensation Committee is authorized to interpret and administer the EQT Plan, the EQM Plan and this Agreement, and to make all decisions and

determinations as it may deem necessary or advisable for the administration thereof, all of which shall be final and binding upon Grantee, the

Company, and EQM Services. In the event of any actual or alleged conflict between the provisions of the EQT Plan or the EQM Plan and the

provisions of this Agreement, the provisions of the EQT Plan (and not the EQM Plan) shall be controlling and determinative. Any conflict between

this Agreement and the terms of a written employment agreement with Grantee in effect prior to the Grant Date shall be decided in favor of the

provisions of such employment agreement.

9. Source of Common Units. The Performance Awards represented by this Agreement are granted under the EQT Plan, which allows such

awards to be settled in cash, stock of the Company, or other property. The Performance Awards represented by this Agreement are also granted under

the EQM Plan, which allows such awards to be settled in cash, Common Units, or other property. The Common Units to be issued to Grantee upon

settlement of Confirmed Performance Awards hereunder (i) constitute “other property” within the meaning of the EQT Plan, and (ii) shall count

against number of Common Units reserved for issuance under the EQM Plan.

10. Recoupment Policy. Common Units awarded hereunder shall be subject to the terms and conditions of any compensation recoupment policy

adopted from time to time by the Board of Directors of EQT or any committee of such Board, to the extent such policy is applicable to Performance

Awards.

11. Relationship to Other Benefits. The Performance Awards shall not affect the calculation of benefits under the Company’s or its Affiliates’

qualified retirement plans or any other retirement or compensation plan or program of the Company or its Affiliates, except to the extent specially

provided in

- 6 -

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

 Document ResearchSM

The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
such other plan or program. Nothing herein shall prevent the Company or its Affiliates from maintaining additional compensation plans and

arrangements, provided however that no payments shall be made under such plans and arrangements if the effect thereof would be the payment of

compensation otherwise payable under this Agreement regardless of whether the Performance Goal was attained.

12. Amendment. Subject to the terms of the EQT Plan and/or the EQM Plan, this Agreement may be modified or amended by the EQT

Compensation Committee; provided that no such amendment shall materially and adversely affect the rights of Grantee hereunder without the consent

of Grantee. Notwithstanding the foregoing, Grantee hereby expressly agrees to any amendment to the EQT Plan and/or the EQM Plan and this

Agreement to the extent necessary to comply with applicable law or changes to applicable law (including, but not limited to, Code Section 409A) and

related regulations or other guidance and federal securities laws.

13. Successor. All obligations of the Company under the EQT Plan and this Agreement, or of EQM Services under the EQM Plan and this

Agreement, with respect to the Performance Awards, shall be binding on any successor to the Company or EQM Services, as the case may be,

whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of

the business and/or assets of the Company or EQM Services, as the case may be.

14. Notice. Except as may be otherwise provided by the EQT Plan or the EQM Plan or determined by the EQT Compensation Committee and

communicated to Grantee, notices and communications hereunder must be in writing and shall be deemed sufficiently given if either hand-delivered or

if sent by fax or overnight courier, or by postage paid first class mail. Notices sent by mail shall be deemed received five business days after mailed,

but in no event later than the date of actual receipt. Notices shall be directed, if to Grantee, at Grantee’s address indicated by the Company’s records

or, if to the Company or to EQM Services, at the Company’s or EQM Service’s principal executive office, Attention: Director, Compensation and

Benefits.

15. Dispute Resolution. Notwithstanding anything to the contrary in the EQT Plan or the EQM Plan, Grantee may make a claim only to the EQT

Compensation Committee with regard to a payment of compensation provided herein. If the EQT Compensation Committee receives a claim in

writing, it must advise Grantee of its decision on the claim in writing in a reasonable period of time after receipt of the claim (not to exceed 120

days). The notice shall set forth the following information:

(a) The specific basis for its decision,

(b) Specific reference to pertinent Agreement or EQT Plan or EQM Plan provisions on which the decision is based,

(c) A description of any additional material or information necessary for Grantee to perfect a claim and an explanation of why such material or

information is necessary, and

(d) An explanation of the claim review procedure.

16. Tax Consequences to Grantee. It is intended that: (i) until the applicable Vesting Date occurs, Grantee’s right to receive Common Units under

this Agreement shall be considered to be subject to a substantial risk of forfeiture in accordance with those terms as defined or referenced in Sections

83(a), 409A and 3121(v)(2) of the Code; and (ii) until the Common Units are paid on the applicable Vesting Date, Grantee shall have merely an

unfunded, unsecured promise to receive such units, and such unfunded promise shall not consist of a transfer of “property” within the meaning of

Code Section 83.

- 7 -

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
The Performance Awards under this Agreement are intended to meet the performance-based compensation exemption from Section 162(m) of the

Code.

17. Code Section 409A.

(a) General. This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or

provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Code and applicable regulations

(“Section 409A”).

(b) Definitional Restrictions. Notwithstanding anything in this Agreement to the contrary, to the extent that any amount or benefit that would

constitute non-exempt “deferred compensation” for purposes of Section 409A (“Non-Exempt Deferred Compensation”) would otherwise be

payable or distributable hereunder by reason of a change of control or Grantee’s termination of employment, such Non-Exempt Deferred

Compensation will not be payable or distributable unless the circumstances giving rise to such change of control or termination of employment,

as the case may be, meet any description or definition of “change in control event” or “separation from service”, as the case may be, in

Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such

definition).

(c) Six-Month Delay in Certain Circumstances. Notwithstanding anything in this Agreement to the contrary, if any Non-Exempt Deferred

Compensation would otherwise be payable or distributable under this Agreement by reason of Grantee’s separation from service during a period

in which he or she is a “specified employee” within the meaning of Section 409A, then, subject to any permissible acceleration of payment by

the Company: (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period

immediately following Grantee’s separation from service will be accumulated through and paid or provided on the first day of the seventh month

following Grantee’s separation from service (or, if Grantee dies during such period, within 30 days after Grantee’s death) (in either case, the

“Required Delay Period”); and (ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the

end of the Required Delay Period.

(d) Permitted Acceleration. The Company shall have the sole authority to make any accelerated distribution permissible under Treas. Reg.

Section 1.409A-3(j)(4) to Grantee of deferred amounts, provided that such distribution meets the requirements of Treas. Reg. Section 1.409A3(j)(4).

18. Plan and Company Information. Grantee may access important information about the Company, the EQT Plan and the EQM Plan through the

Company’s Knowledge Center and website. Copies of the EQT Plan, EQT Plan Prospectus, EQM Plan and EQM Plan Prospectus can be found by

clicking on and logging into the “Total Rewards” link on the main Knowledge Center page under “Human Resources Links,” and then clicking on

the “Wealth” tab. Copies of the Company’s most recent Annual Report on Form 10-K and Proxy Statement can be found at www.eqt.com by

clicking on the “Investors” link on the main page and then “SEC Filings.” Copies of EQM’s Registration Statement on Form S-1 and, once filed, its

most recent Annual Report on Form 10-K can be found at www.eqtmidstreampartners.com by clicking on the “Investors” link on the main page and

then “SEC Filings.” Paper copies of such documents are available upon request made to the Company’s or EQM’s Corporate Secretary, as

appropriate.

- 8 -

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
EXHIBIT A

Determination of Confirmed Performance Awards

The target number of Performance Awards subject to this award is ____________ (as more fully described in the EQM Performance Award

Agreement to which this Exhibit A is attached, the “Target Award”). Grantee may earn and vest in the Target Award plus any additional Performance

Awards accumulated pursuant to Section 4 of the Agreement, depending on (i) the level of EQM TSR for the Performance Period, and (ii) except as

provided in Section 2(c) of the Agreement, Grantee’s continued employment through the applicable Vesting Date, as follows:

1. On the First Confirmation Date, the EQT Compensation Committee shall determine and certify the EQM TSR for the Performance Period in

accordance with the following steps:

Step 1

The “Beginning Point” is defined as one Common Unit with a value equal to the average closing price of the Common Units as reported in the

Nationally Recognized Reporting Service for the thirty (30) consecutive trading day period beginning on and including the date of the

commencement of the Performance Period.

Step 2

Distributions paid on the Common Units from the beginning of the Performance Period will be cumulatively added to the Beginning Point as

additional Common Units. The closing price on the last business day of the month in which the record date for the distribution occurs will be

used as the basis for determining the number of Common Units to be added. Subsequent distributions paid during the Performance Period on

the additional Common Units added pursuant to this Step 2 will also be added as additional Common Units using the same methodology. The

resulting total number of Common Units accumulated during the Performance Period is referred to as the Total Units Held at Ending Point.

Step 3

The “Ending Point” is defined as Total Units Held at Ending Point times the average of the closing prices of the Common Units as reported in

the Nationally Recognized Reporting Service for the last thirty (30) trading days of the Performance Period; provided that in the event of a Unit

Delisting Event prior to the First Anniversary, the Ending Point shall be Total Units Held at Ending Point times the average of the closing prices

of the Common Units as reported in the Nationally Recognized Reporting Service for the thirty (30) trading days immediately preceding the

Unit Delisting Event.

Step 4

EQM’s Total Shareholder Return (“EQM TSR”) will be expressed as a percentage and is calculated by dividing the Ending Point by the

Beginning Point and then subtracting 1 from the result.

- 9 -

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
2. If, as of the First Confirmation Date, the EQM TSR is at least 10%, then Grantee’s Confirmed Performance Awards shall be 100% of the

Target Award plus any additional Performance Awards accumulated prior to the Payment Date pursuant to Section 4 of the Agreement. If the

Performance Period ended by reason of an EQT Change of Control or a Unit Delisting Event, and if the EQM TSR is less than 10%, all of Grantee’s

Performance Awards will immediately be forfeited to the Company without further consideration or any act or action by Grantee.

3. If, as of the First Confirmation Date (unless such the Performance Period ended by reason of an EQT Change of Control or a Unit Delisting

Event), the EQM TSR is less than 10%, then the Performance Period shall be automatically extended for sequential quarterly periods (with the first

such period ending on the last day of the calendar quarter in which the First Confirmation Date occurred) not to extend beyond December 31, 2017

(each, a “Quarterly Extension”). Within 60 days following the end of each such Quarterly Extension, the EQT Compensation Committee shall

determine and certify the EQM TSR as of the end of such Quarterly Extension in accordance with paragraph 1 above (with the Beginning Point

remaining constant throughout). If, as of the end of any such Quarterly Extension, the EQM TSR is less than 10%, the Performance Period shall

automatically be extended for the next Quarterly Extension, not to extend beyond December 31, 2017. If, as of the end of any such Quarterly

Extension, the EQM TSR is at least 10%, then Grantee’s Confirmed Performance Awards shall be 100% of the Target Award plus any additional

Performance Awards accumulated prior to the Payment Date pursuant to Section 4 of the Agreement, and there shall be no further Quarterly

Extensions (i.e., the Performance Period will end). If, as of the end of all permissible Quarterly Extensions, the EQM TSR is less than 10%, all of

Grantee’s Performance Awards will immediately be forfeited to the Company without further consideration or any act or action by Grantee.

4. Notwithstanding paragraph 3 above, in the event an EQT Change of Control or a Unit Delisting Event occurs during a Quarterly Extension,

the Performance Period shall end as of that date. Within 60 days after the end of the Performance Period, the EQT Compensation Committee shall

determine and certify the EQM TSR as of the end of Performance Period in accordance with paragraph 1 above (with the Beginning Point remaining

constant throughout). If the EQM TSR is at least 10%, then Grantee’s Confirmed Performance Awards shall be 100% of the Target Award plus any

additional Performance Awards accumulated prior to the Payment Date pursuant to Section 4 of the Agreement, and there shall be no further Quarterly

Extensions. If the EQM TSR is less than 10%, all of Grantee’s Performance Awards will immediately be forfeited to the Company without further

consideration or any act or action by Grantee.

5. The Confirmed Performance Awards shall be further subject to service-based vesting requirements, such that, except as provided in

Section 2(c) of the Agreement, they will vest only if and when Grantee remains employed with the Company or any of its Affiliates or Subsidiaries

through the applicable Vesting Date, as provided in Section 2 of the Agreement.

- 10 -

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 10.02(s)

PARTICIPANT AWARD AGREEMENT

[Date]

[Name]

[Street Address]

[City, State, Zip Code]

Re: 20[__] Phantom Stock Award – Stock Settled

Dear [Name],

On [_______], you were awarded [__] fully-vested stock units under the EQT Corporation 2009 Long-Term Incentive Plan (the “LTIP”), which

have been credited to a subaccount of your Phantom Stock Account (the “2013 Phantom Award Subaccount -- Stock”) under Article IV of the 2005

Directors’ Deferred Compensation Plan (the “Deferred Compensation Plan”). Capitalized terms used herein and not otherwise defined have the

meanings given such term in the LTIP and/or the Deferred Compensation Plan (the “Plans”), as appropriate.

Each stock unit (referred to in the Deferred Compensation Plan as a share of “Phantom Stock”) has the value of one share of Common Stock of the

Company, as it may change from time to time, calculated as provided in Section 4.3 of the Deferred Compensation Plan. Dividend equivalents on the

Phantom Stock shall be credited and reinvested as additional shares of Phantom Stock as provided in Section 4.2 of the Deferred Compensation Plan.

In accordance with the Deferred Compensation Plan, each unit of Phantom Stock in your 2013 Phantom Award Subaccount -- Stock (including

Phantom Stock acquired through the reinvestment of dividend equivalents) as of the date of your termination of membership on the Board of Directors

of the Company which constitutes a “separation from service” as defined in Section 409A of the Code and applicable regulations (the “Termination

Date”) will be converted to actual shares of Common Stock (on a one-for-one basis, rounded up to the nearest whole share) and registered on the

books of the Company in your name (or your Beneficiary’s name in the case of your death) as of the Termination Date. You are not provided any

election with respect to the taxable year of payment.

The terms contained in the Plans are hereby incorporated into and made a part of this Participant Award Agreement and this Participant Award

Agreement shall be governed by and construed in accordance with the Plans. In the event of any actual or alleged conflict between the provisions of

the Plans and the provisions of this Participant Award Agreement, the provisions of the Plans shall be controlling and determinative.

Copies of the Plans and Plan Prospectuses are available on BoardVantage in the “Directors Resource Book” folder. Please refer to “E. Director

Compensation and Benefits” under the “Table of Contents” for direct links to these documents. Paper copies of such documents are available upon

request made to the Company’s Corporate Secretary.

If you have any questions, please call me at [Number].

Very truly yours,

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 10.02(t)

PARTICIPANT AWARD AGREEMENT

[Date]

[Name]

[Street Address]

[City, State, Zip Code]

Dear [Name]:

Pursuant to the terms and conditions of the EQT Corporation 2009 Long-Term Incentive Plan (the “Plan”), the Management Development and

Compensation Committee of the Board of Directors (“Board”) of EQT Corporation (the “Company”) has granted you Non-Qualified Stock Options

(the “Options”) to purchase shares of the Company’s common stock as outlined below.

Options Granted: [Insert ]

Grant Date: [Insert]

Exercise Price per Share: [Insert closing stock price on date prior to Grant Date]

Expiration Date: [Insert]

Vesting Schedule: 50% on [One Year Anniversary of Grant Date], rounded down to the nearest whole share

50% on [Two Year Anniversary of Grant Date]

Upon termination of your employment for Cause (as defined below), all unvested Options and any unexercised vested Options shall be forfeited

immediately. Upon termination of your employment for any other reason, all unvested Options shall be forfeited, and any unexercised vested Options

held on the date of termination shall remain exercisable for the remaining original term of the Options (except in the event of your death or disability,

in which case the post termination exercise period will be one year after termination of employment). As used herein, “Cause” is defined as: (a) your

conviction of a felony, a crime of moral turpitude or fraud or your having committed fraud, misappropriation or embezzlement in connection with the

performance of your duties, (b) your willful and repeated failures to substantially perform assigned duties; or (c) your violation of any provision of a

written employment-related agreement between you and the Company (including any non-solicitation, non-competition, confidentiality or similar

agreement) or express significant policies of the Company. If the Company terminates your employment for Cause, the Company shall give you

written notice not later than 30 days after such termination.

You may pay your exercise price and/or satisfy your tax withholding obligations with respect to the Options by delivering cash or directing the

Company to (i) withhold that number of shares that would otherwise be issued upon exercise to pay your exercise price and/or satisfy the minimum

required statutory tax withholding obligations, or (ii) accept delivery of previously owned shares to satisfy such exercise price and/or minimum tax

withholding obligations.

The terms contained in the Plan are hereby incorporated into and made a part of this Participant Award Agreement, and this Participant Award

Agreement shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of

the Plan and the provisions of this Participant Award Agreement, the provisions of the Plan shall be controlling and determinative. The Options,

including any shares acquired by you upon

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
exercise of the Options and any cash or other benefit acquired upon the sale of stock acquired through exercise of the Options, shall be subject to the

terms and conditions of any compensation recoupment policy adopted from time to time by the Board or any committee of the Board, to the extent

such policy is applicable to the Options.

You may access important information about the Company and the Plan through the Company’s Knowledge Center and website. Copies of the Plan

and Plan Prospectus can be found by clicking on and logging into the “Total Rewards” link on the main Knowledge Center page under “Human

Resources Links,” and then clicking on the “Wealth” tab. Copies of the Company’s most recent Annual Report on Form 10-K and Proxy Statement

can be found at www.eqt.com by clicking on the “Investors” link on the main page and then “SEC Filings.” Paper copies of such documents are

available upon request made to the Company’s Corporate Secretary.

Your grant of Options under this Participant Award Agreement shall not be effective unless you accept your grant through the Fidelity NetBenefits

website, which can be found at www.netbenefits.fidelity.com, by [Date].

When you accept your grant through the Fidelity NetBenefits website, you shall be deemed to have (a) acknowledged receipt of the Options granted

on the date shown above (the terms of which are subject to the terms and conditions of this Participant Award Agreement and the Plan) and a copy of

the Plan and (b) agreed to be bound by all provisions of this Participant Award Agreement and the Plan.

2

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 10.02(u)

EQT CORPORATION

2013 EXECUTIVE PERFORMANCE INCENTIVE PROGRAM

EQT CORPORATION (the “Company”) hereby establishes this EQT CORPORATION 2013 EXECUTIVE

PERFORMANCE INCENTIVE PROGRAM (the “Program”), in accordance with the terms provided herein.

WHEREAS, the Company maintains certain long-term incentive award plans including the EQT Corporation 2009 Long-Term

Incentive Plan (the “2009 Plan”) for the benefit of its directors and employees, of which the Program is a subset; and

WHEREAS, in order to further align the interests of executives and key employees with the interests of the shareholders, the

Company desires to provide long-term incentive benefits through the Program, in the form of awards qualifying as “Performance

Awards” under the 2009 Plan.

NOW, THEREFORE, the Company hereby provides for incentive benefits for executives and key employees of the Company

and adopts the terms of the Program on the following terms and conditions:

Section 1. Purpose. The main purpose of the Program is to provide long-term incentive opportunities to executives and key

employees to further align their interests with those of the Company’s shareholders and with the strategic objectives of the Company. 

Awards granted hereunder may be earned by achieving relative performance levels against a pre-determined peer group, are forfeited if

defined performance levels are not achieved and are subject to negative adjustment if, among other things, certain other performance

measures are not attained. By placing a portion of the employee’s compensation at risk, the Company has an opportunity to reward

exceptional performance or reduce the compensation opportunity when performance does not meet expectations. As a subset of the

2009 Plan, this Program is subject to and shall be governed by the terms and conditions of the 2009 Plan. Capitalized terms used herein

and not otherwise defined shall have the meanings given such terms in the 2009 Plan. The Share Units (as defined in Section 4 below)

granted under this Program are intended to meet the performance-based compensation exemption under Section 162(m) of the Code.

Section 2. Effective Date. The effective date of this Program is January 1, 2013. The Program will remain in effect until the

earlier of December 31, 2015 or the closing date of a Change of Control event defined in Section 5 unless otherwise amended or

terminated as provided in Section 17 (the “Termination Date”).

Section 3. Eligibility. The Chief Executive Officer of the Company (the “CEO”) shall, in his or her sole discretion, select the

employees of the Company who shall be eligible to participate in the Program from those individuals eligible to participate in the 2009

Plan. The CEO’s selections will become participants in the Program (the

Source: EQT Corp, 10-K, February 21, 2013 Powered by Morningstar®

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
“Participants”) only upon approval by the Committee, comprised in accordance with the requirements of the 2009 Plan, to the extent

such individuals are, or are expected to be, Covered Employees. In the event that an employee is hired by the Company during the

Performance Period, as defined below, the CEO shall, in his or her sole discretion, determine whether the employee will be eligible to

participate in the Program, provided that the Committee must approve all new participants to the Program who are Covered Employees;

provided further that, individuals who are Covered Employees may only become eligible during the first 90 days of the Performance

Period.

Section 4. Performance Incentive Share Unit Awards. Awards under the Program are designated in the form of performance

incentive share units (as adjusted from time to time in accordance with Section 12, the “Share Units”), which are awards to be settled in

stock, the amount per unit of which is determined by reference to one share of the Company’s Common Stock. Upon being selected to

participate in the Program, each Participant shall be awarded a number of Share Units, which award shall be proposed by the CEO and

approved by the Committee. Unless otherwise indicated herein in a particular context, the term “Share Units” includes any Dividend

Units accumulated with respect to an award of Share Units, as provided in Section 12.

The Share Units shall be held in book entry form by the Company until settled as described herein. Share Units do not

represent actual shares of stock. A Participant shall have no right to exchange the Share Units for cash, stock or any other benefit and

shall be a mere unsecured creditor of the Company with respect to such Share Units and any future rights to benefits.

Section 5. Performance Conditions. Subject to Section 7, the amount to be distributed to a Participant will be based on the

following performance conditions (the “Performance Conditions”): (i) the Company’s total shareholder return relative to the peer

group’s (Attachment A) total shareholder return calculated as described in (a) below for the period of January 1, 2013 to the earlier of

December 31, 2015 or the Termination Date (the “Performance Period”) and (ii) the Company’s cash flow per share calculated as

described in (b) below, for the Performance Period.

(a) Total Shareholder Return. For purposes of this Program, total shareholder return will be calculated as follows:

Step 1

The “Beginning Point” for the Company and each company in the peer group is defined as one share of common stock

with a value equal to the average closing stock price as reported in the Nationally Recognized Reporting Service for the ten

(10) consecutive business day period ending on and including the date of the commencement of the Performance Period, for

each company. All references in this Program to the “Nationally Recognized Reporting Service” shall be references to

either the print or electronic version of a nationally recognized publication that reports the daily closing stock price of the

Company and each member of the peer group.

2

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Step 2

Dividends paid for each company from the beginning of the Performance Period will be cumulatively added to the

Beginning Point as additional shares of such company’s common stock. The closing price on the last business day of the

month in which the record date for the dividend occurs will be used as the basis for determining the number of shares to be

added. The resulting total number of shares accumulated during the Performance Period is referred to as the Total Shares

Held at End of Period.

Step 3

Except as provided in the following sentence, the “Ending Point” for each company in the peer group is defined as Total

Shares Held at End of Period for that company times the average of the closing price of such company’s common stock as

reported in the Nationally Recognized Reporting Service for the last ten (10) business days of the Performance Period for

that company. In the event of a change of control (as then defined in the 2009 Plan) of the Company (a “Change of

Control”), the “Ending Point” for each company in the peer group is defined as Total Shares Held at End of Period for that

company times the average of the closing price of such company’s common stock as reported in the Nationally Recognized

Reporting Service for the ten (10) business days preceding the closing of the Change of Control transaction.

Step 4

Total Shareholder Return (“TSR”) will be expressed as a percentage and is calculated by dividing the Ending Point by

the Beginning Point and then subtracting 1 from the result. Each company including the Company will be ranked in

descending order by the TSR so calculated.

If (a) any company in the peer group announces during the Performance Period that it has entered into an agreement that

shall cause its common stock to cease to be publicly traded and does not announce during such period a termination of such

agreement or (b) the common stock of any company in the peer group ceases to be publicly traded during the Performance

Period, such company shall be assigned a TSR value of negative 100% for purposes of the Program.

(b) Cash Flow per Share. For purposes of this Program, the Company’s cash flow per share (“Cash Flow per Share”) shall be

calculated by dividing (i) Annual Operating Cash Flow (as defined below) by (ii) Annual Diluted Common Shares

Outstanding (as defined below).

Annual Operating Cash Flow is the Company’s aggregate net cash provided by operating activities excluding changes in

operating assets and liabilities

3

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
during the Performance Period (as reported in the Company’s Form 10-Qs (for partially completed years in the event of a

Change of Control) and 10-Ks (for fully completed years)), adjusted to reflect the Fixed Price for the Performance Period. 

The Fixed Price shall be equal to the “NYMEX natural gas price ($/Mcf)” for the year ended December 31, 2012 as

reported in the Company’s Form 10-K for the year ended December 31, 2012.

Annual Diluted Common Shares Outstanding is the Company’s aggregate diluted common shares outstanding as of the end

of each year in the Performance Period (as reported in the Company’s Form 10-Qs (for partially completed years in the

event of a Change of Control) and 10-Ks (for fully completed years)).

In the event of a Change of Control on or prior to December 31, 2015, the Cash Flow per Share shall be calculated based

upon the number of calendar quarters actually completed prior to the closing date of the Change of Control.

(c) Application of Performance Condition and Negative Adjustment . A Participant’s “Awarded Value” shall be calculated by

multiplying (A) the sum of such Participant’s Share Units, by (B) the Payout Multiple identified on the payout matrix

(Attachment B) that corresponds to the Company’s TSR ranking and Cash Flow per Share performance on the payout

matrix for the Performance Period by (C) the closing price of the Company’s Common Stock at the end of the

Performance Period or, in the case of a Change of Control, the average of the closing price of the Company’s Common

Stock for the ten (10) business days preceding the Change of Control transaction, in each case as reported in the Nationally

Recognized Reporting Service. Share Units will be cumulatively credited with cash dividends that are paid on the

Company’s Common Stock on or after January 1, 2013 in the form of additional Share Units, which shall be referred to as

the “Dividend Units.” These Dividend Units shall be deemed to have been purchased on the last business day of the month

in which the record date for the dividend occurs, using the closing stock price for the Company as reported in the Nationally

Recognized Reporting Service.

Payments under the Program are expressly contingent upon achievement of the Performance Conditions.

Section 6. Issuance and Distribution. Subject to Section 7 and except as provided in the remainder of this Section 6, each

Participant’s Awarded Value will be distributed in stock no later than March 15, 2016. Subject to Section 7, in the event of a Change of

Control, the Awarded Value will be distributed in stock on the closing date of the transaction. Notwithstanding the foregoing, to the

extent required under Section 409A of the Code or the regulations thereunder, no distributions may be made earlier than the time

permitted under such regulations to any affected Participant. Notwithstanding the first

4

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
sentence of this Section 6, the Committee may determine, in its discretion and for any reason, that the Awarded Value will be issued in

whole or in part in cash. If a Participant receives payment in the form of Company stock, the number of shares of stock shall be based

on the closing price of the Company’s stock on the Termination Date (or the last preceding date on which the Company’s Common

Stock was traded) or, in the case of a Change of Control, the value per share of Common Stock distributed to holders of the Company’s

Common Stock in such transaction. The maximum amount payable to any one Participant under the Program with respect to any one

calendar year within the Performance Period shall be the amount set forth and as calculated in the 2009 Plan with respect to

Performance Awards, which limit has been approved by the shareholders of the Company. No elections shall be permitted with respect

to the timing of any payments. The Awarded Value paid to Participants hereunder, including any shares of stock or cash transferred to

Participants and any cash or other benefit acquired upon the sale of stock acquired hereunder, shall be subject to the terms and conditions

of any compensation recoupment policy adopted from time to time by the Board of Directors of the Company (the “Board”) or any

committee of the Board, to the extent such policy is applicable to this Program.

Section 7. Change of Status; Overall Limit . In making decisions regarding employees’ participation in the Program and the

extent to which awards are payable in the case of an employee whose employment ceases prior to payment, the Committee may

consider any factors that it may consider relevant. Unless otherwise determined by the Committee, the following shall apply in the case

of a Participant whose employment ceases prior to payment of the Awarded Value:

(a) Retirement and Resignation. Unless the Participant remains on the Board of Directors of the Company following his or her

retirement or resignation as an employee, Share Units shall be forfeited. If a Participant’s employment is terminated

voluntarily or involuntarily without fault on the Participant’s part (including retirement) and the Participant remains on the

Board of Directors of the Company following such termination of employment, then notwithstanding any prior agreement

to the contrary (including an agreement to enter into a form of an executive alternative work arrangement) the Participant

shall retain all of his or her Share Units, contingent upon achievement of the Performance Conditions set forth in Section 5,

for as long as the Participant remains on the Board, in which case any references herein to such Participant’s employment

shall be deemed to include his or her continued service on the Board.

(b) Death and Disability. If a Participant’s service is terminated due to death or Disability, Share Units shall be retained by the

Participant or his or her estate or beneficiary, contingent upon achievement of the Performance Conditions set forth in

Section 5, as follows, and the remainder shall be forfeited:

5

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Date of Death or Disability Percent Retained

Prior to January 1, 2014 0%

January 1, 2014 – December 31, 2014 25%

January 1, 2015 – December 31, 2015 50%

(c) Termination. If a Participant’s service is terminated for reasons of misconduct, failure to perform, or other cause, Share

Units shall be forfeited. If the termination is due to reasons such as reorganization, and not due to the fault of the Participant,

the Participant will retain his or her Share Units, contingent upon achievement of the Performance Conditions set forth in

Section 5, as follows, and the remainder shall be forfeited:

Termination Date Percent Retained

Prior to January 1, 2014 0%

January 1, 2014 – December 31, 2014 25%

January 1, 2015 – December 31, 2015 50%

(d) Change of Position. A Participant whose position within the Company changes to a non-Program eligible position as

determined by the Committee but who remains employed through the date of payment of the Awarded Value will retain his

or her Share Units, contingent upon achievement of the Performance Conditions set forth in Section 5, as follows, and the

remainder shall be forfeited:

Change of Position Date Percent Retained

Prior to January 1, 2014 0%

January 1, 2014 – December 31, 2014 25%

January 1, 2015 – December 31, 2015 50%

In such events, any Share Units that are retained shall be payable at the time specified in Section 6 except that, in the event such

amounts are conditioned upon a separation from service and not compensation the Participant could receive without separating from

service, then no such payments may be made to a Participant who is a “specified employee” under Section 409A of the Code until the

first day of the seventh month following the Participant’s separation from service. Notwithstanding any other provisions of the

Program, Participants shall have no vested rights to any Share Units prior to payment.

Section 8. Responsibilities of the Committee. The Committee has responsibility for all aspects of the Program’s administration,

including:

· Determining and certifying in writing, the extent to which the Performance Conditions have been achieved prior to any

payments under the Program,

6

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
· Ensuring that the Program is administered in accordance with its provisions,

· Approving Program Participants,

· Authorizing Share Unit awards to Participants,

· Adjusting Share Unit awards to account for extraordinary events,

· Ruling on any disagreement between Program Participants, Company management, Program administrators, and any other

interested parties to the Program, and

· Maintaining final authority to amend, modify or terminate the Program at any time.

The interpretation and construction by the Committee of any provisions of the Program or of any adjusted Share Units shall be final. No

member of the Committee shall be liable for any action or determination made in good faith on the Program or any Share Units

thereunder. The Committee may designate another party to administer the Program, including Company management or an outside

party to the extent permitted under Code Section 162(m). All conditions of the Share Units must be approved by the Committee. As

early as practicable prior to or during the Performance Period, the Committee shall approve the number of Share Units to be awarded to

each Participant. The associated terms and conditions of the Program will be communicated to Participants as close as possible to the date

an award is made. The Participants will acknowledge receipt of the participant agreement and will agree to the terms of this Program in

accordance with the Company’s procedures.

Section 9. Tax Consequences to Participants/Payment of Taxes. (a) It is intended that: (i) until the Performance Conditions are

satisfied, a Participant’s right to payment for an award under this Program shall be considered to be subject to a substantial risk of

forfeiture in accordance with those terms as defined or referenced in Sections 83(a), 409A and 3121(v)(2) of the Code; (ii) the Awarded

Value shall be subject to employment taxes only upon the satisfaction of the Performance Conditions; and (iii) until the Awarded Value is

actually paid to the Participant, the Participants shall have merely an unfunded, unsecured promise to be paid the benefit, and such

unfunded promise shall not consist of a transfer of “property” within the meaning of Code Section 83. It is further intended that

Participants will not be in actual or constructive receipt of compensation with respect to the Share Units within the meaning of Code

Section 451 until the Awarded Value is paid.

(b) The Company or any affiliate employing Participant has the authority and the right to deduct or withhold, or require

Participant to remit to the employer, an amount sufficient to satisfy federal, state, and local taxes (including Participant’s FICA

obligation) required by law to be withheld with respect to any taxable event arising as a

7

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
result of an award. With respect to withholding required upon any taxable event arising as a result of an award, the employer may satisfy

the tax withholding required by withholding shares of Common Stock having a Fair Market Value (as defined in the 2009 Plan) as of the

date that the amount of tax to be withheld is to be determined as nearly equal as possible to (but no more than) the total minimum

statutory tax required to be withheld. The obligations of the Company under this Program will be conditioned upon such payment or

arrangements, and the Company, and, where applicable, its affiliates will, to the extent permitted by law, have the right to deduct any

such taxes from any payment of any kind otherwise due to Participant.

Section 10. Nonassignment. A Participant shall not be permitted to assign, alienate or otherwise transfer his or her Share Units

and any attempt to do so shall be void.

Section 11. Impact on Benefit Plans. Payments under the Program shall not be considered as earnings for purposes of the

Company’s qualified retirement plans or any such retirement or benefit plan unless specifically provided for and defined under such

plans. Nothing herein shall prevent the Company from maintaining additional compensation plans and arrangements, provided however

that no payments shall be made under such plans and arrangements if the effect thereof would be the payment of compensation

otherwise payable under this Program regardless of whether the Performance Conditions were attained.

Section 12. Successors; Changes in Stock . The obligation of the Company under the Program shall be binding upon the

successors and assigns of the Company. If a dividend or other distribution shall be declared upon the Company’s Common Stock payable

in shares of Company Common Stock, each Participant’s Share Units shall be adjusted by adding thereto the number of shares of

Company Common Stock that would have been distributable thereon if such units had been actual Company shares and outstanding on

the date fixed for determining the shareholders entitled to receive such stock dividend or distribution. In the event of any spin-off, splitoff or split-up, or dividend in partial liquidation, dividend in property other than cash or Company Common Stock, or extraordinary

distribution to shareholders of the Company’s Common Stock, each Participant’s Share Units shall be appropriately adjusted to prevent

dilution or enlargement of the rights of Participants that would otherwise result from any such transaction, provided such adjustment

shall be consistent with Section 409A of the Code.

In the case of a Change of Control, any obligation under the Program shall be handled in accordance with the terms of Section 6

hereof. In any case not constituting a Change of Control in which the Company’s Common Stock is changed into or becomes

exchangeable for a different number or kind of shares of stock or other securities of the Company or another corporation, or cash or

other property, whether through reorganization, reclassification, recapitalization, stock split-up, combination of shares, merger or

consolidation, then (i) the Awarded Value shall be calculated based on the closing price of such common stock on the closing date of the

transaction on the principal market on which such common stock is traded, and (ii) there shall be substituted for each

8

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Share Unit constituting an award, the number and kind of shares of stock or other securities (or cash or other property) into which each

outstanding share of the Company’s Common Stock shall be so changed or for which each such share shall be exchangeable. In the case

of any such adjustment, the Share Units shall remain subject to the terms of the Program.

Section 13. Dispute Resolution. The Participant may make a claim to the Committee with regard to a payment of benefits

provided herein. If the Committee receives a claim in writing, the Committee must advise the Participant of its decision on the claim in

writing in a reasonable period of time after receipt of the claim (not to exceed 120 days). The notice shall set forth the following

information:

(a) The specific basis for its decision,

(b) Specific reference to pertinent Program provisions on which the decision is based,

(c) A description of any additional material or information necessary for the Participant to perfect a claim and an explanation of

why such material or information is necessary, and

(d) An explanation of the Program’s claim review procedure.

Section 14. Applicable Law. This Program shall be governed by and construed under the laws of the Commonwealth of

Pennsylvania without regard to its conflict of law provisions.

Section 15. Severability. In the event that any one or more of the provisions of this Program shall be held to be invalid, illegal

or unenforceable, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 16. Headings. The descriptive headings of the Sections of this Program are inserted for convenience of reference only

and shall not constitute a part of this Program.

Section 17. Amendment or Termination of this Program. This Program may be amended, suspended or terminated by the

Company at any time upon approval by the Committee and following a determination that the Program is no longer meaningful in

relation to the Company’s strategy. Notwithstanding the foregoing, (i) no amendment, suspension or termination shall adversely affect a

Participant’s rights to his or her award after the date of the award; provided, however, that the Company may amend this Program from

time to time without any participant’s consent to the extent deemed necessary or appropriate, in its sole discretion, to effect compliance

with Sections 409A or any other provision of the Code, including regulations and interpretations thereunder, which amendments may

result in a reduction of benefits provided hereunder and/or other

9

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
unfavorable changes to participants, (ii) no amendment may alter the time of payment as provided in Section 6 of the Program, and

(iii) no amendment may be made following a Change of Control.

10

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Attachment A

2013 Executive Performance Incentive Program

Peer Group

CABOT OIL & GAS CORP

CHESAPEAKE ENERGY CORP

CIMAREX ENERGY CO

CONCHO RESOURCES, INC.

CONSOL ENERGY, INC

ENERGEN CORP

EOG RESOURCES INC

EXCO RESOURCES INC

MARKWEST ENERGY PARTNERS LP

MDU RESOURCES GROUP INC

NATIONAL FUEL GAS CO

NEWFIELD EXPLORATION COMPANY

ONEOK INC

PIONEER NATURAL RESOURCES CO

PLAINS EXPLORATION & PRODUCTION CO

QUESTAR CORP

QUICKSILVER RESOURCES INC

RANGE RESOURCES CORP

SEMPRA ENERGY

SM ENERGY

SOUTHWESTERN ENERGY CO

SPECTRA ENERGY CORP

ULTRA PETROLEUM CORP

WHITING PETROLEUM CORPORATION

WILLIAMS COMPANIES INC

11

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Attachment B

2013 Executive Performance Incentive Program

Payout Matrix

Payout Factor

Cumulative

Cash Flow

per Share*

 20% Compounded Annual Growth .75 1.00 1.50 2.00 2.40 2.60 2.80 3.00

 15% Compounded Annual Growth .55 .95 1.35 1.75 2.15 2.35 2.55 2.75

 10% Compounded Annual Growth .30 .70 1.10 1.50 1.90 2.10 2.30 2.50

5% Compounded Annual Growth .00 .20 .60 1.00 1.40 1.60 1.80 2.00

Less than or equal to 2012 Cash

Flow per Share

.00 .00 .00 .50 .90 1.10 1.30 1.50

26-24 23-21 20-18 17-14 13-11 10-8 7-5 4-1

Total Shareholder Return Rank

· Payout Factor shall be interpolated between stated levels of Cumulative Cash Flow per Share.

· 2012 Cash Flow per Share shall be calculated by dividing (i) the 2012 Operating Cash Flow (as defined below) by (ii) the 2012

Diluted Common Shares Outstanding (as defined below). 2012 Operating Cash Flow is the Company’s aggregate net cash

provided by operating activities excluding changes in operating assets and liabilities during 2012 as reported in the Company’s

2012 Form 10-K. 2012 Diluted Common Shares Outstanding is the Company’s aggregate diluted common shares outstanding as

of the end of 2012 as reported in the Company’s 2012 Form 10-K.

12

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 10.02(v)

PARTICIPANT AWARD AGREEMENT

[Date]

[Name]

[Street Address]

[City, State, Zip Code]

Dear [Name]:

Pursuant to the terms and conditions of the EQT Corporation 2009 Long-Term Incentive Plan (the “Plan”) and the 2013 Executive Performance

Incentive Program (the “Program”), effective January 1, 2013, the Management Development and Compensation Committee of the Board of

Directors of EQT Corporation (the “Company”) grants you [__] Target Share Units (the “Award”), the value of which is determined by reference to

the Company’s common stock. The terms and conditions of the Award, including, without limitation, vesting and distribution, shall be governed by

the provisions of the Program document attached hereto as Exhibit A, provided that the Award is also subject to the terms and limits included within

the Plan. The Compensation Committee retains the discretion to distribute the Award in cash, Company stock or any combination thereof.

The terms contained in the Plan and Program are hereby incorporated into and made a part of this Participant Award Agreement and this Participant

Award Agreement shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the

provisions of the Plan and the provisions of this Participant Award Agreement, the provisions of the Plan shall be controlling and determinative.

You may access important information about the Company and the Plan through the Company’s Knowledge Center and website. Copies of the Plan

and Plan Prospectus can be found by clicking on and logging into the “Total Rewards” link on the main Knowledge Center page under “Human

Resources Links,” and then clicking on the “Wealth” tab. Copies of the Company’s most recent Annual Report on Form 10-K and Proxy Statement

can be found at www.eqt.com by clicking on the “Investors” link on the main page and then “SEC Filings.” Paper copies of such documents are

available upon request made to the Company’s Corporate Secretary.

Your Award under the Program shall not be effective unless you accept your Award through the Fidelity NetBenefits website, which can be found at

www.netbenefits.fidelity.com, and, to the extent you are not already subject to a confidentiality, non-solicitation and non-competition agreement with

the Company, you execute an agreement containing such provisions acceptable to the Company, by [Date].

When you accept your Award through the Fidelity NetBenefits website, you shall be deemed to have acknowledged (a) receipt of this Award granted

on the date shown above (the terms of which are subject to the terms and conditions of this Participant Award Agreement, the Program document and

the Plan), the Program document and the Plan, and (b) agreed to be bound by all the provisions of this Participant Award Agreement, the Program

document and Plan.

1

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Exhibit 10.02(w)

EQT CORPORATION

2013 VALUE DRIVER PERFORMANCE AWARD AGREEMENT

Non-transferable

G R A N T T O

_______________________________

(“Grantee”)

by EQT Corporation (the “Company”) of Performance Awards (the “Performance Awards”), representing the right to earn, on a one-for-one basis,

shares of the Company’s common stock (the “Common Stock”), pursuant to and subject to the provisions of the EQT Corporation 2009 Long-Term

Incentive Plan, as amended (the “Plan”), and to the terms and conditions set forth on the following pages of this award agreement (this “Agreement”).

The target number of Performance Awards subject to this award is [____________] (as more fully described herein, the “Target Award”). 

Depending on the Company’s level of attainment of a specified performance goal for the one-year period beginning January 1, 2013 and ending

December 31, 2013, and Grantee’s continued employment with the Company or its Affiliates through the applicable Vesting Dates, Grantee may earn

and vest in 0% to 300% of the Target Award, in accordance with Exhibit A and the terms of this Agreement.

Your grant of Performance Awards under this Agreement shall not be effective unless you accept your Performance Awards through the Fidelity

NetBenefits website, which can be found at www.netbenefits.fidelity.com, and, to the extent you are not already subject to a confidentiality, nonsolicitation and non-competition agreement with the Company, you execute an agreement containing such provisions acceptable to the Company, by

[Date].

When you accept your Performance Awards through the Fidelity NetBenefits website, you shall be deemed to have (a) acknowledged receipt of the

Performance Award granted on the Grant Date (the terms of which are subject to the terms and conditions this Agreement and the Plan), this

Agreement and the Plan, and (b) agreed to be bound by all the provisions of this Agreement and the Plan.

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
TERMS AND CONDITIONS

1. Defined Terms. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. In addition,

and notwithstanding any contrary definition in the Plan, for purposes of this Agreement:

(a) “Confirmation Date” means the date of the Committee’s certification of achievement of the Threshold Performance Goal, determination of the

Performance Multiplier and approval of the Confirmed Performance Awards, but no later than March 15, 2014.

(b) “Confirmed Performance Awards” means the number of Performance Awards (rounded to the nearest whole share) equal to the Target Award

times the Performance Multiplier, as determined by the Committee in accordance with Exhibit A; provided however, that if a Change of

Control occurs on or before December 31, 2013 and while Grantee remains employed, the number of Confirmed Performance Awards shall

equal the Target Award, regardless of the Threshold Performance Goal or any other performance considerations. The term “Confirmed

Performance Awards” shall also include any Performance Awards converted from dividend equivalents after the Confirmation Date pursuant

to Section 4 below.

(c) “Grant Date” shall be January 1, 2013.

(d) “Payment Date” is defined in Section 3 of this Agreement.

(e) “Performance Multiplier” means the percentage, from 0% to 300%, that will be applied to the Target Award to determine the maximum number

of Performance Awards that may ultimately vest and convert to Common Stock based on Grantee’s continued service through the applicable

Vesting Date, as more fully described in Exhibit A hereto.

(f) “Performance Period” means the calendar year ending on December 31, 2013.

(g) “Pro Rata Amount” is defined in Section 2 of this Agreement.

(h) “Target Award” means the number of Performance Awards indicated on the cover page hereof as being the original Target Award, plus any

Performance Awards converted from dividend equivalents on the Target Award prior to the Confirmation Date or a Change of Control pursuant

to Section 4 below.

(i) “Threshold Performance Goal” means the level of 2013 EBITDA, as indicated on Exhibit A hereto, that must be achieved in order for any

Performance Awards to be earned by Grantee pursuant to this Agreement (absent a Change of Control occurring on or before December 31,

2013).

(j) “Vesting Date” is defined in Section 2 of this Agreement.

(k) “2013 EBITDA” means the Company’s earnings before interest, taxes, depreciation and amortization for the fiscal year ending

December 31, 2013, calculated using a fixed gas price equal to the price per mcfe used in the Company’s 2013 business plan, normalized for

weather, excluding the impact of acquisitions and/or dispositions in which the total consideration paid, received or assumed is equal to or in

excess of $100 million. The impact of acquisitions and/or dispositions equal to or in excess of $50 million and less than $100 million may be

considered for the purpose of exercising downward discretion.

2. Earning and Vesting of Performance Awards. The Performance Awards have been credited to a bookkeeping account on behalf of Grantee and

do not represent actual shares of Common Stock. Grantee shall have no right to exchange the Performance Awards for cash, stock or any other

benefit and shall be

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a mere unsecured creditor of the Company with respect to such Performance Awards and any future rights to benefits. The Performance Awards

represent the right to earn and vest in up to 300% of the Target Award, payable in shares of the Company’s Common Stock on the applicable Vesting

Date, depending on (i) the Company’s attainment of the Threshold Performance Goal and the application of the Performance Multiplier to the Target

Award in accordance with Exhibit A (or the occurrence of a Change of Control on or before December 31, 2013, as the case may be), and

(ii) Grantee’s continued employment with the Company or its Affiliates through the applicable Vesting Date. Any Performance Awards that do not

become Confirmed Performance Awards will immediately be forfeited to the Company without further consideration or any act or action by Grantee. 

Confirmed Performance Awards, if any, will vest and become non-forfeitable on the earliest to occur of the following (the “Vesting Date”):

(a) as to 50% of the Confirmed Performance Awards, upon the Payment Date following January 1, 2014, provided Grantee has continued in

the employment of the Company, its Affiliates, and/or its Subsidiaries through such date, and

(b) as to 50% of the Confirmed Performance Awards, upon the Payment Date following January 1, 2015, provided Grantee has continued in

the employment of the Company, its Affiliates, and/or its Subsidiaries through such date, or

(c) as to 100% of the Confirmed Performance Awards, the occurrence of a Change of Control, provided Grantee has continued in the

employment of the Company, its Affiliates, and/or its Subsidiaries through such date, or

(d) as to the Pro Rata Amount only, the termination of Grantee’s employment on or after January 1, 2014 under the circumstances described in

the following sentence.

If Grantee’s employment is terminated involuntarily and without fault on Grantee’s part (including without limitation termination resulting from death

or Disability), any unvested Confirmed Performance Awards will vest as follows (such percentage of Confirmed Performance Awards then vesting is

defined as the “Pro Rata Amount”):

Termination Date

Percent 

Vesting

Prior to January 1, 2014 0%

January 1, 2014 and thereafter 50%

In the event Grantee’s employment terminates for any other reason, including retirement, at any time prior to the applicable Vesting Date, all of

Grantee’s Performance Awards subject to such Vesting Date will immediately be forfeited to the Company without further consideration or any act or

action by Grantee. Notwithstanding anything to the contrary in this Section 2, if Grantee’s employment is terminated voluntarily or involuntarily

without fault on Grantee’s part (including retirement) and Grantee remains on the Board of Directors of the Company following such termination of

employment, then notwithstanding any prior agreement to the contrary (including an agreement to enter into a form of an executive alternative work

arrangement) Grantee’s Performance Awards shall not be forfeited but shall continue to vest in accordance with the above provisions for as long as

Grantee remains on the Board, in which case any references herein and on Exhibit A to Grantee’s employment shall be deemed to include his or her

continued service on the Board.

3. Form and Time of Payment. Confirmed Performance Awards shall be payable as provided in this Section 3:

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· The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(a) shall be a date selected by the Company that is no

later than 60 days after January 1, 2014. Such awards shall be paid on the Payment Date in shares of the Company’s Common Stock, equal

to one share of Common Stock times the number of Confirmed Performance Awards then vesting.

· The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(b) shall be a date selected by the Company that is no

later than 60 days after January 1, 2015. Such awards shall be paid on the Payment Date in shares of the Company’s Common Stock, equal

to one share of Common Stock times the number of Confirmed Performance Awards then vesting.

· The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(c) shall be a date selected by the Company that is no

later than 60 days after the date of the Change of Control. Such awards shall be paid on the Payment Date in shares of the Company’s

Common Stock, equal to one share of Common Stock times the number of Confirmed Performance Awards then vesting.

· The Payment Date for Confirmed Performance Awards vesting pursuant to Section 2(d) shall be a date selected by the Company that is no

later than 60 days after Grantee’s qualifying termination of employment. Such awards shall be paid on the Payment Date in shares of the

Company’s Common Stock, equal to one share of Common Stock times the number of Confirmed Performance Awards then vesting.

Shares of Common Stock paid to Participants under this Agreement will be registered in Grantee’s name on the books of the Company as of the

applicable Payment Dates and will be made available to Grantee thereafter, in certificated or uncertificated form, as Grantee shall direct.

4. Dividend Equivalents. If and when dividends or other distributions are paid with respect to the Common Stock while the Performance Awards

are outstanding, the dollar amount or fair market value of such dividends or distributions with respect to the number of shares of Common Stock then

underlying the Performance Awards shall be converted into additional Performance Awards in Grantee’s name, based on the Fair Market Value of the

Common Stock as of the date such dividends or distributions were payable, and such additional Performance Awards shall be subject to the same

performance and time-vesting conditions and transfer restrictions as apply to the Performance Awards with respect to which they relate.

5. Restrictions on Transfer and Pledge. No right or interest of Grantee in the Performance Awards may be pledged, encumbered, or hypothecated

or be made subject to any lien, obligation, or liability of Grantee to any other party other than the Company or an Affiliate or Subsidiary. Except as

provided in the Plan, the Performance Awards may not be sold, assigned, transferred or otherwise disposed of by Grantee other than by will or the

laws of descent and distribution. The designation of a beneficiary shall not constitute a transfer.

6. Limitation of Rights. The Performance Awards do not confer to Grantee or Grantee’s beneficiary, executors or administrators any rights of a

shareholder of the Company unless and until shares of Common Stock are in fact registered to or on behalf of such person in connection with the

payment of Performance Awards. Grantee shall not have voting or any other rights as a shareholder of the Company with respect to the Performance

Awards. Upon conversion of the Performance Awards into shares of Common Stock, Grantee will obtain full voting and other rights as a shareholder

of the Company.

- 4 -

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
7. Payment of Taxes. The Company or any Affiliate or Subsidiary employing Grantee has the authority and the right to deduct or withhold, or

require Grantee to remit to the employer, an amount sufficient to satisfy federal, state, and local taxes (including Grantee’s FICA obligation) required

by law to be withheld with respect to any taxable event arising as a result of the Performance Awards. With respect to withholding required upon any

taxable event arising as a result of the Performance Awards, the employer may satisfy the tax withholding required by withholding shares of Common

Stock having a Fair Market Value as of the date that the amount of tax to be withheld is to be determined as nearly equal as possible to (but no more

than) the total minimum statutory tax required to be withheld. The obligations of the Company under this Agreement will be conditional on such

payment or arrangements, and the Company, and, where applicable, its Affiliates or Subsidiaries will, to the extent permitted by law, have the right to

deduct any such taxes from any payment of any kind otherwise due to Grantee.

8. Plan Controls. This Agreement and Grantee’s rights hereunder are subject to all the terms and conditions of the Plan, as the same may be

amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly

understood that the Committee is authorized to interpret and administer the Plan and this Agreement, and to make all decisions and determinations as it

may deem necessary or advisable for the administration thereof, all of which shall be final and binding upon Grantee and the Company. In the event

of any actual or alleged conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall be

controlling and determinative. Any conflict between this Agreement and the terms of a written employment agreement with Grantee that has been

approved, ratified or confirmed by the Committee or the Board prior to the Grant Date shall be decided in favor of the provisions of such employment

agreement.

9. Relationship to Other Benefits. The Performance Awards shall not affect the calculation of benefits under the Company’s qualified retirement

plans or any other retirement or compensation plan or program of the Company, except to the extent specially provided in such other plan or program. 

Nothing herein shall prevent the Company from maintaining additional compensation plans and arrangements, provided however that no payments

shall be made under such plans and arrangements if the effect thereof would be the payment of compensation otherwise payable under this Agreement

regardless of whether the Threshold Performance Goal was attained.

10. Amendment. Subject to the terms of the Plan, this Agreement may be modified or amended by the Committee; provided that no such amendment

shall materially and adversely affect the rights of Grantee hereunder without the consent of Grantee. Notwithstanding the foregoing, Grantee hereby

expressly agrees to any amendment to the Plan and this Agreement to the extent necessary to comply with applicable law or changes to applicable law

(including, but not limited to, Code Section 409A) and related regulations or other guidance and federal securities laws.

11. Successor. All obligations of the Company under the Plan and this Agreement, with respect to the Performance Awards, shall be binding on any

successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise,

of all or substantially all of the business and/or assets of the Company.

12. Notice. Except as may be otherwise provided by the Plan or determined by the Committee and communicated to Grantee, notices and

communications hereunder must be in writing and shall be deemed sufficiently given if either hand-delivered or if sent by fax or overnight courier, or

by postage paid first class mail. Notices sent by mail shall be deemed received five business days after mailed, but in no event later than the date of

actual receipt. Notices shall be directed, if to Grantee, at Grantee’s

- 5 -

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
address indicated by the Company’s records or, if to the Company, at the Company’s principal executive office, Attention: Director, Compensation

and Benefits.

13. Dispute Resolution. Grantee may make a claim to the Committee with regard to a payment of compensation provided herein. If the Committee

receives a claim in writing, the Committee must advise Grantee of its decision on the claim in writing in a reasonable period of time after receipt of the

claim (not to exceed 120 days). The notice shall set forth the following information:

(a) The specific basis for its decision,

(b) Specific reference to pertinent Agreement or Plan provisions on which the decision is based,

(c) A description of any additional material or information necessary for Grantee to perfect a claim and an explanation of why such material or

information is necessary, and

(d) An explanation of the claim review procedure.

14. Tax Consequences to Grantee. It is intended that: (i) until the applicable Vesting Date occurs, Grantee’s right to receive shares of Common

Stock under this Agreement shall be considered to be subject to a substantial risk of forfeiture in accordance with those terms as defined or referenced

in Sections 83(a), 409A and 3121(v)(2) of the Code; and (ii) until the Performance Awards are converted to shares of Common Stock on the

applicable Vesting Date, Grantee shall have merely an unfunded, unsecured promise to receive such shares, and such unfunded promise shall not

consist of a transfer of “property” within the meaning of Code Section 83. The Performance Awards under this Agreement are intended to meet the

performance-based compensation exemption from Section 162(m) of the Code.

15. Plan and Company Information. Grantee may access important information about the Company and the Plan through the Company’s Knowledge

Center and website. Copies of the Plan and Plan Prospectus can be found by clicking on and logging into the “Total Rewards” link on the main

Knowledge Center page under “Human Resources Links,” and then clicking on the “Wealth” tab. Copies of the Company’s most recent Annual

Report on Form 10-K and Proxy Statement can be found at www.eqt.com by clicking on the “Investors” link on the main page and then “SEC

Filings.” Paper copies of such documents are available upon request made to the Company’s Corporate Secretary.

- 6 -

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EXHIBIT A

Determination and Vesting of Performance Awards

The target number of Performance Awards subject to this award is described in the 2013 Value Driver Performance Award Agreement to which this

Exhibit A is attached (the “Target Award”). Grantee may earn and vest in 0% to 300% of the Target Award, depending on (i) the Company’s

achievement of a minimum level of EBITDA for 2013, (ii) the Committee’s determination of the Performance Multiplier, taking into consideration

certain financial performance measures and value drivers and individual performance on value drivers, and (iii) Grantee’s continued employment

through the applicable Vesting Date, as follows:

1. Between December 31, 2013 and March 15, 2014 (i.e., on the Confirmation Date), the Committee shall determine and certify the Company’s

2013 EBITDA and the Performance Multiplier applicable to this Award:

 If 2013 EBITDA is less than the Company’s 2013 business plan EBITDA, the Performance Multiplier shall be 0% and the entire Award will

be forfeited to the Company without further consideration or any act or action by Grantee.

 If 2013 EBITDA is equal to the Company’s 2013 business plan EBITDA or above, the Performance Multiplier will be 300%, subject to the

Committee’s discretion to determine that a lower Performance Multiplier shall apply to this Award. In exercising such discretion, the

Committee shall consider and be guided by the following considerations: (i) the financial performance measures and value drivers of the

applicable short-term incentive program of the Company for calendar year 2013, and (ii) if desired, Grantee’s individual performance on his

or her 2013 value drivers. Notwithstanding its certification of the Performance Multiplier on the Confirmation Date, the Committee may

further reduce the Performance Multiplier at any time prior to December 31, 2014 in the event that any of the value driver results used to

originally determine the Performance Multiplier are determined to be materially inaccurate, regardless of whether misconduct of any person

was involved or whether the inaccuracy leads to a restatement of financial results. The Committee may choose not to reduce the Performance

Multiplier based on the facts and circumstances or legal constraints. Moreover, any Awards paid to participants hereunder shall be subject to

the terms and conditions of any compensation recoupment policy adopted from time to time by the Board or any committee of the Board, to

the extent such policy is applicable to the Awards.

2. Grantee’s Confirmed Performance Award shall be determined by multiplying the Target Award by the Performance Multiplier. Notwithstanding

the above, if a Change of Control occurs on or before December 31, 2013 and while Grantee remains employed, the number of Confirmed

Performance Awards shall equal the Target Award, regardless of the Threshold Performance Goal or any other performance considerations.

3. The Confirmed Performance Awards shall be further subject to service-based vesting requirements, such that they will vest and convert to

shares of Common Stock only if and when Grantee remains employed with the Company or any of its Affiliates or Subsidiaries through the

applicable Vesting Date, as provided in Section 2 the 2013 Value Driver Performance Award Agreement.

- 7 -

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Exhibit 10.03

EQT MIDSTREAM SERVICES, LLC

2012 LONG-TERM INCENTIVE PLAN

(As established effective July 2, 2012)

SECTION 1. PURPOSES

1.01 The purpose of the 2012 Long-Term Incentive Plan (the “Plan”) of EQT Midstream Services, LLC (the “Company”),

the general partner of EQT Midstream Partners, LP (the “Partnership), is to assist the Company and the Partnership in attracting,

retaining and motivating Employees and Non-Employee Directors of outstanding ability and to align their interests with those of the

unitholders of the Partnership.

SECTION 2. DEFINITIONS; CONSTRUCTION

2.01 Definitions. In addition to the terms defined elsewhere in the Plan, the following terms as used in the Plan shall have the

following meanings when used with initial capital letters:

2.01.1 “Affiliate” means (i) any Subsidiary or Parent, or (ii) an entity that directly or through one or more

intermediaries controls, is controlled by or is under common control with, the Company.

2.01.2 “Award” means any Option, Unit Appreciation Right, Restricted Unit, Phantom Unit, Performance Award or

Other Unit-Based Award, or any other right or interest relating to Units or cash granted under the Plan.

2.01.3 “Award Agreement” means any written agreement, contract or other instrument or document evidencing an

Award.

2.01.4 “Board” means the Company’s Board of Managers. Members of the Board are referred to herein as “directors.

”

2.01.5 “Cause,” unless otherwise determined by the Committee, when used with respect to the termination of

employment or service of a Participant includes:

(a) the conviction of a felony, a crime of moral turpitude or fraud or having committed fraud,

misappropriation or embezzlement in connection with the performance of his duties;

(b) willful and repeated failures to substantially perform his assigned duties; or

(c) a violation of any express significant policies of the Company or an Affiliate.

For purposes of this Section 2.01.5, no act, or failure to act, on the Participant’s part shall be considered “willful” unless

done, or omitted to be done, by the Participant in

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
bad faith and without reasonable belief that such action or omission was in the best interest of the Company.

2.01.6 “Code” means the Internal Revenue Code of 1986, as amended from time to time, together with rules,

regulations and interpretations promulgated thereunder. References to particular sections of the Code shall include any

successor provisions.

2.01.7 “Change of Control” has the meaning provided in Section 9.03.

2.01.8 “Committee” means the Board or any committee of the Board as may be designated by the Board to

administer the Plan, provided however, that any member of a committee participating in the taking of any action under the Plan

shall qualify as (1) a “non-employee director” as then defined under Rule 16b-3 or any successor rule and (2) an “independent”

director under the rules of the New York Stock Exchange.

2.01.9 “DER” or “Distribution Equivalent Right” means a right to receive an amount in cash or additional Awards

equal to the cash distributions made by the Partnership with respect to a Unit during a specified period.

2.01.10 “Disability” of a Participant has the meaning set forth in Section 409A of the Code and, as of the effective date

of the Plan, means that the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically

determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous

period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment that can be

expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income

replacement benefits for a period of not less than three months under an accident and health plan covering employees of the

Participant’s employer.

2.01.11 “Employee” means an employee of the Company or any of its Affiliates.

2.01.12 “EQT” means EQT Corporation, a Pennsylvania corporation.

2.01.13 “EQT Long-Term Incentive Plan” means the EQT Corporation 2009 Long-Term Incentive Plan, as may be

amended, supplemented or restated from time to time, or any successor plan.

2.01.14 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

2.01.15 “Fair Market Value” of Units or any shares of stock or other securities shall be the closing price per unit for

the date as of which Fair Market Value is to be determined in the principal market in which such Units or other securities are

traded, as quoted in the printed or the electronic version of The Wall Street Journal (or in such other reliable printed or

electronic publication as the Committee, in its discretion, may determine to rely upon). If the Fair Market Value of Units on any

date cannot be determined on the basis set forth in the preceding sentence, or if a determination is

2

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
required as to the Fair Market Value on any date of property other than units, the Committee shall determine the Fair Market

Value of such Units or other property on such date by such method as the Committee determines in good faith to be reasonable

and in compliance with Section 409A of the Code. Fair Market Value shall be determined without regard to any restriction other

than a restriction that, by its terms, will never lapse.

2.01.16 “Non-Employee Director” means a non-employee director of the Company or any of its Affiliates.

2.01.17 “Omnibus Agreement” means that certain Omnibus Agreement, dated as of July 2, 2012, by and among the

Company, the Partnership and EQT, as may be amended, supplemented or restated from time to time.

2.01.18 “Option” means a right, granted under Section 6.02 hereof, to purchase Units at a specified price during

specified time periods.

2.01.19 “Other Unit-Based Award” means an Award, granted under Section 6.07 hereof, that is denominated or

payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Units.

2.01.20 “Parent” means a corporation, limited liability company, partnership or other entity that, directly or indirectly,

owns or beneficially owns a majority of the voting power of the Company.

2.01.21 “Participant” means an Employee or a Non-Employee Director who is granted an Award under the Plan.

2.01.22 “Performance Award,” “Performance Goal” and “Performance Period” shall have the meanings provided in

Section 6.06.

2.01.23 “Phantom Unit” shall have the meaning provided in Section 6.05.

2.01.24 “Qualified Business Criteria” shall have the meaning provided in Section 6.06(iii).

2.01.25 “Restricted Units” means Units, granted under Section 6.04 hereof, that are subject to certain restrictions.

2.01.26 “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor

to such Rule promulgated by the Securities and Exchange Commission under Section 16 of the Exchange Act.

2.01.27 “Unit” or “Common Unit” means a common Unit of the Partnership, and such other securities of the

Partnership or other entity as may be substituted for Units pursuant to Section 8.01 hereof.

3

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
2.01.28 “Unit Appreciation Right” means an award granted under Section 6.03 hereof.

2.01.29 “Subsidiary” means any corporation, limited liability company, partnership or other entity in an unbroken

chain of entities beginning with the Company or the Partnership, if each of the entities other than the last entity in the chain

owns stock or other ownership interests possessing at least 50% of the total combined voting power in one of the other entities in

the chain.

2.02 Construction. For purposes of the Plan, the following rules of construction shall apply:

2.02.1 The word “or” is disjunctive but not necessarily exclusive.

2.02.2 Words in the singular include the plural; words in the plural include the singular; words in the neuter gender

include the masculine and feminine genders, and words in the masculine or feminine gender include the other and neuter

genders.

SECTION 3. ADMINISTRATION

3.01 The Plan shall be administered by the Committee.

The Committee shall have full and final authority to take the following actions, in each case subject to and consistent with the

provisions of the Plan:

(i) to designate Participants;

(ii) to determine the type or types of Awards to be granted to each Participant;

(iii) to determine the number of Awards to be granted, the number of Units or amount of cash or other property to

which an Award will relate, the terms and conditions of any Award (including, but not limited to, any exercise price, grant price

or purchase price, any limitation or restriction, any schedule for lapse of limitations, forfeiture restrictions or restrictions on

exercisability or transferability, and accelerations or waivers thereof, based in each case on such considerations as the Committee

shall determine), and all other matters to be determined in connection with an Award;

(iv) to determine whether, to what extent and under what circumstances an Award may be settled in, or the exercise

price of an Award may be paid in cash, Units, other Awards or other property, or an Award may be accelerated, vested, canceled,

forfeited, exchanged or surrendered;

(v) to interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan;

(vi) to prescribe the form of each Award Agreement, which need not be identical for each Participant;

4

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
(vii) to adopt, amend, suspend, waive and rescind such rules and regulations as the Committee may deem necessary

or advisable to administer the Plan;

(viii) to correct any defect or supply any omission or reconcile any inconsistency, and to construe and interpret the

Plan, the rules and regulations, any Award Agreement or other instrument entered into or Award made under the Plan;

(ix) to make all other decisions and determinations as may be required under the terms of the Plan or as the

Committee may deem necessary or advisable for the administration of the Plan;

(x) to make such filings and take such actions as may be required from time to time by appropriate state, regulatory

and governmental agencies; and

(xi) adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of

the laws of non-U.S. jurisdictions in which the Company or any Affiliate may operate, in order to assure the viability of the

benefits of Awards granted to participants located in such other jurisdictions and to meet the objectives of the Plan.

Any action of the Committee with respect to the Plan shall be final, conclusive and binding on all persons, including the

Company, the Partnership, Affiliates, Participants, any person claiming any rights under the Plan from or through any Participant,

Employees, Non-Employee Directors and unitholders. The express grant of any specific power to the Committee, and the taking of

any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may

delegate, within limits and subject to the terms it may establish from time to time, the authority to perform administrative functions

under the Plan and, with respect to Participants who are not subject to Section 16 of the Exchange Act, to grant Awards and take such

actions and perform such functions under the Plan as the Committee may specify. Specifically, and without limiting the foregoing, the

Committee may delegate to the Compensation Committee of the Board of Directors of EQT all of the powers of the Committee

hereunder with respect to Awards granted hereunder to employees of EQT or its subsidiaries. Each member of the Committee shall be

entitled to, in good faith, rely or act upon any report or other information furnished to him by an Employee, the Company’s independent

certified public accountants, or any executive compensation consultant or other professional retained by the Company and/or the

Committee to assist in the administration of the Plan.

SECTION 4. UNITS SUBJECT TO THE PLAN

4.01 The maximum net number of Units that may be issued and in respect of which Awards may be granted under the Plan

shall be 2,000,000 Units, subject to adjustment as provided in Section 8.01, which may be used for all forms of Awards. Each Unit

issued under the Plan pursuant to an Award other than (i) an Option or other purchase right for which the Participant pays the Fair

Market Value for such Unit measured as of the grant date, or (ii) a Unit Appreciation Right having a Base Price equal to the Fair Market

Value of a Unit as of the grant date, shall reduce the number of available Units by two (2).

5

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For purposes of this Section 4.01, the number of Units to which an Award relates shall be counted against the number of Units

available under the Plan at the time of grant of the Award, unless such number of Units cannot be determined at that time, in which case

the number of Units actually distributed pursuant to the Award shall be counted against the number of Units available under the Plan at

the time of distribution; provided, however, that Awards related to or retroactively added to, or granted in tandem with, substituted for or

converted into, other Awards shall be counted or not counted against the number of Units reserved and available under the Plan in

accordance with procedures adopted by the Committee so as to ensure appropriate counting but avoid double counting.

If any Units to which an Award relates are forfeited, or payment is made to the Participant in the form of cash, cash equivalents

or other property other than Units, or the Award otherwise terminates without payment being made to the Participant in the form of

Units, any Units counted against the number of Units available under the Plan with respect to such Award shall, to the extent of any

such forfeiture, alternative payment or termination, again be available for Awards under the Plan. Notwithstanding the foregoing, the

following Units shall not become available for purposes of the Plan: (1) Units previously owned or acquired by the Participant that are

delivered to the Company, or withheld from an Award, to pay the exercise price, or (2) Units that are delivered or withheld for purposes

of satisfying a tax withholding obligation. Any Units distributed pursuant to an Award may consist, in whole or part, of authorized and

unissued Units, including Units repurchased by the Company for purposes of the Plan.

SECTION 5. ELIGIBILITY

5.01 Awards may be granted only to individuals who are active Employees (including, without limitation, Employees who

also are directors or officers) or Non-Employee Directors.

SECTION 6. SPECIFIC TERMS OF AWARDS

6.01 General. Subject to the terms of the Plan and any applicable Award Agreement, Awards may be granted as set forth in

this Section 6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject

to the terms of Section 10.01), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee

shall determine, including separate escrow provisions and terms requiring forfeiture of Awards in the event of termination of

employment by the Participant. Except as required by applicable law, Awards may be granted for no consideration other than prior and/or

future services. Awards may be granted in conjunction with, or in satisfaction of, awards under the EQT Long-Term Incentive Plan.

6.02 Options. The Committee is authorized to grant Options to Participants on the following terms and conditions:

(i) Exercise Price. The exercise price per Unit of an Option shall not be less than 100% of the Fair Market Value of

a Unit on the date of grant of such Option.

(ii) Option Term. The term of each Option shall be determined by the Committee, except that no Option (other

than nonstatutory Options granted to Participants outside the United States) shall be exercisable after the expiration of ten

6

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years from the date of grant. The Option shall be evidenced by a form of written Award Agreement, and subject to the terms

thereof.

(iii) Times and Methods of Exercise. The Committee shall determine the time or times at which an Option may be

exercised in whole or in part, the methods by which the exercise price may be paid or deemed to be paid, and the form of such

payment, including, without limitation, cash, Units, or other property or any combination thereof, having a Fair Market Value

on the date of exercise equal to the exercise price, provided, however, that (1) in the case of a Participant who is at the time of

exercise subject to Section 16 of the Exchange Act, any portion of the exercise price representing a fraction of a Unit shall in

any event be paid in cash or in property other than any equity security (as defined by the Exchange Act) of the Company and

(2) Units delivered or withheld may be subject to terms and conditions imposed by the Committee.

Units may be withheld from the exercise or delivered in payment of the exercise price of an Option, if authorized by the

Committee, which in the case of delivery may be accomplished through the effective transfer to the Company of Units held by

a broker or other agent. Unless otherwise determined by the Committee, the Company will also cooperate with any person

exercising an Option who participates in a cashless exercise program of a broker or other agent under which all or part of the

Units received upon exercise of the Option are sold through the broker or other agent, for the purpose of paying the exercise

price of an Option. In such case, the date of exercise shall be deemed to be the date on which an irrevocable notice of exercise is

received by the Company, legal ownership of the option Units shall pass to the optionee on such exercise date, and the exercise

price shall be delivered to the Company by the settlement date.

(iv) Termination of Employment. In the case of Participants who are Employees, unless otherwise determined by

the Committee and reflected in the Award Agreement:

(A) If a Participant shall die while employed by the Company or an Affiliate or during a period following

termination of employment during which an Option otherwise remains exercisable under this Section 6.02(iv) or

terminate employment due to Disability, Options granted to the Participant, to the extent exercisable at the time of the

Participant’s death or termination of employment due to Disability, may be exercised within one year after the date of

the Participant’s death or termination due to Disability, but not later than the expiration date of the Option, by the

Participant, or executor or administrator of the Participant’s estate or by the person or persons to whom the Participant

shall have transferred such right by will, by the laws of descent and distribution or, if permitted by the Committee, by

inter vivos transfer.

(B) If the employment of a Participant with the Company or an Affiliate shall be involuntarily terminated

under circumstances that would qualify the Participant for benefits under any Company severance plan or arrangement,

Options granted to the Participant, to the extent exercisable at the date of the Participant’s termination of employment,

may be exercised within 90 days after

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the date of termination of employment, but not later than the expiration date of the Option.

(C) Subject to Section 9.02, if the Participant voluntarily terminates employment with the Company or an

Affiliate for any reason, including retirement, Options granted to the Participant, whether exercisable or not, shall

terminate immediately upon the termination of employment of the Participant.

(D) Except to the extent an Option remains exercisable under paragraph (A) or (B) above or under

Section 9.02, any Option granted to a Participant shall terminate immediately upon the termination of employment of

the Participant with the Company and/or an Affiliate.

(v) Termination of Service. In the case of Participants who are Non-Employee Directors, unless otherwise

determined by the Committee and reflected in the Award Agreement:

(A) If a Participant shall die while in service as a director of the Company or an Affiliate or during a period

following termination of service during which an Option otherwise remains exercisable under this Section 6.02(v),

Options granted to the Participant, to the extent exercisable at the time of the Participant’s death, may be exercised

within three years after the date of the Participant’s death, but not later than the expiration date of the Option, by the

executor or administrator of the Participant’s estate or by the person or persons to whom the Participant shall have

transferred such right by will or by the laws of descent and distribution or, if permitted by the Committee, by inter

vivos transfer.

(B) If the service of a Participant as a director of the Company or an Affiliate shall be terminated for reasons

other than removal for cause by the Board or a court pursuant to applicable law, Options granted to the Participant, to the

extent exercisable at the date of the Participant’s termination of service, may be exercised within three years after the

date of termination of service, but not later than the expiration date of the Option.

(C) Except to the extent an Option remains exercisable under paragraph (A) or (B) above or under

Section 9.02, any Option granted to a Participant shall terminate immediately upon the termination of service of the

Participant as a director of the Company and/or an Affiliate.

(vi) Individual Limit on Options and Unit Appreciation Rights. The aggregate number of Units for which

Options and Unit Appreciation Rights may be granted under the Plan to any single Participant in any calendar year shall not

exceed 150,000 Units.

(vii) Prohibition on Repricing. Except as otherwise provided in Section 8, the exercise price of an Option may not

be reduced, directly or indirectly by cancellation and regrant or otherwise, without the prior approval of the unitholders of the

Partnership. In addition, the Company may not, without the prior approval of unitholders of the Partnership,

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repurchase an Option for value from a Participant if the current Fair Market Value of the Units is lower than the exercise price

per Unit of the Option

(viii) Section 409A Limits. Notwithstanding anything in this Plan or any Award Agreement, no Option shall provide

for DERs or have any feature for the deferral of compensation other than the deferral of recognition of income until the

exercise or disposition of the Option.

(ix) Reload Rights. No Option shall be granted with reload rights.

6.03 Unit Appreciation Rights. The Committee is authorized to grant Unit Appreciation Rights on the following terms and

conditions:

(i) Price of Unit Appreciation Rights. The base price for Unit Appreciation Rights (the “Base Price”) shall be such

price as the Committee, in its sole discretion, shall determine but shall not be less than one hundred percent (100%) of the Fair

Market Value per Unit covered by the Unit Appreciation Right on the date of grant.

(ii) Payment of Unit Appreciation Rights. Unit Appreciation Rights shall entitle the Participant upon exercise to

receive the amount by which the Fair Market Value of a Unit on the date of exercise exceeds the Base Price of a Unit

Appreciation Right, multiplied by the number of units in respect of which the Unit Appreciation Right shall have been

exercised. In the sole discretion of the Committee, the Company may pay all or any part of its obligation arising out of a Unit

Appreciation Right exercise in cash, Units or any combination thereof. Payment shall be made by the Company upon the date of

exercise.

(iii) Term and Exercise of Unit Appreciation Rights. The term of any Unit Appreciation Right granted under the

Plan shall be for such period as the Committee shall determine, but for not more than ten years from the date of grant thereof. 

Each Unit Appreciation Right shall be subject to earlier termination under the rules applicable to Options as provided in

Section 6.02(iv) and (v) hereof. Each Unit Appreciation Right granted under the Plan shall be exercisable on such date or dates

during the term thereof and for such number of Units as may be provided in the Award Agreement.

(iv) Prohibition on Repricing. Except as otherwise provided in Section 8, the base price of a Unit Appreciation

Right may not be reduced, directly or indirectly by cancellation and regrant or otherwise, without the prior approval of the

unitholders of the Partnership. In addition, the Company may not, without the prior approval of unitholders of the Partnership,

repurchase a Unit Appreciation Right for value from a Participant if the current Fair Market Value of the Units is lower than the

Base Price per Unit of the Unit Appreciation Right.

(v) Section 409A Limits. Notwithstanding anything in this Plan or any Award Agreement, no Unit Appreciation

Right shall provide for DERs or have any feature for the deferral of compensation other than the deferral of recognition of

income until the exercise or disposition of the Unit Appreciation Right.

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6.04 Restricted Units. The Committee is authorized to grant Restricted Units to Participants on the following terms and

conditions:

(i) Issuance and Restrictions. Restricted Units shall be subject to such restrictions on transferability and other

restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Units or the

right to receive distributions thereon), which restrictions may lapse separately or in combination at such times, under such

circumstances, in such installments or otherwise, as the Committee shall determine at the time of grant or thereafter. The

restriction period applicable to Restricted Units (other than Restricted Units granted to Non-Employee Directors) shall, in the

case of a time based restriction period, be not less than three years, with no more frequent than annual ratable vesting over such

period or, in the case of a performance based restriction period, be not less than one year; provided, however, that up to 50,000

Units may be granted as Restricted Units or Phantom Units, in either case with no minimum vesting period.

(ii) Forfeiture. Except as otherwise determined by the Committee at the time of grant or thereafter, upon

termination of employment or service during the applicable restriction period, Restricted Units that are at that time subject to

restrictions shall be forfeited and reacquired by the Company for no consideration; provided, however, that the Committee may

provide, by rule or regulation or in any Award Agreement, that restrictions on Restricted Units shall be waived in whole or in

part in the event of terminations resulting from specified causes.

(iii) Certificates for Units. Restricted Units granted under the Plan may be evidenced in such manner as the

Committee shall determine, including, without limitation, issuance of certificates representing Units, which may be held in

escrow or recordation in book entry form. Certificates representing Restricted Units shall be registered in the name of the

Participant and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted

Units.

6.05 Phantom Units. The Committee may, subject to the provisions of the Plan and such other terms and conditions as it

may prescribe, grant Phantom Units to Participants.

(i) Issuance and Restrictions. The restricted period applicable to Phantom Units (other than Phantom Units

granted to Non-Employee Directors) shall, in the case of a time based restriction, be not less than three years, with no more

frequent than annual ratable vesting over such period or, in the case of a performance based restriction, be not less than one

year; provided, however, that up to 50,000 Units may be granted as Phantom Units or Restricted Units, in either case with no

minimum vesting period. The Committee may also provide the right to receive DERs on Phantom Units, on a current,

reinvested and/or restricted basis.

(ii) Forfeiture. Except as otherwise determined by the Committee at the time of grant or thereafter, upon

termination of employment or service during the applicable restriction period, Phantom Units that at that time are subject to

restrictions shall be forfeited; provided, however, that the Committee may provide, by rule or regulation or in

10

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any Award Agreement, that restrictions on Phantom Units shall be waived in whole or in part in the event of terminations

resulting from specified causes.

(iii) Payment. Unless otherwise determined by the Committee and provided in an Award Agreement, during the two

and one-half months following the end of the calendar year in which vesting occurs, the Company shall pay to the Participant in

cash an amount equal to the number of Phantom Units vested multiplied by the Fair Market Value of a Unit on such date. 

Notwithstanding the foregoing sentence, the Committee shall have the authority, in its discretion, to determine that the

obligation of the Company shall be paid in Units or part in cash and part in Units.

6.06 Performance Awards. The Committee is authorized to grant Performance Awards to Participants on the following

terms and conditions:

(i) General. A Performance Award shall represent a right to receive Units, cash, other property or any combination

thereof based on the achievement, or the level of achievement, during a specified Performance Period of one or more

Performance Goals established by the Committee at the time of the Award. Performance Periods for Performance Awards shall

be no less than one year in duration.

(ii) Terms. At or prior to the time a Performance Award is granted, the Committee shall cause to be set forth in the

Award Agreement or otherwise in writing (1) the Performance Goals applicable to the Award and the Performance Period during

which the achievement of the Performance Goals shall be measured, (2) the number of Units or amount that may vest or be

earned by the Participant based on the achievement, or the level of achievement, of the Performance Goals or the formula by

which such number of Units or amount shall be determined and (3) such other terms and conditions applicable to the Award as

the Committee may, in its discretion, determine to include therein. The terms for such Award so established by the Committee

shall be objective such that a third party having knowledge of the relevant facts could determine whether or not any

Performance Goal has been achieved, or the extent of such achievement, and the amount, if any, that has been earned by the

Participant based on such performance. The Committee may retain the discretion to reduce (but not to increase) the amount of a

Performance Award or a number of Units that will be earned based on the achievement of Performance Goals. When the

Performance Goals are established, the Committee shall also specify the manner in which the level of achievement of such

Performance Goals shall be calculated and the weighting assigned to such Performance Goals. The Committee may determine

and specify within the first 90 days of the Performance Period that unusual items or certain specified events or occurrences,

including changes in accounting standards or tax laws and the effects of non-operational items or extraordinary items as defined

by generally accepted accounting principles or international financial reporting standards as specified by the Committee, shall be

excluded from the calculation.

(iii) Performance Goals. “Performance Goals” shall mean one or more preestablished, objective measures of

performance during a specified Performance Period, selected by the Committee in its discretion. Such Performance Goals may

be

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
based upon one or more of the following objective performance measures (“Qualified Business Criteria”): earnings per unit,

earnings per unit growth, revenue growth, revenues, expenses, return on equity, return on total capital, return on assets,

earnings (such as net income, EBIT and similar measures), earnings growth, cash flow (such as EBITDA, cash available for

distributions and similar measures), unit price, economic value added, gross margin, operating income, volumes metrics (such as

volumes transported or gathered and similar measures), operating efficiency metrics (such as unit operating expense measures,

general & administrative expenses (“G&A”) per mcf, G&A per customer and other G&A metrics, unit gathering and

compression expenses and other midstream efficiency measures, lost and unaccounted for gas metrics, compressor, pipeline or

processing downtime and similar measures), construction efficiency metrics (such as timely completion, cost within budget and

similar measures), gas storage metrics (such as lease acquisitions and divestures), customer services measures (such as wait

time, on-time service, calls answered and similar measures) or total unitholder return. Performance Goals based on such

Qualified Business Criteria may be based either on the performance of the Company, one or more Subsidiaries or other

Affiliates, any branch, department, business unit or other portion thereof under such measure for the Performance Period

and/or upon a comparison of such performance with the performance of a peer group of corporations, prior Company

performance or other measure selected or defined by the Committee at the time of grant. Performance Goals with respect to

Qualified Business Criteria may be specified in absolute terms, in percentages, or in terms of growth from period to period or

growth rates over time, as well as measured relative to the performance of a group of comparator companies, or a published or

special index, or a stock market index, that the Committee deems appropriate. Performance Goals need not be based upon an

increase or positive result under a business criterion and could include, for example, the maintenance of the status quo or the

limitation of economic losses (measured, in each case, by reference to a specific business criterion).

(iv) Committee Certification. Following completion of the applicable Performance Period, and prior to any payment

of or release of Units pursuant to a Performance Award to the Participant, the Committee (or the Compensation Committee of

the Board of Directors of EQT with respect to Performance Awards granted hereunder to employees of EQT or its subsidiaries)

shall determine in accordance with the terms of the Award and shall certify in writing whether the applicable Performance Goal

or Goals were achieved, or the level of such achievement, and the amount, if any, earned by the Participant based upon such

performance. For this purpose, approved minutes of the meeting of the Committee at which certification is made shall be

sufficient to satisfy the requirement of a written certification. Performance Awards are not intended to provide for the deferral

of compensation, such that payment for earned Performance Awards shall be paid within two and one-half months following the

end of the calendar year in which the Performance Period ends or upon vesting, as may be required to avoid characterization of

such Awards as deferred compensation under Section 409A of the Code.

(v) Maximum Individual Performance Award Payments. In any one calendar year, the maximum amount that

may be earned by any single Participant for Performance Awards shall be the sum of (a) $2,000,000 for Performance Awards

granted under the

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Plan and payable in cash or property (other than Units) and (b) 100,000 Units for Performance Awards granted under the Plan

and payable in Units. For purposes of applying these limits in the case of multi-year Performance Periods, the amount or

number of Units deemed earned in any one calendar year is the total amount paid or Units earned for the Performance Period

divided by the number of calendar years in the Performance Period. In applying this limit, the amount of any cash or the Fair

Market Value or number of any Units or other property earned by a Participant shall be measured as of the close of the final year

of the Performance Period regardless of the fact that certification by the Committee and actual payment or release of restrictions

to the Participant may occur in a subsequent calendar year or years.

6.07 Other Unit-Based Awards. The Committee is authorized, subject to limitations under applicable law, to grant to

Participants such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or

related to, Units, as deemed by the Committee to be consistent with the purposes of the Plan, including, without limitation, purchase

rights, Units awarded that are not subject to any restrictions or conditions, convertible securities, exchangeable securities or other rights

convertible or exchangeable into Units, as the Committee in its discretion may determine. In the discretion of the Committee, such

Other Unit Based Awards, including Units, or other types of Awards authorized under the Plan, may be used in connection with, or to

satisfy obligations of the Company or an Affiliate under, other compensation or incentive plans, programs or arrangements of the

Company or any Affiliate for eligible Participants.

The Committee shall determine the terms and conditions of Other Unit-Based Awards. Units or securities delivered pursuant to

a purchase right granted under this Section 6.07 shall be purchased for such consideration, paid for by such methods and in such forms,

including, without limitation, cash, Units delivered or withheld, or other property or any combination thereof, as the Committee shall

determine, but the value of such consideration shall not be less than the Fair Market Value of such Units or other securities on the date

of grant of such purchase right. Delivery of Units or other securities in payment of a purchase right, if authorized by the Committee,

may be accomplished through the effective transfer to the Company of Units or other securities held by a broker or other agent. Unless

otherwise determined by the Committee, the Company will also cooperate with any person exercising a purchase right who participates

in a cashless exercise program of a broker or other agent under which all or part of the Units or securities received upon exercise of a

purchase right are sold through the broker or other agent, or under which the broker or other agent makes a loan to such person, for the

purpose of paying the exercise price of a purchase right. Notwithstanding the preceding sentence, unless the Committee, in its

discretion, shall otherwise determine, the exercise of the purchase right shall not be deemed to occur, and no Units or other securities

will be issued by the Company upon exercise of a purchase right, until the Company has received payment in full of the exercise price. 

Units, securities, cash or other payments made with respect to particular Other Unit-Based Awards that may constitute deferred

compensation under Section 409A of the Code may only be payable upon a permissible payment event under Section 409A of the Code

and the terms and conditions of such awards shall be in compliance with such, and all related, requirements.

6.08 DERs. The Committee is authorized to grant DERs with respect to any Awards granted hereunder (other than Options

or Unit Appreciation Rights), subject to such terms and

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conditions as may be selected by the Committee; provided that, subject to Section 12.04 hereof, no distributions shall be paid or

distributed in advance of the vesting of the underlying Award. DERs shall entitle the Participant to receive payments equal to

distributions with respect to all or a portion of the number of Units subject to the Award, as determined by the Committee. The

Committee may provide that DERs will be deemed to have been reinvested in additional Units, or otherwise reinvested. To the extent

that DERs are deemed to be reinvested in additional Units with respect to an Award, such additional Units shall, as the time of such

deemed reinvestment, be included in the number of Units as to which the host Award relates for purposes of the unit limits of

Section 4.01 of the Plan.

SECTION 7. GENERAL TERMS OF AWARDS

7.01 Stand-Alone, Tandem and Substitute Awards. Awards granted under the Plan may, in the discretion of the

Committee, be granted either alone or in addition to, or in tandem with, any other Award granted under the Plan or any award granted

under any other plan, program or arrangement of the Company or any Affiliate (subject to the terms of Section 10.01) or any business

entity acquired or to be acquired by the Company or an Affiliate. Awards granted in addition to or in tandem with other Awards or awards

may be granted either at the same time as or at a different time from the grant of such other Awards or awards.

7.02 Decisions Required to be Made by the Committee . Other provisions of the Plan and any Award Agreement

notwithstanding, if any decision regarding an Award or the exercise of any right by a Participant, at any time such Participant is subject to

Section 16 of the Exchange Act, is required to be made or approved by the Committee in order that a transaction by such Participant will

be exempt under Rule 16b-3, then the Committee shall retain full and exclusive power and authority to make such decision or to

approve or disapprove any such decision by the Participant.

7.03 Term of Awards. The term of each Award shall be for such period as may be determined by the Committee; provided,

however, that in no event shall the term of any Option (other than a nonstatutory Option granted to a Participant outside the United

States) exceed a period of ten years from the date of its grant.

7.04 Form of Payment of Awards. Subject to the terms of the Plan and any applicable Award Agreement, payments or

substitutions to be made by the Company upon the grant, exercise or other payment or distribution of an Award may be made in such

forms as the Committee shall determine at the time of grant or thereafter (subject to the terms of Section 10.01), including, without

limitation, cash, Units, or other property or any combination thereof, in each case in accordance with rules and procedures established,

or as otherwise determined, by the Committee.

7.05 Limits on Transfer of Awards; Beneficiaries. No right or interest of a Participant in any Award shall be pledged,

encumbered or hypothecated to or in favor of any person other than the Company or an Affiliate, or shall be subject to any lien,

obligation or liability of such Participant to any person other than the Company or an Affiliate. Except to the extent otherwise

determined by the Committee with respect to Awards, no Award and no rights or interests therein shall be assignable or transferable by a

Participant otherwise than by will or

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the laws of descent and distribution, and any Option or other right to purchase or acquire Units granted to a Participant under the Plan

shall be exercisable during the Participant’s lifetime only by such Participant. A beneficiary, guardian, legal representative or other

person claiming any rights under the Plan from or through any Participant shall be subject to all the terms and conditions of the Plan and

any Award Agreement applicable to such Participant as well as any additional restrictions or limitations deemed necessary or appropriate

by the Committee.

7.06 Registration and Listing Compliance . No Award shall be paid and no Units or other securities shall be distributed

with respect to any Award in a transaction subject to the registration requirements of the Securities Act of 1933, as amended, or any

state securities law or subject to a listing requirement under any listing agreement between the Company and any national securities

exchange, and no Award shall confer upon any Participant rights to such payment or distribution until such laws and contractual

obligations of the Company have been complied with in all material respects. Except to the extent required by the terms of an Award

Agreement or another contract between the Company and the Participant, neither the grant of any Award nor anything else contained

herein shall obligate the Company to take any action to comply with any requirements of any such securities laws or contractual

obligations relating to the registration (or exemption therefrom) or listing of any Units or other securities, whether or not necessary in

order to permit any such payment or distribution.

7.07 Evidence of Ownership; Trading Restrictions. Units delivered under the terms of the Plan may be recorded in book

entry or electronic form or issued in the form of certificates. Units delivered under the terms of the Plan shall be subject to such stoptransfer orders and other restrictions as the Committee may deem advisable under federal or state securities laws, rules and regulations

thereunder, and the rules of any national securities exchange or automated quotation system on which Units are listed or quoted. The

Committee may cause a legend or legends to be placed on any such certificates or issue instructions to the transfer agent to make

appropriate reference to such restrictions or any other restrictions or limitations that may be applicable to Units. In addition, during any

period in which Awards or Units are subject to restrictions or limitations under the terms of the Plan or any Award Agreement, the

Committee may require any Participant to enter into an agreement providing that certificates representing Units issuable or issued

pursuant to an Award shall remain in the physical custody of the Company or such other person as the Committee may designate.

SECTION 8. ADJUSTMENT PROVISIONS

8.01 If a distribution shall be declared upon the Units payable in Units, the number of Units then subject to any outstanding

Options, Unit Appreciation Rights, Phantom Units, Performance Awards or Other Unit-Based Awards, the number of Units that may be

issued under the Plan but are not then subject to outstanding Options, Unit Appreciation Rights, Phantom Units, Performance Awards or

Other Unit Based Awards and the maximum number of Units as to which Options, Unit Appreciation Rights, Phantom Units,

Performance Awards or Other Unit-Based Awards may be granted and as to which Units may be awarded under Sections 6.02(vi) and

6.06(v), shall be adjusted by adding thereto the number of Units that would have been distributable thereon if such Units had been

outstanding on the date fixed for determining the unitholders entitled to receive such Unit distribution. Units so distributed with respect

to any Restricted Units or Phantom Units, held in escrow shall also be held by the Company in escrow

15

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
and shall be subject to the same restrictions as are applicable to the Restricted Units or Phantom Units on which they were distributed.

If the outstanding Units shall be changed into or exchangeable for a different number or kind of units or other securities of the

Company or another corporation, or cash or other property, whether through reorganization, reclassification, recapitalization, unit splitup, combination of units, merger or consolidation, then there shall be substituted for each Unit subject to any then outstanding Option,

Unit Appreciation Right, Phantom Unit, Performance Award or Other Unit-Based Award, and for each Unit that may be issued under

the Plan but that is not then subject to any outstanding Option, Unit Appreciation Right, Phantom Unit, Performance Award or Other

Unit-Based Award, the number and kind of units or other securities (and in the case of outstanding Options, Unit Appreciation Rights,

Phantom Units, Performance Awards or Other Unit-Based Awards, the cash or other property) into which each outstanding Unit shall be

so changed or for which each such unit shall be exchangeable. Unless otherwise determined by the Committee in its discretion, any

such units or securities, as well as any cash or other property, into or for which any Restricted Units or Phantom Units held in escrow

shall be changed or exchangeable in any such transaction shall also be held by the Company in escrow and shall be subject to the same

restrictions as are applicable to the Restricted Units or Phantom Units in respect of which such units, securities, cash or other property

was issued or distributed.

In case of any adjustment or substitution as provided for in this Section 8.01, the aggregate exercise price for all Units subject to

each then outstanding Option, Unit Appreciation Right, or other purchase right, prior to such adjustment or substitution shall be the

aggregate exercise price for all units or other securities (including any fraction), cash or other property to which such Units shall have

been adjusted or which shall have been substituted for such Units. Any new exercise price per unit shall be carried to at least three

decimal places with the last decimal place rounded upwards to the nearest whole number.

If the outstanding Units shall be changed in value by reason of any spin off, split off or split up, or distribution in partial

liquidation, distribution in property other than cash, or extraordinary distribution to unitholders, (a) the Committee shall make any

adjustments to any then outstanding Option, Unit Appreciation Rights, Phantom Units, Performance Award or Other Unit-Based Award,

that it determines are equitably required to prevent dilution or enlargement of the rights of optionees and awardees that would otherwise

result from any such transaction, and (b) unless otherwise determined by the Committee in its discretion, any units, securities, cash or

other property distributed with respect to any Restricted Units or Phantom Units held in escrow or for which any Restricted Units or

Phantom Units held in escrow shall be exchanged in any such transaction shall also be held by the Company in escrow and shall be

subject to the same restrictions as are applicable to the Restricted Units or Phantom Units in respect of which such units, securities, cash

or other property was distributed or exchanged.

No adjustment or substitution provided for in this Section 8.01 shall require the Partnership to issue or sell a fraction of a Unit or

other security. Accordingly, all fractional Units or other securities that result from any such adjustment or substitution shall be

eliminated and not carried forward to any subsequent adjustment or substitution. Owners of Restricted Units or Phantom Units held in

escrow shall be treated in the same manner as owners of Units not held in escrow with respect to fractional Units created by an

adjustment or substitution of Units, except

16

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
that, unless otherwise determined by the Committee in its discretion, any cash or other property paid in lieu of a fractional Unit shall be

subject to restrictions similar to those applicable to the Restricted Units or Phantom Units exchanged therefor.

All adjustments shall be made in a manner compliant with Section 409A of the Code. Without limiting the foregoing, the

Committee shall not make any adjustments to outstanding Options or Unit Appreciation Rights that would constitute a modification or

substitution of the stock right under Treas. Reg. §1.409A-1(b)(5)(v) that would be treated as the grant of a new stock right or change in

the form of payment for purposes of Section 409A of the Code.

SECTION 9. CHANGE OF CONTROL PROVISIONS

9.01 Acceleration of Exercisability and Lapse of Restrictions. Unless otherwise determined by the Committee at the

time of grant of an Award or unless otherwise provided in the applicable Award Agreement, if any Change of Control shall occur:

(i) all outstanding Awards pursuant to which the Participant may have exercise rights, the exercise of which is

restricted or limited, shall become fully exercisable;

(ii) all restrictions or limitations, including risks of forfeiture but excluding performance based restrictions, on

outstanding Awards subject to restrictions or limitations under the Plan shall lapse; and

(iii) all performance criteria and other conditions to payment of Awards under which payments of cash, Units or

other property are subject to performance conditions shall be deemed to be achieved or fulfilled, measured at the actual

performance level achieved as of the end of the calendar quarter immediately preceding the date of the Change of Control, and

payment of such Awards on that basis shall be made or otherwise settled at the time of the Change of Control; provided,

however, that, if such Awards constitute deferred compensation under Section 409A of the Code, the Awards shall vest on the

basis described above but shall remain payable on the date(s) provided in the underlying Award Agreements.

9.02 Termination of Employment Following Change of Control. If within three years following the date of any Change

of Control the employment or service of a Participant shall be terminated voluntarily or involuntarily for any reason other than for

Cause, then unless otherwise provided in the applicable Award Agreement, and in addition to any other rights of post termination

exercise that the Participant (or other holder of the Award) may have under the Plan or the applicable Award Agreement, any Option,

Unit Appreciation Right or other Award granted to the Participant and outstanding on the date of the Change of Control, the payment or

receipt of which is dependent upon exercise by the Participant (or other holder of the Award) shall be exercisable for a period of 90 days

following the date of such termination of employment or service but not later than the expiration date of the Award.

9.03 Definition of Change of Control. For purposes of this Section 9, a “Change of Control” shall mean any of the

following events: (i) a “Change of Control” as defined in the Omnibus Agreement, (ii) a transaction resulting in the general partner of

the Partnership ceasing

17

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
to be an Affiliate of EQT, or (iii) a “Change of Control” of EQT as defined in the EQT Long-Term Incentive Plan. Anything in this

definition to the contrary notwithstanding, with respect to any Award that is not exempt from but is intended to be compliant with

Section 409A of the Code, no Change of Control shall accelerate payment of such Award unless such event constitutes an event

specified in Section 409A(a)(2)(A)(v) of the Code and the Treasury Regulations promulgated thereunder.

SECTION 10. AMENDMENTS TO AND TERMINATION OF THE PLAN

10.01 The Board may amend, alter, suspend, discontinue or terminate the Plan without the consent of unitholders or

Participants, except that, without the approval of the unitholders of the Partnership, no amendment, alteration, suspension,

discontinuation or termination shall be made if unitholder approval is required by any federal or state law or regulation or by the rules of

any exchange on which the Units may then be listed, or if the amendment, alteration or other change materially increases the benefits

accruing to Participants, increases the number of Units available under the Plan or modifies the requirements for participation under the

Plan, or if the Board in its discretion determines that obtaining such unitholder approval is for any reason advisable; provided, however,

that, without the consent of the Participant, no amendment, alteration, suspension, discontinuation or termination of the Plan may

materially and adversely affect the rights of such Participant under any Award theretofore granted to him. The Committee may,

consistent with the terms of the Plan, waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue

or terminate, any Award theretofore granted, prospectively or retrospectively; provided, however, that, without the consent of a

Participant, no amendment, alteration, suspension, discontinuation or termination of any Award may materially and adversely affect the

rights of such Participant under any Award theretofore granted to him.

SECTION 11. GENERAL PROVISIONS

11.01 No Right to Awards; No Unitholder Rights. No Participant, Employee or Non-Employee Director shall have any

claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants, Employees and

Non-Employee Directors, except as provided in any other compensation, fee or other arrangement with the Participant, Employee or

Non-Employee Director. No Award shall confer on any Participant any of the rights of a unitholder of the Partnership unless and until

Units are in fact issued to such Participant in connection with such Award.

11.02 Withholding. To the extent required by applicable Federal, state, local or foreign law, the Participant or his successor

shall make arrangements satisfactory to the Company, in its discretion, for the satisfaction of any withholding tax obligations that arise in

connection with an Award. The Company shall not be required to issue any Units or make any cash or other payment under the Plan

until such obligations are satisfied.

The Company is authorized to withhold from any Award granted or any payment due under the Plan, including from a

distribution of Units, amounts of withholding taxes due with respect to an Award, its exercise or any payment thereunder, and to take

such other action as the Committee may deem necessary or advisable to enable the Company and Participants to satisfy obligations for

the payment of such taxes. This authority shall include authority to withhold or

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
receive Units, Awards or other property and to make cash payments in respect thereof in satisfaction of such tax obligations.

11.03 No Right to Employment or Continuation of Service . Nothing contained in the Plan or any Award Agreement shall

confer, and no grant of an Award shall be construed as conferring, upon any Participant any right to continue in the employ or service of

the Company or any Affiliate or to interfere in any way with the right of the Company or unitholders to terminate a Participant’s

employment or service at any time or increase or decrease his compensation, fees or other payments from the rate in existence at the

time of granting of an Award, except as provided in any Award Agreement or other compensation, fee or other arrangement with the

Participant.

11.04 Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an “unfunded” plan for

incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan

or any Award Agreement shall give any such Participant any rights that are greater than those of a general unsecured creditor of the

Company; provided, however, that the Committee may authorize the creation of trusts or make other arrangements to meet the

Company’s obligations under the Plan to deliver cash, Units or other property pursuant to any Award, which trusts or other

arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines.

11.05 No Limit on Other Compensatory Arrangements. Nothing contained in the Plan shall prevent the Company from

adopting other or additional compensation arrangements (which may include, without limitation, employment agreements with

executives and arrangements that relate to Awards under the Plan), and such arrangements may be either generally applicable or

applicable only in specific cases. Notwithstanding anything in the Plan to the contrary, the terms of each Award shall be construed so as

to be consistent with such other arrangements in effect at the time of the Award.

11.06 No Fractional Units. No fractional Units shall be issued or delivered pursuant to the Plan or any Award. The

Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of fractional Units or whether

such fractional Units or any rights thereto shall be forfeited or otherwise eliminated.

11.07 Governing Law. The validity, interpretation, construction and effect of the Plan and any rules and regulations relating

to the Plan shall be governed by the laws of the Commonwealth of Pennsylvania (without regard to the conflicts of laws thereof), and

applicable Federal law.

11.08 Severability. If any provision of the Plan or any Award is or becomes or is deemed invalid, illegal or unenforceable in

any jurisdiction, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be

construed or deemed amended to conform to applicable laws or if it cannot be construed or deemed amended without, in the

determination of the Committee, materially altering the intent of the Plan or Award, it shall be deleted and the remainder of the Plan or

Award shall remain in full force and effect; provided, however, that, unless otherwise determined by the Committee, the provision

19

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
shall not be construed or deemed amended or deleted with respect to any Participant whose rights and obligations under the Plan are not

subject to the law of such jurisdiction or the law deemed applicable by the Committee.

SECTION 12. SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE CODE.

12.01 It is intended that the payments and benefits provided under the Plan and any Award shall either be exempt from the

application of, or comply with, the requirements of Section 409A of the Code. The Plan and all Award Agreements shall be construed

in a manner that effects such intent. Nevertheless, the tax treatment of the benefits provided under the Plan or any Award is not

warranted or guaranteed. Neither the Company, its Affiliates nor their respective directors, officers, employees or advisers shall be held

liable for any taxes, interest, penalties or other monetary amounts owed by any Participant or other taxpayer as a result of the Plan or any

Award.

12.02 Notwithstanding anything in the Plan or in any Award Agreement to the contrary, to the extent that any amount or

benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be

payable or distributable, or a different form of payment (e.g., lump sum or installment) would be effected, under the Plan or any Award

Agreement by reason of the occurrence of a Change of Control, or the Participant’s Disability or separation from service, such amount

or benefit will not be payable or distributable to the Participant, and/or such different form of payment will not be effected, by reason of

such circumstance unless the circumstances giving rise to such Change of Control, Disability or separation from service meet any

description or definition of “change in control event”, “disability” or “separation from service”, as the case may be, in Section 409A of

the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This

provision does not prohibit the vesting of any Award upon a change of control, disability or separation from service, however defined. If

this provision prevents the payment or distribution of any amount or benefit, such payment or distribution shall be made on the next

earliest payment or distribution date or event specified in the Award Agreement that is permissible under Section 409A. If this provision

prevents the application of a different form of payment of any amount or benefit, such payment shall be made in the same form as

would have applied absent such designated event or circumstance.

12.03 Notwithstanding anything in the Plan or in any Award Agreement to the contrary, if any amount or benefit that would

constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or distributable

under this Plan or any Award Agreement by reason of a Participant’s separation from service during a period in which the Participant is a

Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg.

Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):

(i) the amount of such non-exempt deferred compensation that would otherwise be payable during the six-month period immediately

following the Participant’s separation from service will be accumulated through and paid or provided on the first day of the seventh

month following the Participant’s separation from service (or, if the Participant dies during such period, within 30 days after the

Participant’s death) (in either case, the “Required Delay Period”); and

20

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(ii) the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required

Delay Period.

For purposes of this Plan, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final

regulations thereunder, provided, however, that, as permitted in such final regulations, the Company’s Specified Employees and its

application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the

Board or any committee of the Board, which shall be applied consistently with respect to all nonqualified deferred compensation

arrangements of the Company, including this Plan.

12.04 Timing of Distribution of DERs. Unless otherwise provided in the applicable Award Agreement, any DERs granted with

respect to an Award hereunder will be paid or distributed no later than the 15th day of the 3rd month following the later of (i) the

calendar year in which the corresponding distributions were paid to unitholders, or (ii) the first calendar year in which the Participant’s

right to such DERs is no longer subject to a substantial risk of forfeiture.

SECTION 13. EFFECTIVE DATE AND TERM OF THE PLAN

13.01 The Plan has been approved by the limited partners of the Partnership and shall become effective on the later of the date

of its approval by the Board or the initial public offering of Units and shall terminate on, and no Awards may be granted after, the earliest

of the date established by the Board or the Committee, the 10th anniversary of the date the Plan was approved by the limited partners of

the Partnership (or such earlier anniversary, if any, required by the rules of the exchange on which Units are traded) or the date Units

are no longer available for delivery pursuant to Awards under the Plan. However, unless otherwise expressly provided in the Plan or in

an applicable Award Agreement, any Award granted prior to such termination, and the authority of the Committee to amend, alter,

adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award, shall extend beyond

such termination date.

21

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 10.07

EQT Corporation

(formerly known as Equitable Resources, Inc. )

2006 PAYROLL DEDUCTION

AND

CONTRIBUTION PROGRAM

(as amended and restated February 19, 2013)

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
EQT CORPORATION

2006 PAYROLL DEDUCTION AND CONTRIBUTION PROGRAM

(As amended and restated February 19, 2013)

TABLE OF CONTENTS

ARTICLE I 1

1.1 Statement of Purpose 1

ARTICLE II - DEFINITIONS 1

2.1 Base Salary 1

2.1 Bonus 1

2.3 Code 1

2.4 Committee (BAC) and Committee (BIC) 1

2.5 Company 2

2.6 Company Benefit 2

2.7 Compensation 2

2.8 Contribution Amount 2

2.9 Eligible Employee 2

2.10 Employer 2

2.11 Participant 2

2.12 Personal Retirement Annuity 2

2.13 Program Year 2

2.14 Program 3

2.15 Qualifying CIC Agreement 3

2.16 Selected Affiliate 3

ARTICLE III - ELIGIBILITY AND PARTICIPATION 3

3.1 Eligibility 3

3.2 Participation; Removal from Participation 4

3.3 Ineligible Participant 4

ARTICLE IV - CONTRIBUTIONS AND COMPANY BENEFITS 5

4.1 Contribution Amounts 5

4.2 Company Benefit 5

4.3 Company Benefit Amounts 5

ARTICLE V - PERSONAL RETIREMENT ANNUITIES 6

5.1 General 6

5.2 Terms of Personal Retirement Annuity 6

ARTICLE VI - ADMINISTRATION 6

6.1 Committees 6

6.2 Agents 7

6.3 Binding Effect of Decisions 7

6.4 Indemnification of Committees 7

ARTICLE VII - AMENDMENT AND TERMINATION OF PROGRAM 7

7.1 Amendment 7

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7.2 Termination 8

ARTICLE VIII - MISCELLANEOUS 8

8.1 Funding 8

8.2 Nonassignability 8

8.3 No Acceleration of Benefits; No Deferred Compensation; Taxation; Tax Withholding 8

8.4 Captions 9

8.5 Governing Law 9

8.6 Successors 9

8.7 No Right to Continued Service 9

8.8 Benefit Claims 9

EXHIBIT A – Section 3.1 – Description of Eligible Employees 11

EXHIBIT B – Personal Retirement Annuity 12

- ii -

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ARTICLE I

1.1 Statement of Purpose

This is the EQT Corporation 2006 Payroll Deduction and Contribution Program (the “Program”). The purpose of the Program

is to provide a select group of management and highly compensated employees of the Employer with the ability to deposit in a Personal

Retirement Annuity, as per Article V, an amount of Company Benefit on an after-tax basis (and, for periods prior to January 1, 2011,

portions of their compensation payable for services rendered to the Employer). It is intended that the Program will assist in attracting and

retaining qualified individuals to serve as officers and managers of the Employer. From and after February 1, 2013, participation in this

Program is limited to individuals who have executed and delivered to the Company a Qualifying CIC Agreement, and such continuing

participation in this Program, together with the increase in the Company Benefit described in paragraph 4.2(c) below and the additional

Company Benefit described in paragraph 4.2(d) below, serve as consideration for such execution and delivery of a Qualifying CIC

Agreement.

ARTICLE II

DEFINITIONS

When used in this Program and initially capitalized, the following words and phrases shall have the meanings indicated:

2.1 Base Salary.

“Base Salary” means a Participant’s base earnings paid by the Employer to a Participant without regard to any increases or

decreases in base earnings as a result of an election between benefits or cash provided under a plan of an Employer maintained pursuant

to Section 125 or 401(k) of the Code.

2.2 Bonus.

“Bonus” means the total amount awarded and paid, prior to any reduction for applicable tax withholdings, under the EQT

Corporation 2011 Executive Short -Term Incentive Plan (as implemented each year) or the EQT Corporation Short -Term Incentive

Plan (as implemented each year).

2.3 Code.

“Code” means the Internal Revenue Code of 1986, as amended.

2.4 Committee (BAC) and Committee (BIC).

“Committee (BAC)” and “Committee (BIC)” have the meanings set forth in Section 6.1. Together the Committee (BAC) and

the Committee (BIC) shall be referred to as the “Committees.”

- 1 -

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2.5 Company.

“Company” means EQT Corporation and any successor thereto.

2.6 Company Benefit.

“Company Benefit” means the benefit contributed to the Personal Retirement Annuity on behalf of the Participant pursuant to

Sections 4.2 and 4.3.

2.7 Compensation.

“Compensation” means the Base Salary payable with respect to an Eligible Employee for each Program Year in excess of the

Base Salary taken into account for purposes of determining a Participant’s deferrals under the EQT 401(k) Plan, as hereinafter defined.

2.8 Contribution Amount.

“Contribution Amount” means, for periods prior to January 1, 2011, the amount contributed to the Personal Retirement

Annuity by a Participant under Section 4.1.

2.9 Eligible Employee.

“Eligible Employee” means a highly compensated or management employee of the Employer who is designated by the

Company, by name or group or description, in accordance with Section 3.1, as eligible to participate in the Program; provided that to the

extent such employee is an executive officer such participation must be approved by the Management Development and Compensation

Committee of the Board of Directors of the Company.

2.10 Employer.

“Employer” means, with respect to a Participant, the Company or the Selected Affiliate which pays such Participant’s

Compensation.

2.11 Participant.

“Participant” means any Eligible Employee listed on Exhibit A and designated under Section 3.2.

2.12 Personal Retirement Annuity.

“Personal Retirement Annuity” means the annuity described in Section 5.1.

2.13 Program Year.

“Program Year” means each twelve-month period commencing January 1 and ending December 31, except that the first

Program Year shall commence on August 14, 2006 and end on December 31, 2006.

- 2 -

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2.14 Program.

“Program” means this EQT Corporation 2006 Payroll Deduction and Contribution Program, as amended from time to time.

2.15 Qualifying CIC Agreement,

“Qualifying CIC Agreement” means an amended and restated change of control agreement described in Section 3.1.

2.16 Selected Affiliate.

“Selected Affiliate” means (1) any company in an unbroken chain of companies beginning with the Company if each of the

companies other than the last company in the chain owns or controls, directly or indirectly, stock possessing not less than 50 percent of

the total combined voting power of all classes of stock in one of the other companies, or (2) any partnership or joint venture in which one

or more of such companies is a partner or venturer, each of which shall be selected by the Company.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

3.1 Eligibility.

Eligibility to participate in the Program is limited to Eligible Employees. From time to time, and subject to Section 3.3, the

Company shall prepare, and attach to the Program as Exhibit A, a complete list of the Eligible Employees, by individual name or by

reference to an identifiable group of persons or by descriptions of individuals which would qualify as individuals who are eligible to

participate, and all of whom shall be a select group of management or highly compensated employees. Notwithstanding the foregoing,

from and after February 1, 2013, no individual shall qualify as an Eligible Employee unless and until he or she shall have executed and

delivered to the Company on or before February 15, 2013 an amended and restated change of control agreement, in the form approved

by the Management Development and Compensation Committee (a “Qualifying CIC Agreement”), that, to the extent applicable

eliminates any “single trigger” payment provision and any tax gross up-provision (except as such provision may relate to medical, longterm disability, dental or life insurance benefits). For the avoidance of doubt, any individual previously participating in the Program shall

automatically and without further action by the Company or the Committee cease to be an Eligible Employee if such individual has not

executed and delivered to the Company a Qualifying CIC Agreement on or before February 15, 2013; provided that any individual who

fails to deliver a Qualifying CIC Agreement by such date may, in the discretion of the Management Development and Compensation

Committee, again become an Eligible Employee upon the execution and delivery to the Company of a Qualifying CIC Agreement.

- 3 -

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3.2 Participation; Removal from Participation.

Participation in the Program shall be limited to Eligible Employees. An Eligible Employee shall commence participation in the

Program upon designation as an Eligible Employee by the Vice President & Chief Human Resources Officer of the Company, provided

that, to the extent such Eligible Employee is an executive officer, such designation also must be approved by the Management

Development and Compensation Committee of the Board of Directors of the Company. Following designation, an Eligible Employee

shall continue participation in the Program from year to year without further action by the Company, subject to this Section and

Section 3.3.

Notwithstanding the foregoing, an Eligible Employee may be removed from participation at any time: (a) in the case of an

executive officer, by the Management Development and Compensation Committee of the Board of Directors of the Company and (b) in

all other cases, by the Vice President & Chief Human Resources Officer of the Company. In the event of such removal:

(i) there shall be no reduction of any Program benefits attributable to participation for years prior to the year of removal;

(ii) for the year of removal, there shall be no reduction of any Program benefits (including Employer contributions under

Article IV) that have been made already to the Personal Retirement Annuity prior to such removal; and

(iii) for the year of removal, the removed Eligible Employee shall not have any right to a pro-rated or proportionate share of

Program benefits for such year (including Employer contributions under Article IV) that have not been made to the

Personal Retirement Annuity prior to such removal.

Eligible Employees who are removed under this Section 3.2 shall be notified in writing by the Company, not later than 90 days after

their removal.

3.3 Ineligible Participant.

Notwithstanding any other provisions of this Program to the contrary, if the Committee (BAC) determines that any Participant

may not qualify as a member of a select group of “management or highly compensated employee” within the meaning of the Employee

Retirement Income Security Act of 1974, as amended, (“ERISA”) or regulations thereunder, the Committee (BAC) may determine, in

its sole discretion, that such Participant shall cease to be eligible to participate in this Program. Upon such determination by the

Committee (BAC), the Committee (BAC) shall give written notice to the individual who has ceased to be eligible to participate in this

Program (and, in the case of an executive officer, a copy of such notice shall also be given to the Management Development and

Compensation Committee of the Board of Directors of the Company). In any such notice, the Committee (BAC) shall explain that all

benefits under the Program have been forfeited (or otherwise handled in a manner that the Committee

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(BAC) determines is consistent with applicable law) due to loss of eligibility under applicable law.

ARTICLE IV

CONTRIBUTIONS AND COMPANY BENEFITS

4.1 Contribution Amounts.

Effective January 1, 2011, no Participant may elect to have a payroll deduction taken from his or her Compensation. Prior to

January 1, 2011, all payroll deductions by Participants were administered on an after-tax basis and, consistent with Section 4.3,

contributed on such basis to each Participant’s Personal Retirement Annuity.

4.2 Company Benefit.

The Employer shall provide a Company Benefit under this Program with respect to each Participant who is eligible to be

allocated matching contributions and/or performance contributions (also known as “retirement contributions”) under the EQT

Corporation Employee Savings Plan (as amended from time to time, the “EQT 401(k) Plan”). Prior to reduction for taxes as set forth in

Section 4.3, the Company Benefit under this Program on behalf of a Participant for a Program Year shall be equal to the sum of (a) the

matching contributions which would be credited to the Participant under the EQT 401(k) Plan based upon the Participant’s hypothetical

pre-tax personal contribution amount that would be made under the EQT 401(k) Plan, absent the limitations of Sections 402(g),

401(a)(17), and 415 of the Code, (b) the performance contributions which would be credited to the Participant under the EQT

401(k) Plan, absent the limitations of Sections 401(a)(17) and 415 of the Code, (c) an amount equal to 9% (which increases to 11%

effective with the Bonus payment in respect of the 2013 plan year) of the Participant’s Bonus payment, prior to reduction for any

applicable tax withholding and (d) an amount equal to 2% of the Participant’s Bonus payment in respect of the 2012 plan year, prior to

reduction for any applicable tax withholding, only if the Participant executes and delivers to the Company on or before February 15,

2013 a Qualifying CIC Agreement. The express provisions herein on the time and form of payment applicable to Company Benefits

shall control over the terms and conditions provided in the EQT 401(k) Plan. For the avoidance of doubt Eligible Employees are not

required to make personal contributions to their EQT 401(k) Plan account or otherwise in order to receive the Company Benefit

described in items (b), (c) or (d) above and, for periods on and after January 1, 2011, personal contributions to the EQT 401(k) Plan are

required to receive the Company Benefit described in item (a) above.

4.3 Company Benefit Amounts.

The Company Benefit under the Program for each Participant shall be contributed by the Employer to the Participant’s Personal

Retirement Annuity on an after-tax basis. The gross amount (pre-tax) of the Company Benefit is determined under Sec. 4.2. Prior to

contribution to the Participant’s Personal Retirement Annuity, the Company shall withhold, and reduce the Company Benefit by, the

applicable income and other taxes that

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the Company determines to be appropriate. All references herein to “contribution of the Company Benefit” (or similar terminology)

shall mean such amount remaining after applicable tax withholding. In no event shall any Company Benefit be contributed to the

Participant’s Personal Retirement Annuity later than 21⁄2 months following the Program Year to which the Company Benefit relates. An

Eligible Employee must be a full-time, regular employee of the Employer on the date that the Employer makes the contribution to the

Participant’s Personal Retirement Annuity. If a Participant ceases to be employed by the Employer as a full-time, regular employee

prior to the date that the Employer makes the contribution to the Participant’s Personal Retirement Annuity, or has terminated his or her

participation in the Program prior to such date, the Company Benefit for such annual period shall be forfeited without any further action

required by the Employer.

ARTICLE V

PERSONAL RETIREMENT ANNUITIES

5.1 General.

The Personal Retirement Annuity to which Company Benefits will be contributed is listed on Exhibit B hereto and may be

changed, on a prospective basis, from time to time. Any such changes shall be authorized and approved by the Committee (BIC) or the

Management Development and Compensation Committee of the Board of Directors of the Company.

5.2 Terms of Personal Retirement Annuity.

The terms of the Personal Retirement Annuity, which is owned by the Participant, shall be as provided solely by the third-party

sponsor of such annuity, including the investment returns and elections, payment and withdrawal provisions and statements of account. 

The election of investments within a Personal Retirement Annuity shall be the sole responsibility of each Participant. The Company,

the Employer, their employees and members of the Committees are not authorized to make any recommendation to any Participant with

respect to such election. Each Participant assumes all risk connected with any adjustment to the value of his or her Personal Retirement

Annuity. None of the Committees, the Management Development and Compensation Committee of the Board of Directors of the

Company, the Company and the Employer in any way guarantees against loss or depreciation.

ARTICLE VI

ADMINISTRATION

6.1 Committees.

The administrative committee for the Program (the “Committee (BAC)”) shall be the Benefits Administration Committee of

the Company. The Committee (BAC) shall have (i) complete discretion to supervise the administration and operation of the Program,

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(ii) complete discretion to adopt rules and procedures governing the Program from time to time, and (iii) sole authority to give

interpretive rulings with respect to the Program.

The investment committee for the Program (the “Committee (BIC)”) shall be the Benefits Investment Committee of the

Company. The Committee (BIC) shall have (i) complete discretion to determine and select the personal retirement annuity program

under Section 5.1; (ii) complete discretion to monitor, remove and replace all or part of any personal retirement annuity program; and

(iii) complete discretion to adopt rules, guidelines or other procedures for the management and investment of Program assets.

6.2 Agents.

The Committees may appoint an individual, who may be an employee of the Company, to be the Committee’s agent with

respect to the day-to-day administration of the Program. In addition, the Committees may, from time to time, employ other agents and

delegate to them such administrative duties as they see fit, and may from time to time consult with counsel who may be counsel to the

Company.

6.3 Binding Effect of Decisions.

Any decision or action of the Committees with respect to any question arising out of or in connection with the administration,

investment, interpretation and application of the Program shall be final and binding upon all persons having any interest in the Program.

6.4 Indemnification of Committees.

The Company shall indemnify and hold harmless the members of the Committees and their duly appointed agents under

Section 6.2 against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to the

Program, except in the case of gross negligence or willful misconduct by any such member or agent of the Committees.

ARTICLE VII

AMENDMENT AND TERMINATION OF PROGRAM

7.1 Amendment.

The Company, on behalf of itself and of each Selected Affiliate may at any time amend, suspend or reinstate any or all of the

provisions of the Program, except that no such amendment, suspension or reinstatement may adversely affect any Participant’s Personal

Retirement Annuity as it existed as of the day before the effective date of such amendment, suspension or reinstatement, without such

Participant’s prior written consent and provided that any amendment, suspension or reinstatement affecting the benefits to any executive

officer of the Company shall require the approval of the Management Development and Compensation Committee of the Board of

Directors of the Company.

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Written notice of any amendment or other action with respect to the Program shall be given to each Participant by the Committee

(BAC).

7.2 Termination.

The Company, on behalf of itself and of each Selected Affiliate, in its sole discretion, may terminate this Program at any time

and for any reason whatsoever. A termination of the Program shall not adversely affect any Participant’s Personal Retirement Annuity

as it existed on the day before such termination, without the Participant’s prior written consent.

ARTICLE VIII

MISCELLANEOUS

8.1 Funding.

Participants and their heirs, successors and assigns, shall have no secured interest or claim in any property or assets of any

Employer or the Company. The Employer’s obligation under the Program to contribute Company Benefits to a Participant’s Personal

Retirement Annuity shall be merely that of an unfunded and unsecured promise. To the extent that any Participant or other person

acquires a right to receive Company Benefits under the Program, such right shall be no greater than the right, and each Participant shall

at all times have the status, of a general unsecured creditor of the Company or any other Employer.

8.2 Nonassignability.

No right or interest under the Program of a Participant (or any person claiming through or under him or her) shall be assignable

or transferable in any manner or be subject to alienation, anticipation, sale, pledge, encumbrance or other legal process or in any manner

be liable for or subject to the debts or liabilities of any such Participant. If any Participant shall attempt to or shall transfer, assign,

alienate, anticipate, sell, pledge or otherwise encumber his or her benefits hereunder or any part thereof, or if by reason of his or her

bankruptcy or other event happening at any time such benefits would devolve upon anyone else or would not be enjoyed by him or her,

then the Committee (BAC), in its discretion, may terminate his or her interest in any such benefit to the extent the Committee (BAC)

considers necessary or advisable to prevent or limit the effects of such occurrence. Termination shall be effected by filing a written

“termination declaration” with the Company’s Corporate Director, Compensation and Benefits and making reasonable efforts to deliver a

copy to the Participant whose interest is adversely affected (the “Terminated Participant”).

8.3 No Acceleration of Benefits; No Deferred Compensation; Taxation; Tax Withholding.

This Program is not intended to provide for the deferral of compensation and there shall be no acceleration of the time or

schedule of any payments or contributions

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
under the Program. The Employer shall be and is authorized to withhold from Company Benefits under this Program, or from such

other compensation or benefits paid or payable to the Participant, those federal, state or local income taxes or similar charges that the

Committee (BAC), in its sole discretion, determines are required to be withheld under applicable law. The Employer does not represent

or guarantee that any particular federal or state income, payroll, personal property or other tax consequence will result from

participation in this Program. Participants are directed to consult with professional tax advisors to determine the tax consequences of

their participation.

8.4 Captions.

The captions contained herein are for convenience only and shall not control or affect the meaning or construction hereof.

8.5 Governing Law.

The provisions of the Program shall be construed and interpreted according to the laws of the Commonwealth of Pennsylvania

without regard to its conflicts of laws provisions. If any insubstantial provision of this Program is declared unlawful for any reason,

including by State or federal legislative act, regulation, or judicial ruling, such provision shall become inoperative but will not affect the

validity of any other provision.

8.6 Successors.

The provisions of the Program shall bind and inure to the benefit of the Company, the Employer, and their respective successors

and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger,

consolidation, purchase or otherwise, acquire all or substantially all of the business and assets of the Company or an Employer and

successors of any such Company or other business entity.

8.7 No Right to Continued Service.

Nothing contained herein shall be construed to confer upon any Eligible Employee the right to continue to serve as an Eligible

Employee of an Employer or in any other capacity.

8.8 Benefit Claims.

(a) Initial Claims. To make a claim for a benefit, a Participant (or the Participant’s authorized representative) may file a

written request setting forth the claim for such benefit with: (i) in the case of an executive officer, the Management Development and

Compensation Committee of the Board of Directors of the Company; and (ii) in all other cases, the Committee (BAC). (On a case-bycase basis, the Management Development and Compensation Committee of the Board of Directors of the Company may delegate its

claim review functions to the Committee (BAC). All references in this Section 8.8 to Committee (BAC) shall include the

Management Development and Compensation Committee of the Board of Directors of the Company,

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
where such Committee of the Board undertakes the review of a claim and does not delegate such review to the Committee (BAC).)

(b) Denied Claims. If the Committee (BAC) receives a claim in writing, the Committee (BAC) will advise the Participant

of its decision on the claim in writing in a reasonable period of time after receipt of the claim (not to exceed 120 days). The notice shall

set forth the following information:

(1) The specific basis for its decision,

(2) Specific reference to pertinent Program provisions on which the decision is based,

(3) A description of any additional material or information necessary for the Participant to perfect a claim and an explanation

of why such material or information is necessary,

(4) An explanation of the Program’s claim review procedure, and

(5) If applicable, a statement of the Participant’s right to bring an action under Section 502 of ERISA upon the denial of the

appeal of a previously denied claim.

(c) Appealing a Claim. The Participant (or the Participant’s authorized representative) may make a written request within

60 days of the denial to the Committee (BAC) to have a designated appeals authority (which shall be different than the Committee

(BAC)) review the denial. The Participant may review the pertinent documents and submit issues and comment in writing for

consideration by the appeals authority. If the Participant does not request a review of the initial determination within such 60-day period,

he or she will be barred from challenging the determination by reason of failure to exhaust administrative remedies.

Within 60 days after the Committee (BAC)’s receipt of the Participant’s request for appeal review, the Participant will receive

notice of the appeals authority’s decision. If the claim is further denied, the notice will contain the specific reasons for the decision of

the appeals authority; specific references to the pertinent provisions of this Program upon which the decision is based; and a statement of

the Participant’s right to bring an action under Section 502 of ERISA. If special circumstances require that the 60-day time period be

extended, the appeals authority will notify the Participant within the initial 60-day time period and will render the decision as soon as

possible, but no later than 120 days after receipt of the request for review.

(d) Limitation of Time to Commence Legal Action. Notwithstanding any otherwise applicable legally-prescribed statute

of limitations period, no legal action may be commenced or maintained to recover benefits under this Program more than twelve (12)

months after the final review decision by the appeals authority has been rendered (or deemed rendered).

- 10 -

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EXHIBIT A

Section 3.1 - Description of Eligible Employees

· Prior to February 1, 2013, full-time Executive Officers of the Company, other than the Vice President & Corporate Controller.

From and after February 1, 2013, only full time Executive Officers of the Company, other than the Vice President &

Controller, who have timely executed and delivered to the Company a Qualifying CIC Agreement

· EVP Drilling & Completions, EQT Production Company, provided he has timely executed and delivered to the Company a

Qualifying CIC Agreement

Date: February 19, 2013

Initials: CP

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EXHIBIT B

Personal Retirement Annuity

Fidelity Personal Retirement Annuity

Date: February 19, 2013 

Initials: CP

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Exhibit 10.10(b)

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

THIS AMENDED AND RESTATED AGREEMENT (the “Agreement”) dated as of the 19 day of February, 2013 (the

“Effective Date”) is made by and between EQT Corporation, a Pennsylvania corporation with its principal place of business at

Pittsburgh, Pennsylvania (the “Company”), and David L. Porges, an individual (the “Employee”). This Agreement amends and restates

that certain Change of Control Agreement, dated as of September 8, 2008, between the parties hereto (the “Existing Agreement”), for

the purposes of (i) eliminating the “Good Reason” trigger under the Existing Agreement consisting of termination of employment by the

Employee for any reason during the 30-day period commencing on the one-year anniversary of a Change of Control, and (ii) eliminating

the Change of Control excise tax gross-up provision of the Existing Agreement.

WITNESSETH:

WHEREAS, the Board of Directors of the Company (the “Board”) believes that it is in the best interest of the Company and its

shareholders to assure that the Company will have the continued dedication of the Employee, notwithstanding the possibility, threat or

occurrence of a Change of Control (as defined below) of the Company; that it is imperative to diminish the inevitable distraction of the

Employee by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the

Employee’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control;

and that it is appropriate to provide the Employee with compensation and benefits arrangements upon a Change of Control which ensure

that the compensation and benefits expectations of the Employee will be satisfied and which are competitive with those of other

corporations in the industry in which the Company’s principal business activity is conducted; and

WHEREAS, in consideration of the compensation and benefits payable to the Employee under this Agreement, Employee’s

eligibility to participate in the Company’s 2006 Payroll Deduction and Contribution Program from and after February 1, 2013 and an

increase in the “Company Benefit” under and as described in the 2006 Payroll Deduction and Contribution Program, the Employee, the

Company desire to enter into this Agreement which amends and restates the Existing Agreement which, among other things, restricts

the Employee from competing with the Company and from soliciting customers and employees of the Company for one (1) year

following the termination of the Employee’s employment following a Change of Control. The Company also desires to require that the

Employee maintain the confidentiality of certain information for two (2) years following any such termination, and the Employee is

willing to agree to such restrictions in consideration of the compensation and benefits payable under this Agreement; and

NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, and intending to be legally

bound hereby, the parties hereto agree as follows:

th

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1. Term. The term of this Agreement shall commence on the Effective Date hereof and, subject to Sections 3(f), 5 and 8,

shall terminate on the earlier of (i) the date of the termination of the Employee’s employment with the Company for any reason prior to

a Change of Control; (ii) the date of the Employee’s transition to employment with the Company on a part-time basis, including without

limitation assumption of “Executive Alternative Work Arrangement” status; or (iii) unless further extended as hereinafter set forth, the

date which is twenty-four (24) months after the Effective Date; provided, that, commencing on the last day of the first full calendar

month after the Effective Date and on the last day of each succeeding calendar month, the term of this Agreement shall be

automatically extended without further action by either party (but not beyond the date of the termination of the Employee’s

employment or transition to part-time employment prior to a Change of Control) for one (1) additional month unless one party provides

written notice to the other party that such party does not wish to extend the term of this Agreement. In the event that such notice shall

have been delivered, the term of this Agreement shall no longer be subject to automatic extension and the term hereof shall expire on

the date which is twenty-four (24) calendar months after the last day of the month in which such written notice is received.

2. Change of Control. Except as provided in Section 12, Change of Control shall mean any of the following events (each of

such events being herein referred to as a “Change of Control”):

(a) The sale or other disposition by the Company of all or substantially all of its assets to a single purchaser or to a group of

purchasers, other than to a corporation with respect to which, following such sale or disposition, more than eighty percent (80%) of,

respectively, the then outstanding shares of Company common stock and the combined voting power of the then outstanding voting

securities entitled to vote generally in the election of the Board of Directors is then owned beneficially, directly or indirectly, by all or

substantially all of the individuals and entities who were the beneficial owners, respectively of the outstanding Company common stock

and the combined voting power of the then outstanding voting securities immediately prior to such sale or disposition in substantially the

same proportion as their ownership of the outstanding Company common stock and voting power immediately prior to such sale or

disposition;

(b) The acquisition in one or more transactions by any person or group, directly or indirectly, of beneficial ownership of

twenty percent (20%) or more of the outstanding shares of Company common stock or the combined voting power of the then

outstanding voting securities of the Company entitled to vote generally in the election of the Board of Directors; provided, however, that

the following shall not constitute a Change of Control: (i) any acquisition by the Company or any of its subsidiaries, or any employee

benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries and (ii) an acquisition by any person or

group of persons of not more than forty percent (40%) of the outstanding shares of Company common stock or the combined voting

power of the then outstanding voting securities of the Company if such acquisition resulted from the issuance of capital stock by the

Company and the issuance and the acquiring person or group was approved in advance of such issuance by at least two-thirds of the

Continuing Directors then in office;

(c) The Company’s termination of its business and liquidation of its assets;

2

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(d) There is consummated a merger, consolidation, reorganization, share exchange, or similar transaction involving the

Company (including a triangular merger), in any case, unless immediately following such transaction: (i) all or substantially all of the

persons who were the beneficial owners of the outstanding common stock and outstanding voting securities of the Company

immediately prior to the transaction beneficially own, directly or indirectly, more than 60% of the outstanding shares of common stock

and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the

corporation resulting from such transaction (including a corporation or other person which as a result of such transaction owns the

Company or all or substantially all of the Company’s assets through one or more subsidiaries (a “Parent Company”)) in substantially the

same proportion as their ownership of the common stock and other voting securities of the Company immediately prior to the

consummation of the transaction, (ii) no person (other than (A) the Company, any employee benefit plan sponsored or maintained by the

Company or, if reference was made to equity ownership of any Parent Company for purposes of determining whether clause (i) above is

satisfied in connection with the transaction, such Parent Company, or (B) any person or group that satisfied the requirements of

subsection (b)(ii), above) beneficially owns, directly or indirectly, 20% or more of the outstanding shares of common stock or the

combined voting power of the voting securities entitled to vote generally in the election of directors of the corporation resulting from

such transaction and (iii) individuals who were members of the Company’s Board of Directors immediately prior to the consummation

of the transaction constitute at least a majority of the members of the board of directors resulting from such transaction (or, if reference

was made to equity ownership of any Parent Company for purposes of determining whether clause, (i) above is satisfied in connection

with the transaction, such Parent Company); or

(e) The following individuals (sometimes referred to herein as “Continuing Directors”) cease for any reasons to constitute a

majority of the number of directors then serving: individuals who, on the date hereof, constitute the entire Board of Directors and any

new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest,

including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by

the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors

then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was

previously so approved.

3. Salary and Benefits Continuation.

(a) “Salary and Benefits Continuation” shall be defined to mean the following:

(i) payment of an amount of cash equal to three (3) times the Employee’s base salary at the rate of base salary per

annum in effect immediately prior to the Change of Control or the termination of the Employee’s

employment, whichever is higher;

(ii) payment of an amount of cash equal to three (3) times the greater of (A) the highest annual incentive (bonus)

payment earned by the Employee under the Company’s applicable Short-Term Incentive Plan (or any

3

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successor plan) for any year in the five (5) years prior to the termination of the Employee’s employment or

(B) the target incentive (bonus) award under the Company’s applicable Short-Term Incentive Plan (or any

successor plan) for the year in which the Change of Control or termination of the Employee’s employment

occurs, whichever is higher;

(iii) provision to the Employee and his eligible dependents of medical, long-term disability, dental and life insurance

coverage (to the extent such coverage was in effect immediately prior to the Change of Control) for thirty-six

(36) months (at the end of which period the Company shall make such benefits available to the Employee and

his eligible dependents in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985

(“COBRA”), whether or not the Company is then required to comply with COBRA); and if the Employee

would have become entitled to benefits under the Company’s post-retirement health care or life insurance

plans (as in effect immediately prior to the Change of Control or the date of the Employee’s termination of

employment, whichever is most favorable to the Employee) had the Employee’s employment terminated at

any time during the period of thirty-six (36) months after such date of termination, the Company shall provide

such post-retirement health care or life insurance benefits to the Employee (subject to any employee

contributions required under the terms of such plans at the level in effect immediately prior to the Change of

Control or the date of termination, whichever is more favorable to the Employee) commencing on the later of

(i) the date that such coverage would have first become available or (ii) the date that benefits described in this

subsection (iii) terminate;

(iv) contribution by the Company to the Employee’s account under the Company’s defined contribution retirement

plan (currently, the EQT Corporation Employee Savings Plan) of an amount of cash equal to the amount that

the Company would have contributed to such plan (including both retirement contributions and Company

matching contributions in respect of the Employee contributions to the plan) had the Employee continued to be

employed by the Company for an additional thirty-six (36) months at a base salary equal to the Employee’s base

salary immediately prior to the Change of Control or the termination of the Employee’s employment,

whichever is higher (and assuming for this purpose that the Employee continued to make the maximum

permissible contributions to such plan during such period), such contribution being deemed to be made

immediately prior to the termination of the Employee’s employment; provided, that to the extent that the

amount of such contribution exceeds the amount then allowed to be contributed to the plan under the applicable

rules relating to tax-qualified retirement plans, then the excess shall be paid to the Employee in cash in respect

of both retirement and matching contributions under the Company’s Employee Savings Plan (or any successor

plan) because of applicable rules relating to tax-qualified retirement plans; and

4

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(v) Payment of an amount of cash equal to $20,000.

(b) All amounts payable by the Company to the Employee pursuant to Sections 3(a)(i), (ii), (iv) and (v) shall be made in a

lump sum on the first day following the six-month anniversary of the Employee’s termination. For purposes of this Agreement, the

term “termination” when used in the context of a condition to, or timing of, payment hereunder shall be interpreted to mean a

“separation from service” as that term is used in Section 409A of the Internal Revenue Code of 1986, as amended, (the “Code”).

(c) To the extent that medical, long-term disability, dental and life insurance benefits cannot be provided on a non-taxable

basis to the Employee under appropriate Company group insurance policies pursuant to Section 3(a)(iii), an amount equal to the

premium necessary for the Employee to purchase directly the same level of coverage in effect immediately prior to the Change of

Control shall be added to the Company’s payments to the Employee pursuant to Section 3(a). Any such payment shall be made in a

lump sum, payable on the first day following the six-month anniversary of the Employee’s termination. If the Employee is required to

pay income or other taxes on any medical, long-term disability, dental or life insurance benefits provided or paid to the Employee

pursuant to Section 3(a)(iii) or this Section 3(c), then the Company shall pay to the Employee an amount of cash sufficient to “grossup” such benefits or payments at the time specified in Section 10 hereof so that the Employee’s “net” benefits received under

Section 3(a)(iii) and this Section 3(c) are not diminished by any such taxes that are imposed with respect to the same or the Company’s

gross-up hereunder with respect to such taxes.

(d) If there is a Change of Control as defined above, the Company will provide Salary and Benefits Continuation if at any

time during the first twenty-four (24) months following the Change of Control, either (i) the Company terminates the Employee’s

employment other than for Cause as defined in Section 4 below or (ii) the Employee terminates his employment for “Good Reason” as

defined below.

(e) For purposes of this Agreement, “Good Reason” is defined as:

(i) Removal of the Employee from the position he held immediately prior to the Change of Control (by reason

other than death, disability or Cause);

(ii) The assignment to the Employee of any duties inconsistent with those performed by the Employee

immediately prior to the Change of Control or a substantial alteration in the nature or status of the Employee’s

responsibilities which renders the Employee’s position to be of less dignity, responsibility or scope;

(iii) A reduction by the Company in the overall level of compensation of the Employee for any year from the level

in effect for the Employee in the prior year. For purposes of this subsection (iii), the following shall not

constitute a reduction in the overall level of compensation of the Employee: (A) across-the-board reductions in

base salary similarly affecting all executives of the Company and all executives of any person

5

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in control of the Company, provided, however, that the Employee’s annual base salary rate shall not be reduced

by an amount equal to ten percent or more of the Employee’s annual base salary rate in effect immediately

prior to the Change of Control; (B) changes in the mix of base salary payable to and the short-term incentive

opportunity available to the Employee; provided, that in no event shall the Employee’s base salary for any year

be reduced below 90% of the annual base salary paid to the Employee in the prior year; (C) a reduction in the

compensation of the Employee resulting from the failure to achieve corporate, business unit and/or individual

performance goals established for purposes of incentive compensation for any year or other period; provided,

that the aggregate short-term incentive opportunity, when combined with the Employee’s annual base salary,

provides, in the aggregate, an opportunity for the Employee to realize at least the same overall level of base

salary and short term incentive compensation as was paid in the immediately prior year or period at target

performance levels; and provided, further, that such target performance levels are reasonable at all times

during the measurement period, taking into account the fact that one of the purposes of such compensation is to

incentivize the Employee; (D) reductions in compensation resulting from changes to any Company benefit

plan; provided, that such changes are generally applicable to all participants in such Company benefit plan; and

(E) any combination of the foregoing;

(iv) The failure to grant the Employee an annual salary increase reasonably necessary to maintain such salary as

reasonably comparable to salaries of senior executives holding positions equivalent to the Employee’s in the

industry in which the Company’s then principal business activity is conducted;

(v) The Company requiring the Employee to be based anywhere other than the Company’s principal executive

offices in the city in which the Employee is principally located immediately prior to the Change of Control,

except for required travel on the Company’s business to an extent substantially consistent with the Employee’s

business travel obligations prior to the Change of Control;

(vi) Any material reduction by the Company of the benefits enjoyed by the Employee under any of the Company’s

pension, retirement, profit sharing, savings, life insurance, medical, health and accident, disability or other

employee benefit plans, programs or arrangements, the taking of any action by the Company which would

directly or indirectly materially reduce any of such benefits or deprive the Employee of any material fringe

benefits, or the failure by the Company to provide the Employee with the number of paid vacation days to

which he is entitled on the basis of years of service with the Company in accordance with the Company’s

normal vacation policy, provided that this subparagraph (vi) shall not apply to any proportional across-the-board

reduction or action similarly affecting all

6

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executives of the Company and all executives of any person in control of the Company; or

(vii) The failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to

perform this Agreement, as contemplated in Section 15 hereof, or any other material breach by the Company

of its obligations contained in this Agreement.

(f) The Employee’s right to Salary and Benefits Continuation shall accrue upon the occurrence of either of the events

specified in (i) or (ii) of Section 3(d) and shall continue as provided, notwithstanding the subsequent termination or expiration of this

Agreement pursuant to Section 1 hereof. The Employee’s subsequent employment, death or disability following the Employee’s

termination of employment in connection with a Change of Control shall not affect the Company’s obligation to continue making Salary

and Benefits Continuation payments, except as provided in Section 8(c). The Employee shall not be required to mitigate the amount of

any payment provided for in this Section 3 by seeking employment or otherwise. The rights to Salary and Benefits Continuation shall

be in addition to whatever other benefits the Employee may be entitled to under any other agreement or compensation plan, program or

arrangement of the Company; provided, that the Employee shall not be entitled to any separate or additional severance payments

pursuant to the Company’s severance plan as then in effect and generally applicable to similarly situated employees. The Company

shall be authorized to withhold from any payment to the Employee, his estate or his beneficiaries hereunder all such amounts, if any,

that the Company may reasonably determine it is required to withhold pursuant to any applicable law or regulation.

4. Termination of The Employee for Cause.

(a) Upon or following a Change of Control, the Company may at any time terminate the Employee’s employment for

Cause. Termination of employment by the Company for “Cause” shall mean termination upon: (i) the willful and continued failure by

the Employee to substantially perform his duties with the Company (other than (A) any such failure resulting from the Employee’s

disability or (B) any such actual or anticipated failure resulting from the Employee’s termination of his employment for Good Reason),

after a written demand for substantial performance is delivered to the Employee by the Board of Directors which specifically identifies

the manner in which the Board of Directors believes that the Employee has not substantially performed his duties, and which failure has

not been cured within thirty days (30) after such written demand; or (ii) the willful and continued engaging by the Employee in conduct

which is demonstrably and materially injurious to the Company, monetarily or otherwise, or (iii) the breach by the Employee of any of

the covenants set forth in Section 8 hereof.

(b) For purposes of this Section 4, no act, or failure to act, on the Employee’s part shall be considered “willful” unless done,

or omitted to be done, by the Employee in bad faith and without reasonable belief that such action or omission was in the best interest of

the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until

there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the

entire

7

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membership of the Board of Directors at a meeting of the Board of Directors called and held for that purpose (after reasonable notice to

the Employee and an opportunity for the Employee, together with his counsel, to be heard before the Board of Directors) finding that in

the good faith opinion of the Board of Directors the Employee is guilty of the conduct set forth above in clauses (a)(i), (ii) or (iii) of this

Section 4 and specifying the particulars thereof in detail.

5. Prior Termination. Anything in this Agreement to the contrary notwithstanding, if the Employee’s employment with

the Company is terminated prior to the date on which a Change of Control occurs either (i) by the Company other than for Cause or

(ii) by the Employee for Good Reason, and it is reasonably demonstrated by the Employee that such termination of employment (a) was

at the request of a third party who has taken steps reasonably calculated to effect the Change of Control, or (b) otherwise arose in

connection with or anticipation of the Change of Control, and (iii) a Change of Control that constitutes a change in ownership or

effective control of the Corporation or a change in the ownership of a substantial portion of the assets of the Company under

Section 409A of the Code occurs within twenty-four (24) months following the Employee’s termination, then for all purposes of this

Agreement the termination shall be deemed to have occurred upon a Change of Control and the Employee will be entitled to Salary and

Benefits Continuation as provided for in Section 3 hereof upon the date on which the Change of Control set forth in clause (iii) of this

Section 5 occurs or, if later, the date specified in Section 3 hereof.

6. Employment at Will. Subject to the provisions of any other agreement between the Employee and the Company, the

Employee shall remain an employee at will and nothing herein shall confer upon the Employee any right to continued employment and

shall not affect the right of the Company to terminate the Employee for any reason not prohibited by law; provided, however, that any

such removal shall be without prejudice to any rights the Employee may have to Salary and Benefits Continuation hereunder.

7. Construction of Agreement.

(a) Governing Law. This Agreement shall be governed by and construed under the laws of the Commonwealth of

Pennsylvania without regard to its conflict of law provisions.

(b) Severability. In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or

unenforceable, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(c) Headings. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience of

reference only and shall not constitute a part of this Agreement.

8. Covenant as to Confidential Information, Non-Competition and Non-Solicitation .

(a) Confidentiality of Information and Nondisclosure . The Employee acknowledges and agrees that his employment by the

Company necessarily involves his knowledge of and access to confidential and proprietary information pertaining to the business of the

Company and its subsidiaries. Accordingly, the Employee agrees that at all times during the term of this Agreement and for as long as

the information remains confidential after the termination of the Employee’s employment, he will not, directly or indirectly, without

the express written authority

8

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
of the Company, unless directed by applicable legal authority having jurisdiction over the Employee, disclose to or use, or knowingly

permit to be so disclosed or used, for the benefit of himself, any person, corporation or other entity other than the Company and its

subsidiaries, (i) any information concerning any financial matters, customer relationships, competitive status, supplier matters, internal

organizational matters, current or future plans, or other business affairs of or relating to the Company and its subsidiaries, (ii) any

management, operational, trade, technical or other secrets or any other proprietary information or other data of the Company or its

subsidiaries, or (iii) any other information related to the Company or its subsidiaries which has not been published and is not generally

known outside of the Company. The Employee acknowledges that all of the foregoing, constitutes confidential and proprietary

information, which is the exclusive property of the Company.

(b) Non-Competition and Non-Solicitation . While the Employee is employed by the Company and for a period of twelve

(12) months after the date of the Employee’s termination of employment with the Company for any reason, the Employee will not,

directly or indirectly, expressly or tacitly, for himself or on behalf of any entity conducting business anywhere in the Restricted

Territory (as defined below): (i) act as an officer, manager, advisor, executive, shareholder, or consultant to any business in which his

duties at or for such business include oversight of or actual involvement in providing services which are competitive with the services or

products being provided or which are being produced or developed by the Company, or were under investigation by the Company within

the last two (2) years prior to the end of the Employee’s employment with the Company, (ii) recruit investors on behalf of an entity

which engages in activities which are competitive with the services or products being provided or which are being produced or developed

by the Company, or were under investigation by the Company within the last two (2) years prior to the end of the Employee’s

employment with the Company, or (iii) become employed by such an entity in any capacity which would require the Employee to carry

out, in whole or in part, the duties the Employee has performed for the Company which are competitive with the services or products

being provided or which are being produced or developed by the Company, or were under active investigation by the Company within

the last two (2) years prior to the end of the Employee’s employment with the Company. Notwithstanding the foregoing, the Employee

may purchase or otherwise acquire up to (but not more than) 1% of any class of securities of any enterprise (but without otherwise

participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been

registered under Section 12(g) of the Securities Exchange Act of 1934. This covenant shall apply to any services, products or

businesses under investigation by the Company within the last two (2) years prior to the end of the Employee’s employment with the

Company only to the extent that the Employee acquired or was privy to confidential information regarding such services, products or

businesses. The Employee acknowledges that this restriction will prevent the Employee from acting in any of the foregoing capacities

for any competing entity operating or conducting business within the Restricted Territory and that this scope is reasonable in light of the

business of the Company.

Restricted Territory shall mean (i) any states in which the Company has a regulated-utility operation, which may change from

time to time, but as of the effective date of this Agreement are Pennsylvania, West Virginia and Kentucky; or (ii) any states in which the

Company owns, operates or has contractual rights to purchase natural gas-related assets (other than commodity trading rights), including

but not limited to, storage facilities, interstate

9

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pipelines, intrastate pipelines, intrastate distribution facilities, liquefied natural gas facilities, propane-air facilities or other peaking

facilities, and/or processing or fractionation facilities; or (iii) any state in which the Company owns proved, developed and/or

undeveloped natural gas and/or oil reserves and/or conducts natural gas or oil exploration and production activities of any kind; or (iv) any

state investigated by the Company as a possible jurisdiction in which to conduct any of the business activities described in subparagraphs

(i) through (iii) above within the last two (2) years prior to the end of the Employee’s employment with the Company.

The Employee agrees that for a period of twelve (12) months following the termination of the Employee’s employment with

the Company for any reason, including without limitation termination for cause or without cause, the Employee shall not, directly or

indirectly, solicit the business of, or do business with: (i) any customer that the Employee approached, solicited or accepted business

from on behalf of the Company, and/or was provided confidential or proprietary information about while employed by the Company

within the one (1) year period preceding the Employee’s separation from the Company; and (ii) any prospective customer of the

Company who was identified to or by the Employee and/or who the Employee was provided confidential or proprietary information

about while employed by the Company within the one (1) year period preceding the Employee’s separation from the Company, for

purposes of marketing, selling and/or attempting to market or sell products and services which are the same as or similar to any product

or service the Company offers within the last two (2) years prior to the end of the Employee’s employment with the Company, and/or,

which are the same as or similar to any product or service the Company has in process over the last two (2) years prior to the end of the

Employee’s employment with the Company to be offered in the future.

While the Employee is employed by the Company and for a period of twelve (12) months after the date of the Employee’s

termination of employment with the Company for any reason, the Employee shall not (directly or indirectly) on his or her own behalf

or on behalf of any other person or entity solicit or induce, or cause any other person or entity to solicit or induce, or attempt to solicit or

induce, any employee or consultant to leave the employ of or engagement by the Company or its successors, assigns or affiliates, or to

violate the terms of their contracts with the Company.

(c) Company Remedies. The Employee acknowledges and agrees that any breach of this Section 8 by him/her will result in

immediate irreparable harm to the Company, and that the Company cannot be reasonably or adequately compensated by damages in an

action at law. In the event of an actual or threatened breach by the Employee of the provisions of this Section 8, the Company shall be

entitled, to the extent permissible by law, immediately to cease to pay or provide the Employee or his/her dependents any compensation

or benefit being, or to be, paid or provided to him pursuant to Section 3 of this Agreement, and also to obtain immediate injunctive relief

restraining the Employee from conduct in breach or threatened breach of the covenants contained in this Section 8. Nothing herein shall

be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach,

including the recovery of damages from the Employee.

9. Reimbursement of Fees. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses

which the Employee may reasonably incur for the period beginning upon the Effective Date and ending upon the Employee’s death as a

result of any

10

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
contest by the Company, Internal Revenue Service or others regarding the validity or enforceability of, or liability under, any provision

of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Employee about the amount of

any payment pursuant to Section 3 of this Agreement) or in connection with any dispute arising from this Agreement, regardless of

whether the Employee prevails in any such contest or dispute. The Company shall pay or reimburse such fees and expenses on a

monthly basis, payable on the first of each month, and all reimbursement payments with respect to expenses incurred within a particular

year shall be made no later than the end of the Employee’s taxable year following the taxable year in which the expense was incurred. 

Any amounts not paid within such monthly reimbursement period shall bear interest at the rate per annum established by PNC Bank,

National Association (or its successor) from time to time as its “prime” or equivalent rate. The amount of reimbursable expenses

incurred in one taxable year of the Employee shall not affect the amount of reimbursable expenses in a different taxable year and such

reimbursement shall not be subject to liquidation or exchange for another benefit. Notwithstanding the foregoing, in the event such

amounts are conditioned upon a separation from service and not compensation the Employee could receive without separating from

service, then no such payments may be made to the Employee until the first day following the six-month anniversary of the

Employee’s termination.

11

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
10. Mandatory Reduction of Payments in Certain Events.

(a) Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment or

distribution by the Company to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the

terms of this Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as “Payments”) would, if

paid, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, prior to the making of any Payments to

the Employee, a calculation shall be made comparing (i) the net after-tax benefit to the Employee of the Payments after payment by the

Employee of the Excise Tax, to (ii) the net after-tax benefit to the Employee if the Payments had been limited to the extent necessary

to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above,

then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The

reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary,

reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the

Change in Control, as determined by the Determination Firm (as defined in Section 10(b) below). For purposes of this Section 10,

present value shall be determined in accordance with Section 280G(d)(4) of the Code. For purposes of this Section 10, the “Parachute

Value” of a Payment means the present value as of the date of the Change in Control of the portion of such Payment that constitutes a

“parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm for purposes of determining

whether and to what extent the Excise Tax will apply to such Payment.

(b) All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be

imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at

such determinations, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually

acceptable to the Company and the Employee (the “Determination Firm”) which shall provide detailed supporting calculations both to

the Company and the Employee within 15 business days after the receipt of notice from the Employee that a Payment is due to be

made, or such earlier time as is requested by the Company. All fees and expenses of the Determination Firm shall be borne solely by

the Company. Any determination by the Determination Firm shall be binding upon the Company and the Employee. As a result of the

uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder,

it is possible that Payments which the Employee was entitled to, but did not receive pursuant to Section 10(a), could have been made

without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such

event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall

be promptly paid by the Company to or for the benefit of the Employee but no later than March 15 of the year after the year in which

the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.

(c) In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without

succession, this Section 10 shall be of no further force or effect.

12

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11. Resolution of Differences Over Breaches of Agreement . Except as otherwise provided herein, in the event of any

controversy, dispute or claim arising out of, or relating to this Agreement, or the breach thereof, or arising out of any other matter

relating to the Employee’s employment with the Company or the termination of such employment, the parties may seek recourse only

for temporary or preliminary injunctive relief to the courts having jurisdiction thereof and if any relief other than injunctive relief is

sought, the Company and the Employee agree that such underlying controversy, dispute or claim shall be settled by arbitration

conducted in Pittsburgh, Pennsylvania in accordance with this Section 11 of this Agreement and the Commercial Arbitration Rules of

the American Arbitration Association (“AAA”). The matter shall be heard and decided, and awards rendered by a panel of three

(3) arbitrators (the “Arbitration Panel”). The Company and the Employee shall each select one arbitrator from the AAA National Panel

of Commercial Arbitrators (the “Commercial Panel”) and AAA shall select a third arbitrator from the Commercial Panel. The award

rendered by the Arbitration Panel shall be final and binding as between the parties hereto and their heirs, executors, administrators,

successors and assigns, and judgment on the award may be entered by any court having jurisdiction thereof.

12. Treatment of Certain Incentive Awards. All “Awards” held by the Employee under the Company’s 1999 Long-Term

Incentive Plan, the Company’s 2009 Long-Term Incentive Plan, or any successor plan or plans (as the case may be, the “Incentive

Plan”) shall, upon a Change of Control, be treated in accordance with the terms of the applicable Incentive Plan and underlying award

agreements when and as awarded, without regard to the subsequent amendment of the applicable Incentive Plan. For purposes of this

Section 12, the terms “Award” and “Change of Control” shall have the meanings ascribed to them in the applicable Incentive Plan.

13. Release. The Employee hereby acknowledges and agrees that prior to the Employee’s or his dependents’ right to

receive from the Company any compensation or benefit to be paid or provided to him or his dependents pursuant to Section 3 of this

Agreement, the Employee may be required by the Company, in its sole discretion, to execute a release in a form reasonably acceptable

to the Company, which releases any and all claims (other than amounts to be paid to the Employee as expressly provided for under this

Agreement) the Employee has or may have against the Company or its subsidiaries, agents, officers, directors, successors or assigns

arising under any public policy, tort or common law or any provision of state, federal or local law, including, but not limited to, the

Pennsylvania Human Relations Act, the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Civil Rights

Protection Act, Family and Medical Leave Act, the Age Discrimination in Employment Act of 1967, or the Employee Retirement

Income Security Act of 1974, all as amended.

14. Waiver. The waiver by a party hereto of any breach by the other party hereto of any provision of this Agreement shall

not operate or be construed as a waiver of any subsequent breach by a party hereto.

15. Assignment. This Agreement, including the non-competition and non-solicitation covenant in Section 8(b) hereof, shall

be binding upon and inure to the benefit of the successors and assigns of the Company. The Company shall be obligated to require any

successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of

13

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
the Company’s business or assets, by a written agreement in form and substance satisfactory to the Employee, to expressly assume and

agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no

succession had taken place. This Agreement shall inure to the extent provided hereunder to the benefit of and be enforceable by the

Employee or his legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. The Employee

may not delegate any of his duties, responsibilities, obligations or positions hereunder to any person and any such purported delegation by

him shall be void and of no force and effect with respect to matters relating to his employment and termination of employment. 

Without limiting the foregoing, the Employee’s rights to receive payments and benefits hereunder shall not be assignable or

transferable, other than a transfer by the Employee’s will or by the laws of descent and distribution.

16. Notices. Any notices required or permitted to be given under this Agreement shall be sufficient if in writing, and if

personally delivered or when sent by first class certified or registered mail, postage prepaid, return receipt requested -- in the case of the

Employee, to his residence address as set forth below, and in the case of the Company, to the address of its principal place of business as

set forth below, in care of the Chairman of the Board -- or to such other person or at such other address with respect to each party as

such party shall notify the other in writing.

17. Pronouns. Pronouns stated in either the masculine, feminine or neuter gender shall include the masculine, feminine and

neuter.

18. Entire Agreement. Except as set forth in any confidentiality, non-solicitation or non-competition agreement to which

you are a party, this Agreement contains the entire agreement of the parties concerning the matters set forth herein and all promises,

representations, understandings, arrangements and prior agreements regarding the subject matter hereof (including the Existing

Agreement, which the parties agree shall terminate as of the Effective Date hereof) are merged herein and superseded hereby. The

provisions of this Agreement may not be amended, modified, repealed, waived, extended or discharged except by an agreement in

writing signed by the party against whom enforcement of any amendment, modification, repeal, waiver, extension or discharge is

sought; provided, however, that the Company may amend this Agreement from time to time without the Employee’s consent to the

extent deemed necessary or appropriate, in its sole discretion, to effect compliance with Section 409A of the Code, including regulations

and interpretations thereunder, which amendments may result in a reduction of benefits provided hereunder and/or other unfavorable

changes to the Employee. No person acting other than pursuant to a resolution of the Board of Directors (or its designee) shall have

authority on behalf of the Company to agree to amend, modify, repeal, waive, extend or discharge any provision of this Agreement or

anything in reference thereto or to exercise any of the Company’s rights to terminate or to fail to extend this Agreement.

14

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers thereunto duly authorized,

and the Employee has hereunto set his hand, all as of the day and year first above written.

ATTEST: EQT CORPORATION

 /s/ Kimberly L. Sachse /s/ Charlene Petrelli

By: Charlene Petrelli

Title: Vice President & Chief Human

 Resources Officer

Address:

625 Liberty Avenue

Pittsburgh, PA 15222

WITNESS:

 /s/ David J. Smith /s/ David L. Porges

Name: David L. Porges

15

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 10.11(b)

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

THIS AMENDED AND RESTATED AGREEMENT (the “Agreement”) dated as of the 19 day of February, 2013 (the

“Effective Date”) is made by and between EQT CORPORATION, a Pennsylvania corporation with its principal place of business at

Pittsburgh, Pennsylvania (the “Company”), and Philip P. Conti, an individual (the “Employee”). This Agreement amends and restates

that certain Change of Control Agreement, dated as of September 8, 2008, between the parties hereto (the “Existing Agreement”), for

the purposes of eliminating the Change of Control excise tax gross-up provision of the Existing Agreement.

WITNESSETH:

WHEREAS, the Board of Directors of the Company (the “Board”) believes that it is in the best interest of the Company and its

shareholders to assure that the Company will have the continued dedication of the Employee, notwithstanding the possibility, threat or

occurrence of a Change of Control (as defined below) of the Company; that it is imperative to diminish the inevitable distraction of the

Employee by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the

Employee’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control;

and that it is appropriate to provide the Employee with compensation and benefits arrangements upon a Change of Control which ensure

that the compensation and benefits expectations of the Employee will be satisfied and which are competitive with those of other

corporations in the industry in which the Company’s principal business activity is conducted; and

WHEREAS, in consideration of the compensation and benefits payable to the Employee under this Agreement, the Employee’s

eligibility to participate in the Company’s 2006 Payroll Deduction and Contribution Program from and after February 1, 2013, and an

increase in the “Company Benefit” under and as described in the 2006 Payroll Deduction and Contribution Program, the Employee and

the Company desire to enter into this Agreement, which amends and restates the Existing Agreement which, among other things,

restricts the Employee from competing with the Company and from soliciting customers and employees of the Company for one

(1) year following the termination of the Employee’s employment following a Change of Control. The Company also desires to require

that the Employee maintain the confidentiality of certain information for two years following any such termination, and the Employee

is willing to agree to such restrictions in consideration of the compensation and benefits payable under this Agreement; and

NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, and intending to be legally

bound hereby, the parties hereto agree as follows:

1. Term. The term of this Agreement shall commence on the Effective Date hereof and, subject to Sections 3(f), 5 and 8,

shall terminate on the earlier of (i) the date of the termination of the Employee’s employment with the Company for any reason prior to

a Change of Control; (ii) the date of Employee’s transition to employment with the Company on a

1

th

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
part-time basis, including without limitation assumption of “Executive Alternative Work Arrangement” status; or (iii) unless further

extended as hereinafter set forth, the date which is twenty-four (24) months after the Effective Date; provided, that, commencing on

the last day of the first full calendar month after the Effective Date and on the last day of each succeeding calendar month, the term of

this Agreement shall be automatically extended without further action by either party (but not beyond the date of the termination of the

Employee’s employment or transition to part-time employment prior to a Change of Control) for one (1) additional month unless one

party provides written notice to the other party that such party does not wish to extend the term of this Agreement. In the event that

such notice shall have been delivered, the term of this Agreement shall no longer be subject to automatic extension and the term hereof

shall expire on the date which is twenty-four (24) calendar months after the last day of the month in which such written notice is

received.

2. Change of Control. Except as provided in Section 12, Change of Control shall mean any of the following events (each of

such events being herein referred to as a “Change of Control”):

(a) The sale or other disposition by the Company of all or substantially all of its assets to a single purchaser or to a group of

purchasers, other than to a corporation with respect to which, following such sale or disposition, more than eighty percent (80%) of,

respectively, the then outstanding shares of Company common stock and the combined voting power of the then outstanding voting

securities entitled to vote generally in the election of the Board of Directors is then owned beneficially, directly or indirectly, by all or

substantially all of the individuals and entities who were the beneficial owners, respectively of the outstanding Company common stock

and the combined voting power of the then outstanding voting securities immediately prior to such sale or disposition in substantially the

same proportion as their ownership of the outstanding Company common stock and voting power immediately prior to such sale or

disposition;

(b) The acquisition in one or more transactions by any person or group, directly or indirectly, of beneficial ownership of

twenty percent (20%) or more of the outstanding shares of Company common stock or the combined voting power of the then

outstanding voting securities of the Company entitled to vote generally in the election of the Board of Directors; provided, however, that

the following shall not constitute a Change of Control: (i) any acquisition by the Company or any of its subsidiaries, or any employee

benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries and (ii) an acquisition by any person or

group of persons of not more than forty percent (40%) of the outstanding shares of Company common stock or the combined voting

power of the then outstanding voting securities of the Company if such acquisition resulted from the issuance of capital stock by the

Company and the issuance and the acquiring person or group was approved in advance of such issuance by at least two-thirds of the

Continuing Directors then in office;

(c) The Company’s termination of its business and liquidation of its assets;

(d) There is consummated a merger, consolidation, reorganization, share exchange, or similar transaction involving the

Company (including a triangular merger), in any case, unless immediately following such transaction: (i) all or substantially all of the

persons who were the beneficial owners of the outstanding common stock and outstanding voting securities of the

2

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Company immediately prior to the transaction beneficially own, directly or indirectly, more than 60% of the outstanding shares of

common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of

directors of the corporation resulting from such transaction (including a corporation or other person which as a result of such transaction

owns the Company or all or substantially all of the Company’s assets through one or more subsidiaries (a “Parent Company”)) in

substantially the same proportion as their ownership of the common stock and other voting securities of the Company immediately prior

to the consummation of the transaction, (ii) no person (other than (A) the Company, any employee benefit plan sponsored or maintained

by the Company or, if reference was made to equity ownership of any Parent Company for purposes of determining whether clause

(i) above is satisfied in connection with the transaction, such Parent Company, or (B) any person or group that satisfied the requirements

of subsection (b)(ii), above) beneficially owns, directly or indirectly, 20% or more of the outstanding shares of common stock or the

combined voting power of the voting securities entitled to vote generally in the election of directors of the corporation resulting from

such transaction and (iii) individuals who were members of the Company’s Board of Directors immediately prior to the consummation

of the transaction constitute at least a majority of the members of the board of directors resulting from such transaction (or, if reference

was made to equity ownership of any Parent Company for purposes of determining whether clause, (i) above is satisfied in connection

with the transaction, such Parent Company); or

(e) The following individuals (sometimes referred to herein as “Continuing Directors”) cease for any reasons to constitute a

majority of the number of directors then serving: individuals who, on the date hereof, constitute the entire Board of Directors and any

new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest,

including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by

the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors

then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was

previously so approved.

3. Salary and Benefits Continuation.

(a) “Salary and Benefits Continuation” shall be defined to mean the following:

(i) payment of an amount of cash equal to two (2) times the Employee’s base salary at the rate of base salary per

annum in effect immediately prior to the Change of Control or the termination of the Employee’s

employment, whichever is higher;

(ii) payment of an amount of cash equal to two (2 ) times the greater of (A) the highest annual incentive (bonus)

payment earned by the Employee under the Company’s applicable Short-Term Incentive Plan (or any

successor plan) for any year in the five (5) years prior to the termination of the Employee’s employment or

(B) the target incentive (bonus) award under the Company’s applicable Short-Term Incentive Plan (or any

successor

3

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
plan) for the year in which the Change of Control or termination of the Employee’s employment occurs,

whichever is higher;

(iii) provision to Employee and his eligible dependents of medical, long-term disability, dental and life insurance

coverage (to the extent such coverage was in effect immediately prior to the Change of Control) for twentyfour (24) months (at the end of which period the Company shall make such benefits available to the Employee

and his eligible dependents in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985

(“COBRA”), whether or not the Company is then required to comply with COBRA); and if the Employee

would have become entitled to benefits under the Company’s post-retirement health care or life insurance

plans (as in effect immediately prior to the Change of Control or the date of the Employee’s termination of

employment, whichever is most favorable to the Employee) had the Employee’s employment terminated at

any time during the period of twenty-four (24) months after such date of termination, the Company shall

provide such post-retirement health care or life insurance benefits to the Employee (subject to any employee

contributions required under the terms of such plans at the level in effect immediately prior to the Change of

Control or the date of termination, whichever is more favorable to the Employee) commencing on the later of

(i) the date that such coverage would have first become available or (ii) the date that benefits described in this

subsection (iii) terminate;

(iv) contribution by the Company to Employee’s account under the Company’s defined contribution retirement

plan (currently, the EQT Corporation Employee Savings Plan) of an amount of cash equal to the amount that

the Company would have contributed to such plan (including both retirement contributions and Company

matching contributions in respect of Employee contributions to the plan) had the Employee continued to be

employed by the Company for an additional twenty-four (24) months at a base salary equal to the Employee’s

base salary immediately prior to the Change of Control or the termination of Employee’s employment,

whichever is higher (and assuming for this purpose that the Employee continued to make the maximum

permissible contributions to such plan during such period), such contribution being deemed to be made

immediately prior to the termination of the Employee’s employment; provided, that to the extent that the

amount of such contribution exceeds the amount then allowed to be contributed to the plan under the applicable

rules relating to tax-qualified retirement plans, then the excess shall be paid to the Employee in cash in respect

of both retirement and matching contributions under the Company’s Employee Savings Plan (or any successor

plan) because of applicable rules relating to tax-qualified retirement plans; and

(v) Payment of an amount of cash equal to $20,000.

4

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(b) All amounts payable by the Company to the Employee pursuant to Sections 3(a)(i), (ii), (iv) and (v) shall be made in a

lump sum on the first day following the six-month anniversary of the Employee’s termination. For purposes of this Agreement, the

term “termination” when used in the context of a condition to, or timing of, payment hereunder shall be interpreted to mean a

“separation from service” as that term is used in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

(c) To the extent that medical, long-term disability, dental and life insurance benefits cannot be provided on a non-taxable

basis to the Employee under appropriate Company group insurance policies pursuant to Section 3(a)(iii), an amount equal to the

premium necessary for the Employee to purchase directly the same level of coverage in effect immediately prior to the Change of

Control shall be added to the Company’s payments to the Employee pursuant to Section 3(a). Any such payment shall be made in a

lump sum, payable on the first day following the six-month anniversary of the Employee’s termination. If the Employee is required to

pay income or other taxes on any medical, long-term disability, dental or life insurance benefits provided or paid to the Employee

pursuant to Section 3(a)(iii) or this Section 3(c), then the Company shall pay to the Employee an amount of cash sufficient to “grossup” such benefits or payments at the time specified in Section 10 hereof so that the Employee’s “net” benefits received under

Section 3(a)(iii) and this Section 3(c) are not diminished by any such taxes that are imposed with respect to the same or the Company’s

gross-up hereunder with respect to such taxes.

(d) If there is a Change of Control as defined above, the Company will provide Salary and Benefits Continuation if at any

time during the first twenty-four (24) months following the Change of Control, either (i) the Company terminates the Employee’s

employment other than for Cause as defined in Section 4 below or (ii) the Employee terminates his employment for “Good Reason” as

defined below.

(e) For purposes of this Agreement, “Good Reason” is defined as:

(i) Removal of the Employee from the position he held immediately prior to the Change of Control (by reason

other than death, disability or Cause);

(ii) The assignment to the Employee of any duties inconsistent with those performed by the Employee

immediately prior to the Change of Control or a substantial alteration in the nature or status of the Employee’s

responsibilities which renders the Employee’s position to be of less dignity, responsibility or scope;

(iii) A reduction by the Company in the overall level of compensation of the Employee for any year from the level

in effect for the Employee in the prior year. For purposes of this subsection (iii), the following shall not

constitute a reduction in the overall level of compensation of the Employee: (A) across-the-board reductions in

base salary similarly affecting all executives of the Company and all executives of any person in control of the

Company, provided, however, that the Employee’s annual base salary rate shall not be reduced by an amount

equal to ten percent or

5

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
more of the Employee’s annual base salary rate in effect immediately prior to the Change of Control;

(B) changes in the mix of base salary payable to and the short-term incentive opportunity available to the

Employee; provided, that in no event shall the Employee’s base salary for any year be reduced below 90% of

the annual base salary paid to the Employee in the prior year; (C) a reduction in the compensation of the

Employee resulting from the failure to achieve corporate, business unit and/or individual performance goals

established for purposes of incentive compensation for any year or other period; provided, that the aggregate

short-term incentive opportunity, when combined with the Employee’s annual base salary, provides, in the

aggregate, an opportunity for the Employee to realize at least the same overall level of base salary and short

term incentive compensation as was paid in the immediately prior year or period at target performance levels;

and provided, further, that such target performance levels are reasonable at all times during the measurement

period, taking into account the fact that one of the purposes of such compensation is to incentivize the

Employee; (D) reductions in compensation resulting from changes to any Company benefit plan; provided, that

such changes are generally applicable to all participants in such Company benefit plan; and (E) any combination

of the foregoing;

(iv) The failure to grant the Employee an annual salary increase reasonably necessary to maintain such salary as

reasonably comparable to salaries of senior executives holding positions equivalent to the Employee’s in the

industry in which the Company’s then principal business activity is conducted;

(v) The Company requiring the Employee to be based anywhere other than the Company’s principal executive

offices in the city in which the Employee is principally located immediately prior to the Change of Control,

except for required travel on the Company’s business to an extent substantially consistent with the Employee’s

business travel obligations prior to the Change of Control;

(vi) Any material reduction by the Company of the benefits enjoyed by the Employee under any of the Company’s

pension, retirement, profit sharing, savings, life insurance, medical, health and accident, disability or other

employee benefit plans, programs or arrangements, the taking of any action by the Company which would

directly or indirectly materially reduce any of such benefits or deprive the Employee of any material fringe

benefits, or the failure by the Company to provide the Employee with the number of paid vacation days to

which he is entitled on the basis of years of service with the Company in accordance with the Company’s

normal vacation policy, provided that this subparagraph (vi) shall not apply to any proportional across-the-board

reduction or action similarly affecting all executives of the Company and all executives of any person in control

of the Company; or

6

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
(vii) The failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to

perform this Agreement, as contemplated in Section 15 hereof, or any other material breach by the Company

of its obligations contained in this Agreement.

(f) The Employee’s right to Salary and Benefits Continuation shall accrue upon the occurrence of either of the events

specified in (i) or (ii) of Section 3(d) and shall continue as provided, notwithstanding the subsequent termination or expiration of this

Agreement pursuant to Section 1 hereof. The Employee’s subsequent employment, death or disability following the Employee’s

termination of employment in connection with a Change of Control shall not affect the Company’s obligation to continue making Salary

and Benefits Continuation payments, except as provided in Section 8(c). The Employee shall not be required to mitigate the amount of

any payment provided for in this Section 3 by seeking employment or otherwise. The rights to Salary and Benefits Continuation shall

be in addition to whatever other benefits the Employee may be entitled to under any other agreement or compensation plan, program or

arrangement of the Company; provided, that the Employee shall not be entitled to any separate or additional severance payments

pursuant to the Company’s severance plan as then in effect and generally applicable to similarly situated employees. The Company

shall be authorized to withhold from any payment to the Employee, his estate or his beneficiaries hereunder all such amounts, if any,

that the Company may reasonably determine it is required to withhold pursuant to any applicable law or regulation.

4. Termination of Employee for Cause.

(a) Upon or following a Change of Control, the Company may at any time terminate the Employee’s employment for

Cause. Termination of employment by the Company for “Cause” shall mean termination upon: (i) the willful and continued failure by

the Employee to substantially perform his duties with the Company (other than (A) any such failure resulting from the Employee’s

disability or (B) any such actual or anticipated failure resulting from the Employee’s termination of his employment for Good Reason),

after a written demand for substantial performance is delivered to the Employee by the Board of Directors which specifically identifies

the manner in which the Board of Directors believes that the Employee has not substantially performed his duties, and which failure has

not been cured within thirty days (30) after such written demand; or (ii) the willful and continued engaging by the Employee in conduct

which is demonstrably and materially injurious to the Company, monetarily or otherwise, or (iii) the breach by the Employee of any of

the covenants set forth in Section 8 hereof.

(b) For purposes of this Section 4, no act, or failure to act, on the Employee’s part shall be considered “willful” unless done,

or omitted to be done, by the Employee in bad faith and without reasonable belief that such action or omission was in the best interest of

the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until

there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the

entire membership of the Board of Directors at a meeting of the Board of Directors called and held for that purpose (after reasonable

notice to the Employee and an opportunity for the Employee, together with his counsel, to be heard before the Board of Directors)

finding that in the good

7

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
faith opinion of the Board of Directors the Employee is guilty of the conduct set forth above in clauses (a)(i), (ii) or (iii) of this Section 4

and specifying the particulars thereof in detail.

5. Prior Termination. Anything in this Agreement to the contrary notwithstanding, if the Employee’s employment with

the Company is terminated prior to the date on which a Change of Control occurs either (i) by the Company other than for Cause or

(ii) by the Employee for Good Reason, and it is reasonably demonstrated by the Employee that such termination of employment (a) was

at the request of a third party who has taken steps reasonably calculated to effect the Change of Control, or (b) otherwise arose in

connection with or anticipation of the Change of Control, and (iii) a Change of Control that constitutes a change in ownership or

effective control of the Corporation or a change in the ownership of a substantial portion of the assets of the Company under

Section 409A of the Code occurs within twenty-four (24) months following the Employee’s termination, then for all purposes of this

Agreement the termination shall be deemed to have occurred upon a Change of Control and the Employee will be entitled to Salary and

Benefits Continuation as provided for in Section 3 hereof upon the date on which the Change of Control set forth in clause (iii) of this

Section 5 occurs or, if later, the date specified in Section 3 hereof.

6. Employment at Will. Subject to the provisions of any other agreement between the Employee and the Company, the

Employee shall remain an employee at will and nothing herein shall confer upon the Employee any right to continued employment and

shall not affect the right of the Company to terminate the Employee for any reason not prohibited by law; provided, however, that any

such removal shall be without prejudice to any rights the Employee may have to Salary and Benefits Continuation hereunder.

7. Construction of Agreement.

(a) Governing Law. This Agreement shall be governed by and construed under the laws of the Commonwealth of

Pennsylvania without regard to its conflict of law provisions.

(b) Severability. In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or

unenforceable, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(c) Headings. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience of

reference only and shall not constitute a part of this Agreement.

8. Covenant as to Confidential Information, Non-Competition and Non-Solicitation .

(a) Confidentiality of Information and Nondisclosure . The Employee acknowledges and agrees that his employment by the

Company necessarily involves his knowledge of and access to confidential and proprietary information pertaining to the business of the

Company and its subsidiaries. Accordingly, the Employee agrees that at all times during the term of this Agreement and for as long as

the information remains confidential after the termination of the Employee’s employment, he/she will not, directly or indirectly,

without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over the

Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of himself, any person, corporation or other

entity other than the Company and its subsidiaries,

8

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
(i) any information concerning any financial matters, customer relationships, competitive status, supplier matters, internal

organizational matters, current or future plans, or other business affairs of or relating to the Company and its subsidiaries, (ii) any

management, operational, trade, technical or other secrets or any other proprietary information or other data of the Company or its

subsidiaries, or (iii) any other information related to the Company or its subsidiaries which has not been published and is not generally

known outside of the Company. The Employee acknowledges that all of the foregoing, constitutes confidential and proprietary

information, which is the exclusive property of the Company.

(b) Non-Competition and Non-Solicitation . While the Employee is employed by the Company and for a period of twelve

(12) months after the date of the Employee’s termination of employment with the Company for any reason, the Employee will not,

directly or indirectly, expressly or tacitly, for himself or on behalf of any entity conducting business anywhere in the Restricted

Territory (as defined below): (i) act as an officer, manager, advisor, executive, shareholder, or consultant to any business in which his

duties at or for such business include oversight of or actual involvement in providing services which are competitive with the services or

products being provided or which are being produced or developed by the Company, or were under investigation by the Company within

the last two (2) years prior to the end of the Employee’s employment with the Company, (ii) recruit investors on behalf of an entity

which engages in activities which are competitive with the services or products being provided or which are being produced or developed

by the Company, or were under investigation by the Company within the last two (2) years prior to the end of the Employee’s

employment with the Company, or (iii) become employed by such an entity in any capacity which would require the Employee to carry

out, in whole or in part, the duties the Employee has performed for the Company which are competitive with the services or products

being provided or which are being produced or developed by the Company, or were under active investigation by the Company within

the last two (2) years prior to the end of the Employee’s employment with the Company. Notwithstanding the foregoing, the Employee

may purchase or otherwise acquire up to (but not more than) 1% of any class of securities of any enterprise (but without otherwise

participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been

registered under Section 12(g) of the Securities Exchange Act of 1934. This covenant shall apply to any services, products or

businesses under investigation by the Company within the last two (2) years prior to the end of the Employee’s employment with the

Company only to the extent that the Employee acquired or was privy to confidential information regarding such services, products or

businesses. The Employee acknowledges that this restriction will prevent the Employee from acting in any of the foregoing capacities

for any competing entity operating or conducting business within the Restricted Territory and that this scope is reasonable in light of the

business of the Company.

Restricted Territory shall mean (i) any states in which the Company has a regulated-utility operation, which may change from

time to time, but as of the effective date of this Agreement are Pennsylvania, West Virginia and Kentucky; or (ii) any states in which the

Company owns, operates or has contractual rights to purchase natural gas-related assets (other than commodity trading rights), including

but not limited to, storage facilities, interstate pipelines, intrastate pipelines, intrastate distribution facilities, liquefied natural gas facilities,

propane-air facilities or other peaking facilities, and/or processing or fractionation facilities; or (iii) any state in which the Company owns

proved, developed and/or undeveloped natural gas

9

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
and/or oil reserves and/or conducts natural gas or oil exploration and production activities of any kind; or (iv) any state investigated by the

Company as a possible jurisdiction in which to conduct any of the business activities described in subparagraphs (i) through (iii) above

within the last two (2) years prior to the end of the Employee’s employment with the Company.

The Employee agrees that for a period of twelve (12) months following the termination of the Employee’s employment with

the Company for any reason, including without limitation termination for cause or without cause, Employee shall not, directly or

indirectly, solicit the business of, or do business with: (i) any customer that the Employee approached, solicited or accepted business

from on behalf of the Company, and/or was provided confidential or proprietary information about while employed by the Company

within the one (1) year period preceding the Employee’s separation from the Company; and (ii) any prospective customer of the

Company who was identified to or by the Employee and/or who the Employee was provided confidential or proprietary information

about while employed by the Company within the one (1) year period preceding the Employee’s separation from the Company, for

purposes of marketing, selling and/or attempting to market or sell products and services which are the same as or similar to any product

or service the Company offers within the last two (2) years prior to the end of the Employee’s employment with the Company, and/or,

which are the same as or similar to any product or service the Company has in process over the last two (2) years prior to the end of the

Employee’s employment with the Company to be offered in the future.

While the Employee is employed by the Company and for a period of twelve (12) months after the date of the Employee’s

termination of employment with the Company for any reason, the Employee shall not (directly or indirectly) on his or her own behalf

or on behalf of any other person or entity solicit or induce, or cause any other person or entity to solicit or induce, or attempt to solicit or

induce, any employee or consultant to leave the employ of or engagement by the Company or its successors, assigns or affiliates, or to

violate the terms of their contracts with the Company.

(c) Company Remedies. The Employee acknowledges and agrees that any breach of this Section 8 by him will result in

immediate irreparable harm to the Company, and that the Company cannot be reasonably or adequately compensated by damages in an

action at law. In the event of an actual or threatened breach by the Employee of the provisions of this Section 8, the Company shall be

entitled, to the extent permissible by law, immediately to cease to pay or provide the Employee or his dependents any compensation or

benefit being, or to be, paid or provided to him pursuant to Section 3 of this Agreement, and also to obtain immediate injunctive relief

restraining the Employee from conduct in breach or threatened breach of the covenants contained in this Section 8. Nothing herein

shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach,

including the recovery of damages from the Employee.

9. Reimbursement of Fees. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses

which the Employee may reasonably incur for the period beginning upon the Effective Date and ending upon the Employee’s death as a

result of any contest by the Company, Internal Revenue Service or others regarding the validity or enforceability of, or liability under,

any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Employee about

the amount of

10

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
any payment pursuant to Section 3 of this Agreement) or in connection with any dispute arising from this Agreement, regardless of

whether Employee prevails in any such contest or dispute. The Company shall pay or reimburse such fees and expenses on a monthly

basis, payable on the first of each month, and all reimbursement payments with respect to expenses incurred within a particular year

shall be made no later than the end of the Employee’s taxable year following the taxable year in which the expense was incurred. Any

amounts not paid within such monthly reimbursement period shall bear interest at the rate per annum established by PNC Bank,

National Association (or its successor) from time to time as its “prime” or equivalent rate. The amount of reimbursable expenses

incurred in one taxable year of the Employee shall not affect the amount of reimbursable expenses in a different taxable year and such

reimbursement shall not be subject to liquidation or exchange for another benefit. Notwithstanding the foregoing, in the event such

amounts are conditioned upon a separation from service and not compensation the Employee could receive without separating from

service, then no such payments may be made to Employee until the first day following the six-month anniversary of the Employee’s

termination.

10. Mandatory Reduction of Payments in Certain Events.

(a) Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment or

distribution by the Company to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the

terms of this Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as “Payments”) would, if

paid, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, prior to the making of any Payments to

the Employee, a calculation shall be made comparing (i) the net after-tax benefit to the Employee of the Payments after payment by the

Employee of the Excise Tax, to (ii) the net after-tax benefit to the Employee if the Payments had been limited to the extent necessary

to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above,

then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The

reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary,

reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the

Change in Control, as determined by the Determination Firm (as defined in Section 10(b) below). For purposes of this Section 10,

present value shall be determined in accordance with Section 280G(d)(4) of the Code. For purposes of this Section 10, the “Parachute

Value” of a Payment means the present value as of the date of the Change in Control of the portion of such Payment that constitutes a

“parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm for purposes of determining

whether and to what extent the Excise Tax will apply to such Payment.

(b) All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be

imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at

such determinations, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually

acceptable to the Company and the Employee (the “Determination Firm”) which shall provide detailed supporting calculations both to

the Company and the Employee within 15 business days after the receipt of notice from the Employee that a Payment is due to be

made, or such earlier time as is requested by the Company. All fees and expenses of

11

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the

Company and the Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial

determination by the Determination Firm hereunder, it is possible that Payments which the Employee was entitled to, but did not

receive pursuant to Section 10(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with

the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the

Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the

Employee but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the

legally binding right to such Underpayment arises.

(c) In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without

succession, this Section 10 shall be of no further force or effect.

11. Resolution of Differences Over Breaches of Agreement . Except as otherwise provided herein, in the event of any

controversy, dispute or claim arising out of, or relating to this Agreement, or the breach thereof, or arising out of any other matter

relating to the Employee’s employment with the Company or the termination of such employment, the parties may seek recourse only

for temporary or preliminary injunctive relief to the courts having jurisdiction thereof and if any relief other than injunctive relief is

sought, the Company and the Employee agree that such underlying controversy, dispute or claim shall be settled by arbitration

conducted in Pittsburgh, Pennsylvania in accordance with this Section 11 of this Agreement and the Commercial Arbitration Rules of

the American Arbitration Association (“AAA”). The matter shall be heard and decided, and awards rendered by a panel of three

(3) arbitrators (the “Arbitration Panel”). The Company and the Employee shall each select one arbitrator from the AAA National Panel

of Commercial Arbitrators (the “Commercial Panel”) and AAA shall select a third arbitrator from the Commercial Panel. The award

rendered by the Arbitration Panel shall be final and binding as between the parties hereto and their heirs, executors, administrators,

successors and assigns, and judgment on the award may be entered by any court having jurisdiction thereof.

12. Treatment of Certain Incentive Awards. All “Awards” held by the Employee under the Company’s 1999 Long-Term

Incentive Plan, the Company’s 2009 Long-Term Incentive Plan, or any successor plan or plans (as the case may be, the “Incentive

Plan”) shall, upon a Change of Control, be treated in accordance with the terms of the applicable Incentive Plan and underlying award

agreements when and as awarded, without regard to the subsequent amendment of the applicable Incentive Plan. For purposes of this

Section 12, the terms “Award” and “Change of Control” shall have the meanings ascribed to them in the applicable Incentive Plan.

13. Release. The Employee hereby acknowledges and agrees that prior to the Employee’s or his dependents’ right to

receive from the Company any compensation or benefit to be paid or provided to him or his dependents pursuant to Section 3 of this

Agreement, the Employee may be required by the Company, in its sole discretion, to execute a release in a form reasonably acceptable

to the Company, which releases any and all claims (other than amounts to be paid to Employee as expressly provided for under this

Agreement) the Employee has or may

12

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
have against the Company or its subsidiaries, agents, officers, directors, successors or assigns arising under any public policy, tort or

common law or any provision of state, federal or local law, including, but not limited to, the Pennsylvania Human Relations Act, the

Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Protection Act, Family and Medical Leave

Act, the Age Discrimination in Employment Act of 1967, or the Employee Retirement Income Security Act of 1974, all as amended.

14. Waiver. The waiver by a party hereto of any breach by the other party hereto of any provision of this Agreement shall

not operate or be construed as a waiver of any subsequent breach by a party hereto.

15. Assignment. This Agreement, including the non-competition and non-solicitation covenant in Section 8(b) hereof, shall

be binding upon and inure to the benefit of the successors and assigns of the Company. The Company shall be obligated to require any

successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the Company’s

business or assets, by a written agreement in form and substance satisfactory to the Employee, to expressly assume and agree to perform

this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken

place. This Agreement shall inure to the extent provided hereunder to the benefit of and be enforceable by the Employee or his legal

representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. The Employee may not delegate any of

his duties, responsibilities, obligations or positions hereunder to any person and any such purported delegation by him shall be void and of

no force and effect with respect to matters relating to his employment and termination of employment. Without limiting the foregoing,

the Employee’s rights to receive payments and benefits hereunder shall not be assignable or transferable, other than a transfer by the

Employee’s will or by the laws of descent and distribution.

16. Notices. Any notices required or permitted to be given under this Agreement shall be sufficient if in writing, and if

personally delivered or when sent by first class certified or registered mail, postage prepaid, return receipt requested -- in the case of the

Employee, to his residence address as set forth below, and in the case of the Company, to the address of its principal place of business as

set forth below, in care of the Chairman of the Board -- or to such other person or at such other address with respect to each party as

such party shall notify the other in writing.

17. Pronouns. Pronouns stated in either the masculine, feminine or neuter gender shall include the masculine, feminine and

neuter.

18. Entire Agreement. Except as set forth in any confidentiality, non-solicitation or non-competition agreement to which

you are a party, this Agreement contains the entire agreement of the parties concerning the matters set forth herein and all promises,

representations, understandings, arrangements and prior agreements regarding the subject matter hereof (including the Existing

Agreement, which the parties agree shall terminate as of the Effective Date hereof) are merged herein and superseded hereby. The

provisions of this Agreement may not be amended, modified, repealed, waived, extended or discharged except by an agreement in

writing signed by the party against whom enforcement of any amendment, modification, repeal, waiver, extension or discharge is

sought; provided, however, that the Company may amend this

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Agreement from time to time without the Employee’s consent to the extent deemed necessary or appropriate, in its sole discretion, to

effect compliance with Section 409A of the Code, including regulations and interpretations thereunder, which amendments may result

in a reduction of benefits provided hereunder and/or other unfavorable changes to the Employee. No person acting other than pursuant

to a resolution of the Board of Directors (or its designee) shall have authority on behalf of the Company to agree to amend, modify,

repeal, waive, extend or discharge any provision of this Agreement or anything in reference thereto or to exercise any of the Company’s

rights to terminate or to fail to extend this Agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers thereunto duly authorized,

and the Employee has hereunto set his hand, all as of the day and year first above written.

ATTEST: EQT CORPORATION

 /s/ Kimberly L. Sachse /s/ Charlene Petrelli

By: Charlene Petrelli

Title: Vice President & Chief Human

 Human Resources Officer

Address:

625 Liberty Avenue, Suite 1700

Pittsburgh, PA 15222

WITNESS:

 /s/ David J. Smith /s/ Philip P. Conti

Name: Philip P. Conti

14

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 10.12(b)

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

THIS AMENDED AND RESTATED AGREEMENT (the “Agreement”) dated as of the 19 day of February, 2013 (the

“Effective Date”) is made by and between EQT CORPORATION, a Pennsylvania corporation with its principal place of business at

Pittsburgh, Pennsylvania (the “Company”), and Randall L. Crawford, an individual (the “Employee”). This Agreement amends and

restates that certain Change of Control Agreement, dated as of September 8, 2008, between the parties hereto (the “Existing

Agreement”), for the purposes of eliminating the Change of Control excise tax gross-up provision of the Existing Agreement.

WITNESSETH:

WHEREAS, the Board of Directors of the Company (the “Board”) believes that it is in the best interest of the Company and its

shareholders to assure that the Company will have the continued dedication of the Employee, notwithstanding the possibility, threat or

occurrence of a Change of Control (as defined below) of the Company; that it is imperative to diminish the inevitable distraction of the

Employee by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the

Employee’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control;

and that it is appropriate to provide the Employee with compensation and benefits arrangements upon a Change of Control which ensure

that the compensation and benefits expectations of the Employee will be satisfied and which are competitive with those of other

corporations in the industry in which the Company’s principal business activity is conducted; and

WHEREAS, in consideration of the compensation and benefits payable to the Employee under this Agreement, the Employee’s

eligibility to participate in the Company’s 2006 Payroll Deduction and Contribution Program from and after February 1, 2013, and an

increase in the “Company Benefit” under and as described in the 2006 Payroll Deduction and Contribution Program, the Employee and

the Company desire to enter into this Agreement, which amends and restates the Existing Agreement which, among other things,

restricts the Employee from competing with the Company and from soliciting customers and employees of the Company for one

(1) year following the termination of the Employee’s employment following a Change of Control. The Company also desires to require

that the Employee maintain the confidentiality of certain information for two years following any such termination, and the Employee

is willing to agree to such restrictions in consideration of the compensation and benefits payable under this Agreement; and

NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, and intending to be legally

bound hereby, the parties hereto agree as follows:

1. Term. The term of this Agreement shall commence on the Effective Date hereof and, subject to Sections 3(f), 5 and 8,

shall terminate on the earlier of (i) the date of the termination of the Employee’s employment with the Company for any reason prior to

a Change of Control; (ii) the date of Employee’s transition to employment with the Company on a

1

th

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
part-time basis, including without limitation assumption of “Executive Alternative Work Arrangement” status; or (iii) unless further

extended as hereinafter set forth, the date which is twenty-four (24) months after the Effective Date; provided, that, commencing on

the last day of the first full calendar month after the Effective Date and on the last day of each succeeding calendar month, the term of

this Agreement shall be automatically extended without further action by either party (but not beyond the date of the termination of the

Employee’s employment or transition to part-time employment prior to a Change of Control) for one (1) additional month unless one

party provides written notice to the other party that such party does not wish to extend the term of this Agreement. In the event that

such notice shall have been delivered, the term of this Agreement shall no longer be subject to automatic extension and the term hereof

shall expire on the date which is twenty-four (24) calendar months after the last day of the month in which such written notice is

received.

2. Change of Control. Except as provided in Section 12, Change of Control shall mean any of the following events (each of

such events being herein referred to as a “Change of Control”):

(a) The sale or other disposition by the Company of all or substantially all of its assets to a single purchaser or to a group of

purchasers, other than to a corporation with respect to which, following such sale or disposition, more than eighty percent (80%) of,

respectively, the then outstanding shares of Company common stock and the combined voting power of the then outstanding voting

securities entitled to vote generally in the election of the Board of Directors is then owned beneficially, directly or indirectly, by all or

substantially all of the individuals and entities who were the beneficial owners, respectively of the outstanding Company common stock

and the combined voting power of the then outstanding voting securities immediately prior to such sale or disposition in substantially the

same proportion as their ownership of the outstanding Company common stock and voting power immediately prior to such sale or

disposition;

(b) The acquisition in one or more transactions by any person or group, directly or indirectly, of beneficial ownership of

twenty percent (20%) or more of the outstanding shares of Company common stock or the combined voting power of the then

outstanding voting securities of the Company entitled to vote generally in the election of the Board of Directors; provided, however, that

the following shall not constitute a Change of Control: (i) any acquisition by the Company or any of its subsidiaries, or any employee

benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries and (ii) an acquisition by any person or

group of persons of not more than forty percent (40%) of the outstanding shares of Company common stock or the combined voting

power of the then outstanding voting securities of the Company if such acquisition resulted from the issuance of capital stock by the

Company and the issuance and the acquiring person or group was approved in advance of such issuance by at least two-thirds of the

Continuing Directors then in office;

(c) The Company’s termination of its business and liquidation of its assets;

(d) There is consummated a merger, consolidation, reorganization, share exchange, or similar transaction involving the

Company (including a triangular merger), in any case, unless immediately following such transaction: (i) all or substantially all of the

persons who were the beneficial owners of the outstanding common stock and outstanding voting securities of the

2

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Company immediately prior to the transaction beneficially own, directly or indirectly, more than 60% of the outstanding shares of

common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of

directors of the corporation resulting from such transaction (including a corporation or other person which as a result of such transaction

owns the Company or all or substantially all of the Company’s assets through one or more subsidiaries (a “Parent Company”)) in

substantially the same proportion as their ownership of the common stock and other voting securities of the Company immediately prior

to the consummation of the transaction, (ii) no person (other than (A) the Company, any employee benefit plan sponsored or maintained

by the Company or, if reference was made to equity ownership of any Parent Company for purposes of determining whether clause

(i) above is satisfied in connection with the transaction, such Parent Company, or (B) any person or group that satisfied the requirements

of subsection (b)(ii), above) beneficially owns, directly or indirectly, 20% or more of the outstanding shares of common stock or the

combined voting power of the voting securities entitled to vote generally in the election of directors of the corporation resulting from

such transaction and (iii) individuals who were members of the Company’s Board of Directors immediately prior to the consummation

of the transaction constitute at least a majority of the members of the board of directors resulting from such transaction (or, if reference

was made to equity ownership of any Parent Company for purposes of determining whether clause, (i) above is satisfied in connection

with the transaction, such Parent Company); or

(e) The following individuals (sometimes referred to herein as “Continuing Directors”) cease for any reasons to constitute a

majority of the number of directors then serving: individuals who, on the date hereof, constitute the entire Board of Directors and any

new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest,

including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by

the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors

then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was

previously so approved.

3. Salary and Benefits Continuation.

(a) “Salary and Benefits Continuation” shall be defined to mean the following:

(i) payment of an amount of cash equal to two (2) times the Employee’s base salary at the rate of base salary per

annum in effect immediately prior to the Change of Control or the termination of the Employee’s

employment, whichever is higher;

(ii) payment of an amount of cash equal to two (2 ) times the greater of (A) the highest annual incentive (bonus)

payment earned by the Employee under the Company’s applicable Short-Term Incentive Plan (or any

successor plan) for any year in the five (5) years prior to the termination of the Employee’s employment or

(B) the target incentive (bonus) award under the Company’s applicable Short-Term Incentive Plan (or any

successor

3

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
plan) for the year in which the Change of Control or termination of the Employee’s employment occurs,

whichever is higher;

(iii) provision to Employee and his eligible dependents of medical, long-term disability, dental and life insurance

coverage (to the extent such coverage was in effect immediately prior to the Change of Control) for twentyfour (24) months (at the end of which period the Company shall make such benefits available to the Employee

and his eligible dependents in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985

(“COBRA”), whether or not the Company is then required to comply with COBRA); and if the Employee

would have become entitled to benefits under the Company’s post-retirement health care or life insurance

plans (as in effect immediately prior to the Change of Control or the date of the Employee’s termination of

employment, whichever is most favorable to the Employee) had the Employee’s employment terminated at

any time during the period of twenty-four (24) months after such date of termination, the Company shall

provide such post-retirement health care or life insurance benefits to the Employee (subject to any employee

contributions required under the terms of such plans at the level in effect immediately prior to the Change of

Control or the date of termination, whichever is more favorable to the Employee) commencing on the later of

(i) the date that such coverage would have first become available or (ii) the date that benefits described in this

subsection (iii) terminate;

(iv) contribution by the Company to Employee’s account under the Company’s defined contribution retirement

plan (currently, the EQT Corporation Employee Savings Plan) of an amount of cash equal to the amount that

the Company would have contributed to such plan (including both retirement contributions and Company

matching contributions in respect of Employee contributions to the plan) had the Employee continued to be

employed by the Company for an additional twenty-four (24) months at a base salary equal to the Employee’s

base salary immediately prior to the Change of Control or the termination of Employee’s employment,

whichever is higher (and assuming for this purpose that the Employee continued to make the maximum

permissible contributions to such plan during such period), such contribution being deemed to be made

immediately prior to the termination of the Employee’s employment; provided, that to the extent that the

amount of such contribution exceeds the amount then allowed to be contributed to the plan under the applicable

rules relating to tax-qualified retirement plans, then the excess shall be paid to the Employee in cash in respect

of both retirement and matching contributions under the Company’s Employee Savings Plan (or any successor

plan) because of applicable rules relating to tax-qualified retirement plans; and

(v) Payment of an amount of cash equal to $20,000.

4

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(b) All amounts payable by the Company to the Employee pursuant to Sections 3(a)(i), (ii), (iv) and (v) shall be made in a

lump sum on the first day following the six-month anniversary of the Employee’s termination. For purposes of this Agreement, the

term “termination” when used in the context of a condition to, or timing of, payment hereunder shall be interpreted to mean a

“separation from service” as that term is used in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

(c) To the extent that medical, long-term disability, dental and life insurance benefits cannot be provided on a non-taxable

basis to the Employee under appropriate Company group insurance policies pursuant to Section 3(a)(iii), an amount equal to the

premium necessary for the Employee to purchase directly the same level of coverage in effect immediately prior to the Change of

Control shall be added to the Company’s payments to the Employee pursuant to Section 3(a). Any such payment shall be made in a

lump sum, payable on the first day following the six-month anniversary of the Employee’s termination. If the Employee is required to

pay income or other taxes on any medical, long-term disability, dental or life insurance benefits provided or paid to the Employee

pursuant to Section 3(a)(iii) or this Section 3(c), then the Company shall pay to the Employee an amount of cash sufficient to “grossup” such benefits or payments at the time specified in Section 10 hereof so that the Employee’s “net” benefits received under

Section 3(a)(iii) and this Section 3(c) are not diminished by any such taxes that are imposed with respect to the same or the Company’s

gross-up hereunder with respect to such taxes.

(d) If there is a Change of Control as defined above, the Company will provide Salary and Benefits Continuation if at any

time during the first twenty-four (24) months following the Change of Control, either (i) the Company terminates the Employee’s

employment other than for Cause as defined in Section 4 below or (ii) the Employee terminates his employment for “Good Reason” as

defined below.

(e) For purposes of this Agreement, “Good Reason” is defined as:

(i) Removal of the Employee from the position he held immediately prior to the Change of Control (by reason

other than death, disability or Cause);

(ii) The assignment to the Employee of any duties inconsistent with those performed by the Employee

immediately prior to the Change of Control or a substantial alteration in the nature or status of the Employee’s

responsibilities which renders the Employee’s position to be of less dignity, responsibility or scope;

(iii) A reduction by the Company in the overall level of compensation of the Employee for any year from the level

in effect for the Employee in the prior year. For purposes of this subsection (iii), the following shall not

constitute a reduction in the overall level of compensation of the Employee: (A) across-the-board reductions in

base salary similarly affecting all executives of the Company and all executives of any person in control of the

Company, provided, however, that the Employee’s annual base salary rate shall not be reduced by an amount

equal to ten percent or

5

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
more of the Employee’s annual base salary rate in effect immediately prior to the Change of Control;

(B) changes in the mix of base salary payable to and the short-term incentive opportunity available to the

Employee; provided, that in no event shall the Employee’s base salary for any year be reduced below 90% of

the annual base salary paid to the Employee in the prior year; (C) a reduction in the compensation of the

Employee resulting from the failure to achieve corporate, business unit and/or individual performance goals

established for purposes of incentive compensation for any year or other period; provided, that the aggregate

short-term incentive opportunity, when combined with the Employee’s annual base salary, provides, in the

aggregate, an opportunity for the Employee to realize at least the same overall level of base salary and short

term incentive compensation as was paid in the immediately prior year or period at target performance levels;

and provided, further, that such target performance levels are reasonable at all times during the measurement

period, taking into account the fact that one of the purposes of such compensation is to incentivize the

Employee; (D) reductions in compensation resulting from changes to any Company benefit plan; provided, that

such changes are generally applicable to all participants in such Company benefit plan; and (E) any combination

of the foregoing;

(iv) The failure to grant the Employee an annual salary increase reasonably necessary to maintain such salary as

reasonably comparable to salaries of senior executives holding positions equivalent to the Employee’s in the

industry in which the Company’s then principal business activity is conducted;

(v) The Company requiring the Employee to be based anywhere other than the Company’s principal executive

offices in the city in which the Employee is principally located immediately prior to the Change of Control,

except for required travel on the Company’s business to an extent substantially consistent with the Employee’s

business travel obligations prior to the Change of Control;

(vi) Any material reduction by the Company of the benefits enjoyed by the Employee under any of the Company’s

pension, retirement, profit sharing, savings, life insurance, medical, health and accident, disability or other

employee benefit plans, programs or arrangements, the taking of any action by the Company which would

directly or indirectly materially reduce any of such benefits or deprive the Employee of any material fringe

benefits, or the failure by the Company to provide the Employee with the number of paid vacation days to

which he is entitled on the basis of years of service with the Company in accordance with the Company’s

normal vacation policy, provided that this subparagraph (vi) shall not apply to any proportional across-the-board

reduction or action similarly affecting all executives of the Company and all executives of any person in control

of the Company; or

6

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
(vii) The failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to

perform this Agreement, as contemplated in Section 15 hereof, or any other material breach by the Company

of its obligations contained in this Agreement.

(f) The Employee’s right to Salary and Benefits Continuation shall accrue upon the occurrence of either of the events

specified in (i) or (ii) of Section 3(d) and shall continue as provided, notwithstanding the subsequent termination or expiration of this

Agreement pursuant to Section 1 hereof. The Employee’s subsequent employment, death or disability following the Employee’s

termination of employment in connection with a Change of Control shall not affect the Company’s obligation to continue making Salary

and Benefits Continuation payments, except as provided in Section 8(c). The Employee shall not be required to mitigate the amount of

any payment provided for in this Section 3 by seeking employment or otherwise. The rights to Salary and Benefits Continuation shall

be in addition to whatever other benefits the Employee may be entitled to under any other agreement or compensation plan, program or

arrangement of the Company; provided, that the Employee shall not be entitled to any separate or additional severance payments

pursuant to the Company’s severance plan as then in effect and generally applicable to similarly situated employees. The Company

shall be authorized to withhold from any payment to the Employee, his estate or his beneficiaries hereunder all such amounts, if any,

that the Company may reasonably determine it is required to withhold pursuant to any applicable law or regulation.

4. Termination of Employee for Cause.

(a) Upon or following a Change of Control, the Company may at any time terminate the Employee’s employment for

Cause. Termination of employment by the Company for “Cause” shall mean termination upon: (i) the willful and continued failure by

the Employee to substantially perform his duties with the Company (other than (A) any such failure resulting from the Employee’s

disability or (B) any such actual or anticipated failure resulting from the Employee’s termination of his employment for Good Reason),

after a written demand for substantial performance is delivered to the Employee by the Board of Directors which specifically identifies

the manner in which the Board of Directors believes that the Employee has not substantially performed his duties, and which failure has

not been cured within thirty days (30) after such written demand; or (ii) the willful and continued engaging by the Employee in conduct

which is demonstrably and materially injurious to the Company, monetarily or otherwise, or (iii) the breach by the Employee of any of

the covenants set forth in Section 8 hereof.

(b) For purposes of this Section 4, no act, or failure to act, on the Employee’s part shall be considered “willful” unless done,

or omitted to be done, by the Employee in bad faith and without reasonable belief that such action or omission was in the best interest of

the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until

there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the

entire membership of the Board of Directors at a meeting of the Board of Directors called and held for that purpose (after reasonable

notice to the Employee and an opportunity for the Employee, together with his counsel, to be heard before the Board of Directors)

finding that in the good

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
faith opinion of the Board of Directors the Employee is guilty of the conduct set forth above in clauses (a)(i), (ii) or (iii) of this Section 4

and specifying the particulars thereof in detail.

5. Prior Termination. Anything in this Agreement to the contrary notwithstanding, if the Employee’s employment with

the Company is terminated prior to the date on which a Change of Control occurs either (i) by the Company other than for Cause or

(ii) by the Employee for Good Reason, and it is reasonably demonstrated by the Employee that such termination of employment (a) was

at the request of a third party who has taken steps reasonably calculated to effect the Change of Control, or (b) otherwise arose in

connection with or anticipation of the Change of Control, and (iii) a Change of Control that constitutes a change in ownership or

effective control of the Corporation or a change in the ownership of a substantial portion of the assets of the Company under

Section 409A of the Code occurs within twenty-four (24) months following the Employee’s termination, then for all purposes of this

Agreement the termination shall be deemed to have occurred upon a Change of Control and the Employee will be entitled to Salary and

Benefits Continuation as provided for in Section 3 hereof upon the date on which the Change of Control set forth in clause (iii) of this

Section 5 occurs or, if later, the date specified in Section 3 hereof.

6. Employment at Will. Subject to the provisions of any other agreement between the Employee and the Company, the

Employee shall remain an employee at will and nothing herein shall confer upon the Employee any right to continued employment and

shall not affect the right of the Company to terminate the Employee for any reason not prohibited by law; provided, however, that any

such removal shall be without prejudice to any rights the Employee may have to Salary and Benefits Continuation hereunder.

7. Construction of Agreement.

(a) Governing Law. This Agreement shall be governed by and construed under the laws of the Commonwealth of

Pennsylvania without regard to its conflict of law provisions.

(b) Severability. In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or

unenforceable, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(c) Headings. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience of

reference only and shall not constitute a part of this Agreement.

8. Covenant as to Confidential Information, Non-Competition and Non-Solicitation .

(a) Confidentiality of Information and Nondisclosure . The Employee acknowledges and agrees that his employment by the

Company necessarily involves his knowledge of and access to confidential and proprietary information pertaining to the business of the

Company and its subsidiaries. Accordingly, the Employee agrees that at all times during the term of this Agreement and for as long as

the information remains confidential after the termination of the Employee’s employment, he/she will not, directly or indirectly,

without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over the

Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of himself, any person, corporation or other

entity other than the Company and its subsidiaries,

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
(i) any information concerning any financial matters, customer relationships, competitive status, supplier matters, internal

organizational matters, current or future plans, or other business affairs of or relating to the Company and its subsidiaries, (ii) any

management, operational, trade, technical or other secrets or any other proprietary information or other data of the Company or its

subsidiaries, or (iii) any other information related to the Company or its subsidiaries which has not been published and is not generally

known outside of the Company. The Employee acknowledges that all of the foregoing, constitutes confidential and proprietary

information, which is the exclusive property of the Company.

(b) Non-Competition and Non-Solicitation . While the Employee is employed by the Company and for a period of twelve

(12) months after the date of the Employee’s termination of employment with the Company for any reason, the Employee will not,

directly or indirectly, expressly or tacitly, for himself or on behalf of any entity conducting business anywhere in the Restricted

Territory (as defined below): (i) act as an officer, manager, advisor, executive, shareholder, or consultant to any business in which his

duties at or for such business include oversight of or actual involvement in providing services which are competitive with the services or

products being provided or which are being produced or developed by the Company, or were under investigation by the Company within

the last two (2) years prior to the end of the Employee’s employment with the Company, (ii) recruit investors on behalf of an entity

which engages in activities which are competitive with the services or products being provided or which are being produced or developed

by the Company, or were under investigation by the Company within the last two (2) years prior to the end of the Employee’s

employment with the Company, or (iii) become employed by such an entity in any capacity which would require the Employee to carry

out, in whole or in part, the duties the Employee has performed for the Company which are competitive with the services or products

being provided or which are being produced or developed by the Company, or were under active investigation by the Company within

the last two (2) years prior to the end of the Employee’s employment with the Company. Notwithstanding the foregoing, the Employee

may purchase or otherwise acquire up to (but not more than) 1% of any class of securities of any enterprise (but without otherwise

participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been

registered under Section 12(g) of the Securities Exchange Act of 1934. This covenant shall apply to any services, products or

businesses under investigation by the Company within the last two (2) years prior to the end of the Employee’s employment with the

Company only to the extent that the Employee acquired or was privy to confidential information regarding such services, products or

businesses. The Employee acknowledges that this restriction will prevent the Employee from acting in any of the foregoing capacities

for any competing entity operating or conducting business within the Restricted Territory and that this scope is reasonable in light of the

business of the Company.

Restricted Territory shall mean (i) any states in which the Company has a regulated-utility operation, which may change from

time to time, but as of the effective date of this Agreement are Pennsylvania, West Virginia and Kentucky; or (ii) any states in which the

Company owns, operates or has contractual rights to purchase natural gas-related assets (other than commodity trading rights), including

but not limited to, storage facilities, interstate pipelines, intrastate pipelines, intrastate distribution facilities, liquefied natural gas facilities,

propane-air facilities or other peaking facilities, and/or processing or fractionation facilities; or (iii) any state in which the Company owns

proved, developed and/or undeveloped natural gas

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
and/or oil reserves and/or conducts natural gas or oil exploration and production activities of any kind; or (iv) any state investigated by the

Company as a possible jurisdiction in which to conduct any of the business activities described in subparagraphs (i) through (iii) above

within the last two (2) years prior to the end of the Employee’s employment with the Company.

The Employee agrees that for a period of twelve (12) months following the termination of the Employee’s employment with

the Company for any reason, including without limitation termination for cause or without cause, Employee shall not, directly or

indirectly, solicit the business of, or do business with: (i) any customer that the Employee approached, solicited or accepted business

from on behalf of the Company, and/or was provided confidential or proprietary information about while employed by the Company

within the one (1) year period preceding the Employee’s separation from the Company; and (ii) any prospective customer of the

Company who was identified to or by the Employee and/or who the Employee was provided confidential or proprietary information

about while employed by the Company within the one (1) year period preceding the Employee’s separation from the Company, for

purposes of marketing, selling and/or attempting to market or sell products and services which are the same as or similar to any product

or service the Company offers within the last two (2) years prior to the end of the Employee’s employment with the Company, and/or,

which are the same as or similar to any product or service the Company has in process over the last two (2) years prior to the end of the

Employee’s employment with the Company to be offered in the future.

While the Employee is employed by the Company and for a period of twelve (12) months after the date of the Employee’s

termination of employment with the Company for any reason, the Employee shall not (directly or indirectly) on his or her own behalf

or on behalf of any other person or entity solicit or induce, or cause any other person or entity to solicit or induce, or attempt to solicit or

induce, any employee or consultant to leave the employ of or engagement by the Company or its successors, assigns or affiliates, or to

violate the terms of their contracts with the Company.

(c) Company Remedies. The Employee acknowledges and agrees that any breach of this Section 8 by him will result in

immediate irreparable harm to the Company, and that the Company cannot be reasonably or adequately compensated by damages in an

action at law. In the event of an actual or threatened breach by the Employee of the provisions of this Section 8, the Company shall be

entitled, to the extent permissible by law, immediately to cease to pay or provide the Employee or his dependents any compensation or

benefit being, or to be, paid or provided to him pursuant to Section 3 of this Agreement, and also to obtain immediate injunctive relief

restraining the Employee from conduct in breach or threatened breach of the covenants contained in this Section 8. Nothing herein

shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach,

including the recovery of damages from the Employee.

9. Reimbursement of Fees. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses

which the Employee may reasonably incur for the period beginning upon the Effective Date and ending upon the Employee’s death as a

result of any contest by the Company, Internal Revenue Service or others regarding the validity or enforceability of, or liability under,

any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Employee about

the amount of

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
any payment pursuant to Section 3 of this Agreement) or in connection with any dispute arising from this Agreement, regardless of

whether Employee prevails in any such contest or dispute. The Company shall pay or reimburse such fees and expenses on a monthly

basis, payable on the first of each month, and all reimbursement payments with respect to expenses incurred within a particular year

shall be made no later than the end of the Employee’s taxable year following the taxable year in which the expense was incurred. Any

amounts not paid within such monthly reimbursement period shall bear interest at the rate per annum established by PNC Bank,

National Association (or its successor) from time to time as its “prime” or equivalent rate. The amount of reimbursable expenses

incurred in one taxable year of the Employee shall not affect the amount of reimbursable expenses in a different taxable year and such

reimbursement shall not be subject to liquidation or exchange for another benefit. Notwithstanding the foregoing, in the event such

amounts are conditioned upon a separation from service and not compensation the Employee could receive without separating from

service, then no such payments may be made to Employee until the first day following the six-month anniversary of the Employee’s

termination.

10. Mandatory Reduction of Payments in Certain Events.

(a) Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment or

distribution by the Company to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the

terms of this Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as “Payments”) would, if

paid, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, prior to the making of any Payments to

the Employee, a calculation shall be made comparing (i) the net after-tax benefit to the Employee of the Payments after payment by the

Employee of the Excise Tax, to (ii) the net after-tax benefit to the Employee if the Payments had been limited to the extent necessary

to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above,

then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The

reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary,

reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the

Change in Control, as determined by the Determination Firm (as defined in Section 10(b) below). For purposes of this Section 10,

present value shall be determined in accordance with Section 280G(d)(4) of the Code. For purposes of this Section 10, the “Parachute

Value” of a Payment means the present value as of the date of the Change in Control of the portion of such Payment that constitutes a

“parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm for purposes of determining

whether and to what extent the Excise Tax will apply to such Payment.

(b) All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be

imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at

such determinations, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually

acceptable to the Company and the Employee (the “Determination Firm”) which shall provide detailed supporting calculations both to

the Company and the Employee within 15 business days after the receipt of notice from the Employee that a Payment is due to be

made, or such earlier time as is requested by the Company. All fees and expenses of

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the

Company and the Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial

determination by the Determination Firm hereunder, it is possible that Payments which the Employee was entitled to, but did not

receive pursuant to Section 10(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with

the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the

Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the

Employee but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the

legally binding right to such Underpayment arises.

(c) In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without

succession, this Section 10 shall be of no further force or effect.

11. Resolution of Differences Over Breaches of Agreement . Except as otherwise provided herein, in the event of any

controversy, dispute or claim arising out of, or relating to this Agreement, or the breach thereof, or arising out of any other matter

relating to the Employee’s employment with the Company or the termination of such employment, the parties may seek recourse only

for temporary or preliminary injunctive relief to the courts having jurisdiction thereof and if any relief other than injunctive relief is

sought, the Company and the Employee agree that such underlying controversy, dispute or claim shall be settled by arbitration

conducted in Pittsburgh, Pennsylvania in accordance with this Section 11 of this Agreement and the Commercial Arbitration Rules of

the American Arbitration Association (“AAA”). The matter shall be heard and decided, and awards rendered by a panel of three

(3) arbitrators (the “Arbitration Panel”). The Company and the Employee shall each select one arbitrator from the AAA National Panel

of Commercial Arbitrators (the “Commercial Panel”) and AAA shall select a third arbitrator from the Commercial Panel. The award

rendered by the Arbitration Panel shall be final and binding as between the parties hereto and their heirs, executors, administrators,

successors and assigns, and judgment on the award may be entered by any court having jurisdiction thereof.

12. Treatment of Certain Incentive Awards. All “Awards” held by the Employee under the Company’s 1999 Long-Term

Incentive Plan, the Company’s 2009 Long-Term Incentive Plan, or any successor plan or plans (as the case may be, the “Incentive

Plan”) shall, upon a Change of Control, be treated in accordance with the terms of the applicable Incentive Plan and underlying award

agreements when and as awarded, without regard to the subsequent amendment of the applicable Incentive Plan. For purposes of this

Section 12, the terms “Award” and “Change of Control” shall have the meanings ascribed to them in the applicable Incentive Plan.

13. Release. The Employee hereby acknowledges and agrees that prior to the Employee’s or his dependents’ right to

receive from the Company any compensation or benefit to be paid or provided to him or his dependents pursuant to Section 3 of this

Agreement, the Employee may be required by the Company, in its sole discretion, to execute a release in a form reasonably acceptable

to the Company, which releases any and all claims (other than amounts to be paid to Employee as expressly provided for under this

Agreement) the Employee has or may

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
have against the Company or its subsidiaries, agents, officers, directors, successors or assigns arising under any public policy, tort or

common law or any provision of state, federal or local law, including, but not limited to, the Pennsylvania Human Relations Act, the

Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Protection Act, Family and Medical Leave

Act, the Age Discrimination in Employment Act of 1967, or the Employee Retirement Income Security Act of 1974, all as amended.

14. Waiver. The waiver by a party hereto of any breach by the other party hereto of any provision of this Agreement shall

not operate or be construed as a waiver of any subsequent breach by a party hereto.

15. Assignment. This Agreement, including the non-competition and non-solicitation covenant in Section 8(b) hereof, shall

be binding upon and inure to the benefit of the successors and assigns of the Company. The Company shall be obligated to require any

successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the Company’s

business or assets, by a written agreement in form and substance satisfactory to the Employee, to expressly assume and agree to perform

this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken

place. This Agreement shall inure to the extent provided hereunder to the benefit of and be enforceable by the Employee or his legal

representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. The Employee may not delegate any of

his duties, responsibilities, obligations or positions hereunder to any person and any such purported delegation by him shall be void and of

no force and effect with respect to matters relating to his employment and termination of employment. Without limiting the foregoing,

the Employee’s rights to receive payments and benefits hereunder shall not be assignable or transferable, other than a transfer by the

Employee’s will or by the laws of descent and distribution.

16. Notices. Any notices required or permitted to be given under this Agreement shall be sufficient if in writing, and if

personally delivered or when sent by first class certified or registered mail, postage prepaid, return receipt requested -- in the case of the

Employee, to his residence address as set forth below, and in the case of the Company, to the address of its principal place of business as

set forth below, in care of the Chairman of the Board -- or to such other person or at such other address with respect to each party as

such party shall notify the other in writing.

17. Pronouns. Pronouns stated in either the masculine, feminine or neuter gender shall include the masculine, feminine and

neuter.

18. Entire Agreement. Except as set forth in any confidentiality, non-solicitation or non-competition agreement to which

you are a party, this Agreement contains the entire agreement of the parties concerning the matters set forth herein and all promises,

representations, understandings, arrangements and prior agreements regarding the subject matter hereof (including the Existing

Agreement, which the parties agree shall terminate as of the Effective Date hereof) are merged herein and superseded hereby. The

provisions of this Agreement may not be amended, modified, repealed, waived, extended or discharged except by an agreement in

writing signed by the party against whom enforcement of any amendment, modification, repeal, waiver, extension or discharge is

sought; provided, however, that the Company may amend this

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Agreement from time to time without the Employee’s consent to the extent deemed necessary or appropriate, in its sole discretion, to

effect compliance with Section 409A of the Code, including regulations and interpretations thereunder, which amendments may result

in a reduction of benefits provided hereunder and/or other unfavorable changes to the Employee. No person acting other than pursuant

to a resolution of the Board of Directors (or its designee) shall have authority on behalf of the Company to agree to amend, modify,

repeal, waive, extend or discharge any provision of this Agreement or anything in reference thereto or to exercise any of the Company’s

rights to terminate or to fail to extend this Agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers thereunto duly authorized,

and the Employee has hereunto set his hand, all as of the day and year first above written.

ATTEST: EQT CORPORATION

 /s/ Kimberly L. Sachse /s/ Charlene Petrelli

By: Charlene Petrelli

Title: Vice President & Chief Human

 Resources Officer

Address:

625 Liberty Avenue, Suite 1700

Pittsburgh, PA 15222

WITNESS:

 /s/ David J. Smith /s/ Randall L. Crawford

Name: Randall L. Crawford

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 10.13(b)

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

THIS AMENDED AND RESTATED AGREEMENT (the “Agreement”) dated as of the 19 day of February, 2013 (the

“Effective Date”) is made by and between EQT CORPORATION, a Pennsylvania corporation with its principal place of business at

Pittsburgh, Pennsylvania (the “Company”), and Lewis B. Gardner, an individual (the “Employee”). This Agreement amends and

restates that certain Change of Control Agreement, dated as of September 8, 2008, between the parties hereto (the “Existing

Agreement”), for the purposes of eliminating the Change of Control excise tax gross-up provision of the Existing Agreement.

WITNESSETH:

WHEREAS, the Board of Directors of the Company (the “Board”) believes that it is in the best interest of the Company and its

shareholders to assure that the Company will have the continued dedication of the Employee, notwithstanding the possibility, threat or

occurrence of a Change of Control (as defined below) of the Company; that it is imperative to diminish the inevitable distraction of the

Employee by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the

Employee’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control;

and that it is appropriate to provide the Employee with compensation and benefits arrangements upon a Change of Control which ensure

that the compensation and benefits expectations of the Employee will be satisfied and which are competitive with those of other

corporations in the industry in which the Company’s principal business activity is conducted; and

WHEREAS, in consideration of the compensation and benefits payable to the Employee under this Agreement, the Employee’s

eligibility to participate in the Company’s 2006 Payroll Deduction and Contribution Program from and after February 1, 2013, and an

increase in the “Company Benefit” under and as described in the 2006 Payroll Deduction and Contribution Program, the Employee and

the Company desire to enter into this Agreement, which amends and restates the Existing Agreement which, among other things,

restricts the Employee from competing with the Company and from soliciting customers and employees of the Company for one

(1) year following the termination of the Employee’s employment following a Change of Control. The Company also desires to require

that the Employee maintain the confidentiality of certain information for two years following any such termination, and the Employee

is willing to agree to such restrictions in consideration of the compensation and benefits payable under this Agreement; and

NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, and intending to be legally

bound hereby, the parties hereto agree as follows:

1. Term. The term of this Agreement shall commence on the Effective Date hereof and, subject to Sections 3(f), 5 and 8,

shall terminate on the earlier of (i) the date of the termination of the Employee’s employment with the Company for any reason prior to

a Change of Control; (ii) the date of Employee’s transition to employment with the Company on a part-time basis, including without

limitation assumption of “Executive Alternative Work Arrangement” status; or (iii) unless further extended as hereinafter set forth, the

date which is

1

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twenty-four (24) months after the Effective Date; provided, that, commencing on the last day of the first full calendar month after the

Effective Date and on the last day of each succeeding calendar month, the term of this Agreement shall be automatically extended

without further action by either party (but not beyond the date of the termination of the Employee’s employment or transition to parttime employment prior to a Change of Control) for one (1) additional month unless one party provides written notice to the other party

that such party does not wish to extend the term of this Agreement. In the event that such notice shall have been delivered, the term of

this Agreement shall no longer be subject to automatic extension and the term hereof shall expire on the date which is twenty-four (24)

calendar months after the last day of the month in which such written notice is received.

2. Change of Control. Except as provided in Section 12, Change of Control shall mean any of the following events (each of

such events being herein referred to as a “Change of Control”):

(a) The sale or other disposition by the Company of all or substantially all of its assets to a single purchaser or to a group of

purchasers, other than to a corporation with respect to which, following such sale or disposition, more than eighty percent (80%) of,

respectively, the then outstanding shares of Company common stock and the combined voting power of the then outstanding voting

securities entitled to vote generally in the election of the Board of Directors is then owned beneficially, directly or indirectly, by all or

substantially all of the individuals and entities who were the beneficial owners, respectively of the outstanding Company common stock

and the combined voting power of the then outstanding voting securities immediately prior to such sale or disposition in substantially the

same proportion as their ownership of the outstanding Company common stock and voting power immediately prior to such sale or

disposition;

(b) The acquisition in one or more transactions by any person or group, directly or indirectly, of beneficial ownership of

twenty percent (20%) or more of the outstanding shares of Company common stock or the combined voting power of the then

outstanding voting securities of the Company entitled to vote generally in the election of the Board of Directors; provided, however, that

the following shall not constitute a Change of Control: (i) any acquisition by the Company or any of its subsidiaries, or any employee

benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries and (ii) an acquisition by any person or

group of persons of not more than forty percent (40%) of the outstanding shares of Company common stock or the combined voting

power of the then outstanding voting securities of the Company if such acquisition resulted from the issuance of capital stock by the

Company and the issuance and the acquiring person or group was approved in advance of such issuance by at least two-thirds of the

Continuing Directors then in office;

(c) The Company’s termination of its business and liquidation of its assets;

(d) There is consummated a merger, consolidation, reorganization, share exchange, or similar transaction involving the

Company (including a triangular merger), in any case, unless immediately following such transaction: (i) all or substantially all of the

persons who were the beneficial owners of the outstanding common stock and outstanding voting securities of the Company

immediately prior to the transaction beneficially own, directly or indirectly, more than 60% of the outstanding shares of common stock

and the combined voting power of the then

2

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outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such transaction

(including a corporation or other person which as a result of such transaction owns the Company or all or substantially all of the

Company’s assets through one or more subsidiaries (a “Parent Company”)) in substantially the same proportion as their ownership of the

common stock and other voting securities of the Company immediately prior to the consummation of the transaction, (ii) no person

(other than (A) the Company, any employee benefit plan sponsored or maintained by the Company or, if reference was made to equity

ownership of any Parent Company for purposes of determining whether clause (i) above is satisfied in connection with the transaction,

such Parent Company, or (B) any person or group that satisfied the requirements of subsection (b)(ii), above) beneficially owns, directly

or indirectly, 20% or more of the outstanding shares of common stock or the combined voting power of the voting securities entitled to

vote generally in the election of directors of the corporation resulting from such transaction and (iii) individuals who were members of

the Company’s Board of Directors immediately prior to the consummation of the transaction constitute at least a majority of the

members of the board of directors resulting from such transaction (or, if reference was made to equity ownership of any Parent

Company for purposes of determining whether clause, (i) above is satisfied in connection with the transaction, such Parent Company);

or

(e) The following individuals (sometimes referred to herein as “Continuing Directors”) cease for any reasons to constitute a

majority of the number of directors then serving: individuals who, on the date hereof, constitute the entire Board of Directors and any

new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest,

including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by

the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors

then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was

previously so approved.

3. Salary and Benefits Continuation.

(a) “Salary and Benefits Continuation” shall be defined to mean the following:

(i) payment of an amount of cash equal to two (2) times the Employee’s base salary at the rate of base salary per

annum in effect immediately prior to the Change of Control or the termination of the Employee’s

employment, whichever is higher;

(ii) payment of an amount of cash equal to two (2 ) times the greater of (A) the highest annual incentive (bonus)

payment earned by the Employee under the Company’s applicable Short-Term Incentive Plan (or any

successor plan) for any year in the five (5) years prior to the termination of the Employee’s employment or

(B) the target incentive (bonus) award under the Company’s applicable Short-Term Incentive Plan (or any

successor plan) for the year in which the Change of Control or termination of the Employee’s employment

occurs, whichever is higher;

3

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(iii) provision to Employee and his eligible dependents of medical, long-term disability, dental and life insurance

coverage (to the extent such coverage was in effect immediately prior to the Change of Control) for twentyfour (24) months (at the end of which period the Company shall make such benefits available to the Employee

and his eligible dependents in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985

(“COBRA”), whether or not the Company is then required to comply with COBRA); and if the Employee

would have become entitled to benefits under the Company’s post-retirement health care or life insurance

plans (as in effect immediately prior to the Change of Control or the date of the Employee’s termination of

employment, whichever is most favorable to the Employee) had the Employee’s employment terminated at

any time during the period of twenty-four (24) months after such date of termination, the Company shall

provide such post-retirement health care or life insurance benefits to the Employee (subject to any employee

contributions required under the terms of such plans at the level in effect immediately prior to the Change of

Control or the date of termination, whichever is more favorable to the Employee) commencing on the later of

(i) the date that such coverage would have first become available or (ii) the date that benefits described in this

subsection (iii) terminate;

(iv) contribution by the Company to Employee’s account under the Company’s defined contribution retirement

plan (currently, the EQT Corporation Employee Savings Plan) of an amount of cash equal to the amount that

the Company would have contributed to such plan (including both retirement contributions and Company

matching contributions in respect of Employee contributions to the plan) had the Employee continued to be

employed by the Company for an additional twenty-four (24) months at a base salary equal to the Employee’s

base salary immediately prior to the Change of Control or the termination of Employee’s employment,

whichever is higher (and assuming for this purpose that the Employee continued to make the maximum

permissible contributions to such plan during such period), such contribution being deemed to be made

immediately prior to the termination of the Employee’s employment; provided, that to the extent that the

amount of such contribution exceeds the amount then allowed to be contributed to the plan under the applicable

rules relating to tax-qualified retirement plans, then the excess shall be paid to the Employee in cash in respect

of both retirement and matching contributions under the Company’s Employee Savings Plan (or any successor

plan) because of applicable rules relating to tax-qualified retirement plans; and

(v) reimbursement to the Employee of reasonable costs incurred by the Employee for outplacement services for

the two (2) year period following termination of the Employee’s employment, in an amount not to exceed

$10,000 per year.

4

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(b) All amounts payable by the Company to the Employee pursuant to Sections 3(a)(i), (ii), and (iv) shall be made in a lump

sum on the first day following the six-month anniversary of the Employee’s termination. For purposes of this Agreement, the term

“termination” when used in the context of a condition to, or timing of, payment hereunder shall be interpreted to mean a “separation

from service” as that term is used in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). All

reimbursements for costs incurred for outplacement services payable by the Company to the Employee pursuant to Section 3(v) shall

be paid or provided in accordance with the Company’s standard payroll and reimbursement procedures, as in effect immediately prior to

the Change of Control, provided that such expenses must be incurred before the end of the second taxable year of the Employee

following the taxable year of the Employee in which the termination occurs and must be reimbursed before the end of the third taxable

year of the Employee following the taxable year of the Employee in which the termination occurs.

(c) To the extent that medical, long-term disability, dental and life insurance benefits cannot be provided on a non-taxable

basis to the Employee under appropriate Company group insurance policies pursuant to Section 3(a)(iii), an amount equal to the

premium necessary for the Employee to purchase directly the same level of coverage in effect immediately prior to the Change of

Control shall be added to the Company’s payments to the Employee pursuant to Section 3(a). Any such payment shall be made in a

lump sum, payable on the first day following the six-month anniversary of the Employee’s termination. If the Employee is required to

pay income or other taxes on any medical, long-term disability, dental or life insurance benefits provided or paid to the Employee

pursuant to Section 3(a)(iii) or this Section 3(c), then the Company shall pay to the Employee an amount of cash sufficient to “grossup” such benefits or payments at the time specified in Section 10 hereof so that the Employee’s “net” benefits received under

Section 3(a)(iii) and this Section 3(c) are not diminished by any such taxes that are imposed with respect to the same or the Company’s

gross-up hereunder with respect to such taxes.

(d) If there is a Change of Control as defined above, the Company will provide Salary and Benefits Continuation if at any

time during the first twenty-four (24) months following the Change of Control, either (i) the Company terminates the Employee’s

employment other than for Cause as defined in Section 4 below or (ii) the Employee terminates his employment for “Good Reason” as

defined below.

(e) For purposes of this Agreement, “Good Reason” is defined as:

(i) Removal of the Employee from the position he held immediately prior to the Change of Control (by reason

other than death, disability or Cause);

(ii) The assignment to the Employee of any duties inconsistent with those performed by the Employee

immediately prior to the Change of Control or a substantial alteration in the nature or status of the Employee’s

responsibilities which renders the Employee’s position to be of less dignity, responsibility or scope;

5

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(iii) A reduction by the Company in the overall level of compensation of the Employee for any year from the level

in effect for the Employee in the prior year. For purposes of this subsection (iii), the following shall not

constitute a reduction in the overall level of compensation of the Employee: (A) across-the-board reductions in

base salary similarly affecting all executives of the Company and all executives of any person in control of the

Company, provided, however, that the Employee’s annual base salary rate shall not be reduced by an amount

equal to ten percent or more of the Employee’s annual base salary rate in effect immediately prior to the

Change of Control; (B) changes in the mix of base salary payable to and the short-term incentive opportunity

available to the Employee; provided, that in no event shall the Employee’s base salary for any year be reduced

below 90% of the annual base salary paid to the Employee in the prior year; (C) a reduction in the compensation

of the Employee resulting from the failure to achieve corporate, business unit and/or individual performance

goals established for purposes of incentive compensation for any year or other period; provided, that the

aggregate short-term incentive opportunity, when combined with the Employee’s annual base salary, provides,

in the aggregate, an opportunity for the Employee to realize at least the same overall level of base salary and

short term incentive compensation as was paid in the immediately prior year or period at target performance

levels; and provided, further, that such target performance levels are reasonable at all times during the

measurement period, taking into account the fact that one of the purposes of such compensation is to incentivize

the Employee; (D) reductions in compensation resulting from changes to any Company benefit plan; provided,

that such changes are generally applicable to all participants in such Company benefit plan; and (E) any

combination of the foregoing;

(iv) The failure to grant the Employee an annual salary increase reasonably necessary to maintain such salary as

reasonably comparable to salaries of senior executives holding positions equivalent to the Employee’s in the

industry in which the Company’s then principal business activity is conducted;

(v) The Company requiring the Employee to be based anywhere other than the Company’s principal executive

offices in the city in which the Employee is principally located immediately prior to the Change of Control,

except for required travel on the Company’s business to an extent substantially consistent with the Employee’s

business travel obligations prior to the Change of Control;

(vi) Any material reduction by the Company of the benefits enjoyed by the Employee under any of the Company’s

pension, retirement, profit sharing, savings, life insurance, medical, health and accident, disability or other

employee benefit plans, programs or arrangements, the taking of any action by the Company which would

directly or indirectly materially

6

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reduce any of such benefits or deprive the Employee of any material fringe benefits, or the failure by the

Company to provide the Employee with the number of paid vacation days to which he is entitled on the basis of

years of service with the Company in accordance with the Company’s normal vacation policy, provided that this

subparagraph (vi) shall not apply to any proportional across-the-board reduction or action similarly affecting all

executives of the Company and all executives of any person in control of the Company; or

(vii) The failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to

perform this Agreement, as contemplated in Section 15 hereof, or any other material breach by the Company

of its obligations contained in this Agreement.

(f) The Employee’s right to Salary and Benefits Continuation shall accrue upon the occurrence of either of the events

specified in (i) or (ii) of Section 3(d) and shall continue as provided, notwithstanding the subsequent termination or expiration of this

Agreement pursuant to Section 1 hereof. The Employee’s subsequent employment, death or disability following the Employee’s

termination of employment in connection with a Change of Control shall not affect the Company’s obligation to continue making Salary

and Benefits Continuation payments, except as provided in Section 8(c). The Employee shall not be required to mitigate the amount of

any payment provided for in this Section 3 by seeking employment or otherwise. The rights to Salary and Benefits Continuation shall

be in addition to whatever other benefits the Employee may be entitled to under any other agreement or compensation plan, program or

arrangement of the Company; provided, that the Employee shall not be entitled to any separate or additional severance payments

pursuant to the Company’s severance plan as then in effect and generally applicable to similarly situated employees. The Company

shall be authorized to withhold from any payment to the Employee, his estate or his beneficiaries hereunder all such amounts, if any,

that the Company may reasonably determine it is required to withhold pursuant to any applicable law or regulation.

4. Termination of Employee for Cause.

(a) Upon or following a Change of Control, the Company may at any time terminate the Employee’s employment for

Cause. Termination of employment by the Company for “Cause” shall mean termination upon: (i) the willful and continued failure by

the Employee to substantially perform his duties with the Company (other than (A) any such failure resulting from the Employee’s

disability or (B) any such actual or anticipated failure resulting from the Employee’s termination of his employment for Good Reason),

after a written demand for substantial performance is delivered to the Employee by the Board of Directors which specifically identifies

the manner in which the Board of Directors believes that the Employee has not substantially performed his duties, and which failure has

not been cured within thirty days (30) after such written demand; or (ii) the willful and continued engaging by the Employee in conduct

which is demonstrably and materially injurious to the Company, monetarily or otherwise, or (iii) the breach by the Employee of any of

the covenants set forth in Section 8 hereof.

7

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(b) For purposes of this Section 4, no act, or failure to act, on the Employee’s part shall be considered “willful” unless done,

or omitted to be done, by the Employee in bad faith and without reasonable belief that such action or omission was in the best interest of

the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until

there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the

entire membership of the Board of Directors at a meeting of the Board of Directors called and held for that purpose (after reasonable

notice to the Employee and an opportunity for the Employee, together with his counsel, to be heard before the Board of Directors)

finding that in the good faith opinion of the Board of Directors the Employee is guilty of the conduct set forth above in clauses (a)(i),

(ii) or (iii) of this Section 4 and specifying the particulars thereof in detail.

5. Prior Termination. Anything in this Agreement to the contrary notwithstanding, if the Employee’s employment with

the Company is terminated prior to the date on which a Change of Control occurs either (i) by the Company other than for Cause or

(ii) by the Employee for Good Reason, and it is reasonably demonstrated by the Employee that such termination of employment (a) was

at the request of a third party who has taken steps reasonably calculated to effect the Change of Control, or (b) otherwise arose in

connection with or anticipation of the Change of Control, and (iii) a Change of Control that constitutes a change in ownership or

effective control of the Corporation or a change in the ownership of a substantial portion of the assets of the Company under

Section 409A of the Code occurs within twenty-four (24) months following the Employee’s termination, then for all purposes of this

Agreement the termination shall be deemed to have occurred upon a Change of Control and the Employee will be entitled to Salary and

Benefits Continuation as provided for in Section 3 hereof upon the date on which the Change of Control set forth in clause (iii) of this

Section 5 occurs or, if later, the date specified in Section 3 hereof.

6. Employment at Will. Subject to the provisions of any other agreement between the Employee and the Company, the

Employee shall remain an employee at will and nothing herein shall confer upon the Employee any right to continued employment and

shall not affect the right of the Company to terminate the Employee for any reason not prohibited by law; provided, however, that any

such removal shall be without prejudice to any rights the Employee may have to Salary and Benefits Continuation hereunder.

7. Construction of Agreement.

(a) Governing Law. This Agreement shall be governed by and construed under the laws of the Commonwealth of

Pennsylvania without regard to its conflict of law provisions.

(b) Severability. In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or

unenforceable, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(c) Headings. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience of

reference only and shall not constitute a part of this Agreement.

8

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8. Covenant as to Confidential Information, Non-Competition and Non-Solicitation .

(a) Confidentiality of Information and Nondisclosure . The Employee acknowledges and agrees that his employment by the

Company necessarily involves his knowledge of and access to confidential and proprietary information pertaining to the business of the

Company and its subsidiaries. Accordingly, the Employee agrees that at all times during the term of this Agreement and for as long as

the information remains confidential after the termination of the Employee’s employment, he/she will not, directly or indirectly,

without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over the

Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of himself, any person, corporation or other

entity other than the Company and its subsidiaries, (i) any information concerning any financial matters, customer relationships,

competitive status, supplier matters, internal organizational matters, current or future plans, or other business affairs of or relating to the

Company and its subsidiaries, (ii) any management, operational, trade, technical or other secrets or any other proprietary information or

other data of the Company or its subsidiaries, or (iii) any other information related to the Company or its subsidiaries which has not been

published and is not generally known outside of the Company. The Employee acknowledges that all of the foregoing, constitutes

confidential and proprietary information, which is the exclusive property of the Company.

(b) Non-Competition and Non-Solicitation . While the Employee is employed by the Company and for a period of twelve

(12) months after the date of the Employee’s termination of employment with the Company for any reason, the Employee will not,

directly or indirectly, expressly or tacitly, for himself or on behalf of any entity conducting business anywhere in the Restricted

Territory (as defined below): (i) act as an officer, manager, advisor, executive, shareholder, or consultant to any business in which his

duties at or for such business include oversight of or actual involvement in providing services which are competitive with the services or

products being provided or which are being produced or developed by the Company, or were under investigation by the Company within

the last two (2) years prior to the end of the Employee’s employment with the Company, (ii) recruit investors on behalf of an entity

which engages in activities which are competitive with the services or products being provided or which are being produced or developed

by the Company, or were under investigation by the Company within the last two (2) years prior to the end of the Employee’s

employment with the Company, or (iii) become employed by such an entity in any capacity which would require the Employee to carry

out, in whole or in part, the duties the Employee has performed for the Company which are competitive with the services or products

being provided or which are being produced or developed by the Company, or were under active investigation by the Company within

the last two (2) years prior to the end of the Employee’s employment with the Company. Notwithstanding the foregoing, the Employee

may purchase or otherwise acquire up to (but not more than) 1% of any class of securities of any enterprise (but without otherwise

participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been

registered under Section 12(g) of the Securities Exchange Act of 1934. This covenant shall apply to any services, products or

businesses under investigation by the Company within the last two (2) years prior to the end of the Employee’s employment with the

Company only to the extent that the Employee acquired or was privy to confidential information regarding such services, products or

businesses. The Employee acknowledges that this restriction will prevent the Employee from acting in any of the foregoing capacities

for any

9

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competing entity operating or conducting business within the Restricted Territory and that this scope is reasonable in light of the business

of the Company. Notwithstanding anything to the contrary in the foregoing paragraph or in this Agreement, Employee shall not in any

way be restricted from being employed as an attorney in the oil and gas industry immediately following the date of Employee’s

termination of employment with the Company.

Restricted Territory shall mean (i) any states in which the Company has a regulated-utility operation, which may change from

time to time, but as of the effective date of this Agreement are Pennsylvania, West Virginia and Kentucky; or (ii) any states in which the

Company owns, operates or has contractual rights to purchase natural gas-related assets (other than commodity trading rights), including

but not limited to, storage facilities, interstate pipelines, intrastate pipelines, intrastate distribution facilities, liquefied natural gas facilities,

propane-air facilities or other peaking facilities, and/or processing or fractionation facilities; or (iii) any state in which the Company owns

proved, developed and/or undeveloped natural gas and/or oil reserves and/or conducts natural gas or oil exploration and production

activities of any kind; or (iv) any state investigated by the Company as a possible jurisdiction in which to conduct any of the business

activities described in subparagraphs (i) through (iii) above within the last two (2) years prior to the end of the Employee’s employment

with the Company.

The Employee agrees that for a period of twelve (12) months following the termination of the Employee’s employment with

the Company for any reason, including without limitation termination for cause or without cause, Employee shall not, directly or

indirectly, solicit the business of, or do business with: (i) any customer that the Employee approached, solicited or accepted business

from on behalf of the Company, and/or was provided confidential or proprietary information about while employed by the Company

within the one (1) year period preceding the Employee’s separation from the Company; and (ii) any prospective customer of the

Company who was identified to or by the Employee and/or who the Employee was provided confidential or proprietary information

about while employed by the Company within the one (1) year period preceding the Employee’s separation from the Company, for

purposes of marketing, selling and/or attempting to market or sell products and services which are the same as or similar to any product

or service the Company offers within the last two (2) years prior to the end of the Employee’s employment with the Company, and/or,

which are the same as or similar to any product or service the Company has in process over the last two (2) years prior to the end of the

Employee’s employment with the Company to be offered in the future.

While the Employee is employed by the Company and for a period of twelve (12) months after the date of the Employee’s

termination of employment with the Company for any reason, the Employee shall not (directly or indirectly) on his or her own behalf

or on behalf of any other person or entity solicit or induce, or cause any other person or entity to solicit or induce, or attempt to solicit or

induce, any employee or consultant to leave the employ of or engagement by the Company or its successors, assigns or affiliates, or to

violate the terms of their contracts with the Company.

(c) Company Remedies. The Employee acknowledges and agrees that any breach of this Section 8 by him will result in

immediate irreparable harm to the Company, and that the Company cannot be reasonably or adequately compensated by damages in an

action at law. In the event of an actual or threatened breach by the Employee of the provisions of this Section 8,

10

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the Company shall be entitled, to the extent permissible by law, immediately to cease to pay or provide the Employee or his dependents

any compensation or benefit being, or to be, paid or provided to him pursuant to Section 3 of this Agreement, and also to obtain

immediate injunctive relief restraining the Employee from conduct in breach or threatened breach of the covenants contained in this

Section 8. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such

breach or threatened breach, including the recovery of damages from the Employee.

9. Reimbursement of Fees. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses

which the Employee may reasonably incur for the period beginning upon the Effective Date and ending upon the Employee’s death as a

result of any contest by the Company, Internal Revenue Service or others regarding the validity or enforceability of, or liability under,

any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Employee about

the amount of any payment pursuant to Section 3 of this Agreement) or in connection with any dispute arising from this Agreement,

regardless of whether Employee prevails in any such contest or dispute. The Company shall pay or reimburse such fees and expenses

on a monthly basis, payable on the first of each month, and all reimbursement payments with respect to expenses incurred within a

particular year shall be made no later than the end of the Employee’s taxable year following the taxable year in which the expense was

incurred. Any amounts not paid within such monthly reimbursement period shall bear interest at the rate per annum established by

PNC Bank, National Association (or its successor) from time to time as its “prime” or equivalent rate. The amount of reimbursable

expenses incurred in one taxable year of the Employee shall not affect the amount of reimbursable expenses in a different taxable year

and such reimbursement shall not be subject to liquidation or exchange for another benefit. Notwithstanding the foregoing, in the event

such amounts are conditioned upon a separation from service and not compensation the Employee could receive without separating from

service, then no such payments may be made to Employee until the first day following the six-month anniversary of the Employee’s

termination.

10. Mandatory Reduction of Payments in Certain Events.

(a) Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment or

distribution by the Company to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the

terms of this Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as “Payments”) would, if

paid, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, prior to the making of any Payments to

the Employee, a calculation shall be made comparing (i) the net after-tax benefit to the Employee of the Payments after payment by the

Employee of the Excise Tax, to (ii) the net after-tax benefit to the Employee if the Payments had been limited to the extent necessary

to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above,

then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The

reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary,

reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the

Change in Control, as determined by the Determination Firm (as defined in Section 10(b) below). For purposes of this Section 10,

present value shall be determined in

11

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accordance with Section 280G(d)(4) of the Code. For purposes of this Section 10, the “Parachute Value” of a Payment means the

present value as of the date of the Change in Control of the portion of such Payment that constitutes a “parachute payment” under

Section 280G(b)(2) of the Code, as determined by the Determination Firm for purposes of determining whether and to what extent the

Excise Tax will apply to such Payment.

(b) All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be

imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at

such determinations, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually

acceptable to the Company and the Employee (the “Determination Firm”) which shall provide detailed supporting calculations both to

the Company and the Employee within 15 business days after the receipt of notice from the Employee that a Payment is due to be

made, or such earlier time as is requested by the Company. All fees and expenses of the Determination Firm shall be borne solely by

the Company. Any determination by the Determination Firm shall be binding upon the Company and the Employee. As a result of the

uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Determination Firm hereunder,

it is possible that Payments which the Employee was entitled to, but did not receive pursuant to Section 10(a), could have been made

without the imposition of the Excise Tax (“Underpayment”), consistent with the calculations required to be made hereunder. In such

event, the Determination Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall

be promptly paid by the Company to or for the benefit of the Employee but no later than March 15 of the year after the year in which

the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises.

(c) In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without

succession, this Section 10 shall be of no further force or effect.

11. Resolution of Differences Over Breaches of Agreement . Except as otherwise provided herein, in the event of any

controversy, dispute or claim arising out of, or relating to this Agreement, or the breach thereof, or arising out of any other matter

relating to the Employee’s employment with the Company or the termination of such employment, the parties may seek recourse only

for temporary or preliminary injunctive relief to the courts having jurisdiction thereof and if any relief other than injunctive relief is

sought, the Company and the Employee agree that such underlying controversy, dispute or claim shall be settled by arbitration

conducted in Pittsburgh, Pennsylvania in accordance with this Section 11 of this Agreement and the Commercial Arbitration Rules of

the American Arbitration Association (“AAA”). The matter shall be heard and decided, and awards rendered by a panel of three

(3) arbitrators (the “Arbitration Panel”). The Company and the Employee shall each select one arbitrator from the AAA National Panel

of Commercial Arbitrators (the “Commercial Panel”) and AAA shall select a third arbitrator from the Commercial Panel. The award

rendered by the Arbitration Panel shall be final and binding as between the parties hereto and their heirs, executors, administrators,

successors and assigns, and judgment on the award may be entered by any court having jurisdiction thereof.

12

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12. Treatment of Certain Incentive Awards. All “Awards” held by the Employee under the Company’s 1999 Long-Term

Incentive Plan, the Company’s 2009 Long-Term Incentive Plan, or any successor plan or plans (as the case may be, the “Incentive

Plan”) shall, upon a Change of Control, be treated in accordance with the terms of the applicable Incentive Plan and underlying award

agreements when and as awarded, without regard to the subsequent amendment of the applicable Incentive Plan. For purposes of this

Section 12, the terms “Award” and “Change of Control” shall have the meanings ascribed to them in the applicable Incentive Plan.

13. Release. The Employee hereby acknowledges and agrees that prior to the Employee’s or his dependents’ right to

receive from the Company any compensation or benefit to be paid or provided to him or his dependents pursuant to Section 3 of this

Agreement, the Employee may be required by the Company, in its sole discretion, to execute a release in a form reasonably acceptable

to the Company, which releases any and all claims (other than amounts to be paid to Employee as expressly provided for under this

Agreement) the Employee has or may have against the Company or its subsidiaries, agents, officers, directors, successors or assigns

arising under any public policy, tort or common law or any provision of state, federal or local law, including, but not limited to, the

Pennsylvania Human Relations Act, the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Civil Rights

Protection Act, Family and Medical Leave Act, the Age Discrimination in Employment Act of 1967, or the Employee Retirement

Income Security Act of 1974, all as amended.

14. Waiver. The waiver by a party hereto of any breach by the other party hereto of any provision of this Agreement shall

not operate or be construed as a waiver of any subsequent breach by a party hereto.

15. Assignment. This Agreement, including the non-competition and non-solicitation covenant in Section 8(b) hereof, shall

be binding upon and inure to the benefit of the successors and assigns of the Company. The Company shall be obligated to require any

successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the Company’s

business or assets, by a written agreement in form and substance satisfactory to the Employee, to expressly assume and agree to perform

this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken

place. This Agreement shall inure to the extent provided hereunder to the benefit of and be enforceable by the Employee or his legal

representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. The Employee may not delegate any of

his duties, responsibilities, obligations or positions hereunder to any person and any such purported delegation by him shall be void and of

no force and effect with respect to matters relating to his employment and termination of employment. Without limiting the foregoing,

the Employee’s rights to receive payments and benefits hereunder shall not be assignable or transferable, other than a transfer by the

Employee’s will or by the laws of descent and distribution.

16. Notices. Any notices required or permitted to be given under this Agreement shall be sufficient if in writing, and if

personally delivered or when sent by first class certified or registered mail, postage prepaid, return receipt requested -- in the case of the

Employee, to his residence address as set forth below, and in the case of the Company, to the address of its principal place of business as

set forth below, in care of the Chairman of the Board -- or to such

13

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
other person or at such other address with respect to each party as such party shall notify the other in writing.

17. Pronouns. Pronouns stated in either the masculine, feminine or neuter gender shall include the masculine, feminine and

neuter.

18. Entire Agreement. Except as set forth in any confidentiality, non-solicitation or non-competition agreement to which

you are a party, this Agreement contains the entire agreement of the parties concerning the matters set forth herein and all promises,

representations, understandings, arrangements and prior agreements regarding the subject matter hereof (including the Existing

Agreement, which the parties agree shall terminate as of the Effective Date hereof) are merged herein and superseded hereby. The

provisions of this Agreement may not be amended, modified, repealed, waived, extended or discharged except by an agreement in

writing signed by the party against whom enforcement of any amendment, modification, repeal, waiver, extension or discharge is

sought; provided, however, that the Company may amend this Agreement from time to time without the Employee’s consent to the

extent deemed necessary or appropriate, in its sole discretion, to effect compliance with Section 409A of the Code, including regulations

and interpretations thereunder, which amendments may result in a reduction of benefits provided hereunder and/or other unfavorable

changes to the Employee. No person acting other than pursuant to a resolution of the Board of Directors (or its designee) shall have

authority on behalf of the Company to agree to amend, modify, repeal, waive, extend or discharge any provision of this Agreement or

anything in reference thereto or to exercise any of the Company’s rights to terminate or to fail to extend this Agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers thereunto duly authorized,

and the Employee has hereunto set his hand, all as of the day and year first above written.

ATTEST: EQT CORPORATION

 /s/ Kimberly L. Sachse /s/ Charlene Petrelli

By: Charlene Petrelli

Title: Vice President & Chief Human

 Resources Officer

Address:

625 Liberty Avenue, Suite 1700

Pittsburgh, PA 15222

WITNESS:

 /s/ David J. Smith /s/ Lewis B. Gardner

Name: Lewis B. Gardner

14

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 10.14(b)

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

THIS AMENDED AND RESTATED AGREEMENT (the “Agreement”) dated as of the 19 day of February, 2013 (the

“Effective Date”) is made by and between EQT CORPORATION., a Pennsylvania corporation with its principal place of business at

Pittsburgh, Pennsylvania (the “Company”), and Steven T. Schlotterbeck, an individual (the “Employee”). This Agreement amends and

restates that certain Change of Control Agreement, dated as of September 8, 2008, between the parties hereto (the “Existing

Agreement”), for the purposes of eliminating the Change of Control excise tax gross-up provision of the Existing Agreement.

WITNESSETH:

WHEREAS, the Board of Directors of the Company (the “Board”) believes that it is in the best interest of the Company and its

shareholders to assure that the Company will have the continued dedication of the Employee, notwithstanding the possibility, threat or

occurrence of a Change of Control (as defined below) of the Company; that it is imperative to diminish the inevitable distraction of the

Employee by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the

Employee’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control;

and that it is appropriate to provide the Employee with compensation and benefits arrangements upon a Change of Control which ensure

that the compensation and benefits expectations of the Employee will be satisfied and which are competitive with those of other

corporations in the industry in which the Company’s principal business activity is conducted; and

WHEREAS, in consideration of the compensation and benefits payable to the Employee under this Agreement, the Employee’s

eligibility to participate in the Company’s 2006 Payroll Deduction and Contribution Program from and after February 1, 2013, and an

increase in the “Company Benefit” under and as described in the 2006 Payroll Deduction and Contribution Program, the Employee and

the Company desire to enter into this Agreement, which amends and restates the Existing Agreement which, among other things,

restricts the Employee from competing with the Company and from soliciting customers and employees of the Company for one

(1) year following the termination of the Employee’s employment following a Change of Control. The Company also desires to require

that the Employee maintain the confidentiality of certain information for two years following any such termination, and the Employee

is willing to agree to such restrictions in consideration of the compensation and benefits payable under this Agreement; and

NOW THEREFORE, in consideration of the premises and mutual covenants contained herein, and intending to be legally

bound hereby, the parties hereto agree as follows:

1. Term. The term of this Agreement shall commence on the Effective Date hereof and, subject to Sections 3(f), 5 and 8,

shall terminate on the earlier of (i) the date of the termination of the Employee’s employment with the Company for any reason prior to

a Change of Control; (ii) the date of Employee’s transition to employment with the Company on a

1

th

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part-time basis, including without limitation assumption of “Executive Alternative Work Arrangement” status; or (iii) unless further

extended as hereinafter set forth, the date which is twenty-four (24) months after the Effective Date; provided, that, commencing on

the last day of the first full calendar month after the Effective Date and on the last day of each succeeding calendar month, the term of

this Agreement shall be automatically extended without further action by either party (but not beyond the date of the termination of the

Employee’s employment or transition to part-time employment prior to a Change of Control) for one (1) additional month unless one

party provides written notice to the other party that such party does not wish to extend the term of this Agreement. In the event that

such notice shall have been delivered, the term of this Agreement shall no longer be subject to automatic extension and the term hereof

shall expire on the date which is twenty-four (24) calendar months after the last day of the month in which such written notice is

received.

2. Change of Control. Except as provided in Section 12, Change of Control shall mean any of the following events (each of

such events being herein referred to as a “Change of Control”):

(a) The sale or other disposition by the Company of all or substantially all of its assets to a single purchaser or to a group of

purchasers, other than to a corporation with respect to which, following such sale or disposition, more than eighty percent (80%) of,

respectively, the then outstanding shares of Company common stock and the combined voting power of the then outstanding voting

securities entitled to vote generally in the election of the Board of Directors is then owned beneficially, directly or indirectly, by all or

substantially all of the individuals and entities who were the beneficial owners, respectively of the outstanding Company common stock

and the combined voting power of the then outstanding voting securities immediately prior to such sale or disposition in substantially the

same proportion as their ownership of the outstanding Company common stock and voting power immediately prior to such sale or

disposition;

(b) The acquisition in one or more transactions by any person or group, directly or indirectly, of beneficial ownership of

twenty percent (20%) or more of the outstanding shares of Company common stock or the combined voting power of the then

outstanding voting securities of the Company entitled to vote generally in the election of the Board of Directors; provided, however, that

the following shall not constitute a Change of Control: (i) any acquisition by the Company or any of its subsidiaries, or any employee

benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries and (ii) an acquisition by any person or

group of persons of not more than forty percent (40%) of the outstanding shares of Company common stock or the combined voting

power of the then outstanding voting securities of the Company if such acquisition resulted from the issuance of capital stock by the

Company and the issuance and the acquiring person or group was approved in advance of such issuance by at least two-thirds of the

Continuing Directors then in office;

(c) The Company’s termination of its business and liquidation of its assets;

(d) There is consummated a merger, consolidation, reorganization, share exchange, or similar transaction involving the

Company (including a triangular merger), in any case, unless immediately following such transaction: (i) all or substantially all of the

persons who were the beneficial owners of the outstanding common stock and outstanding voting securities of the

2

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Company immediately prior to the transaction beneficially own, directly or indirectly, more than 60% of the outstanding shares of

common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of

directors of the corporation resulting from such transaction (including a corporation or other person which as a result of such transaction

owns the Company or all or substantially all of the Company’s assets through one or more subsidiaries (a “Parent Company”)) in

substantially the same proportion as their ownership of the common stock and other voting securities of the Company immediately prior

to the consummation of the transaction, (ii) no person (other than (A) the Company, any employee benefit plan sponsored or maintained

by the Company or, if reference was made to equity ownership of any Parent Company for purposes of determining whether clause

(i) above is satisfied in connection with the transaction, such Parent Company, or (B) any person or group that satisfied the requirements

of subsection (b)(ii), above) beneficially owns, directly or indirectly, 20% or more of the outstanding shares of common stock or the

combined voting power of the voting securities entitled to vote generally in the election of directors of the corporation resulting from

such transaction and (iii) individuals who were members of the Company’s Board of Directors immediately prior to the consummation

of the transaction constitute at least a majority of the members of the board of directors resulting from such transaction (or, if reference

was made to equity ownership of any Parent Company for purposes of determining whether clause, (i) above is satisfied in connection

with the transaction, such Parent Company); or

(e) The following individuals (sometimes referred to herein as “Continuing Directors”) cease for any reasons to constitute a

majority of the number of directors then serving: individuals who, on the date hereof, constitute the entire Board of Directors and any

new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest,

including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by

the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors

then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was

previously so approved.

3. Salary and Benefits Continuation.

(a) “Salary and Benefits Continuation” shall be defined to mean the following:

(i) payment of an amount of cash equal to two (2) times the Employee’s base salary at the rate of base salary per

annum in effect immediately prior to the Change of Control or the termination of the Employee’s

employment, whichever is higher;

(ii) payment of an amount of cash equal to two (2 ) times the greater of (A) the highest annual incentive (bonus)

payment earned by the Employee under the Company’s applicable Short-Term Incentive Plan (or any

successor plan) for any year in the five (5) years prior to the termination of the Employee’s employment or

(B) the target incentive (bonus) award under the Company’s applicable Short-Term Incentive Plan (or any

successor

3

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
plan) for the year in which the Change of Control or termination of the Employee’s employment occurs,

whichever is higher;

(iii) provision to Employee and his eligible dependents of medical, long-term disability, dental and life insurance

coverage (to the extent such coverage was in effect immediately prior to the Change of Control) for twentyfour (24) months (at the end of which period the Company shall make such benefits available to the Employee

and his eligible dependents in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985

(“COBRA”), whether or not the Company is then required to comply with COBRA); and if the Employee

would have become entitled to benefits under the Company’s post-retirement health care or life insurance

plans (as in effect immediately prior to the Change of Control or the date of the Employee’s termination of

employment, whichever is most favorable to the Employee) had the Employee’s employment terminated at

any time during the period of twenty-four (24) months after such date of termination, the Company shall

provide such post-retirement health care or life insurance benefits to the Employee (subject to any employee

contributions required under the terms of such plans at the level in effect immediately prior to the Change of

Control or the date of termination, whichever is more favorable to the Employee) commencing on the later of

(i) the date that such coverage would have first become available or (ii) the date that benefits described in this

subsection (iii) terminate;

(iv) contribution by the Company to Employee’s account under the Company’s defined contribution retirement

plan (currently, the EQT Corporation Employee Savings Plan) of an amount of cash equal to the amount that

the Company would have contributed to such plan (including both retirement contributions and Company

matching contributions in respect of Employee contributions to the plan) had the Employee continued to be

employed by the Company for an additional twenty-four (24) months at a base salary equal to the Employee’s

base salary immediately prior to the Change of Control or the termination of Employee’s employment,

whichever is higher (and assuming for this purpose that the Employee continued to make the maximum

permissible contributions to such plan during such period), such contribution being deemed to be made

immediately prior to the termination of the Employee’s employment; provided, that to the extent that the

amount of such contribution exceeds the amount then allowed to be contributed to the plan under the applicable

rules relating to tax-qualified retirement plans, then the excess shall be paid to the Employee in cash in respect

of both retirement and matching contributions under the Company’s Employee Savings Plan (or any successor

plan) because of applicable rules relating to tax-qualified retirement plans; and

(v) Payment of an amount of cash equal to $20,000.

4

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(b) All amounts payable by the Company to the Employee pursuant to Sections 3(a)(i), (ii), (iv) and (v) shall be made in a

lump sum on the first day following the six-month anniversary of the Employee’s termination. For purposes of this Agreement, the

term “termination” when used in the context of a condition to, or timing of, payment hereunder shall be interpreted to mean a

“separation from service” as that term is used in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

(c) To the extent that medical, long-term disability, dental and life insurance benefits cannot be provided on a non-taxable

basis to the Employee under appropriate Company group insurance policies pursuant to Section 3(a)(iii), an amount equal to the

premium necessary for the Employee to purchase directly the same level of coverage in effect immediately prior to the Change of

Control shall be added to the Company’s payments to the Employee pursuant to Section 3(a). Any such payment shall be made in a

lump sum, payable on the first day following the six-month anniversary of the Employee’s termination. If the Employee is required to

pay income or other taxes on any medical, long-term disability, dental or life insurance benefits provided or paid to the Employee

pursuant to Section 3(a)(iii) or this Section 3(c), then the Company shall pay to the Employee an amount of cash sufficient to “grossup” such benefits or payments at the time specified in Section 10 hereof so that the Employee’s “net” benefits received under

Section 3(a)(iii) and this Section 3(c) are not diminished by any such taxes that are imposed with respect to the same or the Company’s

gross-up hereunder with respect to such taxes.

(d) If there is a Change of Control as defined above, the Company will provide Salary and Benefits Continuation if at any

time during the first twenty-four (24) months following the Change of Control, either (i) the Company terminates the Employee’s

employment other than for Cause as defined in Section 4 below or (ii) the Employee terminates his employment for “Good Reason” as

defined below.

(e) For purposes of this Agreement, “Good Reason” is defined as:

(i) Removal of the Employee from the position he held immediately prior to the Change of Control (by reason

other than death, disability or Cause);

(ii) The assignment to the Employee of any duties inconsistent with those performed by the Employee

immediately prior to the Change of Control or a substantial alteration in the nature or status of the Employee’s

responsibilities which renders the Employee’s position to be of less dignity, responsibility or scope;

(iii) A reduction by the Company in the overall level of compensation of the Employee for any year from the level

in effect for the Employee in the prior year. For purposes of this subsection (iii), the following shall not

constitute a reduction in the overall level of compensation of the Employee: (A) across-the-board reductions in

base salary similarly affecting all executives of the Company and all executives of any person in control of the

Company, provided, however, that the Employee’s annual base salary rate shall not be reduced by an amount

equal to ten percent or

5

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more of the Employee’s annual base salary rate in effect immediately prior to the Change of Control;

(B) changes in the mix of base salary payable to and the short-term incentive opportunity available to the

Employee; provided, that in no event shall the Employee’s base salary for any year be reduced below 90% of

the annual base salary paid to the Employee in the prior year; (C) a reduction in the compensation of the

Employee resulting from the failure to achieve corporate, business unit and/or individual performance goals

established for purposes of incentive compensation for any year or other period; provided, that the aggregate

short-term incentive opportunity, when combined with the Employee’s annual base salary, provides, in the

aggregate, an opportunity for the Employee to realize at least the same overall level of base salary and short

term incentive compensation as was paid in the immediately prior year or period at target performance levels;

and provided, further, that such target performance levels are reasonable at all times during the measurement

period, taking into account the fact that one of the purposes of such compensation is to incentivize the

Employee; (D) reductions in compensation resulting from changes to any Company benefit plan; provided, that

such changes are generally applicable to all participants in such Company benefit plan; and (E) any combination

of the foregoing;

(iv) The failure to grant the Employee an annual salary increase reasonably necessary to maintain such salary as

reasonably comparable to salaries of senior executives holding positions equivalent to the Employee’s in the

industry in which the Company’s then principal business activity is conducted;

(v) The Company requiring the Employee to be based anywhere other than the Company’s principal executive

offices in the city in which the Employee is principally located immediately prior to the Change of Control,

except for required travel on the Company’s business to an extent substantially consistent with the Employee’s

business travel obligations prior to the Change of Control;

(vi) Any material reduction by the Company of the benefits enjoyed by the Employee under any of the Company’s

pension, retirement, profit sharing, savings, life insurance, medical, health and accident, disability or other

employee benefit plans, programs or arrangements, the taking of any action by the Company which would

directly or indirectly materially reduce any of such benefits or deprive the Employee of any material fringe

benefits, or the failure by the Company to provide the Employee with the number of paid vacation days to

which he is entitled on the basis of years of service with the Company in accordance with the Company’s

normal vacation policy, provided that this subparagraph (vi) shall not apply to any proportional across-the-board

reduction or action similarly affecting all executives of the Company and all executives of any person in control

of the Company; or

6

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
(vii) The failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to

perform this Agreement, as contemplated in Section 15 hereof, or any other material breach by the Company

of its obligations contained in this Agreement.

(f) The Employee’s right to Salary and Benefits Continuation shall accrue upon the occurrence of either of the events

specified in (i) or (ii) of Section 3(d) and shall continue as provided, notwithstanding the subsequent termination or expiration of this

Agreement pursuant to Section 1 hereof. The Employee’s subsequent employment, death or disability following the Employee’s

termination of employment in connection with a Change of Control shall not affect the Company’s obligation to continue making Salary

and Benefits Continuation payments, except as provided in Section 8(c). The Employee shall not be required to mitigate the amount of

any payment provided for in this Section 3 by seeking employment or otherwise. The rights to Salary and Benefits Continuation shall

be in addition to whatever other benefits the Employee may be entitled to under any other agreement or compensation plan, program or

arrangement of the Company; provided, that the Employee shall not be entitled to any separate or additional severance payments

pursuant to the Company’s severance plan as then in effect and generally applicable to similarly situated employees. The Company

shall be authorized to withhold from any payment to the Employee, his estate or his beneficiaries hereunder all such amounts, if any,

that the Company may reasonably determine it is required to withhold pursuant to any applicable law or regulation.

4. Termination of Employee for Cause.

(a) Upon or following a Change of Control, the Company may at any time terminate the Employee’s employment for

Cause. Termination of employment by the Company for “Cause” shall mean termination upon: (i) the willful and continued failure by

the Employee to substantially perform his duties with the Company (other than (A) any such failure resulting from the Employee’s

disability or (B) any such actual or anticipated failure resulting from the Employee’s termination of his employment for Good Reason),

after a written demand for substantial performance is delivered to the Employee by the Board of Directors which specifically identifies

the manner in which the Board of Directors believes that the Employee has not substantially performed his duties, and which failure has

not been cured within thirty days (30) after such written demand; or (ii) the willful and continued engaging by the Employee in conduct

which is demonstrably and materially injurious to the Company, monetarily or otherwise, or (iii) the breach by the Employee of any of

the covenants set forth in Section 8 hereof.

(b) For purposes of this Section 4, no act, or failure to act, on the Employee’s part shall be considered “willful” unless done,

or omitted to be done, by the Employee in bad faith and without reasonable belief that such action or omission was in the best interest of

the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have been terminated for Cause unless and until

there shall have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the

entire membership of the Board of Directors at a meeting of the Board of Directors called and held for that purpose (after reasonable

notice to the Employee and an opportunity for the Employee, together with his counsel, to be heard before the Board of Directors)

finding that in the good

7

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
faith opinion of the Board of Directors the Employee is guilty of the conduct set forth above in clauses (a)(i), (ii) or (iii) of this Section 4

and specifying the particulars thereof in detail.

5. Prior Termination. Anything in this Agreement to the contrary notwithstanding, if the Employee’s employment with

the Company is terminated prior to the date on which a Change of Control occurs either (i) by the Company other than for Cause or

(ii) by the Employee for Good Reason, and it is reasonably demonstrated by the Employee that such termination of employment (a) was

at the request of a third party who has taken steps reasonably calculated to effect the Change of Control, or (b) otherwise arose in

connection with or anticipation of the Change of Control, and (iii) a Change of Control that constitutes a change in ownership or

effective control of the Corporation or a change in the ownership of a substantial portion of the assets of the Company under

Section 409A of the Code occurs within twenty-four (24) months following the Employee’s termination, then for all purposes of this

Agreement the termination shall be deemed to have occurred upon a Change of Control and the Employee will be entitled to Salary and

Benefits Continuation as provided for in Section 3 hereof upon the date on which the Change of Control set forth in clause (iii) of this

Section 5 occurs or, if later, the date specified in Section 3 hereof.

6. Employment at Will. Subject to the provisions of any other agreement between the Employee and the Company, the

Employee shall remain an employee at will and nothing herein shall confer upon the Employee any right to continued employment and

shall not affect the right of the Company to terminate the Employee for any reason not prohibited by law; provided, however, that any

such removal shall be without prejudice to any rights the Employee may have to Salary and Benefits Continuation hereunder.

7. Construction of Agreement.

(a) Governing Law. This Agreement shall be governed by and construed under the laws of the Commonwealth of

Pennsylvania without regard to its conflict of law provisions.

(b) Severability. In the event that any one or more of the provisions of this Agreement shall be held to be invalid, illegal or

unenforceable, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(c) Headings. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience of

reference only and shall not constitute a part of this Agreement.

8. Covenant as to Confidential Information, Non-Competition and Non-Solicitation .

(a) Confidentiality of Information and Nondisclosure . The Employee acknowledges and agrees that his employment by the

Company necessarily involves his knowledge of and access to confidential and proprietary information pertaining to the business of the

Company and its subsidiaries. Accordingly, the Employee agrees that at all times during the term of this Agreement and for as long as

the information remains confidential after the termination of the Employee’s employment, he/she will not, directly or indirectly,

without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over the

Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of himself, any person, corporation or other

entity other than the Company and its subsidiaries,

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
(i) any information concerning any financial matters, customer relationships, competitive status, supplier matters, internal

organizational matters, current or future plans, or other business affairs of or relating to the Company and its subsidiaries, (ii) any

management, operational, trade, technical or other secrets or any other proprietary information or other data of the Company or its

subsidiaries, or (iii) any other information related to the Company or its subsidiaries which has not been published and is not generally

known outside of the Company. The Employee acknowledges that all of the foregoing, constitutes confidential and proprietary

information, which is the exclusive property of the Company.

(b) Non-Competition and Non-Solicitation . While the Employee is employed by the Company and for a period of twelve

(12) months after the date of the Employee’s termination of employment with the Company for any reason, the Employee will not,

directly or indirectly, expressly or tacitly, for himself or on behalf of any entity conducting business anywhere in the Restricted

Territory (as defined below): (i) act as an officer, manager, advisor, executive, shareholder, or consultant to any business in which his

duties at or for such business include oversight of or actual involvement in providing services which are competitive with the services or

products being provided or which are being produced or developed by the Company, or were under investigation by the Company within

the last two (2) years prior to the end of the Employee’s employment with the Company, (ii) recruit investors on behalf of an entity

which engages in activities which are competitive with the services or products being provided or which are being produced or developed

by the Company, or were under investigation by the Company within the last two (2) years prior to the end of the Employee’s

employment with the Company, or (iii) become employed by such an entity in any capacity which would require the Employee to carry

out, in whole or in part, the duties the Employee has performed for the Company which are competitive with the services or products

being provided or which are being produced or developed by the Company, or were under active investigation by the Company within

the last two (2) years prior to the end of the Employee’s employment with the Company. Notwithstanding the foregoing, the Employee

may purchase or otherwise acquire up to (but not more than) 1% of any class of securities of any enterprise (but without otherwise

participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange or have been

registered under Section 12(g) of the Securities Exchange Act of 1934. This covenant shall apply to any services, products or

businesses under investigation by the Company within the last two (2) years prior to the end of the Employee’s employment with the

Company only to the extent that the Employee acquired or was privy to confidential information regarding such services, products or

businesses. The Employee acknowledges that this restriction will prevent the Employee from acting in any of the foregoing capacities

for any competing entity operating or conducting business within the Restricted Territory and that this scope is reasonable in light of the

business of the Company.

Restricted Territory shall mean (i) any states in which the Company has a regulated-utility operation, which may change from

time to time, but as of the effective date of this Agreement are Pennsylvania, West Virginia and Kentucky; or (ii) any states in which the

Company owns, operates or has contractual rights to purchase natural gas-related assets (other than commodity trading rights), including

but not limited to, storage facilities, interstate pipelines, intrastate pipelines, intrastate distribution facilities, liquefied natural gas facilities,

propane-air facilities or other peaking facilities, and/or processing or fractionation facilities; or (iii) any state in which the Company owns

proved, developed and/or undeveloped natural gas

9

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
and/or oil reserves and/or conducts natural gas or oil exploration and production activities of any kind; or (iv) any state investigated by the

Company as a possible jurisdiction in which to conduct any of the business activities described in subparagraphs (i) through (iii) above

within the last two (2) years prior to the end of the Employee’s employment with the Company.

The Employee agrees that for a period of twelve (12) months following the termination of the Employee’s employment with

the Company for any reason, including without limitation termination for cause or without cause, Employee shall not, directly or

indirectly, solicit the business of, or do business with: (i) any customer that the Employee approached, solicited or accepted business

from on behalf of the Company, and/or was provided confidential or proprietary information about while employed by the Company

within the one (1) year period preceding the Employee’s separation from the Company; and (ii) any prospective customer of the

Company who was identified to or by the Employee and/or who the Employee was provided confidential or proprietary information

about while employed by the Company within the one (1) year period preceding the Employee’s separation from the Company, for

purposes of marketing, selling and/or attempting to market or sell products and services which are the same as or similar to any product

or service the Company offers within the last two (2) years prior to the end of the Employee’s employment with the Company, and/or,

which are the same as or similar to any product or service the Company has in process over the last two (2) years prior to the end of the

Employee’s employment with the Company to be offered in the future.

While the Employee is employed by the Company and for a period of twelve (12) months after the date of the Employee’s

termination of employment with the Company for any reason, the Employee shall not (directly or indirectly) on his or her own behalf

or on behalf of any other person or entity solicit or induce, or cause any other person or entity to solicit or induce, or attempt to solicit or

induce, any employee or consultant to leave the employ of or engagement by the Company or its successors, assigns or affiliates, or to

violate the terms of their contracts with the Company.

(c) Company Remedies. The Employee acknowledges and agrees that any breach of this Section 8 by him will result in

immediate irreparable harm to the Company, and that the Company cannot be reasonably or adequately compensated by damages in an

action at law. In the event of an actual or threatened breach by the Employee of the provisions of this Section 8, the Company shall be

entitled, to the extent permissible by law, immediately to cease to pay or provide the Employee or his dependents any compensation or

benefit being, or to be, paid or provided to him pursuant to Section 3 of this Agreement, and also to obtain immediate injunctive relief

restraining the Employee from conduct in breach or threatened breach of the covenants contained in this Section 8. Nothing herein

shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach,

including the recovery of damages from the Employee.

9. Reimbursement of Fees. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses

which the Employee may reasonably incur for the period beginning upon the Effective Date and ending upon the Employee’s death as a

result of any contest by the Company, Internal Revenue Service or others regarding the validity or enforceability of, or liability under,

any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Employee about

the amount of

10

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
any payment pursuant to Section 3 of this Agreement) or in connection with any dispute arising from this Agreement, regardless of

whether Employee prevails in any such contest or dispute. The Company shall pay or reimburse such fees and expenses on a monthly

basis, payable on the first of each month, and all reimbursement payments with respect to expenses incurred within a particular year

shall be made no later than the end of the Employee’s taxable year following the taxable year in which the expense was incurred. Any

amounts not paid within such monthly reimbursement period shall bear interest at the rate per annum established by PNC Bank,

National Association (or its successor) from time to time as its “prime” or equivalent rate. The amount of reimbursable expenses

incurred in one taxable year of the Employee shall not affect the amount of reimbursable expenses in a different taxable year and such

reimbursement shall not be subject to liquidation or exchange for another benefit. Notwithstanding the foregoing, in the event such

amounts are conditioned upon a separation from service and not compensation the Employee could receive without separating from

service, then no such payments may be made to Employee until the first day following the six-month anniversary of the Employee’s

termination.

10. Mandatory Reduction of Payments in Certain Events.

(a) Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment or

distribution by the Company to or for the benefit of the Employee (whether paid or payable or distributed or distributable pursuant to the

terms of this Agreement or otherwise) (such benefits, payments or distributions are hereinafter referred to as “Payments”) would, if

paid, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, prior to the making of any Payments to

the Employee, a calculation shall be made comparing (i) the net after-tax benefit to the Employee of the Payments after payment by the

Employee of the Excise Tax, to (ii) the net after-tax benefit to the Employee if the Payments had been limited to the extent necessary

to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above,

then the Payments shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). The

reduction of the Payments due hereunder, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary,

reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the

Change in Control, as determined by the Determination Firm (as defined in Section 10(b) below). For purposes of this Section 10,

present value shall be determined in accordance with Section 280G(d)(4) of the Code. For purposes of this Section 10, the “Parachute

Value” of a Payment means the present value as of the date of the Change in Control of the portion of such Payment that constitutes a

“parachute payment” under Section 280G(b)(2) of the Code, as determined by the Determination Firm for purposes of determining

whether and to what extent the Excise Tax will apply to such Payment.

(b) All determinations required to be made under this Section 10, including whether an Excise Tax would otherwise be

imposed, whether the Payments shall be reduced, the amount of the Reduced Amount, and the assumptions to be utilized in arriving at

such determinations, shall be made by an independent, nationally recognized accounting firm or compensation consulting firm mutually

acceptable to the Company and the Employee (the “Determination Firm”) which shall provide detailed supporting calculations both to

the Company and the Employee within 15 business days after the receipt of notice from the Employee that a Payment is due to be

made, or such earlier time as is requested by the Company. All fees and expenses of

11

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
the Determination Firm shall be borne solely by the Company. Any determination by the Determination Firm shall be binding upon the

Company and the Employee. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial

determination by the Determination Firm hereunder, it is possible that Payments which the Employee was entitled to, but did not

receive pursuant to Section 10(a), could have been made without the imposition of the Excise Tax (“Underpayment”), consistent with

the calculations required to be made hereunder. In such event, the Determination Firm shall determine the amount of the

Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of the

Employee but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the

legally binding right to such Underpayment arises.

(c) In the event that the provisions of Code Section 280G and 4999 or any successor provisions are repealed without

succession, this Section 10 shall be of no further force or effect.

11. Resolution of Differences Over Breaches of Agreement . Except as otherwise provided herein, in the event of any

controversy, dispute or claim arising out of, or relating to this Agreement, or the breach thereof, or arising out of any other matter

relating to the Employee’s employment with the Company or the termination of such employment, the parties may seek recourse only

for temporary or preliminary injunctive relief to the courts having jurisdiction thereof and if any relief other than injunctive relief is

sought, the Company and the Employee agree that such underlying controversy, dispute or claim shall be settled by arbitration

conducted in Pittsburgh, Pennsylvania in accordance with this Section 11 of this Agreement and the Commercial Arbitration Rules of

the American Arbitration Association (“AAA”). The matter shall be heard and decided, and awards rendered by a panel of three

(3) arbitrators (the “Arbitration Panel”). The Company and the Employee shall each select one arbitrator from the AAA National Panel

of Commercial Arbitrators (the “Commercial Panel”) and AAA shall select a third arbitrator from the Commercial Panel. The award

rendered by the Arbitration Panel shall be final and binding as between the parties hereto and their heirs, executors, administrators,

successors and assigns, and judgment on the award may be entered by any court having jurisdiction thereof.

12. Treatment of Certain Incentive Awards. All “Awards” held by the Employee under the Company’s 1999 Long-Term

Incentive Plan, the Company’s 2009 Long-Term Incentive Plan, or any successor plan or plans (as the case may be, the “Incentive

Plan”) shall, upon a Change of Control, be treated in accordance with the terms of the applicable Incentive Plan and underlying award

agreements when and as awarded, without regard to the subsequent amendment of the applicable Incentive Plan. For purposes of this

Section 12, the terms “Award” and “Change of Control” shall have the meanings ascribed to them in the applicable Incentive Plan.

13. Release. The Employee hereby acknowledges and agrees that prior to the Employee’s or his dependents’ right to

receive from the Company any compensation or benefit to be paid or provided to him or his dependents pursuant to Section 3 of this

Agreement, the Employee may be required by the Company, in its sole discretion, to execute a release in a form reasonably acceptable

to the Company, which releases any and all claims (other than amounts to be paid to Employee as expressly provided for under this

Agreement) the Employee has or may

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
have against the Company or its subsidiaries, agents, officers, directors, successors or assigns arising under any public policy, tort or

common law or any provision of state, federal or local law, including, but not limited to, the Pennsylvania Human Relations Act, the

Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Civil Rights Protection Act, Family and Medical Leave

Act, the Age Discrimination in Employment Act of 1967, or the Employee Retirement Income Security Act of 1974, all as amended.

14. Waiver. The waiver by a party hereto of any breach by the other party hereto of any provision of this Agreement shall

not operate or be construed as a waiver of any subsequent breach by a party hereto.

15. Assignment. This Agreement, including the non-competition and non-solicitation covenant in Section 8(b) hereof, shall

be binding upon and inure to the benefit of the successors and assigns of the Company. The Company shall be obligated to require any

successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the Company’s

business or assets, by a written agreement in form and substance satisfactory to the Employee, to expressly assume and agree to perform

this Agreement in the same manner and to the same extent that the Company would be required to perform if no succession had taken

place. This Agreement shall inure to the extent provided hereunder to the benefit of and be enforceable by the Employee or his legal

representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. The Employee may not delegate any of

his duties, responsibilities, obligations or positions hereunder to any person and any such purported delegation by him shall be void and of

no force and effect with respect to matters relating to his employment and termination of employment. Without limiting the foregoing,

the Employee’s rights to receive payments and benefits hereunder shall not be assignable or transferable, other than a transfer by the

Employee’s will or by the laws of descent and distribution.

16. Notices. Any notices required or permitted to be given under this Agreement shall be sufficient if in writing, and if

personally delivered or when sent by first class certified or registered mail, postage prepaid, return receipt requested -- in the case of the

Employee, to his residence address as set forth below, and in the case of the Company, to the address of its principal place of business as

set forth below, in care of the Chairman of the Board -- or to such other person or at such other address with respect to each party as

such party shall notify the other in writing.

17. Pronouns. Pronouns stated in either the masculine, feminine or neuter gender shall include the masculine, feminine and

neuter.

18. Entire Agreement. Except as set forth in any confidentiality, non-solicitation or non-competition agreement to which

you are a party, this Agreement contains the entire agreement of the parties concerning the matters set forth herein and all promises,

representations, understandings, arrangements and prior agreements regarding the subject matter hereof (including the Existing

Agreement, which the parties agree shall terminate as of the Effective Date hereof) are merged herein and superseded hereby. The

provisions of this Agreement may not be amended, modified, repealed, waived, extended or discharged except by an agreement in

writing signed by the party against whom enforcement of any amendment, modification, repeal, waiver, extension or discharge is

sought; provided, however, that the Company may amend this

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Agreement from time to time without the Employee’s consent to the extent deemed necessary or appropriate, in its sole discretion, to

effect compliance with Section 409A of the Code, including regulations and interpretations thereunder, which amendments may result

in a reduction of benefits provided hereunder and/or other unfavorable changes to the Employee. No person acting other than pursuant

to a resolution of the Board of Directors (or its designee) shall have authority on behalf of the Company to agree to amend, modify,

repeal, waive, extend or discharge any provision of this Agreement or anything in reference thereto or to exercise any of the Company’s

rights to terminate or to fail to extend this Agreement.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers thereunto duly authorized,

and the Employee has hereunto set his hand, all as of the day and year first above written.

ATTEST: EQT CORPORATION

 /s/ Kimberly L. Sachse /s/ Charlene Petrelli

By: Charlene Petrelli

Title: Vice President & Chief Human

 Resources Officer

Address:

625 Liberty Avenue, Suite 1700

Pittsburgh, PA 15222

WITNESS:

 /s/ David J. Smith /s/ Steven T. Schlotterbeck

Name: Steven T. Schlotterbeck

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 21

COMPANY NAME DOMICILE

Antrim Midstream, LLC USA, Delaware

Distribution Holdco, LLC USA, Delaware

EPC Investments, Inc. USA, Delaware

EQT Capital Corporation USA, Delaware

EQT Energy, LLC USA, Delaware

EQT Foundation, Inc. USA, Pennsylvania

EQT Gathering Equity, LLC USA, Delaware

EQT Gathering Nora, LLC USA, Delaware

EQT Gathering, Inc. USA, Pennsylvania

EQT Gathering, LLC USA, Delaware

EQT Insurance Company, Ltd. Cayman Islands

EQT International Holdings Corporation USA, Delaware

EQT Investments Holdings, LLC USA, Delaware

EQT IP Ventures, LLC USA, Delaware

EQT Midstream Investments, LLC USA, Delaware

EQT Midstream Partners, LP USA, Delaware

EQT Midstream Services, LLC USA, Delaware

EQT Production Company USA, Pennsylvania

EQT Production Nora, LLC USA, Delaware

Equitable Gas Company, LLC USA, Pennsylvania

Equitable Homeworks, LLC USA, Pennsylvania

Equitrans Construction, LLC USA, Delaware

Equitrans Investments, LLC USA, Delaware

Equitrans Services, LLC USA, Delaware

Equitrans, LP USA, Pennsylvania

ERI Holdings Cayman Islands

ET Blue Grass Clearing, LLC USA, Pennsylvania

ET Blue Grass, LLC USA, Delaware

Nora Gathering, LLC USA, Delaware

PEP Finance Company Cayman Islands

Petroelectrica de Panama LDC Cayman Islands

Sunrise Pipeline, LLC USA, Delaware

Utilities Investments, Inc. USA, Delaware

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The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this

information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 23.01

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements of EQT Corporation:

· Registration Statement No. 333-185845 on Form S-8 pertaining to the Employee Savings Plan;

· Registration Statement No. 333-82189 on Form S-8 pertaining to the 1999 Long-Term Incentive Plan;

· Registration Statement No. 333-82193 on Form S-8 pertaining to the 1999 Non-Employee Directors’ Stock Incentive Plan;

· Registration Statement No. 333-32410 on Form S-8 pertaining to the Deferred Compensation Plan and the Directors’ Deferred Compensation Plan;

· Registration Statement No. 333-70822 on Form S-8 pertaining to the 1999 Long-Term Incentive Plan;

· Registration Statement No. 333-122382 on Form S-8 pertaining to the 2005 Employee Deferred Compensation Plan and the 2005 Directors’ Deferred

Compensation Plan;

· Registration Statement No. 333-152044 on Form S-8 pertaining to the 2008 Employee Stock Purchase Plan;

· Registration Statement No. 333-171068 on Form S-3 pertaining to the Registration of Debt Securities, Preferred Stock and Common Stock;

· Registration Statement No. 333-158198 on Form S-3 pertaining to the 2009 Dividend Reinvestment and Stock Purchase Plan; and

· Registration Statement No. 333-158682 on Form S-8 pertaining to the 2009 Long-Term Incentive Plan.

of our reports dated February 21, 2013, with respect to the consolidated financial statements and schedule of EQT Corporation and the effectiveness of

internal control over financial reporting of EQT Corporation in this Annual Report (Form 10-K) for the year ended December 31, 2012, filed with the

Securities and Exchange Commission.

/s/ Ernst & Young LLP

Pittsburgh, Pennsylvania

February 21, 2013

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EXHIBIT 23.02

TBPE REGISTERED ENGINEERING FIRM F-1580

1100 LOUISIANA SUITE 4600 HOUSTON, TEXAS 77002-5294

FAX (713) 651-0849

TELEPHONE (713) 651-9191

CONSENT

As independent petroleum and natural gas consultants, we hereby consent to the inclusion of our audit report as an exhibit to and

reference of our name in the Annual Report on Form 10-K, for the year ended December 31, 2012 of EQT Corporation and to the

incorporation of our report and our name by reference into EQT Corporation’s effective registration statements under the Securities Act of

1933, as amended. We have no interest of a substantial or material nature in EQT Corporation or in any affiliate. We have not been

employed on a contingent basis, and we are not connected with EQT Corporation, or any affiliate as a promoter, underwriter, voting trustee,

director, officer, employee or affiliate.

RYDER SCOTT COMPANY, L.P.

TBPE Firm Registration No. F-1580

Houston, Texas

February 21, 2013

SUITE 600, 1015 4TH STREET, S.W. CALGARY, ALBERTA T2R 1J4 TEL (403) 262-2799 FAX (403) 262-2790

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 31.01

CERTIFICATION

I, David L. Porges, certify that:

1. I have reviewed this Annual Report on Form 10-K of EQT Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the

statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this

report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the

financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in

Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our

supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by

others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our

supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for

external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the

effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most

recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely

to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the

registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are

reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal

control over financial reporting.

Date: February 21, 2013

/s/ David L. Porges

David L. Porges

Chairman, President and Chief Executive Officer

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 31.02

CERTIFICATION

I, Philip P. Conti, certify that:

1. I have reviewed this Annual Report on Form 10-K of EQT Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the

statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this

report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the

financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in

Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our

supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by

others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our

supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for

external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the

effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most

recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely

to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the

registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are

reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal

control over financial reporting.

Date: February 21, 2013

/s/ Philip P. Conti

Philip P. Conti

Senior Vice President and Chief Financial Officer

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 32

CERTIFICATION

In connection with the Annual Report of EQT Corporation (the “Company”) on Form 10-K for the period ended December 31, 2012, as filed with the

Securities and Exchange Commission on the date hereof (the “Report”), the undersigned certify pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the

Company.

/s/ David L. Porges February 21, 2013

David L. Porges, Chairman, President and

Chief Executive Officer

/s/ Philip P. Conti February 21, 2013

Philip P. Conti, Senior Vice President and

Chief Financial Officer

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information, except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.
Exhibit 99.01

EQT CORPORATION

Estimated

Future Reserves and Income

Attributable to Certain

Leasehold and Royalty Interests

SEC Parameters

As of

December 31, 2012

/s/ Don P. Griffin /s/ Gabrielle Guerre

Don P. Griffin, P.E.

TBPE License No. 64150

Senior Vice President

Gabrielle Guerre, P.E.

TBPE License No. 109935

Petroleum Engineer

RYDER SCOTT COMPANY, L.P.

TBPE Firm Registration No. F-1580

RYDER SCOTT COMPANY PETROLEUM CONSULTANTS

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RYDER SCOTT COMPANY

PETROLEUM CONSULTANTS

TBPE REGISTERED ENGINEERING FIRM F-1580

1100 LOUISIANA SUITE 4600 HOUSTON, TEXAS 77002-5235

FAX (713) 651-0849

TELEPHONE (713) 651-9191

January 18, 2013

EQT Corporation

EQT Plaza

625 Liberty Avenue, Suite 1700

Pittsburgh, PA 15212-5861

Gentlemen:

At the request of EQT Corporation (EQT), Ryder Scott Company, L.P. (Ryder Scott) has conducted a reserves audit of the estimates

of the proved reserves, future production and discounted future net income as of December 31, 2012, prepared by EQT’s engineering and

geological staff based on the definitions and disclosure guidelines of the United States Securities and Exchange Commission (SEC)

contained in Title 17, Code of Federal Regulations, Modernization of Oil and Gas Reporting, Final Rule released January 14, 2009 in the

Federal Register (SEC regulations). Our third party reserves audit, completed on January 15, 2013, and presented herein, was prepared for

public disclosure by EQT in filings made with the SEC in accordance with the disclosure requirements set forth in the SEC regulations. The

estimated reserves shown herein represent EQT’s estimated net reserves attributable to the leasehold and royalty interests in certain

properties owned by EQT as of December 31, 2012. The properties reviewed by Ryder Scott are located in the states of Kentucky,

Pennsylvania, Virginia, and West Virginia.

Ryder Scott reviewed 100 percent of the total net gas and liquid hydrocarbon reserves attributable to the Company’s interests as of

December 31, 2012. Ryder Scott conducted a detailed, well by well, audit of the Company’s largest properties, which consisted of 3,109

cases. This audit covered 80 percent of the Company’s proved reserves. Ryder Scott’s audit of the remaining 20 percent of the Company’s

properties consisted of an audit of aggregated groups not exceeding 200 wells per case, 59 cases in total (11,791 wells).

As prescribed by the Society of Petroleum Engineers in Paragraph 2.2(f) of the Standards Pertaining to the Estimating and Auditing

of Oil and Gas Reserves Information (SPE auditing standards), a reserves audit is defined as “the process of reviewing certain of the

pertinent facts interpreted and assumptions made that have resulted in an estimate of reserves prepared by others and the rendering of an

opinion about (1) the appropriateness of the methodologies employed; (2) the adequacy and quality of the data relied upon; (3) the depth and

thoroughness of the reserves estimation process; (4) the classification of reserves appropriate to the relevant definitions used; and (5) the

reasonableness of the estimated reserve quantities.”

Based on our review, including the data, technical processes and interpretations presented by EQT, it is our opinion that the overall

procedures and methodologies utilized by EQT in preparing their estimates of the proved reserves, future production and discounted future

net income as of December 31, 2012 comply with the current SEC regulations and that the overall proved reserves, future production and

discounted future net income for the reviewed properties as estimated by EQT are, in the aggregate, reasonable within the established audit

tolerance guidelines of 10 percent as set forth in the SPE auditing standards.

The estimated reserves and future net income amounts presented in this report are related to hydrocarbon prices. EQT has informed

us that in the preparation of their reserve and income projections, as of December 31, 2012, they used average prices during the 12-month

period prior to the ending date of the period covered in this report, determined as the unweighted arithmetic averages of the prices in effect on

the first-day-of-the-month for each month within such period, unless prices were defined by contractual

 SUITE 600, 1015 4TH STREET, S.W. CALGARY, ALBERTA T2R 1J4 TEL (403) 262-2799 FAX (403) 262-2790 

 621 17TH STREET, SUITE 1550 DENVER, COLORADO 80293-1501 TEL (303) 623-9147 FAX (303) 623-4258 

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EQT Corporation

January 18, 2013

Page 2

arrangements, as required by the SEC regulations. Actual future prices may vary significantly from the prices required by SEC regulations;

therefore, volumes of reserves actually recovered and the amounts of income actually received may differ significantly from the estimated

quantities presented in this report. The net reserves as estimated by EQT attributable to EQT’s interest in properties that we reviewed are

summarized as follows:

SEC PARAMETERS

Estimated Net Reserves

Certain Leasehold and Royalty Interests of

EQT Corporation

As of December 31, 2012

Proved

Developed Total

Producing Non-Producing Undeveloped Proved

Net Reserves of Properties

Audited by Ryder Scott

Gas – MMCF 2,716,152 63,035 3,206,570 5,985,757

Oil/Condensate - MBarrels 3,199 0 0 3,199

Income Data (M$)

Future Gross Revenue $6,582,439 $164,435 $8,503,142 $15,250,016

Deductions 1,553,952 19,501 4,054,533 5,627,986

Future Net Income (FNI) $5,028,487 $144,934 $4,448,609 $ 9,622,030

Discounted FNI @ 10% $2,225,364 $ 79,980 $1,023,757 $ 3,329,101

Liquid hydrocarbons are expressed in thousands of standard 42 gallon barrels (MBarrels). All gas volumes are reported on an “as

sold basis” expressed in millions of cubic feet (MMCF) at the official temperature and pressure bases of the areas in which the gas reserves

are located. In this report, discounted and undiscounted future net income data are expressed as thousands of U.S. dollars (M$).

Reserves Included in This Report

In our opinion, the proved reserves presented in this report conform to the definition as set forth in the Securities and Exchange

Commission’s Regulations Part 210.4-10(a). An abridged version of the SEC reserves definitions from 210.4-10(a) entitled “Petroleum

Reserves Definitions” is included as an attachment to this report.

The various proved reserve status categories are defined under the attachment entitled “Petroleum Reserves Status Definitions and

Guidelines” in this report. The proved developed non-producing reserves included herein consist of shut-in and behind pipe categories.

Reserves are “estimated remaining quantities of oil and gas and related substances anticipated to be economically producible, as of a

given date, by application of development projects to known accumulations.” All reserve estimates involve an assessment of the uncertainty

relating the likelihood that the actual remaining quantities recovered will be greater or less than the estimated quantities determined as of the

date the estimate is made. The uncertainty depends chiefly on the amount of reliable geologic and engineering data available at the time of

the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed by placing reserves into one of two

principal classifications, either proved or unproved. Unproved reserves are less certain to be recovered than proved reserves and may be

further sub-classified as probable and possible reserves to denote progressively increasing uncertainty in

RYDER SCOTT COMPANY PETROLEUM CONSULTANTS

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EQT Corporation

January 18, 2013

Page 3

their recoverability. At EQT’s request, this report addresses only the proved reserves attributable to the properties reviewed herein.

Proved oil and gas reserves are “those quantities of oil and gas which, by analysis of geoscience and engineering data, can be

estimated with reasonable certainty to be economically producible from a given date forward.” The proved reserves included herein were

estimated using deterministic methods. The SEC has defined reasonable certainty for proved reserves, when based on deterministic

methods, as a “high degree of confidence that the quantities will be recovered.”

Proved reserve estimates will generally be revised only as additional geologic or engineering data become available or as economic

conditions change. For proved reserves, the SEC states that “as changes due to increased availability of geoscience (geological, geophysical,

and geochemical), engineering, and economic data are made to the estimated ultimate recovery (EUR) with time, reasonably certain EUR is

much more likely to increase or remain constant than to decrease.” Moreover, estimates of proved reserves may be revised as a result of

future operations, effects of regulation by governmental agencies or geopolitical or economic risks. Therefore, the proved reserves included in

this report are estimates only and should not be construed as being exact quantities, and if recovered, the revenues therefrom, and the actual

costs related thereto, could be more or less than the estimated amounts.

Audit Data, Methodology, Procedure and Assumptions

The estimation of reserves involves two distinct determinations. The first determination results in the estimation of the quantities of

recoverable oil and gas and the second determination results in the estimation of the uncertainty associated with those estimated quantities

in accordance with the definitions set forth by the Securities and Exchange Commission’s Regulations Part 210.4-10(a). The process of

estimating the quantities of recoverable oil and gas reserves relies on the use of certain generally accepted analytical procedures. These

analytical procedures fall into three broad categories or methods: (1) performance- based methods; (2) volumetric-based methods; and

(3) analogy. These methods may be used singularly or in combination by the reserve evaluator in the process of estimating the quantities of

reserves. Reserve evaluators must select the method or combination of methods which in their professional judgment is most appropriate

given the nature and amount of reliable geoscience and engineering data available at the time of the estimate, the established or anticipated

performance characteristics of the reservoir being evaluated and the stage of development or producing maturity of the property.

In many cases, the analysis of the available geoscience and engineering data and the subsequent interpretation of this data may

indicate a range of possible outcomes in an estimate, irrespective of the method selected by the evaluator. When a range in the quantity of

reserves is identified, the evaluator must determine the uncertainty associated with the incremental quantities of the reserves. If the reserve

quantities are estimated using the deterministic incremental approach, the uncertainty for each discrete incremental quantity of the reserves

is addressed by the reserve category assigned by the evaluator. Therefore, it is the categorization of reserve quantities as proved, probable

and/or possible that addresses the inherent uncertainty in the estimated quantities reported. For proved reserves, uncertainty is defined by

the SEC as reasonable certainty wherein the “quantities actually recovered are much more likely than not to be achieved.” The SEC states

that “probable reserves are those additional reserves that are less certain to be recovered than proved reserves but which, together with

proved reserves, are as likely as not to be recovered.” The SEC states that “possible reserves are those additional reserves that are less

certain to be recovered than probable reserves and the total quantities ultimately recovered from a project have a low probability of exceeding

proved plus probable plus possible reserves.” All quantities of reserves within the same reserve category must meet the SEC definitions as

noted above.

Estimates of reserves quantities and their associated reserve categories may be revised in the future as additional geoscience or

engineering data become available. Furthermore, estimates of reserves quantities and their associated reserve categories may also be

revised due to other factors such as changes

RYDER SCOTT COMPANY PETROLEUM CONSULTANTS

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EQT Corporation

January 18, 2013

Page 4

in economic conditions, results of future operations, effects of regulation by governmental agencies or geopolitical or economic risks as

previously noted herein.

The proved reserves for the properties that we reviewed were estimated by performance methods, the volumetric method, analogy,

or a combination of methods. Approximately 98 percent of the proved producing reserves attributable to producing wells and/or reservoirs that

we reviewed were estimated by performance methods. These performance methods include, but may not be limited to, decline curve

analysis which utilized extrapolations of historical production and pressure data available through November 2012, in those cases where

such data were considered to be definitive. The data utilized in this analysis were furnished to Ryder Scott by EQT and were considered

sufficient for the purpose thereof. The remaining 2 percent of the proved producing reserves that we reviewed were estimated by the

volumetric method, analogy, or a combination of methods. These methods were used where there were inadequate historical performance

data to establish a definitive trend and where the use of production performance data as a basis for the reserve estimates was considered to

be inappropriate.

Approximately 99 percent of the proved developed non-producing and undeveloped reserves that we reviewed were estimated

primarily by the analogy method. The data utilized from the analogues were considered sufficient for the purpose thereof.

To estimate economically recoverable proved oil and gas reserves and related future net cash flows, we consider many factors and

assumptions including, but not limited to, the use of reservoir parameters derived from geological, geophysical and engineering data which

cannot be measured directly, economic criteria based on current costs and SEC pricing requirements, and forecasts of future production rates.

Under the SEC regulations 210.4-10(a)(22)(v) and (26), proved reserves must be anticipated to be economically producible from a given date

forward based on existing economic conditions including the prices and costs at which economic producibility from a reservoir is to be

determined. While it may reasonably be anticipated that the future prices received for the sale of production and the operating costs and other

costs relating to such production may increase or decrease from those under existing economic conditions, such changes were, in

accordance with rules adopted by the SEC, omitted from consideration in conducting this review.

As stated previously, proved reserves must be anticipated to be economically producible from a given date forward based on existing

economic conditions including the prices and costs at which economic producibility from a reservoir is to be determined. To confirm that the

proved reserves reviewed by us meet the SEC requirements to be economically producible, we have reviewed certain primary economic data

utilized by EQT relating to hydrocarbon prices and costs as noted herein.

The hydrocarbon prices furnished by EQT for the properties reviewed by us are based on SEC price parameters using the average

prices during the 12-month period prior to the ending date of the period covered in this report, determined as the unweighted arithmetic

averages of the prices in effect on the first-day-of-the-month for each month within such period, unless prices were defined by contractual

arrangements. For hydrocarbon products sold under contract, the contract prices, including fixed and determinable escalations exclusive of

inflation adjustments, were used until expiration of the contract. Upon contract expiration, the prices were adjusted to the 12-month

unweighted arithmetic average as previously described.

The initial SEC hydrocarbon prices in effect on December 31, 2012 for the properties reviewed by us were determined using the 12-

month average first-day-of-the-month benchmark prices appropriate to the geographic area where the hydrocarbons are sold. These

benchmark prices are prior to the adjustments for differentials as described herein. EQT has provided a detailed table (see Table 1) which

summarizes the “benchmark prices” and “price reference” used by EQT for the various “take points” within Appalachia. In certain cases, the

price reference and benchmark prices may be defined by contractual arrangements.

RYDER SCOTT COMPANY PETROLEUM CONSULTANTS

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EQT Corporation

January 18, 2013

Page 5

The product prices which were actually used by EQT to determine the future gross revenue for each property reviewed by us reflect

adjustments to the benchmark prices for gravity, quality, local conditions, gathering and transportation fees, and/or distance from market,

referred to herein as “differentials.” The differentials used by EQT were accepted as factual data and reviewed by us for their reasonableness;

however, we have not conducted an independent verification of the data used by EQT.

The average realized prices shown in the table below were determined from EQT’s estimate of the total future gross revenue before

production taxes and EQT’s estimate of the total net reserves for the Appalachian area. The data shown in the table below is presented in

accordance with SEC disclosure requirements.

Geographic Area Product

Average

Realized

Prices

North America

United States

Appalachia Gas $2.503/MCF

Oil/Condensate $82.90/Bbl

The effects of derivative instruments designated as price hedges of oil and gas quantities are not reflected in EQT’s individual

property evaluations.

Accumulated gas production imbalances, if any, were not taken into account in the proved gas reserve estimates reviewed. The

proved gas volumes presented herein do not include volumes of gas consumed in operations as reserves.

Operating costs furnished by EQT are based on the operating expense reports of EQT and include only those costs directly applicable

to the leases or wells for the properties reviewed by us. The operating costs include a portion of general and administrative costs allocated

directly to the leases and wells. For operated properties, the operating costs include an appropriate level of corporate general administrative

and overhead costs. The operating costs for non-operated properties include the COPAS overhead costs that are allocated directly to the

leases and wells under terms of operating agreements. The operating costs furnished by EQT were accepted as factual data and reviewed by

us for their reasonableness; however, we have not conducted an independent verification of the data used by EQT. No deduction was made

for loan repayments, interest expenses, or exploration and development prepayments that were not charged directly to the leases or wells.

Development costs furnished by EQT are based on authorizations for expenditure for the proposed work or actual costs for similar

projects. The development costs furnished by EQT were accepted as factual data and reviewed by us for their reasonableness; however, we

have not conducted an independent verification of the data used by EQT. EQT’s estimates of zero abandonment costs after salvage value for

onshore properties were accepted without independent verification. Ryder Scott has not performed a detailed study of the abandonment costs

or the salvage value and makes no warranty for EQT’s estimate.

The proved developed non-producing and undeveloped reserves for the properties reviewed by us have been incorporated herein in

accordance with EQT’s plans to develop these reserves as of December 31, 2012. The implementation of EQT’s development plans as

presented to us is subject to the approval process adopted by EQT’s management. As the result of our inquiries during the course of our

review, EQT has informed us that the development activities for the properties reviewed by us have been subjected to and received the

internal approvals required by EQT’s management at the appropriate local, regional and/or corporate level. In addition to the internal

approvals as noted, certain development activities may still be subject to specific partner AFE processes, Joint Operating Agreement (JOA)

requirements or other

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EQT Corporation

January 18, 2013

Page 6

administrative approvals external to EQT. Additionally, EQT has informed us that they are not aware of any legal, regulatory, political or

economic obstacles that would significantly alter their plans.

Current costs used by EQT were held constant throughout the life of the properties.

EQT’s forecasts of future production rates are based on historical performance from wells currently on production. If no production

decline trend has been established, future production rates were held constant, or adjusted for the effects of curtailment where appropriate,

until a decline in ability to produce was anticipated. An estimated rate of decline was then applied to depletion of the reserves. If a decline trend

has been established, this trend was used as the basis for estimating future production rates.

Test data and other related information were used by EQT to estimate the anticipated initial production rates for those wells or

locations that are not currently producing. For reserves not yet on production, sales were estimated to commence at an anticipated date

furnished by EQT. Wells or locations that are not currently producing may start producing earlier or later than anticipated in EQT’s estimates

due to unforeseen factors causing a change in the timing to initiate production. Such factors may include delays due to weather, the

availability of rigs, the sequence of drilling, completing and/or recompleting wells and/or constraints set by regulatory bodies.

The future production rates from wells currently on production or wells or locations that are not currently producing may be more or

less than estimated because of changes including, but not limited to, reservoir performance, operating conditions related to surface facilities,

compression and artificial lift, pipeline capacity and/or operating conditions, producing market demand and/or allowables or other constraints

set by regulatory bodies.

EQT’s operations may be subject to various levels of governmental controls and regulations. These controls and regulations may

include, but may not be limited to, matters relating to land tenure and leasing, the legal rights to produce hydrocarbons, drilling and

production practices, environmental protection, marketing and pricing policies, royalties, various taxes and levies including income tax and

are subject to change from time to time. Such changes in governmental regulations and policies may cause volumes of proved reserves

actually recovered and amounts of proved income actually received to differ significantly from the estimated quantities.

The estimates of proved reserves presented herein were based upon a detailed study of the properties in which EQT owns an

interest; however, we have not made any field examination of the properties. No consideration was given in this report to potential

environmental liabilities that may exist nor were any costs included by EQT for potential liabilities to restore and clean up damages, if any,

caused by past operating practices.

Certain technical personnel of EQT are responsible for the preparation of reserve estimates on new properties and for the preparation

of revised estimates, when necessary, on old properties. These personnel assembled the necessary data and maintained the data and

workpapers in an orderly manner. We consulted with these technical personnel and had access to their workpapers and supporting data in

the course of our audit.

EQT has informed us that they have furnished us all of the material accounts, records, geological and engineering data, and reports

and other data required for this investigation. In performing our audit of EQT’s forecast of future proved production and income, we have

relied upon data furnished by EQT with respect to property interests owned, production and well tests from examined wells, normal direct

costs of operating the wells or leases, other costs such as transportation and/or processing fees, ad valorem and production taxes,

recompletion and development costs, abandonment costs after salvage, product prices based on the SEC regulations, adjustments or

differentials to product prices, geological structural and isochore maps, well logs, core analyses, and pressure measurements. Ryder Scott

reviewed such factual data for its reasonableness; however, we have not conducted an independent verification of the data

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EQT Corporation

January 18, 2013

Page 7

furnished by EQT. We consider the factual data furnished to us by EQT to be appropriate and sufficient for the purpose of our review of EQT’s

estimates of reserves and future net income. In summary, we consider the assumptions, data, methods and analytical procedures used by

EQT and as reviewed by us appropriate for the purpose hereof, and we have used all such methods and procedures that we consider

necessary and appropriate under the circumstances to render the conclusions set forth herein.

Audit Opinion

Based on our review, including the data, technical processes and interpretations presented by EQT, it is our opinion that the overall

procedures and methodologies utilized by EQT in preparing their estimates of the proved reserves, future production and discounted future

net income as of December 31, 2012 comply with the current SEC regulations and that the overall proved reserves, future production and

discounted future net income for the reviewed properties as estimated by EQT are, in the aggregate, reasonable within the established audit

tolerance guidelines of 10 percent as set forth in the SPE auditing standards. Further, EQT has revised their reserve projections in all cases

where deviations were noted by us as significant. As a consequence, the actual tolerance of this reserves audit approaches zero percent.

Therefore, it is our opinion that on an aggregate basis the data presented herein for the properties that we reviewed fairly reflects the

estimated net reserves owned by EQT.

Standards of Independence and Professional Qualification

Ryder Scott is an independent petroleum engineering consulting firm that has been providing petroleum consulting services

throughout the world for over seventy years. Ryder Scott is employee-owned and maintains offices in Houston, Texas; Denver, Colorado;

and Calgary, Alberta, Canada. We have over eighty engineers and geoscientists on our permanent staff. By virtue of the size of our firm and

the large number of clients for which we provide services, no single client or job represents a material portion of our annual revenue. We do

not serve as officers or directors of any privately-owned or publicly-traded oil and gas company and are separate and independent from the

operating and investment decision-making process of our clients. This allows us to bring the highest level of independence and objectivity to

each engagement for our services.

Ryder Scott actively participates in industry-related professional societies and organizes an annual public forum focused on the

subject of reserves evaluations and SEC regulations. Many of our staff have authored or co-authored technical papers on the subject of

reserves related topics. We encourage our staff to maintain and enhance their professional skills by actively participating in ongoing

continuing education.

Prior to becoming an officer of the Company, Ryder Scott requires that staff engineers and geoscientists have received professional

accreditation in the form of a registered or certified professional engineer’s license or a registered or certified professional geoscientist’s

license, or the equivalent thereof, from an appropriate governmental authority or a recognized self-regulating professional organization.

We are independent petroleum engineers with respect to EQT. Neither we nor any of our employees have any interest in the subject

properties, and neither the employment to do this work nor the compensation is contingent on our estimates of reserves for the properties

which were reviewed.

The results of this audit, presented herein, are based on technical analysis conducted by teams of geoscientists and engineers from

Ryder Scott. The professional qualifications of the undersigned, the technical person primarily responsible for overseeing, reviewing and

approving the review of the reserves information discussed in this report, are included as an attachment to this letter.

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EQT Corporation

January 18, 2013

Page 8

Terms of Usage

The results of our third party audit, presented in report form herein, were prepared in accordance with the disclosure requirements

set forth in the SEC regulations and intended for public disclosure as an exhibit in filings made with the SEC by EQT.

We have provided EQT with a digital version of the original signed copy of this audit letter. In the event there are any differences

between the digital version included in filings made by EQT and the original signed audit letter, the original signed audit letter shall control

and supersede the digital version. The data and work papers used in the preparation of this report are available for examination by authorized

parties in our offices. Please contact us if we can be of further service.

Very truly yours,

RYDER SCOTT COMPANY, L.P.

TBPE Firm Registration No. F-1580

/s/ Don P. Griffin

Don P. Griffin, P.E.

TBPE License No. 64150

Senior Vice President

/s/ Gabrielle Guerre

Gabrielle Guerre, P.E.

TBPE License No. 109935

Petroleum Engineer

DPG (FWZ)/pl

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TABLE 1

EQT 2012 YEAR PRICING

Brenton Madison

Weston, Non

Marcellus

Weston,

Marcellus -

 PA

Weston,

Marcellus -

 WV KY West Plkeville

BSG -

 NORA

BSG -

 RF Camegie Equitrans Royalty

INDEX (NYMEX +

Basis) 2.791 2.786 2.785 2.777 2.784 2.857 2.793 2.769 2.769 2.785 2.785 2.788

SHRINK 11.09% 10.0% 7.46% 1.0% 1.5% 9.38% 8.61% 7.14% 10.23% 0.0% 0.0% 0.0%

BTU 1.104 1.142 1.208 1.038 1.198 1.215 1.220 1.025 1.116 1.152 1.146 1.000

NGL Uplift 0.494 0.764

G&C, $/mcf 1,163 1,416 0.766 0.496 0.580 1.447 1.23 1.056 1.235 0.903 0.876 0.000

NET PRICE, $/mcf $1.706 $1.589 $2.404 $2.363 $3.039 $2.562 $1.990 $1.655 $1.655 $2.305 $2.315 $2.788

Source:

2012 Crude Oil Price based first day of each month pricing for WTI of $95.01 - $12.11 (Appalachian Basin Adjustment) = $82.90

CRUDE OIL, $/BBL 82.90 82.90 82.90 82.90 82.90 82.90 82.90 82.90 82.90 82.90 82.90 82.90

Severance Tax Rates as

% of revenue 5.00% 5.00% 5.00% 0.00% 5.00% 4.50% 4.50% 3.00% 3.00% 5.00% 5.00% 0.00%

Property Tax Rates as %

of revenue 1.97% 1.97% 1.97% 0.00% 1.97% 1.05% 1.05% 4.91% 4.91% 1.97% 1.97% 0.00%

Sev & Property Tax Rates 6.97% 6.97%

0% PA

Wells

6.97% WV

wells 0.00% 6.97% 5.55% 5.55% 7.91% 7.91%

0% PA

Wells

6.97% WV

wells

0% PA

Wells

6.97% WV

wells 0.00%

* The West Virginia state worker’s compensation tax of $0.047/mcf is included in the severance tax percentages above.

* The Pennsylvania Impact Fee is included as a tax for all Pennsylvania horizontal Marcellus wells.

TCD DTI ETENN TGP Into Equitrans DEO NFG NYMEX

$/Dth $/Dth $/Dth $/Dth $/Dth $/Dth $/Dth $/Dth

Basis 0.005 -0.003 -0.020 -0.148 -0.006 -0.003 -0.003

Index 2.793 2.785 2.769 2.641 2.782 2.785 2.785 2.788

Based on Gas Daily for TCO and DTI for flow on the first day of each month in

2012.

Sales Point Percentages

TCO DTI ETENN Cabot TGP TETCO M2

Kentucky West 25.0% 0.0% 0.0% 0.0% 75.0% 0.0%

Pikeville 100.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Big Stone Gap - Nora 0.0% 0.0% 100.0% 0.0% 0.0% 0.0%

Big Stone Gap - Roaring

Fork 0.0% 0.0% 100.0% 0.0% 0.0% 0.0%

Weston, Non Marcellus 0.0% 100.0% 0.0% 0.0% 0.0% 0.0%

Weston, Marcellus - PA 15.0% 11.0% 0.0% 0.0% 2.0% 68.0%

Weston, Marcellus - WV 15.0% 5.0% 0.0% 0.0% 0.0% 80.0%

Equitrans 18.0% 6.0% 0.0% 0.0% 0.0% 76.0%

Camegie 18.0% 6.0% 0.0% 0.0% 0.0% 76.0%

Madison 10.0% 90.0% 0.0% 0.0% 0.0% 0.0%

Brenton 75.0% 25.0% 0.0% 0.0% 0.0% 0.0%

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Professional Qualifications of Primary Technical Person

The conclusions presented in this report are the result of technical analysis conducted by teams of geoscientists and engineers from Ryder

Scott Company, L.P. Don P. Griffin was the primary technical person responsible for overseeing the estimate of the reserves, future

production and income presented herein.

Mr. Griffin, an employee of Ryder Scott Company, L.P. (Ryder Scott) since 1981, is a Senior Vice President responsible for coordinating and

supervising staff and consulting engineers of the company in ongoing reservoir evaluation studies worldwide. Before joining Ryder Scott,

Mr. Griffin served in a number of engineering positions with Amoco Production Company. For more information regarding Mr. Griffin’s

geographic and job specific experience, please refer to the Ryder Scott Company website at

http://www.ryderscott.com/Experience/Emplovees.php.

Mr. Griffin graduated with honors from Texas Tech University with a Bachelor of Science degree in Electrical Engineering in 1975 and is a

licensed Professional Engineer in the State of Texas. He is also a member of the Society of Petroleum Engineers and the Society of

Petroleum Evaluation Engineers.

In addition to gaining experience and competency through prior work experience, the Texas Board of Professional Engineers requires a

minimum of fifteen hours of continuing education annually, including at least one hour in the area of professional ethics, which Mr. Griffin

fulfills. Mr. Griffin attended an additional 15 hours of training during 2012 covering such topics as reservoir engineering, geoscience and

petroleum economics evaluation methods, procedures and software and ethics for consultants.

Based on his educational background, professional training and more than 30 years of practical experience in the estimation and evaluation

of petroleum reserves, Mr. Griffin has attained the professional qualifications as a Reserves Estimator and Reserves Auditor as set forth in

Article III of the “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information” promulgated by the Society of

Petroleum Engineers as of February 19, 2007.

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PETROLEUM RESERVES DEFINITIONS

As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE COMMISSION (SEC)

PREAMBLE

On January 14, 2009, the United States Securities and Exchange Commission (SEC) published the “Modernization of Oil and Gas

Reporting; Final Rule” in the Federal Register of National Archives and Records Administration (NARA). The “Modernization of Oil and Gas

Reporting; Final Rule” includes revisions and additions to the definition section in Rule 4-10 of Regulation S-X, revisions and additions to the

oil and gas reporting requirements in Regulation S-K, and amends and codifies Industry Guide 2 in Regulation S-K. The “Modernization of

Oil and Gas Reporting; Final Rule”, including all references to Regulation S-X and Regulation S-K, shall be referred to herein collectively as

the “SEC regulations”. The SEC regulations take effect for all filings made with the United States Securities and Exchange Commission as

of December 31, 2009, or after January 1, 2010. Reference should be made to the full text under Title 17, Code of Federal Regulations,

Regulation S-X Part 210, Rule 4-10(a) for the complete definitions (direct passages excerpted in part or wholly from the aforementioned SEC

document are denoted in italics herein).

Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically

producible, as of a given date, by application of development projects to known accumulations. All reserve estimates involve an

assessment of the uncertainty relating the likelihood that the actual remaining quantities recovered will be greater or less than the estimated

quantities determined as of the date the estimate is made. The uncertainty depends chiefly on the amount of reliable geologic and

engineering data available at the time of the estimate and the interpretation of these data. The relative degree of uncertainty may be conveyed

by placing reserves into one of two principal classifications, either proved or unproved. Unproved reserves are less certain to be recovered

than proved reserves and may be further sub-classified as probable and possible reserves to denote progressively increasing uncertainty in

their recoverability. Under the SEC regulations as of December 31, 2009, or after January 1, 2010, a company may optionally disclose

estimated quantities of probable or possible oil and gas reserves in documents publicly filed with the SEC. The SEC regulations continue to

prohibit disclosure of estimates of oil and gas resources other than reserves and any estimated values of such resources in any document

publicly filed with the SEC unless such information is required to be disclosed in the document by foreign or state law as noted in §229.1202

Instruction to Item 1202.

Reserves estimates will generally be revised only as additional geologic or engineering data become available or as economic

conditions change.

Reserves may be attributed to either natural energy or improved recovery methods. Improved recovery methods include all methods

for supplementing natural energy or altering natural forces in the reservoir to increase ultimate recovery. Examples of such methods are

pressure maintenance, natural gas cycling, waterflooding, thermal methods, chemical flooding, and the use of miscible and immiscible

displacement fluids. Other improved recovery methods may be developed in the future as petroleum technology continues to evolve.

Reserves may be attributed to either conventional or unconventional petroleum accumulations. Petroleum accumulations are

considered as either conventional or unconventional based on the nature of their in-place characteristics, extraction method applied, or degree

of processing prior to sale. Examples of unconventional petroleum accumulations include coalbed or coalseam methane (CBM/CSM), basincentered gas, shale gas, gas hydrates, natural bitumen and oil shale deposits.

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PETROLEUM RESERVES DEFINITIONS

Page 2

These unconventional accumulations may require specialized extraction technology and/or significant processing prior to sale.

Reserves do not include quantities of petroleum being held in inventory.

Because of the differences in uncertainty, caution should be exercised when aggregating quantities of petroleum from different

reserves categories.

RESERVES (SEC DEFINITIONS)

Securities and Exchange Commission Regulation S-X §210.4-10(a)(26) defines reserves as follows:

Reserves. Reserves are estimated remaining quantities of oil and gas and related substances anticipated to be economically

producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there

must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed

means of delivering oil and gas or related substances to market, and all permits and financing required to implement the project.

Note to paragraph (a)(26): Reserves should not be assigned to adjacent reservoirs isolated by major, potentially sealing, faults until

those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are

clearly separated from a known accumulation by a non-productive reservoir ( i.e., absence of reservoir, structurally low reservoir, or

negative test results). Such areas may contain prospective resources ( i.e., potentially recoverable resources from undiscovered

accumulations).

PROVED RESERVES (SEC DEFINITIONS)

Securities and Exchange Commission Regulation S-X §210.4-10(a)(22) defines proved oil and gas reserves as follows:

Proved oil and gas reserves. Proved oil and gas reserves are those quantities of oil and gas, 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. The project to extract the hydrocarbons must have commenced or

the operator must be reasonably certain that it will commence the project within a reasonable time.

(i) The area of the reservoir considered as proved includes:

(A) The area identified by drilling and limited by fluid contacts, if any, and

(B) Adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it

and to contain economically producible oil or gas on the basis of available geoscience and engineering data.

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PETROLEUM RESERVES DEFINITIONS

Page 3

PROVED RESERVES (SEC DEFINITIONS) CONTINUED

(ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons

(LKH) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology

establishes a lower contact with reasonable certainty.

(iii) Where direct observation from well penetrations has defined a highest known oil (HKO) elevation and the potential exists

for an associated gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if

geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable

certainty.

(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not

limited to, fluid injection) are included in the proved classification when:

(A) Successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the

reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other

evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the

project or program was based; and

(B) The project has been approved for development by all necessary parties and entities, including governmental

entities.

(v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be

determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered

by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such

period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

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PETROLEUM RESERVES STATUS DEFINITIONS AND GUIDELINES

As Adapted From:

RULE 4-10(a) of REGULATION S-X PART 210

UNITED STATES SECURITIES AND EXCHANGE COMMISSION (SEC)

and

PETROLEUM RESOURCES MANAGEMENT SYSTEM (SPE-PRMS)

Sponsored and Approved by:

SOCIETY OF PETROLEUM ENGINEERS (SPE)

WORLD PETROLEUM COUNCIL (WPC)

AMERICAN ASSOCIATION OF PETROLEUM GEOLOGISTS (AAPG)

SOCIETY OF PETROLEUM EVALUATION ENGINEERS (SPEE)

Reserves status categories define the development and producing status of wells and reservoirs. Reference should be made to Title

17, Code of Federal Regulations, Regulation S-X Part 210, Rule 4-10(a) and the SPE-PRMS as the following reserves status definitions are

based on excerpts from the original documents (direct passages excerpted from the aforementioned SEC and SPE-PRMS documents are

denoted in italics herein).

DEVELOPED RESERVES (SEC DEFINITIONS)

Securities and Exchange Commission Regulation S-X §210.4-10(a)(6) defines developed oil and gas reserves as follows:

Developed oil and gas reserves are reserves of any category that can be expected to be recovered:

(i) Through existing wells with existing equipment and operating methods or in which the cost of the required

equipment is relatively minor compared to the cost of a new well; and

(ii) Through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the

extraction is by means not involving a well.

Developed Producing (SPE-PRMS Definitions)

While not a requirement for disclosure under the SEC regulations, developed oil and gas reserves may be further sub-classified

according to the guidance contained in the SPE-PRMS as Producing or Non-Producing.

Developed Producing Reserves

Developed Producing Reserves are expected to be recovered from completion intervals that are open and producing at the

time of the estimate.

Improved recovery reserves are considered producing only after the improved recovery project is in operation.

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PETROLEUM RESERVES STATUS DEFINITIONS AND GUIDELINES

Page 2

Developed Non-Producinq

Developed Non-Producing Reserves include shut-in and behind-pipe reserves.

Shut-In

Shut-in Reserves are expected to be recovered from:

(1) completion intervals which are open at the time of the estimate, but which have not started producing;

(2) wells which were shut-in for market conditions or pipeline connections; or

(3) wells not capable of production for mechanical reasons.

Behind-Pipe

Behind-pipe Reserves are expected to be recovered from zones in existing wells, which will require additional completion

work or future re-completion prior to start of production.

In all cases, production can be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.

UNDEVELOPED RESERVES (SEC DEFINITIONS)

Securities and Exchange Commission Regulation S-X §210.4-10(a)(31) defines undeveloped oil and gas reserves as follows:

Undeveloped oil and gas reserves are reserves of any category that are expected to be recovered from new wells on

undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

(i) Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are

reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes

reasonable certainty of economic producibility at greater distances.

(ii) Undrilled locations can be classified as having undeveloped reserves only if a development plan has been

adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a

longer time.

(iii) Under no circumstances shall estimates for undeveloped reserves be attributable to any acreage for which an

application of fluid injection or other improved recovery technique is contemplated, unless such techniques have

been proved effective by actual projects in the same reservoir or an analogous reservoir, as defined in paragraph

(a)(2) of this section, or by other evidence using reliable technology establishing reasonable certainty.

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