EX-99 2 nfg-3312020xexhibit99x.htm EXHIBIT 99 Exhibit

Exhibit 99

exhibit998kimagea15.jpg
 
 
 
 
 
 
6363 Main Street/Williamsville, NY 14221
 
 
 
 
Release Date:
Immediate April 30, 2020
Kenneth E. Webster
Investor Relations
716-857-7067
Karen M. Camiolo
Treasurer
716-857-7344
 
 
 
 

NATIONAL FUEL REPORTS SECOND QUARTER EARNINGS

WILLIAMSVILLE, N.Y.: National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the second quarter of its 2020 fiscal year and for the six months ended March 31, 2020.

FISCAL 2020 SECOND QUARTER SUMMARY
GAAP net loss of $106.1 million, or $1.23 per share, compared to GAAP net income of $90.6 million, or $1.04 per share, in the prior year, which includes a $129.3 million after-tax impairment of oil and gas properties and a $56.8 million deferred tax valuation allowance described in further detail in this release
Adjusted operating results of $84.2 million, or $0.97 per share, compared to $92.9 million, or $1.07 per share, in the prior year (see non-GAAP reconciliation on page 2)
Adjusted EBITDA of $231.1 million, an increase of $5.3 million from $225.8 million in the prior year (non-GAAP reconciliation on page 24)
E&P segment net production of 59.8 Bcfe, an increase of 11 Bcfe, or 23% from the prior year, including the impact of approximately 2.7 Bcf of curtailments due to sustained low natural gas prices in Appalachia
Average natural gas prices, after the impact of hedging, of $2.12 per Mcf, down $0.46 per Mcf from the prior year
Average oil prices, after the impact of hedging, of $58.23 per Bbl, down $2.78 per Bbl from the prior year
Gathering revenues of $35.3 million, an increase of $5.9 million, or 20%, on higher throughput from the E&P segment
Pipeline & Storage revenues of $79.2 million, an increase of $6.9 million, or 10%, from the prior year, largely driven by the successful resolution of a National Fuel Gas Supply Corporation rate proceeding
Reducing fiscal 2020 consolidated capital expenditure guidance to a range of $680 to $740 million, a decrease of $30 million from the midpoint of the Company's previous guidance range

MANAGEMENT COMMENTS ON COMPANY’S COVID-19 RESPONSE

David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “As we confront the challenges of the COVID-19 pandemic, I am proud to say that National Fuel has continued to safely and reliably provide natural gas service to our over 743,000 utility customers in western New York and northwestern Pennsylvania, operate our extensive network of transportation, compression and gathering infrastructure, and produce essential natural gas supplies.

The continuity of our operations is a direct result of the dedication and hard work of our over 2,000 employees. During this unprecedented situation, National Fuel has remained committed to our workforce - the bedrock of our Company - and has not instituted any furloughs or workforce reductions. With a large portion of our employees now working remotely, we have implemented a number of initiatives to provide the flexibility needed to address this new normal, including additional paid time off to address child care needs, and encouraging the use of alternative work schedules.

With respect to our in-field workforce and customer service representatives, all of whom provide essential services to our communities each and every day, we have adopted appropriate social distancing measures and have provided necessary personal protective equipment in line with directives from federal, state, and local agencies. As this public health crisis evolves, the health and well-being of our employees and our communities will remain our number one priority, and National Fuel will continue to monitor developments affecting our stakeholders in order to take appropriate steps to mitigate the impacts of the COVID-19 virus.”

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RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
 March 31,
 
 March 31,
(in thousands except per share amounts)
 
2020
 
2019
 
2020
 
2019
Reported GAAP Earnings
 
$
(106,068
)
 
$
90,595

 
$
(19,477
)
 
$
193,256

Items impacting comparability:
 
 
 
 
 
 
 
 
Impairment of oil and gas properties (E&P)
 
177,761

 

 
177,761

 

Tax impact of impairment of oil and gas properties
 
(48,503
)
 

 
(48,503
)
 

Deferred tax valuation allowance
 
56,770

 

 
56,770

 

Remeasurement of deferred income taxes under 2017 Tax Reform
 

 

 

 
(5,000
)
Mark-to-market adjustments due to hedge ineffectiveness (E&P)
 

 
6,742

 

 
237

Tax impact of mark-to-market adjustments due to hedge ineffectiveness
 

 
(1,416
)
 

 
(50
)
Unrealized (gain) loss on other investments (Corporate / All Other)
 
5,414

 
(3,831
)
 
6,433

 
2,516

Tax impact of unrealized (gain) loss on other investments
 
(1,137
)
 
805

 
(1,351
)
 
(528
)
Adjusted Operating Results
 
$
84,237

 
$
92,895

 
$
171,633

 
$
190,431

 
 
 
 
 
 
 
 
 
Reported GAAP Earnings Per Share
 
$
(1.23
)
 
$
1.04

 
$
(0.23
)
 
$
2.23

Items impacting comparability:
 
 
 
 
 
 
 
 
Impairment of oil and gas properties, net of tax (E&P)
 
1.49

 

 
1.49

 

Deferred tax valuation allowance
 
0.66

 

 
0.66

 

Remeasurement of deferred income taxes under 2017 Tax Reform
 

 

 

 
(0.06
)
Mark-to-market adjustments due to hedge ineffectiveness, net of tax (E&P)
 

 
0.06

 

 

Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)
 
0.05

 
(0.03
)
 
0.06

 
0.02

Rounding
 

 

 

 
0.01

Adjusted Operating Results Per Share
 
$
0.97

 
$
1.07

 
$
1.98

 
$
2.20



MANAGEMENT COMMENTS ON SECOND QUARTER RESULTS

Mr. Bauer added: “Low commodity prices continued to serve as a headwind during the quarter, weighing on our results and requiring the Company to write down the value of its oil and gas reserves in our Exploration and Production segment. Operationally, however, our results were in line with our expectations, driven by the strong performance of our Pipeline and Storage and Gathering businesses, both of which saw significant earnings growth. In these uncertain times, our diversified business model continues to function as designed, providing National Fuel with stability through a consistent, predictable base of cash flows and a strong balance sheet.”


FISCAL 2020 GUIDANCE AND BUSINESS UPDATE

National Fuel is revising its fiscal 2020 earnings guidance to reflect revised commodity price assumptions for the balance of the fiscal year, and the results of the fiscal second quarter. The Company is now projecting that earnings, excluding items impacting comparability, will be within the range of $2.75 to $2.95 per share, or $2.85 per share at the midpoint of the range.

The Company is assuming that NYMEX natural gas prices will average $2.05 per MMBtu for the remainder of fiscal 2020, unchanged from the previous guidance, while also lowering its Appalachian spot price forecast to $1.65 per MMBtu. Additionally, the Company is now assuming that WTI oil prices will average $22.50 per barrel (Bbl) for the remainder of fiscal 2020, a decrease of $32.50 per Bbl from the $55.00 assumed in the previous guidance. These price assumptions are intended to reflect the current NYMEX forward markets for natural gas and oil and consider the impact of local sales point differentials.

The Exploration and Production segment is lowering its fiscal 2020 net production guidance to a range of 230 to 240 Bcfe, which reflects the impacts of curtailments during the second quarter and estimated curtailments for the month of April. During the second quarter, Seneca executed approximately 12.6 Bcf of new NYMEX swap contracts and fixed price physical firm sales for fiscal 2020. The Company currently has financial hedges and fixed price physical firm sales contracts in place on approximately 72% of Seneca’s remaining expected fiscal 2020 natural gas production that, on average, lock-in a price realization after the cost of transportation of $2.16 per Mcf.

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In addition, the Company is lowering its consolidated capital expenditure guidance to a range of $680 to $740 million, a $30 million decrease from the midpoint of the Company’s prior guidance range. The Company’s other guidance assumptions remain largely unchanged from the previous guidance.

Additional details on the Company's updated forecast assumptions and business segment guidance for fiscal 2020 are outlined in the table on page 8.


DISCUSSION OF SECOND QUARTER RESULTS BY SEGMENT

The following earnings discussion of each operating segment for the quarter ended March 31, 2020 is summarized in a tabular form on pages 9 and 10 of this report (earnings drivers for the six months ended March 31, 2020 are summarized on pages 11 and 12). It may be helpful to refer to those tables while reviewing this discussion. As of the quarter ended September 30, 2019, the Company is no longer reporting the Energy Marketing operations as a reportable segment. The Energy Marketing operations have been included in the All Other category in the disclosures and tables that follow below. Prior year segment information has been restated to reflect this change in presentation.

Note that management defines Adjusted Operating Results as reported GAAP earnings adjusted for items impacting comparability, and Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability.

Upstream Business

Exploration and Production Segment

The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC ("Seneca"). Seneca explores for, develops and produces natural gas and oil reserves, primarily in Pennsylvania and California.
 
Three Months Ended
 
March 31,
(in thousands)
2020
 
2019
 
Variance
GAAP Earnings
$
(175,275
)
 
$
21,873

 
$
(197,148
)
Impairment of oil and gas properties, net of tax
129,258

 

 
129,258

Deferred tax valuation allowance
60,463

 

 
60,463

Mark-to-market adjustments due to hedge ineffectiveness, net of tax

 
5,326

 
(5,326
)
Adjusted Operating Results
$
14,446

 
$
27,199

 
$
(12,753
)
 
 
 
 
 
 
Adjusted EBITDA
$
79,846

 
$
83,580

 
$
(3,734
)

Seneca’s second quarter GAAP earnings decreased $197.1 million versus the prior year, which includes the impact of a non-cash, pre-tax impairment of Seneca’s oil and natural gas reserves, and the recognition of a valuation allowance that reduced the deferred tax asset related to certain state-level net operating loss and credit carryforwards that may not be realized.

During the second quarter, Seneca recorded a non-cash, pre-tax impairment charge of $177.8 million ($129.3 million after-tax) to write-down the value of Seneca’s oil and natural gas reserves under the full cost method of accounting. The full cost method of accounting requires that Seneca perform a quarterly “ceiling test” to compare the present value of future revenues from its oil and natural gas reserves based on an unweighted arithmetic average of the first day of the month oil and gas prices for each month within the 12-month period prior to the end of the reporting period (“the ceiling”) with the book value of those reserves at the balance sheet date. If the book value of the reserves exceeds the ceiling, a non-cash impairment charge must be recorded in order to reduce the book value of the reserves to the calculated ceiling. It is anticipated that the current low commodity price environment will lead to impairments during the remainder of fiscal 2020 and likely in the first quarter of fiscal 2021 as well.

During the quarter ended March 31, 2020, the Company recorded a full valuation allowance in the amount of $60.5 million against certain state deferred tax assets based on its conclusion, considering all available evidence (both positive and negative),

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that it was more likely than not that these deferred tax assets would not be realized. A significant item of objective negative evidence considered was a projected three-year cumulative pre-tax loss primarily due to the non-cash impairments of Seneca’s oil and gas reserves noted above. Changes in judgment regarding future realization of these deferred tax assets may result in a reversal of all or a portion of the valuation allowance.

Excluding these items noted above, as well as the net impact of non-cash mark-to-market adjustments recorded in the prior year relating to hedge ineffectiveness (see table above), Seneca’s second quarter earnings decreased $12.8 million as the positive impact of higher production was more than offset by the negative impacts of lower realized natural gas and crude oil prices, higher operating expenses, higher interest expense, and a higher effective tax rate.

Seneca produced 59.8 Bcfe during the second quarter, an increase of 11.0 Bcfe, or 23%, from the prior year. Natural gas production increased 10.7 Bcf, or 24%, due primarily to production from new Marcellus and Utica wells completed and connected to sales in Appalachia. Net production increased 5.4 Bcf to 26.6 Bcf in Seneca’s Western Development Area and 5.4 Bcf to 29.0 Bcf in the Eastern Development Area. Seneca curtailed an estimated 2.7 Bcf of net natural gas production during the second quarter due to lower spot pricing at local sales points in Pennsylvania. Oil production for the second quarter increased 42,000 Bbls from the prior year as new production continues to come on-line from Seneca’s development of the Pioneer and 17N assets in the Midway Sunset area of California, as well as the Coalinga assets.

Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.12 per Mcf, a decrease of $0.46 per Mcf from the prior year. This decline was largely due to lower NYMEX prices and lower spot pricing at local sales points in Pennsylvania. Seneca's average realized oil price, after the impact of hedging, was $58.23 per Bbl, a decrease of $2.78 per Bbl compared to the prior year. The decline in oil price realizations was due primarily to lower market prices for crude oil during the quarter and reduced price differentials at local sales points in California.

The increase in Seneca’s operating expenses was largely due to higher production during the quarter. Lease operating and transportation (“LOE”) expense, which increased $5.8 million, includes the fees paid to the Company’s Gathering segment for gathering and compression services used to connect Seneca’s Marcellus and Utica production to sales points along interstate pipelines. In addition to higher production, the $9.2 million increase in depreciation, depletion and amortization (“DD&A”) expense was also due to a higher DD&A rate. Seneca’s general and administrative (“G&A”) costs were relatively flat despite the increased production. On a unit of production basis, G&A expenses during the quarter decreased $0.06 per Mcfe to $0.29 per Mcfe.

The increase in Seneca’s effective tax rate, excluding the impact of the valuation allowance recorded at March 31, 2020 discussed above, was largely driven by the prior year impact of the Enhanced Oil Recovery tax credit, which was not available in the current year.

Midstream Businesses

Pipeline and Storage Segment

The Pipeline and Storage segment’s operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and Pennsylvania.
 
Three Months Ended
 
March 31,
(in thousands)
2020
 
2019
 
Variance
GAAP Earnings
$
22,087

 
$
17,749

 
$
4,338

 
 
 
 
 
 
Adjusted EBITDA
$
49,102

 
$
41,281

 
$
7,821


The Pipeline and Storage segment’s second quarter GAAP earnings increased $4.3 million versus the prior year primarily driven by higher operating revenues and lower operation and maintenance (“O&M”) expenses, partially offset by higher DD&A expense. The increase in operating revenues of $6.9 million, or 10%, was largely due to an increase in Supply Corporation's transportation and storage rates effective February 1, 2020, in accordance with Supply Corporation's rate case settlement in principle coupled with new demand charges for transportation service from Supply Corporation's Line N to Monaca expansion

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project, which was placed in service on November 1, 2019. O&M expense decreased $0.9 million primarily due to lower compressor and facility maintenance costs, partially offset by an increase in pipeline integrity costs. The increase in DD&A expense of $2.1 million was primarily attributable to an increase in Supply Corporation's depreciation rates associated with its rate case settlement in principle.

Gathering Segment

The Gathering segment’s operations are carried out by National Fuel Gas Midstream Company, LLC’s limited liability companies. The Gathering segment constructs, owns and operates natural gas gathering pipelines and compression facilities in the Appalachian region, which currently deliver Seneca’s gross Appalachian production to the interstate pipeline system.
 
Three Months Ended
 
March 31,
(in thousands)
2020
 
2019
 
Variance
GAAP Earnings
$
19,898

 
$
12,690

 
$
7,208

Deferred tax valuation allowance
(3,769
)
 

 
(3,769
)
Adjusted Operating Results
$
16,129

 
$
12,690

 
$
3,439

 
 
 
 
 
 
Adjusted EBITDA
$
29,541

 
$
24,598

 
$
4,943


The Gathering segment’s second quarter GAAP earnings increased $7.2 million versus the prior year. Earnings were positively impacted by $3.8 million as a result of the Gathering segment's recognition of an income tax benefit that was recorded as an offset to the valuation allowance described above in the Exploration and Production segment. This offset is a result of the Gathering and Exploration and Production segments’ subsidiaries filing a combined state tax return. Taxable income generated in the Gathering segment is used to offset taxable losses in the Exploration and Production segment, which provided the opportunity to reduce the valuation allowance recorded in the Exploration and Production segment. Excluding this item, the Gathering segment’s earnings increased $3.4 million. The increase was primarily driven by higher operating revenues, which were partially offset by higher O&M expense and a modest increase in DD&A expense. Operating revenues increased $5.9 million, or 20%, primarily due to an 11.0 Bcf increase in gathered volumes from Seneca’s Appalachian natural gas production. The $1.0 million increase in O&M expense was due to an increase in compressor station operating and preventative maintenance activity during the current quarter. The $0.6 million increase in DD&A expense was due primarily to a higher average total value of plant assets in service versus the prior year.

Downstream Businesses

Utility Segment

The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania.
 
Three Months Ended
 
March 31,
(in thousands)
2020
 
2019
 
Variance
GAAP Earnings
$
31,499

 
$
35,589

 
$
(4,090
)
 
 
 
 
 
 
Adjusted EBITDA
$
73,192

 
$
78,688

 
$
(5,496
)

The Utility segment’s second quarter GAAP earnings decreased $4.1 million over the prior year primarily driven by a decline in customer margin (operating revenues less purchased gas sold) and higher O&M expense. The $1.5 million decrease in customer margin was due primarily to warmer weather in Distribution's Pennsylvania service territory, partially offset by higher revenues earned through the Company’s system modernization tracking mechanism and the positive impact of adjustments related to regulatory rate and cost recovery mechanisms subject to annual reconciliation. Weather in Distribution's Pennsylvania service territory was 17.5% warmer on average than last year, resulting in a decrease in residential and transportation customer throughput and revenues. The impact of weather variations on earnings in Distribution's New York service territory is largely mitigated by that jurisdiction's weather normalization clause. The $3.3 million increase in O&M expense was primarily attributable to higher personnel costs as well as a higher accrual for bad debt expense given the economic backdrop in the Company's service territory.

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Corporate and All Other

The Company’s operations that are included in Corporate and All Other, which now include the Company’s energy marketing business, generated a combined loss of $4.3 million in the current year second quarter, which was a $7.0 million decrease from the combined earnings of $2.7 million generated in the prior-year second quarter. The decrease in earnings was driven primarily by higher unrealized losses on investment securities in the current quarter compared to unrealized gains on investment securities in the prior year second quarter.


EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, May 1, 2020, at 8:30 a.m. Eastern Time to discuss this announcement. There are two ways to access this call. For those with Internet access, visit the NFG Investor Relations News & Events page at National Fuel’s website at investor.nationalfuelgas.com. For those without Internet access, audio access is also provided by dialing (toll-free) 833-287-0795, using conference ID number “9349819”. For those unable to listen to the live conference call, an audio replay will be available approximately two hours following the teleconference at the same website link and by phone at (toll-free) 800-585-8367 using conference ID number “9349819”. Both the webcast and a telephonic replay will be available until the close of business on Friday, May 8, 2020.

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.

 
 
 
 
 
 
Analyst Contact:
Kenneth E. Webster
716-857-7067
Media Contact:
Karen L. Merkel
716-857-7654


Certain statements contained herein, including statements identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions, and statements which are other than statements of historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; changes in the price of natural gas or oil; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; the length and severity of the recent COVID-19 pandemic, including its impacts across our businesses on demand, operations, global supply chains and liquidity; changes in economic conditions, including global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; 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; delays or changes in costs or plans with respect to Company projects or related projects of other companies, including disruptions due to COVID-19, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; changes in price differentials between similar quantities of natural gas or oil sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; 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 and oil reserves, including among others geology, lease availability, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and

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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 or oil having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; changes in demographic patterns and weather conditions; changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.

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NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

GUIDANCE SUMMARY

As discussed on page 2, the Company is revising its earnings guidance for fiscal 2020. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below.

While the Company expects to incur additional ceiling test impairment charges in the remaining quarters of fiscal 2020 and likely in the first quarter of fiscal 2021 as well, the amount of these charges is not reasonably determinable at this time. The amount of any ceiling test charge is determined at the end of the applicable quarter and will depend on many factors, including additions to or subtractions from proved reserves, fluctuations in oil and gas prices, and income tax effects related to the differences between the book and tax basis of the Company’s oil and gas properties. Some or all of these factors are likely to be significant. Because the expected ceiling test impairment charges and other potential items impacting comparability are not reasonably determinable at this time, the Company is unable to provide earnings guidance other than on a non-GAAP basis that excludes these items.
 
Updated FY 2020 Guidance
 
Previous FY 2020 Guidance
Consolidated Earnings per Share, excluding items impacting comparability
$2.75 to $2.95
 
$2.95 to $3.15
Consolidated Effective Tax Rate
~ 26%
 
 ~ 25%
 
 
 
 
Capital Expenditures (Millions)
 
 
 
    Exploration and Production
$375 - $395
 
$375 - $410
    Pipeline and Storage
$175 - $195
 
$180 - $215
    Gathering
$50 - $60
 
$50 - $60
    Utility
$80 - $90
 
$90 - $100
    Consolidated Capital Expenditures
$680 - $740
 
$695 - $785
 
 
 
 
Exploration & Production Segment Guidance
 
 
 
 
 
 
 
    Commodity Price Assumptions
 
 
 
    NYMEX natural gas price
$2.05 /MMBtu
 
$2.05 /MMBtu
    Appalachian basin spot price
$1.65 /MMBtu
 
$1.70 /MMBtu
    NYMEX (WTI) crude oil price
$22.50 /Bbl
 
$55.00 /Bbl
    California oil price premium (% of WTI)
90%
 
104%
 
 
 
 
    Production (Bcfe)
 
 
 
    East Division - Appalachia
214 to 224
 
219 to 229
    West Division - California
~ 16
 
~ 16
    Total Production
230 to 240
 
235 to 245
 
 
 
 
    E&P Operating Costs ($/Mcfe)
 
 
 
    LOE
$0.85 - $0.89
 
$0.85 - $0.89
    G&A
$0.27 - $0.30
 
$0.27 - $0.30
    DD&A
$0.70 - $0.74
 
$0.73 - $0.77
 
 
 
 
Other Business Segment Guidance (Millions)
 
 
 
    Gathering Segment Revenues
$135 - $140
 
$135 - $145
    Pipeline and Storage Segment Revenues
~ $305
 
$290 - $295
























































Page 9.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED MARCH 31, 2020
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Upstream
 
Midstream
 
Downstream
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exploration &
 
Pipeline &
 
 
 
 
 
Corporate /
 
 
(Thousands of Dollars)
Production
 
Storage
 
Gathering
 
Utility
 
All Other
 
Consolidated*
 
 
 
 
 
 
 
 
 
 
 
 
Second quarter 2019 GAAP earnings
$
21,873

 
$
17,749

 
$
12,690

 
$
35,589

 
$
2,694

 
$
90,595

 
 
 
 
 
 
 
 
 
 
 
 
Items impacting comparability:
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market adjustments due to hedge ineffectiveness
6,742

 
 
 
 
 
 
 

 
6,742

Tax impact of mark-to-market adjustments due to hedge ineffectiveness
(1,416
)
 
 
 
 
 
 
 
 
 
(1,416
)
Unrealized (gain) loss on other investments
 
 
 
 
 
 
 
 
(3,831
)
 
(3,831
)
Tax impact of unrealized (gain) loss on other investments
 
 
 
 
 
 
 
 
805

 
805

Second quarter 2019 adjusted operating results
27,199

 
17,749

 
12,690

 
35,589

 
(332
)
 
92,895

 
 
 
 
 
 
 
 
 
 
 
 
Drivers of adjusted operating results**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Upstream Revenues
 
 
 
 
 
 
 
 
 
 
 
Higher (lower) natural gas production
21,887

 
 
 
 
 
 
 
 
 
21,887

Higher (lower) crude oil production
2,030

 
 
 
 
 
 
 
 
 
2,030

Higher (lower) realized natural gas prices, after hedging
(20,168
)
 
 
 
 
 
 
 
 
 
(20,168
)
Higher (lower) realized crude oil prices, after hedging
(1,332
)
 
 
 
 
 
 
 
 
 
(1,332
)
 
 
 
 
 
 
 
 
 
 
 
 
Midstream Revenues
 
 
 
 
 
 
 
 
 
 
 
Higher (lower) operating revenues
 
 
5,456

 
4,660

 
 
 
 
 
10,116

 
 
 
 
 
 
 
 
 
 
 

Downstream Margins***
 
 
 
 
 
 
 
 
 
 

Impact of usage and weather
 
 
 
 
 
 
(3,814
)
 
 
 
(3,814
)
System modernization tracker revenues
 
 
 
 
 
 
1,689

 
 
 
1,689

Regulatory revenue adjustments
 
 
 
 
 
 
615

 
 
 
615

Higher (lower) energy marketing margins
 
 
 
 
 
 
 
 
604

 
604

 
 
 
 
 
 
 
 
 
 
 

Operating Expenses
 
 
 
 
 
 
 
 
 
 

Lower (higher) lease operating and transportation expenses
(4,573
)
 
 
 
 
 
 
 
 
 
(4,573
)
Lower (higher) operating expenses
(395
)
 
705

 
(751
)
 
(2,880
)
 
415

 
(2,906
)
Lower (higher) depreciation / depletion
(7,306
)
 
(1,630
)
 
(479
)
 
 
 
 
 
(9,415
)
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 

(Higher) lower other deductions
(365
)
 
(483
)
 
 
 
 
 
 
 
(848
)
(Higher) lower interest expense
(486
)
 
 
 
 
 
 
 
(608
)
 
(1,094
)
 
 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 
 
 
 
 
 
 
 

Lower (higher) income tax expense / effective tax rate
(1,646
)
 
(2
)
 
2

 
343

 
24

 
(1,279
)
 
 
 
 
 
 
 
 
 
 
 
 
All other / rounding
(399
)
 
292

 
7

 
(43
)
 
(27
)
 
(170
)
Second quarter 2020 adjusted operating results
14,446


22,087


16,129


31,499


76


84,237

 
 
 
 
 
 
 
 
 
 
 
 
Items impacting comparability:
 
 
 
 
 
 
 
 
 
 
 
Impairment of oil and gas properties
(177,761
)
 
 
 
 
 
 
 
 
 
(177,761
)
Tax impact of impairment of oil and gas properties
48,503

 
 
 
 
 
 
 
 
 
48,503

Deferred tax valuation allowance
(60,463
)
 
 
 
3,769

 
 
 
(76
)
 
(56,770
)
Unrealized gain (loss) on other investments
 
 
 
 
 
 
 
 
(5,414
)
 
(5,414
)
Tax impact of unrealized gain (loss) on other investments
 
 
 
 
 
 
 
 
1,137

 
1,137

Second quarter 2020 GAAP earnings
$
(175,275
)
 
$
22,087

 
$
19,898

 
$
31,499

 
$
(4,277
)
 
$
(106,068
)
 
 
 
 
 
 
 
 
 
 
 
 
* Amounts do not reflect intercompany eliminations
 
 
 
 
 
 
 
 
 
 
 
** Operating results have been calculated using the 21% federal statutory rate effective for the 2019 fiscal year.
*** Downstream margin defined as operating revenues less purchased gas expense.







Page 10.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED MARCH 31, 2020
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Upstream
 
Midstream
 
Downstream
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exploration &
 
Pipeline &
 
 
 
 
 
Corporate /
 
 
 
Production
 
Storage
 
Gathering
 
Utility
 
All Other
 
Consolidated*
 
 
 
 
 
 
 
 
 
 
 
 
Second quarter 2019 GAAP earnings per share
$
0.25

 
$
0.20

 
$
0.15

 
$
0.41

 
$
0.03

 
$
1.04

Items impacting comparability:
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market adjustments due to hedge ineffectiveness, net of tax
0.06

 
 
 
 
 
 
 
 
 
0.06

Unrealized (gain) loss on other investments, net of tax
 
 
 
 
 
 
 
 
(0.03
)
 
(0.03
)
Second quarter 2019 adjusted operating results per share
0.31


0.20


0.15


0.41




1.07

 
 
 
 
 
 
 
 
 
 
 
 
Drivers of adjusted operating results**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Upstream Revenues
 
 
 
 
 
 
 
 
 
 
 
Higher (lower) natural gas production
0.25

 
 
 
 
 
 
 
 
 
0.25

Higher (lower) crude oil production
0.02

 
 
 
 
 
 
 
 
 
0.02

Higher (lower) realized natural gas prices, after hedging
(0.23
)
 
 
 
 
 
 
 
 
 
(0.23
)
Higher (lower) realized crude oil prices, after hedging
(0.02
)
 
 
 
 
 
 
 
 
 
(0.02
)
 
 
 
 
 
 
 
 
 
 
 


Midstream Revenues
 
 
 
 
 
 
 
 
 
 


Higher (lower) operating revenues
 
 
0.06

 
0.05

 
 
 
 
 
0.11

 
 
 
 
 
 
 
 
 
 
 


Downstream Margins***
 
 
 
 
 
 
 
 
 
 


Impact of usage and weather
 
 
 
 
 
 
(0.04
)
 
 
 
(0.04
)
System modernization tracker revenues
 
 
 
 
 
 
0.02

 
 
 
0.02

Regulatory revenue adjustments
 
 
 
 
 
 
0.01

 
 
 
0.01

Higher (lower) energy marketing margins
 
 
 
 
 
 
 
 
0.01

 
0.01

 
 
 
 
 
 
 
 
 
 
 


Operating Expenses
 
 
 
 
 
 
 
 
 
 


Lower (higher) lease operating and transportation expenses
(0.05
)
 
 
 
 
 
 
 
 
 
(0.05
)
Lower (higher) operating expenses

 
0.01

 
(0.01
)
 
(0.03
)
 

 
(0.03
)
Lower (higher) depreciation / depletion
(0.08
)
 
(0.02
)
 
(0.01
)
 
 
 
 
 
(0.11
)
 
 
 
 
 
 
 
 
 
 
 


Other Income (Expense)
 
 
 
 
 
 
 
 
 
 


(Higher) lower other deductions

 
(0.01
)
 
 
 
 
 
 
 
(0.01
)
(Higher) lower interest expense
(0.01
)
 
 
 
 
 
 
 
(0.01
)
 
(0.02
)
 
 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 
 
 
 
 
 
 
 
 
Lower (higher) income tax expense / effective tax rate
(0.02
)
 

 

 

 

 
(0.02
)
 
 
 
 
 
 
 
 
 
 
 

All other / rounding

 
0.01

 
0.01

 
(0.01
)
 

 
0.01

Second quarter 2020 adjusted operating results per share
0.17

 
0.25

 
0.19

 
0.36

 

 
0.97

 
 
 
 
 
 
 
 
 
 
 

Items impacting comparability:
 
 
 
 
 
 
 
 
 
 
 
Impairment of oil and gas properties, net of tax
(1.49
)
 
 
 
 
 
 
 
 
 
(1.49
)
Deferred tax valuation allowance
(0.70
)
 
 
 
0.04

 
 
 

 
(0.66
)
Unrealized gain (loss) on other investments, net of tax
 
 
 
 
 
 
 
 
(0.05
)
 
(0.05
)
Earnings per share impact of diluted shares
(0.01
)
 
0.01

 
 
 
 
 
 
 

Second quarter 2020 GAAP earnings per share
$
(2.03
)
 
$
0.26

 
$
0.23

 
$
0.36

 
$
(0.05
)
 
$
(1.23
)
 
 
 
 
 
 
 
 
 
 
 
 
* Amounts do not reflect intercompany eliminations
 
 
 
 
 
 
 
 
 
 
 
** Operating results have been calculated using the 21% federal statutory rate effective for the 2019 fiscal year.
*** Downstream margin defined as operating revenues less purchased gas expense.












Page 11.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
SIX MONTHS ENDED MARCH 31, 2020
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Upstream
 
Midstream
 
Downstream
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exploration &
 
Pipeline &
 
 
 
 
 
Corporate /
 
 
(Thousands of Dollars)
Production
 
Storage
 
Gathering
 
Utility
 
All Other
 
Consolidated*
 
 
 
 
 
 
 
 
 
 
 
 
Six months ended March 31, 2019 GAAP earnings
$
60,087

 
$
42,851

 
$
26,872

 
$
61,237

 
$
2,209

 
$
193,256

 
 
 
 
 
 
 
 
 
 
 
 
Items impacting comparability:
 
 
 
 
 
 
 
 
 
 
 
Remeasurement of deferred taxes under 2017 Tax Reform
(990
)
 
 
 
(500
)
 
 
 
(3,510
)
 
(5,000
)
Mark-to-market adjustments due to hedge ineffectiveness
237

 
 
 
 
 
 
 
 
 
237

Tax impact of mark-to-market adjustments due to hedge ineffectiveness
(50
)
 
 
 
 
 
 
 
 
 
(50
)
Unrealized (gain) loss on other investments
 
 
 
 
 
 
 
 
2,516

 
2,516

Tax impact of unrealized (gain) loss on other investments
 
 
 
 
 
 
 
 
(528
)
 
(528
)
Six months ended March 31, 2019 adjusted operating results
59,284

 
42,851

 
26,372

 
61,237

 
687

 
190,431

 
 
 
 
 
 
 
 
 
 
 
 
Drivers of adjusted operating results**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Upstream Revenues
 
 
 
 
 
 
 
 
 
 
 
Higher (lower) natural gas production
40,427

 
 
 
 
 
 
 
 
 
40,427

Higher (lower) crude oil production
3,487

 
 
 
 
 
 
 
 
 
3,487

Higher (lower) realized natural gas prices, after hedging
(32,792
)
 
 
 
 
 
 
 
 
 
(32,792
)
Higher (lower) realized crude oil prices, after hedging
(754
)
 
 
 
 
 
 
 
 
 
(754
)
 
 
 
 
 
 
 
 
 
 
 
 
Midstream Revenues
 
 
 
 
 
 
 
 
 
 
 
Higher (lower) operating revenues
 
 
1,625

 
8,688

 
 
 
 
 
10,313

 
 
 
 
 
 
 
 
 
 
 
 
Downstream Margins***
 
 
 
 
 
 
 
 
 
 
 
Impact of usage and weather
 
 
 
 
 
 
(3,678
)
 
 
 
(3,678
)
System modernization tracker revenues
 
 
 
 
 
 
2,033

 
 
 
2,033

Regulatory revenue adjustments
 
 
 
 
 
 
1,550

 
 
 
1,550

Higher (lower) energy marketing margins
 
 
 
 
 
 
 
 
891

 
891

 
 
 
 
 
 
 
 
 
 
 
 
Operating Expenses
 
 
 
 
 
 
 
 
 
 
 
Lower (higher) lease operating and transportation expenses
(11,082
)
 
 
 
 
 
 
 
 
 
(11,082
)
Lower (higher) operating expenses
(1,016
)
 
1,260

 
(2,038
)
 
(2,707
)
 
674

 
(3,827
)
Lower (higher) property, franchise and other taxes
1,187

 
(1,215
)
 
 
 
 
 
 
 
(28
)
Lower (higher) depreciation / depletion
(14,770
)
 
(2,017
)
 
(843
)
 
 
 
 
 
(17,630
)
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 
 
(Higher) lower other deductions
(713
)
 
(916
)
 
 
 
 
 
1,004

 
(625
)
(Higher) lower interest expense
(1,192
)
 
412

 
272

 
 
 
(717
)
 
(1,225
)
 
 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 
 
 
 
 
 
 
 
 
Lower (higher) income tax expense / effective tax rate
(2,980
)
 
(2,458
)
 
(213
)
 
(443
)
 
(266
)
 
(6,360
)
 
 
 
 
 
 
 
 
 
 
 
 
All other / rounding
(664
)
 
650

 
(165
)
 
90

 
591

 
502

Six months ended March 31, 2020 adjusted operating results
38,422

 
40,192

 
32,073

 
58,082

 
2,864

 
171,633

 
 
 
 
 
 
 
 
 
 
 
 
Items impacting comparability:
 
 
 
 
 
 
 
 
 
 
 
Impairment of oil and gas properties
(177,761
)
 
 
 
 
 
 
 
 
 
(177,761
)
Tax impact of impairment of oil and gas properties
48,503

 
 
 
 
 
 
 
 
 
48,503

Deferred tax valuation allowance
(60,463
)
 
 
 
3,769

 
 
 
(76
)
 
(56,770
)
Unrealized gain (loss) on other investments
 
 
 
 
 
 
 
 
(6,433
)
 
(6,433
)
Tax impact of unrealized gain (loss) on other investments
 
 
 
 
 
 
 
 
1,351

 
1,351

Six months ended March 31, 2020 GAAP earnings
$
(151,299
)
 
$
40,192

 
$
35,842

 
$
58,082

 
$
(2,294
)
 
$
(19,477
)
 
 
 
 
 
 
 
 
 
 
 
 
* Amounts do not reflect intercompany eliminations
 
 
 
 
 
 
 
 
 
 
 
** Operating results have been calculated using the 21% federal statutory rate effective for the 2019 fiscal year.
*** Downstream margin defined as operating revenues less purchased gas expense.






Page 12.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
SIX MONTHS ENDED MARCH 31, 2020
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
Upstream
 
Midstream
 
Downstream
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exploration &
 
Pipeline &
 
 
 
 
 
Corporate /
 
 
 
Production
 
Storage
 
Gathering
 
Utility
 
All Other
 
Consolidated*
Six months ended March 31, 2019 GAAP earnings per share
$
0.69

 
$
0.49

 
$
0.31

 
$
0.71

 
$
0.03

 
$
2.23

Items impacting comparability:
 
 
 
 
 
 
 
 
 
 
 
Remeasurement of deferred taxes under 2017 Tax Reform
(0.01
)
 
 
 
(0.01
)
 
 
 
(0.04
)
 
(0.06
)
Mark-to-market adjustments due to hedge ineffectiveness, net of tax

 
 
 
 
 
 
 
 
 

Unrealized (gain) loss on other investments, net of tax
 
 
 
 
 
 
 
 
0.02

 
0.02

Rounding

 

 

 

 
0.01

 
0.01

Six months ended March 31, 2019 adjusted operating results per share
0.68

 
0.49

 
0.30

 
0.71

 
0.02

 
2.20

 
 
 
 
 
 
 
 
 
 
 
 
Drivers of adjusted operating results**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Upstream Revenues
 
 
 
 
 
 
 
 
 
 
 
Higher (lower) natural gas production
0.47

 
 
 
 
 
 
 
 
 
0.47

Higher (lower) crude oil production
0.04

 
 
 
 
 
 
 
 
 
0.04

Higher (lower) realized natural gas prices, after hedging
(0.38
)
 
 
 
 
 
 
 
 
 
(0.38
)
Higher (lower) realized crude oil prices, after hedging
(0.01
)
 
 
 
 
 
 
 
 
 
(0.01
)
 
 
 
 
 
 
 
 
 
 
 
 
Midstream Revenues
 
 
 
 
 
 
 
 
 
 


Higher (lower) operating revenues
 
 
0.02

 
0.10

 
 
 
 
 
0.12

 
 
 
 
 
 
 
 
 
 
 
 
Downstream Margins***
 
 
 
 
 
 
 
 
 
 


Impact of usage and weather
 
 
 
 
 
 
(0.04
)
 
 
 
(0.04
)
System modernization tracker revenues
 
 
 
 
 
 
0.02

 
 
 
0.02

Regulatory revenue adjustments
 
 
 
 
 
 
0.02

 
 
 
0.02

Higher (lower) energy marketing margins
 
 
 
 
 
 
 
 
0.01

 
0.01

 
 
 
 
 
 
 
 
 
 
 
 
Operating Expenses
 
 
 
 
 
 
 
 
 
 


Lower (higher) lease operating and transportation expenses
(0.13
)
 
 
 
 
 
 
 
 
 
(0.13
)
Lower (higher) operating expenses
(0.01
)
 
0.01

 
(0.02
)
 
(0.03
)
 
0.01

 
(0.04
)
Lower (higher) property, franchise and other taxes
0.01

 
(0.01
)
 
 
 
 
 
 
 

Lower (higher) depreciation / depletion
(0.17
)
 
(0.02
)
 
(0.01
)
 
 
 
 
 
(0.20
)
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense)
 
 
 
 
 
 
 
 
 
 


(Higher) lower other deductions
(0.01
)
 
(0.01
)
 
 
 
 
 
0.01

 
(0.01
)
(Higher) lower interest expense
(0.01
)
 

 

 
 
 
(0.01
)
 
(0.02
)
 
 
 
 
 
 
 
 
 
 
 
 
Income Taxes
 
 
 
 
 
 
 
 
 
 


Lower (higher) income tax expense / effective tax rate
(0.03
)
 
(0.03
)
 

 
(0.01
)
 

 
(0.07
)
 
 
 
 
 
 
 
 
 
 
 

All other / rounding
(0.01
)
 
0.01

 

 

 

 

Six months ended March 31, 2020 adjusted operating results per share
0.44

 
0.46

 
0.37

 
0.67

 
0.04

 
1.98

 
 
 
 
 
 
 
 
 
 
 
 
Items impacting comparability:
 
 
 
 
 
 
 
 
 
 

Impairment of oil and gas properties, net of tax
(1.49
)
 
 
 
 
 
 
 
 
 
(1.49
)
Deferred tax valuation allowance
(0.70
)
 
 
 
0.04

 
 
 

 
(0.66
)
Unrealized gain (loss) on other investments, net of tax
 
 
 
 
 
 
 
 
(0.06
)
 
(0.06
)
Earnings per share impact of diluted shares
 
 
 
 
0.01

 
 
 
(0.01
)
 

Six months ended March 31, 2020 GAAP earnings per share
$
(1.75
)
 
$
0.46

 
$
0.42

 
$
0.67

 
$
(0.03
)
 
$
(0.23
)
 
 
 
 
 
 
 
 
 
 
 
 
* Amounts do not reflect intercompany eliminations
 
 
 
 
 
 
 
 
 
 
 
** Operating results have been calculated using the 21% federal statutory rate effective for the 2019 fiscal year.
*** Downstream margin defined as operating revenues less purchased gas expense.





Page 13.


 



 



 
 
 
 
 



NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
 
 
 
 
 



(Thousands of Dollars, except per share amounts)
 
 
 
 



 
Three Months Ended
 
Six Months Ended
 
March 31,
 
March 31,
 
(Unaudited)
 
(Unaudited)
SUMMARY OF OPERATIONS
2020
 
2019
 
2020

2019
Operating Revenues:

 
 
 
 

 
Utility and Energy Marketing Revenues
$
282,634

 
$
357,654

 
$
510,660

 
$
629,747

Exploration and Production and Other Revenues
156,542

 
146,467

 
323,735

 
310,403

Pipeline and Storage and Gathering Revenues
51,919

 
48,423

 
100,888

 
102,641

 
491,095

 
552,544

 
935,283


1,042,791

Operating Expenses:
 
 
 
 





Purchased Gas
118,270

 
195,037

 
210,542


333,697

Operation and Maintenance:
 
 
 
 





      Utility and Energy Marketing
51,725

 
48,559

 
94,981

 
92,475

      Exploration and Production and Other
39,959

 
40,141

 
76,652

 
72,936

      Pipeline and Storage and Gathering
27,305

 
27,249

 
53,190

 
52,182

Property, Franchise and Other Taxes
22,743

 
22,535

 
45,887


46,540

Depreciation, Depletion and Amortization
77,912

 
65,664

 
152,830


129,918

Impairment of Oil and Gas Producing Properties
177,761

 

 
177,761

 

 
515,675

 
399,185

 
811,843


727,748

 
 
 
 
 





Operating Income (Loss)
(24,580
)
 
153,359

 
123,440


315,043

 
 
 
 
 





Other Income (Expense):
 
 
 
 





Other Income (Deductions)
(17,480
)
 
(5,919
)
 
(20,520
)

(15,521
)
Interest Expense on Long-Term Debt
(25,270
)
 
(25,273
)
 
(50,713
)

(50,713
)
Other Interest Expense
(1,892
)
 
(1,787
)
 
(3,443
)

(2,860
)
 
 
 
 
 





Income (Loss) Before Income Taxes
(69,222
)
 
120,380

 
48,764


245,949

 
 
 
 
 





Income Tax Expense
36,846

 
29,785

 
68,241


52,693

 
 
 
 
 





Net Income (Loss) Available for Common Stock
$
(106,068
)
 
$
90,595

 
$
(19,477
)

$
193,256

 
 
 
 
 



Earnings (Loss) Per Common Share
 
 
 
 



Basic
$
(1.23
)
 
$
1.05

 
$
(0.23
)

$
2.24

Diluted
$
(1.23
)
 
$
1.04

 
$
(0.23
)

$
2.23

 
 
 
 
 



Weighted Average Common Shares:
 
 
 
 



Used in Basic Calculation
86,561,066

 
86,290,047

 
86,469,258


86,159,932

Used in Diluted Calculation
86,561,066

 
86,767,673

 
86,469,258


86,738,809














Page 14.


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
 
 
March 31,
 
September 30,
(Thousands of Dollars)
2020
 
2019
 
 
 
 
ASSETS
 
 
 
Property, Plant and Equipment

$11,559,528

 

$11,204,838

Less - Accumulated Depreciation, Depletion and Amortization
6,003,658

 
5,695,328

Net Property, Plant and Equipment
5,555,870

 
5,509,510

 
 
 
 
Current Assets:
 
 
 
Cash and Temporary Cash Investments
111,655

 
20,428

Hedging Collateral Deposits
10,728

 
6,832

Receivables - Net
172,011

 
139,956

Unbilled Revenue
44,715

 
18,758

Gas Stored Underground
8,860

 
36,632

Materials and Supplies - at average cost
48,113

 
40,717

Unrecovered Purchased Gas Costs

 
2,246

Other Current Assets
100,188

 
97,054

Total Current Assets
496,270

 
362,623

 
 
 
 
Other Assets:
 
 
 
Recoverable Future Taxes
115,934

 
115,197

Unamortized Debt Expense
13,151

 
14,005

Other Regulatory Assets
161,800

 
167,320

Deferred Charges
56,855

 
33,843

Other Investments
137,044

 
144,917

Goodwill
5,476

 
5,476

Prepaid Post-Retirement Benefit Costs
71,381

 
60,517

Fair Value of Derivative Financial Instruments
94,797

 
48,669

Other
81

 
80

Total Other Assets
656,519

 
590,024

Total Assets

$6,708,659

 

$6,462,157

 
 
 
 
CAPITALIZATION AND LIABILITIES
 
 
 
Capitalization:
 
 
 
Comprehensive Shareholders' Equity
 
 
 
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and
 
 
 
Outstanding - 86,561,532 Shares and 86,315,287 Shares, Respectively

$86,562

 

$86,315

Paid in Capital
835,444

 
832,264

Earnings Reinvested in the Business
1,176,870

 
1,272,601

Accumulated Other Comprehensive Loss
(18,917
)
 
(52,155
)
Total Comprehensive Shareholders' Equity
2,079,959

 
2,139,025

Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs
2,134,964

 
2,133,718

Total Capitalization
4,214,923

 
4,272,743

 
 
 
 
Current and Accrued Liabilities:
 
 
 
Notes Payable to Banks and Commercial Paper
230,000

 
55,200

Current Portion of Long-Term Debt

 

Accounts Payable
106,938

 
132,208

Amounts Payable to Customers
17,213

 
4,017

Dividends Payable
37,654

 
37,547

Interest Payable on Long-Term Debt
18,508

 
18,508

Customer Advances
615

 
13,044

Customer Security Deposits
14,999

 
16,210

Other Accruals and Current Liabilities
150,239

 
139,600

Fair Value of Derivative Financial Instruments
7,652

 
5,574

Total Current and Accrued Liabilities
583,818

 
421,908

 
 
 
 
Deferred Credits:
 
 
 
Deferred Income Taxes
777,299

 
653,382

Taxes Refundable to Customers
360,331

 
366,503

Cost of Removal Regulatory Liability
224,546

 
221,699

Other Regulatory Liabilities
157,371

 
142,367

Pension and Other Post-Retirement Liabilities
126,959

 
133,729

Asset Retirement Obligations
128,779

 
127,458

Other Deferred Credits
134,633

 
122,368

Total Deferred Credits
1,909,918

 
1,767,506

Commitments and Contingencies

 

Total Capitalization and Liabilities

$6,708,659

 

$6,462,157







Page 15.


 
 
 
 
 
 
 
 
 
 
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
Six Months Ended
 
 
March 31,
(Thousands of Dollars)
 
2020
 
2019
 
 
 
 
 
Operating Activities:
 
 
 
 
Net Income (Loss) Available for Common Stock
 
$
(19,477
)
 
$
193,256

Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided by Operating Activities:
 
 

 
 

Impairment of Oil and Gas Producing Properties
 
177,761

 

Depreciation, Depletion and Amortization
 
152,830

 
129,918

Deferred Income Taxes
 
104,883

 
90,468

Stock-Based Compensation
 
7,580

 
10,731

Other
 
9,800

 
7,997

Change in:
 
 
 
 
Receivables and Unbilled Revenue
 
(58,248
)
 
(130,377
)
Gas Stored Underground and Materials and Supplies
 
20,086

 
29,093

Unrecovered Purchased Gas Costs
 
2,246

 
(1,556
)
Other Current Assets
 
(3,134
)
 
10,438

Accounts Payable
 
(5,465
)
 
10,226

Amounts Payable to Customers
 
13,196

 
12,069

Customer Advances
 
(12,429
)
 
(13,176
)
Customer Security Deposits
 
(1,211
)
 
(7,184
)
Other Accruals and Current Liabilities
 
9,076

 
48,028

Other Assets
 
(10,359
)
 
(38,686
)
Other Liabilities
 
3,857

 
(10,410
)
Net Cash Provided by Operating Activities
 
$
390,992

 
$
340,835

 
 
 
 
 
Investing Activities:
 
 
 
 
Capital Expenditures
 
$
(395,486
)
 
$
(386,579
)
Other
 
4,167

 
(2,616
)
Net Cash Used in Investing Activities
 
$
(391,319
)
 
$
(389,195
)
 
 
 
 
 
Financing Activities:
 
 
 
 
Changes in Notes Payable to Banks and Commercial Paper
 
$
174,800

 
$

Dividends Paid on Common Stock
 
(75,197
)
 
(73,197
)
Net Repurchases of Common Stock
 
(4,153
)
 
(8,864
)
Net Cash Provided by (Used in) Financing Activities
 
$
95,450

 
$
(82,061
)
 
 
 
 
 
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash
 
95,123

 
(130,421
)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period
 
27,260

 
233,047

Cash, Cash Equivalents, and Restricted Cash at March 31
 
$
122,383

 
$
102,626
















Page 16.


 

 

 

 



 
 
 
 
 
 
 



NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
 
 
 
 
 
 
 



SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
 
 
 
 
 
 
 



UPSTREAM BUSINESS
 
 
 
 
 
 
 



 
 
 
 
 
 
 



 
Three Months Ended
 
Six Months Ended
(Thousands of Dollars, except per share amounts)
March 31,
 
March 31,
EXPLORATION AND PRODUCTION SEGMENT
2020
 
2019
 
Variance
 
2020
2019
Variance
Total Operating Revenues
$
155,560

 
$
146,102

 
$
9,458

 
$
321,499

$
308,978

$
12,521

 
 
 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
 
 
Operation and Maintenance:
 
 
 
 
 
 
 
 
 
General and Administrative Expense
17,429

 
17,113

 
316

 
32,809

32,312

497

Lease Operating and Transportation Expense
51,730

 
45,941

 
5,789

 
102,531

88,503

14,028

All Other Operation and Maintenance Expense
3,084

 
2,900

 
184

 
6,041

5,252

789

Property, Franchise and Other Taxes
3,471

 
3,310

 
161

 
8,171

9,673

(1,502
)
Depreciation, Depletion and Amortization
45,136

 
35,888

 
9,248

 
89,284

70,588

18,696

Impairment of Oil and Gas Producing Properties
177,761

 

 
177,761

 
177,761


177,761

 
298,611

 
105,152

 
193,459

 
416,597

206,328

210,269

 
 
 
 
 
 
 
 
 
 
Operating Income (Loss)
(143,051
)
 
40,950

 
(184,001
)
 
(95,098
)
102,650

(197,748
)
 
 
 
 
 
 
 
 
 
 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
Non-Service Pension and Post-Retirement Benefit Costs
(395
)
 
(4
)
 
(391
)
 
(790
)
(8
)
(782
)
Interest and Other Income
208

 
279

 
(71
)
 
441

562

(121
)
Interest Expense
(14,163
)
 
(13,548
)
 
(615
)
 
(28,220
)
(26,711
)
(1,509
)
 
 
 
 
 
 
 
 
 
 
Income (Loss) Before Income Taxes
(157,401
)
 
27,677

 
(185,078
)
 
(123,667
)
76,493

(200,160
)
Income Tax Expense
17,874

 
5,804

 
12,070

 
27,632

16,406

11,226

Net Income (Loss)
$
(175,275
)
 
$
21,873

 
$
(197,148
)
 
$
(151,299
)
$
60,087

$
(211,386
)
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) Per Share (Diluted)
$
(2.03
)
 
$
0.25

 
$
(2.28
)
 
$
(1.75
)
$
0.69

$
(2.44
)
 
 
 
 
 
 
 






















































































































































































Page 17.


 
 
 
 
 
 
 
 
 
 
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
 
 
 
 
 
 
 
 
 
 
MIDSTREAM BUSINESSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
(Thousands of Dollars, except per share amounts)
March 31,
 
March 31,
PIPELINE AND STORAGE SEGMENT
2020
 
2019
 
Variance
 
2020
2019
Variance
Revenues from External Customers
$
51,919

 
$
48,421

 
$
3,498

 
$
100,888

$
102,639

$
(1,751
)
Intersegment Revenues
27,326

 
23,918

 
3,408

 
50,577

46,769

3,808

Total Operating Revenues
79,245

 
72,339

 
6,906

 
151,465

149,408

2,057

 
 
 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
 
 
Purchased Gas
(3
)
 
510

 
(513
)
 
(10
)
813

(823
)
Operation and Maintenance
22,014

 
22,907

 
(893
)
 
42,945

44,540

(1,595
)
Property, Franchise and Other Taxes
8,132

 
7,641

 
491

 
16,487

14,949

1,538

Depreciation, Depletion and Amortization
13,356

 
11,293

 
2,063

 
24,960

22,407

2,553

 
43,499

 
42,351

 
1,148

 
84,382

82,709

1,673

 
 
 
 
 
 
 
 
 
 
Operating Income
35,746

 
29,988

 
5,758

 
67,083

66,699

384

 
 
 
 
 
 
 
 
 
 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
Non-Service Pension and Post-Retirement Benefit (Costs) Credit
(174
)
 
930

 
(1,104
)
 
(349
)
1,397

(1,746
)
Interest and Other Income
1,535

 
1,043

 
492

 
3,088

2,502

586

Interest Expense
(7,152
)
 
(7,500
)
 
348

 
(14,264
)
(14,786
)
522

 
 
 
 
 
 
 
 
 
 
Income Before Income Taxes
29,955

 
24,461

 
5,494

 
55,558

55,812

(254
)
Income Tax Expense
7,868

 
6,712

 
1,156

 
15,366

12,961

2,405

Net Income
$
22,087

 
$
17,749

 
$
4,338

 
$
40,192

$
42,851

$
(2,659
)
 
 
 
 
 
 
 
 
 
 
Net Income Per Share (Diluted)
$
0.26

 
$
0.20

 
$
0.06

 
$
0.46

$
0.49

$
(0.03
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
March 31,
 
March 31,
GATHERING SEGMENT
2020
 
2019
 
Variance
 
2020
2019
Variance
Revenues from External Customers
$

 
$
2

 
$
(2
)
 
$

$
2

$
(2
)
Intersegment Revenues
35,267

 
29,366

 
5,901

 
70,055

59,056

10,999

Total Operating Revenues
35,267

 
29,368

 
5,899

 
70,055

59,058

10,997

 
 
 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
 
 
Operation and Maintenance
5,702

 
4,752

 
950

 
11,044

8,464

2,580

Property, Franchise and Other Taxes
24

 
18

 
6

 
38

48

(10
)
Depreciation, Depletion and Amortization
5,279

 
4,673

 
606

 
10,418

9,351

1,067

 
11,005

 
9,443

 
1,562

 
21,500

17,863

3,637

 
 
 
 
 
 
 
 
 
 
Operating Income
24,262

 
19,925

 
4,337

 
48,555

41,195

7,360

 
 
 
 
 
 
 
 
 
 
Other Income (Expense):
 
 
 
 

 
 
 
 
Non-Service Pension and Post-Retirement Benefit Costs
(71
)
 
(1
)
 
(70
)
 
(143
)
(83
)
(60
)
Interest and Other Income
89

 
190

 
(101
)
 
157

315

(158
)
Interest Expense
(2,160
)
 
(2,345
)
 
185

 
(4,379
)
(4,723
)
344

 
 
 
 
 
 
 
 
 
 
Income Before Income Taxes
22,120

 
17,769

 
4,351

 
44,190

36,704

7,486

Income Tax Expense
2,222

 
5,079

 
(2,857
)
 
8,348

9,832

(1,484
)
Net Income
$
19,898

 
$
12,690

 
$
7,208

 
$
35,842

$
26,872

$
8,970

 
 
 
 
 
 
 
 
 
 
Net Income Per Share (Diluted)
$
0.23

 
$
0.15

 
$
0.08

 
$
0.42

$
0.31

$
0.11

 
 
 
 
 
 
 
 
 
 




Page 18.


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
 
 
 
 
 
 
 
 
 
 
DOWNSTREAM BUSINESS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
(Thousands of Dollars, except per share amounts)
March 31,
 
March 31,
UTILITY SEGMENT
2020
 
2019
 
Variance
 
2020
2019
Variance
Revenues from External Customers
$
250,556

 
$
298,636

 
$
(48,080
)
 
$
445,465

$
518,647

$
(73,182
)
Intersegment Revenues
3,937

 
4,394

 
(457
)
 
5,853

7,040

(1,187
)
Total Operating Revenues
254,493

 
303,030

 
(48,537
)
 
451,318

525,687

(74,369
)
 
 
 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
 
 
Purchased Gas
119,411

 
165,235

 
(45,824
)
 
204,116

277,115

(72,999
)
Operation and Maintenance
51,070

 
47,795

 
3,275

 
93,913

90,950

2,963

Property, Franchise and Other Taxes
10,820

 
11,312

 
(492
)
 
20,634

21,365

(731
)
Depreciation, Depletion and Amortization
13,751

 
13,365

 
386

 
27,382

26,656

726

 
195,052

 
237,707

 
(42,655
)
 
346,045

416,086

(70,041
)
 
 
 
 
 
 
 
 
 
 
Operating Income
59,441

 
65,323

 
(5,882
)
 
105,273

109,601

(4,328
)
 
 
 
 
 
 
 
 
 
 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
Non-Service Pension and Post-Retirement Benefit Costs
(12,388
)
 
(12,686
)
 
298

 
(19,151
)
(19,614
)
463

Interest and Other Income
294

 
1,068

 
(774
)
 
1,245

1,780

(535
)
Interest Expense
(5,516
)
 
(6,263
)
 
747

 
(11,190
)
(12,157
)
967

 
 
 
 
 
 
 
 
 
 
Income Before Income Taxes
41,831

 
47,442

 
(5,611
)
 
76,177

79,610

(3,433
)
Income Tax Expense
10,332

 
11,853

 
(1,521
)
 
18,095

18,373

(278
)
Net Income
$
31,499

 
$
35,589

 
$
(4,090
)
 
$
58,082

$
61,237

$
(3,155
)
 
 
 
 
 
 
 
 
 
 
Net Income Per Share (Diluted)
$
0.36

 
$
0.41

 
$
(0.05
)
 
$
0.67

$
0.71

$
(0.04
)
 
 
 
 
 
 
 
 
 
 































Page 19.


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
(Thousands of Dollars, except per share amounts)
March 31,
 
March 31
ALL OTHER
2020
 
2019
 
Variance
 
2020
2019
Variance
Revenues from External Customers
$
32,925

 
$
59,328

 
$
(26,403
)
 
$
67,161

$
112,416

$
(45,255
)
Intersegment Revenues
79

 
43

 
36

 
256

375

(119
)
Total Operating Revenues
33,004

 
59,371

 
(26,367
)
 
67,417

112,791

(45,374
)
Operating Expenses:
 
 
 
 
 
 
 
 
 
Purchased Gas
29,151

 
56,820

 
(27,669
)
 
61,184

108,337

(47,153
)
Operation and Maintenance
1,875

 
1,944

 
(69
)
 
3,578

3,822

(244
)
Property, Franchise and Other Taxes
176

 
134

 
42

 
320

270

50

Depreciation, Depletion and Amortization
206

 
254

 
(48
)
 
408

536

(128
)
 
31,408

 
59,152

 
(27,744
)
 
65,490

112,965

(47,475
)
 
 
 
 
 
 
 
 
 
 
Operating Income (Loss)
1,596

 
219

 
1,377

 
1,927

(174
)
2,101

 
 
 
 
 
 
 
 
 
 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
Non-Service Pension and Post-Retirement Benefit Costs
(69
)
 
(11
)
 
(58
)
 
(138
)
(133
)
(5
)
Interest and Other Income
193

 
360

 
(167
)
 
471

666

(195
)
Interest Expense
(24
)
 
(8
)
 
(16
)
 
(42
)
(13
)
(29
)
 
 
 
 
 
 
 
 
 
 
Income Before Income Taxes
1,696

 
560

 
1,136

 
2,218

346

1,872

Income Tax Expense (Benefit)
527

 
144

 
383

 
678

(153
)
831

Net Income
$
1,169

 
$
416

 
$
753

 
$
1,540

$
499

$
1,041

Net Income Per Share (Diluted)
$
0.01

 
$
0.01

 
$

 
$
0.02

$
0.01

$
0.01

 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
March 31,
 
March 31,
CORPORATE
2020
 
2019
 
Variance
 
2020
2019
Variance
Revenues from External Customers
$
135

 
$
55

 
$
80

 
$
270

$
109

$
161

Intersegment Revenues
1,094

 
1,165

 
(71
)
 
2,187

2,329

(142
)
Total Operating Revenues
1,229

 
1,220

 
9

 
2,457

2,438

19

Operating Expenses:
 
 
 
 
 
 
 
 
 
Operation and Maintenance
3,499

 
3,955

 
(456
)
 
6,142

6,751

(609
)
Property, Franchise and Other Taxes
120

 
120

 

 
237

235

2

Depreciation, Depletion and Amortization
184

 
191

 
(7
)
 
378

380

(2
)
 
3,803

 
4,266

 
(463
)
 
6,757

7,366

(609
)
 
 
 
 
 
 
 
 
 
 
Operating Loss
(2,574
)
 
(3,046
)
 
472

 
(4,300
)
(4,928
)
628

 
 
 
 
 
 
 
 
 
 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
Non-Service Pension and Post-Retirement Benefit Costs
(775
)
 
(647
)
 
(128
)
 
(1,550
)
(1,385
)
(165
)
Interest and Other Income
22,801

 
32,761

 
(9,960
)
 
53,874

56,377

(2,503
)
Interest Expense on Long-Term Debt
(25,270
)
 
(25,273
)
 
3

 
(50,713
)
(50,713
)

Other Interest Expense
(1,605
)
 
(1,324
)
 
(281
)
 
(3,023
)
(2,367
)
(656
)
 
 
 
 
 
 
 
 
 
 
Income (Loss) before Income Taxes
(7,423
)
 
2,471

 
(9,894
)
 
(5,712
)
(3,016
)
(2,696
)
Income Tax Expense (Benefit)
(1,977
)
 
193

 
(2,170
)
 
(1,878
)
(4,726
)
2,848

Net Income (Loss)
$
(5,446
)
 
$
2,278

 
$
(7,724
)
 
$
(3,834
)
$
1,710

$
(5,544
)
Net Income (Loss) Per Share (Diluted)
$
(0.06
)
 
$
0.02

 
$
(0.08
)
 
$
(0.05
)
$
0.02

$
(0.07
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
March 31,
 
March 31,
INTERSEGMENT ELIMINATIONS
2020
 
2019
 
Variance
 
2020
2019
Variance
Intersegment Revenues
$
(67,703
)
 
$
(58,886
)
 
$
(8,817
)
 
$
(128,928
)
$
(115,569
)
$
(13,359
)
Operating Expenses:
 
 
 
 
 
 
 
 
 
Purchased Gas
(30,289
)
 
(27,528
)
 
(2,761
)
 
(54,748
)
(52,568
)
(2,180
)
Operation and Maintenance
(37,414
)
 
(31,358
)
 
(6,056
)
 
(74,180
)
(63,001
)
(11,179
)
 
(67,703
)
 
(58,886
)
 
(8,817
)
 
(128,928
)
(115,569
)
(13,359
)
 
 
 
 
 
 
 
 
 
 
Operating Income

 

 

 



 
 
 
 
 
 
 
 
 
 
Other Income (Expense):
 
 
 
 
 
 
 
 
 
Interest and Other Deductions
(28,728
)
 
(29,201
)
 
473

 
(57,675
)
(57,897
)
222

Interest Expense
28,728

 
29,201

 
(473
)
 
57,675

57,897

(222
)
Net Income (Loss)
$

 
$

 
$

 
$

$

$

Net Income (Loss) Per Share (Diluted)
$

 
$

 
$

 
$

$

$







Page 20.


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
 
 
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
March 31,
 
March 31,
 
(Unaudited)
 
(Unaudited)
 
 
 
 
 
Increase
 
 
 
 
 
Increase
 
2020
 
2019
 
(Decrease)
 
2020
 
2019
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures:
 
 
 
 
 
 
 
 
 
 
 
Exploration and Production
$
102,424

(1) 
$
142,571

(3) 
$
(40,147
)
 
$
229,343

(1)(2) 
$
262,786

(3)(4) 
$
(33,443
)
Pipeline and Storage
25,554

(1) 
22,674

(3) 
2,880

 
82,638

(1)(2) 
52,638

(3)(4) 
30,000

Gathering
15,072

(1) 
12,680

(3) 
2,392

 
24,910

(1)(2) 
21,470

(3)(4) 
3,440

Utility
19,457

(1) 
19,735

(3) 
(278
)
 
36,622

(1)(2) 
35,657

(3)(4) 
965

Total Reportable Segments
162,507


197,660


(35,153
)

373,513


372,551


962

All Other
1

 
22

 
(21
)
 
22

 
41

 
(19
)
Corporate
134

 
85

 
49

 
320

 
103

 
217

Total Capital Expenditures
$
162,642

 
$
197,767

 
$
(35,125
)
 
$
373,855

 
$
372,695

 
$
1,160






(1) 
Capital expenditures for the quarter and six months ended March 31, 2020, include accounts payable and accrued liabilities related to capital expenditures of $41.2 million, $9.7 million, $4.4 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 March 31, 2020, since they represent non-cash investing activities at that date.

(2) 
Capital expenditures for the six months ended March 31, 2020, exclude capital expenditures of $38.0 million, $23.8 million, $6.6 million and $12.7 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, 2019 and paid during the six months ended March 31, 2020. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2019, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at March 31, 2020.

(3) 
Capital expenditures for the quarter and six months ended March 31, 2019, include accounts payable and accrued liabilities related to capital expenditures of $53.4 million, $10.7 million, $7.4 million, and $3.4 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at March 31, 2019, since they represent non-cash investing activities at that date.

(4) 
Capital expenditures for the six months ended March 31, 2019, exclude capital expenditures of $51.3 million, $21.9 million, $6.1 million and $9.5 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2018 and paid during the six months ended March 31, 2019. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2018, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at March 31, 2019.


 
 
 
 
 
 
 
 
 
 
DEGREE DAYS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percent Colder
 
 
 
 
 
 
 
(Warmer) Than:
Three Months Ended March 31
Normal
 
2020
 
2019
 
  Normal (1)
 
Last Year (1)
 
 
 
 
 
 
 
 
 
 
Buffalo, NY
3,326
 
2,738
 
3,372
 
(17.7
)
 
(18.8
)
Erie, PA
3,142
 
2,555
 
3,096
 
(18.7
)
 
(17.5
)
 
 
 
 
 
 
 
 
 
 
Six Months Ended March 31
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Buffalo, NY
5,579
 
4,970
 
5,697
 
(10.9
)
 
(12.8
)
Erie, PA
5,186
 
4,461
 
5,126
 
(14.0
)
 
(13.0
)
 
 
 
 
 
 
 
 
 
 
(1) 
Percents compare actual 2020 degree days to normal degree days and actual 2020 degree days to actual 2019 degree days.






Page 21.


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
 
 
 
EXPLORATION AND PRODUCTION INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
March 31,
 
March 31,
 
 
 
 
 
 
Increase
 
 
 
 
 
Increase
 
 
2020
 
2019
 
(Decrease)
 
2020
 
2019
 
(Decrease)
 
 
 
 
 
 
 
 
 
 
 
 
 
Gas Production/Prices:
 
 
 
 
 
 
 
 
 
 
 
 
Production (MMcf)
 
 
 
 
 
 
 
 
 
 
 
 
Appalachia
 
55,638

 
44,883

 
10,755

 
109,922

 
90,188

 
19,734

West Coast
 
479

 
487

 
(8
)
 
966

 
989

 
(23
)
Total Production
 
56,117

 
45,370

 
10,747

 
110,888

 
91,177

 
19,711

 
 
 
 
 
 
 
 
 
 
 
 
 
Average Prices (Per Mcf)
 
 
 
 
 
 
 
 
 
 
 
 
Appalachia
 
$
1.77

 
$
2.65

 
$
(0.88
)
 
$
1.97

 
$
2.79

 
$
(0.82
)
West Coast
 
4.34

 
6.06

 
(1.72
)
 
4.67

 
6.40

 
(1.73
)
Weighted Average
 
1.80

 
2.69

 
(0.89
)
 
1.99

 
2.83

 
(0.84
)
Weighted Average after Hedging
 
2.12

 
2.58

 
(0.46
)
 
2.22

 
2.60

 
(0.38
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Oil Production/Prices:
 
 
 
 
 
 
 
 
 
 
 
 
Production (Thousands of Barrels)
 
 
 
 
 
 
 
 
 
 
 
 
Appalachia
 
1

 
1

 

 
2

 
2

 

West Coast
 
605

 
563

 
42

 
1,206

 
1,134

 
72

Total Production
 
606

 
564

 
42

 
1,208

 
1,136

 
72

 
 
 
 
 
 
 
 
 
 
 
 
 
Average Prices (Per Barrel)
 
 
 
 
 
 
 
 
 
 
 
 
Appalachia
 
$
55.90

 
$
47.54

 
$
8.36

 
$
55.48

 
$
55.93

 
$
(0.45
)
West Coast
 
49.91

 
61.85

 
(11.94
)
 
56.25

 
63.79

 
(7.54
)
Weighted Average
 
49.92

 
61.82

 
(11.90
)
 
56.25

 
63.78

 
(7.53
)
Weighted Average after Hedging
 
58.23

 
61.01

 
(2.78
)
 
60.57

 
61.36

 
(0.79
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Production (MMcfe)
 
59,753

 
48,754

 
10,999

 
118,136

 
97,993

 
20,143

 
 
 
 
 
 
 
 
 
 
 
 
 
Selected Operating Performance Statistics:
 
 
 
 
 
 
 
 
 
 
 
 
General & Administrative Expense per Mcfe (1)
 
$
0.29

 
$
0.35

 
$
(0.06
)
 
$
0.28

 
$
0.33

 
$
(0.05
)
Lease Operating and Transportation Expense per Mcfe (1)(2)
 
$
0.87

 
$
0.94

 
$
(0.07
)
 
$
0.87

 
$
0.90

 
$
(0.03
)
Depreciation, Depletion & Amortization per Mcfe (1)
 
$
0.76

 
$
0.74

 
$
0.02

 
$
0.76

 
$
0.72

 
$
0.04

 
 
 
 
 
 
 
 
 
 
 
 
 


(1) 
Refer to page 16 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment.
 
(2) 
Amounts include transportation expense of $0.56 and $0.56 per Mcfe for the three months ended March 31, 2020 and March 31, 2019, respectively. Amounts include transportation expense of $0.57 and $0.55 per Mcfe for the six months ended March 31, 2020 and March 31, 2019, respectively.
 










Page 22.


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
 
 
 
 
 
 
 
EXPLORATION AND PRODUCTION INFORMATION
 
Hedging Summary for Remaining Six Months of Fiscal 2020
 
Volume
 
 
Average Hedge Price
Oil Swaps
 
 
 
 
 
 
Brent
 
690,000

BBL
 
$
64.55 / BBL
NYMEX
 
162,000

BBL
 
$
50.52 / BBL
Total
 
852,000

BBL
 
$
61.88 / BBL
 
 
 
 
 
 
 
Gas Swaps
 
 
 
 
 
 
NYMEX
 
45,700,000

MMBTU
 
$
2.67 / MMBTU
DAWN
 
3,600,000

MMBTU
 
$
3.00 / MMBTU
Fixed Price Physical Sales
 
29,608,125

MMBTU
 
$
2.18 / MMBTU
Total
 
78,908,125

MMBTU
 
 
 
 
 
 
 
 
 
 
Hedging Summary for Fiscal 2021
 
Volume
 
 
Average Hedge Price
Oil Swaps
 
 
 
 
 
 
Brent
 
696,000

BBL
 
$
64.29 / BBL
NYMEX
 
156,000

BBL
 
$
51.00 / BBL
Total
 
852,000

BBL
 
$
61.86 / BBL
 
 
 
 
 
 
 
Gas Swaps
 
 
 
 
 
 
NYMEX
 
117,920,000

MMBTU
 
$
2.61/ MMBTU
   DAWN
 
600,000

MMBTU
 
$
3.00 / MMBTU
No Cost Collars
 
25,850,000

MMBTU
 
$
2.28 / MMBTU (Floor) / $2.77 / MMBTU (Ceiling)
Fixed Price Physical Sales
 
46,810,846

MMBTU
 
$
2.22 / MMBTU
Total
 
191,180,846

MMBTU
 
 
 
 
 
 
 
 
 
 
Hedging Summary for Fiscal 2022
 
Volume
 
 
Average Hedge Price
Oil Swaps
 
 
 
 
 
 
Brent
 
300,000

BBL
 
$
60.07 / BBL
NYMEX
 
156,000

BBL
 
$
51.00 / BBL
Total
 
456,000

BBL
 
$
56.97 / BBL
 
 
 
 
 
 
 
Gas Swaps
 
 
 
 
 
 
NYMEX
 
62,550,000

MMBTU
 
$
2.52 / MMBTU
No Cost Collars
 
2,350,000

MMBTU
 
$
2.28 / MMBTU (Floor) / $2.77 / MMBTU (Ceiling)
Fixed Price Physical Sales
 
40,588,964

MMBTU
 
$
2.23 / MMBTU
Total
 
105,488,964

MMBTU
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hedging Summary for Fiscal 2023
 
Volume
 
 
Average Hedge Price
Gas Swaps
 
 
 
 
 
 
NYMEX
 
17,500,000

MMBTU
 
$
2.47 / MMBTU
Fixed Price Physical Sales
 
36,961,007

MMBTU
 
$
2.26 / MMBTU
Total
 
54,461,007

MMBTU
 
 
 
 
 
 
 
 
 
 
Hedging Summary for Fiscal 2024
 
Volume
 
 
Average Hedge Price
Gas Swaps
 
 
 
 
 
 
NYMEX
 
1,150,000

MMBTU
 
$
2.45 / MMBTU
Fixed Price Physical Sales
 
20,801,194

MMBTU
 
$
2.25 / MMBTU
Total
 
21,951,194

MMBTU
 
 
 
 
 
 
 
 
 
 
Hedging Summary for Fiscal 2025
 
Volume
 
 
Average Hedge Price
Fixed Price Physical Sales
 
2,293,200

MMBTU
 
$
2.18 / MMBTU

 
 
 
 
 




Page 23.


 
 
 
 
 
 
 
 
 
 
 
 
 
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
March 31,
 
March 31,
 
 
 
 
 
 
Increase
 
 
 
 
 
Increase
 
 
2020
 
2019
 
(Decrease)
 
2020
 
2019
 
(Decrease)
Firm Transportation - Affiliated
 
42,602

 
50,967

 
(8,365
)
 
77,269

 
86,668

 
(9,399
)
Firm Transportation - Non-Affiliated
 
153,197

 
148,653

 
4,544

 
327,178

 
304,855

 
22,323

Interruptible Transportation
 
531

 
750

 
(219
)
 
1,244

 
1,665

 
(421
)
 
 
196,330

 
200,370

 
(4,040
)
 
405,691

 
393,188

 
12,503

 
 
 
 
 
 
 
 
 
 
 
 
 
Gathering Volume - (MMcf)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
March 31,
 
March 31,
 
 
 
 
 
 
Increase
 
 
 
 
 
Increase
 
 
2020
 
2019
 
(Decrease)
 
2020
 
2019
 
(Decrease)
Gathered Volume - Affiliated
 
65,134

 
54,157

 
10,977

 
129,526

 
108,845

 
20,681

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Utility Throughput - (MMcf)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
March 31,
 
March 31,
 
 
 
 
 
 
Increase
 
 
 
 
 
Increase
 
 
2020
 
2019
 
(Decrease)
 
2020
 
2019
 
(Decrease)
Retail Sales:
 
 
 
 
 
 
 
 
 
 
 
 
Residential Sales
 
26,155

 
30,906

 
(4,751
)
 
45,631

 
50,686

 
(5,055
)
Commercial Sales
 
4,033

 
4,712

 
(679
)
 
6,846

 
7,558

 
(712
)
Industrial Sales
 
183

 
284

 
(101
)
 
400

 
488

 
(88
)
 
 
30,371

 
35,902

 
(5,531
)
 
52,877

 
58,732

 
(5,855
)
Transportation
 
25,157

 
28,928

 
(3,771
)
 
45,712

 
51,198

 
(5,486
)
 
 
55,528

 
64,830

 
(9,302
)
 
98,589

 
109,930

 
(11,341
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  



















Page 24.


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

In addition to financial measures calculated in accordance with generally accepted accounting principles (GAAP), this press release contains information regarding Adjusted Operating Results and Adjusted EBITDA, which are non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company's ongoing operating results and for comparing the Company’s financial performance to other companies. The Company's management uses these non-GAAP financial measures for the same purpose, and for planning and forecasting purposes. The presentation of non-GAAP financial measures is not meant to be a substitute for financial measures in accordance with GAAP.

Management defines Adjusted Operating Results as reported GAAP earnings before items impacting comparability. The following table reconciles National Fuel's reported GAAP earnings to Adjusted Operating Results for the three and six months ended March 31, 2020 and 2019:
 
 
Three Months Ended
 
Six Months Ended
 
 
March 31,
 
March 31,
(in thousands except per share amounts)
 
2020
 
2019
 
2020
 
2019
Reported GAAP Earnings
 
$
(106,068
)
 
$
90,595

 
$
(19,477
)
 
$
193,256

Items impacting comparability
 
 
 
 
 
 
 
 
Impairment of oil and gas properties (E&P)
 
177,761

 

 
177,761

 

Tax impact of impairment of oil and gas properties
 
(48,503
)
 

 
(48,503
)
 

Deferred tax valuation allowance
 
56,770

 

 
56,770

 

Remeasurement of deferred income taxes under 2017 Tax Reform
 

 

 

 
(5,000
)
Mark-to-market adjustments due to hedge ineffectiveness (E&P)
 

 
6,742

 

 
237

Tax impact of mark-to-market adjustments due to hedge ineffectiveness
 

 
(1,416
)
 

 
(50
)
Unrealized (gain) loss on other investments (Corporate/All Other)
 
5,414

 
(3,831
)
 
6,433

 
2,516

Tax impact of unrealized (gain) loss on other investments
 
(1,137
)
 
805

 
(1,351
)
 
(528
)
Adjusted Operating Results
 
$
84,237

 
$
92,895

 
$
171,633

 
$
190,431

 
 
 
 
 
 
 
 
 
Reported GAAP Earnings per share
 
$
(1.23
)
 
$
1.04

 
$
(0.23
)
 
$
2.23

Items impacting comparability
 
 
 
 
 
 
 
 
Impairment of oil and gas properties, net of tax (E&P)
 
1.49

 

 
1.49

 

Deferred tax valuation allowance
 
0.66

 

 
0.66

 

Remeasurement of deferred income taxes under 2017 Tax Reform
 

 

 

 
(0.06
)
Mark-to-market adjustments due to hedge ineffectiveness, net of tax (E&P)
 

 
0.06

 

 

Unrealized (gain) loss on other investments, net of tax (Corporate/All Other)
 
0.05

 
(0.03
)
 
0.06

 
0.02

Rounding
 

 

 

 
0.01

Adjusted Operating Results per share
 
$
0.97

 
$
1.07

 
$
1.98

 
$
2.20


Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and six months ended March 31, 2020 and 2019:
 
 
Three Months Ended
 
Six Months Ended
 
 
March 31,
 
March 31,
(in thousands)
 
2020
 
2019
 
2020
 
2019
Reported GAAP Earnings
 
$
(106,068
)
 
$
90,595

 
$
(19,477
)
 
$
193,256

Depreciation, Depletion and Amortization
 
77,912

 
65,664

 
152,830

 
129,918

Other (Income) Deductions
 
17,480

 
5,919

 
20,520

 
15,521

Interest Expense
 
27,162

 
27,060

 
54,156

 
53,573

Income Taxes
 
36,846

 
29,785

 
68,241

 
52,693

Mark-to-Market Adjustments due to Hedge Ineffectiveness
 

 
6,742

 

 
237

Impairment of Oil and Gas Producing Properties
 
177,761

 

 
177,761

 

Adjusted EBITDA
 
$
231,093

 
$
225,765

 
$
454,031

 
$
445,198

 
 
 
 
 
 
 
 
 
Adjusted EBITDA by Segment
 
 
 
 
 
 
 
 
Pipeline and Storage Adjusted EBITDA
 
$
49,102

 
$
41,281

 
$
92,043

 
$
89,106

Gathering Adjusted EBITDA
 
29,541

 
24,598

 
58,973

 
50,546

Total Midstream Businesses Adjusted EBITDA
 
78,643

 
65,879


151,016


139,652

Exploration and Production Adjusted EBITDA
 
79,846

 
83,580

 
171,947

 
173,475

Utility Adjusted EBITDA
 
73,192

 
78,688

 
132,655

 
136,257

Corporate and All Other Adjusted EBITDA
 
(588
)
 
(2,382
)
 
(1,587
)
 
(4,186
)
Total Adjusted EBITDA
 
$
231,093

 
$
225,765


$
454,031


$
445,198







Page 25.


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
SEGMENT ADJUSTED EBITDA
 
 
Three Months Ended
 
Six Months Ended
 
 
March 31,
 
March 31,
(in thousands)
 
2020
 
2019
 
2020
 
2019
Exploration and Production Segment
 
 
 
 
 
 
 
 
Reported GAAP Earnings
 
$
(175,275
)
 
$
21,873

 
$
(151,299
)
 
$
60,087

Depreciation, Depletion and Amortization
 
45,136

 
35,888

 
89,284

 
70,588

Other (Income) Deductions
 
187

 
(275
)
 
349

 
(554
)
Interest Expense
 
14,163

 
13,548

 
28,220

 
26,711

Income Taxes
 
17,874

 
5,804

 
27,632

 
16,406

Mark-to-Market Adjustments due to Hedge Ineffectiveness
 

 
6,742

 

 
237

Impairment of Oil and Gas Producing Properties
 
177,761

 

 
177,761

 

Adjusted EBITDA
 
$
79,846

 
$
83,580

 
$
171,947

 
$
173,475

 
 
 
 
 
 
 
 
 
Pipeline and Storage Segment
 
 
 
 
 
 
 
 
Reported GAAP Earnings
 
$
22,087

 
$
17,749

 
$
40,192

 
$
42,851

Depreciation, Depletion and Amortization
 
13,356

 
11,293

 
24,960

 
22,407

Other (Income) Deductions
 
(1,361
)
 
(1,973
)
 
(2,739
)
 
(3,899
)
Interest Expense
 
7,152

 
7,500

 
14,264

 
14,786

Income Taxes
 
7,868

 
6,712

 
15,366

 
12,961

Adjusted EBITDA
 
$
49,102

 
$
41,281

 
$
92,043

 
$
89,106

 
 
 
 
 
 
 
 
 
Gathering Segment
 
 
 
 
 
 
 
 
Reported GAAP Earnings
 
$
19,898

 
$
12,690

 
$
35,842

 
$
26,872

Depreciation, Depletion and Amortization
 
5,279

 
4,673

 
10,418

 
9,351

Other (Income) Deductions
 
(18
)
 
(189
)
 
(14
)
 
(232
)
Interest Expense
 
2,160

 
2,345

 
4,379

 
4,723

Income Taxes
 
2,222

 
5,079

 
8,348

 
9,832

Adjusted EBITDA
 
$
29,541

 
$
24,598

 
$
58,973

 
$
50,546

 
 
 
 
 
 
 
 
 
Utility Segment
 
 
 
 
 
 
 
 
Reported GAAP Earnings
 
$
31,499

 
$
35,589

 
$
58,082

 
$
61,237

Depreciation, Depletion and Amortization
 
13,751

 
13,365

 
27,382

 
26,656

Other (Income) Deductions
 
12,094

 
11,618

 
17,906

 
17,834

Interest Expense
 
5,516

 
6,263

 
11,190

 
12,157

Income Taxes
 
10,332

 
11,853

 
18,095

 
18,373

Adjusted EBITDA
 
$
73,192

 
$
78,688

 
$
132,655

 
$
136,257

 
 
 
 
 
 
 
 
 
Corporate and All Other
 
 
 
 
 
 
 
 
Reported GAAP Earnings
 
$
(4,277
)
 
$
2,694

 
$
(2,294
)
 
$
2,209

Depreciation, Depletion and Amortization
 
390

 
445

 
786

 
916

Other (Income) Deductions
 
6,578

 
(3,262
)
 
5,018

 
2,372

Interest Expense
 
(1,829
)
 
(2,596
)
 
(3,897
)
 
(4,804
)
Income Taxes
 
(1,450
)
 
337

 
(1,200
)
 
(4,879
)
Adjusted EBITDA
 
$
(588
)
 
$
(2,382
)
 
$
(1,587
)
 
$
(4,186
)