PITTSBURGH--(BUSINESS WIRE)--EQT Corporation (NYSE:EQT) today filed a new investor presentation with the U.S. Securities and Exchange Commission in connection with its 2019 Annual Meeting of Shareholders (the “Annual Meeting”) to be held on July 10, 2019.
Highlights of the presentation include EQT’s:
Transformation. Under the Company’s refreshed Board of
Directors (the “Board”) and management team, the new EQT is a more
efficient, premier pure-play upstream company.
- EQT generated more than $300 million in cumulative adjusted free cash flow1 in Q4 2018 and Q1 2019.
Tremendous progress. EQT is delivering significant value
through a compelling new, bottom-up strategic plan, capitalizing on
the Company’s top-tier asset base to generate significant free cash
- EQT is on track to deliver $300 to $400 million of adjusted free cash flow1 in 2019, and over $3.0 billion through 2023 with meaningful upside.
Outstanding recent performance. Earlier this week EQT
released strong preliminary second quarter 2019 results, which
demonstrate the Company’s momentum, including:
- Sales volumes at the high end of the Company’s guidance of 355 to 375 Bcfe;
- Approximately $25 million of incremental annual capital expenditure savings under EQT’s Target 10% Initiative;
- Adjusted free cash flow1 improvement of $25 million over the previously provided guidance2;
- 8% reduction in drilling days / 1,000 feet quarter-over-quarter3;
- 20% improvement in frac stages / crew quarter-over-quarter3; and
- 14% increase in frac plugs drilled per day quarter-over-quarter3.
Industry-leading cost structure. EQT has superior unit costs
and drilling efficiencies as compared to peers.
- EQT’s well productivity, costs and planning efficiency were historically as competitive as, or better than, Rice Energy’s, according to independent analysis conducted by industry research specialist Wood Mackenzie, and EQT’s new management team has already identified $175 million in annual cost savings since November 2018.
Significant stock price outperformance. EQT stock has outpaced
peers as new leadership has successfully executed its strategic plan.
- EQT has outperformed its Appalachian Peers by 49%4 since the spin-off of Equitrans Midstream Corporation.
Commitment to Board refreshment. EQT has actively engaged with
shareholders and added highly qualified new independent directors.
EQT added four highly qualified independent directors to the Board
at the end of 2018 and nominated three additional highly qualified
independent director candidates for the Annual Meeting. If
elected, 67% of the Board will be new in the last year and the
average tenure will be 2.3 years.
- EQT added four highly qualified independent directors to the Board at the end of 2018 and nominated three additional highly qualified independent director candidates for the Annual Meeting. If elected, 67% of the Board will be new in the last year and the average tenure will be 2.3 years.
Concerns that the election of the Toby Rice slate would result in a
weaker Board, managerial chaos and value destruction.
- The replacement of EQT’s recently refreshed management team and Board would decrease Board independence, disrupt the Company’s progress, adversely impact financial and operational results and jeopardize EQT’s strong outperformance.
The investor presentation and other materials regarding the Board of Directors’ recommendations for the Annual Meeting are available at VoteGoldForEQT.com/Presentations. EQT also today posted additional videos highlighting the strengths of the Company’s directors to VoteGoldForEQT.com/our-nominees/.
To ensure EQT can continue its successful transformation and build on its momentum, the Board recommends that shareholders vote “FOR” all 12 of EQT’s highly qualified director nominees by phone, on the internet or by signing and returning the GOLD universal proxy card in the postage-paid envelope provided. EQT reminds shareholders that their vote is extremely important no matter how many shares they own. Every vote counts and will impact the future of EQT as a focused E&P business.
If you have any questions, or need assistance in voting
your shares on the GOLD universal proxy card,
please call EQT’s proxy solicitor:
INNISFREE M&A INCORPORATED
TOLL-FREE at 1-877-687-1866 (from the U.S. or Canada)
Or at (412) 232-3651 (From Other Locations)
|Please discard and do NOT vote using any white proxy cards you may|
|receive from the Toby Rice Group|
About EQT Corporation:
EQT Corporation is a natural gas production company with emphasis in the Appalachian Basin and operations throughout Pennsylvania, West Virginia and Ohio. With 130 years of experience and a long-standing history of good corporate citizenship, EQT is the largest producer of natural gas in the United States. As a leader in the use of advanced horizontal drilling technology, EQT is committed to minimizing the impact of drilling-related activities and reducing its overall environmental footprint. Through safe and responsible operations, EQT is helping to meet our nation’s demand for clean-burning energy, while continuing to provide a rewarding workplace and support for activities that enrich the communities where its employees live and work. Visit EQT Corporation at www.EQT.com; and to learn more about EQT’s sustainability efforts, please visit https://csr.eqt.com.
EQT Management speaks to investors from time to time and the analyst presentation for these discussions, which is updated periodically, is available via the Company’s investor relationship website at ir.eqt.com.
This news release contains 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. Without limiting the generality of the foregoing, forward-looking statements contained in this news release specifically include the expectations of plans, strategies, objectives and growth and anticipated financial and operational performance of the Company and its subsidiaries, including guidance regarding projected adjusted free cash flow, sales volumes and capital expenditures; and anticipated cost savings. These forward-looking statements 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, taking into account all information currently available to the Company. 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, many of which are difficult to predict and beyond the Company’s control. 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,” of the Company’s Form 10-K for the year ended December 31, 2018, as filed with the SEC and as updated by subsequent Form 10-Qs filed by the Company, and those set forth in the other documents the Company files from time to time with the SEC.
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, except as required by law.
Adjusted Free Cash Flow
Adjusted free cash flow is defined as the Company’s net cash provided by operating activities less changes in other assets and liabilities, less EBITDA attributable to discontinued operations (a non-GAAP supplemental financial measure defined below), plus interest expense attributable to discontinued operations and cash distributions from discontinued operations, less accrual-based capital expenditures attributable to continuing operations. Adjusted free cash flow is a non-GAAP supplemental financial measure that the Company's management and external users of its consolidated financial statements, such as industry analysts, lenders and ratings agencies use to assess the Company’s liquidity. The Company believes that adjusted free cash flow provides useful information to management and investors in assessing the impact of the Company’s ability to generate cash flow in excess of capital requirements and return cash to shareholders. Adjusted free cash flow should not be considered as an alternative to net cash provided by operating activities or any other measure of liquidity presented in accordance with GAAP.
The table below reconciles adjusted free cash flow with net cash provided by operating activities, the most comparable financial measure calculated in accordance with GAAP, as derived from the Statements of Condensed Consolidated Cash Flows included in the Company's report on Form 10-Q for the quarter ended March 31, 2019 and in the Company’s report on Form 10-K for the year ended December 31, 2018.
Three Months Ended
March 31, 2019
Three Months Ended
December 31, 2018
|Net cash provided by operating activities||$||871,287||$||530,866||$||1,402,153|
|(Deduct) / add back changes in other assets and liabilities||(223,934||)||261,216||37,282|
|Operating cash flow||$||647,353||$||792,082||$||1,439,435|
|(Deduct) / add back:|
|EBITDA attributable to discontinued operations(a)||—||(118,934||)||(118,934||)|
|Interest expense attributable to discontinued operations||—||19,452||19,452|
|Adjusted operating cash flow||$||647,353||$||692,600||$||1,339,953|
|Capital expenditures attributable to continuing operations||(476,022||)||(558,351||)||(1,034,373||)|
|Adjusted free cash flow||$||171,331||$||134,249||$||305,580|
|(a)||As a result of the separation of the Company's midstream business from its upstream business and subsequent spin-off of Equitrans Midstream Corporation in November 2018, the results of operations of Equitrans Midstream Corporation are presented as discontinued operations in the Company's Statements of Condensed Consolidated Operations. EBITDA attributable to discontinued operations is a non-GAAP supplemental financial measure reconciled in the section below.|
The Company has not provided projected net cash provided by operating activities or a reconciliation of projected adjusted free cash flow to projected net cash provided by operating activities, the most comparable financial measure calculated in accordance with GAAP. The Company is unable to project net cash provided by operating activities for any future period because this metric includes the impact of changes in operating assets and liabilities related to the timing of cash receipts and disbursements that may not relate to the period in which the operating activities occurred. The Company is unable to project these timing differences with any reasonable degree of accuracy without unreasonable efforts such as predicting the timing of its and customers’ payments, with accuracy to a specific day, months in advance. Furthermore, the Company does not provide guidance with respect to its average realized price, among other items, that impact reconciling items between net cash provided by operating activities and adjusted operating cash flow and adjusted free cash flow, as applicable. Natural gas prices are volatile and out of the Company’s control, and the timing of transactions and the income tax effects of future transactions and other items are difficult to accurately predict. Therefore, the Company is unable to provide projected net cash provided by operating activities, or the related reconciliation of projected adjusted free cash flow to projected net cash provided by operating activities, without unreasonable effort. Projected 2019 adjusted free cash flow is based on average NYMEX natural gas price (April to December) of $2.79 per MMbtu as of March 31, 2019. For the period 2020 through 2023, projected adjusted free cash flow is based on average NYMEX natural gas price of $2.85 per MMbtu for Henry Hub and ($0.45) local basis.
EBITDA Attributable to Discontinued Operations
EBITDA attributable to discontinued operations is a non-GAAP supplemental financial measure defined as income from discontinued operations, net of tax plus interest expense, income tax expense, depreciation and amortization of intangible assets attributable to discontinued operations for the three months ended December 31, 2018.
The table below reconciles EBITDA attributable to discontinued operations with income from discontinued operations, net of tax, the most comparable financial measure calculated in accordance with GAAP, as reported in the Statements of Condensed Consolidated Operations included in the Company’s report on Form 10-K for the year ended December 31, 2018.
Three Months Ended
December 31, 2018
|Income (loss) from discontinued operations, net of tax||$||(163,911)|
|Add back / (deduct):|
|Income tax benefit||(31,575)|
|Amortization of intangible assets||4,847|
|Impairment of goodwill||267,878|
|EBITDA attributable to discontinued operations||$||118,934|
EQT Corporation (the “Company”) filed a definitive proxy statement and associated GOLD universal proxy card with the Securities and Exchange Commission (the “SEC”) on May 22, 2019 in connection with the solicitation of proxies for the Company’s 2019 Annual Meeting of Shareholders (the “2019 Annual Meeting”). Details concerning the nominees for election to the Company’s Board of Directors at the 2019 Annual Meeting are included in the definitive proxy statement. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SHAREHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE COMPANY’S DEFINITIVE PROXY STATEMENT AND ANY SUPPLEMENTS THERETO, IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and shareholders can obtain a copy of the relevant documents filed by the Company with the SEC, including the definitive proxy statement, free of charge by visiting the SEC’s website, www.sec.gov. Investors and shareholders can also obtain, without charge, a copy of the definitive proxy statement, when available, and other relevant filed documents by directing a request to Blake McLean, Senior Vice President, Investor Relations and Strategy of EQT Corporation, at BMcLean@eqt.com, by calling the Company’s proxy solicitor, Innisfree M&A Incorporated, toll-free, at 877-687-1866, or from the Company’s website at https://ir.eqt.com/sec-filings.
Non-GAAP financial measure, see non-GAAP disclosures for definition and pricing assumptions.
|2||Excludes the impact of litigation reserves and proxy-related costs.|
|3||Second quarter through May 31, 2019 compared to first quarter 2019.|
|4||Based on total shareholder return from 11/13/18 through 5/31/19. Appalachian Peers represents the median total shareholder return of AR, CNX, COG, RRC and SWN from 11/13/18 through 5/31/19.|