EX-99 2 l22092aexv99.htm EXHIBIT 99 exv99
 

Exhibit 99

National Fuel Gas Company . Philip C. Ackerman Chairman & CEO

 

Safe Harbor NOTE: This presentation contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements concerning plans, objectives, goals, projections, strategies and future events or performance, other statements that are not statements of historical fact, and statements identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "may," "should," "will" or words of similar meaning. While National Fuel's expectations, beliefs and projections are made in good faith and are believed to have a reasonable basis, actual results may differ materially. You may refer to National Fuel's most recent Form 10-Q for a listing of important risk factors you should consider. In addition, this presentation contains certain non-GAAP financial measures. For pages that contain non- GAAP financial measures, pages containing the most directly comparable GAAP financial measures and reconciliations are provided at the end of this presentation.

 

Grow shareholder value through timely investment in the energy industry. National Fuel Gas Company Corporate Objective

 

'70 0.19 '71 0.2 '72 0.205 '73 0.215 '74 0.225 '75 0.235 '76 0.245 '77 0.255 '78 0.27 '79 0.2875 '80 0.3075 '81 0.33 '82 0.36 '83 0.39 '84 0.47 '85 0.52 '86 0.57 '87 0.6 '88 0.63 '89 0.67 '90 0.71 '91 0.73 '92 0.75 '93 0.77 '94 0.79 '95 0.81 '96 0.84 '97 0.87 '98 0.9 '99 0.93 '00 0.96 '01 1.01 '02 1.04 '03 1.08 '04 1.12 '05 1.16 '06E 1.2 $0.19 $1.20 Annual Rate At Fiscal Year End National Fuel Gas Company Dividend Growth

 

'70 '71 '72 '73 '74 '75 '76 '77 '78 '79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 3.23 3.36 3.58 3.64 3.8 3.94 4.06 4.21 4.39 4.63 4.82 5.18 5.54 5.75 6.31 6.76 7.07 7.61 7.83 8.22 8.48 8.76 9.34 10.04 10.47 10.69 11.31 11.97 11.57 12.09 12.55 12.63 12.54 13.97 15.11 14.58 16.11 $3.23 $16.11 Fiscal Year 3Q '06 National Fuel Gas Company Book Value per Common Share

 

* Long-term Debt includes Current Portion of Long-term Debt. ** Includes Discontinued Operations. $2.51 Billion at June 30, 2005** Long-Term Debt Short-Term Debt Shareholder Equity Capitalization 1137 49.6 1325.8 Short-Term Debt 1.9% Shareholder Equity 52.8% Long-Term* Debt 45.3% $2.46 Billion at June 30, 2006 Long-Term Debt Short-Term Debt Shareholder Equity Capitalization 1121.2 0 1341.7 Short-Term Debt 0% National Fuel Gas Company Capitalization Shareholder Equity 54.5% Long-Term* Debt 45.5%

 

$2.9 Billion At June 30, 2006 Utility P&S E&P All Other Net plant 1.1 0.7 1 0.1 National Fuel Gas Company Net Plant by Segment

 

$194.0 Million* 12 Months Ended June 30, 2006 Utility P&S E&P Timber Energy Mkt. Corp. & Other NI 45.2 64.3 79.3 6.1 6.1 -7 National Fuel Gas Company Net Income from Continuing Operations * Excludes oil and gas impairment of $39.5 million.

 

$ Millions Fiscal Year 2001 2002 2003 2004 2005 2006E 2007E Utility 42.4 51.5 49.9 55.5 50.1 56 58 P & S 26 30.3 199.4 23.2 21.1 34 65 E & P 296.4 114.6 75.8 77.7 122.4 208 212 Energy Mkt. 0.116 0.1 0.2 0.0102 0 0 0 Timber 3.7 25.6 3.5 2.8 18.9 2 2 Corp & All Other 16.537 10.8 52.6 24 7 2.5 2 $385.1 $232.9 $381.4 $172.3 $219.5 Approx. $337-$341 National Fuel Gas Company Expenditures for Long-Lived Assets Approx. $302.5

 

9

 

Fiscal Year 2002 2003 2004 2005 9 Mos Ended 6/30/06 Earnings 0.62 0.7 0.59 0.46 0.59 a Excludes SFAS 88 settlement loss of -$0.03 a Fiscal Year Utility Diluted Earnings per Share

 

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 Capital Spending 66.1 64.9 65.7 61.8 61.7 64.8 63.7 66.9 50.7 47 55.8 42.4 51.5 49.9 55.5 50.1 Depreciation Expense 20.8 22.9 25 27.1 28.2 30 31.5 33 33.5 34.2 35.8 36.6 37.4 38.2 39.1 40.2 $ Millions Fiscal Year Utility Capital Expenditures and Depreciation Expense

 

At 06/30/03 At 06/30/04 At 06/30/05 At 06/30/06 30-59 days 15.2 13.64 17.23 16.44 60-89 days 15.57 13.81 15.53 16.94 90-119 days 13.15 11.25 12.8 15.08 120 days & over 29.95 39.4 43.03 54.81 Reserve for Bad Debt 17.17 15.16 18.13 32.21 Utility Accounts Receivable - Customer $ Millions

 

New York Merchant Function Charge Varies with Cost of Gas Rates Include Allowance Attributable to Uncollectible Expense Residential Non-Residential 2.742% .304% Multiplied by Gas Supply Cost Rate Utility Bad Debt Tracking

 

'73 '74 '75 '76 '77 '78 '79 '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 12 180.205 173.305 173.431 170.237 164.955 156.044 156.898 152.605 153.207 145.597 132.388 134.153 131.672 132.194 131.12 135.531 132.77 130.829 133.551 128.393 127.036 128.857 123.223 124.975 124.137 119.631 116.131 118.369 116.198 114.23 115.627 113.961 107.929 105.24 Fiscal Year Utility Average Use Per Residential Customer Mcf 105.24 Mcf (New York) Mos Ending 6/30/06

 

Utility Rate Case Settlements New York Pennsylvania Approximate Rate Base $640-$650 MM $270 MM Approximate Rate Base Revenue Increase $21 MM $12 MM Effective Date 08/01/2005 04/12/2005 Next Possible Filing Date 09/01/2006 05/31/2006

 

Utility Pennsylvania Jurisdiction On May 31, 2006 the Utility filed a rate case with the Pennsylvania PUC, to increase revenues by $25.9 million. Based on a typical rate proceeding, the case may not be completed until March, 2007. Contributing Factors Include, in part: An ongoing construction program, consisting of primarily non-revenue producing replacements of mains and services Increases in operation and maintenance expenses Increases in payroll and expenses for benefits Loss of load per account and increases in uncollectible accounts Increased cost of capital

 

17

 

a Excludes impairment of Independence Pipeline of -$0.12 b Excludes SFAS 88 settlement loss of -$0.02 c Excludes base gas sale of $0.03 and gain associated with insurance proceeds of $0.05 Fiscal Year Pipeline & Storage Diluted Earnings per Share Fiscal Year 2002 2003 2004 2005 9 Mos Ended 6/30/06 Earnings 0.49 0.56 0.599 0.63 0.527 a b c

 

2,972 Miles of System Pipeline 15 Compressor Stations Totaling 39,606 Horsepower Transportation Volume for Fiscal 2005: 372.4 Bcf $121.6 MM in Revenues for Fiscal 2005 Pipeline & Storage Pipeline Operating Statistics

 

32 Underground Natural Gas Storage Fields (4 Co-owned with Nonaffiliated Companies) 15 Compressor Stations Totaling 35,475 Horsepower 73.4 Bcf of Working Storage Capacity $65.6 MM in Revenues for Fiscal 2005 Pipeline & Storage Storage Operating Statistics

 

78 MILES of 24" 20,700 HP COMPRESSION APPROX. $143 MILLION COST TARGET IN-SERVICE DATE 11/07 EMPIRE PIPELINE PROPOSED EMPIRE CONNECTOR Update Pending from Tim Driscoll

 

Our Prime Location Niagara CANADA Lake Ontario Lake Erie Leidy Ellisburg NY PA PA OH TRANSCANADA UNION GAS Chippawa Corning A-5 Line Independence MILLENNIUM Empire Connector Project 250 MDth/Day Cost: Approx. $144 Million NFGSC Tuscarora Extension Project Will Interconnect with both Millennium and Empire Pipelines 130 MDth/Day Cost: Approx. $39 Million Tuscarora Storage GAS SUPPLY SOURCES DAWN HUB: Canadian, Gulf, &Mid-Continent FUTURE: Alaska, Rocky Mountain & Gulf LNG TCPL INTERCONNECTS At Niagara & Chippawa GAS SUPPLY SOURCES Gulf & Appalachian Prod'n FUTURE: Cove Point & Gulf LNG ELLISBERG LEIDY HUB INTERCONNECTS Transco, TETCO, TGP, TCO & DTI GAS SUPPLY Millennium Pipeline 500 MDth/Day National Fuel Gas Company NFGSC System Storages NFGSC System Pipelines Empire State Pipeline Interconnects Empire Pipeline 22

 

4/7/06: Complaint & Motion for Summary Disposition filed against Supply Corp. by NYPSC, PaPUC and Pennsylvania OCA (FERC Docket No. RP06-298-000) Complainants allege that Supply's rates are unjust and unreasonable and challenge Supply's fuel retainage level Supply is vigorously opposing these actions 6/7/06: FERC denied Complainants' Motion for Summary Disposition and deferred hearing pending outcome of settlement discussions Pipeline & Storage FERC Proceeding

 

Canada - 9% 56.3 BCFE NY PA Gulf Coast - 8% 46.2 BCFE East - 14% 84.2 BCFE CA - 69% 413 BCFE Total: 599.7 BCFE Oil: 60% Gas: 40% Exploration & Production Reserves by Region (at 9/30/05)

 

Fiscal Year 2002 2003 2004 2005 9 Mos Ended 6/30/06 Earnings 0.33 0.46 0.61 0.6 0.785 a b a Excludes oil & gas impairment, loss on sale and cum. effect of change in acctg of - $0.85 b Excludes SFAS 88 settlement loss of -$0.01 and Adjustment of loss on sale of oil and gas assets of +$0.06 c Excludes oil & gas impairment -$0.46 Fiscal Year Exploration & Production Diluted Earnings per Share c

 

Expenses Actual Amount $/Mcfe LOE $42,151,000 $1.19 DD&A $70,655,000 $2.00 General and Administrative $18,465,000 $0.52 Exploration & Production Nine Month Results at June 30, 2006 Production Number of Wells Drilled Operating Revenue EBITDA Net Income Diluted Earnings per Share 35.3 Bcfe 209 $257.4 MM $190.7 MM * $ 67.7 MM ** $0.79 ** ** Excludes oil and gas impairment of $39.5 million, or -$0.46 per share. * Excludes oil and gas impairment of $62.4 million.

 

2002 2003 2004 2005 2006E 2007E East 8.4 9.4 9.5 12.5 27 35.5 West 34.4 11.4 17.4 29.6 44 42.5 Canada 27 30.8 31.4 38.5 46 34.5 Gulf 44.8 24.2 19.4 41.8 90 99.5 $114.6 $75.8 $77.7 $122.4 $207.0 Fiscal Year $US Millions Exploration & Production Capital Expenditures by Division $210-$214

 

$US Millions Exploration & Production Estimated Capital Expenditures 2006 Gulf West East Canada Exploration Drlg. 43.9 0 1.2 21.2 G&G 9 0 0.1 2.5 Development New 0 0 22.8 4.2 Development Proved 2.2 30.9 0 0 Facilities 28.2 7.9 1.7 10.2 Leasehold Acquisition 6.1 0 0.8 6.8 Other 0.3 5.7 0.5 1.5 $89.7 $44.5 $27.0 $46.4

 

2004 2005 2006E 2007E East 5.25 4.9 5.4 6 West 19.957 19.3 19.4 19.5 Canada 8.2 9.8 10 9.25 Gulf 26.8 18.4 13.2 14.75 BCFE Fiscal Year Exploration & Production Total Production by Division 46 - 48 52.4 60.2 47 - 52

 

Gulf East West Canada High Low Risk Reserve Potential High Low **Well plans as of 8/29/06 Anticipated Well Drilling Well Successful Well P & A Well Sukunka #93-D (#5) Drumheller (15) Westline/Kinzua (70) Muzette (20) PineCreek #3-22 High Island 24L Viosca Knoll 256 #1 Bonanza #12-23 Vermilion 342 #1 High Island 37 #A-5 2006 Exploration and Exploitation Opportunities** Sukunka #77-D (#6) Sukunka #69-C (#7) Sukunka #66-E (#4) Lambert #6-28 Brazos 502 #2 Knoxdale (11) St. Mary's (22)

 

High Island 37 #A-5 On Production 78% Medium Sukunka #77-D (#6) P & A 20% High Sukunka #93-D (#5) On Production 20% High Sukunka #66-E (#4) P & A 20% High Pine Creek 3-22 Evaluate Tie-in Options 60% Low Bonanza 12-23 Completing 65% Medium Lambert 6-28 Completing 19% High Viosca Knoll 256 #1 P & A 47% Low Brazos 502 #2 Mudline Suspended 65% Low High Island 24L Drilling 20% Medium Vermilion 342 #1 P & A 100% Medium Working Well Location Status Interest Reserve Impact Exploration & Production Impact Wells Production & Reserves Fiscal 2006

 

Gulf East West Canada High Low Risk Reserve Potential High Low **Well plans as of 8/29/06 Anticipated Well Drilling Well Successful Well P & A Well Sukunka #8 2007 Exploration and Exploitation Opportunities** Sukunka 69-C #7 Peppers #16-16 West Cameron 96 #2 High Island 37 #B-2 High Island A-306/315 Ship Shoal 79 East Cameron 352 Vermilion 253 Trenton (2) Knoxdale (35) Muzette (30) Westline/Kinzua (35) St. Marys (20) East Cameron 34 Peppers #12-12 Drumheller (6) PineCreek (6) Bonanza development (2) Other Prospects (36)

 

Fiscal 2007 Sukunka c-69-C #7 Drilling 20.0% High Sukunka Well #8 Planning Stage 20.0% High Peppers 16-16 Planning Stage 19.0% Medium Peppers 12-12 Licensing Stage 18.0% Medium West Cameron 96 #2 Partner Approval 11.5% Medium East Cameron 34 #1 Waiting on Rig 15.0% Medium High Island 37 #B-2 Partner Approval 25.0% Medium High Island A-306/315 Filing Exploration Plan 40.0% Medium East Cameron 352 Filing Exploration Plan 65.0% Medium Ship Shoal 79 Waiting on rig 50.0% Medium Vermilion 253 Preparing Economics 50.0% Medium Well Location Status Working Interest Reserve Potential (Impact) Exploration & Production Impact Wells Production & Reserves

 

Seneca's Working Interest: 20% Sukunka b-60-E Production Commenced on December 13, 2004 Current Sales Rate up to 60 MMcf/d * Sukunka d-93-D Well Successfully Completed Production Tests at Rates up to 33 MMcf/d * Exploration & Production Sukunka Wells * Third Party Processing Facilities Limit Production to 65 MMcf/d

 

0 15 miles (2nd Well) (3rd Well) (5th Well) (4th Well) (6th Well) AREA OF MUTUAL INTEREST Gas Wells Drilling Wells Working interest lands Lands to be earned by drilling 66-E 79-J 50-C 93-D (1st Well) 60-E Sukunka Area Land Map Monkman P & A'd 77-D (7th Well) 69-C

 

935,000 Total Net Acres 778,000 in PA 157,000 in NY National Fuel Mineral Interests

 

Fiscal Year 2002 2003 2004 2005 9 Mos Ending 6/30/2006 Earnings 0.12 0.12 0.07 0.06 0.061 a b a Excludes gain from timber sale of +$1.26 b Excludes adj. of gain on timber sale of -$0.01 Fiscal Year Timber Diluted Earnings per Share

 

Energy Marketing Diluted Earnings per Share Fiscal Year 2002 2003 2004 2005 9 Mos Ending 6/30/2006 Earnings 0.11 0.07 0.07 0.06 0.069 Fiscal Year

 

National Fuel Gas Company Share Buyback Date Authorized: December 8, 2005 Authorized Amount: Up to 8 Million Shares As of 6/30/06: 2,284,350 Shares Repurchased

 

National Fuel Gas Company As a Value Company Financially Strong Diversified Asset Base Prime Location: Proximity to Canada Undeveloped Storage Pipeline Corridor to East Coast Strong Dividend Record

 

APPENDIX

 

National Fuel Gas Company Energy Mktg. Timber E&P P&S Utility National Fuel Gas Distribution Corporation National Fuel Gas Supply Corporation and Empire State Pipeline Seneca Resources Corporation Highland Forest Resources, Inc. and NE Div. Of Seneca Resources Corporation National Fuel Resources, Inc. National Fuel Gas Company Major Business Segments

 

National Fuel Gas Company New York Stock Exchange NFG Shares Outstanding (Approx.) (As of 06/30/06) 83.3 Million Average Daily Trading Volume (12 Months Ended 08/31/06) 451,616 Market Capitalization (Approx.) (As of 08/31/06) $3.2 Billion $1.20 Annual Dividend Rate (At 06/30/06) September Fiscal Year End

 

1/1/1970 2/1/1970 3/1/1970 4/1/1970 5/1/1970 6/1/1970 7/1/1970 8/1/1970 9/1/1970 10/1/1970 11/1/1970 12/1/1970 1/1/1971 2/1/1971 3/1/1971 4/1/1971 5/1/1971 6/1/1971 7/1/1971 8/1/1971 9/1/1971 10/1/1971 11/1/1971 12/1/1971 1/1/1972 2/1/1972 3/1/1972 4/1/1972 5/1/1972 6/1/1972 7/1/1972 8/1/1972 9/1/1972 10/1/1972 11/1/1972 12/1/1972 1/1/1973 2/1/1973 3/1/1973 4/1/1973 5/1/1973 6/1/1973 7/1/1973 8/1/1973 9/1/1973 10/1/1973 11/1/1973 12/1/1973 1/1/1974 2/1/1974 3/1/1974 4/1/1974 5/1/1974 6/1/1974 7/1/1974 8/1/1974 9/1/1974 10/1/1974 11/1/1974 12/1/1974 1/1/1975 2/1/1975 3/1/1975 4/1/1975 5/1/1975 6/1/1975 7/1/1975 8/1/1975 9/1/1975 10/1/1975 11/1/1975 12/1/1975 1/1/1976 2/1/1976 3/1/1976 4/1/1976 5/1/1976 6/1/1976 7/1/1976 8/1/1976 9/1/1976 10/1/1976 11/1/1976 12/1/1976 1/1/1977 2/1/1977 3/1/1977 4/1/1977 5/1/1977 6/1/1977 7/1/1977 8/1/1977 9/1/1977 10/1/1977 11/1/1977 12/1/1977 1/1/1978 2/1/1978 3/1/1978 2.727279545 2.798297727 2.840918182 2.698881818 2.514225 2.372140909 2.428984091 2.642038636 2.5284 2.500002273 2.599418182 2.5284 2.784075 2.911936364 2.684659091 2.982954545 2.840918182 2.784075 2.7699 2.840918182 2.713056818 2.755677273 2.741454545 2.840918182 3.03975 3.03975 2.982954545 2.897713636 2.883538636 2.840918182 2.798297727 2.869315909 2.982954545 3.025575 3.153388636 3.139213636 3.181834091 3.210231818 3.139213636 2.897713636 2.713056818 2.727279545 2.613640909 2.627863636 2.883538636 2.7699 2.500002273 2.400586364 2.670436364 2.698881818 2.514225 2.386363636 2.159086364 1.974429545 2.173309091 1.974429545 2.045447727 2.144863636 2.088068182 2.088068182 2.343743182 2.301122727 2.457381818 2.357965909 2.500002273 2.556797727 2.428984091 2.400586364 2.357965909 2.400586364 2.414761364 2.428984091 2.713056818 2.500002273 2.500002273 2.5284 2.514225 2.5284 2.741454545 2.826695455 2.840918182 2.869315909 2.869315909 3.181834091 3.238629545 3.011352273 2.954556818 3.053972727 3.025575 3.238629545 3.110815909 2.897713636 2.997177273 3.025575 2.997177273 3.03975 2.840918182 2.840918182 2.883538636 National Fuel Gas Company Stock Price (Jan 1970 - Aug 2006) 8/31/2006 $38.17

 

Standard & Poor's Moody's Fitch, Inc. Long-Term Debt BBB+ Baa1 A- Outlook Stable Stable Stable Commercial Paper A-2 P-2 F2 NFG Debt Ratings

 

Commercial Paper Program And Bilateral Credit Facilities - Aggregate Of $745 MM $0 MM borrowed at August 31, 2006 $300.0 MM Committed Credit Facility Through September 30, 2010 $0 borrowed Universal Shelf Registration on File - Additional $550 MM Can Be Issued As Debt Or Equity Securities Any offer and sale of such securities will be made only by means of a prospectus meeting requirements of securities laws National Fuel Gas Company Capital Resources

 

Earnings * Dividends Paid 85 0.95 0.48 86 0.88 0.53 87 0.88 0.58 88 0.83 0.61 89 0.97 0.64 90 0.92 0.68 91 0.82 0.72 92 0.97 0.74 93 1.08 0.76 94 1.16 0.78 95 1.02 0.8 96 1.39 0.82 97 1.49 0.85 98 1.44 0.88 99 1.47 0.91 '00 1.61 0.94 '01 2.11 0.97 '02 1.58 1.02 '03 1.89 1.05 '04 1.98 1.09 '05 2.15 1.13 '06E 2.34 1.17 * Excludes special items Dividends Paid Fiscal Year National Fuel Gas Company Earnings vs. Dividends Paid Earnings per Diluted Share

 

Exploration & Production Hedging Summary at 06/30/06 $15.47 / MCF $8.28 / MCF 1.1 BCF Gas Ceiling Price Floor Price Volume No-cost Collars $6.20 /MCF 2.3 BCF Gas $35.33 / BBL 0.5 MMBBL Oil Average Hedge Price Volume Swaps Remainder of Fiscal 2006 $77.00 / BBL $70.00 / BBL 0.2 MMBBL Oil $17.45 / MCF $8.12 / MCF 5.7 BCF Gas Ceiling Price Floor Price Volume No-cost Collars $5.84 /MCF 0.7 BCF Gas $37.03 / BBL 0.9 MMBBL Oil Average Hedge Price Volume Swaps Fiscal 2007 $16.45 / MCF $8.83 / MCF 1.4 BCF Gas Ceiling Price Floor Price Volume No-cost Collars Fiscal 2008

 

Comparable GAAP Financial Measure Slides And Reconciliations

 

$154.4 Million 12 Months Ended June 30, 2006 Utility P&S E&P Timber Energy Mkt. Corp. & Other NI 45.2 64.3 39.8 6 6.1 -7 National Fuel Gas Company Net Income from Continuing Operations

 

Fiscal Year Utility vs. Consolidated NFG Diluted Earnings per Share 2002 2003 2004 2005 9 Mos Ended 6/30/06 Utility 0.62 0.7 0.56 0.46 0.59 All Other Segments 0.84 1.5 1.45 1.77 0.99 $1.46 $2.20 $2.01 $2.23 $1.58

 

2002 2003 2004 2005 9 Mos Ended 6/30/06 Pipeline & Storage 0.37 0.56 0.58 0.71 0.53 All Other Segments 1.09 1.64 1.43 1.52 1.05 $1.46 $2.20 $2.01 $2.23 Fiscal Year Pipeline & Storage vs. Consolidated NFG Diluted Earnings per Share $1.58

 

2002 2003 2004 2005 9 Mos Ended 6/30/06 Exploration & Production 0.33 -0.39 0.66 0.6 0.33 All Other Segments 1.13 2.59 1.35 1.63 1.25 $1.46 $2.20 $2.01 $2.23 Fiscal Year Exploration & Production vs. Consolidated NFG Diluted Earnings per Share $1.58

 

Fiscal Year Timber vs. Consolidated NFG Diluted Earnings per Share 2002 2003 2004 2005 9 Mos Ending 6/30/2006 Timber 0.12 1.38 0.06 0.06 0.06 All Other Segments 1.34 0.82 1.95 2.17 1.52 $1.46 $2.20 $2.01 $2.23 $1.58

 

2002 2003 2004 2005 9 Mos Ending 6/30/2006 Energy Marketing 0.11 0.07 0.07 0.06 0.07 All Other Segments 1.35 2.13 1.94 2.17 1.51 Fiscal Year $1.46 $2.20 $2.01 $2.23 $1.58 Energy Marketing vs. Consolidated NFG Diluted Earnings per Share

 

Earnings Dividends Paid 85 0.95 0.48 86 0.88 0.53 87 0.88 0.58 88 0.83 0.61 89 0.97 0.64 90 0.92 0.68 91 0.82 0.72 92 0.97 0.74 93 1.08 0.76 94 1.16 0.78 95 1.02 0.8 96 1.39 0.82 97 1.49 0.85 98 0.3 0.88 99 1.47 0.91 '00 1.61 0.94 '01 0.82 0.97 '02 1.46 1.02 '03 2.2 1.04 '04 2.01 1.09 '05 2.23 1.13 National Fuel Gas Company Earnings vs. Dividends Paid Fiscal Year Dividends Paid Earnings per Diluted Share

 

Reconciliation of National Fuel Gas Expenditures for Long-lived Assets to
  Consolidated Net Cash Used in Investing Activities
(‘000)
                                         
    2002     2003     2004     2005     2006E  
     
 
Capital Expenditures
   $ (232,368 )   $ (152,251 )   $ (172,341 )   $ (219,530 )   $ (302,500 )
Investment in Subsidiaries, Net of Cash
   $ —       (228,814 )   $ —     $ —     $ —  
Investment in Partnerships
   $ (536 )   $ (375 )   $ —     $ —     $ —  
 
                              
Expenditures for Long Lived Assets
   $ (232,904 )   $ (381,440 )   $ (172,341 )   $ (219,530 )   $ (302,500 )
Expenditures for Long Lived Assets
   $ (232,904 )   $ (381,440 )   $ (172,341 )   $ (219,530 )   $ (302,500 )
Net Proceeds from Sale of Foreign Subsidiary
   $ —     $ —     $ —     $ 111,619     $ —  
Net Proceeds from Sale of Timber Properties
   $ —     $ 186,014     $ —     $ —     $ —  
Net Proceeds from Sale of Oil and Gas Producing Properties
   $ 22,068     $ 78,531     $ 7,162     $ 1,349     $ 4  
Other
   $ 5,012     $ 12,065     $ 1,974     $ 3,238     $ (1,578 )
 
                              
Net Cash Used in Investing Activities
   $ (205,824 )   $ (104,830 )   $ (163,205 )   $ (103,324 )   $ (304,074 )
     
Reconciliation of Segment Net Plant to
  Consolidated Property, Plant and Equipment
(‘000)
         
    At 6/30/2006  
 
Utility
   $ 1,075,932  
Pipeline & Storage
     682,235  
Exporation & Production
     1,009,746  
Energy Marketing
     56  
Timber
     91,201  
Corporate & Other
     25,930  
 
      
Consolidated Property, Plant and Equipment
   $ 2,885,100  
 
      

57

 

Reconciliation of Segment Net Income from Continuing Operations to
  Consolidated Net Income from Continuing Operations
(‘000)
         
    12 Mos  
    Ended  
    6/30/06  
 
Utility
   $ 45,161  
Pipeline & Storage
     64,262  
 
Exploration & Production
     79,330  
Plus: Impairment of O&G Prod. Prop.
     (39,502 )
 
      
Total Exploration & Production
     39,828  
 
Energy Marketing
     6,077  
Timber
     6,065  
Corporate & Other
     (6,958 )
 
      
 
Consolidated Net Income from Continuing Operations
   $ 154,435  
 
      
Reconciliation of Utility Segment Diluted Earnings per Share to
  Consolidated Reported Earnings per Share
($000s)
                                         
                                    9 Mos Ended  
    2002     2003     2004     2005     6/30/2006  
     
 
Utility Segment
   $ 0.62     $ 0.70     $ 0.59     $ 0.46     $ 0.59  
Plus:
                                        
Pension Settlement Loss
                   $ (0.03 )                
     
Utility Segment Reported Earnings
   $ 0.62     $ 0.70     $ 0.56     $ 0.46     $ 0.59  
All Other Segments
     0.84       1.50       1.45       1.77       0.99  
 
                              
Total Corporation
   $ 1.46     $ 2.20     $ 2.01     $ 2.23     $ 1.58  
     

58

 

                                                                 
Reconciliation of Utility Segment Capital Expenditures to
Consolidated Capital Expenditures
                                                                
($000s)
                                                                
 
     1990       1991       1992       1993       1994       1995       1996       1997  
     
 
                                                                
Utility Segment
   $ 66,110     $ 64,937     $ 65,650     $ 61,803     $ 61,715     $ 64,844     $ 63,730     $ 66,908  
All Other
     95,391       91,242       92,206       70,123       73,369       117,982       107,837       147,093  
 
                                                
Total Corporation
   $ 161,501     $ 156,179     $ 157,856     $ 131,926     $ 135,084     $ 182,826     $ 171,567     $ 214,001  
     
 
                                                                
 
     1998       1999       2000       2001       2002       2003       2004       2005  
     
 
                                                                
Utility Segment
   $ 50,680     $ 46,974     $ 55,799     $ 42,374     $ 51,550     $ 49,944     $ 55,449     $ 50,071  
All Other
     339,438       209,146       213,572       250,332       180,818       102,307       116,892       169,459  
 
                                                
Total Corporation
   $ 390,118     $ 256,120     $ 269,371     $ 292,706     $ 232,368     $ 152,251     $ 172,341     $ 219,530  
     
 
                                                                
Reconciliation of Utility Depreciation Expense to
Consolidated Depreciation Expense
($000s)
      1990       1991       1992       1993       1994       1995       1996       1997  
     
 
                                                                
Utility Segment
   $ 20,802     $ 22,877     $ 25,001     $ 27,137     $ 28,216     $ 30,052     $ 31,491     $ 32,971  
All Other
     22,938       27,928       30,725       42,288       46,548       41,730       66,740       78,679  
 
                                                
Total Corporation
   $ 43,740     $ 50,805     $ 55,726     $ 69,425     $ 74,764     $ 71,782     $ 98,231     $ 111,650  
     
 
                                                                
 
     1998       1999       2000       2001       2002       2003       2004       2005  
     
Utility Segment
   $ 33,459     $ 34,215     $ 35,842     $ 36,607     $ 37,412     $ 38,186     $ 39,101     $ 40,159  
All Other
     83,779       90,563       106,328       126,632       131,333       143,143       135,188       139,608  
 
                                                
Total Corporation
   $ 117,238     $ 124,778     $ 142,170     $ 163,239     $ 168,745     $ 181,329     $ 174,289     $ 179,767  
     
 
                                                                
Reconciliation of Utility Segment Aged Accounts Receivable to
Consolidated Accounts Receivable — Net
                                                               
Millions
 
   at 6/30/03   at 6/30/04   at 6/30/05   at 6/30/06                                
                                     
 
                                                                
Utility Aged Accounts Receivable
   $ 70.37     $ 85.14     $ 93.12     $ 98.83                                  
Utility Current/Other Accounts Receivable
   $ 101.31     $ 76.76     $ 81.64     $ 92.38                                  
Utility Gross Accounts Receivable
   $ 171.68     $ 161.90     $ 174.76     $ 191.21                                  
Utility Reserve for Bad Debt
   $ (17.17 )   $ (15.16 )   $ (18.13 )   $ (32.21 )                                
 
                                                        
Utility Net Accounts Receivable
   $ 154.51     $ 146.74     $ 156.63     $ 159.00                                  
                                     
All Other Segments Gross Accounts Receivable
   $ 66.57     $ 67.60     $ 66.83     $ 76.04                                  
All Other Segments Reserve for Bad Debts
   $ (4.28 )   $ (4.50 )   $ (2.05 )   $ (1.89 )                                
 
                                                        
All Other Segments Net Accounts Receivable
   $ 62.29     $ 63.10     $ 64.78     $ 74.15                                  
Total Corporation Accounts Receivable — Net
   $ 216.80     $ 209.84     $ 221.41     $ 233.15                                  
                                     

59

 

                                         
Reconciliation of Pipeline Segment Diluted Earnings per Share to
Consolidated Reported Earnings per Share
                                        
($000s)
                                  9 Months
 
                                   Ended
 
     2002       2003       2004       2005       6/30/2006  
     
 
                                        
Pipeline Segment
   $ 0.49     $ 0.56     $ 0.60     $ 0.63     $ 0.53  
Plus:
                                        
Gain Associaged with Insurance Proceeds
                           $ 0.05          
Impairment of Independence Pipline
   $ (0.12 )                                
Pension Settlement Loss
                   $ (0.02 )                
Base Gas Sale
                           $ 0.03          
     
Pipeline Segment Reported Earnings
   $ 0.37     $ 0.56     $ 0.58     $ 0.71     $ 0.53  
All Other Segments
     1.09       1.64       1.43       1.52       1.05  
 
                              
Total Corporation
   $ 1.46     $ 2.20     $ 2.01     $ 2.23     $ 1.58  
     
 
                                        
Reconciliation of Pipeline Operating Revenues to
Consolidated Operating Revenues from Continuing Operations
                                        
($000s)
                                        
 
   Fiscal Year                                
 
     2005                                  
 
                                      
 
                                        
Pipeline Operating Revenues
   $ 121,559                                  
Storage Operating Revenues
     65,587                                  
Other Operating Revenues
     28,713                                  
 
                                      
Total Pipeline & Storage Operating Revenues
   $ 215,859                                  
All Other Segments Operating Revenues from Continuing Operations
     1,707,690                                  
 
                                      
Consolidated Operating Revenues from Continuing Operations
   $ 1,923,549                                  
 
                                      
 
                                        
Reconciliation of Exploration & Production Segment Diluted Earnings per Share to
Consolidated Reported Earnings per Share
                                        
($000s)
 
                                   9 Months
 
                                   Ended
 
     2002       2003       2004       2005       6/30/2006  
     
 
                                        
Exploration & Production Segment
   $ 0.33     $ 0.46     $ 0.61     $ 0.60     $ 0.79  
Plus:
                                        
Impairment of O&G Prod. Prop.
           $ (0.36 )                     (0.46 )
Loss on Sale of Oil and Gas Assets
           $ (0.48 )                        
Cumulative Effect of Change in Accounting
           $ (0.01 )                        
Adjustment on Loss on Sale of Oil and Gas Assets
                   $ 0.06                  
Pension Settlement Loss
                   $ (0.01 )                
Exploration & Production Reported Earnings
   $ 0.33     $ (0.39 )   $ 0.66     $ 0.60     $ 0.33  
All Other Segments
     1.13       2.59       1.35       1.63       1.25  
 
                              
Total Corporation
   $ 1.46     $ 2.20     $ 2.01     $ 2.23     $ 1.58  
     

60

 

         
Reconciliation of Exploration & Production Operating Revenue to
Consolidated Operating Revenue
        
($000s)
  9 Mos Ended
 
     6/30/2006  
 
      
 
        
Exploration & Production
   $ 257,406  
All Other Segments
     1,759,783  
 
      
Consolidated Operating Revenue
   $ 2,017,189  
 
      
 
        
Reconciliation of Exploration & Production EBITDA to
Consolidated Net Income
        
($000s)
        
 
   9 Mos Ended
 
     6/30/2006  
 
      
 
        
Exploration & Production EBITDA
   $ 190,724  
 
        
Less:
        
Impairment of O&G Prod. Prop.
     62,371  
Interest Charges — Net
     31,509  
Federal & State Income Taxes
     (1,963 )
Depreciation, Depletion & Amortization
     70,655  
 
      
Exploration & Production Net Income
     28,152  
All Other Segments Net Income
     107,971  
 
      
Consolidated Net Income
   $ 136,123  
 
      
 
        
Reconciliation of Exploration & Production Net Income to
Consolidated Net Income
        
($000s)
        
 
   9 Mos Ended
 
     6/30/2006  
 
      
 
        
Exploration & Production Net Income
   $ 67,652  
Impairment of O&G Prod. Prop.
   $ (39,502 )
 
      
 
   $ 28,150  
All Other Segments Net Income
     107,973  
 
      
Consolidated Net Income
   $ 136,123  
 
      

61

 

         
Reconciliation of Exploration & Production Lease Operating Expense (LOE) to
Consolidated O&M
        
($000s)
  9 Mos Ended
 
     6/30/2006  
 
      
 
        
Exploration & Production LOE
   $ 38,179  
Exploration & Production Property, Franchise and
Other Taxes
     3,972  
 
      
Exploration & Production Total LOE *
   $ 42,151  
 
      
 
        
Exploration & Production LOE
   $ 38,179  
Exploration & Production Other O&M
     24,433  
 
      
Exploration & Production Total O&M
   $ 62,612  
All Other Segments O&M
     258,209  
 
      
Total Consolidated O&M
   $ 320,821  
 
      
 
        
Exploration & Production Property, Franchise and
Other Taxes
   $ 3,972  
All Other Segments Property, Franchise and Other Taxes
     50,175  
 
      
Total Consolidated Property Franchise and Other Taxes
   $ 54,147  
 
      
 
        
Reconciliation of Exploration & Production Depreciation, Depletion and Amortization to Consolidated Depreciation, Depletion and Amortization (DD&A)
        
($000s)
        
 
   9 Mos Ended
 
     6/30/2006  
 
      
 
        
Exploration & Production DD&A *
   $ 38,179  
All Other Segments DD&A
     96,088  
 
      
Consolidated DD&A
   $ 134,267  
 
      
* DD&A and Total LOE cost per Mcf equivalent equals the 9 months ended 6/30/2006 Exploration & Production DD&A and Total LOE costs, respectively, divided by the Total Gas & Oil Production (Mmcfe) in that same fiscal period.

62

 

                                                 
Reconciliation of Exploration & Production General & Administrative Costs to
Consolidated O&M
                                                
($000s)
    9 Mos Ended                                        
 
     6/30/2006                                          
 
                                              
 
                                                
Exploration & Production General & Administrative *
   $ 18,465                                          
Exploration & Production All Other O&M
     44,147                                          
 
                                              
Exporation & Production Total O&M
   $ 62,612                                          
All Other Segments O&M
     258,209                                          
 
                                              
Total Consolidated O&M
   $ 320,821                                          
 
                                              
 
* General and Administrative cost per Mcf equivalent equals the 9 months ended 6/30/2006 Exploration & Production General and Administrative cost divided by the Total Gas & Oil Production (Mmcfe) in that same fiscal period.                                        
 
                                                
Reconciliation of Exploration & Production Segment Capital Expenditures to
Consolidated Capital Expenditures
                                                
($000s)
                                                
 
     2002       2003       2004       2005       2006E     2007E
     
 
                                                
Exploration & Production Capital Expenditures
     114,602     $ 75,837     $ 77,654     $ 121,200     $ 207,000     $ 210,000 - $214,000  
Other
     —     $ —     $ —     $ 1,250     $ —     $ —  
     
 
                                                
Total Exploration & Production Capital Expenditures
     114,602     $ 75,837     $ 77,654     $ 122,450     $ 207,000     $ 210,000 - $214,000  
All Other
     117,766       76,414       94,687       97,080       95,500     $ 127,000  
     
Total Corporation
     232,368     $ 152,251     $ 172,341     $ 219,530     $ 302,500     $ 337,000 - $341,000  
     
 
                                                
Reconciliation of Timber Segment Diluted Earnings Per Share to
Consolidated Diluted Earnings Per Share
                                                
 
                                   9 Mos Ending        
 
     2002       2003       2004       2005       6/30/06          
             
 
                                                
Timber Segment
   $ 0.12     $ 0.12     $ 0.07     $ 0.06     $ 0.06          
Nonrecurring Items
   $ —     $ 1.26     $ (0.01 )   $ —                  
Timber Segment Reported Earnings
   $ 0.12     $ 1.38     $ 0.06     $ 0.06                  
All Other Segments
     1.34       0.82       1.95       2.17       1.52          
             
Total Corporation
   $ 1.46     $ 2.20     $ 2.01     $ 2.23     $ 1.58          
             
 
                                                
Reconciliation of Energy Marketing Segment Diluted Earnings Per Share to
Consolidated Diluted Earnings Per Share
                                                
 
                                   9 Mos Ending        
 
     2002       2003       2004       2005       6/30/06          
             
 
                                                
Energy Marketing Segment
   $ 0.11     $ 0.07     $ 0.07     $ 0.06     $ 0.07          
All Other Segments
     1.35       2.13       1.94       2.17       1.51          
             
Total Corporation
   $ 1.46     $ 2.20     $ 2.01     $ 2.23     $ 1.58          
             

63

 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
RECONCILIATION TO REPORTED EARNINGS
                                         
    Fiscal Year     Fiscal Year     Fiscal Year     Fiscal Year     Fiscal Year  
    Ended     Ended     Ended     Ended     Ended  
(Diluted Earnings Per Share)   September 30, 2001     September 30, 2002     September 30, 2003     September 30, 2004     September 30, 2005  
Utility
                                        
Reported earnings
   $ 0.76     $ 0.62     $ 0.70     $ 0.56     $ 0.46  
Pension settlement loss
     —       —       —       0.03       —  
 
                              
Earnings before non-recurring items
     0.76       0.62       0.70       0.59       0.46  
 
                              
 
                                        
Pipeline and Storage
                                        
Reported earnings
     0.50       0.37       0.56       0.58       0.71  
Impairment of Independence Pipeline
     —       0.12       —       —       —  
Pension settlement loss
     —       —       —       0.02       —  
Gain associated with insurance proceeds
     —       —       —       —       (0.05 )
Base gas sale
                                     (0.03 )
 
                              
Earnings before non-recurring items
     0.50       0.49       0.56       0.60       0.63  
 
                              
 
                                        
Exploration and Production
                                        
Reported earnings
     (0.40 )     0.33       (0.39 )     0.66       0.60  
Loss on sale of oil and gas assets
     —       —       0.48       —       —  
Impairment of oil and gas producing properties
     1.29       —       0.36       —       —  
Cumulative Effect of Change in Accounting
     —       —       0.01       —       —  
Adjustment of loss on sale of oil and gas assets
     —       —       —       (0.06 )     —  
Pension settlement loss
     —       —       —       0.01       —  
 
                              
Earnings before non-recurring items
     0.89       0.33       0.46       0.61       0.60  
 
                              
 
                                        
International
                                        
Reported earnings
     (0.04 )     (0.06 )     (0.12 )     0.07          
Cumulative Effect of Change in Accounting
     —       —       0.10       —     see
Pension settlement loss
     —       —       —       —     "Discontinued
Tax rate change
     —       —       —       (0.06 )   Operations"
Repatriation tax
                                   below
 
                                
Earnings before non-recurring items
     (0.04 )     (0.06 )     (0.02 )     0.01          
 
                                
 
                                        
Energy Marketing
                                        
Reported earnings
     (0.04 )     0.11       0.07       0.07       0.06  
Pension settlement loss
     —       —       —       —       —  
 
                              
Earnings before non-recurring items
     (0.04 )     0.11       0.07       0.07       0.06  
 
                              
 
                                        
Timber
                                        
Reported earnings
     0.10       0.12       1.38       0.06       0.06  
Gain on sale of timber assets
     —       —       (1.26 )     —       —  
Pension settlement loss
     —       —       —       —       —  
Adjustment of gain on sale of timber properties
     —       —       —       0.01       —  
 
                              
Earnings before non-recurring items
     0.10       0.12       0.12       0.07       0.06  
 
                              
 
                                        
Corporate and All Other
                                        
Reported earnings
     (0.06 )     (0.03 )     —       0.01       (0.08 )
Pension settlement loss
     —       —       —       0.02       —  
 
                              
Earnings before non-recurring items
     (0.06 )     (0.03 )     —       0.03       (0.08 )
 
                              
 
                                        
Consolidated
                                        
Reported earnings
     0.82       1.46       2.20       2.01          
Total non-recurring items from above
     1.29       0.12       (0.31 )     (0.03 )        
 
                                
Earnings before non-recurring items
   $ 2.11     $ 1.58     $ 1.89     $ 1.98          
 
                                
 
                                        
Consolidated Earnings from Continuing Operations
                                        
Reported earnings from continuing operations
                                     1.81  
Total non-recurring items from above
                                     (0.08 )
 
                                      
Earnings from continuing operations before non-recurring items
                                   $ 1.73  
 
                                      
 
                                        
Discontinued Operations
                                        
Reported earnings from discontinued operations
                                     0.42  
 
                                      
 
                                        
Consolidated
                                        
Reported earnings
                                   $ 2.23  
 
                                      

64