National Fuel Reports Second Quarter Earnings
WILLIAMSVILLE, N.Y., May 02, 2019 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE: NFG) today announced consolidated results for the second quarter of its 2019 fiscal year and for the six months ended March 31, 2019.
FISCAL 2019 SECOND QUARTER SUMMARY
- GAAP earnings of $90.6 million, or $1.04 per share, compared to $91.8 million, or $1.06 per share, in the prior year
- Adjusted operating results of $92.9 million, or $1.07 per share, compared to $95.6 million, or $1.11 per share, in the prior year (see non-GAAP reconciliation below)
- Consolidated Adjusted EBITDA of $225.8 million compared to $232.4 million in the prior year (see non-GAAP reconciliation on page 24)
- E&P segment net production of 48.8 Bcfe, an increase of 6% from the prior year
- Appalachian net natural gas production of 499 MMcf/d, up 8% from the prior year and up 1% from the first quarter
- Average natural gas prices, after the impact of hedging, of $2.58 per Mcf, up $0.06 per Mcf from the prior year
- Average oil prices, after the impact of hedging, of $61.01 per Bbl, up $2.70 per Bbl from the prior year
- Gathering segment operating revenues increased $1.6 million on 5% increase in gathered volumes
- Utility segment net income increased $2.2 million, or 7%, on higher customer margins and lower interest expense
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| (in thousands except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Reported GAAP Earnings | $ | 90,595 | $ | 91,847 | $ | 193,256 | $ | 290,501 | ||||||||
| Items impacting comparability | ||||||||||||||||
| Remeasurement of deferred income taxes under 2017 Tax Reform | — | 4,000 | (5,000 | ) | (107,000 | ) | ||||||||||
| Unrealized (gain) loss on hedge ineffectiveness (E&P) | 6,742 | (335 | ) | 237 | 98 | |||||||||||
| Tax impact of unrealized (gain) loss on hedge ineffectiveness | (1,416 | ) | 82 | (50 | ) | (24 | ) | |||||||||
| Unrealized (gain) loss on other investments (Corporate / All Other) | (3,831 | ) | — | 2,516 | — | |||||||||||
| Tax impact of unrealized (gain) loss on other investments | 805 | — | (528 | ) | — | |||||||||||
| Adjusted Operating Results | $ | 92,895 | $ | 95,594 | $ | 190,431 | $ | 183,575 | ||||||||
| Reported GAAP Earnings per share | $ | 1.04 | $ | 1.06 | $ | 2.23 | $ | 3.37 | ||||||||
| Items impacting comparability | ||||||||||||||||
| Remeasurement of deferred income taxes under 2017 Tax Reform | — | 0.05 | (0.06 | ) | (1.24 | ) | ||||||||||
| Unrealized (gain) loss on hedge ineffectiveness (E&P) | 0.08 | — | — | — | ||||||||||||
| Tax impact of unrealized (gain) loss on hedge ineffectiveness | (0.02 | ) | — | — | — | |||||||||||
| Unrealized (gain) loss on other investments (Corporate / All Other) | (0.04 | ) | — | 0.03 | — | |||||||||||
| Tax impact of unrealized (gain) loss on other investments | 0.01 | — | (0.01 | ) | — | |||||||||||
| Rounding | — | — | 0.01 | — | ||||||||||||
| Adjusted Operating Results per share | $ | 1.07 | $ | 1.11 | $ | 2.20 | $ | 2.13 | ||||||||
MANAGEMENT COMMENTS
Ronald J. Tanski, President and Chief Executive Officer of National Fuel Gas Company, stated: “The Company’s second fiscal quarter results evidence the value of our integrated business model, where the consistent earnings from each of our major operating segments contributed to our balanced consolidated earnings. Our financial results were in line with our forecast for the quarter, and keep us on track to deliver results in line with our fiscal year earnings guidance, which remains unchanged.
“Financial results in our regulated businesses were consistent with the prior year, where higher earnings in the utility business offset a portion of the expected decline in the interstate pipeline business caused by the expiration of a large transportation contract. In our Exploration & Production business, we experienced a few operational delays during the quarter, which deferred a portion of our production that was scheduled to come online this quarter into the latter part of fiscal 2019. We still expect, however, that our steady, three-rig drilling program will deliver average production growth of 15 to 20 percent through our fiscal 2022 forecast period. Given our large undeveloped acreage position, our production growth can be sustained throughout the next decade.
“We are excited that that our various Pipeline & Storage projects under development continue to take meaningful strides forward, including the recent receipt of the FERC Certificate for our Empire North project, positive legal and regulatory developments on our Northern Access project, and the commencement of construction on our Line N to Monaca project. Each of these projects will help to meet the increasing regional demand for domestic and abundant natural gas supplies. As the nation’s electric grid continues to decrease reliance on aging coal-fired plants and integrate more intermittent renewable generation facilities, more reliance will be placed on natural gas electric generation, much like many of our residential customers depend on their gas-powered back-up generators.”
FISCAL 2019 GUIDANCE
National Fuel is reaffirming its full year earnings guidance for fiscal 2019. The Company projects that earnings on a non-GAAP basis will be within the range of $3.45 to $3.65 per share, or $3.55 per share at the midpoint of the range. The Company’s earnings guidance range reflects the impact of actual results for the six months ended March 31, 2019, an update to the Company’s commodity price assumptions to reflect the current futures market, including a $10 per barrel increase in NYMEX crude oil, offset by the consolidated impact of the reduction in its production guidance discussed below. Further changes in NYMEX or Appalachian basin spot natural gas prices are not expected to have a significant impact on current year earnings as the realizations on a large portion of the Company’s remaining natural gas production are locked in with firm sales and financial hedges. Projections for consolidated and individual segment capital expenditures are unchanged.
The Company is revising its Exploration and Production segment’s fiscal 2019 net production guidance to be in the range of 205 to 215 billion cubic feet equivalent (“Bcfe”). At the midpoint of the range, the Company’s revised fiscal 2019 production guidance represents an 18 percent increase over fiscal 2018.
The 10 Bcfe, or 5 percent, decrease from the midpoint of the Company’s previous guidance range is primarily due to the following factors:
- Drilling and completion delays at DCNR tracts 007 and 100 in the EDA, which has deferred forecasted production online dates;
- The impact of the Company's ongoing testing efforts to optimize its Utica drilling and completion design in the WDA; and
- The Company's continued trend towards drilling longer laterals, which is expected to benefit the program's economics, but defers the online dates related to future development pads beyond the previous plan.
While the delays in new well turn on dates have the effect of pushing production to future periods, they are not expected to have a material impact on the ultimate recovery of the Company’s reserves or the economics of its Marcellus and Utica programs.
The Company’s earnings guidance range does not include the impact of certain items that impacted the comparability of earnings during the six months ended March 31, 2019, including: (1) the remeasurement of deferred income taxes resulting from the 2017 Tax Reform Act, which reduced the Company’s income tax expense and benefited consolidated earnings in the six months ended March 31, 2019 by $0.06 per share; (2) the full year impact of the Exploration and Production segment’s unrealized gain on hedging ineffectiveness; and (3) the unrealized loss on other investments due to the change in an accounting rule discussed on page 6, which lowered earnings by $0.02 per share. While the Company expects to record additional adjustments to one or more of these items during the remaining six months ending September 30, 2019, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.
Additional details on the Company's forecast assumptions and business segment guidance for fiscal 2019 are outlined in the table on page 8.
DISCUSSION OF RESULTS BY SEGMENT
The following discussion of earnings of each operating segment for the quarter ended March 31, 2019 is summarized in a tabular form on pages 9 and 10 of this report (earnings drivers for the six months ended March 31, 2019 are summarized on pages 11 and 12). It may be helpful to refer to those tables while reviewing this discussion. Note that management defines Adjusted Operating Results as reported GAAP earnings adjusted for items impacting comparability, and Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability.
Upstream Business
Exploration and Production Segment
The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC ("Seneca"). Seneca explores for, develops and produces natural gas and oil reserves, primarily in Pennsylvania and California.
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| (in thousands) | 2019 | 2018 | Variance | ||||||||
| GAAP Earnings | $ | 21,873 | $ | 26,537 | $ | (4,664 | ) | ||||
| Remeasurement of deferred taxes under 2017 Tax Reform | $ | — | $ | 790 | $ | (790 | ) | ||||
| Unrealized (gain) loss on hedge ineffectiveness | $ | 6,742 | $ | (335 | ) | $ | 7,077 | ||||
| Tax impact of unrealized (gain) loss on hedge ineffectiveness | $ | (1,416 | ) | $ | 82 | $ | (1,498 | ) | |||
| Adjusted Operating Results | $ | 27,199 | $ | 27,074 | $ | 125 | |||||
| Adjusted EBITDA | $ | 83,580 | $ | 78,728 | $ | 4,852 | |||||
The Exploration and Production segment’s second quarter GAAP earnings decreased $4.7 million versus the prior year, driven primarily by the net impact of unrealized gains and losses that were recognized due to hedge accounting ineffectiveness and an $0.8 million adjustment recorded in the prior year second quarter relating to the remeasurement of deferred income taxes under the 2017 Tax Reform Act. Excluding these items (see table above), the Exploration and Production segment’s second quarter earnings increased $0.1 million as the positive impacts of higher natural gas production and better realized natural gas and crude oil prices were offset by lower crude oil production, higher lease operating and transportation (“LOE”) expense, higher depreciation, depletion and amortization (“DD&A”) expense, and the impact of income taxes.
Seneca’s second quarter net production was 48.8 Bcfe, an increase of 2.7 Bcfe, or 6 percent, from the prior year. Natural gas production increased 3.3 billion cubic feet (“Bcf”), or 8 percent, due primarily to production from new Marcellus and Utica wells completed and connected to sales in Appalachia. Seneca increased production in the WDA-Clermont area by 4.4 Bcf, where Seneca has increased development activity. Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.58 per thousand cubic feet ("Mcf"), an increase of $0.06 per Mcf from the prior year. The improvement was driven primarily by higher NYMEX pricing and local spot pricing in Pennsylvania, which benefited realizations on Seneca’s unhedged production.
Seneca’s oil production for the second quarter decreased 99 thousand barrels ("Mbbl") due largely to the impact of the sale of Seneca’s Sespe properties in California in the third quarter of fiscal 2018. Seneca's average realized oil price, after the impact of hedging, was $61.01 per barrel ("Bbl"), an increase of $2.70 per Bbl over the prior year. The improvement in oil price realizations was due primarily to stronger price differentials relative to West Texas Intermediate (WTI) index prices at local sales points in California.
LOE expense increased $2.1 million due mostly to higher gathering expenses in Appalachia resulting from the increase in natural gas production coupled with an increase in well repairs, contract labor and steam fuel costs in the West Coast region, partially offset by lower operating costs in California following the sale of Seneca’s Sespe properties. DD&A expense increased $3.9 million due to the increase in production and a higher unit depletion rate.
The 2017 Tax Reform Act lowered the Company’s statutory federal income tax rate from a blended 24.5 percent in fiscal 2018 to 21 percent in fiscal 2019, which decreased the segment’s income tax expense on current period income by $1.0 million. The impact of the lower federal rate on current quarter income was more than offset by the net effect of other items that increased income tax expense by $1.9 million.
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 | |||||||||||
| March 31, | |||||||||||
| (in thousands) | 2019 | 2018 | Variance | ||||||||
| GAAP Earnings | $ | 17,749 | $ | 22,724 | $ | (4,975 | ) | ||||
| Adjusted EBITDA | $ | 41,281 | $ | 49,786 | $ | (8,505 | ) | ||||
The Pipeline and Storage segment’s second quarter GAAP earnings decreased $5.0 million versus the prior year. The decrease was driven primarily by lower operating revenues and higher operation and maintenance (“O&M”) expenses, which were partially offset by lower income tax expense due to the impact of the 2017 Tax Reform Act. The $4.4 million decrease in operating revenues was due largely to the anticipated expiration of a significant firm transportation contract on the Empire system in December 2018. The impact of the contract expiration was partially offset by an increase in Empire’s transportation rates following the Company’s rate case settlement effective January 1, 2019. The settlement remains subject to FERC approval. O&M expense increased $3.1 million due primarily to an increase in compressor and facility maintenance activity during the quarter and higher personnel costs.
The 2017 Tax Reform Act lowered the Company’s statutory federal income tax rate from a blended 24.5 percent in fiscal 2018 to 21 percent in fiscal 2019, which decreased the Pipeline and Storage segment’s income tax expense on current period income by $0.8 million.
Gathering Segment
The Gathering segment’s operations are carried out by National Fuel Gas Midstream Company, LLC’s 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 | |||||||||||
| March 31, | |||||||||||
| (in thousands) | 2019 | 2018 | Variance | ||||||||
| GAAP Earnings | $ | 12,690 | $ | 11,770 | $ | 920 | |||||
| Remeasurement of deferred taxes under 2017 Tax Reform | $ | — | $ | 400 | $ | (400 | ) | ||||
| Adjusted Operating Results | $ | 12,690 | $ | 12,170 | $ | 520 | |||||
| Adjusted EBITDA | $ | 24,598 | $ | 24,220 | $ | 378 | |||||
The $0.9 million increase in the Gathering segment’s second quarter GAAP earnings was driven primarily by higher operating revenues and the net impact of the 2017 Tax Reform Act, which were partially offset by higher O&M expenses. Operating revenues increased $1.6 million, or 6 percent, due primarily to a 2.8 Bcf increase in gathered volume from Seneca’s Appalachian natural gas production. O&M expenses increased $1.3 million in the second quarter due largely to the operation of additional compression facilities along the Covington gathering system, which were acquired from affiliate Seneca in March 2018, and an increase in normal-course preventative compressor maintenance activity at the Clermont gathering system.
The 2017 Tax Reform Act lowered the Company’s statutory federal income tax rate from a blended 24.5 percent in fiscal 2018 to 21 percent in fiscal 2019, which decreased the segment’s income tax expense on current period income by $0.6 million. Additionally, the Gathering segment recorded a $0.4 million adjustment in the prior year second quarter to the remeasurement of deferred income taxes under the 2017 Tax Reform Act, which increased income tax expense and lowered earnings in the prior 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 | |||||||||||
| March 31, | |||||||||||
| (in thousands) | 2019 | 2018 | Variance | ||||||||
| GAAP Earnings | $ | 35,589 | $ | 33,360 | $ | 2,229 | |||||
| Adjusted EBITDA | $ | 78,688 | $ | 80,591 | $ | (1,903 | ) | ||||
The $2.2 million increase in the Utility segment’s second quarter GAAP earnings was due primarily to higher customer margins and lower interest expense partially offset by the net impact of the 2017 Tax Reform Act. Higher customer usage, an increase in revenues relating to a system modernization tracking mechanism, and the impact of regulatory adjustments contributed to the increase in customer margins. Interest expense decreased $0.6 million due primarily to the Company’s early refinancing of an 8.75 percent coupon 10-year note that was set to mature in May 2019. The $1.9 million increase in O&M expense was substantially offset by the $2.3 million decrease in other deductions, which was largely a result of non-service pension and postretirement benefit costs that are now reported separately from O&M expenses following the adoption of new accounting guidance in the current year.
The 2017 Tax Reform Act lowered the Company’s statutory federal income tax rate from a blended 24.5 percent in fiscal 2018 to 21 percent in fiscal 2019, which decreased income tax expense on current period income by $1.5 million. In accordance with state regulatory orders, the Utility segment has been recording a refund provision to return the net effect of the 2017 Tax Reform Act to its customers. The refund provision recorded during the quarter as a reduction to operating revenues was $3.7 million higher than the refund provision recorded in the prior year, reducing second quarter earnings by $2.8 million and offsetting the benefit of the lower federal income tax rate.
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 | |||||||||||
| March 31, | |||||||||||
| (in thousands) | 2019 | 2018 | Variance | ||||||||
| GAAP Earnings | $ | 544 | $ | 578 | $ | (34 | ) | ||||
| Remeasurement of deferred taxes under 2017 Tax Reform | $ | — | $ | 159 | $ | (159 | ) | ||||
| Adjusted Operating Results | $ | 544 | $ | 737 | $ | (193 | ) | ||||
| Adjusted EBITDA | $ | 620 | $ | 1,048 | $ | (428 | ) | ||||
The Energy Marketing segment’s second quarter GAAP earnings were largely unchanged versus the prior year, as the slight decline in customer margins (operating revenues less purchased gas sold) was offset by the impact of an adjustment made in the prior year second quarter to the segment’s remeasurement of deferred income taxes under the 2017 Tax Reform Act.
Corporate and All Other
Corporate and All Other operations had combined earnings of $2.2 million in the current year second quarter, which was $5.3 million higher than the loss of $3.1 million in the prior year second quarter. The increase in earnings was primarily attributable to the impact of the 2017 Tax Reform Act, which resulted in a remeasurement of deferred income taxes that increased the prior year’s second quarter income tax expense by $2.7 million, and the impact of $3.8 million in unrealized gains on investments in equity securities recorded during the quarter ($3.0 million after-tax). Unrealized gains and losses on investments in equity securities are now recognized in earnings following the adoption of new accounting guidance in the current year. These unrealized gains and losses had been previously recorded as other comprehensive income. These increases were partially offset by lower operating revenues from the sale of standing timber by the Company’s land and timber operations.
EARNINGS TELECONFERENCE
The Company will host a conference call on Friday, May 3, 2019, 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 “6683755”. 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 “6683755”. Both the webcast and a telephonic replay will be available until the close of business on Friday, May 10, 2019.
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.
| Analyst Contact: | Kenneth E. Webster | 716-857-7067 |
| Media Contact: | Karen L. Merkel | 716-857-7654 |
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; 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; changes in the price of natural gas or oil; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; 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; the impact of potential information technology, cybersecurity or data security breaches; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war; 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
AND SUBSIDIARIES
GUIDANCE SUMMARY
As discussed on page 2, the Company is revising its earnings guidance for fiscal 2019. Additional details on the Company's forecast assumptions and business segment guidance for fiscal 2019 are outlined in the table below.
The Company's earnings guidance range does not include the impact of certain items that impacted the comparability of earnings during the six months ended March 31, 2019, including: (1) the remeasurement of deferred income taxes resulting from the 2017 Tax Reform Act, which reduced the Company’s income tax expense and benefited consolidated earnings in the six months ended March 31, 2019 by $0.06 per share; (2) the full year impact of the Exploration and Production segment’s unrealized gain on hedging ineffectiveness; and (3) the unrealized loss on other investments due to the change in an accounting rule discussed on page 6, which lowered earnings by $0.02 per share. While the Company expects to record additional adjustments to one or more of these items during the remaining six months ending September 30, 2019, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.
| Updated FY 2019 Guidance | Previous FY 2019 Guidance | ||||
| Consolidated Earnings per Share | $3.45 to $3.65 | $3.45 to $3.65 | |||
| Consolidated Effective Tax Rate | ~ 24% | 24% to 25% | |||
| Capital Expenditures (Millions) | |||||
| Exploration and Production | $460 - $495 | $460 - $495 | |||
| Pipeline and Storage | $120 - $150 | $120 - $150 | |||
| Gathering | $55 - $65 | $55 - $65 | |||
| Utility | $90 - $100 | $90 - $100 | |||
| Consolidated Capital Expenditures | $725 - $810 | $725 - $810 | |||
| Exploration & Production Segment Guidance | |||||
| Commodity Price Assumptions (1) | |||||
| NYMEX natural gas price | $2.60 /MMBtu | $3.25 /MMBtu | $2.75 /MMBtu | |||
| Appalachian basin spot price | $2.10 /MMBtu | $2.75 /MMBtu | $2.25 /MMBtu | |||
| NYMEX (WTI) crude oil price | $65.00 /Bbl | $55.00 /Bbl | |||
| California oil price (% of WTI) | 108 | % | 102 | % | |
| Production (Bcfe) | |||||
| East Division - Appalachia | 189 to 199 | 194 to 214 | |||
| West Division - California | ~ 16 | ~ 16 | |||
| Total Production | 205 to 215 | 210 to 230 | |||
| E&P Operating Costs ($/Mcfe) | |||||
| LOE | $0.85 - $0.90 | $0.85 - $0.90 | |||
| G&A | $0.25 - $0.35 | $0.25 - $0.35 | |||
| DD&A | $0.70 - $0.75 | $0.70 - $0.75 | |||
| Other Business Segment Guidance (Millions) | |||||
| Gathering Segment Revenues | $125 - $130 | $130 - $140 | |||
| Pipeline and Storage Segment Revenues | ~$285 | ~$285 | |||
(1) Revised commodity price assumptions reflect the Company's forecast for the remainder of fiscal 2019.
| NATIONAL FUEL GAS COMPANY | |||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS | |||||||||||||||||||||||||||
| QUARTER ENDED MARCH 31, 2019 | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Upstream | Midstream Businesses | Downstream Businesses | |||||||||||||||||||||||||
| Exploration & | Pipeline & | Energy | Corporate / | ||||||||||||||||||||||||
| (Thousands of Dollars) | Production | Storage | Gathering | Utility | Marketing | All Other | Consolidated* | ||||||||||||||||||||
| Second quarter 2018 GAAP earnings | $ | 26,537 | $ | 22,724 | $ | 11,770 | $ | 33,360 | $ | 578 | $ | (3,122 | ) | $ | 91,847 | ||||||||||||
| Items impacting comparability: | |||||||||||||||||||||||||||
| Remeasurement of deferred taxes under 2017 Tax Reform | 790 | 400 | 159 | 2,651 | 4,000 | ||||||||||||||||||||||
| Unrealized (gain) loss on hedge ineffectiveness | (335 | ) | (335 | ) | |||||||||||||||||||||||
| Tax impact of unrealized gain) loss on hedge ineffectiveness | 82 | 82 | |||||||||||||||||||||||||
| Second quarter 2018 adjusted operating results | 27,074 | 22,724 | 12,170 | 33,360 | 737 | (471 | ) | 95,594 | |||||||||||||||||||
| Drivers of adjusted operating results** | |||||||||||||||||||||||||||
| Upstream Revenues | |||||||||||||||||||||||||||
| Higher (lower) natural gas production | 6,261 | 6,261 | |||||||||||||||||||||||||
| Higher (lower) crude oil production | (4,359 | ) | (4,359 | ) | |||||||||||||||||||||||
| Higher (lower) realized natural gas prices, after hedging | 2,018 | 2,018 | |||||||||||||||||||||||||
| Higher (lower) realized crude oil prices, after hedging | 1,154 | 1,154 | |||||||||||||||||||||||||
| Midstream and All Other Revenues | |||||||||||||||||||||||||||
| Higher (lower) operating revenues | (3,336 | ) | 1,234 | (699 | ) | (2,801 | ) | ||||||||||||||||||||
| Downstream Margins*** | |||||||||||||||||||||||||||
| Impact of higher usage and weather | 618 | 618 | |||||||||||||||||||||||||
| System modernization tracker revenues | 680 | 680 | |||||||||||||||||||||||||
| Lower (higher) refund provision on tax rate change | (2,827 | ) | (2,827 | ) | |||||||||||||||||||||||
| Regulatory true-up adjustments | 886 | 886 | |||||||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||||||
| Lower (higher) lease operating and transportation expenses | (1,610 | ) | (1,610 | ) | |||||||||||||||||||||||
| Lower (higher) operating expenses | (2,359 | ) | (953 | ) | (1,255 | ) | (4,567 | ) | |||||||||||||||||||
| Lower (higher) depreciation / depletion | (2,946 | ) | (2,946 | ) | |||||||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||||||
| (Higher) lower other deductions | 1,746 | 1,746 | |||||||||||||||||||||||||
| (Higher) lower interest expense | (127 | ) | 283 | 123 | 448 | (6 | ) | 276 | 997 | ||||||||||||||||||
| Income Taxes | |||||||||||||||||||||||||||
| Impact of tax rate reduction due to 2017 Tax Reform | 1,010 | 822 | 564 | 1,535 | 23 | 22 | 3,976 | ||||||||||||||||||||
| Lower (higher) income tax expense / effective tax rate | (1,910 | ) | 81 | (4 | ) | (44 | ) | 11 | (10 | ) | (1,876 | ) | |||||||||||||||
| All other / rounding | 634 | (466 | ) | (444 | ) | 442 | (221 | ) | 6 | (49 | ) | ||||||||||||||||
| Second quarter 2019 adjusted operating results | 27,199 | 17,749 | 12,690 | 35,589 | 544 | (876 | ) | 92,895 | |||||||||||||||||||
| Items impacting comparability: | |||||||||||||||||||||||||||
| Unrealized gain (loss) on hedge ineffectiveness | (6,742 | ) | (6,742 | ) | |||||||||||||||||||||||
| Tax impact of unrealized gain (loss) on hedge ineffectiveness | 1,416 | 1,416 | |||||||||||||||||||||||||
| Unrealized gain (loss) on other investments | 3,831 | 3,831 | |||||||||||||||||||||||||
| Tax impact of unrealized gain (loss) on other investments | (805 | ) | (805 | ) | |||||||||||||||||||||||
| Second quarter 2019 GAAP earnings | $ | 21,873 | $ | 17,749 | $ | 12,690 | $ | 35,589 | $ | 544 | $ | 2,150 | $ | 90,595 | |||||||||||||
| * Amounts do not reflect intercompany eliminations | |||||||||||||||||||||||||||
| ** Operating results have been calculated using the 24.5% federal statutory rate effective for the 2018 fiscal year. The impact of the change to a 21% federal statutory rate for the 2019 fiscal year is broken out separately under the caption "Income Taxes". | |||||||||||||||||||||||||||
| *** Downstream margin defined as operating revenues less purchased gas expense. | |||||||||||||||||||||||||||
| NATIONAL FUEL GAS COMPANY | |||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE | |||||||||||||||||||||||||||
| QUARTER ENDED MARCH 31, 2019 | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Upstream | Midstream Businesses | Downstream Businesses | |||||||||||||||||||||||||
| Exploration & | Pipeline & | Energy | Corporate / | ||||||||||||||||||||||||
| Production | Storage | Gathering | Utility | Marketing | All Other | Consolidated* | |||||||||||||||||||||
| Second quarter 2018 GAAP earnings per share | $ | 0.31 | $ | 0.26 | $ | 0.14 | $ | 0.39 | $ | 0.01 | $ | (0.05 | ) | $ | 1.06 | ||||||||||||
| Items impacting comparability: | |||||||||||||||||||||||||||
| Remeasurement of deferred taxes under 2017 Tax Reform | 0.01 | 0.01 | — | 0.03 | 0.05 | ||||||||||||||||||||||
| Unrealized (gain) loss on hedge ineffectiveness | — | — | |||||||||||||||||||||||||
| Tax impact of unrealized (gain) loss on hedge ineffectiveness | — | — | |||||||||||||||||||||||||
| Rounding | (0.01 | ) | — | (0.01 | ) | — | — | 0.02 | — | ||||||||||||||||||
| Second quarter 2018 adjusted operating results per share | 0.31 | 0.26 | 0.14 | 0.39 | 0.01 | — | 1.11 | ||||||||||||||||||||
| Drivers of adjusted operating results** | |||||||||||||||||||||||||||
| Upstream Revenues | |||||||||||||||||||||||||||
| Higher (lower) natural gas production | 0.07 | 0.07 | |||||||||||||||||||||||||
| Higher (lower) crude oil production | (0.05 | ) | (0.05 | ) | |||||||||||||||||||||||
| Higher (lower) realized natural gas prices, after hedging | 0.02 | 0.02 | |||||||||||||||||||||||||
| Higher (lower) realized crude oil prices, after hedging | 0.01 | 0.01 | |||||||||||||||||||||||||
| Midstream and All Other Revenues | |||||||||||||||||||||||||||
| Higher (lower) operating revenues | (0.04 | ) | 0.01 | (0.01 | ) | (0.04 | ) | ||||||||||||||||||||
| Downstream Margins*** | |||||||||||||||||||||||||||
| Impact of higher usage and weather | 0.01 | 0.01 | |||||||||||||||||||||||||
| System modernization tracker revenues | 0.01 | 0.01 | |||||||||||||||||||||||||
| Lower (higher) refund provision on tax rate change | (0.03 | ) | (0.03 | ) | |||||||||||||||||||||||
| Regulatory true-up adjustments | 0.01 | 0.01 | |||||||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||||||
| Lower (higher) lease operating and transportation expenses | (0.02 | ) | (0.02 | ) | |||||||||||||||||||||||
| Lower (higher) operating expenses | (0.03 | ) | (0.01 | ) | (0.01 | ) | (0.05 | ) | |||||||||||||||||||
| Lower (higher) depreciation / depletion | (0.03 | ) | (0.03 | ) | |||||||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||||||
| (Higher) lower other deductions | 0.02 | 0.02 | |||||||||||||||||||||||||
| (Higher) lower interest expense | — | — | — | 0.01 | — | — | 0.01 | ||||||||||||||||||||
| Income Taxes | |||||||||||||||||||||||||||
| Impact of tax rate reduction due to 2017 Tax Reform | 0.01 | 0.01 | 0.01 | 0.02 | — | — | 0.05 | ||||||||||||||||||||
| Lower (higher) income tax expense / effective tax rate | (0.02 | ) | — | — | — | — | — | (0.02 | ) | ||||||||||||||||||
| All other / rounding | 0.01 | — | — | (0.02 | ) | — | — | (0.01 | ) | ||||||||||||||||||
| Second quarter 2019 adjusted operating results per share | 0.31 | 0.20 | 0.15 | 0.41 | 0.01 | (0.01 | ) | 1.07 | |||||||||||||||||||
| Items impacting comparability: | |||||||||||||||||||||||||||
| Unrealized gain (loss) on hedge ineffectiveness | (0.08 | ) | (0.08 | ) | |||||||||||||||||||||||
| Tax impact of unrealized gain (loss) on hedge ineffectiveness | 0.02 | 0.02 | |||||||||||||||||||||||||
| Unrealized gain (loss) on other investments | 0.04 | 0.04 | |||||||||||||||||||||||||
| Tax impact of unrealized gain (loss) on other investments | (0.01 | ) | (0.01 | ) | |||||||||||||||||||||||
| Second quarter 2019 GAAP earnings per share | $ | 0.25 | $ | 0.20 | $ | 0.15 | $ | 0.41 | $ | 0.01 | $ | 0.02 | $ | 1.04 | |||||||||||||
| * Amounts do not reflect intercompany eliminations | |||||||||||||||||||||||||||
| ** Operating results have been calculated using the 24.5% federal statutory rate effective for the 2018 fiscal year. The impact of the change to a 21% federal statutory rate for the 2019 fiscal year is broken out separately under the caption "Income Taxes". | |||||||||||||||||||||||||||
| *** Downstream margin defined as operating revenues less purchased gas expense. | |||||||||||||||||||||||||||
| NATIONAL FUEL GAS COMPANY | |||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS | |||||||||||||||||||||||||||
| SIX MONTHS ENDED MARCH 31, 2019 | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Upstream | Midstream Businesses | Downstream Businesses | |||||||||||||||||||||||||
| Exploration & | Pipeline & | Energy | Corporate / | ||||||||||||||||||||||||
| (Thousands of Dollars) | Production | Storage | Gathering | Utility | Marketing | All Other | Consolidated* | ||||||||||||||||||||
| Six months ended March 31, 2018 GAAP earnings | $ | 133,235 | $ | 61,186 | $ | 57,169 | $ | 54,353 | $ | 1,624 | $ | (17,066 | ) | $ | 290,501 | ||||||||||||
| Items impacting comparability: | |||||||||||||||||||||||||||
| Remeasurement of deferred taxes under 2017 Tax Reform | (76,510 | ) | (14,100 | ) | (34,500 | ) | 359 | 17,751 | (107,000 | ) | |||||||||||||||||
| Unrealized (gain) loss on hedge ineffectiveness | 98 | 98 | |||||||||||||||||||||||||
| Tax impact of unrealized (gain) loss on hedge ineffectiveness | (24 | ) | (24 | ) | |||||||||||||||||||||||
| Six months ended March 31, 2018 adjusted operating results | 56,799 | 47,086 | 22,669 | 54,353 | 1,983 | 685 | 183,575 | ||||||||||||||||||||
| Drivers of adjusted operating results** | |||||||||||||||||||||||||||
| Upstream Revenues | |||||||||||||||||||||||||||
| Higher (lower) natural gas production | 25,603 | 25,603 | |||||||||||||||||||||||||
| Higher (lower) crude oil production | (8,915 | ) | (8,915 | ) | |||||||||||||||||||||||
| Higher (lower) realized natural gas prices, after hedging | (989 | ) | (989 | ) | |||||||||||||||||||||||
| Higher (lower) realized crude oil prices, after hedging | 1,973 | 1,973 | |||||||||||||||||||||||||
| Midstream and All Other Revenues | |||||||||||||||||||||||||||
| Higher (lower) operating revenues | (1,997 | ) | 5,655 | (764 | ) | 2,894 | |||||||||||||||||||||
| Downstream Margins*** | |||||||||||||||||||||||||||
| Impact of higher usage and weather | 2,220 | 2,220 | |||||||||||||||||||||||||
| System modernization tracker revenues | 1,568 | 1,568 | |||||||||||||||||||||||||
| Lower (higher) refund provision on tax rate change | (2,414 | ) | (2,414 | ) | |||||||||||||||||||||||
| Higher (lower) marketing margins | (2,110 | ) | (2,110 | ) | |||||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||||||
| Lower (higher) lease operating and transportation expenses | (3,811 | ) | (3,811 | ) | |||||||||||||||||||||||
| Lower (higher) operating expenses | (1,328 | ) | (5,350 | ) | (1,502 | ) | (880 | ) | (9,060 | ) | |||||||||||||||||
| Lower (higher) property, franchise and other taxes | (1,684 | ) | (539 | ) | (2,223 | ) | |||||||||||||||||||||
| Lower (higher) depreciation / depletion | (8,439 | ) | (735 | ) | (782 | ) | (9,956 | ) | |||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||||||
| (Higher) lower other deductions | 2,103 | 2,103 | |||||||||||||||||||||||||
| (Higher) lower interest expense | 32 | 729 | 94 | 1,161 | (1 | ) | 550 | 2,565 | |||||||||||||||||||
| Income Taxes | |||||||||||||||||||||||||||
| Impact of tax rate reduction due to 2017 Tax Reform | 2,603 | 1,618 | 1,150 | 2,542 | (7 | ) | (196 | ) | 7,710 | ||||||||||||||||||
| Lower (higher) income tax expense / effective tax rate | (3,094 | ) | 1,715 | (604 | ) | (75 | ) | 172 | 97 | (1,789 | ) | ||||||||||||||||
| All other / rounding | 534 | 324 | (308 | ) | 659 | 8 | 270 | 1,487 | |||||||||||||||||||
| Six months ended March 31, 2019 adjusted operating results | 59,284 | 42,851 | 26,372 | 61,237 | 45 | 642 | 190,431 | ||||||||||||||||||||
| Items impacting comparability: | |||||||||||||||||||||||||||
| Remeasurement of deferred taxes under 2017 Tax Reform | 990 | 500 | 198 | 3,312 | 5,000 | ||||||||||||||||||||||
| Unrealized gain (loss) on hedge ineffectiveness | (237 | ) | (237 | ) | |||||||||||||||||||||||
| Tax impact of unrealized gain (loss) on hedge ineffectiveness | 50 | 50 | |||||||||||||||||||||||||
| Unrealized gain (loss) on other investments | (2,516 | ) | (2,516 | ) | |||||||||||||||||||||||
| Tax impact of unrealized gain (loss) on other investments | 528 | 528 | |||||||||||||||||||||||||
| Six months ended March 31, 2019 GAAP earnings | $ | 60,087 | $ | 42,851 | $ | 26,872 | $ | 61,237 | $ | 243 | $ | 1,966 | $ | 193,256 | |||||||||||||
| * Amounts do not reflect intercompany eliminations | |||||||||||||||||||||||||||
| ** Operating results have been calculated using the 24.5% federal statutory rate effective for the 2018 fiscal year. The impact of the change to a 21% federal statutory rate for the 2019 fiscal year is broken out separately under the caption "Income Taxes". | |||||||||||||||||||||||||||
| *** Downstream margin defined as operating revenues less purchased gas expense. | |||||||||||||||||||||||||||
| NATIONAL FUEL GAS COMPANY | |||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE | |||||||||||||||||||||||||||
| SIX MONTHS ENDED MARCH 31, 2019 | |||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||
| Upstream | Midstream Businesses | Downstream Businesses | |||||||||||||||||||||||||
| Exploration & | Pipeline & | Energy | Corporate / | ||||||||||||||||||||||||
| Production | Storage | Gathering | Utility | Marketing | All Other | Consolidated* | |||||||||||||||||||||
| Six months ended March 31, 2018 GAAP earnings per share | $ | 1.54 | $ | 0.71 | $ | 0.66 | $ | 0.63 | $ | 0.02 | $ | (0.19 | ) | $ | 3.37 | ||||||||||||
| Items impacting comparability: | |||||||||||||||||||||||||||
| Remeasurement of deferred taxes under 2017 Tax Reform | (0.89 | ) | (0.16 | ) | (0.40 | ) | — | 0.21 | (1.24 | ) | |||||||||||||||||
| Unrealized (gain) loss on hedge ineffectiveness | — | — | |||||||||||||||||||||||||
| Tax impact of unrealized (gain) loss on hedge ineffectiveness | — | — | |||||||||||||||||||||||||
| Rounding | 0.01 | — | — | — | — | (0.01 | ) | — | |||||||||||||||||||
| Six months ended March 31, 2018 adjusted operating results per share | 0.66 | 0.55 | 0.26 | 0.63 | 0.02 | 0.01 | 2.13 | ||||||||||||||||||||
| Drivers of adjusted operating results** | |||||||||||||||||||||||||||
| Upstream Revenues | |||||||||||||||||||||||||||
| Higher (lower) natural gas production | 0.30 | 0.30 | |||||||||||||||||||||||||
| Higher (lower) crude oil production | (0.10 | ) | (0.10 | ) | |||||||||||||||||||||||
| Higher (lower) realized natural gas prices, after hedging | (0.01 | ) | (0.01 | ) | |||||||||||||||||||||||
| Higher (lower) realized crude oil prices, after hedging | 0.02 | 0.02 | |||||||||||||||||||||||||
| Midstream and All Other Revenues | |||||||||||||||||||||||||||
| Higher (lower) operating revenues | (0.02 | ) | 0.07 | (0.01 | ) | 0.04 | |||||||||||||||||||||
| Downstream Margins*** | |||||||||||||||||||||||||||
| Impact of higher usage and weather | 0.03 | 0.03 | |||||||||||||||||||||||||
| System modernization tracker revenues | 0.02 | 0.02 | |||||||||||||||||||||||||
| Lower (higher) refund provision on tax rate change | (0.03 | ) | (0.03 | ) | |||||||||||||||||||||||
| Higher (lower) marketing margins | (0.02 | ) | (0.02 | ) | |||||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||||||
| Lower (higher) lease operating and transportation expenses | (0.04 | ) | (0.04 | ) | |||||||||||||||||||||||
| Lower (higher) operating expenses | (0.02 | ) | (0.06 | ) | (0.02 | ) | (0.01 | ) | (0.11 | ) | |||||||||||||||||
| Lower (higher) property, franchise and other taxes | (0.02 | ) | (0.01 | ) | (0.03 | ) | |||||||||||||||||||||
| Lower (higher) depreciation / depletion | (0.10 | ) | (0.01 | ) | (0.01 | ) | (0.12 | ) | |||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||||||
| (Higher) lower other deductions | 0.02 | 0.02 | |||||||||||||||||||||||||
| (Higher) lower interest expense | — | 0.01 | — | 0.01 | — | 0.01 | 0.03 | ||||||||||||||||||||
| Income Taxes | |||||||||||||||||||||||||||
| Impact of tax rate reduction due to 2017 Tax Reform | 0.03 | 0.02 | 0.01 | 0.03 | — | — | 0.09 | ||||||||||||||||||||
| Lower (higher) income tax expense / effective tax rate | (0.04 | ) | 0.02 | (0.01 | ) | — | — | — | (0.03 | ) | |||||||||||||||||
| All other / rounding | — | (0.01 | ) | — | 0.01 | — | 0.01 | 0.01 | |||||||||||||||||||
| Six months ended March 31, 2019 adjusted operating results per share | 0.68 | 0.49 | 0.30 | 0.71 | — | 0.02 | 2.20 | ||||||||||||||||||||
| Items impacting comparability: | |||||||||||||||||||||||||||
| Remeasurement of deferred taxes under 2017 Tax Reform | 0.01 | 0.01 | — | 0.04 | 0.06 | ||||||||||||||||||||||
| Unrealized gain (loss) on hedge ineffectiveness | — | — | |||||||||||||||||||||||||
| Tax impact of unrealized gain (loss) on hedge ineffectiveness | — | — | |||||||||||||||||||||||||
| Unrealized gain (loss) on other investments | (0.03 | ) | (0.03 | ) | |||||||||||||||||||||||
| Tax impact of unrealized gain (loss) on other investments | 0.01 | 0.01 | |||||||||||||||||||||||||
| Rounding | (0.01 | ) | (0.01 | ) | |||||||||||||||||||||||
| Six months ended March 31, 2019 GAAP earnings per share | $ | 0.69 | $ | 0.49 | $ | 0.31 | $ | 0.71 | $ | — | $ | 0.03 | $ | 2.23 | |||||||||||||
| * Amounts do not reflect intercompany eliminations | |||||||||||||||||||||||||||
| ** Operating results have been calculated using the 24.5% federal statutory rate effective for the 2018 fiscal year. The impact of the change to a 21% federal statutory rate for the 2019 fiscal year is broken out separately under the caption "Income Taxes". | |||||||||||||||||||||||||||
| *** Downstream margin defined as operating revenues less purchased gas expense. | |||||||||||||||||||||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||
| (Thousands of Dollars, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| SUMMARY OF OPERATIONS | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Operating Revenues: | ||||||||||||||||
| Utility and Energy Marketing Revenues | $ | 357,654 | $ | 339,422 | $ | 629,747 | $ | 565,147 | ||||||||
| Exploration and Production and Other Revenues | 146,467 | 147,868 | 310,403 | 288,318 | ||||||||||||
| Pipeline and Storage and Gathering Revenues | 48,423 | 53,615 | 102,641 | 107,096 | ||||||||||||
| 552,544 | 540,905 | 1,042,791 | 960,561 | |||||||||||||
| Operating Expenses: | ||||||||||||||||
| Purchased Gas | 195,037 | 176,608 | 333,697 | 270,642 | ||||||||||||
| Operation and Maintenance: | ||||||||||||||||
| Utility and Energy Marketing | 48,559 | 46,708 | 92,475 | 90,789 | ||||||||||||
| Exploration and Production and Other | 40,141 | 39,127 | 72,936 | 74,209 | ||||||||||||
| Pipeline and Storage and Gathering | 27,249 | 22,916 | 52,182 | 43,227 | ||||||||||||
| Property, Franchise and Other Taxes | 22,535 | 22,802 | 46,540 | 43,650 | ||||||||||||
| Depreciation, Depletion and Amortization | 65,664 | 61,155 | 129,918 | 116,985 | ||||||||||||
| 399,185 | 369,316 | 727,748 | 639,502 | |||||||||||||
| Operating Income | 153,359 | 171,589 | 315,043 | 321,059 | ||||||||||||
| Other Income (Expense): | ||||||||||||||||
| Other Income (Deductions) | (5,919 | ) | (13,092 | ) | (15,521 | ) | (16,594 | ) | ||||||||
| Interest Expense on Long-Term Debt | (25,273 | ) | (27,148 | ) | (50,713 | ) | (55,235 | ) | ||||||||
| Other Interest Expense | (1,787 | ) | (1,233 | ) | (2,860 | ) | (1,736 | ) | ||||||||
| Income Before Income Taxes | 120,380 | 130,116 | 245,949 | 247,494 | ||||||||||||
| Income Tax Expense (Benefit) | 29,785 | 38,269 | 52,693 | (43,007 | ) | |||||||||||
| Net Income Available for Common Stock | $ | 90,595 | $ | 91,847 | $ | 193,256 | $ | 290,501 | ||||||||
| Earnings Per Common Share | ||||||||||||||||
| Basic | $ | 1.05 | $ | 1.07 | $ | 2.24 | $ | 3.39 | ||||||||
| Diluted | $ | 1.04 | $ | 1.06 | $ | 2.23 | $ | 3.37 | ||||||||
| Weighted Average Common Shares: | ||||||||||||||||
| Used in Basic Calculation | 86,290,047 | 85,809,233 | 86,159,932 | 85,718,779 | ||||||||||||
| Used in Diluted Calculation | 86,767,673 | 86,323,636 | 86,738,809 | 86,318,892 | ||||||||||||
| NATIONAL FUEL GAS COMPANY | |||||||
| AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (Unaudited) | |||||||
| March 31, | September 30, | ||||||
| (Thousands of Dollars) | 2019 | 2018 | |||||
| ASSETS | |||||||
| Property, Plant and Equipment | $ | 10,788,894 | $ | 10,439,839 | |||
| Less - Accumulated Depreciation, Depletion and Amortization | 5,573,020 | 5,462,696 | |||||
| Net Property, Plant and Equipment | 5,215,874 | 4,977,143 | |||||
| Current Assets: | |||||||
| Cash and Temporary Cash Investments | 100,643 | 229,606 | |||||
| Hedging Collateral Deposits | 1,983 | 3,441 | |||||
| Receivables - Net | 235,586 | 141,498 | |||||
| Unbilled Revenue | 60,196 | 24,182 | |||||
| Gas Stored Underground | 6,848 | 37,813 | |||||
| Materials and Supplies - at average cost | 37,695 | 35,823 | |||||
| Unrecovered Purchased Gas Costs | 5,760 | 4,204 | |||||
| Other Current Assets | 57,586 | 68,024 | |||||
| Total Current Assets | 506,297 | 544,591 | |||||
| Other Assets: | |||||||
| Recoverable Future Taxes | 113,441 | 115,460 | |||||
| Unamortized Debt Expense | 14,922 | 15,975 | |||||
| Other Regulatory Assets | 108,193 | 112,918 | |||||
| Deferred Charges | 39,634 | 40,025 | |||||
| Other Investments | 135,022 | 132,545 | |||||
| Goodwill | 5,476 | 5,476 | |||||
| Prepaid Post-Retirement Benefit Costs | 86,802 | 82,733 | |||||
| Fair Value of Derivative Financial Instruments | 11,130 | 9,518 | |||||
| Other | 42,184 | 102 | |||||
| Total Other Assets | 556,804 | 514,752 | |||||
| Total Assets | $ | 6,278,975 | $ | 6,036,486 | |||
| CAPITALIZATION AND LIABILITIES | |||||||
| Capitalization: | |||||||
| Comprehensive Shareholders' Equity | |||||||
| Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and | |||||||
| Outstanding - 86,300,675 Shares and 85,956,814 Shares, Respectively | $ | 86,301 | $ | 85,957 | |||
| Paid in Capital | 821,837 | 820,223 | |||||
| Earnings Reinvested in the Business | 1,236,657 | 1,098,900 | |||||
| Accumulated Other Comprehensive Loss | (54,286 | ) | (67,750 | ) | |||
| Total Comprehensive Shareholders' Equity | 2,090,509 | 1,937,330 | |||||
| Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs | 2,132,488 | 2,131,365 | |||||
| Total Capitalization | 4,222,997 | 4,068,695 | |||||
| Current and Accrued Liabilities: | |||||||
| Notes Payable to Banks and Commercial Paper | — | — | |||||
| Current Portion of Long-Term Debt | — | — | |||||
| Accounts Payable | 141,851 | 160,031 | |||||
| Amounts Payable to Customers | 15,463 | 3,394 | |||||
| Dividends Payable | 36,678 | 36,532 | |||||
| Interest Payable on Long-Term Debt | 18,508 | 19,062 | |||||
| Customer Advances | 433 | 13,609 | |||||
| Customer Security Deposits | 18,519 | 25,703 | |||||
| Other Accruals and Current Liabilities | 195,797 | 132,693 | |||||
| Fair Value of Derivative Financial Instruments | 5,749 | 49,036 | |||||
| Total Current and Accrued Liabilities | 432,998 | 440,060 | |||||
| Deferred Credits: | |||||||
| Deferred Income Taxes | 618,850 | 512,686 | |||||
| Taxes Refundable to Customers | 365,380 | 370,628 | |||||
| Cost of Removal Regulatory Liability | 215,864 | 212,311 | |||||
| Other Regulatory Liabilities | 156,722 | 146,743 | |||||
| Pension and Other Post-Retirement Liabilities | 49,213 | 66,103 | |||||
| Asset Retirement Obligations | 104,138 | 108,235 | |||||
| Other Deferred Credits | 112,813 | 111,025 | |||||
| Total Deferred Credits | 1,622,980 | 1,527,731 | |||||
| Commitments and Contingencies | — | — | |||||
| Total Capitalization and Liabilities | $ | 6,278,975 | $ | 6,036,486 | |||
| NATIONAL FUEL GAS COMPANY | ||||||||
| AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| Six Months Ended | ||||||||
| March 31, | ||||||||
| (Thousands of Dollars) | 2019 | 2018 | ||||||
| Operating Activities: | ||||||||
| Net Income Available for Common Stock | $ | 193,256 | $ | 290,501 | ||||
| Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||||
| Depreciation, Depletion and Amortization | 129,918 | 116,985 | ||||||
| Deferred Income Taxes | 90,468 | (62,459 | ) | |||||
| Stock-Based Compensation | 10,731 | 7,862 | ||||||
| Other | 7,997 | 8,052 | ||||||
| Change in: | ||||||||
| Receivables and Unbilled Revenue | (130,377 | ) | (123,954 | ) | ||||
| Gas Stored Underground and Materials and Supplies | 29,093 | 28,004 | ||||||
| Unrecovered Purchased Gas Costs | (1,556 | ) | 4,197 | |||||
| Other Current Assets | 10,438 | (8,819 | ) | |||||
| Accounts Payable | 10,226 | 10,838 | ||||||
| Amounts Payable to Customers | 12,069 | 12,083 | ||||||
| Customer Advances | (13,176 | ) | (15,547 | ) | ||||
| Customer Security Deposits | (7,184 | ) | (1,399 | ) | ||||
| Other Accruals and Current Liabilities | 48,028 | 37,646 | ||||||
| Other Assets | (38,686 | ) | (9,541 | ) | ||||
| Other Liabilities | (10,410 | ) | (5,767 | ) | ||||
| Net Cash Provided by Operating Activities | $ | 340,835 | $ | 288,682 | ||||
| Investing Activities: | ||||||||
| Capital Expenditures | $ | (386,579 | ) | $ | (261,720 | ) | ||
| Net Proceeds from Sale of Oil and Gas Producing Properties | — | 17,310 | ||||||
| Other | (2,616 | ) | 5,355 | |||||
| Net Cash Used in Investing Activities | $ | (389,195 | ) | $ | (239,055 | ) | ||
| Financing Activities: | ||||||||
| Reduction of Long-Term Debt | $ | — | $ | (307,047 | ) | |||
| Dividends Paid on Common Stock | (73,197 | ) | (71,091 | ) | ||||
| Net Proceeds from Issuance (Repurchase) of Common Stock | (8,864 | ) | 2,891 | |||||
| Net Cash Used in Financing Activities | $ | (82,061 | ) | $ | (375,247 | ) | ||
| Net Decrease in Cash, Cash Equivalents, and Restricted Cash | (130,421 | ) | (325,620 | ) | ||||
| Cash, Cash Equivalents, and Restricted Cash at Beginning of Period | 233,047 | 557,271 | ||||||
| Cash, Cash Equivalents, and Restricted Cash at March 31 | $ | 102,626 | $ | 231,651 | ||||
| NATIONAL FUEL GAS COMPANY | |||||||||||||||||||||
| AND SUBSIDIARIES | |||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | |||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||
| UPSTREAM BUSINESS | |||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| (Thousands of Dollars, except per share amounts) | March 31, | March 31, | |||||||||||||||||||
| EXPLORATION AND PRODUCTION SEGMENT | 2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||||
| Total Operating Revenues | $ | 146,102 | $ | 146,411 | $ | (309 | ) | $ | 308,978 | $ | 285,552 | $ | 23,426 | ||||||||
| Operating Expenses: | |||||||||||||||||||||
| Operation and Maintenance: | |||||||||||||||||||||
| General and Administrative Expense | 17,113 | 16,748 | 365 | 32,312 | 30,350 | 1,962 | |||||||||||||||
| Lease Operating and Transportation Expense | 45,941 | 43,808 | 2,133 | 88,503 | 83,455 | 5,048 | |||||||||||||||
| All Other Operation and Maintenance Expense | 2,900 | 2,919 | (19 | ) | 5,252 | 5,454 | (202 | ) | |||||||||||||
| Property, Franchise and Other Taxes | 3,310 | 3,873 | (563 | ) | 9,673 | 7,443 | 2,230 | ||||||||||||||
| Depreciation, Depletion and Amortization | 35,888 | 31,986 | 3,902 | 70,588 | 59,411 | 11,177 | |||||||||||||||
| 105,152 | 99,334 | 5,818 | 206,328 | 186,113 | 20,215 | ||||||||||||||||
| Operating Income | 40,950 | 47,077 | (6,127 | ) | 102,650 | 99,439 | 3,211 | ||||||||||||||
| Other Income (Expense): | |||||||||||||||||||||
| Other Income (Deductions) | 275 | 12 | 263 | 554 | 15 | 539 | |||||||||||||||
| Other Interest Expense | (13,548 | ) | (13,380 | ) | (168 | ) | (26,711 | ) | (26,753 | ) | 42 | ||||||||||
| Income Before Income Taxes | 27,677 | 33,709 | (6,032 | ) | 76,493 | 72,701 | 3,792 | ||||||||||||||
| Income Tax Expense (Benefit) | 5,804 | 7,172 | (1,368 | ) | 16,406 | (60,534 | ) | 76,940 | |||||||||||||
| Net Income | $ | 21,873 | $ | 26,537 | $ | (4,664 | ) | $ | 60,087 | $ | 133,235 | $ | (73,148 | ) | |||||||
| Net Income Per Share (Diluted) | $ | 0.25 | $ | 0.31 | $ | (0.06 | ) | $ | 0.69 | $ | 1.54 | $ | (0.85 | ) | |||||||
| NATIONAL FUEL GAS COMPANY | |||||||||||||||||||||
| AND SUBSIDIARIES | |||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | |||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||
| MIDSTREAM BUSINESSES | |||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| (Thousands of Dollars, except per share amounts) | March 31, | March 31, | |||||||||||||||||||
| PIPELINE AND STORAGE SEGMENT | 2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||||
| Revenues from External Customers | $ | 48,421 | $ | 53,714 | $ | (5,293 | ) | $ | 102,639 | $ | 107,025 | $ | (4,386 | ) | |||||||
| Intersegment Revenues | 23,918 | 23,044 | 874 | 46,769 | 45,028 | 1,741 | |||||||||||||||
| Total Operating Revenues | 72,339 | 76,758 | (4,419 | ) | 149,408 | 152,053 | (2,645 | ) | |||||||||||||
| Operating Expenses: | |||||||||||||||||||||
| Purchased Gas | 510 | 55 | 455 | 813 | 161 | 652 | |||||||||||||||
| Operation and Maintenance | 22,907 | 19,782 | 3,125 | 44,540 | 37,454 | 7,086 | |||||||||||||||
| Property, Franchise and Other Taxes | 7,641 | 7,135 | 506 | 14,949 | 14,235 | 714 | |||||||||||||||
| Depreciation, Depletion and Amortization | 11,293 | 10,838 | 455 | 22,407 | 21,434 | 973 | |||||||||||||||
| 42,351 | 37,810 | 4,541 | 82,709 | 73,284 | 9,425 | ||||||||||||||||
| Operating Income | 29,988 | 38,948 | (8,960 | ) | 66,699 | 78,769 | (12,070 | ) | |||||||||||||
| Other Income (Expense): | |||||||||||||||||||||
| Other Income (Deductions) | 1,973 | 1,173 | 800 | 3,899 | 2,819 | 1,080 | |||||||||||||||
| Interest Expense | (7,500 | ) | (7,875 | ) | 375 | (14,786 | ) | (15,752 | ) | 966 | |||||||||||
| Income Before Income Taxes | 24,461 | 32,246 | (7,785 | ) | 55,812 | 65,836 | (10,024 | ) | |||||||||||||
| Income Tax Expense | 6,712 | 9,522 | (2,810 | ) | 12,961 | 4,650 | 8,311 | ||||||||||||||
| Net Income | $ | 17,749 | $ | 22,724 | $ | (4,975 | ) | $ | 42,851 | $ | 61,186 | $ | (18,335 | ) | |||||||
| Net Income Per Share (Diluted) | $ | 0.20 | $ | 0.26 | $ | (0.06 | ) | $ | 0.49 | $ | 0.71 | $ | (0.22 | ) | |||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| March 31, | March 31, | ||||||||||||||||||||
| GATHERING SEGMENT | 2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||||
| Revenues from External Customers | $ | 2 | $ | (99 | ) | $ | 101 | $ | 2 | $ | 71 | $ | (69 | ) | |||||||
| Intersegment Revenues | 29,366 | 27,832 | 1,534 | 59,056 | 51,497 | 7,559 | |||||||||||||||
| Total Operating Revenues | 29,368 | 27,733 | 1,635 | 59,058 | 51,568 | 7,490 | |||||||||||||||
| Operating Expenses: | |||||||||||||||||||||
| Operation and Maintenance | 4,752 | 3,490 | 1,262 | 8,464 | 6,474 | 1,990 | |||||||||||||||
| Property, Franchise and Other Taxes | 18 | 23 | (5 | ) | 48 | 61 | (13 | ) | |||||||||||||
| Depreciation, Depletion and Amortization | 4,673 | 4,227 | 446 | 9,351 | 8,315 | 1,036 | |||||||||||||||
| 9,443 | 7,740 | 1,703 | 17,863 | 14,850 | 3,013 | ||||||||||||||||
| Operating Income | 19,925 | 19,993 | (68 | ) | 41,195 | 36,718 | 4,477 | ||||||||||||||
| Other Income (Expense): | |||||||||||||||||||||
| Other Income (Deductions) | 189 | 337 | (148 | ) | 232 | 651 | (419 | ) | |||||||||||||
| Interest Expense | (2,345 | ) | (2,508 | ) | 163 | (4,723 | ) | (4,847 | ) | 124 | |||||||||||
| Income Before Income Taxes | 17,769 | 17,822 | (53 | ) | 36,704 | 32,522 | 4,182 | ||||||||||||||
| Income Tax Expense (Benefit) | 5,079 | 6,052 | (973 | ) | 9,832 | (24,647 | ) | 34,479 | |||||||||||||
| Net Income | $ | 12,690 | $ | 11,770 | $ | 920 | $ | 26,872 | $ | 57,169 | $ | (30,297 | ) | ||||||||
| Net Income Per Share (Diluted) | $ | 0.15 | $ | 0.14 | $ | 0.01 | $ | 0.31 | $ | 0.66 | $ | (0.35 | ) | ||||||||
| NATIONAL FUEL GAS COMPANY | |||||||||||||||||||||
| AND SUBSIDIARIES | |||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | |||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||
| DOWNSTREAM BUSINESSES | |||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| (Thousands of Dollars, except per share amounts) | March 31, | March 31, | |||||||||||||||||||
| UTILITY SEGMENT | 2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||||
| Revenues from External Customers | $ | 298,636 | $ | 283,778 | $ | 14,858 | $ | 518,647 | $ | 470,867 | $ | 47,780 | |||||||||
| Intersegment Revenues | 4,394 | 5,700 | (1,306 | ) | 7,040 | 7,882 | (842 | ) | |||||||||||||
| Total Operating Revenues | 303,030 | 289,478 | 13,552 | 525,687 | 478,749 | 46,938 | |||||||||||||||
| Operating Expenses: | |||||||||||||||||||||
| Purchased Gas | 165,235 | 151,493 | 13,742 | 277,115 | 233,418 | 43,697 | |||||||||||||||
| Operation and Maintenance | 47,795 | 45,885 | 1,910 | 90,950 | 89,203 | 1,747 | |||||||||||||||
| Property, Franchise and Other Taxes | 11,312 | 11,509 | (197 | ) | 21,365 | 21,388 | (23 | ) | |||||||||||||
| Depreciation, Depletion and Amortization | 13,365 | 13,340 | 25 | 26,656 | 26,665 | (9 | ) | ||||||||||||||
| 237,707 | 222,227 | 15,480 | 416,086 | 370,674 | 45,412 | ||||||||||||||||
| Operating Income | 65,323 | 67,251 | (1,928 | ) | 109,601 | 108,075 | 1,526 | ||||||||||||||
| Other Income (Expense): | |||||||||||||||||||||
| Other Income (Deductions) | (11,618 | ) | (13,930 | ) | 2,312 | (17,834 | ) | (20,620 | ) | 2,786 | |||||||||||
| Interest Expense | (6,263 | ) | (6,857 | ) | 594 | (12,157 | ) | (13,695 | ) | 1,538 | |||||||||||
| Income Before Income Taxes | 47,442 | 46,464 | 978 | 79,610 | 73,760 | 5,850 | |||||||||||||||
| Income Tax Expense | 11,853 | 13,104 | (1,251 | ) | 18,373 | 19,407 | (1,034 | ) | |||||||||||||
| Net Income | $ | 35,589 | $ | 33,360 | $ | 2,229 | $ | 61,237 | $ | 54,353 | $ | 6,884 | |||||||||
| Net Income Per Share (Diluted) | $ | 0.41 | $ | 0.39 | $ | 0.02 | $ | 0.71 | $ | 0.63 | $ | 0.08 | |||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| March 31, | March 31, | ||||||||||||||||||||
| ENERGY MARKETING SEGMENT | 2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||||
| Revenues from External Customers | $ | 59,018 | $ | 55,644 | $ | 3,374 | $ | 111,100 | $ | 94,280 | $ | 16,820 | |||||||||
| Intersegment Revenues | 43 | (51 | ) | 94 | 375 | 76 | 299 | ||||||||||||||
| Total Operating Revenues | 59,061 | 55,593 | 3,468 | 111,475 | 94,356 | 17,119 | |||||||||||||||
| Operating Expenses: | |||||||||||||||||||||
| Purchased Gas | 56,820 | 52,980 | 3,840 | 108,337 | 88,423 | 19,914 | |||||||||||||||
| Operation and Maintenance | 1,621 | 1,565 | 56 | 3,239 | 3,079 | 160 | |||||||||||||||
| Depreciation, Depletion and Amortization | 71 | 68 | 3 | 141 | 138 | 3 | |||||||||||||||
| 58,512 | 54,613 | 3,899 | 111,717 | 91,640 | 20,077 | ||||||||||||||||
| Operating Income (Loss) | 549 | 980 | (431 | ) | (242 | ) | 2,716 | (2,958 | ) | ||||||||||||
| Other Income (Expense): | |||||||||||||||||||||
| Other Income (Deductions) | 198 | 59 | 139 | 245 | 72 | 173 | |||||||||||||||
| Interest Expense | (8 | ) | — | (8 | ) | (13 | ) | (12 | ) | (1 | ) | ||||||||||
| Income (Loss) Before Income Taxes | 739 | 1,039 | (300 | ) | (10 | ) | 2,776 | (2,786 | ) | ||||||||||||
| Income Tax Expense (Benefit) | 195 | 461 | (266 | ) | (253 | ) | 1,152 | (1,405 | ) | ||||||||||||
| Net Income | $ | 544 | $ | 578 | $ | (34 | ) | $ | 243 | $ | 1,624 | $ | (1,381 | ) | |||||||
| Net Income Per Share (Diluted) | $ | 0.01 | $ | 0.01 | $ | — | $ | — | $ | 0.02 | $ | (0.02 | ) | ||||||||
| NATIONAL FUEL GAS COMPANY | |||||||||||||||||||||
| AND SUBSIDIARIES | |||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | |||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| (Thousands of Dollars, except per share amounts) | March 31, | March 31, | |||||||||||||||||||
| ALL OTHER | 2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||||
| Total Operating Revenues | $ | 310 | $ | 1,232 | $ | (922 | ) | $ | 1,316 | $ | 2,328 | $ | (1,012 | ) | |||||||
| Operating Expenses: | |||||||||||||||||||||
| Operation and Maintenance | 323 | 357 | (34 | ) | 583 | 671 | (88 | ) | |||||||||||||
| Property, Franchise and Other Taxes | 134 | 145 | (11 | ) | 270 | 288 | (18 | ) | |||||||||||||
| Depreciation, Depletion and Amortization | 183 | 506 | (323 | ) | 395 | 645 | (250 | ) | |||||||||||||
| 640 | 1,008 | (368 | ) | 1,248 | 1,604 | (356 | ) | ||||||||||||||
| Operating Income (Loss) | (330 | ) | 224 | (554 | ) | 68 | 724 | (656 | ) | ||||||||||||
| Other Income (Expense): | |||||||||||||||||||||
| Other Income (Deductions) | 151 | 81 | 70 | 288 | 143 | 145 | |||||||||||||||
| Income (Loss) Before Income Taxes | (179 | ) | 305 | (484 | ) | 356 | 867 | (511 | ) | ||||||||||||
| Income Tax Expense (Benefit) | (51 | ) | 98 | (149 | ) | 100 | 1,378 | (1,278 | ) | ||||||||||||
| Net Income (Loss) | $ | (128 | ) | $ | 207 | $ | (335 | ) | $ | 256 | $ | (511 | ) | $ | 767 | ||||||
| Net Income (Loss) Per Share (Diluted) | $ | — | $ | — | $ | — | $ | 0.01 | $ | — | $ | 0.01 | |||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| March 31, | March 31, | ||||||||||||||||||||
| CORPORATE | 2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||||
| Revenues from External Customers | $ | 55 | $ | 225 | $ | (170 | ) | $ | 109 | $ | 438 | $ | (329 | ) | |||||||
| Intersegment Revenues | 1,165 | 999 | 166 | 2,329 | 1,999 | 330 | |||||||||||||||
| Total Operating Revenues | 1,220 | 1,224 | (4 | ) | 2,438 | 2,437 | 1 | ||||||||||||||
| Operating Expenses: | |||||||||||||||||||||
| Operation and Maintenance | 3,955 | 3,801 | 154 | 6,751 | 7,207 | (456 | ) | ||||||||||||||
| Property, Franchise and Other Taxes | 120 | 117 | 3 | 235 | 235 | — | |||||||||||||||
| Depreciation, Depletion and Amortization | 191 | 190 | 1 | 380 | 377 | 3 | |||||||||||||||
| 4,266 | 4,108 | 158 | 7,366 | 7,819 | (453 | ) | |||||||||||||||
| Operating Loss | (3,046 | ) | (2,884 | ) | (162 | ) | (4,928 | ) | (5,382 | ) | 454 | ||||||||||
| Other Income (Expense): | |||||||||||||||||||||
| Other Income (Deductions) | 32,114 | 30,122 | 1,992 | 54,992 | 62,591 | (7,599 | ) | ||||||||||||||
| Interest Expense on Long-Term Debt | (25,273 | ) | (27,148 | ) | 1,875 | (50,713 | ) | (55,235 | ) | 4,522 | |||||||||||
| Other Interest Expense | (1,324 | ) | (1,559 | ) | 235 | (2,367 | ) | (2,942 | ) | 575 | |||||||||||
| Income (Loss) before Income Taxes | 2,471 | (1,469 | ) | 3,940 | (3,016 | ) | (968 | ) | (2,048 | ) | |||||||||||
| Income Tax Expense (Benefit) | 193 | 1,860 | (1,667 | ) | (4,726 | ) | 15,587 | (20,313 | ) | ||||||||||||
| Net Income (Loss) | $ | 2,278 | $ | (3,329 | ) | $ | 5,607 | $ | 1,710 | $ | (16,555 | ) | $ | 18,265 | |||||||
| Net Income (Loss) Per Share (Diluted) | $ | 0.02 | $ | (0.05 | ) | $ | 0.07 | $ | 0.02 | $ | (0.19 | ) | $ | 0.21 | |||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||
| March 31, | March 31, | ||||||||||||||||||||
| INTERSEGMENT ELIMINATIONS | 2019 | 2018 | Variance | 2019 | 2018 | Variance | |||||||||||||||
| Intersegment Revenues | $ | (58,886 | ) | $ | (57,524 | ) | $ | (1,362 | ) | $ | (115,569 | ) | $ | (106,482 | ) | $ | (9,087 | ) | |||
| Operating Expenses: | |||||||||||||||||||||
| Purchased Gas | (27,528 | ) | (27,920 | ) | 392 | (52,568 | ) | (51,360 | ) | (1,208 | ) | ||||||||||
| Operation and Maintenance | (31,358 | ) | (29,604 | ) | (1,754 | ) | (63,001 | ) | (55,122 | ) | (7,879 | ) | |||||||||
| (58,886 | ) | (57,524 | ) | (1,362 | ) | (115,569 | ) | (106,482 | ) | (9,087 | ) | ||||||||||
| Operating Income | — | — | — | — | — | — | |||||||||||||||
| Other Income (Expense): | |||||||||||||||||||||
| Other Income (Deductions) | (29,201 | ) | (30,946 | ) | 1,745 | (57,897 | ) | (62,265 | ) | 4,368 | |||||||||||
| Interest Expense | 29,201 | 30,946 | (1,745 | ) | 57,897 | 62,265 | (4,368 | ) | |||||||||||||
| Net Income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
| Net Income Per Share (Diluted) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
| NATIONAL FUEL GAS COMPANY | |||||||||||||||||||||||
| AND SUBSIDIARIES | |||||||||||||||||||||||
| SEGMENT INFORMATION (Continued) | |||||||||||||||||||||||
| (Thousands of Dollars) | |||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| March 31, | March 31, | ||||||||||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||||||||
| Increase | Increase | ||||||||||||||||||||||
| 2019 | 2018 | (Decrease) | 2019 | 2018 | (Decrease) | ||||||||||||||||||
| Capital Expenditures: | |||||||||||||||||||||||
| Exploration and Production | $ | 142,571 | (1) | $ | 84,559 | (3) | $ | 58,012 | $ | 262,786 | (1)(2) | $ | 159,285 | (3)(4) | $ | 103,501 | |||||||
| Pipeline and Storage | 22,674 | (1) | 15,167 | (3) | 7,507 | 52,638 | (1)(2) | 37,440 | (3)(4) | 15,198 | |||||||||||||
| Gathering | 12,680 | (1) | 19,352 | (3) | (6,672 | ) | 21,470 | (1)(2) | 32,283 | (3)(4) | (10,813 | ) | |||||||||||
| Utility | 19,735 | (1) | 15,755 | (3) | 3,980 | 35,657 | (1)(2) | 32,290 | (3)(4) | 3,367 | |||||||||||||
| Energy Marketing | 22 | 4 | 18 | 41 | 22 | 19 | |||||||||||||||||
| Total Reportable Segments | 197,682 | 134,837 | 62,845 | 372,592 | 261,320 | 111,272 | |||||||||||||||||
| All Other | — | — | — | — | 1 | (1 | ) | ||||||||||||||||
| Corporate | 85 | 15 | 70 | 103 | 44 | 59 | |||||||||||||||||
| Eliminations | — | (19,922 | ) | 19,922 | — | (19,922 | ) | 19,922 | |||||||||||||||
| Total Capital Expenditures | $ | 197,767 | $ | 114,930 | $ | 82,837 | $ | 372,695 | $ | 241,443 | $ | 131,252 | |||||||||||
(1) Capital expenditures for the quarter and six months ended March 31, 2019, include accounts payable and accrued liabilities related to capital expenditures of $53.4 million, $10.7 million, $7.4 million, and $3.4 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 March 31, 2019, since they represent non-cash investing activities at that date.
(2) Capital expenditures for the six months ended March 31, 2019, exclude capital expenditures of $51.3 million, $21.9 million, $6.1 million and $9.5 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, 2018 and paid during the six months ended March 31, 2019. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2018, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at March 31, 2019.
(3) Capital expenditures for the quarter and six months ended March 31, 2018, include accounts payable and accrued liabilities related to capital expenditures of $38.8 million, $9.0 million, $1.6 million, and $2.5 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 March 31, 2018, since they represent non-cash investing activities at that date.
(4) Capital expenditures for the six months ended March 31, 2018, exclude 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 were in accounts payable and accrued liabilities at September 30, 2017 and paid during the six months ended March 31, 2018. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2017, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at March 31, 2018.
| DEGREE DAYS | |||||||||
| Percent Colder | |||||||||
| (Warmer) Than: | |||||||||
| Three Months Ended March 31 | Normal | 2019 | 2018 | Normal (1) | Last Year (1) | ||||
| Buffalo, NY | 3,290 | 3,372 | 3,208 | 2.5 | 5.1 | ||||
| Erie, PA | 3,108 | 3,096 | 3,075 | (0.4) | 0.7 | ||||
| Six Months Ended March 31 | |||||||||
| Buffalo, NY | 5,543 | 5,697 | 5,435 | 2.8 | 4.8 | ||||
| Erie, PA | 5,152 | 5,126 | 5,104 | (0.5) | 0.4 | ||||
(1) Percents compare actual 2019 degree days to normal degree days and actual 2019 degree days to actual 2018 degree days.
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||
| EXPLORATION AND PRODUCTION INFORMATION | ||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| March 31, | March 31, | |||||||||||||||||||||||
| Increase | Increase | |||||||||||||||||||||||
| 2019 | 2018 | (Decrease) | 2019 | 2018 | (Decrease) | |||||||||||||||||||
| Gas Production/Prices: | ||||||||||||||||||||||||
| Production (MMcf) | ||||||||||||||||||||||||
| Appalachia | 44,883 | 41,403 | 3,480 | 90,188 | 76,817 | 13,371 | ||||||||||||||||||
| West Coast | 487 | 675 | (188 | ) | 989 | 1,370 | (381 | ) | ||||||||||||||||
| Total Production | 45,370 | 42,078 | 3,292 | 91,177 | 78,187 | 12,990 | ||||||||||||||||||
| Average Prices (Per Mcf) | ||||||||||||||||||||||||
| Appalachia | $ | 2.65 | $ | 2.46 | $ | 0.19 | $ | 2.79 | $ | 2.41 | $ | 0.38 | ||||||||||||
| West Coast | 6.06 | 4.40 | 1.66 | 6.40 | 4.70 | 1.70 | ||||||||||||||||||
| Weighted Average | 2.69 | 2.49 | 0.20 | 2.83 | 2.45 | 0.38 | ||||||||||||||||||
| Weighted Average after Hedging | 2.58 | 2.52 | 0.06 | 2.60 | 2.61 | (0.01 | ) | |||||||||||||||||
| Oil Production/Prices: | ||||||||||||||||||||||||
| Production (Thousands of Barrels) | ||||||||||||||||||||||||
| Appalachia | 1 | 1 | — | 2 | 2 | — | ||||||||||||||||||
| West Coast | 563 | 662 | (99 | ) | 1,134 | 1,334 | (200 | ) | ||||||||||||||||
| Total Production | 564 | 663 | (99 | ) | 1,136 | 1,336 | (200 | ) | ||||||||||||||||
| Average Prices (Per Barrel) | ||||||||||||||||||||||||
| Appalachia | $ | 47.54 | $ | 58.54 | $ | (11.00 | ) | $ | 55.93 | $ | 49.82 | $ | 6.11 | |||||||||||
| West Coast | 61.85 | 65.39 | (3.54 | ) | 63.79 | 61.61 | 2.18 | |||||||||||||||||
| Weighted Average | 61.82 | 65.39 | (3.57 | ) | 63.78 | 61.60 | 2.18 | |||||||||||||||||
| Weighted Average after Hedging | 61.01 | 58.31 | 2.70 | 61.36 | 59.05 | 2.31 | ||||||||||||||||||
| Total Production (MMcfe) | 48,754 | 46,056 | 2,698 | 97,993 | 86,203 | 11,790 | ||||||||||||||||||
| Selected Operating Performance Statistics: | ||||||||||||||||||||||||
| General & Administrative Expense per Mcfe (1) | $ | 0.35 | $ | 0.36 | $ | (0.01 | ) | $ | 0.33 | $ | 0.35 | $ | (0.02 | ) | ||||||||||
| Lease Operating and Transportation Expense per Mcfe (1)(2) | $ | 0.94 | $ | 0.95 | $ | (0.01 | ) | $ | 0.90 | $ | 0.97 | $ | (0.07 | ) | ||||||||||
| Depreciation, Depletion & Amortization per Mcfe (1) | $ | 0.74 | $ | 0.69 | $ | 0.05 | $ | 0.72 | $ | 0.69 | $ | 0.03 | ||||||||||||
(1) Refer to page 16 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment.
(2) Amounts include transportation expense of $0.56 and $0.54 per Mcfe for the three months ended March 31, 2019 and March 31, 2018, respectively. Amounts include transportation expense of $0.55 and $0.54 per Mcfe for the six months ended March 31, 2019 and March 31, 2018, respectively.
| NATIONAL FUEL GAS COMPANY | |||||||
| AND SUBSIDIARIES | |||||||
| EXPLORATION AND PRODUCTION INFORMATION | |||||||
| Hedging Summary for Remaining Six Months of Fiscal 2019 | Volume | Average Hedge Price | |||||
| Oil Swaps | |||||||
| Brent | 372,000 | BBL | $ | 63.52 / BBL | |||
| NYMEX | 534,000 | BBL | $ | 53.42 / BBL | |||
| Total | 906,000 | BBL | $ | 57.57 / BBL | |||
| Gas Swaps | |||||||
| NYMEX | 40,080,000 | MMBTU | $ | 2.93 / MMBTU | |||
| DAWN | 3,600,000 | MMBTU | $ | 3.00 / MMBTU | |||
| Fixed Price Physical Sales | 37,356,436 | MMBTU | $ | 2.61 / MMBTU | |||
| Total | 81,036,436 | MMBTU | $ | 2.78 / MMBTU | |||
| Hedging Summary for Fiscal 2020 | Volume | Average Hedge Price | |||||
| Oil Swaps | |||||||
| Brent | 1,128,000 | BBL | $ | 64.26 / BBL | |||
| NYMEX | 324,000 | BBL | $ | 50.52 / BBL | |||
| Total | 1,452,000 | BBL | $ | 61.20 / BBL | |||
| Gas Swaps | |||||||
| NYMEX | 40,990,000 | MMBTU | $ | 2.92 / MMBTU | |||
| DAWN | 7,200,000 | MMBTU | $ | 3.00 / MMBTU | |||
| Fixed Price Physical Sales | 45,816,742 | MMBTU | $ | 2.35 / MMBTU | |||
| Total | 94,006,742 | MMBTU | $ | 2.64 / MMBTU | |||
| Hedging Summary for Fiscal 2021 | Volume | Average Hedge Price | |||||
| Oil Swaps | |||||||
| Brent | 576,000 | BBL | $ | 64.48 / BBL | |||
| NYMEX | 156,000 | BBL | $ | 51.00 / BBL | |||
| Total | 732,000 | BBL | $ | 61.61 / BBL | |||
| Gas Swaps | |||||||
| NYMEX | 6,790,000 | MMBTU | $ | 2.95 / MMBTU | |||
| DAWN | 600,000 | MMBTU | $ | 3.00 / MMBTU | |||
| Fixed Price Physical Sales | 41,567,229 | MMBTU | $ | 2.22 / MMBTU | |||
| Total | 48,957,229 | MMBTU | $ | 2.33 / MMBTU | |||
| Hedging Summary for Fiscal 2022 | Volume | Average Hedge Price | |||||
| Oil Swaps | |||||||
| Brent | 300,000 | BBL | $ | 60.07 / BBL | |||
| NYMEX | 156,000 | BBL | $ | 51.00 / BBL | |||
| Total | 456,000 | BBL | $ | 56.97 / BBL | |||
| Fixed Price Physical Sales | 40,683,056 | MMBTU | $ | 2.23 / MMBTU | |||
| Hedging Summary for Fiscal 2023 | Volume | Average Hedge Price | |||||
| Fixed Price Physical Sales | 37,225,983 | MMBTU | $ | 2.26 / MMBTU | |||
| Hedging Summary for Fiscal 2024 | Volume | Average Hedge Price | |||||
| Fixed Price Physical Sales | 21,074,815 | MMBTU | $ | 2.25 / 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 | ||||||||||||||||||
| Pipeline & Storage Throughput - (millions of cubic feet - MMcf) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| Increase | Increase | |||||||||||||||||
| 2019 | 2018 | (Decrease) | 2019 | 2018 | (Decrease) | |||||||||||||
| Firm Transportation - Affiliated | 50,967 | 47,551 | 3,416 | 86,668 | 82,392 | 4,276 | ||||||||||||
| Firm Transportation - Non-Affiliated | 148,653 | 152,128 | (3,475 | ) | 304,855 | 323,989 | (19,134 | ) | ||||||||||
| Interruptible Transportation | 750 | 1,165 | (415 | ) | 1,665 | 2,046 | (381 | ) | ||||||||||
| 200,370 | 200,844 | (474 | ) | 393,188 | 408,427 | (15,239 | ) | |||||||||||
| Gathering Volume - (MMcf) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| Increase | Increase | |||||||||||||||||
| 2019 | 2018 | (Decrease) | 2019 | 2018 | (Decrease) | |||||||||||||
| Gathered Volume - Affiliated | 54,157 | 51,374 | 2,783 | 108,845 | 94,536 | 14,309 | ||||||||||||
| Utility Throughput - (MMcf) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| Increase | Increase | |||||||||||||||||
| 2019 | 2018 | (Decrease) | 2019 | 2018 | (Decrease) | |||||||||||||
| Retail Sales: | ||||||||||||||||||
| Residential Sales | 30,906 | 28,568 | 2,338 | 50,686 | 46,415 | 4,271 | ||||||||||||
| Commercial Sales | 4,712 | 4,500 | 212 | 7,558 | 7,096 | 462 | ||||||||||||
| Industrial Sales | 284 | 287 | (3 | ) | 488 | 431 | 57 | |||||||||||
| 35,902 | 33,355 | 2,547 | 58,732 | 53,942 | 4,790 | |||||||||||||
| Off-System Sales | — | 119 | (119 | ) | — | 141 | (141 | ) | ||||||||||
| Transportation | 28,928 | 29,624 | (696 | ) | 51,198 | 51,051 | 147 | |||||||||||
| 64,830 | 63,098 | 1,732 | 109,930 | 105,134 | 4,796 | |||||||||||||
| Energy Marketing Volume | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| Increase | Increase | |||||||||||||||||
| 2019 | 2018 | (Decrease) | 2019 | 2018 | (Decrease) | |||||||||||||
| Natural Gas (MMcf) | 16,191 | 16,112 | 79 | 28,610 | 28,091 | 519 | ||||||||||||
NATIONAL FUEL GAS COMPANY
AND 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 Adjusted 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 Adjusted Operating Results as reported GAAP earnings before items impacting comparability. The following table reconciles National Fuel's reported GAAP earnings to Adjusted Operating Results for the three and six months ended March 31, 2019 and 2018:
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| (in thousands except per share amounts) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Reported GAAP Earnings | $ | 90,595 | $ | 91,847 | $ | 193,256 | $ | 290,501 | ||||||||
| Items impacting comparability | ||||||||||||||||
| Remeasurement of deferred income taxes under 2017 Tax Reform | — | 4,000 | (5,000 | ) | (107,000 | ) | ||||||||||
| Unrealized (gain) loss on hedge ineffectiveness (E&P) | 6,742 | (335 | ) | 237 | 98 | |||||||||||
| Tax impact of unrealized (gain) loss on hedge ineffectiveness | (1,416 | ) | 82 | (50 | ) | (24 | ) | |||||||||
| Unrealized (gain) loss on other investments (Corporate/All Other) | (3,831 | ) | — | 2,516 | — | |||||||||||
| Tax impact of unrealized (gain) loss on other investments | 805 | — | (528 | ) | — | |||||||||||
| Adjusted Operating Results | $ | 92,895 | $ | 95,594 | $ | 190,431 | $ | 183,575 | ||||||||
| Reported GAAP Earnings per share | $ | 1.04 | $ | 1.06 | $ | 2.23 | $ | 3.37 | ||||||||
| Items impacting comparability | ||||||||||||||||
| Remeasurement of deferred income taxes under 2017 Tax Reform | — | 0.05 | (0.06 | ) | (1.24 | ) | ||||||||||
| Unrealized (gain) loss on hedge ineffectiveness (E&P) | 0.08 | — | — | — | ||||||||||||
| Tax impact of unrealized (gain) loss on hedge ineffectiveness | (0.02 | ) | — | — | — | |||||||||||
| Unrealized (gain) loss on other investments (Corporate/All Other) | (0.04 | ) | — | 0.03 | — | |||||||||||
| Tax impact of unrealized (gain) loss on other investments | 0.01 | — | (0.01 | ) | — | |||||||||||
| Rounding | — | — | 0.01 | — | ||||||||||||
| Adjusted Operating Results per share | $ | 1.07 | $ | 1.11 | $ | 2.20 | $ | 2.13 | ||||||||
Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and six months ended March 31, 2019 and 2018:
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Reported GAAP Earnings | $ | 90,595 | $ | 91,847 | $ | 193,256 | $ | 290,501 | ||||||||
| Depreciation, Depletion and Amortization | 65,664 | 61,155 | 129,918 | 116,985 | ||||||||||||
| Other (Income) Deductions | 5,919 | 13,092 | 15,521 | 16,594 | ||||||||||||
| Interest Expense | 27,060 | 28,381 | 53,573 | 56,971 | ||||||||||||
| Income Taxes | 29,785 | 38,269 | 52,693 | (43,007 | ) | |||||||||||
| Unrealized (Gain) Loss on Hedge Ineffectiveness | 6,742 | (335 | ) | 237 | 98 | |||||||||||
| Adjusted EBITDA | $ | 225,765 | $ | 232,409 | $ | 445,198 | $ | 438,142 | ||||||||
| Adjusted EBITDA by Segment | ||||||||||||||||
| Pipeline and Storage Adjusted EBITDA | $ | 41,281 | $ | 49,786 | $ | 89,106 | $ | 100,203 | ||||||||
| Gathering Adjusted EBITDA | 24,598 | 24,220 | 50,546 | 45,033 | ||||||||||||
| Total Midstream Businesses Adjusted EBITDA | 65,879 | 74,006 | 139,652 | 145,236 | ||||||||||||
| Exploration and Production Adjusted EBITDA | 83,580 | 78,728 | 173,475 | 158,948 | ||||||||||||
| Utility Adjusted EBITDA | 78,688 | 80,591 | 136,257 | 134,740 | ||||||||||||
| Energy Marketing Adjusted EBITDA | 620 | 1,048 | (101 | ) | 2,854 | |||||||||||
| Corporate and All Other Adjusted EBITDA | (3,002 | ) | (1,964 | ) | (4,085 | ) | (3,636 | ) | ||||||||
| Total Adjusted EBITDA | $ | 225,765 | $ | 232,409 | $ | 445,198 | $ | 438,142 | ||||||||
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
SEGMENT ADJUSTED EBITDA
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| (in thousands) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
| Exploration and Production Segment | ||||||||||||||||
| Reported GAAP Earnings | $ | 21,873 | $ | 26,537 | $ | 60,087 | $ | 133,235 | ||||||||
| Depreciation, Depletion and Amortization | 35,888 | 31,986 | 70,588 | 59,411 | ||||||||||||
| Other (Income) Deductions | (275 | ) | (12 | ) | (554 | ) | (15 | ) | ||||||||
| Interest Expense | 13,548 | 13,380 | 26,711 | 26,753 | ||||||||||||
| Income Taxes | 5,804 | 7,172 | 16,406 | (60,534 | ) | |||||||||||
| Unrealized (Gain) Loss on Hedge Ineffectiveness | 6,742 | (335 | ) | 237 | 98 | |||||||||||
| Adjusted EBITDA | $ | 83,580 | $ | 78,728 | $ | 173,475 | $ | 158,948 | ||||||||
| Pipeline and Storage Segment | ||||||||||||||||
| Reported GAAP Earnings | $ | 17,749 | $ | 22,724 | $ | 42,851 | $ | 61,186 | ||||||||
| Depreciation, Depletion and Amortization | 11,293 | 10,838 | 22,407 | 21,434 | ||||||||||||
| Other (Income) Deductions | (1,973 | ) | (1,173 | ) | (3,899 | ) | (2,819 | ) | ||||||||
| Interest Expense | 7,500 | 7,875 | 14,786 | 15,752 | ||||||||||||
| Income Taxes | 6,712 | 9,522 | 12,961 | 4,650 | ||||||||||||
| Adjusted EBITDA | $ | 41,281 | $ | 49,786 | $ | 89,106 | $ | 100,203 | ||||||||
| Gathering Segment | ||||||||||||||||
| Reported GAAP Earnings | $ | 12,690 | $ | 11,770 | $ | 26,872 | $ | 57,169 | ||||||||
| Depreciation, Depletion and Amortization | 4,673 | 4,227 | 9,351 | 8,315 | ||||||||||||
| Other (Income) Deductions | (189 | ) | (337 | ) | (232 | ) | (651 | ) | ||||||||
| Interest Expense | 2,345 | 2,508 | 4,723 | 4,847 | ||||||||||||
| Income Taxes | 5,079 | 6,052 | 9,832 | (24,647 | ) | |||||||||||
| Adjusted EBITDA | $ | 24,598 | $ | 24,220 | $ | 50,546 | $ | 45,033 | ||||||||
| Utility Segment | ||||||||||||||||
| Reported GAAP Earnings | $ | 35,589 | $ | 33,360 | $ | 61,237 | $ | 54,353 | ||||||||
| Depreciation, Depletion and Amortization | 13,365 | 13,340 | 26,656 | 26,665 | ||||||||||||
| Other (Income) Deductions | 11,618 | 13,930 | 17,834 | 20,620 | ||||||||||||
| Interest Expense | 6,263 | 6,857 | 12,157 | 13,695 | ||||||||||||
| Income Taxes | 11,853 | 13,104 | 18,373 | 19,407 | ||||||||||||
| Adjusted EBITDA | $ | 78,688 | $ | 80,591 | $ | 136,257 | $ | 134,740 | ||||||||
| Energy Marketing Segment | ||||||||||||||||
| Reported GAAP Earnings | $ | 544 | $ | 578 | $ | 243 | $ | 1,624 | ||||||||
| Depreciation, Depletion and Amortization | 71 | 68 | 141 | 138 | ||||||||||||
| Other (Income) Deductions | (198 | ) | (59 | ) | (245 | ) | (72 | ) | ||||||||
| Interest Expense | 8 | — | 13 | 12 | ||||||||||||
| Income Taxes | 195 | 461 | (253 | ) | 1,152 | |||||||||||
| Adjusted EBITDA | $ | 620 | $ | 1,048 | $ | (101 | ) | $ | 2,854 | |||||||
| Corporate and All Other | ||||||||||||||||
| Reported GAAP Earnings | $ | 2,150 | $ | (3,122 | ) | $ | 1,966 | $ | (17,066 | ) | ||||||
| Depreciation, Depletion and Amortization | 374 | 696 | 775 | 1,022 | ||||||||||||
| Other (Income) Deductions | (3,064 | ) | 743 | 2,617 | (469 | ) | ||||||||||
| Interest Expense | (2,604 | ) | (2,239 | ) | (4,817 | ) | (4,088 | ) | ||||||||
| Income Taxes | 142 | 1,958 | (4,626 | ) | 16,965 | |||||||||||
| Adjusted EBITDA | $ | (3,002 | ) | $ | (1,964 | ) | $ | (4,085 | ) | $ | (3,636 | ) | ||||
Kenneth E. Webster
Investor Relations
716-857-7067
David P. Bauer
Treasurer
716-857-7318