National Fuel Gas Company (“National Fuel” or the “Company”)
(NYSE:NFG) today announced consolidated results for the three
months and fiscal year ended September 30, 2017.
FISCAL 2017 FOURTH QUARTER SUMMARY
- Consolidated net income of $45.6
million, or $0.53 per share, compared to consolidated net income of
$37.6 million, or $0.44 per share, and operating results of $56.6
million, or $0.66 per share, in the prior year (see reconciliation
below)
- Consolidated adjusted EBITDA of $142.8
million (non-GAAP reconciliation on page 25)
- Net production of 40.4 Bcfe, a 1%
increase from the prior year
- Price-related natural gas production
curtailments of 2.5 Bcf in Appalachia
- Average natural gas prices, after the
impact of hedging, of $2.91 per Mcf, down $0.18 per Mcf from the
prior year
- Average oil prices, after the impact of
hedging, of $54.77 per Bbl, down $5.24 per Bbl from the prior
year
- Gathering revenues of $25.0 million, up
6% from the prior year, on 44.9 Bcf of gathering system
throughput
FISCAL 2017 HIGHLIGHTS
- Consolidated net income of $283.5
million, or $3.30 per share, compared to consolidated net loss of
$291.0 million, or $3.43 per share, and operating results of $263.6
million, or $3.09 per share, in the prior year (see reconciliation
below)
- Consolidated adjusted EBITDA of $777.0
million (non-GAAP reconciliation on page 25)
- Cash provided by operations exceeded
net cash used in investing activities by $262 million
- Gathering net income of $40.4 million,
a 32% increase from the prior year
- Net production of 173.5 Bcfe, an 8%
increase from the prior year
- Proved reserves at September 30, 2017,
of 2.2 Tcfe, an increase of 17% from September 30, 2016
- Seneca finding and development costs,
excluding revisions, of $0.60 per Mcfe
- Increased shareholder dividend for the
47th consecutive year to an annualized distribution of $1.66 per
share
OPERATING RESULTS
Three Months Ended Fiscal Year Ended September 30, September
30, (in thousands except per share amounts) 2017 2016
2017 2016
Reported GAAP earnings (loss) $
45,577 $ 37,553 $ 283,482 $ (290,958 )
Items impacting
comparability: Impairment of oil and gas properties (E&P)
32,756 948,307 Tax impact of impairment of oil and gas properties
(13,757 ) (398,287 ) Joint development agreement professional fees
(E&P) 7,855 Tax impact of joint development agreement
professional fees (3,299 )
Operating
results $ 45,577 $ 56,552 $ 283,482 $
263,618
Reported GAAP earnings (loss) per
share $ 0.53 $ 0.44 $ 3.30 $ (3.43 )
Items impacting
comparability: Impairment of oil and gas properties (E&P)
0.38 11.18 Tax impact of impairment of oil and gas properties (0.16
) (4.69 ) Joint development agreement professional fees (E&P)
0.09 Tax impact of joint development agreement professional fees
(0.04 ) Earnings per share impact of diluted shares
(0.02 )
Operating results per diluted share $ 0.53
$ 0.66 $ 3.30 $ 3.09
MANAGEMENT COMMENTS
Ronald J. Tanski, President and Chief Executive Officer of
National Fuel Gas Company, stated: “National Fuel ended its 2017
fiscal year on a strong note. Our Exploration and Production
segment continues to make progress in the appraisal and
optimization of our Utica shale potential. Utica well completions
helped drive the 17 percent increase in our proved reserves while
lowering our finding and development costs in Appalachia to $0.51
per Mcf. Our Gathering segment meanwhile capped-off an outstanding
year that saw its earnings grow by 32 percent. In spite of
commodity price volatility and regulatory challenges, the Company
generated positive free cash flow for the second consecutive year,
which allowed us to continue to grow our dividend, maintain the
safety and reliability of our pipeline systems, and position our
upstream and midstream businesses for the next leg of growth in
Appalachia.
“As we enter 2018, we are optimistic that the ongoing build-out
of pipeline infrastructure in the region will help local pricing
and provide a tailwind while we continue to work through the
regulatory process with our Northern Access project. In any event,
just as we have always done, we will continue to manage our
business in a way that minimizes the risk to our earnings and cash
flows, maintains a strong balance sheet to preserve financial
flexibility as opportunities in the market arise, and prioritizes
economic returns that add long-term value for our
shareholders.”
DISCUSSION OF RESULTS BY SEGMENT
The following discussion of the earnings of each segment is
summarized in a tabular form on pages 9 through 12 of this report.
It may be helpful to refer to those tables while reviewing this
discussion. Note that management defines operating results as
reported GAAP earnings before items impacting comparability and
adjusted EBITDA as reported GAAP earnings before the following
items: interest expense, income taxes, depreciation, depletion and
amortization, interest and other income, impairments, and items
impacting comparability.
Upstream Business
Exploration and Production
Segment
The Exploration and Production segment operations are carried
out by Seneca Resources Corporation ("Seneca"). Seneca explores
for, develops and produces natural gas and oil reserves, primarily
in Pennsylvania and California.
Three Months Ended Fiscal
Year Ended September 30, September 30, (in
thousands except per share amounts)
2017
2016 Variance 2017
2016 Variance Net Income / (Loss) $
30,354 $ 16,744 $ 13,610 $ 129,326
$ (452,842 ) $ 582,168 Net Income /
(Loss) Per Share (Diluted) $ 0.35 $ 0.20 $ 0.15 $ 1.50 $ (5.34 ) $
6.84 Adjusted EBITDA $ 75,303 $ 95,157 $ (19,854 ) $ 360,979 $
363,830 $ (2,851 )
The $13.6 million increase in the Exploration and Production
segment’s fourth quarter earnings was primarily attributable to the
non-recurrence of a $32.8 million ($19.0 million after-tax) ceiling
test impairment charge recorded to reduce the book value of
Seneca’s oil and gas properties in the prior year. Excluding the
impairment charge, results for the segment declined $5.4 million,
or $0.07 per share, as the impact of higher net production and the
benefit of a lower effective income tax rate was more than offset
by a decline in realized natural gas and oil prices, an increase in
lease operating and transportation (“LOE”) expense, and higher
other operating expenses.
Seneca’s fourth quarter net production was 40.4 billion cubic
feet equivalent (“Bcfe”), an increase of 0.5 Bcfe, or 1 percent,
from the prior year. Net natural gas production increased 0.8 Bcf,
or 2 percent, due to significantly reduced price-related
curtailments across Seneca’s Appalachian producing areas and higher
production in the Western Development Area (“WDA”) from new wells
completed and brought online during the year, partially offset by
natural declines from Marcellus locations in the Eastern
Development Area (“EDA”). As a result of depressed local daily spot
prices in Pennsylvania, Seneca voluntarily curtailed an estimated
2.5 Bcf of net natural gas production in the fourth quarter, which
was down from an estimated 6.2 Bcf of curtailments in the prior
year. Seneca’s oil production decreased 49 thousand barrels
("Mbbl") due mainly to a reduction in well workover activity in
prior quarters and modifications to steaming operations at its
North Midway Sunset field in California.
Seneca's average realized natural gas price, after the impact of
hedging and all marketing and transportation costs, was $2.91 per
thousand cubic feet ("Mcf"), a decrease of $0.18 per Mcf from the
prior year. Seneca's average realized oil price, after the impact
of hedging, was $54.77 per barrel ("Bbl"), a decrease of $5.24 per
Bbl. The decline in Seneca’s realized natural gas and oil prices is
primarily attributable to the expiration of physical firm sales and
financial hedge contracts over the past 12 months that had
favorable pricing relative to current market prices and hedge book.
Seneca's average realized natural gas and oil prices benefited from
an uplift of $0.47 per Mcf and $7.33 per Bbl, respectively, from
financial hedges settled during the quarter.
LOE increased $4.6 million, or $0.10 per Mcf equivalent ("Mcfe")
on a cost per unit of production basis, due primarily to an
increase in well workover and repair activities as well as higher
steam volumes at North Midway Sunset in California. The elevated
activities are expected to arrest, and in some cases reverse,
natural field production declines in fiscal 2018. LOE expense in
California is projected to return to normal levels over the next
few quarters. Other operating expenses increased $2.9 million
versus the prior year due mainly to a one-time payment made to
reimburse a third-party pipeline operator for development costs on
a project that Seneca has future contracted firm transportation
capacity. Seneca will recoup the full amount of the payment when
facilities are ultimately constructed.
A decrease in Seneca’s effective tax rate increased the
segment’s earnings by $7.2 million in the fourth quarter. This
decrease was largely due to an anticipated increase in the sale of
future natural gas production at delivery points in the
southeastern U.S. utilizing firm transportation capacity on the
Atlantic Sunrise project, which decreased the effective tax rate
used in the calculation of Seneca’s deferred taxes. Seneca holds
approximately 190 million cubic feet ("MMcf") per day of capacity
on Atlantic Sunrise, which commenced construction during the fourth
quarter and is expected to be in-service before the end of the
Company’s 2018 fiscal year.
For fiscal 2017, the $582.2 million increase in the Exploration
and Production segment’s earnings was primarily attributable to the
non-recurrence of two items that reduced earnings in the prior
year. In fiscal 2016, Seneca recorded a $948.3 million ($550.0
million after-tax) ceiling test impairment charge to reduce the
book value of Seneca’s oil and gas properties. Seneca also incurred
$7.9 million ($4.6 million after-tax) in the prior year for
professional and legal expenses related to the joint development
agreement ("JDA") to develop certain Marcellus wells. Excluding
these items, annual results for the segment improved $27.6 million,
or $0.31 per share, due primarily to the impact of higher net
production, lower general and administrative ("G&A") and
depreciation, depletion and amortization (“DD&A”) expenses, and
the benefit of a lower effective income tax rate, partially offset
by a decline in realized natural gas and oil prices.
Seneca generated net production of 173.5 Bcfe in fiscal 2017, an
increase of 12.4 Bcfe, or 8 percent, versus the prior year and the
highest annual output in the Company’s history. Seneca's average
realized natural gas and oil prices, after the impact of hedging
and all marketing and transportation costs, were $2.95 per Mcf and
$53.87 Bbl, respectively, a decrease of $0.07 per Mcf and $4.04 per
Bbl from fiscal 2016.
G&A expense, excluding the joint development agreement
costs, declined $4.0 million, or $0.05 per Mcfe, due to lower
personnel costs. DD&A expense decreased $27.4 million as the
decline in Seneca’s full cost pool depletion rate more than offset
the impact of higher production. Seneca’s per unit DD&A
decreased by $0.22 per Mcfe to $0.65 per Mcfe due mainly to a lower
depletable fixed asset balance resulting from the ceiling test
impairment charges recorded in fiscal 2016. LOE expense increased
by $12.1 million in fiscal 2017, in-line with production growth,
resulting in per unit LOE expense holding flat versus the prior
year at $0.96 per Mcfe.
A decrease in Seneca’s effective tax rate increased the
segment’s earnings by $10.6 million in fiscal 2017. The decrease in
the effective tax rate was due mostly to the impact on deferred
taxes of Seneca's Atlantic Sunrise capacity discussed above, as
well as an enhanced oil recovery tax credit related to Seneca’s
California properties. This credit was applicable this year as a
result of relatively low domestic crude oil prices.
Year End Proved Reserves
Seneca’s total proved natural gas and crude oil reserves at
September 30, 2017 increased 17 percent to 2,154 Bcfe from 1,849
Bcfe at September 30, 2016. In fiscal 2017, Seneca recorded 391
Bcfe of proved reserve extensions and discoveries, primarily from
Utica and Marcellus locations in Appalachia, and 111 Bcfe of net
positive revisions, due mainly to higher natural gas and oil prices
during the year. Seneca sold 22 Bcfe of proved reserves associated
with 16 Marcellus and Utica wells located in non-core areas of the
WDA during the fiscal year. The Company’s total proved reserve base
is now 92 percent natural gas and 8 percent crude oil. Seneca’s
total proved undeveloped reserves (“PUDs”) at the end of fiscal
2017 were 612 Bcfe, or 28 percent of total proved reserves.
Adjusting for sales and revisions, Seneca replaced 225 percent
of its production in fiscal 2017, up from the 117 percent reserve
replacement achieved in fiscal 2016. The year over year improvement
was due mainly to the success of Seneca’s Utica Shale appraisal
program in the WDA, increased development activity in the EDA where
Seneca added a rig this past May, and the general shift to
developing more 100 percent working interest wells in the WDA as
activity on JDA locations is set to conclude in fiscal 2018.
Seneca’s consolidated finding and development (“F&D”) cost,
excluding the impact of positive revisions that were largely
related to an increase in natural gas and oil prices, was $0.60 per
Mcfe in fiscal 2017, driven primarily by Utica and Marcellus shale
extensions and discoveries that achieved a drill-bit F&D cost
of $0.51 per Mcfe in Appalachia. The Company’s three-year average
consolidated F&D cost was $0.98 per Mcfe, down $0.34 per Mcfe
from the three-year average of $1.32 per Mcfe at the end of fiscal
2016.
Midstream Businesses
Pipeline and Storage Segment
The Pipeline and Storage segment’s operations are carried out by
National Fuel Gas Supply Corporation (“Supply Corporation”) and
Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment
provides natural gas transportation and storage services to
affiliated and non-affiliated companies through an integrated
system of pipelines and underground natural gas storage fields in
western New York and Pennsylvania.
Three Months Ended Fiscal
Year Ended September 30, September 30, (in
thousands except per share amounts)
2017
2016 Variance 2017
2016 Variance Net Income / (Loss) $
13,791 $ 16,816 $ (3,025 ) $ 68,446
$ 76,610 $ (8,164 ) Net Income / (Loss)
Per Share (Diluted) $ 0.16 $ 0.20 $ (0.04 ) $ 0.80 $ 0.90 $ (0.10 )
Adjusted EBITDA $ 39,049 $ 46,517 $ (7,468 ) $ 180,328 $ 199,446 $
(19,118 )
The $3.0 million decrease in the Pipeline and Storage segment's
fourth quarter earnings was primarily due to a decline in operating
revenues and higher Operation and Maintenance (“O&M”) expense,
offset partially by the impact of a lower effective income tax
rate. Operating revenues decreased $3.7 million due to the
scheduled reduction in Supply Corporation and Empire’s
transportation rates that went into effect during the first quarter
of fiscal 2017 resulting from their respective rate case
settlements, lower reservation revenues resulting from recent
contract terminations and restructurings, and a decline in
short-term interruptible transportation service in the current
quarter. O&M expense increased $3.4 million due mostly to costs
associated with the overhaul of two compressor facilities and an
increase in the reserve for preliminary engineering costs on
projects in development.
The Pipeline and Storage segment’s fiscal 2017 earnings
decreased $8.2 million from the prior year as lower operating
revenues and higher O&M expenses were only partially offset by
a decrease in DD&A expense and the impact of a lower effective
income tax rate. Similar to the fourth quarter, operating revenues
were negatively impacted by scheduled rate reductions related to
Supply and Empire’s rate case settlements, as well as contract
terminations and restructurings and lower demand for short-term
interruptible transportation service. The increase in O&M
expense was primarily due to higher personnel costs and an increase
in compressor station maintenance expenses. DD&A expense
decreased primarily due to Empire’s rate case settlement, which
lowered the subsidiary’s depreciation rate.
Gathering Segment
The Gathering segment’s operations are carried out by National
Fuel Gas Midstream Corporation’s subsidiary limited liability
companies. The Gathering segment constructs, owns and operates
natural gas gathering pipelines and compression facilities in the
Appalachian region which currently delivers Seneca’s gross
Appalachian production to the interstate pipeline system.
Three Months Ended Fiscal
Year Ended September 30, September 30, (in
thousands except per share amounts)
2017
2016 Variance 2017
2016 Variance Net Income / (Loss) $
9,003 $ 8,537 $ 466 $ 40,377
$ 30,499 $ 9,878 Net Income / (Loss) Per Share
(Diluted) $ 0.10 $ 0.10 $ — $ 0.47 $ 0.36 $ 0.11 Adjusted EBITDA $
21,206 $ 20,963 $ 243 $ 94,380 $ 78,685 $ 15,695
The Gathering segment’s fourth quarter earnings increased 5
percent versus the prior year due to higher operating revenues and
a lower effective tax rate, partially offset by higher operating
expenses. Operating revenues increased $1.4 million, or 6 percent,
from the prior year due mostly to higher throughput. The Company
transported 44.9 Bcf on its gathering systems in the fourth
quarter, an increase of 2.3 Bcf, or 5 percent, from the prior year.
O&M expense increased $1.3 million due to higher personnel
costs and expenses associated with operating new gathering and
compression assets placed in service during the past year.
The Gathering segment’s fiscal 2017 earnings increased $9.9
million, or 32 percent, versus the prior year due mainly to higher
operating revenues, offset slightly by higher O&M and DD&A
expenses. The growth in Seneca’s gross natural gas production in
Appalachia, which includes production from Marcellus joint
development locations, helped drive a 20 percent increase in
throughput across the Company’s gathering systems during the year.
O&M expense increased $2.8 million due to higher personnel and
contract labor costs associated with the continued growth of the
segment. DD&A expense increased due to higher gross plant in
service during the year.
Downstream Businesses
Utility Segment
The Utility segment operations are carried out by National Fuel
Gas Distribution Corporation (“Distribution”), which sells or
transports natural gas to customers located in western New York and
northwestern Pennsylvania.
Three Months Ended Fiscal
Year Ended September 30, September 30, (in
thousands except per share amounts)
2017
2016 Variance 2017
2016 Variance Net Income / (Loss) $
(4,168 ) $ (1,784 ) $ (2,384 ) $ 46,935
$ 50,960 $ (4,025 ) Net Income / (Loss)
Per Share (Diluted) $ (0.05 ) $ (0.02 ) $ (0.03 ) $ 0.55 $ 0.60 $
(0.05 ) Adjusted EBITDA $ 11,846 $ 10,400 $ 1,446 $ 151,078 $
148,683 $ 2,395
The Utility segment’s fourth quarter net loss increased $2.4
million from the prior year as an improvement in the segment’s
operating loss was more than offset by higher interest expense,
lower interest and other income, and the impact of a lower income
tax benefit. The $1.5 million improvement in Distribution’s
operating loss was largely attributable to the impact of new
customer rates in Distribution’s New York service territory that
went into effect following the rate case order issued in April as
well as lower O&M expense. The decrease in interest and other
income was primarily due to lower accrued interest income on
regulatory reserve accounts, while interest expense was negatively
impacted by a non-recurring regulatory adjustment that was recorded
in the prior year.
For fiscal 2017, the Utility segment’s earnings decreased $4.0
million as higher utility margin (operating revenues less purchased
gas costs) was more than offset by an increase in O&M,
DD&A, and interest expenses and a decrease in interest and
other income. Utility margin increased $9.2 million due mainly to
an increase in normalized customer usage, the benefit of new
customer rates in New York, and the impact of regulatory
adjustments. O&M expense increased $6.1 million due mainly to
higher personnel costs. DD&A expense increased $4.0 million due
to higher average plant balances during the year, which was
primarily driven by the replacement of Distribution’s customer
information system that was placed in service in May of fiscal
2016.
Energy Marketing Segment
The Energy Marketing segment's operations are carried out by
National Fuel Resources, Inc. (“NFR”). NFR markets natural gas to
industrial, wholesale, commercial, public authority, and
residential customers primarily in western and central New York and
northwestern Pennsylvania, offering competitively priced natural
gas to its customers.
Three Months Ended Fiscal
Year Ended September 30, September 30, (in
thousands except per share amounts)
2017
2016 Variance 2017
2016 Variance Net Income / (Loss) $
(614 ) $ 231 $ (845 ) $ 1,509
$ 4,348 $ (2,839 ) Net Income / (Loss) Per
Share (Diluted) $ (0.01 ) $ — $ (0.01 ) $ 0.02 $ 0.05 $ (0.03 )
Adjusted EBITDA $ (1,134 ) $ 87 $ (1,221 ) $ 2,080 $ 6,655 $ (4,575
)
The Energy Marketing segment's fourth quarter earnings decreased
slightly versus the prior year, resulting in a net loss of $0.6
million, or $0.01 per share. For fiscal 2017, the $2.8 million
decline in the Energy Marketing segment’s earnings was due largely
to lower customer margins. NFR’s customer margins were negatively
impacted by stronger natural gas prices at local purchase points
relative to NYMEX-based customer sales contracts during the winter
heating season.
Corporate and All Other
The Corporate and All Other category’s net loss of $2.8 million
for the fourth quarter was relatively unchanged from the $3.0
million net loss in the prior year. For fiscal 2017, the Corporate
and All Other category had a net loss of $3.1 million compared to a
net loss of $0.5 million in the prior year. The $2.6 million
increase in the net loss was primarily attributable to the
non-recurrence of life insurance proceeds and the related tax
benefits that were recognized in the prior year.
GUIDANCE
National Fuel is revising its fiscal 2018 earnings guidance to
be within a range of $2.75 to $3.05 per share, or $2.90 per share
at the midpoint of the range. The $0.40 per share decrease from the
fiscal 2017 earnings of $3.30 per share is being driven primarily
by lower expected price realizations after hedging on Seneca’s
natural gas and oil production and higher expected operating costs
at the Company’s regulated businesses, offset partially by the
impact of normal weather on the Utility segment's earnings and an
increase in projected natural gas production in Appalachia, which
will benefit earnings for the Company’s Exploration and Production
and Gathering segments.
Additional details on the Company's forecast assumptions and
business segment guidance for fiscal 2018 are outlined in the table
below.
Updated FY 2018 Guidance Consolidated
Earnings per Share $2.75 to $3.05 Capital
Expenditures (Millions) Exploration and Production (1) $275 -
$325 Pipeline and Storage $110 - $140 Gathering $60 - $80 Utility
$90 -
$100
Consolidated Capital Expenditures $535 - $645
Exploration & Production Segment Guidance
Commodity Price Assumptions NYMEX natural gas price $3.00
/MMBtu Appalachian basin spot price $2.40 /MMBtu NYMEX (WTI) crude
oil price $50.00 /Bbl California oil price (% of WTI) 95%
Production (Bcfe) East Division - Appalachia (2) 165 to 180
West Division - California
~ 20
Total Production 185 to 200 E&P
Operating Costs ($/Mcfe) LOE $0.90 - $1.00 G&A $0.30 -
$0.35 DD&A $0.65 - $0.70
Other Business Segment
Guidance Gathering Segment Revenues (Millions) $115 - $125
Pipeline and Storage Segment Revenues (Millions) ~$295 (1)
Net of conveyance proceeds received from joint development
partner for working interest in joint development wells. (2) Seneca
East Division - Appalachia production guidance assumes
approximately 32 Bcf of spot sales at the midpoint of guidance.
EARNINGS TELECONFERENCE
The Company will host a conference call on Friday, November 3,
2017, at 11 a.m. Eastern Time to discuss this announcement. There
are two ways to access this call. For those with Internet access,
visit the NFG Investor Relations News & Events page at National
Fuel’s website at investor.nationalfuelgas.com. For those without
Internet access, audio access is also provided by dialing
(toll-free) 833-287-0795, using conference ID number “96083185.”
For those unable to listen to the live conference call, an audio
replay will be available approximately two hours following the
teleconference at the same website link and by phone at (toll-free)
800-585-8367 using conference ID number “96083185.” Both the
webcast and a telephonic replay will be available until the close
of business on Friday, November 10, 2017.
National Fuel is an integrated energy company reporting
financial results for five operating segments: Exploration and
Production, Pipeline and Storage, Gathering, Utility, and Energy
Marketing. Additional information about National Fuel is available
at www.nationalfuelgas.com.
Certain statements contained herein, including statements
identified by the use of the words “anticipates,” “estimates,”
“expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,”
“believes,” “seeks,” “will,” “may” and similar expressions, and
statements which are other than statements of historical facts, are
“forward-looking statements” as defined by the Private Securities
Litigation Reform Act of 1995. Forward-looking statements involve
risks and uncertainties, which could cause actual results or
outcomes to differ materially from those expressed in the
forward-looking statements. The Company’s expectations, beliefs and
projections contained herein are expressed in good faith and are
believed to have a reasonable basis, but there can be no assurance
that such expectations, beliefs or projections will result or be
achieved or accomplished. In addition to other factors, the
following are important factors that could cause actual results to
differ materially from those discussed in the forward-looking
statements: delays or changes in costs or plans with respect to
Company projects or related projects of other companies, including
difficulties or delays in obtaining necessary governmental
approvals, permits or orders or in obtaining the cooperation of
interconnecting facility operators; governmental/regulatory
actions, initiatives and proceedings, including those involving
rate cases (which address, among other things, target rates of
return, rate design and retained natural gas), environmental/safety
requirements, affiliate relationships, industry structure, and
franchise renewal; changes in laws, regulations or judicial
interpretations to which the Company is subject, including those
involving derivatives, taxes, safety, employment, climate change,
other environmental matters, real property, and exploration and
production activities such as hydraulic fracturing; impairments
under the SEC’s full cost ceiling test for natural gas and oil
reserves; changes in the price of natural gas or oil; financial and
economic conditions, including the availability of credit, and
occurrences affecting the Company’s ability to obtain financing on
acceptable terms for working capital, capital expenditures and
other investments, including any downgrades in the Company’s credit
ratings and changes in interest rates and other capital market
conditions; factors affecting the Company’s ability to successfully
identify, drill for and produce economically viable natural gas and
oil reserves, including among others geology, lease availability,
title disputes, weather conditions, shortages, delays or
unavailability of equipment and services required in drilling
operations, insufficient gathering, processing and transportation
capacity, the need to obtain governmental approvals and permits,
and compliance with environmental laws and regulations; increasing
health care costs and the resulting effect on health insurance
premiums and on the obligation to provide other post-retirement
benefits; changes in price differentials between similar quantities
of natural gas or oil sold at different geographic locations, and
the effect of such changes on commodity production, revenues and
demand for pipeline transportation capacity to or from such
locations; other changes in price differentials between similar
quantities of natural gas or oil having different quality, heating
value, hydrocarbon mix or delivery date; the cost and effects of
legal and administrative claims against the Company or activist
shareholder campaigns to effect changes at the Company; uncertainty
of oil and gas reserve estimates; significant differences between
the Company’s projected and actual production levels for natural
gas or oil; changes in demographic patterns and weather conditions;
changes in the availability, price or accounting treatment of
derivative financial instruments; changes in laws, actuarial
assumptions, the interest rate environment and the return on
plan/trust assets related to the Company’s pension and other
post-retirement benefits, which can affect future funding
obligations and costs and plan liabilities; changes in economic
conditions, including global, national or regional recessions, and
their effect on the demand for, and customers’ ability to pay for,
the Company’s products and services; the creditworthiness or
performance of the Company’s key suppliers, customers and
counterparties; economic disruptions or uninsured losses resulting
from major accidents, fires, severe weather, natural disasters,
terrorist activities, acts of war, cyber attacks or pest
infestation; significant differences between the Company’s
projected and actual capital expenditures and operating expenses;
or increasing costs of insurance, changes in coverage and the
ability to obtain insurance. The Company disclaims any obligation
to update any forward-looking statements to reflect events or
circumstances after the date thereof.
NATIONAL FUEL GAS
COMPANY RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP
EARNINGS QUARTER ENDED SEPTEMBER 30, 2017
(Unaudited) Upstream
MidstreamBusinesses
DownstreamBusinesses
Exploration & Pipeline & Energy Corporate /
(Thousands of Dollars) Production Storage
Gathering Utility Marketing
All Other Consolidated*
Fourth quarter 2016 GAAP earnings $ 16,744 $ 16,816 $ 8,537
$ (1,784 ) $ 231 $ (2,991 ) $ 37,553
Items impacting
comparability: Impairment of oil and gas producing properties
32,756 32,756
Tax impact of impairment of oil and gas
producing properties
(13,757 )
(13,757 )
Fourth Quarter 2016 operating results 35,743
16,816 8,537 (1,784 ) 231 (2,991 ) 56,552
Drivers of
operating results Higher (lower) crude oil prices (2,303 )
(2,303 ) Higher (lower) natural gas prices (4,202 ) (4,202 ) Higher
(lower) natural gas production 1,677 1,677 Higher (lower) crude oil
production (1,891 ) (1,891 ) Derivative mark to market adjustments
(765 ) (765 )
Lower (higher) lease operating and
transportation expenses
(3,021 ) (3,021 ) Higher (lower) transportation revenues
(2,364 ) (2,364 ) Higher (lower) gathering and processing revenues
926 926 Lower (higher) other operating expenses (1,952 ) (2,185 )
(869 ) 541 (4,465 ) Impact of new rates 554 554
Higher (lower) margins (703 ) (703 ) Higher (lower) interest
income (560 ) (560 ) Lower (higher) interest expense (738 )
(738 ) Lower (higher) income tax expense / effective tax
rate 7,215 1,453 536 (1,837 ) 7,367 All other / rounding
(147 ) 71 (127 )
(344 ) (142 ) 202
(487 )
Fourth quarter 2017 GAAP earnings and
operatingresults
$ 30,354 $ 13,791 $ 9,003
$ (4,168 ) $ (614 )
$ (2,789 ) $ 45,577 * Amounts do
not reflect intercompany eliminations
NATIONAL FUEL GAS COMPANY RECONCILIATION OF
CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE QUARTER ENDED
SEPTEMBER 30, 2017 (Unaudited)
Upstream
MidstreamBusinesses
DownstreamBusinesses
Exploration & Pipeline & Energy Corporate /
Production Storage Gathering
Utility Marketing All Other
Consolidated*
Fourth quarter 2016 GAAP
earnings $ 0.20 $ 0.20 $ 0.10 $ (0.02 ) $ — $ (0.04 ) $ 0.44
Items impacting comparability: Impairment of oil and gas
producing properties 0.38 0.38
Tax impact of impairment of oil and gas
producing properties
(0.16 )
(0.16 )
Fourth quarter 2016 operating results 0.42 0.20 0.10 (0.02 )
— (0.04 ) 0.66
Drivers of operating results Higher
(lower) crude oil prices (0.03 ) (0.03 ) Higher (lower) natural gas
prices (0.05 ) (0.05 ) Higher (lower) natural gas production 0.02
0.02 Higher (lower) crude oil production (0.02 ) (0.02 ) Derivative
mark to market adjustments (0.01 ) (0.01 )
Lower (higher) lease operating and
transportation expenses
(0.04 ) (0.04 ) Higher (lower) transportation revenues (0.03
) (0.03 ) Higher (lower) gathering and processing revenues 0.01
0.01 Lower (higher) other operating expenses (0.02 ) (0.03 ) (0.01
) 0.01 (0.05 ) Impact of new rates 0.01 0.01 Higher
(lower) margins (0.01 ) (0.01 ) High (lower) interest income
(0.01 ) (0.01 ) Lower (higher) interest expense (0.01 )
(0.01 ) Lower (higher) income tax expense / effective tax
rate 0.08 0.02 0.01 (0.02 ) 0.09 All other / rounding —
— (0.01 ) (0.01 )
— 0.02 —
Fourth quarter 2017 GAAP earnings and
operatingresults
$ 0.35 $ 0.16 $ 0.10
$ (0.05 ) $ (0.01 ) $
(0.02 ) $ 0.53 * Amounts do not reflect
intercompany eliminations
NATIONAL
FUEL GAS COMPANY RECONCILIATION OF CURRENT AND PRIOR YEAR
GAAP EARNINGS TWELVE MONTHS ENDED SEPTEMBER 30, 2017
(Unaudited) Upstream
MidstreamBusinesses
DownstreamBusinesses
Exploration & Pipeline & Energy Corporate /
(Thousands of Dollars) Production Storage
Gathering Utility Marketing
All Other Consolidated*
Fiscal 2016 GAAP earnings $ (452,842 ) $ 76,610 $ 30,499 $
50,960 $ 4,348 $ (533 ) $ (290,958 )
Items impacting
comparability: Impairment of oil and gas producing properties
948,307 948,307
Tax impact of impairment of oil and gas
producing properties
(398,287 ) (398,287 ) Joint development agreement professional fees
7,855 7,855
Tax impact of joint development agreement
professional fees
(3,299 )
(3,299 )
Fiscal 2016 operating results 101,734 76,610 30,499
50,960 4,348 (533 ) 263,618
Drivers of operating
results Higher (lower) crude oil prices (7,198 ) (7,198 )
Higher (lower) natural gas prices (7,318 ) (7,318 ) Higher (lower)
natural gas production 26,571 26,571 Higher (lower) crude oil
production (6,884 ) (6,884 )
Lower (higher) lease operating and
transportation expenses
(7,851 ) (7,851 ) Lower (higher) depreciation / depletion 17,808
1,350 (571 ) (2,577 ) 16,010 Higher (lower) transportation
revenues (6,885 ) (6,885 ) Higher (lower) gathering and processing
revenues 11,852 11,852 Lower (higher) other operating expenses
2,193 (4,377 ) (1,799 ) (3,335 ) (1,181 ) (8,499 ) Lower (higher)
property, franchise and other taxes (1,060 ) (753 ) (1,813 )
Regulatory true-up adjustments 464 464 Higher (lower) usage 2,543
2,543 Impact of new rates 1,481 1,481 Higher (lower) margins
(2,634 ) (1,027 ) (3,661 ) Higher (lower) AFUDC** (484 )
(913 ) (1,397 ) Higher (lower) interest income (581 ) (581 )
Lower (higher) interest expense 1,126 (592 ) 534
Lower (higher) income tax expense / effective tax rate 10,609 3,185
(948 ) (460 ) 12,386 All other / rounding (404 )
(200 ) 396 433
(205 ) 90 110
Fiscal 2017 GAAP earnings and operating results $
129,326 $ 68,446 $ 40,377
$ 46,935 $ 1,509
$ (3,111 ) $ 283,482 *
Amounts do not reflect intercompany eliminations ** AFUDC =
Allowance for Funds Used During Construction
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER
SHARE TWELVE MONTHS ENDED SEPTEMBER 30, 2017
(Unaudited) Upstream
MidstreamBusinesses
DownstreamBusinesses
Exploration & Pipeline & Energy Corporate /
Production Storage Gathering
Utility Marketing All Other
Consolidated*
Fiscal 2016 GAAP earnings
$ (5.34 ) $ 0.90 $ 0.36 $ 0.60 $ 0.05 $ — $ (3.43 )
Items
impacting comparability: Impairment of oil and gas producing
properties 11.18 11.18
Tax impact of impairment of oil and gas
producing properties
(4.69 ) (4.69 ) Joint development agreement professional fees 0.09
0.09
Tax impact of joint development agreement
professional fees
(0.04 ) (0.04 )
Earnings per share impact of diluted
shares
(0.01 )
(0.01 )
(0.02 )
Fiscal 2016 operating results 1.19 0.90 0.36 0.60
0.05 (0.01 ) 3.09
Drivers of operating results Higher
(lower) crude oil prices (0.08 ) (0.08 ) Higher (lower) natural gas
prices (0.09 ) (0.09 ) Higher (lower) natural gas production 0.31
0.31 Higher (lower) crude oil production (0.08 ) (0.08 )
Lower (higher) lease operating and
transportation expenses
(0.09 ) (0.09 ) Lower (higher) depreciation / depletion 0.21 0.02
(0.01 ) (0.03 ) 0.19 Higher (lower) transportation revenues
(0.08 ) (0.08 ) Higher (lower) gathering and processing revenues
0.14 0.14 Lower (higher) other operating expenses 0.03 (0.05 )
(0.02 ) (0.04 ) (0.01 ) (0.09 ) Lower (higher) property, franchise
and other taxes (0.01 ) (0.01 ) (0.02 ) Regulatory true-up
adjustments 0.01 0.01 Higher (lower) usage 0.03 0.03 Impact of new
rates 0.02 0.02 Higher (lower) margins (0.03 ) (0.01 ) (0.04
) Higher (lower) AFUDC** (0.01 ) (0.01 ) (0.02 )
Higher (lower) interest income (0.01 ) (0.01 ) Lower
(higher) interest expense 0.01 (0.01 ) — Lower (higher)
income tax expense / effective tax rate 0.12 0.04 (0.01 ) (0.01 )
0.14 All other / rounding (0.02 ) (0.01 )
— — —
— (0.03 )
Fiscal 2017
GAAP earnings and operating results $ 1.50
$ 0.80 $ 0.47 $ 0.55
$ 0.02 $ (0.04 )
$ 3.30 * Amounts do not reflect intercompany
eliminations ** AFUDC = Allowance for Funds Used During
Construction
NATIONAL FUEL GAS COMPANY AND
SUBSIDIARIES (Thousands of Dollars, except per share
amounts) Three Months Ended Twelve Months Ended September 30,
September 30, (Unaudited) (Unaudited)
SUMMARY OF
OPERATIONS
2017 2016 2017 2016 Operating Revenues:
Utility and Energy Marketing Revenues $ 92,456 $ 83,620 $ 755,485 $
624,602 Exploration and Production and Other Revenues 144,049
155,734 617,666 611,766 Pipeline and Storage and Gathering Revenues
50,432 53,118 206,730 216,048 286,937
292,472 1,579,881 1,452,416 Operating Expenses: Purchased Gas
10,905 814 275,254 147,982 Operation and Maintenance: Utility and
Energy Marketing 40,497 41,038 199,293 192,512 Exploration and
Production and Other 42,946 36,235 145,099 160,201 Pipeline and
Storage and Gathering 29,184 24,477 98,200 88,801 Property,
Franchise and Other Taxes 20,627 19,791 84,995 81,714 Depreciation,
Depletion and Amortization 55,383 56,117 224,195 249,417 Impairment
of Oil and Gas Producing Properties — 32,756 —
948,307 199,542 211,228 1,027,036 1,868,934 Operating
Income (Loss) 87,395 81,244 552,845 (416,518 ) Other Income
(Expense): Interest Income 1,269 1,595 4,113 4,235 Other Income
2,316 2,647 7,043 9,820 Interest Expense on Long-Term Debt (29,230
) (29,083 ) (116,471 ) (117,347 ) Other Interest Expense (686 ) 241
(3,366 ) (3,697 ) Income (Loss) Before Income Taxes
61,064 56,644 444,164 (523,507 ) Income Tax Expense
(Benefit) 15,487 19,091 160,682 (232,549 )
Net Income (Loss) Available for Common Stock $ 45,577
$ 37,553 $ 283,482 $ (290,958 ) Earnings
(Loss) Per Common Share Basic $ 0.53 $ 0.44 $ 3.32
$ (3.43 ) Diluted $ 0.53 $ 0.44 $ 3.30
$ (3.43 )
Weighted Average Common Shares: Used in
Basic Calculation 85,512,637 85,016,408 85,364,929 84,847,993 Used
in Diluted Calculation 86,238,287 85,629,858 86,021,386 84,847,993
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited) September 30,
September 30, (Thousands of Dollars)
2017 2016
ASSETS Property, Plant and
Equipment $9,945,560 $9,539,581 Less - Accumulated Depreciation,
Depletion and Amortization 5,271,486
5,085,099 Net Property, Plant and Equipment
4,674,074 4,454,482
Current Assets: Cash and Temporary Cash Investments 555,530 129,972
Hedging Collateral Deposits 1,741 1,484 Receivables - Net 112,383
133,201 Unbilled Revenue 22,883 18,382 Gas Stored Underground
35,689 34,332 Materials and Supplies - at average cost 33,926
33,866 Unrecovered Purchased Gas Costs 4,623 2,440 Other Current
Assets 51,505 59,354
Total Current Assets 818,280
413,031 Other Assets: Recoverable Future Taxes
181,363 177,261 Unamortized Debt Expense 1,159 1,688 Other
Regulatory Assets 174,433 320,750 Deferred Charges 30,047 20,978
Other Investments 125,265 110,664 Goodwill 5,476 5,476 Prepaid
Post-Retirement Benefit Costs 56,370 17,649 Fair Value of
Derivative Financial Instruments 36,111 113,804 Other
742 604 Total Other Assets
610,966 768,874 Total Assets
$6,103,320 $5,636,387
CAPITALIZATION AND LIABILITIES Capitalization:
Comprehensive Shareholders' Equity Common Stock, $1 Par Value
Authorized - 200,000,000 Shares; Issued and Outstanding -
85,543,125 Shares and 85,118,886 Shares, Respectively $85,543
$85,119 Paid in Capital 796,646 771,164 Earnings Reinvested in the
Business 851,669 676,361 Accumulated Other Comprehensive Loss
(30,123 ) (5,640 ) Total Comprehensive
Shareholders' Equity 1,703,735 1,527,004 Long-Term Debt, Net of
Current Portion and Unamortized Discount and Debt Issuance Costs
2,083,681 2,086,252 Total
Capitalization 3,787,416
3,613,256 Current and Accrued Liabilities: Notes
Payable to Banks and Commercial Paper — — Current Portion of
Long-Term Debt 300,000 — Accounts Payable 126,443 108,056 Amounts
Payable to Customers — 19,537 Dividends Payable 35,500 34,473
Interest Payable on Long-Term Debt 35,031 34,900 Customer Advances
15,701 14,762 Customer Security Deposits 20,372 16,019 Other
Accruals and Current Liabilities 111,889 74,430 Fair Value of
Derivative Financial Instruments 1,103
1,560 Total Current and Accrued Liabilities
646,039 303,737 Deferred
Credits: Deferred Income Taxes 891,287 823,795 Taxes Refundable to
Customers 95,739 93,318 Cost of Removal Regulatory Liability
204,630 193,424 Other Regulatory Liabilities 113,716 99,789 Pension
and Other Post-Retirement Liabilities 149,079 277,113 Asset
Retirement Obligations 106,395 112,330 Other Deferred Credits
109,019 119,625 Total
Deferred Credits 1,669,865
1,719,394 Commitments and Contingencies —
— Total Capitalization and Liabilities
$6,103,320 $5,636,387
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) Twelve Months Ended September 30,
(Thousands of Dollars) 2017 2016
Operating Activities: Net Income (Loss) Available for Common Stock
$ 283,482 $ (290,958 ) Adjustments to Reconcile Net Income (Loss)
to Net Cash Provided by Operating Activities: Impairment of Oil and
Gas Producing Properties — 948,307 Depreciation, Depletion and
Amortization 224,195 249,417 Deferred Income Taxes 117,975 (246,794
) Excess Tax Benefits Associated with Stock-Based Compensation
Awards — (1,868 ) Stock-Based Compensation 12,262 5,755 Other
16,476 12,620 Change in: Hedging Collateral Deposits (257 ) 9,640
Receivables and Unbilled Revenue (3,380 ) (6,408 ) Gas Stored
Underground and Materials and Supplies (1,417 ) (3,532 )
Unrecovered Purchased Gas Costs (2,183 ) (2,440 ) Other Current
Assets 7,849 3,179 Accounts Payable 17,192 (40,664 ) Amounts
Payable to Customers (19,537 ) (37,241 ) Customer Advances 939
(1,474 ) Customer Security Deposits 4,353 (471 ) Other Accruals and
Current Liabilities 27,004 3,453 Other Assets (2,885 ) 1,941 Other
Liabilities 2,183 (13,483 ) Net
Cash Provided by Operating Activities $ 684,251
$ 588,979 Investing Activities:
Capital Expenditures $ (450,335 ) $ (581,576 ) Net Proceeds from
Sale of Oil and Gas Producing Properties 26,554 137,316 Other
1,216 (9,236 ) Net Cash Used in
Investing Activities $ (422,565 ) $
(453,496 ) Financing Activities: Excess Tax Benefits
Associated with Stock-Based Compensation Awards $ — $ 1,868
Dividends Paid on Common Stock (139,063 ) (134,824 ) Net Proceeds
From Issuance of Long-Term Debt 295,151 — Net Proceeds From
Issuance of Common Stock 7,784
13,849 Net Cash Provided by (Used in) Financing Activities
$ 163,872 $ (119,107 )
Net Increase in Cash and Temporary Cash Investments 425,558 16,376
Cash and Temporary Cash Investments at Beginning of Period
129,972 113,596 Cash and
Temporary Cash Investments at September 30 $ 555,530
$ 129,972
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS (UNAUDITED)
UPSTREAM BUSINESS Three Months Ended
Twelve Months Ended (Thousands of Dollars, except per share
amounts) September 30, September 30,
EXPLORATION AND
PRODUCTION SEGMENT
2017 2016 Variance 2017
2016 Variance Total Operating Revenues $ 142,952
$ 154,530 $ (11,578 ) $
614,599 $ 607,113 $ 7,486
Operating Expenses: Operation and Maintenance:
General and Administrative Expense 15,060 14,928 132 58,734 70,598
(11,864 ) Lease Operating and Transportation Expense 43,110 38,463
4,647 165,991 153,914 12,077 All Other Operation and Maintenance
Expense 5,301 2,429 2,872 13,469 12,832 637 Property, Franchise and
Other Taxes 4,178 3,553 625 15,426 13,794 1,632 Depreciation,
Depletion and Amortization 27,212 27,377 (165 ) 112,565 139,963
(27,398 ) Impairment of Oil and Gas Producing Properties —
32,756 (32,756 ) —
948,307 (948,307 ) 94,861
119,506 (24,645 ) 366,185
1,339,408 (973,223 ) Operating
Income (Loss) 48,091 35,024 13,067 248,414 (732,295) 980,709
Other Income (Expense): Interest Income 257 78 179 707 858 (151 )
Interest Expense (13,432 ) (13,552 )
120 (53,702 ) (55,434 ) 1,732
Income (Loss) Before Income Taxes 34,916 21,550
13,366 195,419 (786,871 ) 982,290 Income Tax Expense (Benefit)
4,562 4,806 (244 ) 66,093
(334,029 ) 400,122 Net Income (Loss) $ 30,354
$ 16,744 $ 13,610 $ 129,326
$ (452,842 ) $ 582,168
Net Income (Loss) Per Share (Diluted) $ 0.35
$ 0.20 $ 0.15 $ 1.50
$ (5.34 ) $ 6.84
NATIONAL FUEL GAS COMPANY AND
SUBSIDIARIES SEGMENT OPERATING RESULTS AND
STATISTICS (UNAUDITED) MIDSTREAM
BUSINESSES Three Months Ended Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30,
September 30,
PIPELINE AND
STORAGE SEGMENT
2017 2016 Variance 2017
2016 Variance Revenues from External Customers $
50,403 $ 53,047 $ (2,644 ) $ 206,615 $ 215,674 $ (9,059 )
Intersegment Revenues 21,421 22,483
(1,062 ) 87,810 90,755 (2,945 ) Total Operating
Revenues 71,824 75,530 (3,706 ) 294,425
306,429 (12,004 ) Operating Expenses:
Purchased Gas 90 (10 ) 100 271 1,048 (777 ) Operation and
Maintenance 25,618 22,256 3,362 86,135 79,402 6,733 Property,
Franchise and Other Taxes 7,067 6,767 300 27,691 26,533 1,158
Depreciation, Depletion and Amortization 10,545
11,128 (583 ) 41,196
43,273 (2,077 ) 43,320
40,141 3,179 155,293
150,256 5,037
Operating Income 28,504 35,389 (6,885 ) 139,132 156,173 (17,041 )
Other Income (Expense): Interest Income 483 242 241 1,467
770 697 Other Income 568 583 (15 ) 2,511 3,235 (724 ) Interest
Expense (8,540 ) (8,309 ) (231 )
(33,717 ) (33,327 ) (390 )
Income Before Income Taxes 21,015 27,905 (6,890 ) 109,393 126,851
(17,458 ) Income Tax Expense 7,224 11,089
(3,865 ) 40,947 50,241
(9,294 ) Net Income $ 13,791
$ 16,816 $ (3,025 ) $ 68,446
$ 76,610 $ (8,164 ) Net
Income Per Share (Diluted) $ 0.16 $ 0.20
$ (0.04 ) $ 0.80 $ 0.90
$ (0.10 ) Three Months Ended
Twelve Months Ended September 30, September 30,
GATHERING
SEGMENT
2017 2016 Variance 2017
2016 Variance Revenues from External Customers $ 29 $
71 $ (42 ) $ 115 $ 374 $ (259 ) Intersegment Revenues 24,937
23,471 1,466 107,566
89,073 18,493
Total Operating Revenues 24,966 23,542
1,424 107,681 89,447
18,234 Operating Expenses:
Operation and Maintenance 3,884 2,547 1,337 13,380 10,613 2,767
Property, Franchise and Other Taxes (124 ) 32 (156 ) (79 ) 149 (228
) Depreciation, Depletion and Amortization 4,154
3,876 278 16,162
15,282 880 7,914
6,455 1,459 29,463
26,044 3,419 Operating
Income 17,052 17,087 (35 ) 78,218 63,403 14,815 Other Income
(Expense): Interest Income 353 109 244 994 297 697 Other Income — 1
(1 ) 1 5 (4 ) Interest Expense (2,403 ) (2,091 )
(312 ) (9,142 ) (8,872 )
(270 ) Income Before Income Taxes 15,002 15,106 (104 )
70,071 54,833 15,238 Income Tax Expense 5,999
6,569 (570 ) 29,694
24,334 5,360 Net Income $ 9,003
$ 8,537 $ 466 $ 40,377
$ 30,499 $ 9,878
Net Income Per Share (Diluted) $ 0.10 $
0.10 $ — $ 0.47 $
0.36 $ 0.11
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS (UNAUDITED)
DOWNSTREAM BUSINESSES Three Months
Ended Twelve Months Ended (Thousands of Dollars, except per share
amounts) September 30, September 30,
UTILITY
SEGMENT
2017 2016 Variance 2017
2016 Variance Revenues from External Customers $
76,080 $ 67,870 $ 8,210 $ 626,899 $ 531,024 $ 95,875 Intersegment
Revenues 1,758 2,367 (609
) 13,072 13,123 (51 )
Total Operating Revenues 77,838 70,237
7,601 639,971 544,147
95,824 Operating Expenses:
Purchased Gas 17,321 10,392 6,929 252,802 166,155 86,647 Operation
and Maintenance 39,448 40,294 (846 ) 195,231 189,178 6,053
Property, Franchise and Other Taxes 9,223 9,151 72 40,860 40,131
729 Depreciation, Depletion and Amortization 13,080
13,107 (27 ) 52,582
48,618 3,964 79,072
72,944 6,128 541,475
444,082 97,393
Operating Income (Loss) (1,234 ) (2,707 ) 1,473 98,496
100,065 (1,569 ) Other Income (Expense): Interest Income 633
1,415 (782 ) 1,051 1,737 (686 ) Other Income 197 593 (396 ) 774
2,342 (1,568 ) Interest Expense (7,037 ) (5,898 )
(1,139 ) (28,492 ) (27,582 )
(910 ) Income (Loss) Before Income Taxes (7,441 )
(6,597 ) (844 ) 71,829 76,562 (4,733 ) Income Tax Expense (Benefit)
(3,273 ) (4,813 ) 1,540 24,894
25,602 (708 ) Net Income
(Loss) $ (4,168 ) $ (1,784 ) $ (2,384 )
$ 46,935 $ 50,960 $
(4,025 ) Net Income (Loss) Per Share (Diluted) $ (0.05 )
$ (0.02 ) $ (0.03 ) $ 0.55
$ 0.60 $ (0.05 )
Three Months Ended Twelve Months Ended September 30, September 30,
ENERGY MARKETING
SEGMENT
2017 2016 Variance 2017
2016 Variance Revenues from External Customers $
16,376 $ 15,750 $ 626 $ 128,586 $ 93,578 $ 35,008 Intersegment
Revenues 194 30 164
794 884 (90 )
Total Operating Revenues 16,570 15,780
790 129,380 94,462
34,918 Operating Expenses: Purchased
Gas 15,982 14,111 1,871 120,317 81,347 38,970 Operation and
Maintenance 1,717 1,575 142 6,978 6,447 531 Property, Franchise and
Other Taxes 5 7 (2 ) 5 13 (8 ) Depreciation, Depletion and
Amortization 69 70 (1 )
279 278 1 17,773
15,763 2,010
127,579 88,085 39,494
Operating Income (Loss) (1,203 ) 17 (1,220 ) 1,801
6,377 (4,576 ) Other Income (Expense): Interest Income 153
136 17 571 422 149 Other Income 19 15 4 75 58 17 Interest Expense
(10 ) (13 ) 3 (47 )
(49 ) 2 Income (Loss) Before
Income Taxes (1,041 ) 155 (1,196 ) 2,400 6,808 (4,408 ) Income Tax
Expense (Benefit) (427 ) (76 ) (351 )
891 2,460 (1,569 ) Net
Income (Loss) $ (614 ) $ 231 $
(845 ) $ 1,509 $ 4,348 $
(2,839 ) Net Income (Loss) Per Share (Diluted) $ (0.01 )
$ — $ (0.01 ) $ 0.02
$ 0.05 $ (0.03 )
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED) Three Months Ended Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30,
September 30,
ALL
OTHER
2017 2016 Variance 2017
2016 Variance Total Operating Revenues $ 862
$ 978 $ (116 ) $ 2,173
$ 3,753 $ (1,580 ) Operating
Expenses: Operation and Maintenance 374 281 93 1,718 776 942
Property, Franchise and Other Taxes 151 145 6 596 593 3
Depreciation, Depletion and Amortization 136
373 (237 ) 661 1,260
(599 ) 661 799
(138 ) 2,975 2,629
346 Operating Income (Loss) 201 179 22 (802 )
1,124 (1,926 ) Other Income (Expense): Interest Income 66 35 31 213
117 96 Other Income — 98
(98 ) — 98 (98 )
Income (Loss) Before Income Taxes 267 312 (45 ) (589 ) 1,339 (1,928
) Income Tax Expense (Benefit) 111 130
(19 ) (247 ) 561
(808 ) Net Income (Loss) $ 156 $ 182
$ (26 ) $ (342 ) $ 778
$ (1,120 ) Net Income (Loss) Per Share (Diluted) $
0.01 $ — $ 0.01 $
(0.01 ) $ 0.01 $ (0.02 )
Three Months Ended Twelve Months Ended September 30,
September 30,
CORPORATE
2017 2016 Variance 2017
2016 Variance Revenues from External Customers $ 235
$ 226 $ 9 $ 894 $ 900 $ (6 ) Intersegment Revenues 895
1,091 (196 ) 3,825
3,991 (166 ) Total Operating Revenues
1,130 1,317 (187 ) 4,719
4,891 (172 ) Operating
Expenses: Operation and Maintenance 4,832 4,740 92 15,887 15,012
875 Property, Franchise and Other Taxes 127 136 (9 ) 496 501 (5 )
Depreciation, Depletion and Amortization 187
186 1 750 743
7 5,146 5,062
84 17,133 16,256
877 Operating Loss (4,016 )
(3,745 ) (271 ) (12,414 ) (11,365 ) (1,049 ) Other Income
(Expense): Interest Income 31,318 30,389 929 125,003 123,156 1,847
Other Income 1,532 1,357 175 3,682 4,082 (400 ) Interest Expense on
Long-Term Debt (29,230 ) (29,083 ) (147 ) (116,471 ) (117,347 ) 876
Other Interest Expense (1,258 ) (705 )
(553 ) (4,159 ) (1,555 ) (2,604 )
Loss Before Income Taxes (1,654 ) (1,787 ) 133 (4,359 )
(3,029 ) (1,330 ) Income Tax Expense (Benefit) 1,291
1,386 (95 ) (1,590 )
(1,718 ) 128 Net Loss $ (2,945 )
$ (3,173 ) $ 228 $ (2,769 ) $
(1,311 ) $ (1,458 ) Net Loss Per Share
(Diluted) $ (0.03 ) $ (0.04 ) $ 0.01
$ (0.03 ) $ (0.01 ) $ (0.02 )
Three Months Ended Twelve Months Ended September 30,
September 30,
INTERSEGMENT
ELIMINATIONS
2017 2016 Variance 2017
2016 Variance Intersegment Revenues $ (49,205 )
$ (49,442 ) $ 237 $ (213,067 )
$ (197,826 ) $ (15,241 ) Operating
Expenses: Purchased Gas (22,488 ) (23,679 ) 1,191 (98,136 )
(100,568 ) 2,432 Operation and Maintenance (26,717 )
(25,763 ) (954 ) (114,931 ) (97,258 )
(17,673 ) (49,205 ) (49,442 )
237 (213,067 ) (197,826 )
(15,241 ) Operating Income — — — — — — Other Income
(Expense): Interest Income (31,994 ) (30,809 ) (1,185 ) (125,893 )
(123,122 ) (2,771 ) Interest Expense 31,994
30,809 1,185 125,893
123,122 2,771 Net Income $ —
$ — $ — $ —
$ — $ — Net Income
Per Share (Diluted) $ — $ —
$ — $ — $ —
$ —
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION (Continued) (Thousands of
Dollars) Three Months Ended Twelve Months Ended
September 30, September 30, (Unaudited) (Unaudited) Increase
Increase 2017 2016 (Decrease) 2017 2016 (Decrease)
Capital
Expenditures:
Exploration and Production $ 84,512 (1) $ 41,181 (2) $ 43,331 $
253,057 (1)(2) $ 256,104 (2)(3) $ (3,047 ) Pipeline and Storage
41,808 (1) 38,230 (2) 3,578 95,336 (1)(2) 114,250 (2)(3) (18,914 )
Gathering 8,940 (1) 10,578 (2) (1,638 ) 32,645 (1)(2) 54,293 (2)(3)
(21,648 ) Utility 24,456 (1) 25,719 (2) (1,263 ) 80,867 (1)(2)
98,007 (2)(3) (17,140 ) Energy Marketing 22 6 16
36 34 2 Total Reportable Segments
159,738 115,714 44,024 461,941 522,688 (60,747 ) All Other — — — 39
37 2 Corporate 49 136 (87 ) 137 326 (189 ) Eliminations 482
— 482 — — — Total Capital
Expenditures $ 160,269 $ 115,850 $ 44,419 $
462,117 $ 523,051 $ (60,934 )
(1)
Capital expenditures for the quarter and year ended
September 30, 2017, include accounts payable and accrued
liabilities related to capital expenditures of $36.5 million, $25.1
million, $3.9 million, and $6.7 million in the Exploration and
Production segment, Pipeline and Storage segment, Gathering segment
and Utility segment, respectively. These amounts have been excluded
from the Consolidated Statement of Cash Flows at September 30,
2017, since they represent non-cash investing activities at that
date.
(2)
Capital expenditures for the year ended September 30, 2017, exclude
capital expenditures of $25.2 million, $18.7 million, $5.3 million
and $11.2 million in the Exploration and Production segment,
Pipeline and Storage segment, Gathering segment and Utility
segment, respectively. These amounts were in accounts payable and
accrued liabilities at September 30, 2016 and paid during the year
ended September 30, 2017. These amounts were excluded from the
Consolidated Statement of Cash Flows at September 30, 2016, since
they represented non-cash investing activities at that date. These
amounts have been included in the Consolidated Statement of Cash
Flows at September 30, 2017.
(3)
Capital expenditures for the year ended September 30, 2016, exclude
capital expenditures of $46.2 million, $33.9 million, $22.4 million
and $16.5 million in the Exploration and Production segment,
Pipeline and Storage segment, Gathering segment and Utility
segment, respectively. These amounts were in accounts payable and
accrued liabilities at September 30, 2015 and paid during the year
ended September 30, 2016. These amounts were excluded from the
Consolidated Statement of Cash Flows at September 30, 2015, since
they represented non-cash investing activities at that date. These
amounts have been included in the Consolidated Statement of Cash
Flows at September 30, 2016.
DEGREE
DAYS
Percent Colder (Warmer) Than:
Three Months Ended
September 30
Normal 2017 2016 Normal (1) Last Year (1) Buffalo, NY 162
109 44 (32.7) 147.7 Erie, PA 124 97 23 (21.8) 321.7
Twelve Months Ended
September 30
Buffalo, NY 6,617 5,708 5,611 (13.7) 1.7 Erie, PA 6,147
5,179 5,182 (15.7) (0.1 ) (1) Percents compare actual
2017 degree days to normal degree days and actual 2017 degree days
to actual 2016 degree days.
NATIONAL
FUEL GAS COMPANY AND SUBSIDIARIES
EXPLORATION AND
PRODUCTION INFORMATION
Three Months Ended Twelve Months Ended September 30,
September 30, Increase Increase 2017 2016 (Decrease) 2017 2016
(Decrease)
Gas
Production/Prices:
Production (MMcf) Appalachia 35,576 34,711 865 154,093 140,457
13,636 West Coast 749 779 (30 ) 2,995 3,090
(95 ) Total Production 36,325 35,490 835
157,088 143,547 13,541 Average
Prices (Per Mcf) Appalachia $ 2.42 $ 2.24 $ 0.18 $ 2.52 $ 1.94 $
0.58 West Coast 3.77 3.62 0.15 4.00 3.25 0.75 Weighted Average 2.44
2.27 0.17 2.55 1.97 0.58 Weighted Average after Hedging 2.91 3.09
(0.18 ) 2.95 3.02 (0.07 )
Oil
Production/Prices:
Production (Thousands of Barrels) Appalachia 1 12 (11 ) 4 28 (24 )
West Coast 674 712 (38 ) 2,736 2,895
(159 ) Total Production 675 724 (49 ) 2,740
2,923 (183 ) Average Prices (Per Barrel) Appalachia $
45.71 $ 63.46 $ (17.75 ) $ 48.27 $ 52.15 $ (3.88 ) West Coast 47.44
39.06 8.38 46.14 35.26 10.88 Weighted Average 47.44 39.46 7.98
46.18 35.42 10.76 Weighted Average after Hedging 54.77 60.01 (5.24
) 53.87 57.91 (4.04 ) Total Production (Mmcfe) 40,375
39,834 541 173,528 161,085 12,443
Selected
Operating Performance Statistics:
General & Administrative Expense per Mcfe (1) $ 0.37 $ 0.37 $ —
$ 0.34 $ 0.44 $ (0.10 ) Lease Operating and Transportation Expense
per Mcfe (1)(2) $ 1.07 $ 0.97 $ 0.10 $ 0.96 $ 0.96 $ —
Depreciation, Depletion & Amortization per Mcfe (1) $ 0.67 $
0.69 $ (0.02 ) $ 0.65 $ 0.87 $ (0.22 ) (1) Refer to
page 16 for the General and Administrative Expense, Lease Operating
Expense and Depreciation, Depletion, and Amortization Expense for
the Exploration and Production segment. (2) Amounts include
transportation expense of $0.54 and $0.52 per Mcfe for the three
months ended September 30, 2017 and September 30, 2016,
respectively. Amounts include transportation expense of $0.54 and
$0.52 per Mcfe for the twelve months ended September 30, 2017 and
September 30, 2016, respectively.
NATIONAL FUEL
GAS COMPANY AND SUBSIDIARIES
EXPLORATION AND
PRODUCTION INFORMATION
Hedging Summary
for Fiscal 2018
Volume Average Hedge Price
Oil Swaps Brent 24,000 BBL $ 91.00 / BBL NYMEX 1,731,000 BBL $
53.79 / BBL
Total 1,755,000 BBL $
54.30 / BBL Gas Swaps NYMEX 42,570,000 MMBTU $ 3.34 /
MMBTU DOM 180,000 MMBTU $ 3.82 / MMBTU DAWN 8,400,000 MMBTU $ 3.08
/ MMBTU Fixed Price Physical Sales 47,992,454 MMBTU $ 2.43 / MMBTU
Total 99,142,454 MMBTU $ 2.88 /
MMBTU
Hedging Summary
for Fiscal 2019
Volume Average Hedge Price
Oil Swaps NYMEX 1,068,000 BBL $ 53.42 / BBL Gas Swaps NYMEX
27,060,000 MMBTU $ 3.17 / MMBTU DAWN 7,200,000 MMBTU $ 3.00 / MMBTU
Fixed Price Physical Sales 34,438,090 MMBTU $ 2.49 / MMBTU
Total 68,698,090 MMBTU $ 2.81 /
MMBTU
Hedging Summary
for Fiscal 2020
Volume Average Hedge Price
Oil Swaps NYMEX 324,000 BBL $ 50.52 / BBL Gas Swaps NYMEX
16,880,000 MMBTU $ 3.07 / MMBTU DAWN 7,200,000 MMBTU $ 3.00 / MMBTU
Fixed Price Physical Sales 38,428,255 MMBTU $ 2.28 / MMBTU
Total 62,508,255 MMBTU $ 2.58 /
MMBTU
Hedging Summary
for Fiscal 2021
Volume Average Hedge Price
Oil Swaps NYMEX 156,000 BBL $ 51.00 / BBL Gas Swaps NYMEX
4,840,000 MMBTU $ 3.01 / MMBTU DAWN 600,000 MMBTU $ 3.00 / MMBTU
Fixed Price Physical Sales 41,260,451 MMBTU $ 2.21 / MMBTU
Total 46,700,451 MMBTU $ 2.31 /
MMBTU
Hedging Summary
for Fiscal 2022
Volume Average Hedge Price
Oil Swaps NYMEX 156,000 BBL $ 51.00 / BBL Fixed Price
Physical Sales 39,844,042 MMBTU $ 2.23 / MMBTU
Hedging Summary
for Fiscal 2023
Volume Average Hedge Price
Fixed Price Physical Sales 35,769,734 MMBTU $ 2.25 / MMBTU
Hedging Summary
for Fiscal 2024
Volume Average Hedge Price
Fixed Price Physical Sales 20,111,036 MMBTU $ 2.24 / MMBTU
Hedging Summary
for Fiscal 2025
Volume Average Hedge Price
Fixed Price Physical Sales 2,293,200 MMBTU $ 2.18 / MMBTU
NATIONAL
FUEL GAS COMPANY AND SUBSIDIARIES
EXPLORATION AND
PRODUCTION INFORMATION
Reserve Quantity Information (Unaudited)
Gas MMcf U.S. Appalachian West Coast Total Region
Region Company Proved Developed and
Undeveloped Reserves: September 30, 2016 1,631,451 43,124 1,674,575
Extensions and Discoveries 386,649 8 386,657 Revisions of Previous
Estimates 84,480 6,369 90,849 Production (154,093 ) (2,995 )
(157,088 ) Sales of Minerals in Place (21,873 ) —
(21,873 ) September 30, 2017 1,926,614
46,506 1,973,120
Proved Developed Reserves: September 30, 2016 1,089,492
43,124 1,132,616 September 30, 2017 1,316,596 46,506 1,363,102
Oil Mbbl U.S. Appalachian West Coast Total Region
Region Company Proved Developed and
Undeveloped Reserves: September 30, 2016 73 28,936 29,009
Extensions and Discoveries — 674 674 Revisions of Previous
Estimates (12 ) 3,305 3,293 Production (4 ) (2,736 ) (2,740 ) Sales
of Minerals in Place (29 ) — (29
) September 30, 2017 28 30,179
30,207 Proved Developed Reserves:
September 30, 2016 73 28,698 28,771 September 30, 2017 28 29,771
29,799
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES Pipeline &
Storage Throughput - (millions of cubic feet - MMcf)
Three Months Ended Twelve Months Ended September 30, September 30,
Increase Increase 2017 2016 (Decrease) 2017 2016 (Decrease) Firm
Transportation - Affiliated 15,404 13,468 1,936 107,987 100,637
7,350 Firm Transportation - Non-Affiliated 176,380 169,247 7,133
671,395 640,238 31,157 Interruptible Transportation 727
5,079 (4,352 ) 5,805 23,548 (17,743 ) 192,511
187,794 4,717 785,187 764,423
20,764
Gathering Volume - (MMcf) Three Months
Ended Twelve Months Ended September 30, September 30, Increase
Increase 2017 2016 (Decrease) 2017 2016 (Decrease) Gathered Volume
- Affiliated 44,915 42,600 2,315 194,921
161,955 32,966
Utility
Throughput - (MMcf) Three Months Ended Twelve Months Ended
September 30, September 30, Increase Increase 2017 2016 (Decrease)
2017 2016 (Decrease) Retail Sales: Residential Sales 3,576 3,143
433 52,394 49,971 2,423 Commercial Sales 555 477 78 7,927 7,247 680
Industrial Sales 50 11 39 333 244
89 4,181 3,631 550 60,654 57,462 3,192 Off-System
Sales 7 — 7 1,301 1,243 58 Transportation 10,587 11,078
(491 ) 71,040 70,847 193 14,775
14,709 66 132,995 129,552 3,443
Energy Marketing Volume Three Months Ended Twelve
Months Ended September 30, September 30, Increase Increase 2017
2016 (Decrease) 2017 2016 (Decrease) Natural Gas (MMcf) 5,932
6,048 (116 ) 38,901 39,849 (948 )
NATIONAL FUEL GAS COMPANYAND
SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
In addition to financial measures calculated in accordance with
generally accepted accounting principles (GAAP), this press release
contains information regarding operating results and Adjusted
EBITDA, which are non-GAAP financial measures. The Company believes
that these non-GAAP financial measures are useful to investors
because they provide an alternative method for assessing the
Company's ongoing operating results and for comparing the Company’s
financial performance to other companies. The Company's management
uses these non-GAAP financial measures for the same purpose, and
for planning and forecasting purposes. The presentation of non-GAAP
financial measures is not meant to be a substitute for financial
measures in accordance with GAAP.
Management defines operating results as reported GAAP earnings
before items impacting comparability. The table at page 2 of this
report reconciles National Fuel's reported GAAP earnings to
operating results for the three and twelve months ended September
30, 2017 and 2016.
Management defines Adjusted EBITDA as reported GAAP earnings
before the following items: interest expense, income taxes,
depreciation, depletion and amortization, interest and other
income, impairments, and items impacting comparability.
The following tables reconcile National Fuel's reported GAAP
earnings to Adjusted EBITDA for the three and twelve months ended
September 30, 2017 and 2016:
Three
Months Ended Twelve Months Ended September 30, September 30, 2017
2016 2017 2016 (in thousands)
Reported GAAP Earnings $
45,577 $ 37,553 $ 283,482 $ (290,958 ) Depreciation, Depletion and
Amortization 55,383 56,117 224,195 249,417 Interest and Other
Income (3,585 ) (4,242 ) (11,156 ) (14,055 ) Interest Expense
29,916 28,842 119,837 121,044 Income Taxes 15,487 19,091 160,682
(232,549 ) Impairment of Oil and Gas Producing
Properties
— 32,756 — 948,307 Joint Development Agreement Professional
Fees
— — — 7,855
Adjusted EBITDA $
142,778 $ 170,117 $ 777,040 $ 789,061
Adjusted EBITDA by Segment Pipeline and Storage
Adjusted EBITDA $ 39,049 $ 46,517 $ 180,328 $ 199,446 Gathering
Adjusted EBITDA 21,206 20,963 94,380 78,685
Total Midstream Businesses Adjusted EBITDA 60,255 67,480
274,708 278,131 Exploration and Production Adjusted EBITDA 75,303
95,157 360,979 363,830 Utility Adjusted EBITDA 11,846 10,400
151,078 148,683 Energy Marketing Adjusted EBITDA (1,134 ) 87 2,080
6,655 Corporate and All Other Adjusted EBITDA (3,492 ) (3,007 )
(11,805 ) (8,238 )
Total Adjusted EBITDA $ 142,778 $
170,117 $ 777,040 $ 789,061
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
SEGMENT ADJUSTED EBITDA
Three Months Ended Twelve Months Ended September 30,
September 30, (in thousands) 2017 2016 2017
2016
Exploration and
Production Segment
Reported GAAP Earnings $ 30,354 $ 16,744 $ 129,326 $ (452,842 )
Depreciation, Depletion and Amortization 27,212 27,377 112,565
139,963 Interest and Other Income (257 ) (78 ) (707 ) (858 )
Interest Expense 13,432 13,552 53,702 55,434 Income Taxes 4,562
4,806 66,093 (334,029 ) Impairment of Oil and Gas Producing
Properties — 32,756 — 948,307 Joint Development Agreement
Professional Fees — — — 7,855 Adjusted
EBITDA $ 75,303 $ 95,157 $ 360,979 $ 363,830
Pipeline and
Storage Segment
Reported GAAP Earnings $ 13,791 $ 16,816 $ 68,446 $ 76,610
Depreciation, Depletion and Amortization 10,545 11,128 41,196
43,273 Interest and Other Income (1,051 ) (825 ) (3,978 ) (4,005 )
Interest Expense 8,540 8,309 33,717 33,327 Income Taxes 7,224
11,089 40,947 50,241 Adjusted EBITDA $
39,049 $ 46,517 $ 180,328 $ 199,446
Gathering
Segment
Reported GAAP Earnings $ 9,003 $ 8,537 $ 40,377 $ 30,499
Depreciation, Depletion and Amortization 4,154 3,876 16,162 15,282
Interest and Other Income (353 ) (110 ) (995 ) (302 ) Interest
Expense 2,403 2,091 9,142 8,872 Income Taxes 5,999 6,569
29,694 24,334 Adjusted EBITDA $ 21,206
$ 20,963 $ 94,380 $ 78,685
Utility
Segment
Reported GAAP Earnings $ (4,168 ) $ (1,784 ) $ 46,935 $ 50,960
Depreciation, Depletion and Amortization 13,080 13,107 52,582
48,618 Interest and Other Income (830 ) (2,008 ) (1,825 ) (4,079 )
Interest Expense 7,037 5,898 28,492 27,582 Income Taxes (3,273 )
(4,813 ) 24,894 25,602 Adjusted EBITDA $ 11,846
$ 10,400 $ 151,078 $ 148,683
Energy Marketing
Segment
Reported GAAP Earnings $ (614 ) $ 231 $ 1,509 $ 4,348 Depreciation,
Depletion and Amortization 69 70 279 278 Interest and Other Income
(172 ) (151 ) (646 ) (480 ) Interest Expense 10 13 47 49 Income
Taxes (427 ) (76 ) 891 2,460 Adjusted EBITDA $ (1,134
) $ 87 $ 2,080 $ 6,655
Corporate and All
Other
Reported GAAP Earnings $ (2,789 ) $ (2,991 ) $ (3,111 ) $ (533 )
Depreciation, Depletion and Amortization 323 559 1,411 2,003
Interest and Other Income (922 ) (1,070 ) (3,005 ) (4,331 )
Interest Expense (1,506 ) (1,021 ) (5,263 ) (4,220 ) Income Taxes
1,402 1,516 (1,837 ) (1,157 ) Adjusted EBITDA $
(3,492 ) $ (3,007 ) $ (11,805 ) $ (8,238 )
NATIONAL FUEL GAS COMPANY AND
SUBSIDIARIES
Quarter Ended
September 30 (unaudited)
2017 2016 Operating Revenues $ 286,937,000 $
292,472,000 Net Income Available for Common Stock $
45,577,000 $ 37,553,000 Earnings Per Common
Share Basic $ 0.53 $ 0.44 Diluted $ 0.53 $
0.44 Weighted Average Common Shares: Used in Basic
Calculation 85,512,637 85,016,408 Used in Diluted
Calculation 86,238,287 85,629,858
Twelve Months
Ended September 30 (unaudited)
Operating Revenues $ 1,579,881,000 $ 1,452,416,000
Net Income (Loss) Available for Common Stock $
283,482,000 $ (290,958,000 ) Earnings (Loss) Per
Common Share Basic $ 3.32 $ (3.43 ) Diluted $ 3.30 $
(3.43 ) Weighted Average Common Shares: Used in Basic
Calculation 85,364,929 84,847,993 Used in Diluted
Calculation 86,021,386 84,847,993
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171102006837/en/
National Fuel Gas CompanyAnalyst:Brian M.
Welsch, 716-857-7875orMedia:Karen L. Merkel,
716-857-7654
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