WILLIAMSVILLE, N.Y., Nov. 03, 2022 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the three months and fiscal year ended September 30, 2022.

FISCAL 2022 FOURTH QUARTER SUMMARY

  • GAAP net income of $158.1 million, or $1.71 per share, compared to GAAP net income of $87.0 million, or $0.95 per share, in the prior year, an increase of 80% per share.
  • Adjusted operating results of $109.3 million, or $1.19 per share, an increase of 25%, compared to $0.95 per share, in the prior year (see non-GAAP reconciliation on page 2).
  • Adjusted EBITDA of $271.9 million, an increase of 26%, compared to $215.9 million in the prior year (see non-GAAP reconciliation on page 26).

FISCAL 2022 HIGHLIGHTS

  • GAAP net income of $566.0 million, or $6.15 per share, an increase of 55% per share from the prior year.
  • Adjusted operating results of $541.6 million, or $5.88 per share, an increase of 37% per share from the prior year (see non-GAAP reconciliation on page 2).
  • Adjusted EBITDA of $1.2 billion, an increase of 23% from the prior year (see non-GAAP reconciliation on page 26).
  • E&P segment net production increased by 8% from the prior year, which includes the impact of the divestiture of our California operations.
  • Gathering segment revenues increased by 11% from the prior year.
  • Pipeline & Storage segment revenues increased by 10% from the prior year, primarily driven by the completion of the Company's FM100 project.
  • Utility segment invested $82.6 million in system modernization and reliability, replacing over 150 miles of older vintage mains and services, and bringing 5-year total to over $377 million.
  • Increased shareholder dividend for the 52nd consecutive year to an annual rate of $1.90 per share, an increase of 4.4%, continuing our long history of consecutive dividend increases and our 120th year of uninterrupted dividend payments.
  • Achieved an "A" certification grade under the MiQ Standard for Methane Emissions Performance, the highest available certification level, for 100% of the Company's natural gas production.
  • Continued to enhance sustainability disclosures with the publication of the inaugural Climate Report and the third annual Corporate Responsibility Report.

MANAGEMENT COMMENTS

David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “The fourth quarter was a terrific ending to a very strong fiscal year for National Fuel. Adjusted operating results for the quarter were up more than 25% compared to last year as a result of higher production at Seneca and the tailwind of improved natural gas prices.

“As we enter fiscal 2023, the outlook for National Fuel is excellent. Continued production growth at Seneca, combined with a strong outlook for natural gas prices, should translate to significant free cash flow, which will be used to deleverage the balance sheet, pursue future growth opportunities, and return capital to shareholders.”

RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

                 
    Three Months Ended   Fiscal Year Ended
    September 30,   September 30,
(in thousands except per share amounts)    2022     2021     2022     2021 
Reported GAAP Earnings   $ 158,143     $ 86,962     $ 566,021     $ 363,647  
Items impacting comparability:                
Items impacting comparability from West Coast asset sale (E&P) (1)                 41,589        
Tax impact of items impacting comparability from West Coast asset sale (1)                 (10,533 )      
Unrealized (gain) loss on derivative asset (E&P)     4,395             4,395        
Tax impact of unrealized (gain) loss on derivative asset     (1,203 )           (1,203 )      
Reversal of deferred tax valuation allowance     (24,850 )           (24,850 )      
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction     (28,406 )           (28,406 )      
Reduction of other post-retirement regulatory liability (Utility)                 (18,533 )      
Tax impact of reduction of other post-retirement regulatory liability                 3,892        
Unrealized (gain) loss on other investments (Corporate / All Other)     1,532       395       11,625       (181 )
Tax impact of unrealized (gain) loss on other investments     (322 )     (83 )     (2,441 )     38  
Impairment of oil and gas properties (E&P)                       76,152  
Tax impact of impairment of oil and gas properties                       (20,980 )
Gain on sale of timber properties (Corporate / All Other)                       (51,066 )
Tax impact of gain on sale of timber properties                       14,069  
Premium paid on early redemption of debt                       15,715  
Tax impact of premium paid on early redemption of debt             —                       —                       —                       (4,321 )
Adjusted Operating Results   $ 109,289     $ 87,274     $ 541,556     $ 393,073  
                 
Reported GAAP Earnings Per Share   $ 1.71     $ 0.95     $ 6.15     $ 3.97  
Items impacting comparability:                
Items impacting comparability from West Coast asset sale, net of tax (E&P) (1)                 0.34        
Unrealized (gain) loss on derivative asset, net of tax (E&P)     0.03             0.03        
Reversal of deferred tax valuation allowance     (0.27 )           (0.27 )      
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction     (0.31 )           (0.31 )      
Reduction of other post-retirement regulatory liability, net of tax (Utility)                 (0.16 )      
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)     0.01             0.10        
Impairment of oil and gas properties, net of tax (E&P)                       0.60  
Gain on sale of timber properties, net of tax (Corporate / All Other)                       (0.40 )
Premium paid on early redemption of debt, net of tax                       0.12  
Rounding     0.02                    
Adjusted Operating Results Per Share   $ 1.19     $ 0.95     $ 5.88     $ 4.29  


(1)   Refer to non-GAAP reconciliation on page 25 for a separate breakout of items impacting comparability from the West Coast asset sale.

FISCAL 2023 GUIDANCE UPDATE

National Fuel is revising its fiscal 2023 earnings guidance to reflect updated forecast assumptions and projections, including the impact of revised natural gas price expectations since the Company’s preliminary guidance was announced in August 2022. The Company is now projecting that earnings will be within the range of $6.40 to $6.90 per share, an increase of 13% from the Company’s 2022 adjusted operating results at the midpoint of the updated guidance range.

The Company is now assuming that NYMEX natural gas prices will average $6.00 per MMBtu for the first six months of fiscal 2023 (October-March) and $4.75 per MMBtu for the second half of fiscal 2023 (April-September). For guidance purposes, the Company’s updated natural gas price projections approximate the current NYMEX forward curve and consider the impact of local sales point differentials and new physical firm sales, transportation, and financial hedge contracts.

Consistent with preliminary guidance, the Exploration and Production segment’s fiscal 2023 net production guidance range of 370 to 390 Bcfe remains unchanged. Seneca currently has firm sales contracts in place for approximately 88% of its projected fiscal 2023 Appalachian production, limiting its exposure to in-basin markets. Approximately 67% of Seneca’s expected Appalachian production is either matched by a financial hedge, including a combination of swaps and no-cost collars, or were entered into at a fixed price.

The Company’s consolidated and individual segment capital expenditures guidance also remain unchanged from the preliminary guidance. Other guidance assumptions remain largely unchanged from the previous guidance. The details are outlined in the table on page 8.

DISCUSSION OF FOURTH QUARTER RESULTS BY SEGMENT

The following earnings discussion of each operating segment for the quarter ended September 30, 2022 is summarized in a tabular form on pages 9 and 10 of this report (earnings drivers for the fiscal year ended September 30, 2022 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 primarily natural gas reserves in Pennsylvania.

  Three Months Ended
  September 30,
(in thousands)  2022     2021   Variance
GAAP Earnings $ 116,077     $ 55,703   $ 60,374  
Unrealized (gain) loss on derivative asset, net of tax   3,192           3,192  
Reversal of deferred tax valuation allowance   (28,589 )         (28,589 )
Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction   (16,152 )         (16,152 )
Adjusted Operating Results $ 74,528     $ 55,703   $ 18,825  
           
Adjusted EBITDA $ 166,238     $ 120,588   $ 45,650  

Seneca’s fourth quarter GAAP earnings, which increased $60.4 million versus the prior year, include the impact of several items noted in the table above. In particular, Seneca reversed a valuation allowance of $28.6 million on deferred tax assets related to certain state net operating loss and credit carryforwards as these deferred tax assets are now expected to be realized in the future. Seneca also recorded an income tax benefit of $16.2 million from the remeasurement of deferred state income taxes related to a prospective series of reductions in the Pennsylvania state corporate income tax rate that was signed into law in July 2022. In addition, during the fourth quarter, Seneca recognized an unrealized loss of $4.4 million ($3.2 million after-tax) due to a reduction in the implied fair value of an asset related to contingent consideration in connection with the June 2022 sale of Seneca's California assets.

Excluding these items noted above, Seneca’s earnings increased $18.8 million primarily due to higher realized natural gas prices and higher natural gas production, which were partially offset by the loss of earnings from Seneca's California assets that were sold in June, as well as higher Appalachian operating expenses, higher interest expense and a higher effective income tax rate.

Seneca produced 87.9 Bcfe during the fourth quarter, an increase of 8.3 Bcfe, or 10%, from the prior year. This is a result of an 11.6 Bcf increase in natural gas production primarily due to growth from Seneca's development program in Appalachia. Seneca's crude oil production decreased 545 MBbls versus the prior year due to Seneca's aforementioned sale of its California assets in June 2022.

Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.84 per Mcf, an increase of $0.47 per Mcf from the prior year. This increase was primarily due to higher NYMEX prices and higher spot prices at local sales points in Pennsylvania.

Lease operating and transportation ("LOE") expense was $0.71 per Mcfe, a decrease of $0.14 per Mcfe from the prior year. General and administrative expense was $0.18 per Mcfe, a decrease of $0.03 per Mcfe from the prior year. Depreciation, depletion and amortization ("DD&A") expense was $0.60 per Mcfe, an increase of $0.03 per Mcfe from the prior year.

On an absolute basis, LOE expense decreased $5.3 million primarily due to the impact of the third quarter sale of Seneca's California assets, partly offset by increases in LOE expense from higher transportation and gathering costs in Appalachia as a result of increased production, as well as higher workover and rental expenses in Appalachia. LOE expense includes $52.1 million in intercompany expense for gathering and compression services used to connect Seneca's Appalachian production to sales points along interstate pipelines. The decrease in Seneca's other operating expenses of $3.1 million was also primarily due to the impact of the third quarter sale of Seneca's California assets. DD&A expense increased $7.8 million due to higher natural gas production and a higher per unit DD&A rate, which was driven by an increase in capitalized costs in Seneca's full cost pool.

Interest expense increased $2.5 million due primarily to a higher weighted average interest rate on intercompany short-term borrowings. Excluding the impact of the elimination of the valuation allowance and remeasurement of deferred income taxes from the reduction in the state income tax rate in Pennsylvania, both of which are discussed above, Seneca's effective income tax rate increased. This increase was primarily driven by a reduction to the valuation allowance recorded in the fiscal 2021 fourth quarter.

Proved Reserves Year-End Update

Seneca’s total proved reserves at September 30, 2022 were 4,172 Bcfe, an increase of 319 Bcfe, or 8%, from September 30, 2021. Seneca sold 154 Bcfe of proved reserves (81% of which were oil reserves) with the sale of its California assets, which represented substantially all of Seneca's oil reserves. As a result of the sale, the proved reserves base is now comprised of approximately 100% natural gas. Seneca also sold another 21 Bcfe of proved reserves during fiscal 2022 related to the sale of certain gas assets in Tioga County, Pennsylvania. Seneca’s proved developed reserves at the end of fiscal 2022 were 3,314 Bcfe, representing 79% of total proved reserves, compared to 84% a year ago. In fiscal 2022, Seneca recorded 839 Bcfe of proved reserve extensions and discoveries, and 8 Bcfe of net positive revisions due primarily to certain price-related revisions, improvements in well performance and changes in development plans. Adjusting for sales, Seneca replaced 240% of its fiscal 2022 production.

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
  September 30,
(in thousands) 2022   2021   Variance
GAAP Earnings $ 25,320   $ 21,482   $ 3,838
           
Adjusted EBITDA $ 59,819   $ 49,131   $ 10,688

The Pipeline and Storage segment’s fourth quarter GAAP earnings increased $3.8 million versus the prior year primarily due to an increase in operating revenues, partially offset by higher operation and maintenance ("O&M") expense, higher DD&A expense and a higher effective income tax rate. The increase in operating revenues of $12.7 million was primarily attributable to higher transportation revenues from Supply Corporation's FM100 Project, which was placed in service in December 2021. O&M expense increased $2.1 million primarily due to an increase in personnel costs and compressor station maintenance costs. The increase in DD&A expense of $1.7 million was primarily attributable to incremental depreciation expense from the FM100 Project. The increase in the Pipeline and Storage segment's effective income tax rate was primarily driven by a reduction in benefits associated with the tax sharing agreement with affiliated companies combined with higher state income taxes due to higher pre-tax earnings.

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 primarily delivers Seneca’s gross Appalachian production to the interstate pipeline system.

  Three Months Ended
  September 30,
(in thousands)  2022     2021   Variance
GAAP Earnings $ 31,224     $ 18,597   $ 12,627  
Reversal of deferred tax valuation allowance   3,739           3,739  
Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction   (11,856 )         (11,856 )
Adjusted Operating Results $ 23,107     $ 18,597   $ 4,510  
           
Adjusted EBITDA $ 43,335     $ 37,858   $ 5,477  

The Gathering segment’s fourth quarter GAAP earnings increased $12.6 million versus the prior year. Earnings were positively impacted by an $11.9 million income tax benefit recorded due to the remeasurement of deferred income taxes related to the aforementioned reduction in the Pennsylvania corporate income tax rate. Earnings were also impacted by the Gathering segment's recognition of a $3.7 million increase in income tax expense that was recorded as an offset to the reversal of a valuation allowance described above in the Exploration and Production segment due to the Gathering and Exploration and Production segments' subsidiaries filing a combined state tax return. Excluding these items, the Gathering segment's earnings increased $4.5 million. The increase was primarily driven by higher operating revenues, which were partially offset by higher O&M expense. Operating revenues increased $6.7 million, or 14%, primarily driven by a 14.0 Bcf increase in gathered volumes due to an increase in natural gas production from both Seneca and non-affiliated parties. The increase in O&M expense of $1.3 million was primarily due to higher costs for materials and higher compression leasing expenses, which are both primarily attributable to higher throughput, as well as an increase in personnel costs.

Downstream Business

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
  September 30,
(in thousands)  2022     2021    Variance
GAAP Earnings $ (10,852 )   $ (5,587 )   $ (5,265 )
           
Adjusted EBITDA $ 6,270     $ 11,093     $ (4,823 )

The Utility segment’s fourth quarter net loss was $5.3 million higher than the net loss in the prior-year fourth quarter primarily due to higher O&M and interest expense, partially offset by higher customer margin (operating revenues less purchased gas sold) and a decrease in non-service post-retirement benefit costs recorded in other income (deductions). The increase in O&M expense of $6.5 million was primarily attributable to higher personnel costs and higher pipeline integrity expenses. Interest expense increased $1.7 million due primarily to a higher weighted average interest rate on intercompany short-term borrowings. The increase in customer margin was due primarily to the positive impact of adjustments related to certain regulatory rate and cost recovery mechanisms subject to annual reconciliation, partially offset by a reduction in base rates in Pennsylvania as a result of a rate proceeding that concluded in the second quarter whereby the Utility agreed to lower the amount of other post-employment benefit (“OPEB”) expense it recovers in rates. With the elimination of OPEB expenses in rates, there was also a decrease in non-service post-retirement benefit costs recorded in other income (deductions).

Corporate and All Other

The Company’s operations that are included in Corporate and All Other generated a combined net loss of $3.6 million in the current year fourth quarter, which was $0.4 million higher than the combined net loss of $3.2 million in the prior-year fourth quarter. The increase in net loss was primarily driven by a higher amount of unrealized losses on investment securities recognized in the current quarter as compared to the prior-year fourth quarter.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, November 4, 2022, at 11 a.m. Eastern Time to discuss this announcement. To pre-register for this call (recommended), please visit https://www.netroadshow.com/events/login?show=d40ff074&confId=42546. After registering, you will receive your access details via email. To join by telephone on the day of the call, dial U.S. toll free 1-844–200–6205 and provide Access Code 879958. The teleconference will be simultaneously webcast online and can be accessed on the NFG Investor Relations website at investor.nationalfuelgas.com. An audio replay of the teleconference call will be available until Friday November 11, 2022. To access the telephone replay, dial U.S. toll free 866-813-9403 and provide Access Code 533110.

National Fuel is an integrated energy company reporting financial results for four operating segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility. Additional information about National Fuel is available at www.nationalfuelgas.com

 

Certain statements contained herein, including statements identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions, and statements which are other than statements of historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: 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; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design, retained natural gas and system modernization), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; the Company’s ability to estimate accurately the time and resources necessary to meet emissions targets; governmental/regulatory actions and/or market pressures to reduce or eliminate reliance on natural gas; changes in economic conditions, including inflationary pressures, supply chain issues, liquidity challenges, and global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; changes in the price of natural gas; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; 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; impairments under the SEC’s full cost ceiling test for natural gas reserves; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; the Company's ability to complete planned strategic transactions; the Company's ability to successfully integrate acquired assets and achieve expected cost synergies; changes in price differentials between similar quantities of natural gas 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; the impact of information technology disruptions, cybersecurity or data security breaches; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, 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; other changes in price differentials between similar quantities of natural gas 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; negotiations with the collective bargaining units representing the Company's workforce, including potential work stoppages during negotiations; uncertainty of gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas; changes in demographic patterns and weather conditions (including those related to climate change); 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; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; 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 2023. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below.

While the Company expects to record certain adjustments to unrealized gain or loss on a derivative asset and unrealized gain or loss on investments during the fiscal year ending September 30, 2023, 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.

  Preliminary FY 2023 Guidance   Updated FY 2023 Guidance
Consolidated Earnings per Share, excluding items impacting comparability $7.25 to $7.75   $6.40 to $6.90
Consolidated Effective Tax Rate ~ 25.5 - 26%   ~ 25.5 - 26%
       
Capital Expenditures (Millions)      
Exploration and Production $525 - $575   $525 - $575
Pipeline and Storage $110 - $130   $110 - $130
Gathering $85 - $105   $85 - $105
Utility $110 - $130   $110 - $130
Consolidated Capital Expenditures $830 - $940   $830 - $940
       
Exploration & Production Segment Guidance      
       
Commodity Price Assumptions      
NYMEX natural gas price (Oct - Mar | Apr - Sep) $7.50 /MMBtu l $5.00 /MMBtu   $6.00 /MMBtu l $4.75 /MMBtu
Appalachian basin spot price (Oct - Mar | Apr - Sep) $6.50 /MMBtu l $3.90 /MMBtu   $4.95 /MMBtu l $3.55 /MMBtu
       
Production (Bcfe) 370 to 390   370 to 390
       
E&P Operating Costs ($/Mcfe)      
LOE $0.67 - $0.69   $0.67 - $0.69
G&A $0.17 - $0.19   $0.17 - $0.19
DD&A $0.60 - $0.64   $0.60 - $0.64
       
Other Business Segment Guidance (Millions)      
Gathering Segment Revenues $235 - $250   $230 - $245
Pipeline and Storage Segment Revenues $360 - $380   $360 - $380


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED SEPTEMBER 30, 2022
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
(Thousands of Dollars) Production   Storage   Gathering   Utility   All Other   Consolidated*
                       
Fourth quarter 2021 GAAP earnings $ 55,703     $ 21,482     $ 18,597     $ (5,587 )   $ (3,233 )   $ 86,962  
Items impacting comparability:                      
Unrealized (gain) loss on other investments                   395       395  
Tax impact of unrealized (gain) loss on other investments                   (83 )     (83 )
Fourth quarter 2021 adjusted operating results   55,703       21,482       18,597       (5,587 )     (2,921 )     87,274  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   21,670                       21,670  
Higher (lower) crude oil production           (25,805 )                             (25,805 )
Higher (lower) realized natural gas prices, after hedging   32,485                       32,485  
Midstream Revenues                      
Higher (lower) operating revenues       10,052       5,330               15,382  
Downstream Margins***                      
Impact of usage and weather               507           507  
Impact of new rates               (465 )         (465 )
Regulatory revenue adjustments               1,108           1,108  
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   4,201                       4,201  
Lower (higher) operating expenses   2,410       (1,694 )     (1,003 )     (4,960 )     (762 )     (6,009 )
Lower (higher) property, franchise and other taxes   653                       653  
Lower (higher) depreciation / depletion   (6,180 )     (1,309 )                 (7,489 )
Other Income (Expense)                      
(Higher) lower other deductions   1,093               939       (1,386 )     646  
(Higher) lower interest expense   (2,000 )     (1,032 )         (1,314 )     1,934       (2,412 )
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   (10,151 )     (1,844 )     441       (669 )     374       (11,849 )
All other / rounding   449       (335 )     (258 )     (411 )     (53 )     (608 )
Fourth quarter 2022 adjusted operating results   74,528       25,320       23,107       (10,852 )     (2,814 )     109,289  
Items impacting comparability:                      
Unrealized gain (loss) on derivative asset   (4,395 )                     (4,395 )
Tax impact of unrealized gain (loss) on derivative asset   1,203                       1,203  
Reversal of deferred tax valuation allowance   28,589           (3,739 )             24,850  
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction   16,152           11,856           398       28,406  
Unrealized gain (loss) on other investments                           (1,532 )             (1,532 )
Tax impact of unrealized gain (loss) on other investments                   322       322  
Fourth quarter 2022 GAAP earnings $ 116,077     $ 25,320     $ 31,224     $ (10,852 )   $ (3,626 )   $ 158,143  
                       
* Amounts do not reflect intercompany eliminations.           
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** 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 SEPTEMBER 30, 2022
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
  Production   Storage   Gathering   Utility   All Other   Consolidated*
                       
Fourth quarter 2021 GAAP earnings per share $ 0.61     $ 0.23     $ 0.20     $ (0.06 )   $ (0.03 )   $ 0.95  
Items impacting comparability:                      
Unrealized (gain) loss on other investments, net of tax                           —                       —          
Fourth quarter 2021 adjusted operating results per share   0.61       0.23       0.20       (0.06 )     (0.03 )     0.95  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   0.24                       0.24  
Higher (lower) crude oil production   (0.28 )                     (0.28 )
Higher (lower) realized natural gas prices, after hedging   0.35                       0.35  
Midstream Revenues                      
Higher (lower) operating revenues       0.11       0.06               0.17  
Downstream Margins***                      
Impact of usage and weather               0.01           0.01  
Impact of new rates               (0.01 )         (0.01 )
Regulatory revenue adjustments               0.01           0.01  
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   0.05                       0.05  
Lower (higher) operating expenses   0.03       (0.02 )     (0.01 )     (0.05 )     (0.01 )     (0.06 )
Lower (higher) property, franchise and other taxes   0.01                               0.01  
Lower (higher) depreciation / depletion   (0.07 )     (0.01 )                         (0.08 )
Other Income (Expense)                      
(Higher) lower other deductions   0.01               0.01       (0.02 )      
(Higher) lower interest expense   (0.02 )     (0.01 )         (0.01 )     0.02       (0.02 )
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   (0.11 )     (0.02 )           (0.01 )           (0.14 )
All other / rounding   (0.01 )     (0.01 )           (0.01 )     0.02       (0.01 )
Fourth quarter 2022 adjusted operating results per share   0.81       0.27       0.25       (0.12 )     (0.02 )     1.19  
Items impacting comparability:                      
Unrealized gain (loss) on derivative asset, net of tax   (0.03 )                     (0.03 )
Reversal of deferred tax valuation allowance   0.31           (0.04 )             0.27  
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction   0.18           0.13                 0.31  
Unrealized gain (loss) on other investments, net of tax                           (0.01 )             (0.01 )
Rounding   (0.01 )                 (0.01 )     (0.02 )
Fourth quarter 2022 GAAP earnings per share $ 1.26     $ 0.27     $ 0.34     $ (0.12 )   $ (0.04 )   $ 1.71  
                       
* Amounts do not reflect intercompany eliminations.           
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 2022
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
(Thousands of Dollars) Production   Storage   Gathering   Utility   All Other   Consolidated*
Fiscal 2021 GAAP earnings $ 101,916     $ 92,542     $ 80,274     $ 54,335     $ 34,580     $ 363,647  
Items impacting comparability:                      
Impairment of oil and gas properties   76,152                       76,152  
Tax impact of impairment of oil and gas properties   (20,980 )                     (20,980 )
Gain on sale of timber properties                   (51,066 )     (51,066 )
Tax impact of gain on sale of timber properties                   14,069       14,069  
Premium paid on early redemption of debt   14,772           943               15,715  
Tax impact of premium paid on early redemption of debt   (4,062 )         (259 )             (4,321 )
Unrealized (gain) loss on other investments                   (181 )     (181 )
Tax impact of unrealized (gain) loss on other investments                   38       38  
Fiscal 2021 adjusted operating results   167,798       92,542       80,958       54,335       (2,560 )     393,073  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   51,264                       51,264  
Higher (lower) crude oil production   (28,169 )                     (28,169 )
Higher (lower) realized natural gas prices, after hedging   126,330                       126,330  
Higher (lower) realized crude oil prices, after hedging   18,071                       18,071  
Higher (lower) other operating revenues   5,037                       5,037  
Midstream Revenues                      
Higher (lower) operating revenues       25,738       17,047               42,785  
Downstream Margins***                      
Impact of usage and weather               2,887           2,887  
Impact of new rates               (5,596 )         (5,596 )
System modernization tracker revenues               3,585           3,585  
Higher (lower) energy marketing margins                   1,287       1,287  
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   (13,112 )                     (13,112 )
Lower (higher) operating expenses   (5,432 )     (7,571 )     (3,181 )     (9,502 )     995       (24,691 )
Lower (higher) property, franchise and other taxes   (2,484 )     (800 )                 (3,284 )
Lower (higher) depreciation / depletion   (20,268 )     (4,163 )     (1,302 )             (25,733 )
Other Income (Expense)                      
(Higher) lower other deductions   1,676               9,767       (3,262 )     8,181  
(Higher) lower interest expense   1,176       (1,198 )         (1,992 )     2,030       16  
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   (6,318 )     (2,279 )     (578 )     574       (2,569 )     (11,170 )
All other / rounding   2       288       50       249       206       795  
Fiscal 2022 adjusted operating results   295,571       102,557       92,994       54,307       (3,873 )     541,556  
Items impacting comparability:                      
Reduction of other post-retirement regulatory liability               18,533           18,533  
Tax impact of reduction of other post-retirement regulatory liability               (3,892 )         (3,892 )
Gain on sale of West Coast assets   12,736                       12,736  
Tax impact of gain on sale of West Coast assets   (3,225 )                     (3,225 )
Loss from discontinuance of crude oil cash flow hedges   (44,632 )                     (44,632 )
Tax impact of loss from discontinuance of crude oil cash flow hedges   11,303                       11,303  
Transaction and severance costs related to West Coast asset sale   (9,693 )                     (9,693 )
Tax impact of transaction and severance costs related to West Cost asset sale   2,455                       2,455  
Unrealized gain (loss) on derivative asset   (4,395 )                     (4,395 )
Tax impact of unrealized gain (loss) on derivative asset   1,203                       1,203  
Reversal of deferred tax valuation allowance   28,589           (3,739 )             24,850  
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction   16,152           11,856           398       28,406  
Unrealized gain (loss) on other investments                   (11,625 )     (11,625 )
Tax impact of unrealized gain (loss) on other investments                   2,441       2,441  
Fiscal 2022 GAAP earnings $ 306,064     $ 102,557     $ 101,111     $ 68,948     $ (12,659 )   $ 566,021  
                       
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
TWELVE MONTHS ENDED SEPTEMBER 30, 2022
(Unaudited)
                       
  Upstream   Midstream   Downstream        
                       
  Exploration &   Pipeline &           Corporate /    
  Production   Storage   Gathering   Utility   All Other   Consolidated*
Fiscal 2021 GAAP earnings per share $ 1.11     $ 1.01     $ 0.88     $ 0.59     $ 0.38     $ 3.97  
Items impacting comparability:                      
Impairment of oil and gas properties, net of tax   0.60                       0.60  
Gain on sale of timber properties, net of tax                   (0.40 )     (0.40 )
Premium paid on early redemption of debt, net of tax   0.12                         0.12  
Unrealized (gain) loss on other investments, net of tax                          
Fiscal 2021 adjusted operating results per share   1.83       1.01       0.88       0.59       (0.02 )     4.29  
Drivers of adjusted operating results**                      
Upstream Revenues                      
Higher (lower) natural gas production   0.56                       0.56  
Higher (lower) crude oil production   (0.31 )                     (0.31 )
Higher (lower) realized natural gas prices, after hedging   1.37                       1.37  
Higher (lower) realized crude oil prices, after hedging   0.20                       0.20  
Higher (lower) other operating revenues   0.05                       0.05  
Midstream Revenues                      
Higher (lower) operating revenues       0.28       0.19               0.47  
Downstream Margins***                      
Impact of usage and weather               0.03           0.03  
Impact of new rates               (0.06 )         (0.06 )
System modernization tracker revenues               0.04           0.04  
Higher (lower) energy marketing margins                   0.01       0.01  
Operating Expenses                      
Lower (higher) lease operating and transportation expenses   (0.14 )                     (0.14 )
Lower (higher) operating expenses   (0.06 )     (0.08 )     (0.03 )     (0.10 )     0.01       (0.26 )
Lower (higher) property, franchise and other taxes           (0.03 )             (0.01 )                         (0.04 )
Lower (higher) depreciation / depletion           (0.22 )             (0.05 )             (0.01 )                     (0.28 )
Other Income (Expense)                      
(Higher) lower other deductions   0.02               0.11       (0.04 )     0.09  
(Higher) lower interest expense   0.01       (0.01 )         (0.02 )     0.02        
Income Taxes                      
Lower (higher) income tax expense / effective tax rate   (0.07 )     (0.02 )     (0.01 )     0.01       (0.03 )     (0.12 )
All other / rounding         (0.01 )     (0.01 )     (0.01 )     0.01       (0.02 )
Fiscal 2022 adjusted operating results per share   3.21       1.11       1.01       0.59       (0.04 )     5.88  
Items impacting comparability:                      
Reduction of other post-retirement regulatory liability, net of tax               0.16           0.16  
Gain on sale of West Coast assets, net of tax   0.10                       0.10  
Loss from discontinuance of crude oil cash flow hedges, net of tax   (0.36 )                     (0.36 )
Transaction and severance costs related to West Coast asset sale, net of tax   (0.08 )                     (0.08 )
Unrealized gain (loss) on derivative asset, net of tax   (0.03 )                     (0.03 )
Reversal of deferred tax valuation allowance   0.31           (0.04 )             0.27  
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction   0.18           0.13                 0.31  
Unrealized gain (loss) on other investments, net of tax                   (0.10 )     (0.10 )
Rounding   (0.01 )                 0.01        
Fiscal 2022 GAAP earnings per share $ 3.32     $ 1.11     $ 1.10     $ 0.75     $ (0.13 )   $ 6.15  
                       
* Amounts do not reflect intercompany eliminations.           
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** 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   Twelve Months Ended  
  September 30,   September 30,  
  (Unaudited)   (Unaudited)  
SUMMARY OF OPERATIONS  2022     2021     2022     2021   
Operating Revenues:                
Utility and Energy Marketing Revenues $ 112,252     $ 80,302     $ 897,916     $ 667,549    
Exploration and Production and Other Revenues   252,035       215,664       1,010,629       837,597    
Pipeline and Storage and Gathering Revenues   70,859       60,022       277,501       237,513    
    435,146       355,988       2,186,046       1,742,659    
Operating Expenses:                
Purchased Gas   22,925       (5,190 )     392,093       171,827    
Operation and Maintenance:                
Utility and Energy Marketing   46,535       40,026       193,058       179,547    
Exploration and Production and Other   31,554       46,007       191,572       173,041    
Pipeline and Storage and Gathering   39,138       35,747       136,571       123,218    
Property, Franchise and Other Taxes   23,089       23,454       101,182       94,713    
Depreciation, Depletion and Amortization   94,109       83,671       369,790       335,303    
Impairment of Oil and Gas Producing Properties                     76,152    
    257,350       223,715       1,384,266       1,153,801    
Gain on Sale of Assets               12,736       51,066    
Operating Income   177,796       132,273       814,516       639,924    
                 
Other Expense:                
Other Income (Deductions)           (4,800 )             (160 )             (1,509 )             (15,238 )  
Interest Expense on Long-Term Debt           (30,207 )             (30,161 )             (120,507 )             (141,457 )  
Other Interest Expense           (3,289 )             (270 )             (9,850 )             (4,900 )  
                 
Income Before Income Taxes   139,500       101,682       682,650       478,329    
                 
Income Tax Expense (Benefit)   (18,643 )     14,720       116,629       114,682    
                 
Net Income Available for Common Stock $ 158,143     $ 86,962     $ 566,021     $ 363,647    
                 
Earnings Per Common Share                
Basic $ 1.73     $ 0.95     $ 6.19     $ 3.99    
Diluted $ 1.71     $ 0.95     $ 6.15     $ 3.97    
                 
Weighted Average Common Shares:                
Used in Basic Calculation   91,476,535       91,181,292       91,410,625       91,130,941    
Used in Diluted Calculation   92,218,581       91,851,443       92,107,066       91,684,583    


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
   
  September 30,   September 30,
(Thousands of Dollars)  2022     2021 
ASSETS      
Property, Plant and Equipment $ 12,551,909     $ 13,103,639  
Less - Accumulated Depreciation, Depletion and Amortization   5,985,432       6,719,356  
Net Property, Plant and Equipment   6,566,477       6,384,283  
Current Assets:      
Cash and Temporary Cash Investments   46,048       31,528  
Hedging Collateral Deposits   91,670       88,610  
Receivables - Net   361,626       205,294  
Unbilled Revenue   30,075       17,000  
Gas Stored Underground   32,364       33,669  
Materials, Supplies and Emission Allowances   40,637       53,560  
Unrecovered Purchased Gas Costs   99,342       33,128  
Other Current Assets   59,369       59,660  
Total Current Assets   761,131       522,449  
Other Assets:      
Recoverable Future Taxes   106,247       121,992  
Unamortized Debt Expense   8,884       10,589  
Other Regulatory Assets   67,101       60,145  
Deferred Charges   77,472       59,939  
Other Investments   95,025       149,632  
Goodwill   5,476       5,476  
Prepaid Pension and Post-Retirement Benefit Costs   196,597       149,151  
Fair Value of Derivative Financial Instruments   9,175        
Other   2,677       1,169  
Total Other Assets   568,654       558,093  
Total Assets $ 7,896,262     $ 7,464,825  
CAPITALIZATION AND LIABILITIES      
Capitalization:      
Comprehensive Shareholders' Equity      
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and      
Outstanding - 91,478,064 Shares and 91,181,549 Shares, Respectively $ 91,478     $ 91,182  
Paid in Capital   1,027,066       1,017,446  
Earnings Reinvested in the Business   1,587,085       1,191,175  
Accumulated Other Comprehensive Loss   (625,733 )     (513,597 )
Total Comprehensive Shareholders' Equity   2,079,896       1,786,206  
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs   2,083,409       2,628,687  
Total Capitalization   4,163,305       4,414,893  
Current and Accrued Liabilities:      
Notes Payable to Banks and Commercial Paper   60,000       158,500  
Current Portion of Long-Term Debt   549,000        
Accounts Payable   178,945       171,655  
Amounts Payable to Customers   419       21  
Dividends Payable   43,452       41,487  
Interest Payable on Long-Term Debt   17,376       17,376  
Customer Advances   26,108       17,223  
Customer Security Deposits   24,283       19,292  
Other Accruals and Current Liabilities   257,327       194,169  
Fair Value of Derivative Financial Instruments   785,659       616,410  
Total Current and Accrued Liabilities   1,942,569       1,236,133  
Other Liabilities:      
Deferred Income Taxes   698,229       660,420  
Taxes Refundable to Customers   362,098       354,089  
Cost of Removal Regulatory Liability   259,947       245,636  
Other Regulatory Liabilities   188,803       200,643  
Pension and Other Post-Retirement Liabilities   3,065       7,526  
Asset Retirement Obligations   161,545       209,639  
Other Liabilities   116,701       135,846  
Total Other Liabilities   1,790,388       1,813,799  
Commitments and Contingencies          
Total Capitalization and Liabilities $ 7,896,262     $ 7,464,825  


         
         
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
    Twelve Months Ended
    September 30,
(Thousands of Dollars)    2022     2021 
         
Operating Activities:        
Net Income Available for Common Stock   $ 566,021     $ 363,647  
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
       
Gain on Sale of Assets     (12,736 )     (51,066 )
Impairment of Oil and Gas Producing Properties           76,152  
Depreciation, Depletion and Amortization     369,790       335,303  
Deferred Income Taxes     104,415       105,993  
Premium Paid on Early Redemption of Debt           15,715  
Stock-Based Compensation     19,506       17,065  
Reduction of Other Post-Retirement Regulatory Liability     (18,533 )      
Other     31,983       10,896  
Change in:        
Receivables and Unbilled Revenue     (168,769 )     (61,413 )
Gas Stored Underground and Materials, Supplies and Emission Allowances     3,109       (2,014 )
Unrecovered Purchased Gas Costs             (66,214 )             (33,128 )
Other Current Assets     291       (11,972 )
Accounts Payable     11,907       31,352  
Amounts Payable to Customers     398       (10,767 )
Customer Advances     8,885       1,904  
Customer Security Deposits     4,991       2,093  
Other Accruals and Current Liabilities     34,260       34,314  
Other Assets     (58,924 )     1,250  
Other Liabilities     (17,859 )     (33,771 )
Net Cash Provided by Operating Activities   $ 812,521     $ 791,553  
         
Investing Activities:        
Capital Expenditures   $ (811,826 )   $ (751,734 )
Net Proceeds from Sale of Oil and Gas Producing Properties     254,439        
Net Proceeds from Sale of Timber Properties           104,582  
Sale of Fixed Income Mutual Fund Shares in Grantor Trust     30,000        
Other     8,683       13,935  
Net Cash Used in Investing Activities   $ (518,704 )   $ (633,217 )
         
Financing Activities:        
Changes in Notes Payable to Banks and Commercial Paper   $ (98,500 )   $ 128,500  
Reduction of Long-Term Debt           (515,715 )
Dividends Paid on Common Stock     (168,147 )     (163,089 )
Net Proceeds From Issuance of Long-Term Debt           495,267  
Net Repurchases of Common Stock     (9,590 )     (3,702 )
Net Cash Used in Financing Activities   $ (276,237 )   $ (58,739 )
         
Net Increase in Cash, Cash Equivalents, and Restricted Cash     17,580       99,597  
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period     120,138       20,541  
Cash, Cash Equivalents, and Restricted Cash at September 30   $ 137,718     $ 120,138  


                   
                   
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
UPSTREAM BUSINESS
                   
                   
  Three Months Ended   Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30,   September 30,
EXPLORATION AND PRODUCTION SEGMENT 2022   2021   Variance   2022   2021   Variance
Total Operating Revenues $ 252,035     $ 215,581     $ 36,454     $ 1,010,464   $ 836,697   $ 173,767  
Operating Expenses:                  
Operation and Maintenance:                  
General and Administrative Expense   15,664       16,957       (1,293 )     79,061     67,973     11,088  
Lease Operating and Transportation Expense   62,701       68,019       (5,318 )     283,914     267,316     16,598  
All Other Operation and Maintenance Expense   1,957       3,715       (1,758 )     20,140     14,659     5,481  
Property, Franchise and Other Taxes   5,475       6,302       (827 )     25,364     22,220     3,144  
Depreciation, Depletion and Amortization   52,958       45,135       7,823       208,148     182,492     25,656  
Impairment of Oil and Gas Producing Properties                         76,152     (76,152 )
    138,755       140,128       (1,373 )     616,627     630,812     (14,185 )
Gain on Sale of Assets                     12,736         12,736  
Operating Income   113,280       75,453       37,827       406,573     205,885     200,688  
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Costs   (186 )     (289 )     103       (744 )   (1,148 )   404  
Interest and Other Income   (3,080 )     35       (3,115 )     (2,466 )   211     (2,677 )
Interest Expense on Long-Term Debt                         (15,119 )   15,119  
Interest Expense   (14,474 )     (11,942 )     (2,532 )     (53,401 )   (54,543 )   1,142  
Income Before Income Taxes   95,540       63,257       32,283       349,962     135,286     214,676  
Income Tax Expense (Benefit)   (20,537 )     7,554       (28,091 )     43,898     33,370     10,528  
Net Income $ 116,077     $ 55,703     $ 60,374     $ 306,064   $ 101,916   $ 204,148  
Net Income Per Share (Diluted) $ 1.26     $ 0.61     $ 0.65     $ 3.32   $ 1.11   $ 2.21  
                   


                   
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
MIDSTREAM BUSINESSES
                   
  Three Months Ended   Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30,   September 30,
PIPELINE AND STORAGE SEGMENT  2022     2021    Variance    2022   2021    Variance
Revenues from External Customers $ 68,836     $ 58,515     $ 10,321     $ 265,415   $ 234,397   $ 31,018  
Intersegment Revenues   28,913       26,510       2,403       111,629     109,160     2,469  
Total Operating Revenues   97,749       85,025       12,724       377,044     343,557     33,487  
Operating Expenses:                  
Purchased Gas   592       764       (172 )     1,890     983     907  
Operation and Maintenance   28,868       26,724       2,144       100,117     90,533     9,584  
Property, Franchise and Other Taxes   8,470       8,406       64       34,133     33,120     1,013  
Depreciation, Depletion and Amortization   17,283       15,626       1,657       67,701     62,431     5,270  
    55,213       51,520       3,693       203,841     187,067     16,774  
                   
Operating Income   42,536       33,505       9,031       173,203     156,490     16,713  
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Credit   767       125       642       3,069     501     2,568  
Interest and Other Income   1,490       2,180       (690 )     3,820     5,339     (1,519 )
Interest Expense   (10,929 )     (9,623 )     (1,306 )     (42,492 )   (40,976 )   (1,516 )
Income Before Income Taxes   33,864       26,187       7,677       137,600     121,354     16,246  
Income Tax Expense   8,544       4,705       3,839       35,043     28,812     6,231  
Net Income $ 25,320     $ 21,482     $ 3,838     $ 102,557   $ 92,542   $ 10,015  
Net Income Per Share (Diluted) $ 0.27     $ 0.23     $ 0.04     $ 1.11   $ 1.01   $ 0.10  
                   
                   
  Three Months Ended   Twelve Months Ended
  September 30,   September 30,
GATHERING SEGMENT  2022     2021    Variance    2022   2021   Variance
Revenues from External Customers $ 2,023     $ 1,507     $ 516     $ 12,086   $ 3,116   $ 8,970  
Intersegment Revenues   52,061       45,830       6,231       202,757     190,148     12,609  
Total Operating Revenues   54,084       47,337       6,747       214,843     193,264     21,579  
Operating Expenses:                  
Operation and Maintenance   10,725       9,456       1,269       38,234     34,207     4,027  
Property, Franchise and Other Taxes   24       23       1       37     52     (15 )
Depreciation, Depletion and Amortization   8,656       8,219       437       33,998     32,350     1,648  
    19,405       17,698       1,707       72,269     66,609     5,660  
                   
Operating Income   34,679       29,639       5,040       142,574     126,655     15,919  
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Costs   (56 )     (68 )     12       (224 )   (271 )   47  
Interest and Other Income   117       6       111       198     259     (61 )
Interest Expense on Long-Term Debt                         (965 )   965  
Interest Expense   (4,105 )     (4,093 )     (12 )     (16,488 )   (16,528 )   40  
Income Before Income Taxes   30,635       25,484       5,151       126,060     109,150     16,910  
Income Tax Expense (Benefit)   (589 )     6,887       (7,476 )     24,949     28,876     (3,927 )
Net Income $ 31,224     $ 18,597     $ 12,627     $ 101,111   $ 80,274   $ 20,837  
Net Income Per Share (Diluted) $ 0.34     $ 0.20     $ 0.14     $ 1.10   $ 0.88   $ 0.22  
                   


                   
                   
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
DOWNSTREAM BUSINESS
                   
                   
  Three Months Ended   Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30,   September 30,
UTILITY SEGMENT  2022     2021    Variance    2022    2021   Variance
Revenues from External Customers $ 112,252     $ 80,302     $ 31,950     $ 897,916   $ 666,920   $ 230,996  
Intersegment Revenues   60       60             305     331     (26 )
Total Operating Revenues   112,312       80,362       31,950       898,221     667,251     230,970  
Operating Expenses:                  
Purchased Gas   49,692       19,826       29,866       497,959     274,837     223,122  
Operation and Maintenance   47,369       40,855       6,514       196,254     182,266     13,988  
Property, Franchise and Other Taxes   8,981       8,588       393       41,137     38,769     2,368  
Depreciation, Depletion and Amortization   15,167       14,646       521       59,760     57,457     2,303  
    121,209       83,915       37,294       795,110     553,329     241,781  
                   
Operating Income (Loss)   (8,897 )     (3,553 )     (5,344 )     103,111     113,922     (10,811 )
                   
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit (Costs) Credit           (492 )             (1,985 )     1,493       5,526             (26,659 )           32,185          
Interest and Other Income   429       733       (304 )     1,591     2,874     (1,283 )
Interest Expense   (7,000 )     (5,337 )     (1,663 )     (24,115 )   (21,795 )   (2,320 )
Income (Loss) Before Income Taxes   (15,960 )     (10,142 )     (5,818 )     86,113     68,342     17,771  
Income Tax Expense (Benefit)   (5,108 )     (4,555 )     (553 )     17,165     14,007     3,158  
Net Income (Loss) $ (10,852 )   $ (5,587 )   $ (5,265 )   $ 68,948   $ 54,335   $ 14,613  
Net Income (Loss) Per Share (Diluted) $ (0.12 )   $ (0.06 )   $ (0.06 )   $ 0.75   $ 0.59   $ 0.16  
                   


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                   
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
                   
  Three Months Ended   Twelve Months Ended
(Thousands of Dollars, except per share amounts) September 30,   September 30,
ALL OTHER  2022     2021    Variance    2022    2021   Variance
Revenues from External Customers $     $     $     $   $ 1,173   $ (1,173 )
Intersegment Revenues         26       (26 )     6     49     (43 )
Total Operating Revenues         26       (26 )     6     1,222     (1,216 )
Operating Expenses:                  
Purchased Gas         9       (9 )     6     2,306     (2,300 )
Operation and Maintenance         (20 )     20       5     682     (677 )
Property, Franchise and Other Taxes                         47     (47 )
Depreciation, Depletion and Amortization                         394     (394 )
          (11 )     11       11     3,429     (3,418 )
Gain on Sale of Assets                         51,066     (51,066 )
Operating Income (Loss)         37       (37 )     (5 )   48,859     (48,864 )
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Costs                         (7 )   7  
Interest and Other Income   1       2       (1 )     3     231     (228 )
Interest Expense   (4 )           (4 )     (4 )       (4 )
Income (Loss) before Income Taxes   (3 )     39       (42 )     (6 )   49,083     (49,089 )
Income Tax Expense (Benefit)   (1 )     10       (11 )     3     11,438     (11,435 )
Net Income (Loss) $ (2 )   $ 29     $ (31 )   $ (9 ) $ 37,645   $ (37,654 )
Net Income (Loss) Per Share (Diluted) $     $     $     $   $ 0.41   $ (0.41 )
           
  Three Months Ended   Twelve Months Ended
  September 30,   September 30,
CORPORATE  2022     2021    Variance    2022    2021   Variance
Revenues from External Customers $     $ 83     $ (83 )   $ 165   $ 356   $ (191 )
Intersegment Revenues   1,183       1,146       37       4,430     3,864     566  
Total Operating Revenues   1,183       1,229       (46 )     4,595     4,220     375  
Operating Expenses:                  
Operation and Maintenance   4,801       3,857       944       14,841     15,423     (582 )
Property, Franchise and Other Taxes   139       135       4       511     505     6  
Depreciation, Depletion and Amortization   45       45             183     179     4  
    4,985       4,037       948       15,535     16,107     (572 )
                   
Operating Loss   (3,802 )     (2,808 )     (994 )     (10,940 )   (11,887 )   947  
Other Income (Expense):                  
Non-Service Pension and Post-Retirement Benefit Costs   (1,017 )     (923 )     (94 )     (4,069 )   (3,692 )   (377 )
Interest and Other Income   33,712       31,154       2,558       126,648     138,882     (12,234 )
Interest Expense on Long-Term Debt   (30,207 )     (30,161 )     (46 )     (120,507 )   (125,373 )   4,866  
Other Interest Expense   (3,262 )     (405 )     (2,857 )     (8,211 )   (2,816 )   (5,395 )
Loss before Income Taxes   (4,576 )     (3,143 )     (1,433 )     (17,079 )   (4,886 )   (12,193 )
Income Tax Expense (Benefit)   (952 )     119       (1,071 )     (4,429 )   (1,821 )   (2,608 )
Net Loss $ (3,624 )   $ (3,262 )   $ (362 )   $ (12,650 ) $ (3,065 ) $ (9,585 )
Net Loss Per Share (Diluted) $ (0.04 )   $ (0.03 )   $ (0.01 )   $ (0.13 ) $ (0.03 ) $ (0.10 )
                   
                   
  Three Months Ended   Twelve Months Ended
  September 30,   September 30,
INTERSEGMENT ELIMINATIONS  2022     2021    Variance    2022    2021   Variance
Intersegment Revenues $         (82,217 )   $         (73,572 )   $         (8,645 )   $         (319,127 ) $         (303,552 ) $         (15,575 )
Operating Expenses:                  
Purchased Gas           (27,359 )             (25,789 )             (1,570 )             (107,762 )           (106,299 )           (1,463 )
Operation and Maintenance           (54,858 )             (47,783 )             (7,075 )             (211,365 )           (197,253 )           (14,112 )
            (82,217 )             (73,572 )             (8,645 )             (319,127 )           (303,552 )           (15,575 )
Operating Income           —                       —                       —                       —                     —                     —          
Other Income (Expense):                  
Interest and Other Deductions           (36,485 )             (31,130 )             (5,355 )             (134,861 )           (131,758 )           (3,103 )
Interest Expense   36,485       31,130       5,355       134,861     131,758     3,103  
Net Income $     $     $     $   $   $  
Net Income Per Share (Diluted) $     $     $     $   $   $  


                       
                       
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                       
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
                       
                       
  Three Months Ended   Twelve Months Ended
  September 30,   September 30,
  (Unaudited)   (Unaudited)
          Increase           Increase
   2022    2021   (Decrease)    2022    2021   (Decrease)
                       
Capital Expenditures:                      
Exploration and Production $ 160,056 (1) $ 117,646 (2) $ 42,410     $ 565,791 (1)(2) $ 381,408 (2)(3) $ 184,383  
Pipeline and Storage   37,563 (1)   96,760 (2)   (59,197 )     95,806 (1)(2)   252,316 (2)(3)   (156,510 )
Gathering   26,957 (1)   9,041 (2)   17,916       55,546 (1)(2)   34,669 (2)(3)   20,877  
Utility   40,061 (1)   34,154 (2)   5,907       111,033 (1)(2)   100,845 (2)(3)   10,188  
Total Reportable Segments   264,637     257,601     7,036       828,176     769,238     58,938  
All Other                          
Corporate   549     231     318       1,212     450     762  
Eliminations       2,341     (2,341 )         223     (223 )
Total Capital Expenditures $ 265,186   $ 260,173   $ 5,013     $ 829,388   $ 769,911   $ 59,477  


(1)   Capital expenditures for the quarter and year ended September 30, 2022, include accounts payable and accrued liabilities related to capital expenditures of $83.0 million, $15.2 million, $10.7 million, and $11.4 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 September 30, 2022, since they represent non-cash investing activities at that date.
     
(2)   Capital expenditures for the year ended September 30, 2022, exclude capital expenditures of $47.9 million, $39.4 million, $4.8 million and $10.6 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, 2021 and paid during the year ended September 30, 2022. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2021, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2022.
     
(3)   Capital expenditures for the year ended September 30, 2021, exclude capital expenditures of $45.8 million, $17.3 million, $13.5 million and $10.7 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, 2020 and paid during the year ended September 30, 2021. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2020, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2021.

   

                   
DEGREE DAYS                  
              Percent Colder
              (Warmer) Than:
Three Months Ended September 30, Normal   2022   2021   Normal (1)   Last Year (1)
Buffalo, NY 162   107   38           (34.0 )   181.6
Erie, PA 124   94   33           (24.2 )   184.8
                   
Twelve Months Ended September 30,                  
Buffalo, NY 6,617   5,769   5,731           (12.8 )   0.7
Erie, PA 6,147   5,368   5,221           (12.7 )   2.8
                   


(1)   Percents compare actual 2022 degree days to normal degree days and actual 2022 degree days to actual 2021 degree days.

   

                         
                         
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
                         
EXPLORATION AND PRODUCTION INFORMATION
                         
                         
    Three Months Ended   Twelve Months Ended
    September 30,   September 30,
            Increase           Increase
     2022    2021   (Decrease)    2022    2021   (Decrease)
                         
Gas Production/Prices:                        
Production (MMcf)                        
Appalachia     87,858     75,871     11,987       341,700     312,300     29,400  
West Coast     1     420     (419 )     1,211     1,720     (509 )
Total Production     87,859     76,291     11,568       342,911     314,020     28,891  
                         
Average Prices (Per Mcf)                        
Appalachia   $ 6.16   $ 3.14   $ 3.02     $ 5.03   $ 2.46   $ 2.57  
West Coast   N/M     7.93   N/M       10.03     6.34     3.69  
Weighted Average     6.16     3.16     3.00       5.05     2.49     2.56  
Weighted Average after Hedging     2.84     2.37     0.47       2.71