National Fuel Gas Company (“National Fuel” or the “Company”)
(NYSE:NFG) today announced consolidated results for the first
quarter of its 2023 fiscal year.
FISCAL 2023 FIRST QUARTER
SUMMARY
- GAAP net income of
$169.7 million, or $1.84 per share, compared to GAAP net income of
$132.4 million, or $1.44 per share, in the prior year, an increase
of 28% per share.
- Adjusted operating
results of $169.5 million, or $1.84 per share, an increase of 24%,
compared to $1.48 per share, in the prior year (see non-GAAP
reconciliation on page 2).
- Adjusted EBITDA of
$351.0 million, an increase of 18%, compared to $298.2 million in
the prior year (see non-GAAP reconciliation on page 21).
- Net cash provided
by operating activities of $327.3 million, an increase of 91%,
compared to $171.5 million in the prior year.
- Pipeline &
Storage segment Adjusted EBITDA of $64.5 million, an increase of
13%, compared to $57.2 million in the prior year.
- E&P segment
Adjusted EBITDA of $190.3 million, an increase of 29%, compared to
$147.0 million in the prior year.
- E&P segment net
Appalachian natural gas production of 90.6 Bcfe, an increase of 9.2
Bcfe, or 11%, higher than prior year and 3% higher than fiscal 2022
fourth quarter.
- Average realized
natural gas prices of $3.02 per Mcf, up $0.50 per Mcf from the
prior year.
- Company is revising
its fiscal 2023 earnings guidance to a range of $5.35 to $5.75 per
share.
MANAGEMENT COMMENTS
David P. Bauer, President and Chief Executive
Officer of National Fuel Gas Company, stated: “First, I want to
share my appreciation for the exceptional performance of our
employees during Winter Storm Elliott in Buffalo, NY. In the face
of extreme weather conditions, they went the extra mile to ensure
that safe, reliable natural gas service continued uninterrupted
when it was needed most.
“Despite this weather challenge, National Fuel
had a terrific start to fiscal 2023, with all four segments
contributing to a 24% increase in adjusted operating results. Our
upstream business led the way, with 11% growth in Appalachian
natural gas production and the tailwind of strong natural gas
pricing, driving a large portion of the increase over last
year.
“While our outlook for the remainder of fiscal
2023 has been impacted by the recent reduction in natural gas
prices, the strength of our integrated model, underpinned by our
rate-regulated businesses, provides a measure of earnings and cash
flow stability. Longer-term, we are very well positioned to
generate significant free cash flow, which we expect will further
strengthen our investment grade balance sheet and provide
flexibility to deliver additional value to our shareholders in the
years ahead.”
RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING
RESULTS
|
|
Three Months Ended |
|
|
December 31, |
(in thousands except per share
amounts) |
|
2022 |
|
2021 |
Reported GAAP Earnings |
|
$ |
169,689 |
|
|
$ |
132,392 |
|
Items impacting comparability: |
|
|
|
|
Unrealized (gain) loss on other investments (Corporate / All
Other) |
|
|
(209 |
) |
|
|
4,490 |
|
Tax impact of unrealized (gain) loss on other investments |
|
|
44 |
|
|
|
(943 |
) |
Adjusted Operating
Results |
|
$ |
169,524 |
|
|
$ |
135,939 |
|
|
|
|
|
|
Reported GAAP Earnings
Per Share |
|
$ |
1.84 |
|
|
$ |
1.44 |
|
Items impacting comparability: |
|
|
|
|
Unrealized (gain) loss on other investments, net of tax (Corporate
/ All Other) |
|
|
— |
|
|
|
0.04 |
|
Adjusted Operating
Results Per Share |
|
$ |
1.84 |
|
|
$ |
1.48 |
|
|
|
|
|
|
|
|
|
|
FISCAL 2023 GUIDANCE UPDATE
National Fuel is revising its fiscal 2023
earnings guidance to reflect the results of the first quarter,
along with updated forecast assumptions and projections. The
Company is now projecting that earnings will be within the range of
$5.35 to $5.75 per share, a decrease of $1.10 per share from the
midpoint of the Company’s prior guidance range. The decrease from
the Company’s prior earnings guidance primarily reflects the impact
of lower natural gas price expectations, as the rest of the
Company's assumptions and projections are largely unchanged.
The Company is now assuming that NYMEX natural
gas prices will average $3.25 per MMBtu for the remainder of fiscal
2023, a decrease of $1.92 per MMBtu from the $5.17 per MMBtu
average ($6.00 per MMBtu in January through March and $4.75 per
MMBtu in April through September) assumed in the previous guidance
over the remaining nine months of the fiscal year. 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.
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 90% of its projected remaining fiscal 2023
production, limiting its exposure to in-basin markets.
Approximately 68% of Seneca’s expected remaining production is
either matched by a financial hedge, including a combination of
swaps and no-cost collars, or was entered into at a fixed
price.
The Company’s consolidated and individual
segment capital expenditures and other guidance assumptions remain
largely unchanged from the previous guidance. The details are
outlined in the table on page 7.
DISCUSSION OF FIRST QUARTER RESULTS BY
SEGMENT
The following earnings discussion of each
operating segment for the quarter ended December 31, 2022 is
summarized in a tabular form on pages 8 and 9 of this report. 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 |
|
December 31, |
(in thousands) |
2022 |
|
2021 |
|
Variance |
GAAP Earnings |
$ |
91,192 |
|
|
$ |
62,369 |
|
|
$ |
28,823 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
190,330 |
|
|
$ |
146,999 |
|
|
$ |
43,331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Seneca’s first quarter GAAP earnings increased
$28.8 million versus the prior year primarily due to higher
realized natural gas prices and natural gas production. These
increases were partially offset by the loss of earnings from
Seneca’s California assets that were sold in June 2022, higher
Appalachian operating expenses and higher income tax expense.
Seneca produced 90.6 Bcfe during the first
quarter, an increase of 5.5 Bcfe, or 7%, from the prior year. This
is a result of a 9.2 Bcf increase, or 11%, in Appalachian natural
gas production from Seneca’s development program, offset by a 3.7
Bcfe decrease in production related to the aforementioned
California sale.
Seneca’s average realized natural gas price,
after the impact of hedging and transportation costs, was $3.02 per
Mcf, an increase of $0.50 per Mcf from the prior year. This
increase was primarily due to higher NYMEX prices, higher spot
prices at local sales points in Pennsylvania, and an increase in
the weighted average hedge price compared to the prior year first
quarter.
On an absolute basis, lease operating and
transportation expense (“LOE”) decreased $7.6 million primarily due
to the California sale. Partly offsetting that decrease were
increases in LOE from higher transportation and gathering costs as
a result of increased production, as well as higher repair, rental
and personnel costs in Appalachia. LOE expense includes $53.8
million in intercompany expense for gathering and compression
services used to connect Seneca’s production to sales points along
interstate pipelines. On a per unit basis, LOE was $0.68 per Mcfe,
a decrease of $0.13 per Mcfe from the prior year.
General and administrative (“G&A”) expense
decreased by $2.2 million largely due to the California sale. On a
per unit basis, G&A expense was $0.17 per Mcfe, a decrease of
$0.04 per Mcfe from the prior year.
The decrease in Seneca’s other operating
expenses of $2.1 million was also primarily due to the impact of
the sale of Seneca’s California assets.
Depreciation, depletion and amortization
(“DD&A”) expense increased $6.1 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. DD&A expense was $0.61 per Mcfe, an increase of $0.03 per
Mcfe from the prior year.
The increase in Seneca’s income tax expense was
primarily driven by a prior year first quarter benefit realized
from the Enhanced Oil Recovery tax credit, which did not recur in
the current year as a result of the sale of the California
assets.
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 |
|
December 31, |
(in thousands) |
2022 |
|
2021 |
|
Variance |
GAAP Earnings |
$ |
29,476 |
|
|
$ |
25,168 |
|
|
$ |
4,308 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
64,528 |
|
|
$ |
57,150 |
|
|
$ |
7,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The Pipeline and Storage segment’s first quarter
GAAP earnings increased $4.3 million versus the prior year
primarily due to an increase in operating revenues, partially
offset by higher operation and maintenance (“O&M”) expense and
higher DD&A expense. The increase in operating revenues of $9.3
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 $1.8 million
primarily due to an increase in personnel and pipeline integrity
costs. The increase in DD&A expense of $1.6 million was
primarily attributable to incremental depreciation expense from the
FM100 Project.
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 and other
non-affiliated Appalachian production to the interstate pipeline
system.
|
Three Months Ended |
|
December 31, |
(in thousands) |
2022 |
|
2021 |
|
Variance |
GAAP Earnings |
$ |
24,738 |
|
|
$ |
23,137 |
|
|
$ |
1,601 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
46,715 |
|
|
$ |
44,032 |
|
|
$ |
2,683 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The Gathering segment’s first quarter GAAP
earnings increased $1.6 million versus the prior year primarily due
to higher operating revenues, partially offset by higher O&M
expense. Operating revenues increased $4.2 million, or 8%, which
was the result of a 6.9 Bcf increase in gathered volumes due to an
increase in Seneca’s natural gas production. The increase in
O&M expense of $1.5 million was due to higher compression
leasing expenses, as well as increases in personnel and
preventative maintenance expenses.
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 |
|
December 31, |
(in thousands) |
2022 |
|
2021 |
|
Variance |
GAAP Earnings |
$ |
23,817 |
|
|
$ |
22,130 |
|
|
$ |
1,687 |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
51,577 |
|
|
$ |
52,028 |
|
|
$ |
(451 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
The Utility segment’s first quarter GAAP
earnings increased $1.7 million versus the prior year primarily due
to higher customer margin (operating revenues less purchased gas
sold) and a decrease in non-service pension and post-retirement
benefit (“OPEB”) costs, partially offset by higher O&M and
interest expense. The increase in customer margin was mainly due to
increased customer usage, largely attributable to weather that was
27% colder on average than last year in Distribution’s Pennsylvania
service territory (where the Company does not have a Weather
Normalization Clause), combined with higher revenues from the
Company’s system modernization tracking mechanism in its New York
service territory. These factors were partially offset by a
reduction in base rates in New York as a result of a rate
proceeding that became effective October 1, 2022 which temporarily
reduced the Utility’s recovery of pension and OPEB expenses to
zero. In addition to lowering rates, the proceeding mandated a
corresponding decrease in pension and OPEB expense, most of which
had been previously recorded in “below the line” non-service
pension and post-retirement benefit costs. O&M expense
increased by $3.8 million largely due to higher personnel costs. An
increase in the accrual for uncollectible accounts, which was
generally in line with the increase in the Utility segment’s
revenue, also contributed to higher O&M expense for the
quarter. Interest expense increased $2.5 million due primarily to a
higher weighted average interest rate on intercompany short-term
borrowings.
Corporate and All Other
The Company’s operations that are included in
Corporate and All Other generated combined earnings of $0.5 million
in the current year first quarter, which was a $0.9 million
increase over the combined net loss of $0.4 million in the
prior-year first quarter. The increase in earnings was primarily
driven by unrealized gains on investment securities recognized in
the current quarter compared to unrealized losses on investment
securities recognized in the prior-year first quarter, partially
offset by a lower amount of realized gains on investment securities
sold in the current quarter as compared to the prior-year first
quarter.
EARNINGS TELECONFERENCE
The Company will host a conference call on
Friday, February 3, 2023, 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=3963c6bd&confld=46096.
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 276256. 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, February 10, 2023. To access the telephone replay, dial
U.S. toll free 1-866-813-9403 and provide Access Code 856816.
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.nationalfuel.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; 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 natural 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
COMPANYAND 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 investments during the
nine months 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.
|
Previous FY 2023 Guidance |
|
Updated FY 2023 Guidance |
Consolidated Earnings
per Share, excluding items impacting comparability |
$6.40 to $6.90 |
|
$5.35 to $5.75 |
Consolidated Effective
Tax Rate |
~ 25.5 - 26% |
|
~ 25 - 25.5% |
|
|
|
|
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) |
$6.00 /MMBtu l $4.75 /MMBtu |
|
$3.25 /MMBtu |
Appalachian basin spot price (Oct - Mar | Apr - Sep) |
$4.95 /MMBtu l $3.55 /MMBtu |
|
$2.25 /MMBtu |
|
|
|
|
Production (Bcfe) |
370 to 390 |
|
370 to 390 |
|
|
|
|
E&P Operating Costs ($/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 |
$230 - $245 |
|
$230 - $245 |
Pipeline and Storage Segment Revenues |
$360 - $380 |
|
$360 - $380 |
* Commodity price assumptions are for the
remaining 9 months of the fiscal year. Previous guidance included
separate pricing assumptions for October - March and April -
September.
|
NATIONAL FUEL GAS COMPANY |
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP
EARNINGS |
QUARTER ENDED DECEMBER 31, 2022 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Upstream |
|
Midstream |
|
Downstream |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration & |
|
Pipeline & |
|
|
|
|
|
Corporate / |
|
|
(Thousands of Dollars) |
Production |
|
Storage |
|
Gathering |
|
Utility |
|
All Other |
|
Consolidated* |
|
|
|
|
|
|
|
|
|
|
|
|
First quarter 2022 GAAP earnings |
$ |
62,369 |
|
|
$ |
25,168 |
|
|
$ |
23,137 |
|
|
$ |
22,130 |
|
|
$ |
(412 |
) |
|
$ |
132,392 |
|
Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
Unrealized (gain) loss on
other investments |
|
|
|
|
|
|
|
|
|
4,490 |
|
|
|
4,490 |
|
Tax impact of unrealized
(gain) loss on other investments |
|
|
|
|
|
|
|
|
|
(943 |
) |
|
|
(943 |
) |
First quarter 2022
adjusted operating results |
|
62,369 |
|
|
|
25,168 |
|
|
|
23,137 |
|
|
|
22,130 |
|
|
|
3,135 |
|
|
|
135,939 |
|
Drivers of adjusted
operating results** |
|
|
|
|
|
|
|
|
|
|
|
Upstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) natural gas
production |
|
17,445 |
|
|
|
|
|
|
|
|
|
|
|
17,445 |
|
Higher (lower) crude oil
production |
|
(27,438 |
) |
|
|
|
|
|
|
|
|
|
|
(27,438 |
) |
Higher (lower) realized
natural gas prices, after hedging |
|
35,798 |
|
|
|
|
|
|
|
|
|
|
|
35,798 |
|
Midstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) operating
revenues |
|
|
|
7,351 |
|
|
|
3,309 |
|
|
|
|
|
|
|
10,660 |
|
Downstream
Margins*** |
|
|
|
|
|
|
|
|
|
|
|
Impact of usage and
weather |
|
|
|
|
|
|
|
3,268 |
|
|
|
|
|
3,268 |
|
Impact of new rates**** |
|
|
|
|
|
|
|
(3,726 |
) |
|
|
|
|
(3,726 |
) |
System modernization tracker
revenues |
|
|
|
|
|
|
|
868 |
|
|
|
|
|
868 |
|
Regulatory revenue
adjustments |
|
|
|
|
|
|
|
170 |
|
|
|
|
|
170 |
|
Higher (lower) other operating
revenues |
|
|
|
|
|
|
|
1,023 |
|
|
|
|
|
1,023 |
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Lower (higher) lease operating
and transportation expenses |
|
5,996 |
|
|
|
|
|
|
|
|
|
|
|
5,996 |
|
Lower (higher) operating
expenses |
|
3,325 |
|
|
|
(1,458 |
) |
|
|
(1,184 |
) |
|
|
(2,390 |
) |
|
|
|
|
(1,707 |
) |
Lower (higher) property,
franchise and other taxes |
|
(981 |
) |
|
|
|
|
|
|
|
|
|
|
(981 |
) |
Lower (higher) depreciation /
depletion |
|
(4,781 |
) |
|
|
(1,274 |
) |
|
|
|
|
|
|
|
|
(6,055 |
) |
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
(Higher) lower other
deductions |
|
1,428 |
|
|
|
593 |
|
|
|
|
|
4,135 |
|
|
|
(4,441 |
) |
|
|
1,715 |
|
(Higher) lower interest
expense |
|
(871 |
) |
|
|
(648 |
) |
|
|
|
|
(2,028 |
) |
|
|
1,721 |
|
|
|
(1,826 |
) |
Income
Taxes |
|
|
|
|
|
|
|
|
|
|
|
Lower (higher) income tax
expense / effective tax rate |
|
(1,185 |
) |
|
|
(191 |
) |
|
|
(552 |
) |
|
|
(67 |
) |
|
|
47 |
|
|
|
(1,948 |
) |
All other / rounding |
|
87 |
|
|
|
(65 |
) |
|
|
28 |
|
|
|
434 |
|
|
|
(161 |
) |
|
|
323 |
|
First quarter 2023
adjusted operating results |
|
91,192 |
|
|
|
29,476 |
|
|
|
24,738 |
|
|
|
23,817 |
|
|
|
301 |
|
|
|
169,524 |
|
Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on
other investments |
|
|
|
|
|
|
|
|
|
209 |
|
|
|
209 |
|
Tax impact of unrealized gain
(loss) on other investments |
|
|
|
|
|
|
|
|
|
(44 |
) |
|
|
(44 |
) |
First quarter 2023
GAAP earnings |
$ |
91,192 |
|
|
$ |
29,476 |
|
|
$ |
24,738 |
|
|
$ |
23,817 |
|
|
$ |
466 |
|
|
$ |
169,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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. |
**** Amount is
offset by corresponding decrease in other deductions and will have
no earnings impact for the year ended September 30, 2023. |
|
|
NATIONAL FUEL GAS COMPANY |
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER
SHARE |
QUARTER ENDED DECEMBER 31, 2022 |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Upstream |
|
Midstream |
|
Downstream |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration & |
|
Pipeline & |
|
|
|
|
|
Corporate / |
|
|
|
Production |
|
Storage |
|
Gathering |
|
Utility |
|
All Other |
|
Consolidated* |
|
|
|
|
|
|
|
|
|
|
|
|
First quarter 2022 GAAP earnings per share |
$ |
0.68 |
|
|
$ |
0.27 |
|
|
$ |
0.25 |
|
|
$ |
0.24 |
|
|
$ |
— |
|
|
$ |
1.44 |
|
Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
Unrealized (gain) loss on
other investments, net of tax |
|
|
|
|
|
|
|
|
|
0.04 |
|
|
|
0.04 |
|
First quarter 2022
adjusted operating results per share |
|
0.68 |
|
|
|
0.27 |
|
|
|
0.25 |
|
|
|
0.24 |
|
|
|
0.04 |
|
|
|
1.48 |
|
Drivers of adjusted
operating results** |
|
|
|
|
|
|
|
|
|
|
|
Upstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) natural gas
production |
|
0.19 |
|
|
|
|
|
|
|
|
|
|
|
0.19 |
|
Higher (lower) crude oil
production |
|
(0.30 |
) |
|
|
|
|
|
|
|
|
|
|
(0.30 |
) |
Higher (lower) realized
natural gas prices, after hedging |
|
0.39 |
|
|
|
|
|
|
|
|
|
|
|
0.39 |
|
Midstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) operating
revenues |
|
|
|
0.08 |
|
|
|
0.04 |
|
|
|
|
|
|
|
0.12 |
|
Downstream
Margins*** |
|
|
|
|
|
|
|
|
|
|
|
Impact of usage and
weather |
|
|
|
|
|
|
|
0.04 |
|
|
|
|
|
0.04 |
|
Impact of new rates**** |
|
|
|
|
|
|
|
(0.04 |
) |
|
|
|
|
(0.04 |
) |
System modernization tracker
revenues |
|
|
|
|
|
|
|
0.01 |
|
|
|
|
|
0.01 |
|
Regulatory revenue
adjustments |
|
|
|
|
|
|
|
— |
|
|
|
|
|
— |
|
Higher (lower) other operating
revenues |
|
|
|
|
|
|
|
0.01 |
|
|
|
|
|
0.01 |
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Lower (higher) lease operating
and transportation expenses |
|
0.06 |
|
|
|
|
|
|
|
|
|
|
|
0.06 |
|
Lower (higher) operating
expenses |
|
0.04 |
|
|
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
(0.03 |
) |
|
|
|
|
(0.02 |
) |
Lower (higher) property,
franchise and other taxes |
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
(0.01 |
) |
Lower (higher) depreciation /
depletion |
|
(0.05 |
) |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
(0.06 |
) |
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
(Higher) lower other
deductions |
|
0.02 |
|
|
|
0.01 |
|
|
|
|
|
0.04 |
|
|
|
(0.05 |
) |
|
|
0.02 |
|
(Higher) lower interest
expense |
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
|
|
(0.02 |
) |
|
|
0.02 |
|
|
|
(0.02 |
) |
Income
Taxes |
|
|
|
|
|
|
|
|
|
|
|
Lower (higher) income tax
expense / effective tax rate |
|
(0.01 |
) |
|
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
|
|
— |
|
|
|
(0.02 |
) |
All other / rounding |
|
(0.01 |
) |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
(0.01 |
) |
|
|
(0.01 |
) |
First quarter 2023
adjusted operating results per share |
|
0.99 |
|
|
|
0.32 |
|
|
|
0.27 |
|
|
|
0.26 |
|
|
|
— |
|
|
|
1.84 |
|
Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on
other investments, net of tax |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
First quarter 2023
GAAP earnings per share |
$ |
0.99 |
|
|
$ |
0.32 |
|
|
$ |
0.27 |
|
|
$ |
0.26 |
|
|
$ |
— |
|
|
$ |
1.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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. |
**** Amount is
offset by corresponding decrease in other deductions and will have
no earnings impact for the year ended September 30, 2023. |
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
|
|
|
|
(Thousands of Dollars, except
per share amounts) |
|
|
|
|
Three Months Ended |
|
December 31, |
|
(Unaudited) |
SUMMARY OF
OPERATIONS |
2022 |
|
2021 |
Operating Revenues: |
|
|
|
Utility Revenues |
$ |
311,619 |
|
|
$ |
236,684 |
|
Exploration and Production and Other Revenues |
|
276,973 |
|
|
|
244,281 |
|
Pipeline and Storage and Gathering Revenues |
|
70,267 |
|
|
|
65,592 |
|
|
|
658,859 |
|
|
|
546,557 |
|
Operating Expenses: |
|
|
|
Purchased Gas |
|
171,197 |
|
|
|
101,628 |
|
Operation and Maintenance: |
|
|
|
Utility |
|
50,352 |
|
|
|
46,644 |
|
Exploration and Production and Other |
|
26,874 |
|
|
|
45,619 |
|
Pipeline and Storage and Gathering |
|
33,261 |
|
|
|
29,928 |
|
Property, Franchise and Other Taxes |
|
26,205 |
|
|
|
24,501 |
|
Depreciation, Depletion and Amortization |
|
96,600 |
|
|
|
88,578 |
|
|
|
404,489 |
|
|
|
336,898 |
|
|
|
|
|
Operating Income |
|
254,370 |
|
|
|
209,659 |
|
|
|
|
|
Other Income (Expense): |
|
|
|
Other Income (Deductions) |
|
6,318 |
|
|
|
(1,079 |
) |
Interest Expense on Long-Term Debt |
|
(29,604 |
) |
|
|
(30,130 |
) |
Other Interest Expense |
|
(3,843 |
) |
|
|
(1,161 |
) |
|
|
|
|
Income Before Income
Taxes |
|
227,241 |
|
|
|
177,289 |
|
|
|
|
|
Income Tax Expense |
|
57,552 |
|
|
|
44,897 |
|
|
|
|
|
Net Income Available for
Common Stock |
$ |
169,689 |
|
|
$ |
132,392 |
|
|
|
|
|
Earnings Per Common Share |
|
|
|
Basic |
$ |
1.85 |
|
|
$ |
1.45 |
|
Diluted |
$ |
1.84 |
|
|
$ |
1.44 |
|
|
|
|
|
Weighted Average
Common Shares: |
|
|
|
Used in Basic Calculation |
|
91,579,814 |
|
|
|
91,266,300 |
|
Used in Diluted
Calculation |
|
92,268,210 |
|
|
|
92,032,775 |
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
|
|
|
December 31, |
|
September 30, |
(Thousands of Dollars) |
2022 |
|
2022 |
ASSETS |
|
|
|
Property, Plant and Equipment |
$ |
12,773,470 |
|
|
$ |
12,551,909 |
|
Less -
Accumulated Depreciation, Depletion and Amortization |
|
6,074,626 |
|
|
|
5,985,432 |
|
Net Property, Plant and Equipment |
|
6,698,844 |
|
|
|
6,566,477 |
|
Current Assets: |
|
|
|
Cash and Temporary Cash
Investments |
|
244,475 |
|
|
|
46,048 |
|
Hedging Collateral
Deposits |
|
1,600 |
|
|
|
91,670 |
|
Receivables - Net |
|
332,410 |
|
|
|
361,626 |
|
Unbilled Revenue |
|
87,110 |
|
|
|
30,075 |
|
Gas Stored Underground |
|
23,780 |
|
|
|
32,364 |
|
Materials and Supplies - at
average cost |
|
43,599 |
|
|
|
40,637 |
|
Unrecovered Purchased Gas
Costs |
|
78,739 |
|
|
|
99,342 |
|
Other Current Assets |
|
61,117 |
|
|
|
59,369 |
|
Total Current Assets |
|
872,830 |
|
|
|
761,131 |
|
Other Assets: |
|
|
|
Recoverable Future Taxes |
|
107,467 |
|
|
|
106,247 |
|
Unamortized Debt Expense |
|
8,473 |
|
|
|
8,884 |
|
Other Regulatory Assets |
|
73,321 |
|
|
|
67,101 |
|
Deferred Charges |
|
75,253 |
|
|
|
77,472 |
|
Other Investments |
|
72,870 |
|
|
|
95,025 |
|
Goodwill |
|
5,476 |
|
|
|
5,476 |
|
Prepaid Pension and
Post-Retirement Benefit Costs |
|
206,629 |
|
|
|
196,597 |
|
Fair Value of Derivative
Financial Instruments |
|
12,170 |
|
|
|
9,175 |
|
Other |
|
1,581 |
|
|
|
2,677 |
|
Total Other Assets |
|
563,240 |
|
|
|
568,654 |
|
Total Assets |
$ |
8,134,914 |
|
|
$ |
7,896,262 |
|
CAPITALIZATION AND LIABILITIES |
|
|
|
Capitalization: |
|
|
|
Comprehensive Shareholders'
Equity |
|
|
|
Common Stock, $1 Par Value
Authorized - 200,000,000 Shares; Issued and |
|
|
|
Outstanding - 91,786,806
Shares and 91,478,064 Shares, Respectively |
$ |
91,787 |
|
|
$ |
91,478 |
|
Paid in Capital |
|
1,025,639 |
|
|
|
1,027,066 |
|
Earnings Reinvested in the
Business |
|
1,713,176 |
|
|
|
1,587,085 |
|
Accumulated Other Comprehensive Loss |
|
(293,746 |
) |
|
|
(625,733 |
) |
Total Comprehensive Shareholders' Equity |
|
2,536,856 |
|
|
|
2,079,896 |
|
Long-Term Debt, Net of Current Portion and Unamortized Discount and
Debt Issuance Costs |
|
2,084,363 |
|
|
|
2,083,409 |
|
Total Capitalization |
|
4,621,219 |
|
|
|
4,163,305 |
|
Current and Accrued Liabilities: |
|
|
|
Notes Payable to Banks and
Commercial Paper |
|
250,000 |
|
|
|
60,000 |
|
Current Portion of Long-Term
Debt |
|
399,000 |
|
|
|
549,000 |
|
Accounts Payable |
|
168,387 |
|
|
|
178,945 |
|
Amounts Payable to
Customers |
|
154 |
|
|
|
419 |
|
Dividends Payable |
|
43,598 |
|
|
|
43,452 |
|
Interest Payable on Long-Term
Debt |
|
43,142 |
|
|
|
17,376 |
|
Customer Advances |
|
31,314 |
|
|
|
26,108 |
|
Customer Security
Deposits |
|
28,829 |
|
|
|
24,283 |
|
Other Accruals and Current
Liabilities |
|
239,097 |
|
|
|
257,327 |
|
Fair
Value of Derivative Financial Instruments |
|
331,521 |
|
|
|
785,659 |
|
Total Current and Accrued Liabilities |
|
1,535,042 |
|
|
|
1,942,569 |
|
Other Liabilities: |
|
|
|
Deferred Income Taxes |
|
879,676 |
|
|
|
698,229 |
|
Taxes Refundable to
Customers |
|
360,276 |
|
|
|
362,098 |
|
Cost of Removal Regulatory
Liability |
|
263,707 |
|
|
|
259,947 |
|
Other Regulatory
Liabilities |
|
191,499 |
|
|
|
188,803 |
|
Other Post-Retirement
Liabilities |
|
2,998 |
|
|
|
3,065 |
|
Asset Retirement
Obligations |
|
161,221 |
|
|
|
161,545 |
|
Other
Liabilities |
|
119,276 |
|
|
|
116,701 |
|
Total Other Liabilities |
|
1,978,653 |
|
|
|
1,790,388 |
|
Commitments and Contingencies |
|
— |
|
|
|
— |
|
Total Capitalization and Liabilities |
$ |
8,134,914 |
|
|
$ |
7,896,262 |
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Unaudited) |
|
|
Three Months Ended |
|
|
December 31, |
(Thousands of Dollars) |
|
2022 |
|
2021 |
|
|
|
|
|
Operating Activities: |
|
|
|
|
Net Income Available for Common Stock |
|
$ |
169,689 |
|
|
$ |
132,392 |
|
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities: |
|
|
|
|
Depreciation, Depletion and Amortization |
|
|
96,600 |
|
|
|
88,578 |
|
Deferred Income Taxes |
|
|
53,457 |
|
|
|
44,122 |
|
Stock-Based Compensation |
|
|
5,575 |
|
|
|
5,487 |
|
Other |
|
|
4,078 |
|
|
|
4,675 |
|
Change in: |
|
|
|
|
Receivables and Unbilled Revenue |
|
|
(29,522 |
) |
|
|
(98,688 |
) |
Gas Stored Underground and Materials, Supplies and Emission
Allowances |
|
|
5,622 |
|
|
|
17,111 |
|
Unrecovered Purchased Gas Costs |
|
|
20,603 |
|
|
|
526 |
|
Other Current Assets |
|
|
(1,748 |
) |
|
|
(4,654 |
) |
Accounts Payable |
|
|
6,091 |
|
|
|
(10,888 |
) |
Amounts Payable to Customers |
|
|
(265 |
) |
|
|
15 |
|
Customer Advances |
|
|
5,206 |
|
|
|
(2,603 |
) |
Customer Security Deposits |
|
|
4,546 |
|
|
|
981 |
|
Other Accruals and Current Liabilities |
|
|
4,523 |
|
|
|
5,044 |
|
Other Assets |
|
|
(20,238 |
) |
|
|
(6,838 |
) |
Other Liabilities |
|
|
3,122 |
|
|
|
(3,777 |
) |
Net Cash Provided by Operating Activities |
|
$ |
327,339 |
|
|
$ |
171,483 |
|
|
|
|
|
|
Investing Activities: |
|
|
|
|
Capital Expenditures |
|
$ |
(233,473 |
) |
|
$ |
(213,491 |
) |
Sale of Fixed Income Mutual
Fund Shares in Grantor Trust |
|
|
10,000 |
|
|
|
30,000 |
|
Other |
|
|
14,637 |
|
|
|
13,781 |
|
Net Cash Used in Investing Activities |
|
$ |
(208,836 |
) |
|
$ |
(169,710 |
) |
|
|
|
|
|
Financing Activities: |
|
|
|
|
Proceeds from Issuance of
Short-Term Note Payable to Bank |
|
$ |
250,000 |
|
|
$ |
— |
|
Net Change in Other Short-Term
Notes Payable to Banks and Commercial Paper |
|
|
(60,000 |
) |
|
|
7,500 |
|
Reduction of Long-Term
Debt |
|
|
(150,000 |
) |
|
|
— |
|
Dividends Paid on Common
Stock |
|
|
(43,452 |
) |
|
|
(41,487 |
) |
Net
Repurchases of Common Stock |
|
|
(6,694 |
) |
|
|
(8,859 |
) |
Net Cash Used in Financing Activities |
|
$ |
(10,146 |
) |
|
$ |
(42,846 |
) |
|
|
|
|
|
Net Increase (Decrease) in
Cash, Cash Equivalents, and Restricted Cash |
|
|
108,357 |
|
|
|
(41,073 |
) |
Cash,
Cash Equivalents, and Restricted Cash at Beginning of Period |
|
|
137,718 |
|
|
|
120,138 |
|
Cash, Cash Equivalents, and Restricted Cash at December 31 |
|
$ |
246,075 |
|
|
$ |
79,065 |
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS |
(UNAUDITED) |
|
|
|
|
|
|
UPSTREAM BUSINESS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
(Thousands of Dollars, except
per share amounts) |
December 31, |
EXPLORATION AND
PRODUCTION SEGMENT |
2022 |
|
2021 |
|
Variance |
Total Operating Revenues |
$ |
276,973 |
|
|
$ |
244,198 |
|
|
$ |
32,775 |
|
Operating Expenses: |
|
|
|
|
|
Operation and Maintenance: |
|
|
|
|
|
General and Administrative Expense |
|
15,598 |
|
|
|
17,756 |
|
|
|
(2,158 |
) |
Lease Operating and Transportation Expense |
|
61,546 |
|
|
|
69,136 |
|
|
|
(7,590 |
) |
All Other Operation and Maintenance Expense |
|
2,523 |
|
|
|
4,573 |
|
|
|
(2,050 |
) |
Property, Franchise and Other Taxes |
|
6,976 |
|
|
|
5,734 |
|
|
|
1,242 |
|
Depreciation, Depletion and Amortization |
|
55,558 |
|
|
|
49,506 |
|
|
|
6,052 |
|
|
|
142,201 |
|
|
|
146,705 |
|
|
|
(4,504 |
) |
|
|
|
|
|
|
Operating Income |
|
134,772 |
|
|
|
97,493 |
|
|
|
37,279 |
|
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
Non-Service Pension and Post-Retirement Benefit (Costs) Credit |
|
347 |
|
|
|
(186 |
) |
|
|
533 |
|
Interest and Other Income |
|
1,331 |
|
|
|
56 |
|
|
|
1,275 |
|
Interest Expense |
|
(13,234 |
) |
|
|
(12,132 |
) |
|
|
(1,102 |
) |
Income Before Income
Taxes |
|
123,216 |
|
|
|
85,231 |
|
|
|
37,985 |
|
Income Tax Expense |
|
32,024 |
|
|
|
22,862 |
|
|
|
9,162 |
|
Net Income |
$ |
91,192 |
|
|
$ |
62,369 |
|
|
$ |
28,823 |
|
Net Income Per Share
(Diluted) |
$ |
0.99 |
|
|
$ |
0.68 |
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS |
(UNAUDITED) |
|
|
|
|
|
|
MIDSTREAM BUSINESSES |
|
|
|
|
|
|
|
Three Months Ended |
(Thousands of Dollars, except
per share amounts) |
December 31, |
PIPELINE AND STORAGE
SEGMENT |
2022 |
|
2021 |
|
Variance |
Revenues from External Customers |
$ |
67,621 |
|
|
$ |
61,547 |
|
|
$ |
6,074 |
|
Intersegment Revenues |
|
30,034 |
|
|
|
26,803 |
|
|
|
3,231 |
|
Total Operating Revenues |
|
97,655 |
|
|
|
88,350 |
|
|
|
9,305 |
|
Operating Expenses: |
|
|
|
|
|
Purchased Gas |
|
425 |
|
|
|
448 |
|
|
|
(23 |
) |
Operation and Maintenance |
|
24,018 |
|
|
|
22,172 |
|
|
|
1,846 |
|
Property, Franchise and Other
Taxes |
|
8,684 |
|
|
|
8,580 |
|
|
|
104 |
|
Depreciation, Depletion and
Amortization |
|
17,414 |
|
|
|
15,801 |
|
|
|
1,613 |
|
|
|
50,541 |
|
|
|
47,001 |
|
|
|
3,540 |
|
|
|
|
|
|
|
Operating Income |
|
47,114 |
|
|
|
41,349 |
|
|
|
5,765 |
|
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
Non-Service Pension and Post-Retirement Benefit Credit |
|
1,330 |
|
|
|
767 |
|
|
|
563 |
|
Interest and Other Income |
|
1,864 |
|
|
|
1,402 |
|
|
|
462 |
|
Interest Expense |
|
(10,952 |
) |
|
|
(10,132 |
) |
|
|
(820 |
) |
Income Before Income
Taxes |
|
39,356 |
|
|
|
33,386 |
|
|
|
5,970 |
|
Income Tax Expense |
|
9,880 |
|
|
|
8,218 |
|
|
|
1,662 |
|
Net Income |
$ |
29,476 |
|
|
$ |
25,168 |
|
|
$ |
4,308 |
|
Net Income Per Share
(Diluted) |
$ |
0.32 |
|
|
$ |
0.27 |
|
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, |
GATHERING
SEGMENT |
2022 |
|
2021 |
|
Variance |
Revenues from External
Customers |
$ |
2,646 |
|
|
$ |
4,045 |
|
|
$ |
(1,399 |
) |
Intersegment Revenues |
|
53,767 |
|
|
|
48,180 |
|
|
|
5,587 |
|
Total Operating Revenues |
|
56,413 |
|
|
|
52,225 |
|
|
|
4,188 |
|
Operating Expenses: |
|
|
|
|
|
Operation and Maintenance |
|
9,687 |
|
|
|
8,188 |
|
|
|
1,499 |
|
Property, Franchise and Other Taxes |
|
11 |
|
|
|
5 |
|
|
|
6 |
|
Depreciation, Depletion and Amortization |
|
8,709 |
|
|
|
8,391 |
|
|
|
318 |
|
|
|
18,407 |
|
|
|
16,584 |
|
|
|
1,823 |
|
|
|
|
|
|
|
Operating Income |
|
38,006 |
|
|
|
35,641 |
|
|
|
2,365 |
|
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
Non-Service Pension and Post-Retirement Benefit (Costs) Credit |
|
37 |
|
|
|
(56 |
) |
|
|
93 |
|
Interest and Other Income |
|
170 |
|
|
|
9 |
|
|
|
161 |
|
Interest Expense |
|
(4,042 |
) |
|
|
(4,148 |
) |
|
|
106 |
|
Income Before Income
Taxes |
|
34,171 |
|
|
|
31,446 |
|
|
|
2,725 |
|
Income Tax Expense |
|
9,433 |
|
|
|
8,309 |
|
|
|
1,124 |
|
Net Income |
$ |
24,738 |
|
|
$ |
23,137 |
|
|
$ |
1,601 |
|
Net Income Per Share
(Diluted) |
$ |
0.27 |
|
|
$ |
0.25 |
|
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS |
(UNAUDITED) |
|
|
|
|
|
|
DOWNSTREAM BUSINESS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
(Thousands of Dollars, except
per share amounts) |
December 31, |
UTILITY
SEGMENT |
2022 |
|
2021 |
|
Variance |
Revenues from External Customers |
$ |
311,619 |
|
|
$ |
236,684 |
|
|
$ |
74,935 |
|
Intersegment Revenues |
|
62 |
|
|
|
75 |
|
|
|
(13 |
) |
Total Operating Revenues |
|
311,681 |
|
|
|
236,759 |
|
|
|
74,922 |
|
Operating Expenses: |
|
|
|
|
|
Purchased Gas |
|
198,420 |
|
|
|
127,212 |
|
|
|
71,208 |
|
Operation and Maintenance |
|
51,276 |
|
|
|
47,461 |
|
|
|
3,815 |
|
Property, Franchise and Other Taxes |
|
10,408 |
|
|
|
10,058 |
|
|
|
350 |
|
Depreciation, Depletion and Amortization |
|
14,874 |
|
|
|
14,831 |
|
|
|
43 |
|
|
|
274,978 |
|
|
|
199,562 |
|
|
|
75,416 |
|
|
|
|
|
|
|
Operating Income |
|
36,703 |
|
|
|
37,197 |
|
|
|
(494 |
) |
|
|
|
|
|
|
Other Income (Expense): |
|
|
|
|
|
Non-Service Pension and Post-Retirement Benefit Costs |
|
(8 |
) |
|
|
(4,326 |
) |
|
|
4,318 |
|
Interest and Other Income |
|
1,440 |
|
|
|
525 |
|
|
|
915 |
|
Interest Expense |
|
(8,043 |
) |
|
|
(5,524 |
) |
|
|
(2,519 |
) |
Income Before Income
Taxes |
|
30,092 |
|
|
|
27,872 |
|
|
|
2,220 |
|
Income Tax Expense |
|
6,275 |
|
|
|
5,742 |
|
|
|
533 |
|
Net Income |
$ |
23,817 |
|
|
$ |
22,130 |
|
|
$ |
1,687 |
|
Net Income Per Share
(Diluted) |
$ |
0.26 |
|
|
$ |
0.24 |
|
|
$ |
0.02 |
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS |
(UNAUDITED) |
|
|
|
|
|
|
|
Three Months Ended |
(Thousands of Dollars, except
per share amounts) |
December 31, |
ALL
OTHER |
2022 |
|
2021 |
|
Variance |
Revenues from External Customers |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Intersegment Revenues |
|
— |
|
|
|
6 |
|
|
|
(6 |
) |
Total Operating Revenues |
|
— |
|
|
|
6 |
|
|
|
(6 |
) |
Operating Expenses: |
|
|
|
|
|
Purchased Gas |
|
— |
|
|
|
6 |
|
|
|
(6 |
) |
Operation and Maintenance |
|
21 |
|
|
|
5 |
|
|
|
16 |
|
|
|
21 |
|
|
|
11 |
|
|
|
10 |
|
|
|
|
|
|
|
Operating Loss |
|
(21 |
) |
|
|
(5 |
) |
|
|
(16 |
) |
Other Income (Expense): |
|
|
|
|
|
Interest and Other Income |
|
(324 |
) |
|
|
2 |
|
|
|
(326 |
) |
Interest Expense |
|
(21 |
) |
|
|
— |
|
|
|
(21 |
) |
Loss before Income Taxes |
|
(366 |
) |
|
|
(3 |
) |
|
|
(363 |
) |
Income Tax Expense
(Benefit) |
|
(86 |
) |
|
|
4 |
|
|
|
(90 |
) |
Net Loss |
$ |
(280 |
) |
|
$ |
(7 |
) |
|
$ |
(273 |
) |
Net Loss Per Share
(Diluted) |
$ |
(0.01 |
) |
|
$ |
— |
|
|
$ |
(0.01 |
) |
|
|
|
Three Months Ended |
|
December 31, |
CORPORATE |
2022 |
|
2021 |
|
Variance |
Revenues from External
Customers |
$ |
— |
|
|
$ |
83 |
|
|
$ |
(83 |
) |
Intersegment Revenues |
|
1,152 |
|
|
|
1,082 |
|
|
|
70 |
|
Total Operating Revenues |
|
1,152 |
|
|
|
1,165 |
|
|
|
(13 |
) |
Operating Expenses: |
|
|
|
|
|
Operation and Maintenance |
|
3,185 |
|
|
|
3,008 |
|
|
|
177 |
|
Property, Franchise and Other Taxes |
|
126 |
|
|
|
124 |
|
|
|
2 |
|
Depreciation, Depletion and Amortization |
|
45 |
|
|
|
49 |
|
|
|
(4 |
) |
|
|
3,356 |
|
|
|
3,181 |
|
|
|
175 |
|
|
|
|
|
|
|
Operating Loss |
|
(2,204 |
) |
|
|
(2,016 |
) |
|
|
(188 |
) |
Other Income (Expense): |
|
|
|
|
|
Non-Service Pension and Post-Retirement Benefit Costs |
|
(354 |
) |
|
|
(1,017 |
) |
|
|
663 |
|
Interest and Other Income |
|
37,877 |
|
|
|
33,177 |
|
|
|
4,700 |
|
Interest Expense on Long-Term Debt |
|
(29,604 |
) |
|
|
(30,130 |
) |
|
|
526 |
|
Other Interest Expense |
|
(4,943 |
) |
|
|
(657 |
) |
|
|
(4,286 |
) |
Net Income (Loss) before
Income Taxes |
|
772 |
|
|
|
(643 |
) |
|
|
1,415 |
|
Income Tax Expense
(Benefit) |
|
26 |
|
|
|
(238 |
) |
|
|
264 |
|
Net Income (Loss) |
$ |
746 |
|
|
$ |
(405 |
) |
|
$ |
1,151 |
|
Net Income (Loss) Per Share
(Diluted) |
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, |
INTERSEGMENT
ELIMINATIONS |
2022 |
|
2021 |
|
Variance |
Intersegment Revenues |
$ |
(85,015 |
) |
|
$ |
(76,146 |
) |
|
$ |
(8,869 |
) |
Operating Expenses: |
|
|
|
|
|
Purchased Gas |
|
(27,648 |
) |
|
|
(26,038 |
) |
|
|
(1,610 |
) |
Operation and Maintenance |
|
(57,367 |
) |
|
|
(50,108 |
) |
|
|
(7,259 |
) |
|
|
(85,015 |
) |
|
|
(76,146 |
) |
|
|
(8,869 |
) |
Operating Income |
|
— |
|
|
|
— |
|
|
|
— |
|
Other Income (Expense): |
|
|
|
|
|
Interest and Other Deductions |
|
(37,392 |
) |
|
|
(31,432 |
) |
|
|
(5,960 |
) |
Interest Expense |
|
37,392 |
|
|
|
31,432 |
|
|
|
5,960 |
|
Net Income |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Net Income Per Share
(Diluted) |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
|
|
|
|
|
|
SEGMENT INFORMATION (Continued) |
(Thousands of Dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, |
|
(Unaudited) |
|
|
|
|
|
Increase |
|
2022 |
|
2021 |
|
(Decrease) |
|
|
|
|
|
|
Capital
Expenditures: |
|
|
|
|
|
Exploration and Production |
$ |
168,505 |
|
(1)(2) |
$ |
139,212 |
|
(3)(4) |
$ |
29,293 |
|
Pipeline and Storage |
|
16,427 |
|
(1)(2) |
|
24,061 |
|
(3)(4) |
|
(7,634 |
) |
Gathering |
|
13,293 |
|
(1)(2) |
|
8,920 |
|
(3)(4) |
|
4,373 |
|
Utility |
|
25,288 |
|
(1)(2) |
|
19,383 |
|
(3)(4) |
|
5,905 |
|
Total Reportable Segments |
|
223,513 |
|
|
|
191,576 |
|
|
|
31,937 |
|
All Other |
|
— |
|
|
|
— |
|
|
|
— |
|
Corporate |
|
12 |
|
|
|
225 |
|
|
|
(213 |
) |
Total Capital Expenditures |
$ |
223,525 |
|
|
$ |
191,801 |
|
|
$ |
31,724 |
|
(1) |
|
Capital expenditures for the quarter ended December 31, 2022,
include accounts payable and accrued liabilities related to capital
expenditures of $102.9 million, $2.1 million, $1.1 million, and
$4.2 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 December 31, 2022, since
they represent non-cash investing activities at that date. |
|
|
|
(2) |
|
Capital expenditures for the quarter ended December 31, 2022,
exclude 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 were in accounts
payable and accrued liabilities at September 30, 2022 and paid
during the quarter ended December 31, 2022. These amounts were
excluded from the Consolidated Statement of Cash Flows at September
30, 2022, since they represented non-cash investing activities at
that date. These amounts have been included in the Consolidated
Statement of Cash Flows at December 31, 2022. |
|
|
|
(3) |
|
Capital expenditures for the quarter ended December 31, 2021,
include accounts payable and accrued liabilities related to capital
expenditures of $69.9 million, $5.4 million, $2.6 million, and $3.1
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 December 31, 2021, since
they represent non-cash investing activities at that date. |
|
|
|
(4) |
|
Capital expenditures for the quarter ended December 31, 2021,
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 quarter ended December 31, 2021. 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 December 31, 2021. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEGREE
DAYS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent Colder |
|
|
|
|
|
|
|
|
|
|
(Warmer) Than: |
Three Months Ended December
31, |
Normal |
|
2022 |
|
2021 |
|
Normal(1) |
|
Last Year(1) |
Buffalo, NY |
2,253 |
|
|
2,048 |
|
|
1,704 |
|
|
(9.1 |
) |
|
20.2 |
|
Erie, PA |
2,044 |
|
|
1,987 |
|
|
1,560 |
|
|
(2.8 |
) |
|
27.4 |
|
(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 |
|
|
December 31, |
|
|
|
|
|
|
Increase |
|
|
2022 |
|
2021 |
|
(Decrease) |
|
|
|
|
|
|
|
Gas
Production/Prices: |
|
|
|
|
|
|
Production (MMcf) |
|
|
|
|
|
|
Appalachia |
|
|
90,574 |
|
|
|
81,389 |
|
|
|
9,185 |
|
West Coast |
|
|
— |
|
|
|
408 |
|
|
|
(408 |
) |
Total Production |
|
|
90,574 |
|
|
|
81,797 |
|
|
|
8,777 |
|
|
|
|
|
|
|
|
Average Prices (Per Mcf) |
|
|
|
|
|
|
Appalachia |
|
$ |
4.77 |
|
|
$ |
4.39 |
|
|
$ |
0.38 |
|
West Coast |
|
N/M |
|
|
|
9.79 |
|
|
N/M |
|
Weighted Average |
|
|
4.77 |
|
|
|
4.42 |
|
|
|
0.35 |
|
Weighted Average after Hedging |
|
|
3.02 |
|
|
|
2.52 |
|
|
|
0.50 |
|
|
|
|
|
|
|
|
Oil
Production/Prices: |
|
|
|
|
|
|
Production (Thousands of
Barrels) |
|
|
|
|
|
|
Appalachia |
|
|
8 |
|
|
|
— |
|
|
|
8 |
|
West Coast |
|
|
— |
|
|
|
548 |
|
|
|
(548 |
) |
Total Production |
|
|
8 |
|
|
|
548 |
|
|
|
(540 |
) |
|
|
|
|
|
|
|
Average Prices (Per
Barrel) |
|
|
|
|
|
|
Appalachia |
|
$ |
82.09 |
|
|
$ |
70.86 |
|
|
$ |
11.23 |
|
West Coast |
|
N/M |
|
|
|
77.34 |
|
|
N/M |
|
Weighted Average |
|
|
82.09 |
|
|
|
77.34 |
|
|
|
4.75 |
|
Weighted Average after Hedging |
|
|
82.09 |
|
|
|
64.29 |
|
|
|
17.80 |
|
|
|
|
|
|
|
|
Total Production (MMcfe) |
|
|
90,622 |
|
|
|
85,085 |
|
|
|
5,537 |
|
|
|
|
|
|
|
|
Selected Operating
Performance Statistics: |
|
|
|
|
|
|
General & Administrative
Expense per Mcfe(1) |
|
$ |
0.17 |
|
|
$ |
0.21 |
|
|
$ |
(0.04 |
) |
Lease Operating and
Transportation Expense per Mcfe(1)(2) |
|
$ |
0.68 |
|
|
$ |
0.81 |
|
|
$ |
(0.13 |
) |
Depreciation, Depletion &
Amortization per Mcfe(1) |
|
$ |
0.61 |
|
|
$ |
0.58 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
N/M |
|
Not Meaningful (as a result of the sale of Seneca's West Coast
assets in June 2022) |
|
|
|
(1) |
|
Refer to page 13 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 $0.59 and $0.56 per Mcfe
for the three months ended December 31, 2022 and December 31, 2021,
respectively. |
|
|
|
|
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
EXPLORATION AND PRODUCTION INFORMATION |
|
Hedging Summary for
Remaining Nine Months of Fiscal 2023 |
|
Volume |
|
|
Average Hedge
Price |
Gas Swaps |
|
|
|
|
|
|
|
NYMEX |
|
80,460,000 |
|
MMBTU |
|
$ |
2.80 / MMBTU |
No Cost Collars |
|
67,080,000 |
|
MMBTU |
|
$ |
3.34 / MMBTU (Floor) / $3.99 /
MMBTU (Ceiling) |
Fixed Price Physical
Sales |
|
54,466,307 |
|
MMBTU |
|
$ |
2.47 / MMBTU |
Total |
|
202,006,307 |
|
MMBTU |
|
|
|
|
|
|
|
|
|
|
|
Hedging Summary for
Fiscal 2024 |
|
Volume |
|
|
Average Hedge
Price |
Gas Swaps |
|
|
|
|
|
|
|
NYMEX |
|
67,680,000 |
|
MMBTU |
|
$ |
2.98 / MMBTU |
No Cost Collars |
|
65,280,000 |
|
MMBTU |
|
$ |
3.33 / MMBTU (Floor) / $4.17 /
MMBTU (Ceiling) |
Fixed Price Physical
Sales |
|
65,607,429 |
|
MMBTU |
|
$ |
2.38 / MMBTU |
Total |
|
198,567,429 |
|
MMBTU |
|
|
|
|
|
|
|
|
|
|
|
Hedging Summary for
Fiscal 2025 |
|
Volume |
|
|
Average Hedge
Price |
Gas Swaps |
|
|
|
|
|
|
|
NYMEX |
|
27,560,000 |
|
MMBTU |
|
$ |
3.07 / MMBTU |
No Cost Collars |
|
43,960,000 |
|
MMBTU |
|
$ |
3.49 / MMBTU (Floor) / $4.65 /
MMBTU (Ceiling) |
Fixed Price Physical
Sales |
|
64,221,273 |
|
MMBTU |
|
$ |
2.43 / MMBTU |
Total |
|
135,741,273 |
|
MMBTU |
|
|
|
|
|
|
|
|
|
|
|
Hedging Summary for
Fiscal 2026 |
|
Volume |
|
|
Average Hedge
Price |
Gas Swaps |
|
|
|
|
|
|
|
NYMEX |
|
2,020,000 |
|
MMBTU |
|
$ |
3.09 / MMBTU |
No Cost Collars |
|
42,720,000 |
|
MMBTU |
|
$ |
3.53 / MMBTU (Floor) / $4.76 /
MMBTU (Ceiling) |
Fixed Price Physical
Sales |
|
62,453,675 |
|
MMBTU |
|
$ |
2.37 / MMBTU |
Total |
|
107,193,675 |
|
MMBTU |
|
|
|
|
|
|
|
|
|
|
|
Hedging Summary for
Fiscal 2027 |
|
Volume |
|
|
Average Hedge
Price |
No Cost Collars |
|
3,560,000 |
|
MMBTU |
|
$ |
3.53 / MMBTU (Floor) / $4.76 /
MMBTU (Ceiling) |
Fixed Price Physical
Sales |
|
45,517,002 |
|
MMBTU |
|
$ |
2.39 / MMBTU |
Total |
|
49,077,002 |
|
MMBTU |
|
|
|
|
|
|
|
|
|
|
|
Hedging Summary for
Fiscal 2028 |
|
Volume |
|
|
Average Hedge
Price |
Fixed Price Physical
Sales |
|
11,850,451 |
|
MMBTU |
|
$ |
2.48 / MMBTU |
|
|
|
|
|
|
|
|
Hedging Summary for
Fiscal 2029 |
|
Volume |
|
|
Average Hedge
Price |
Fixed Price Physical
Sales |
|
766,673 |
|
MMBTU |
|
$ |
2.54 / MMBTU |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pipeline
& Storage Throughput - (millions of cubic feet -
MMcf) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
December 31, |
|
|
|
|
|
|
|
|
Increase |
|
|
2022 |
|
2021 |
|
(Decrease) |
Firm Transportation -
Affiliated |
|
38,469 |
|
|
28,197 |
|
|
10,272 |
|
Firm Transportation -
Non-Affiliated |
|
186,154 |
|
|
165,397 |
|
|
20,757 |
|
Interruptible
Transportation |
|
1,308 |
|
|
767 |
|
|
541 |
|
|
|
225,931 |
|
|
194,361 |
|
|
31,570 |
|
|
|
|
|
|
|
|
|
|
|
Gathering Volume -
(MMcf) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
December 31, |
|
|
|
|
|
|
|
|
Increase |
|
|
2022 |
|
2021 |
|
(Decrease) |
Gathered Volume |
|
108,027 |
|
|
101,094 |
|
|
6,933 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility Throughput -
(MMcf) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
December 31, |
|
|
|
|
|
|
|
|
Increase |
|
|
2022 |
|
2021 |
|
(Decrease) |
Retail Sales: |
|
|
|
|
|
|
|
|
|
Residential Sales |
|
20,153 |
|
|
17,496 |
|
|
2,657 |
|
Commercial Sales |
|
2,994 |
|
|
2,543 |
|
|
451 |
|
Industrial Sales |
|
151 |
|
|
123 |
|
|
28 |
|
|
|
23,298 |
|
|
20,162 |
|
|
3,136 |
|
Transportation |
|
18,310 |
|
|
17,593 |
|
|
717 |
|
|
|
41,608 |
|
|
37,755 |
|
|
3,853 |
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS
COMPANYAND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
In addition to financial measures calculated in
accordance with generally accepted accounting principles (GAAP),
this press release contains information regarding Adjusted
Operating Results, Adjusted EBITDA and free cash flow, 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 or liquidity 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 months ended December
31, 2022 and 2021:
|
|
Three Months Ended |
|
|
December 31, |
(in thousands except per share
amounts) |
|
2022 |
|
2021 |
Reported GAAP Earnings |
|
$ |
169,689 |
|
|
$ |
132,392 |
|
Items impacting comparability: |
|
|
|
|
Unrealized (gain) loss on other investments (Corporate / All
Other) |
|
|
(209 |
) |
|
|
4,490 |
|
Tax impact of unrealized (gain) loss on other investments |
|
|
44 |
|
|
|
(943 |
) |
Adjusted Operating
Results |
|
$ |
169,524 |
|
|
$ |
135,939 |
|
|
|
|
|
|
Reported GAAP Earnings
Per Share |
|
$ |
1.84 |
|
|
$ |
1.44 |
|
Items impacting comparability: |
|
|
|
|
Unrealized (gain) loss on other investments, net of tax (Corporate
/ All Other) |
|
|
— |
|
|
|
0.04 |
|
Adjusted Operating
Results Per Share |
|
$ |
1.84 |
|
|
$ |
1.48 |
|
|
|
|
|
|
|
|
|
|
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 months ended December 31, 2022 and 2021:
|
|
Three Months Ended |
|
|
December 31, |
(in thousands) |
|
2022 |
|
2021 |
Reported GAAP Earnings |
|
$ |
169,689 |
|
|
$ |
132,392 |
|
Depreciation, Depletion and Amortization |
|
|
96,600 |
|
|
|
88,578 |
|
Other (Income) Deductions |
|
|
(6,318 |
) |
|
|
1,079 |
|
Interest Expense |
|
|
33,447 |
|
|
|
31,291 |
|
Income Taxes |
|
|
57,552 |
|
|
|
44,897 |
|
Adjusted
EBITDA |
|
$ |
350,970 |
|
|
$ |
298,237 |
|
|
|
|
|
|
Adjusted EBITDA by
Segment |
|
|
|
|
Pipeline and Storage Adjusted
EBITDA |
|
$ |
64,528 |
|
|
$ |
57,150 |
|
Gathering Adjusted EBITDA |
|
|
46,715 |
|
|
|
44,032 |
|
Total Midstream Businesses
Adjusted EBITDA |
|
|
111,243 |
|
|
|
101,182 |
|
Exploration and Production
Adjusted EBITDA |
|
|
190,330 |
|
|
|
146,999 |
|
Utility Adjusted EBITDA |
|
|
51,577 |
|
|
|
52,028 |
|
Corporate and All Other
Adjusted EBITDA |
|
|
(2,180 |
) |
|
|
(1,972 |
) |
Total Adjusted
EBITDA |
|
$ |
350,970 |
|
|
$ |
298,237 |
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS
COMPANYAND SUBSIDIARIESNON-GAAP
FINANCIAL MEASURES SEGMENT ADJUSTED
EBITDA
|
|
Three Months Ended |
|
|
December 31, |
(in thousands) |
|
2022 |
|
2021 |
Exploration and
Production Segment |
|
|
|
|
Reported GAAP Earnings |
|
$ |
91,192 |
|
|
$ |
62,369 |
|
Depreciation, Depletion and Amortization |
|
|
55,558 |
|
|
|
49,506 |
|
Other (Income) Deductions |
|
|
(1,678 |
) |
|
|
130 |
|
Interest Expense |
|
|
13,234 |
|
|
|
12,132 |
|
Income Taxes |
|
|
32,024 |
|
|
|
22,862 |
|
Adjusted EBITDA |
|
$ |
190,330 |
|
|
$ |
146,999 |
|
|
|
|
|
|
Pipeline and Storage
Segment |
|
|
|
|
Reported GAAP Earnings |
|
$ |
29,476 |
|
|
$ |
25,168 |
|
Depreciation, Depletion and Amortization |
|
|
17,414 |
|
|
|
15,801 |
|
Other (Income) Deductions |
|
|
(3,194 |
) |
|
|
(2,169 |
) |
Interest Expense |
|
|
10,952 |
|
|
|
10,132 |
|
Income Taxes |
|
|
9,880 |
|
|
|
8,218 |
|
Adjusted EBITDA |
|
$ |
64,528 |
|
|
$ |
57,150 |
|
|
|
|
|
|
Gathering
Segment |
|
|
|
|
Reported GAAP Earnings |
|
$ |
24,738 |
|
|
$ |
23,137 |
|
Depreciation, Depletion and Amortization |
|
|
8,709 |
|
|
|
8,391 |
|
Other (Income) Deductions |
|
|
(207 |
) |
|
|
47 |
|
Interest Expense |
|
|
4,042 |
|
|
|
4,148 |
|
Income Taxes |
|
|
9,433 |
|
|
|
8,309 |
|
Adjusted EBITDA |
|
$ |
46,715 |
|
|
$ |
44,032 |
|
|
|
|
|
|
Utility
Segment |
|
|
|
|
Reported GAAP Earnings |
|
$ |
23,817 |
|
|
$ |
22,130 |
|
Depreciation, Depletion and Amortization |
|
|
14,874 |
|
|
|
14,831 |
|
Other (Income) Deductions |
|
|
(1,432 |
) |
|
|
3,801 |
|
Interest Expense |
|
|
8,043 |
|
|
|
5,524 |
|
Income Taxes |
|
|
6,275 |
|
|
|
5,742 |
|
Adjusted EBITDA |
|
$ |
51,577 |
|
|
$ |
52,028 |
|
|
|
|
|
|
Corporate and All
Other |
|
|
|
|
Reported GAAP Earnings |
|
$ |
466 |
|
|
$ |
(412 |
) |
Depreciation, Depletion and Amortization |
|
|
45 |
|
|
|
49 |
|
Other (Income) Deductions |
|
|
193 |
|
|
|
(730 |
) |
Interest Expense |
|
|
(2,824 |
) |
|
|
(645 |
) |
Income Taxes |
|
|
(60 |
) |
|
|
(234 |
) |
Adjusted EBITDA |
|
$ |
(2,180 |
) |
|
$ |
(1,972 |
) |
|
|
|
|
|
|
|
|
|
Management defines free cash flow as funds from
operations (net cash provided by operating activities less changes
in working capital) less capital expenditures. The Company is
unable to provide a reconciliation of projected free cash flow as
described in this release to its comparable financial measure
calculated in accordance with GAAP without unreasonable efforts.
This is due to our inability to calculate the comparable GAAP
projected metrics, including operating income and total production
costs, given the unknown effect, timing, and potential significance
of certain income statement items.
Brandon J. Haspett
Investor Relations
716-857-7697
Karen M. Camiolo
Treasurer
716-857-7344
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