National Fuel Gas Company (�National Fuel� or the �Company�)
(NYSE:NFG) today announced earnings for the third quarter of its
2008 fiscal year and for the nine months ended June 30, 2008.
HIGHLIGHTS Earnings of $59.9 million, or $0.72 per share, for the
third quarter were up 28% from the prior year, an increase of $13.1
million, or $0.17 per share. Increased earnings in the Exploration
and Production segment provided the majority of the increase.
Higher average commodity prices realized and increased natural gas
production were the main drivers of the higher earnings. Quarterly
operating results before items impacting comparability increased
71% to $0.72 per share, an increase of $0.30 per share from the
prior year�s third quarter. Operating results increased in the
Exploration and Production, Pipeline and Storage, and Utility
segments from the prior year�s third quarter. The Company is
increasing its GAAP earnings guidance for fiscal 2008 earnings to a
range of $3.10 to $3.20 per share. It had previously been in the
range of $2.90 to $3.00 per share. The Company is providing
preliminary GAAP guidance for fiscal 2009 in the range of $3.20 to
$3.40 per share. This includes oil and gas production for the
Exploration and Production segment in the range of 38 to 44 billion
cubic feet equivalent (�Bcfe�) and is based on an assumed average
NYMEX price, exclusive of basis differential, of $9.50 per Million
British Thermal Units (�MMBtu�) for natural gas and $115 per barrel
(�Bbl�) for crude oil. This preliminary guidance for fiscal 2009
does not take into account any impacts resulting from the possible
sale of certain landfill gas related assets. A conference call is
scheduled for Friday, August 8, 2008, at 11:00 a.m. Eastern Time.
MANAGEMENT COMMENTS David F. Smith, Chief Executive Officer and
President of National Fuel Gas Company stated: �This was another
outstanding quarter for the Company. Our GAAP earnings of $0.72 per
share set a record for earnings in the third quarter, as did
operating results, which increased 71 percent quarter over quarter.
Much of this growth is due to higher average commodity prices
realized in our Exploration and Production segment and higher
natural gas production in the Gulf of Mexico and Appalachia. Our
Pipeline and Storage and Utility segments also posted strong
results for the quarter.� �We are pleased to report continued
progress toward achieving a completion date of November 2008 for
the Empire Connector Pipeline. Of course, our target in-service
date is contingent on the downstream Millennium Pipeline being
ready to accept deliveries. Our operating staff will be
coordinating our commencement of deliveries with the operators of
Millennium. It is our intent to continue to grow this important
segment of our regulated business to enhance the stable and
consistent base of earnings that these assets provide.� Smith
continued: �We will continue to aggressively pursue long-lived
reserve opportunities on our Appalachian mineral acreage. Based on
the success of our Upper Devonian drilling program in Appalachia,
and the Marcellus shale potential across a portion of this acreage,
we have increased our capital budget for fiscal 2009 in Appalachia
to a range of $110 to $150 million, a significant increase from the
2008 budget of approximately $71 million.� �While we are excited
about our long-term growth opportunities in our Pipeline and
Storage and Exploration and Production segments, we remain
concerned about the immediate impact high energy costs are having
on our Utility customers. While the price of natural gas is set by
the market, and therefore is principally determined by the forces
of supply and demand, we are working hard to help our Utility
customers prepare for the coming heating season by encouraging them
to take steps now to become as energy efficient as possible and to
be aware of the array of programs and services we offer to help
them manage their bills.� SUMMARY OF RESULTS National Fuel had
consolidated earnings for the quarter ended June 30, 2008 of $59.9
million, an increase of $13.1 million, or $0.17 per share, from the
prior year�s third quarter of $46.8 million, or $0.55 per share
(note: all references to earnings per share are to diluted earnings
per share, all amounts are stated in U.S. dollars and all amounts
used in the earnings and operating results discussions are after
tax unless otherwise noted). Consolidated earnings for the nine
months ended June 30, 2008, of $225.5 million, or $2.65 per share,
increased $45.7 million, or $0.54 per share, from the same period
in the prior year, where earnings were $179.8 million, or $2.11 per
share. � Three Months � � Nine Months Ended June 30, Ended June 30,
2008 � 2007 2008 � 2007 (in thousands except per share amounts)
Reported GAAP earnings $ 59,855 $ 46,798 $ 225,463 $ 179,765 Items
impacting comparability1: Gain on sale of turbine (586 ) Reversal
of reserve for preliminary project costs (4,787 ) (4,787 ) Income
from discontinued operations (5,586 ) (12,385 ) Resolution of
purchased gas contingency (2,344 ) Discontinuation of hedge
accounting (1,888 ) � � � � Operating results $ 59,855 $ 36,425 � $
224,877 � $ 158,361 � � Reported GAAP earnings per share $ 0.72 $
0.55 $ 2.65 $ 2.11 Items impacting comparability1: Gain on sale of
turbine (0.01 ) Reversal of reserve for preliminary project costs
(0.06 ) (0.06 ) Income from discontinued operations (0.07 ) (0.15 )
Resolution of purchased gas contingency (0.03 ) Discontinuation of
hedge accounting (0.02 ) � � � � Earnings excluding these items $
0.72 $ 0.42 � $ 2.64 � $ 1.85 � 1 See discussion of these
individual items below. As outlined in the table above, certain
items included in GAAP earnings impacted the comparability of the
Company�s operating results when comparing the quarter and nine
months ended June 30, 2008, to the comparable periods in fiscal
2007. Excluding these items, most of which occurred in fiscal 2007,
operating results for the current third quarter of $59.9 million,
or $0.72 per share, increased $23.4 million, or $0.30 per share.
Excluding these items for the nine month period ended June 30,
2008, operating results of $224.9 million, or $2.64 per share,
increased $66.5 million, or $0.79 per share. Items impacting
comparability will be discussed in more detail within the
discussion of segment earnings below. DISCUSSION OF RESULTS BY
SEGMENT (The following discussion of earnings for each segment is
summarized in a tabular form in this report. It may be helpful to
refer to those tables while reviewing this discussion.) Exploration
and Production Segment The Exploration and Production segment
operations are carried out by Seneca Resources Corporation
(�Seneca�). Seneca explores for, develops and purchases natural gas
and oil reserves in California, in the Appalachian region, and in
the Gulf of Mexico. Seneca previously had Canadian Exploration and
Production operations, which it sold on August 31, 2007. As a
result of that sale, the Company has presented the Canadian
operations as discontinued operations. The Exploration and
Production segment�s earnings in the third quarter of fiscal 2008
of $39.8 million, or $0.48 per share, increased $15.4 million, or
$0.19 per share, when compared with the prior year�s third quarter.
Excluding earnings from discontinued operations discussed below,
operating results in the Exploration and Production segment
increased $20.9 million, or $0.26 per share, for the third quarter
of fiscal 2008. The increase was primarily due to higher crude oil
and natural gas prices realized after hedging and higher natural
gas production. For the quarter ended June 30, 2008, the weighted
average oil price received by Seneca (after hedging) was $89.55 per
Bbl, an increase of $36.01 per Bbl, or 67.3 percent, from the prior
year�s quarter. The weighted average natural gas price received by
Seneca (after hedging) for the quarter ended June 30, 2008, was
$9.73 per thousand cubic feet (�Mcf�), an increase of $2.19 per
Mcf, or 29.0 percent. Lower interest expense during the quarter
also contributed to the growth in operating results. Overall
production for the quarter was 10.3 Bcfe, an increase of 0.9 Bcfe
compared to the prior year�s quarter. A 26.4 percent increase in
natural gas production more than offset a drop in crude oil
production. The increase in natural gas production occurred in the
Gulf of Mexico where production increased 0.7 billion cubic feet
(�Bcf�) or 30.3 percent mainly due to the production from the High
Island 24L field that came on production in October 2007.
Production in the Appalachian region was up 0.5 Bcf, or 41.6
percent, over the prior year�s quarter. The decrease in crude oil
volumes occurred mostly in the Gulf Division and was attributable
to the natural production decline of Seneca�s properties. Other
items impacting operating results for the quarter were higher
depletion expense, lease operating expenses (�LOE�), state income
taxes and general and administrative expenses. The increase in
depletion expense was caused by higher production and a $0.29
increase in the per unit depletion rate, which was mainly due to
the reduction in proved reserves in California, primarily in the
Midway Sunset field, at the end of fiscal 2007. That reduction
resulted from an audit by Netherland, Sewell & Associates which
determined that reduced performance from certain wells in the field
supported a reduction in proved reserves. The increase in LOE is
due to the High Island 24L field that began production in October
2007, higher steaming costs in California and an increase in costs
associated with a higher number of producing properties in
Appalachia. The Exploration and Production segment�s earnings of
$108.4 million, or $1.28 per share, for the nine months ended June
30, 2008, increased $43.4 million, or $0.52 per share, when
compared with the nine months ended June 30, 2007. Excluding
earnings from discontinued operations, operating results for the
nine months ended June 30, 2008, increased $55.8 million, or $0.67
per share, from the prior year. The increase was primarily due to
higher crude oil and natural gas prices realized after hedging and
was also significantly impacted by higher natural gas production.
For the nine months ended June 30, 2008, the weighted average oil
price received by Seneca (after hedging) was $79.97 per Bbl, an
increase of $31.58 per Bbl, or 65.3 percent, from the prior year�s
nine month period. The weighted average natural gas price received
by Seneca (after hedging) for the nine months ended June 30, 2008,
was $8.95 per Mcf, an increase of $1.66 per Mcf, or 22.8 percent.
Overall production for the nine months ended June 30, 2008, was
31.3 Bcfe, an increase of 2.0 Bcfe, compared to the prior year�s
nine month period. An increase in natural gas production of 17.6
percent more than offset a 4.0 percent decline in crude oil
production. Higher interest income and lower interest expense
during the current nine month period also contributed to the
increase in operating results. Other items impacting operating
results for the nine months ended June 30, 2008, were higher
depletion expense, LOE, general and administrative expenses, state
income taxes and mark-to-market adjustments to recognize hedge
ineffectiveness on certain derivative financial instruments used to
hedge prices on Seneca�s oil and gas production. The increase in
depletion expense is due to higher production and a higher per unit
rate as discussed above. Similar to the quarterly results described
above, the increase in LOE is due to the High Island 24L field that
began production in October 2007, higher steaming costs in
California, and an increase in costs associated with a higher
number of producing properties in Appalachia. Pipeline and Storage
Segment The Pipeline and Storage segment operations are carried out
by National Fuel Gas Supply Corporation (�Supply Corporation�) and
Empire State Pipeline (�Empire�). These companies provide 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
western Pennsylvania. The Pipeline and Storage segment�s earnings
of $12.5 million, or $0.15 per share, for the quarter ended June
30, 2008, decreased $2.9 million, or $0.03 per share, when compared
with the same period in the prior fiscal year. The comparability of
the quarterly results is impacted by the reversal in the prior
year�s third quarter of a $4.8 million reserve for preliminary
project costs on the Empire Connector project. Empire recorded a
reserve against project development costs until such time that it
was probable that the project would be built and placed in service.
Excluding this item, operating results for the Pipeline and Storage
segment increased $1.9 million or $0.03 per share. Higher
efficiency gas revenue due to both higher natural gas prices and
higher retained volumes compared to the prior year�s quarter was
the primary reason for the increase. An increase in the allowance
for funds used during construction (�AFUDC�) resulting from the
construction of the Empire Connector and lower income taxes,
partially offset by higher interest expense, also contributed to
the increase in operating results for the quarter. The Pipeline and
Storage segment�s earnings of $40.9 million, or $0.48 per share,
for the nine months ended June 30, 2008, decreased $2.1 million, or
$0.03 per share, when compared with the nine months ended June 30,
2007. The comparability of the results for the nine months ended
June 30, 2008, is impacted by the reversal in the prior year of a
$4.8 million reserve for preliminary project costs on the Empire
Connector project discussed above, and a $1.9 million gain
associated with the prepayment in the first quarter of 2007 of the
project financing debt for the Empire State Pipeline. Excluding
these items, operating results increased $4.5 million for the nine
months ended June 30, 2008, mainly due to higher transportation and
storage revenues and higher efficiency gas revenues. Higher AFUDC
also contributed to the increase in operating results. Higher
operating expenses and interest expense during the nine month
period partially offset those items. 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. The Utility segment�s earnings of $7.8
million, or $0.09 per share for the quarter ended June 30, 2008,
increased $4.1 million, or $0.05 per share when compared with the
prior year�s third quarter; however, the results are not directly
comparable to the prior year�s third quarter due to a rate design
change in the New York Division discussed below. In the New York
Division, earnings increased $4.4 million or $0.05 per share. On
December 21, 2007, the New York Public Service Commission issued an
order allowing Distribution to increase annual revenues by $1.8
million. In addition to the revenue increase, the order approved a
rate design change, which allows Distribution to recover a greater
amount of its operating costs in the minimum bill amount. This
results in shifting more than $4.3 million of earnings from the
second quarter of fiscal 2008 and spreading it to the third and
fourth quarters of the fiscal year. As a result of this change,
earnings for the third quarter of fiscal 2008 increased from the
third quarter of fiscal 2007. Also contributing to the increase in
earnings was a regulatory adjustment in the third quarter of fiscal
2007 that did not recur in 2008, a lower effective tax rate and
lower operating expenses mostly related to postretirement benefits.
Partially offsetting this increase was a decrease in customer usage
per account. In the Pennsylvania Division, earnings decreased $0.3
million. A decrease in customer usage per account was partially
offset by lower operating expense compared to the prior year�s
third quarter. The Utility segment�s earnings of $62.2 million, or
$0.73 per share, for the nine months ended June 30, 2008, increased
$7.9 million, or $0.09 per share, compared to the nine months ended
June 30, 2007. Earnings in Distribution�s New York Division for the
nine months ended June 30, 2008, of $41.2 million increased $5.2
million, or $0.06 per share, compared to the prior year. The
increase is mainly due to lower postretirement benefits and bad
debt expenses, lower property and other taxes, and the positive
impact of certain routine regulatory adjustments. The impact of
these items more than offset the impact on earnings of the rate
design change included in the rate order discussed above. For the
nine months ended June 30, 2008, earnings in Distribution�s
Pennsylvania Division of $21.0 million, or $0.25 per share,
increased $2.7 million, or $0.03 per share, compared to the prior
year. Earnings increased primarily due to an increase in base
rates, higher usage per customer and a decrease in bad debt
expense. On January 1, 2007, Distribution implemented a Settlement
Agreement approved by the Pennsylvania Public Utility Commission
that provided for a $14.3 million (before tax) annual base rate
increase. Warmer weather during the nine months ended June 30, 2008
partially offset the increase in earnings. Energy Marketing
National Fuel Resources, Inc. (�NFR�) comprises the Company�s
Energy Marketing segment. NFR markets natural gas to industrial,
commercial, public authority and residential customers in western
and central New York and northwestern Pennsylvania, offering
competitively priced energy and energy management services to its
customers. The Energy Marketing segment�s earnings for the quarter
ended June 30, 2008, of $0.5 million, decreased $0.8 million, or
$0.01 per share, compared to the third quarter of last year,
primarily due to higher bad debt expense. Earnings for the nine
months ended June 30, 2008, in the Energy Marketing segment of $7.1
million, or $0.08 per share, decreased $1.4 million, or $0.02 per
share, from the prior period. The comparability of the results is
impacted by a $2.3 million reversal of an accrual for purchased gas
expense for which a contingency was resolved during the second
quarter of fiscal 2007. Excluding this item, operating results for
the nine months ended June 30, 2008, increased $1.0 million, or
$0.01 per share, compared to the prior year, mainly due to
increased sales throughput. NFR also benefited from the profitable
sale of certain gas held as inventory and from the marketing
flexibility that it derives from its contracts for significant
storage capacity. Higher bad debt expense partially offset these
items. Timber Segment The Timber segment operations are carried out
by Highland Forest Resources, Inc. (�Highland�) and Seneca�s
Northeast Division. This segment markets high quality hardwoods
from its New York and Pennsylvania land holdings, and owns two
sawmill/dry kiln operations in northwestern Pennsylvania. The
Timber segment�s loss for the quarter ended June 30, 2008, of $2.1
million, or $0.02 per share, increased $1.7 million, or $0.02 per
share from the prior year�s third quarter loss of $0.4 million, or
less than $0.01 per share. The increased loss is due to lower sales
volumes resulting from a combination of reduced demand and wet
weather that hampered harvesting. Earnings for the nine months
ended June 30, 2008, of $2.2 million, decreased $0.8 million from
the prior year�s earnings. Although overall sales volumes increased
for the current nine month period, a decrease in high margin cherry
veneer logs and cherry kiln dry lumber, combined with lower prices
on most products, were the main reasons for the decrease in
earnings. Corporate and All Other Other direct, wholly-owned
subsidiaries of the Company include: Horizon LFG, Inc., a
corporation engaged through subsidiaries in the purchase,
processing, transportation and sale of landfill gas; and Horizon
Power, Inc., a corporation that develops and owns independent
electric generation facilities which are fueled with natural gas or
landfill gas. Earnings in the Corporate and All Other category for
the quarter ended June 30, 2008, were $1.3 million, a $1.1 million
decrease compared to the prior year�s third quarter earnings.
Higher income from unconsolidated subsidiaries and lower income
taxes were more than offset by higher interest expense and higher
operating expenses mainly related to the proxy contest initiated by
a shareholder. Earnings in the Corporate and All Other category for
the nine months ended June 30, 2008, were $4.6 million, a decrease
of $1.3 million when compared to the prior year�s earnings. The
comparability of the nine month results is impacted by a $0.6
million gain on the sale of a gas-powered turbine the Company had
previously planned to use in the development of a co-generation
plant. Excluding this item, operating results decreased $1.9
million. Higher margins from the landfill gas operations, higher
income from unconsolidated subsidiaries, lower interest expense and
lower income taxes were more than offset by lower interest income
and higher operating expenses mainly related to the proxy contest
noted above. Discontinued Operations On August 31, 2007, Seneca
completed the sale of its Canadian subsidiary. As a result of that
sale, the Company has presented the Canadian operations as
discontinued operations. Earnings in the third quarter of fiscal
2007 include earnings from discontinued operations of $5.6 million.
There were no earnings from discontinued operations in the third
quarter of fiscal 2008. Earnings for the nine months ended June 30,
2007, include earnings from discontinued operations of $12.4
million. There were no earnings from discontinued operations for
the nine months ended June 30, 2008. EARNINGS GUIDANCE The Company
is increasing its GAAP earnings guidance for fiscal 2008 earnings
to a range of $3.10 to $3.20 per share. Earnings guidance had
previously been in the range of $2.90 to $3.00 per share. The
Company is providing preliminary GAAP guidance for fiscal 2009 in
the range of $3.20 to $3.40 per share. This includes oil and gas
production for the Exploration and Production segment in the range
of 38 to 44 Bcfe and is based on an assumed average NYMEX price,
exclusive of basis differential, of $9.50 per MMBtu for natural gas
and $115 per Bbl for crude oil. Further details regarding the
production guidance are included in this document. The Company is
currently exploring a possible sale of certain landfill gas related
assets. The preliminary guidance for fiscal 2009 does not take into
account any earnings impacts resulting from such possible sale or
sales. If a sale were to occur, certain earnings that have
historically been included in operating results would be changed to
a non-operating classification, as would any gain or loss on the
sale. EARNINGS TELECONFERENCE The Company will host a conference
call on Friday, August 8, 2008, at 11 a.m. (Eastern Time) to
discuss this announcement. There are two ways to access this call.
For those with Internet access, visit the investor relations page
at National Fuel�s Web site at investor.nationalfuelgas.com. For
those without Internet access, access is also provided by dialing
(toll-free) 1-866-578-5788, and using the passcode �35482868.� For
those unable to listen to the live conference call, a replay will
be available approximately one hour after the conclusion of the
call at the same Web site link and by phone at (toll free)
1-888-286-8010 using passcode �23769429.� Both the webcast and
telephonic replay will be available until the close of business on
Friday, August 15, 2008. National Fuel is an integrated energy
company with $4.3 billion in assets comprised of the following five
operating segments: Exploration and Production, Pipeline and
Storage, Utility, Energy Marketing, and Timber. Additional
information about National Fuel is available on its Internet Web
site: http://www.nationalfuelgas.com or through its investor
information service at 1-800-334-2188. Certain statements contained
herein, including those regarding estimated future earnings, and
statements that are identified by the use of the words
�anticipates,� �estimates,� �expects,� �forecasts,� �intends,�
�plans,� �predicts,� �projects,� �believes,� �seeks,� �will,� �may�
and similar expressions, are �forward-looking statements� as
defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve risks and uncertainties, which
could cause actual results or outcomes to differ materially from
those expressed in the forward-looking statements. The Company�s
expectations, beliefs and projections contained herein are
expressed in good faith and are believed to have a reasonable
basis, but there can be no assurance that such expectations,
beliefs or projections will result or be achieved or accomplished.
In addition to other factors, the following are important factors
that could cause actual results to differ materially from those
discussed in the forward-looking statements: changes in economic
conditions, including economic disruptions caused by terrorist
activities, acts of war or major accidents, and downturns in
economic activity including national or regional recessions;
changes in demographic patterns and weather conditions, including
the occurrence of severe weather such as hurricanes; changes in the
availability and/or price of natural gas or oil and the effect of
such changes on the accounting treatment of derivative financial
instruments or the valuation of the Company�s natural gas and oil
reserves; uncertainty of oil and gas reserve estimates; ability to
successfully identify, drill for and produce economically viable
natural gas and oil reserves, including shortages, delays or
unavailability of equipment and services required in drilling
operations; significant changes from expectations in the Company�s
actual production levels for natural gas or oil; changes in the
availability and/or price of derivative financial instruments;
changes in the price differentials between various types of oil;
inability to obtain new customers or retain existing ones;
significant changes in competitive factors affecting the Company;
changes in laws and regulations to which the Company is subject,
including changes in tax, environmental, safety and employment laws
and regulations; governmental/regulatory actions, initiatives and
proceedings, including those involving acquisitions, financings,
rate cases (which address, among other things, allowed rates of
return, rate design and retained gas), affiliate relationships,
industry structure, franchise renewal, and environmental/safety
requirements; unanticipated impacts of restructuring initiatives in
the natural gas and electric industries; significant changes from
expectations in actual capital expenditures and operating expenses
and unanticipated project delays or changes in project costs or
plans; the nature and projected profitability of pending and
potential projects and other investments, and the ability to obtain
necessary governmental approvals and permits; occurrences affecting
the Company�s ability to obtain funds from operations, from
borrowings under our credit lines or other credit facilities or
from issuances of other short-term notes or debt or equity
securities to finance needed capital expenditures and other
investments, including any downgrades in the Company�s credit
ratings; ability to successfully identify and finance acquisitions
or other investments and ability to operate and integrate existing
and any subsequently acquired business or properties; impairments
under the SEC�s full cost ceiling test for natural gas and oil
reserves; changes in the market price of timber and the impact such
changes might have on the types and quantity of timber harvested by
the Company; significant changes in tax rates or policies or in
rates of inflation or interest; significant changes in the
Company�s relationship with its employees or contractors and the
potential adverse effects if labor disputes, grievances or
shortages were to occur; changes in accounting principles or the
application of such principles to the Company; the cost and effects
of legal and administrative claims against the Company; changes in
actuarial assumptions and the return on assets with respect to the
Company�s retirement plan and post-retirement benefit plans;
increasing health care costs and the resulting effect on health
insurance premiums and on the obligation to provide post-retirement
benefits; 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 hereof. NATIONAL FUEL GAS
COMPANY RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED JUNE 30, 2008 � � � � � � � Exploration&
Pipeline& Energy Corporate/ (Thousands of Dollars) Production*
� Storage � Utility � Marketing � Timber � All Other � Consolidated
� Third quarter 2007 GAAP earnings $ 24,435 $ 15,451 $ 3,705 $
1,233 $ (364 ) $ 2,338 $ 46,798 Items impacting comparability:
Income from discontinued operations (5,586 ) (5,586 ) Reversal of
reserve for preliminary project costs � � � (4,787 ) � � � � � � �
� � � (4,787 ) Third quarter 2007 operating results 18,849 10,664
3,705 1,233 (364 ) 2,338 36,425 � Drivers of operating results
Higher (lower) crude oil prices 17,434 17,434 Higher (lower)
natural gas prices 8,259 8,259 Higher (lower) natural gas
production 5,963 5,963 Higher (lower) crude oil production (1,757 )
(1,757 ) Lower (higher) lease operating expenses (4,164 ) (4,164 )
� Higher (lower) efficiency gas revenues 1,216 1,216 Lower (higher)
operating costs (1,500 ) 241 2,226 (785 ) (755 ) (573 ) Lower
(higher) depreciation / depletion (3,093 ) (237 ) (3,330 ) Lower
(higher) property, franchise and other taxes 473 473 � Base rate
and minimum bill change in New York 1,702 1,702 Higher (lower)
usage (2,361 ) (2,361 ) Regulatory true-up adjustment 900 900 �
Income from unconsolidated subsidiaries 413 413 � Higher (lower)
margins 128 (1,690 ) (1,562 ) � Higher (lower) AFUDC** 1,021 1,021
Higher (lower) interest income 156 156 Lower (higher) interest
expense 2,106 (791 ) (1,282 ) 33 � Lower (higher) income tax
expense / effective tax rate (2,479 ) 477 950 377 (675 ) � All
other / rounding � 173 � � � (294 ) � � 253 � � � (98 ) � � 225 � �
� 23 � � � 282 � � Third quarter 2008 operating results 39,791
12,534 7,848 478 (2,066 ) 1,270 59,855 Items impacting
comparability � - � � � - � � � - � � � - � � � - � � � - � � � - �
Third quarter 2008 GAAP earnings $ 39,791 � � $ 12,534 � � $ 7,848
� � $ 478 � � $ (2,066 ) � $ 1,270 � � $ 59,855 � � � * Includes
discontinued operations ** AFUDC = Allowance for Funds Used During
Construction NATIONAL FUEL GAS COMPANY RECONCILIATION OF CURRENT
AND PRIOR YEAR GAAP EARNINGS PER SHARE QUARTER ENDED JUNE 30, 2008
� � � � � � � Exploration& Pipeline& Energy Corporate/
Production* � Storage � Utility � Marketing � Timber � All Other �
Consolidated � Third quarter 2007 GAAP earnings $ 0.29 $ 0.18 $
0.04 $ 0.01 $ - $ 0.03 $ 0.55 Items impacting comparability: Income
from discontinued operations (0.07 ) (0.07 ) Reversal of reserve
for preliminary project costs � � � (0.06 ) � � � � � � � � � �
(0.06 ) Third quarter 2007 operating results 0.22 0.12 0.04 0.01 -
0.03 0.42 � Drivers of operating results Higher (lower) crude oil
prices 0.21 0.21 Higher (lower) natural gas prices 0.10 0.10 Higher
(lower) natural gas production 0.07 0.07 Higher (lower) crude oil
production (0.02 ) (0.02 ) Lower (higher) lease operating expenses
(0.05 ) (0.05 ) � Higher (lower) efficiency gas revenues 0.01 0.01
Lower (higher) operating costs (0.02 ) - 0.03 (0.01 ) (0.01 ) (0.01
) Lower (higher) depreciation / depletion (0.04 ) - (0.04 ) Lower
(higher) property, franchise and other taxes 0.01 0.01 � Base rate
and minimum bill change in New York 0.02 0.02 Higher (lower) usage
(0.03 ) (0.03 ) Regulatory true-up adjustment 0.01 0.01 � Income
from unconsolidated subsidiaries 0.01 0.01 � Higher (lower) margins
- (0.02 ) (0.02 ) � Higher (lower) AFUDC** 0.01 0.01 Higher (lower)
interest income - - Lower (higher) interest expense 0.03 (0.01 )
(0.02 ) - � Lower (higher) income tax expense / effective tax rate
(0.03 ) 0.01 0.01 0.01 - � All other / rounding � 0.01 � � � 0.01 �
� � - � � � - � � � - � � � - � � � 0.02 � � Third quarter 2008
operating results 0.48 0.15 0.09 - (0.02 ) 0.02 0.72 Items
impacting comparability � - � � � - � � � - � � � - � � � - � � � -
� � � - � Third quarter 2008 GAAP earnings $ 0.48 � � $ 0.15 � � $
0.09 � � $ - � � $ (0.02 ) � $ 0.02 � � $ 0.72 � � � * Includes
discontinued operations ** AFUDC = Allowance for Funds Used During
Construction NATIONAL FUEL GAS COMPANY RECONCILIATION OF CURRENT
AND PRIOR YEAR GAAP EARNINGS NINE MONTHS ENDED JUNE 30, 2008 � � �
� � � � Exploration& � Pipeline& � � � Energy � � �
Corporate/ � � (Thousands of Dollars) Production* � Storage �
Utility � Marketing � Timber � All Other � Consolidated � Nine
months ended June 30, 2007 GAAP earnings $ 64,958 $ 43,075 $ 54,322
$ 8,431 $ 3,053 $ 5,926 $ 179,765 Items impacting comparability:
Income from discontinued operations (12,385 ) (12,385 ) Reversal of
reserve for preliminary project costs (4,787 ) (4,787 ) Resolution
of a purchased gas contingency (2,344 ) (2,344 ) Discontinuance of
hedge accounting � � � (1,888 ) � � � � � � � � � � (1,888 ) Nine
months ended June 30, 2007 operating results 52,573 36,400 54,322
6,087 3,053 5,926 158,361 � Drivers of operating results Higher
(lower) crude oil prices 47,657 47,657 Higher (lower) natural gas
prices 18,763 18,763 Higher (lower) natural gas production 12,319
12,319 Higher (lower) crude oil production (3,089 ) (3,089 )
Derivative mark to market adjustment (1,283 ) (1,283 ) Lower
(higher) lease operating expenses (9,035 ) (9,035 ) � Higher
(lower) transportation and storage revenues 2,527 2,527 Higher
(lower) efficiency gas revenues 2,049 2,049 Lower (higher)
operating costs (3,764 ) (908 ) 5,578 (1,019 ) (4,500 ) (4,613 )
Lower (higher) depreciation / depletion (8,950 ) 456 (603 ) (9,097
) Lower (higher) property, franchise and other taxes 895 895 �
Warmer weather in Pennsylvania (1,451 ) (1,451 ) Base rate and
minimum bill change in New York (3,121 ) (3,121 ) Base rate
increase in Pennsylvania 2,572 2,572 Higher (lower) usage 1,277
1,277 Regulatory true-up adjustments 1,612 1,612 � Income from
unconsolidated subsidiaries 1,148 1,148 � Higher (lower) margins
1,851 (127 ) 330 2,054 � Higher (lower) AFUDC** 2,251 2,251 Higher
(lower) interest income 1,631 (586 ) 1,045 Lower (higher) interest
expense 4,497 (1,137 ) 736 4,096 � Lower (higher) income tax
expense / effective tax rate (3,408 ) 770 (2,638 ) � All other /
rounding � 474 � � � (251 ) � � 88 � � � 160 � � � (109 ) � � 216 �
� � 578 � � Nine months ended June 30, 2008 operating results
108,385 40,931 62,228 7,079 2,214 4,040 224,877 Items impacting
comparability: Gain on sale of turbine � � � � � � � � � � � 586 �
� � 586 � Nine months ended June 30, 2008 GAAP earnings $ 108,385 �
� $ 40,931 � � $ 62,228 � � $ 7,079 � � $ 2,214 � � $ 4,626 � � $
225,463 � � � * Includes discontinued operations ** AFUDC =
Allowance for Funds Used During Construction NATIONAL FUEL GAS
COMPANY RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER
SHARE NINE MONTHS ENDED JUNE 30, 2008 � � � � � � �
Exploration& Pipeline& Energy Corporate/ Production* �
Storage � Utility � Marketing � Timber � All Other � Consolidated �
Nine months ended June 30, 2007 GAAP earnings $ 0.76 $ 0.51 $ 0.64
$ 0.10 $ 0.04 $ 0.06 $ 2.11 Items impacting comparability: Income
from discontinued operations (0.15 ) (0.15 ) Reversal of reserve
for preliminary project costs (0.06 ) (0.06 ) Resolution of a
purchased gas contingency (0.03 ) (0.03 ) Discontinuance of hedge
accounting � � � (0.02 ) � � � � � � � � � � (0.02 ) Nine months
ended June 30, 2007 operating results 0.61 0.43 0.64 0.07 0.04 0.06
1.85 � Drivers of operating results Higher (lower) crude oil prices
0.56 0.56 Higher (lower) natural gas prices 0.22 0.22 Higher
(lower) natural gas production 0.14 0.14 Higher (lower) crude oil
production (0.04 ) (0.04 ) Derivative mark to market adjustment
(0.01 ) (0.01 ) Lower (higher) lease operating expenses (0.11 )
(0.11 ) � Higher (lower) transportation and storage revenues 0.03
0.03 Higher (lower) efficiency gas revenues 0.02 0.02 Lower
(higher) operating costs (0.04 ) (0.01 ) 0.07 (0.01 ) (0.05 ) (0.04
) Lower (higher) depreciation / depletion (0.10 ) 0.01 (0.01 )
(0.10 ) Lower (higher) property, franchise and other taxes 0.01
0.01 � Warmer weather in Pennsylvania (0.02 ) (0.02 ) Base rate and
minimum bill change in New York (0.04 ) (0.04 ) Base rate increase
in Pennsylvania 0.03 0.03 Higher (lower) usage 0.01 0.01 Regulatory
true-up adjustments 0.02 0.02 � Income from unconsolidated
subsidiaries 0.01 0.01 � Higher (lower) margins 0.02 - - 0.02 �
Higher (lower) AFUDC** 0.03 0.03 Higher (lower) interest income
0.02 (0.01 ) 0.01 Lower (higher) interest expense 0.05 (0.01 ) 0.01
0.05 � Lower (higher) income tax expense / effective tax rate (0.04
) 0.01 (0.03 ) � All other / rounding � 0.02 � � � (0.01 ) � � - �
� � - � � � - � � � 0.01 � � � 0.02 � � Nine months ended June 30,
2008 operating results 1.28 0.48 0.73 0.08 0.03 0.04 2.64 Items
impacting comparability: Gain on sale of turbine � � � � � � � � �
� � 0.01 � � � 0.01 � Nine months ended June 30, 2008 GAAP earnings
$ 1.28 � � $ 0.48 � � $ 0.73 � � $ 0.08 � � $ 0.03 � � $ 0.05 � � $
2.65 � � * Includes discontinued operations ** AFUDC = Allowance
for Funds Used During Construction � � � � NATIONAL FUEL GAS
COMPANY AND SUBSIDIARIES � (Thousands of Dollars, except per share
amounts) Three Months Ended Nine Months Ended June 30, June 30,
(Unaudited) (Unaudited) SUMMARY OF OPERATIONS 2008 2007 2008 2007
Operating Revenues $ 548,382 � $ 448,779 � $ 2,002,503 � $
1,737,537 � � Operating Expenses: Purchased Gas 272,893 219,075
1,082,340 938,918 Operation and Maintenance 102,602 90,390 325,642
305,502 Property, Franchise and Other Taxes 19,135 17,622 58,206
54,562 Depreciation, Depletion and Amortization � 42,804 � � 37,759
� � 129,337 � � 115,561 � 437,434 364,846 1,595,525 1,414,543 �
Operating Income 110,948 83,933 406,978 322,994 � Other Income
(Expense): Income from Unconsolidated Subsidiaries 1,561 926 4,866
3,099 Interest Income 3,086 1,377 8,356 3,098 Other Income 1,649
787 4,982 4,028 Interest Expense on Long-Term Debt (19,468 )
(18,226 ) (52,045 ) (52,158 ) Other Interest Expense � (1,199 ) �
(1,512 ) � (4,209 ) � (4,877 ) � Income from Continuing Operations
Before Income Taxes 96,577 67,285 368,928 276,184 � Income Tax
Expense � 36,722 � � 26,073 � � 143,465 � � 108,804 � � Income from
Continuing Operations 59,855 41,212 225,463 167,380 � Income from
Discontinued Operations, Net of Tax � - � � 5,586 � � - � � 12,385
� � Net Income Available for Common Stock $ 59,855 � $ 46,798 � $
225,463 � $ 179,765 � � Earnings Per Common Share: Basic: Income
from Continuing Operations $ 0.74 $ 0.49 $ 2.72 $ 2.02 Income from
Discontinued Operations � - � � 0.07 � � - � � 0.15 � Net Income
Available for Common Stock $ 0.74 � $ 0.56 � $ 2.72 � $ 2.17 � �
Diluted: Income from Continuing Operations $ 0.72 $ 0.48 $ 2.65 $
1.96 Income from Discontinued Operations � - � � 0.07 � � - � �
0.15 � Net Income Available for Common Stock $ 0.72 � $ 0.55 � $
2.65 � $ 2.11 � � Weighted Average Common Shares: Used in Basic
Calculation � 81,342,788 � � 83,483,718 � � 82,789,748 � �
83,018,583 � Used in Diluted Calculation � 83,712,193 � �
85,668,055 � � 85,000,381 � � 85,192,777 � � � NATIONAL FUEL GAS
COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) �
June 30, September 30, (Thousands of Dollars) � 2008 � 2007 �
ASSETS Property, Plant and Equipment $4,730,708 $4,461,586 Less -
Accumulated Depreciation, Depletion and Amortization � 1,686,616 �
� 1,583,181 � Net Property, Plant and Equipment � 3,044,092 � �
2,878,405 � � Current Assets: Cash and Temporary Cash Investments
259,198 124,806 Cash Held in Escrow - 61,964 Hedging Collateral
Deposits 30,778 4,066 Receivables - Net 302,522 172,380 Unbilled
Utility Revenue 19,580 20,682 Gas Stored Underground 53,735 66,195
Materials and Supplies - at average cost 33,310 35,669 Unrecovered
Purchased Gas Costs 5,680 14,769 Other Current Assets 31,767 45,057
Deferred Income Taxes � 84,297 � � 8,550 � Total Current Assets �
820,867 � � 554,138 � � Other Assets: Recoverable Future Taxes
83,453 83,954 Unamortized Debt Expense 14,501 12,070 Other
Regulatory Assets 129,640 137,577 Deferred Charges 5,235 5,545
Other Investments 82,474 85,902 Investments in Unconsolidated
Subsidiaries 16,916 18,256 Goodwill 5,476 5,476 Intangible Assets
26,839 28,836 Prepaid Pension and Post-Retirement Benefit Costs
56,926 61,006 Fair Value of Derivative Financial Instruments -
9,188 Other � 7,442 � � 8,059 � Total Other Assets � 428,902 � �
455,869 � Total Assets � $4,293,861 � � $3,888,412 � �
CAPITALIZATION AND LIABILITIES Capitalization: Comprehensive
Shareholders' Equity Common Stock, $1 Par Value Authorized -
200,000,000 Shares; Issued and Outstanding - 81,473,550 Shares and
83,461,308 Shares, Respectively $81,474 $83,461 Paid in Capital
583,693 569,085 Earnings Reinvested in the Business � 1,024,377 � �
983,776 � Total Common Shareholder Equity Before Items of Other
Comprehensive Loss 1,689,544 1,636,322 Accumulated Other
Comprehensive Loss � (105,872 ) � (6,203 ) Total Comprehensive
Shareholders' Equity 1,583,672 1,630,119 Long-Term Debt, Net of
Current Portion � 999,000 � � 799,000 � Total Capitalization �
2,582,672 � � 2,429,119 � � Current and Accrued Liabilities: Notes
Payable to Banks and Commercial Paper - - Current Portion of
Long-Term Debt 100,000 200,024 Accounts Payable 162,838 109,757
Amounts Payable to Customers 12,864 10,409 Dividends Payable 26,479
25,873 Interest Payable on Long-Term Debt 15,774 18,158 Customer
Advances - 22,863 Other Accruals and Current Liabilities 136,458
36,062 Fair Value of Derivative Financial Instruments � 180,255 � �
16,200 � Total Current and Accrued Liabilities � 634,668 � �
439,346 � � Deferred Credits: Deferred Income Taxes 605,818 575,356
Taxes Refundable to Customers 14,037 14,026 Unamortized Investment
Tax Credit 4,866 5,392 Cost of Removal Regulatory Liability 101,251
91,226 Other Regulatory Liabilities 95,846 76,659 Post-Retirement
Liabilities 60,152 70,555 Asset Retirement Obligations 74,653
75,939 Other Deferred Credits � 119,898 � � 110,794 � Total
Deferred Credits � 1,076,521 � � 1,019,947 � Commitments and
Contingencies � - � � - � Total Capitalization and Liabilities �
$4,293,861 � � $3,888,412 � � � NATIONAL FUEL GAS COMPANY AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) �
Nine Months Ended June 30, (Thousands of Dollars) � 2008 � 2007 �
Operating Activities: Net Income Available for Common Stock
$225,463 $179,765 Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities: Depreciation, Depletion and
Amortization 129,337 125,986 Deferred Income Taxes 27,603 27,107
Income from Unconsolidated Subsidiaries, Net of Cash Distributions
1,340 (1,486 ) Excess Tax Benefits Associated with Stock-Based
Compensation Awards (16,275 ) (13,689 ) Other (1,120 ) 4,722 Change
in: Hedging Collateral Deposits (26,712 ) 16,276 Receivables and
Unbilled Utility Revenue (129,102 ) (43,733 ) Gas Stored
Underground and Materials and Supplies 14,819 34,725 Unrecovered
Purchased Gas Costs 9,089 12,970 Prepayments and Other Current
Assets 17,370 30,685 Accounts Payable 53,081 (12,560 ) Amounts
Payable to Customers 2,455 (4,738 ) Customer Advances (22,863 )
(29,417 ) Other Accruals and Current Liabilities 94,031 77,842
Other Assets 19,178 918 Other Liabilities � 17,373 � � (821 ) Net
Cash Provided by Operating Activities � $415,067 � � $404,552 � �
Investing Activities: Capital Expenditures ($264,728 ) ($206,509 )
Investment in Partnership - (3,300 ) Cash Held in Escrow 58,397 -
Net Proceeds from Sale of Oil and Gas Producing Properties 5,675
5,137 Other � (3,414 ) � (1,072 ) Net Cash Used in Investing
Activities � ($204,070 ) � ($205,744 ) � Financing Activities:
Excess Tax Benefits Associated with Stock-Based Compensation Awards
$16,275 $13,689 Shares Repurchased under Repurchase Plan (129,592 )
(43,344 ) Net Proceeds from Issuance of Long-Term Debt 296,655 -
Reduction of Long-Term Debt (200,024 ) (119,550 ) Dividends Paid on
Common Stock (77,204 ) (74,748 ) Proceeds From Issuance of Common
Stock � 17,285 � � 16,819 � Net Cash Used In Financing Activities �
($76,605 ) � ($207,134 ) Effect of Exchange Rates on Cash � - � �
1,245 � Net Increase (Decrease) in Cash and Temporary Cash
Investments 134,392 (7,081 ) Cash and Temporary Cash Investments at
Beginning of Period � 124,806 � � 69,611 � Cash and Temporary Cash
Investments at June 30 � $259,198 � � $62,530 � NATIONAL FUEL GAS
COMPANY AND SUBSIDIARIES � � � � � � SEGMENT OPERATING RESULTS AND
STATISTICS (UNAUDITED) � Three Months Ended Nine Months Ended
(Thousands of Dollars, except per share amounts) June 30, June 30,
EXPLORATION AND PRODUCTION SEGMENT 2008 � 2007 � Variance 2008 �
2007 � Variance Operating Revenues $ 126,154 � � $ 80,028 � � $
46,126 � $ 348,829 � � $ 233,708 � � $ 115,121 � � Operating
Expenses: Operation and Maintenance: General and Administrative
Expense 5,924 4,999 925 18,676 13,703 4,973 Lease Operating Expense
14,964 10,788 4,176 41,112 32,332 8,780 All Other Operation and
Maintenance Expense 3,708 2,326 1,382 7,727 6,908 819 Property,
Franchise and Other Taxes (Lease Operating Expense) 3,518 1,288
2,230 8,394 3,274 5,120 Depreciation, Depletion and Amortization �
23,249 � � � 18,491 � � � 4,758 � � 70,098 � � � 56,330 � � �
13,768 � � 51,363 � � � 37,892 � � � 13,471 � � 146,007 � � �
112,547 � � � 33,460 � � Operating Income 74,791 42,136 32,655
202,822 121,161 81,661 � Other Income (Expense): Interest Income
2,247 2,111 136 9,280 6,771 2,509 Other Income - - - 18 - 18
Interest Expense on Long-Term Debt - (1,188 ) 1,188 - (1,188 )
1,188 Other Interest Expense � (10,457 ) � � (12,510 ) � � 2,053 �
� (32,675 ) � � (38,406 ) � � 5,731 � � Income from Continuing
Operations Before Income Taxes 66,581 30,549 36,032 179,445 88,338
91,107 Income Tax Expense � 26,790 � � � 11,700 � � � 15,090 � �
71,060 � � � 35,765 � � � 35,295 � Income from Continuing
Operations 39,791 18,849 20,942 108,385 52,573 55,812 � Income from
Discontinued Operations, Net of Tax � - � � � 5,586 � � � (5,586 )
� - � � � 12,385 � � � (12,385 ) � Net Income $ 39,791 � � $ 24,435
� � $ 15,356 � $ 108,385 � � $ 64,958 � � $ 43,427 � � Income from
Continuing Operations Per Share (Diluted) $ 0.48 $ 0.22 $ 0.26 $
1.28 $ 0.61 $ 0.67 Income from Discontinued Operations, Net of Tax,
Per Share (Diluted) � - � � � 0.07 � � � (0.07 ) � � - � � � 0.15 �
� � (0.15 ) Net Income Per Share (Diluted) $ 0.48 � � $ 0.29 � � $
0.19 � $ 1.28 � � $ 0.76 � � $ 0.52 � � � � � � Three Months Ended
Nine Months Ended June 30, June 30, PIPELINE AND STORAGE SEGMENT
2008 � 2007 � Variance 2008 � 2007 � Variance Revenues from
External Customers $ 32,054 $ 30,128 $ 1,926 $ 101,871 $ 94,889 $
6,982 Intersegment Revenues � 20,131 � � � 20,332 � � � (201 ) �
61,340 � � � 61,585 � � � (245 ) Total Operating Revenues � 52,185
� � � 50,460 � � � 1,725 � � 163,211 � � � 156,474 � � � 6,737 � �
Operating Expenses: Purchased Gas (4 ) - (4 ) (13 ) (11 ) (2 )
Operation and Maintenance 16,462 9,471 6,991 50,877 42,118 8,759
Property, Franchise and Other Taxes 4,007 4,182 (175 ) 12,539
12,795 (256 ) Depreciation, Depletion and Amortization � 8,344 � �
� 7,995 � � � 349 � � 24,629 � � � 24,851 � � � (222 ) � 28,809 � �
� 21,648 � � � 7,161 � � 88,032 � � � 79,753 � � � 8,279 � �
Operating Income 23,376 28,812 (5,436 ) 75,179 76,721 (1,542 ) �
Other Income (Expense): Interest Income 562 100 462 726 224 502
Other Income 1,124 154 970 2,545 418 2,127 Interest Expense on
Long-Term Debt - (21 ) 21 (31 ) 1,807 (1,838 ) Other Interest
Expense � (4,350 ) � � (3,112 ) � � (1,238 ) � (9,938 ) � � (8,140
) � � (1,798 ) � Income Before Income Taxes 20,712 25,933 (5,221 )
68,481 71,030 (2,549 ) Income Tax Expense � 8,178 � � � 10,482 � �
� (2,304 ) � 27,550 � � � 27,955 � � � (405 ) Net Income $ 12,534 �
� $ 15,451 � � $ (2,917 ) $ 40,931 � � $ 43,075 � � $ (2,144 ) �
Net Income Per Share (Diluted) $ 0.15 � � $ 0.18 � � $ (0.03 ) $
0.48 � � $ 0.51 � � $ (0.03 ) NATIONAL FUEL GAS COMPANY AND
SUBSIDIARIES � � � � � � SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED) � Three Months Ended Nine Months Ended (Thousands of
Dollars, except per share amounts) June 30, June 30, UTILITY
SEGMENT 2008 � 2007 � Variance 2008 � � 2007 � Variance Revenues
from External Customers $ 217,339 $ 210,604 $ 6,735 $ 1,067,194 $
1,000,860 $ 66,334 Intersegment Revenues � 3,154 � � � 2,586 � � �
568 � � 13,567 � � � 12,556 � � � 1,011 � Total Operating Revenues
� 220,493 � � � 213,190 � � � 7,303 � � 1,080,761 � � � 1,013,416 �
� � 67,345 � � Operating Expenses: Purchased Gas 137,949 131,469
6,480 735,259 670,694 64,565 Operation and Maintenance 44,202
47,231 (3,029 ) 157,980 165,446 (7,466 ) Property, Franchise and
Other Taxes 11,120 11,688 (568 ) 35,750 36,986 (1,236 )
Depreciation, Depletion and Amortization � 9,625 � � � 10,053 � � �
(428 ) � 29,452 � � � 30,153 � � � (701 ) � 202,896 � � � 200,441 �
� � 2,455 � � 958,441 � � � 903,279 � � � 55,162 � � Operating
Income 17,597 12,749 4,848 122,320 110,137 12,183 � Other Income
(Expense): Interest Income 326 100 226 688 562 126 Other Income 279
273 6 883 926 (43 ) Other Interest Expense � (6,865 ) � � (6,697 )
� � (168 ) � (21,770 ) � � (21,343 ) � � (427 ) � Income Before
Income Taxes 11,337 6,425 4,912 102,121 90,282 11,839 Income Tax
Expense � 3,489 � � � 2,720 � � � 769 � � 39,893 � � � 35,960 � � �
3,933 � Net Income $ 7,848 � � $ 3,705 � � $ 4,143 � $ 62,228 � � $
54,322 � � $ 7,906 � � Net Income Per Share (Diluted) $ 0.09 � � $
0.04 � � $ 0.05 � $ 0.73 � � $ 0.64 � � $ 0.09 � � � � � Three
Months Ended Nine Months Ended June 30, June 30, ENERGY MARKETING
SEGMENT 2008 � 2007 � Variance 2008 � � 2007 � Variance Operating
Revenues $ 162,129 � � $ 113,380 � � $ 48,749 � $ 440,111 � � $
360,036 � � $ 80,075 � � Operating Expenses: Purchased Gas 159,339
110,765 48,574 423,991 343,047 80,944 Operation and Maintenance
2,384 1,199 1,185 5,170 3,711 1,459 Property, Franchise and Other
Taxes 9 11 (2 ) 32 46 (14 ) Depreciation, Depletion and
Amortization � 10 � � � 9 � � � 1 � � 32 � � � 23 � � � 9 � �
161,742 � � � 111,984 � � � 49,758 � � 429,225 � � � 346,827 � � �
82,398 � � Operating Income 387 1,396 (1,009 ) 10,886 13,209 (2,323
) � Other Income (Expense): Interest Income 206 359 (153 ) 293 498
(205 ) Other Income 73 273 (200 ) 206 590 (384 ) Other Interest
Expense � (6 ) � � (2 ) � � (4 ) � (133 ) � � (253 ) � � 120 � �
Income Before Income Taxes 660 2,026 (1,366 ) 11,252 14,044 (2,792
) Income Tax Expense � 182 � � � 793 � � � (611 ) � 4,173 � � �
5,613 � � � (1,440 ) Net Income $ 478 � � $ 1,233 � � $ (755 ) $
7,079 � � $ 8,431 � � $ (1,352 ) � Net Income Per Share (Diluted) $
- � � $ 0.01 � � $ (0.01 ) $ 0.08 � � $ 0.10 � � $ (0.02 ) NATIONAL
FUEL GAS COMPANY AND SUBSIDIARIES � � � � � � SEGMENT OPERATING
RESULTS AND STATISTICS (UNAUDITED) � Three Months Ended Nine Months
Ended (Thousands of Dollars, except per share amounts) June 30,
June 30, TIMBER SEGMENT 2008 � 2007 � Variance 2008 � 2007 �
Variance Operating Revenues $ 10,114 � � $ 13,131 � � $ (3,017 ) $
40,438 � � $ 43,079 � � $ (2,641 ) � Operating Expenses: Operation
and Maintenance 11,448 11,919 (471 ) 30,091 32,031 (1,940 )
Property, Franchise and Other Taxes 393 363 30 1,220 1,183 37
Depreciation, Depletion and Amortization � 1,208 � � � 843 � � �
365 � � 4,021 � � � 3,093 � � � 928 � � 13,049 � � � 13,125 � � �
(76 ) � 35,332 � � � 36,307 � � � (975 ) � Operating Income (Loss)
(2,935 ) 6 (2,941 ) 5,106 6,772 (1,666 ) � Other Income (Expense):
Interest Income 233 310 (77 ) 812 923 (111 ) Other Income 111 - 111
111 21 90 Other Interest Expense � (742 ) � � (808 ) � � 66 � �
(2,392 ) � � (2,403 ) � � 11 � � Income (Loss) Before Income Taxes
(3,333 ) (492 ) (2,841 ) 3,637 5,313 (1,676 ) Income Tax Expense
(Benefit) � (1,267 ) � � (128 ) � � (1,139 ) � 1,423 � � � 2,260 �
� � (837 ) Net Income (Loss) $ (2,066 ) � $ (364 ) � $ (1,702 ) $
2,214 � � $ 3,053 � � $ (839 ) � Net Income (Loss) Per Share
(Diluted) $ (0.02 ) � $ - � � $ (0.02 ) $ 0.03 � � $ 0.04 � � $
(0.01 ) � � � Three Months Ended Nine Months Ended June 30, June
30, ALL OTHER 2008 � 2007 � Variance 2008 � 2007 � Variance
Revenues from External Customers $ 395 $ 1,308 $ (913 ) $ 3,564 $
4,387 $ (823 ) Intersegment Revenues � 4,439 � � � 2,253 � � �
2,186 � � 10,251 � � � 6,540 � � � 3,711 � Total Operating Revenues
� 4,834 � � � 3,561 � � � 1,273 � � 13,815 � � � 10,927 � � � 2,888
� � Operating Expenses: Purchased Gas 3,229 1,910 1,319 7,941 5,560
2,381 Operation and Maintenance 1,184 1,007 177 3,297 2,763 534
Property, Franchise and Other Taxes 17 22 (5 ) 57 69 (12 )
Depreciation, Depletion and Amortization � 195 � � � 196 � � � (1 )
� 588 � � � 589 � � � (1 ) � 4,625 � � � 3,135 � � � 1,490 � �
11,883 � � � 8,981 � � � 2,902 � � Operating Income 209 426 (217 )
1,932 1,946 (14 ) � Other Income (Expense): Income from
Unconsolidated Subsidiaries 1,561 926 635 4,866 3,099 1,767
Interest Income 65 4 61 108 11 97 Other Income 21 12 9 941 37 904
Other Interest Expense � (106 ) � � (662 ) � � 556 � � (535 ) � �
(1,999 ) � � 1,464 � � Income Before Income Taxes 1,750 706 1,044
7,312 3,094 4,218 Income Tax Expense � 644 � � � 248 � � � 396 � �
2,175 � � � 1,183 � � � 992 � Net Income $ 1,106 � � $ 458 � � $
648 � $ 5,137 � � $ 1,911 � � $ 3,226 � � Net Income Per Share
(Diluted) $ 0.02 � � $ 0.01 � � $ 0.01 � $ 0.06 � � $ 0.02 � � $
0.04 � NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES � � � � � �
SEGMENT OPERATING RESULTS AND STATISTICS (UNAUDITED) � Three Months
Ended Nine Months Ended (Thousands of Dollars, except per share
amounts) June 30, June 30, CORPORATE 2008 � � 2007 � Variance 2008
� 2007 � Variance Revenues from External Customers $ 197 $ 200 $ (3
) $ 496 $ 578 $ (82 ) Intersegment Revenues � 961 � � � 853 � � �
108 � � 2,883 � � � 2,616 � � � 267 � Total Operating Revenues �
1,158 � � � 1,053 � � � 105 � � 3,379 � � � 3,194 � � � 185 � �
Operating Expenses: Operation and Maintenance 3,391 2,405 986
13,915 9,415 4,500 Property, Franchise and Other Taxes 71 68 3 214
209 5 Depreciation, Depletion and Amortization � 173 � � � 172 � �
� 1 � � 517 � � � 522 � � � (5 ) � 3,635 � � � 2,645 � � � 990 � �
14,646 � � � 10,146 � � � 4,500 � � Operating Loss (2,477 ) (1,592
) (885 ) (11,267 ) (6,952 ) (4,315 ) � Other Income (Expense):
Interest Income 21,890 21,711 179 64,780 65,778 (998 ) Other Income
41 75 (34 ) 278 2,036 (1,758 ) Interest Expense on Long-Term Debt
(19,468 ) (17,017 ) (2,451 ) (52,014 ) (52,777 ) 763 Other Interest
Expense � (1,116 ) � � (1,039 ) � � (77 ) � (5,097 ) � � (4,002 ) �
� (1,095 ) � Income (Loss) Before Income Taxes (1,130 ) 2,138
(3,268 ) (3,320 ) 4,083 (7,403 ) Income Tax Expense (Benefit) �
(1,294 ) � � 258 � � � (1,552 ) � (2,809 ) � � 68 � � � (2,877 )
Net Income (Loss) $ 164 � � $ 1,880 � � $ (1,716 ) $ (511 ) � $
4,015 � � $ (4,526 ) � Net Income (Loss) Per Share (Diluted) $ - �
� $ 0.02 � � $ (0.02 ) $ (0.01 ) � $ 0.04 � � $ (0.05 ) � � � Three
Months Ended Nine Months Ended June 30, June 30, INTERSEGMENT
ELIMINATIONS 2008 � 2007 � Variance 2008 � � 2007 � Variance
Intersegment Revenues $ (28,685 ) � $ (26,024 ) � $ (2,661 ) $
(88,041 ) � $ (83,297 ) � $ (4,744 ) � Operating Expenses:
Purchased Gas (27,620 ) (25,069 ) (2,551 ) (84,838 ) (80,372 )
(4,466 ) Operation and Maintenance � (1,065 ) � � (955 ) � � (110 )
� (3,203 ) � � (2,925 ) � � (278 ) � (28,685 ) � � (26,024 ) � �
(2,661 ) � (88,041 ) � � (83,297 ) � � (4,744 ) � Operating Income
- - - - - - � Other Income (Expense): Interest Income (22,443 )
(23,318 ) 875 (68,331 ) (71,669 ) 3,338 Other Interest Expense �
22,443 � � � 23,318 � � � (875 ) � 68,331 � � � 71,669 � � � (3,338
) � Net Income $ - � � $ - � � $ - � $ - � � $ - � � $ - � � Net
Income Per Share (Diluted) $ - � � $ - � � $ - � $ - � � $ - � � $
- � NATIONAL FUEL GAS COMPANY � � � � SEGMENT INFORMATION
(Continued) (Thousands of Dollars) � � Three Months Ended Nine
Months Ended June 30, June 30, (Unaudited) (Unaudited) � Increase
Increase 2008 2007 (Decrease) 2008 2007 (Decrease) � Capital
Expenditures: Exploration and Production $ 75,681 $ 36,870 $ 38,811
$ 140,543 $ 112,789 $ 27,754 Pipeline and Storage (1) 49,094 16,255
32,839 106,204 26,408 79,796 Utility 14,939 14,387 552 38,836
39,945 (1,109 ) Energy Marketing 6 41 (35 ) 21 57 (36 ) Timber � 31
� 1,056 � (1,025 ) � 1,174 � � 2,263 � � (1,089 ) Total Reportable
Segments 139,751 68,609 71,142 286,778 181,462 105,316 All Other 77
3 74 129 87 42 Corporate 48 33 15 83 (538 ) 621 Eliminations � - �
- � - � � (2,407 ) � - � � (2,407 ) Total Expenditures from
Continuing Operations 139,876 68,645 71,231 284,583 181,011 103,572
Discontinued Operations � - � 5,551 � (5,551 ) � - � � 25,498 � �
(25,498 ) Total Capital Expenditures $ 139,876 $ 74,196 $ 65,680 �
$ 284,583 � $ 206,509 � $ 78,074 � � � (1) Amount for the quarter
and nine months ended June 30, 2008 includes $19.9 million of
accrued capital expenditures related to the Empire Connector
project. This amount has been excluded from the Consolidated
Statement of Cash Flows at June 30, 2008 since it represents a
non-cash investing activity at that date. � � � � � DEGREE DAYS �
Percent Colder (Warmer) Than: Three Months Ended June 30 Normal
2008 2007 Normal Last Year � Buffalo, NY 927 817 921 (11.9 ) (11.3
) Erie, PA 885 762 900 (13.9 ) (15.3 ) � Nine Months Ended June 30
� Buffalo, NY 6,551 6,175 6,195 (5.7 ) (0.3 ) Erie, PA 6,142 5,737
5,930 (6.6 ) (3.3 ) � � � � � NATIONAL FUEL GAS COMPANY AND
SUBSIDIARIES � EXPLORATION AND PRODUCTION INFORMATION � � Three
Months Ended Nine Months Ended June 30, June 30, Increase Increase
2008 2007 (Decrease) 2008 2007 (Decrease) � Gas Production/Prices:
Production (MMcf) Gulf Coast 3,019 2,317 702 8,868 7,934 934 West
Coast 1,007 1,019 (12 ) 3,010 2,883 127 Appalachia � 1,793 � 1,266
� 527 � � 5,538 � 3,998 � 1,540 � Total Production from Continuing
Operations 5,819 4,602 1,217 17,416 14,815 2,601 Canada -
Discontinued Operations � - � 1,639 � (1,639 ) � - � 5,216 � (5,216
) Total Production � 5,819 � 6,241 � (422 ) � 17,416 � 20,031 �
(2,615 ) � Average Prices (Per Mcf) Gulf Coast $ 12.17 $ 7.37 $
4.80 $ 9.66 $ 6.74 $ 2.92 West Coast 10.61 7.20 3.41 8.43 6.76 1.67
Appalachia 11.53 8.59 2.94 9.25 7.71 1.54 Weighted Average for
Continuing Operations 11.71 7.67 4.04 9.32 7.01 2.31 Weighted
Average after Hedging for Continuing Operations 9.73 7.54 2.19 8.95
7.29 1.66 Canada - Discontinued Operations N/M 6.82 N/M N/M 6.34
N/M � Oil Production/Prices: Production (Thousands of Barrels) Gulf
Coast 124 165 (41 ) 409 540 (131 ) West Coast 598 599 (1 ) 1,825
1,789 36 Appalachia � 23 � 32 � (9 ) � 88 � 91 � (3 ) Total
Production from Continuing Operations 745 796 (51 ) 2,322 2,420 (98
) Canada - Discontinued Operations � - � 58 � (58 ) � - � 175 �
(175 ) Total Production � 745 � 854 � (109 ) � 2,322 � 2,595 � (273
) � Average Prices (Per Barrel) Gulf Coast $ 124.43 $ 65.17 $ 59.26
$ 103.46 $ 59.37 $ 44.09 West Coast 114.35 57.77 56.58 94.64 52.96
41.68 Appalachia 114.99 60.43 54.56 94.18 59.35 34.83 Weighted
Average for Continuing Operations 116.05 59.41 56.64 96.17 54.63
41.54 Weighted Average after Hedging for Continuing Operations
89.55 53.54 36.01 79.97 48.39 31.58 Canada - Discontinued
Operations N/M 51.58 N/M N/M 48.16 N/M � Total Production from
Continuing Operations (Mmcfe) 10,289 9,378 911 31,348 29,335 2,013
Total Canadian Production (Mmcfe) � - � 1,987 � (1,987 ) � - �
6,266 � (6,266 ) Total Production (Mmcfe) � 10,289 � 11,365 �
(1,076 ) � 31,348 � 35,601 � (4,253 ) � Selected Operating
Performance Statistics: General & Administrative Expense per
Mcfe (1) $ 0.58 $ 0.53 $ 0.05 $ 0.60 $ 0.47 $ 0.13 Lease Operating
Expense per Mcfe (1) $ 1.80 $ 1.29 $ 0.51 $ 1.58 $ 1.21 $ 0.37
Depreciation, Depletion & Amortization per Mcfe (1) $ 2.26 $
1.97 $ 0.29 $ 2.24 $ 1.92 $ 0.32 � � (1) Refer to the table titled,
National Fuel Gas Company and Subsidiaries, Segment Operating
Results and Statistics(Unaudited), for the General and
Administrative Expense, Lease Operating Expense and Depreciation,
Depletion, and Amortization Expense for the Exploration and
Production segment. Amounts exclude discontinued operations of
Canada. � N/M = Not meaningful NATIONAL FUEL GAS COMPANY AND
SUBSIDIARIES � � � � EXPLORATION AND PRODUCTION INFORMATION � �
Hedging Summary for the Remaining Three Months of Fiscal 2008 �
SWAPS Volume Average Hedge Price Oil 0.4 MMBBL $65.72 / BBL Gas 3.7
BCF $8.50 / MCF � Hedging Summary for Fiscal 2009 � SWAPS Volume
Average Hedge Price Oil 1.1 MMBBL $80.89 / BBL Gas 10.1 BCF $9.49 /
MCF � Hedging Summary for Fiscal 2010 � SWAPS Volume Average Hedge
Price Oil 0.6 MMBBL $102.52 / BBL Gas 3.0 BCF $11.04 / MCF �
Hedging Summary for Fiscal 2011 � SWAPS Volume Average Hedge Price
Oil 0.1 MMBBL $125.25 / BBL � � Gross Wells in Process of Drilling
Nine Months Ended June 30, 2008 Total Gulf West East Company �
Wells in Process - Beginning of Period Exploratory 2.00 0.00 21.00
23.00 Developmental 0.00 4.00 69.00 73.00 Wells Commenced
Exploratory 5.00 1.00 11.00 17.00 Developmental 1.00 51.00 136.00
188.00 Wells Completed Exploratory 2.00 0.00 6.00 8.00
Developmental 0.00 49.00 136.00 185.00 Wells Plugged &
Abandoned Exploratory 0.00 0.00 1.00 1.00 Developmental 0.00 1.00
0.00 1.00 Wells Sold Exploratory 2.00 0.00 0.00 2.00 Developmental
0.00 0.00 0.00 0.00 Wells in Process - End of Period Exploratory
3.00 1.00 25.00 29.00 Developmental 1.00 5.00 69.00 75.00 � � Net
Wells in Process of Drilling Nine Months Ended June 30, 2008 Total
Gulf West East Company � Wells in Process - Beginning of Period
Exploratory 1.30 0.00 20.00 21.30 Developmental 0.00 4.00 68.00
72.00 Wells Commenced Exploratory 1.80 1.00 11.00 13.80
Developmental 0.30 51.00 135.00 186.30 Wells Completed Exploratory
0.84 0.00 6.00 6.84 Developmental 0.00 49.00 135.00 184.00 Wells
Plugged & Abandoned Exploratory 0.00 0.00 1.00 1.00
Developmental 0.00 1.00 0.00 1.00 Wells Sold Exploratory 1.30 0.00
0.00 1.30 Developmental 0.00 0.00 0.00 0.00 Wells in Process - End
of Period Exploratory 0.96 1.00 24.00 25.96 Developmental 0.30 5.00
68.00 73.30 � � NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES � �
EXPLORATION AND PRODUCTION INFORMATION � Fiscal 2009 Financial
& Operating Guidance � � Total Production (Bcfe) 38 - 44 � �
Production by Division (Bcfe) � Gulf 11 - 15 East 9 - 10 West 18 -
19 � � Guidance Based on Crude Oil Average 2009 NYMEX Price ($/Bbl)
(without hedges) of $115.00 � Forecast price differentials � Gulf
-$2.00 to $1.00 East -$5.00 to -$8.00 West -$15.00 to -$20.00 �
Guidance Based on Natural Gas Average 2009 NYMEX Price ($/MMBtu)
(without hedges) of $9.50 � Forecast price differentials � Gulf
$0.00 to -$0.50 East $0.00 to +$0.50 West -$1.00 to -$1.50 � � Cost
and Expenses $ per Mcfe � Lease Operating Expenses $1.80 - $2.00
Depreciation, Depletion and Amortization $2.35 - $2.50 Other Taxes
(% of Revenue) $0.35 - $0.45 � Other Operating Expenses $7M - $8M
General and Administrative $27M - $29M � � Capital Investment by
Division Number of Wells to be Drilled � Gulf $35M - $60M 3 - 6
East $110M - $150M 300 - 360 West $50M - $60M 70 - 80 Total $195M -
$270M NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES � � � � � � �
Pipeline & Storage Throughput- (millions of cubic feet - MMcf)
Three Months Ended Nine Months Ended June 30, June 30, Increase
Increase 2008 2007 (Decrease) 2008 2007 (Decrease) Firm
Transportation - Affiliated 16,697 19,817 (3,120 ) 96,849 100,563
(3,714 ) Firm Transportation - Non-Affiliated 51,566 58,638 (7,072
) 186,255 172,950 13,305 Interruptible Transportation 1,540 1,670
(130 ) 3,844 3,597 247 � 69,803 80,125 (10,322 ) 286,948 277,110
9,838 � � Utility Throughput - (MMcf) Three Months Ended Nine
Months Ended June 30, June 30, Increase Increase 2008 2007
(Decrease) 2008 2007 (Decrease) Retail Sales: Residential Sales
8,618 10,679 (2,061 ) 53,881 56,729 (2,848 ) Commercial Sales 1,334
1,836 (502 ) 9,197 10,132 (935 ) Industrial Sales 77 113 (36 ) 524
628 (104 ) 10,029 12,628 (2,599 ) 63,602 67,489 (3,887 ) Off-System
Sales 1,711 467 1,244 4,790 467 4,323 Transportation 12,086 12,981
(895 ) 55,966 53,556 2,410 � 23,826 26,076 (2,250 ) 124,358 121,512
2,846 � � Energy Marketing Volumes Three Months Ended Nine Months
Ended June 30, June 30, Increase Increase 2008 2007 (Decrease) 2008
2007 (Decrease) Natural Gas (MMcf) 14,641 13,014 1,627 � 47,189
44,063 3,126 � � � Timber Board Feet (Thousands) Three Months Ended
Nine Months Ended June 30, June 30, Increase Increase 2008 2007
(Decrease) 2008 2007 (Decrease) Log Sales 1,527 1,724 (197 ) 7,140
6,458 682 Green Lumber Sales 2,273 2,709 (436 ) 7,496 6,619 877
Kiln-Dried Lumber Sales 3,436 4,001 (565 ) 10,536 10,953 (417 )
7,236 8,434 (1,198 ) 25,172 24,030 1,142 � NATIONAL FUEL GAS
COMPANY AND SUBSIDIARIES FISCAL 2009 EARNINGS GUIDANCE AND
SENSITIVITY � � � � � � � � Earnings per share sensitivity to
changes Fiscal 2009 (Diluted earnings per share guidance*) from
prices used in guidance* + � $1 change per MMBtu gas $5 change per
Bbl oil Earnings Range Increase Decrease Increase Decrease �
Consolidated Earnings $3.20 - $3.40 + $0.08 - $0.08 + $0.07 - $0.07
� � � * Please refer to forward looking statement provided in this
release. � + This sensitivity table is current as of August 7, 2008
and only considers revenue from the Exploration and Production
segment's crude oil and natural gas sales. This revenue is based
upon pricing used in the Company's preliminary earnings forecast.
For its fiscal 2009 earnings forecast, the Company is utilizing
flat commodity pricing, exclusive of basis differential, of $9.50
per MMBtu for natural gas and $115 per Bbl for crude oil. The
sensitivities will become obsolete with the passage of time,
changes in Seneca's production forecast, changes in basis
differential, as additional hedging contracts are entered into, and
with the settling of hedge contracts at their maturity. NATIONAL
FUEL GAS COMPANY AND SUBSIDIARIES � � � � � Quarter Ended June 30
(unaudited) � 2008 � 2007 � � Operating Revenues $ 548,382,000 $
448,779,000 � � Income from Continuing Operations $ 59,855,000 $
41,212,000 Income from Discontinued Operations, Net of Tax � - �
5,586,000 � Net Income Available for Common Stock $ 59,855,000 $
46,798,000 � � Earnings Per Common Share: Basic: Income from
Continuing Operations $ 0.74 $ 0.49 Income from Discontinued
Operations � - � 0.07 � Net Income Available for Common Stock $
0.74 $ 0.56 � � Diluted: Income from Continuing Operations $ 0.72 $
0.48 Income from Discontinued Operations � - � 0.07 � Net Income
Available for Common Stock $ 0.72 $ 0.55 � � Weighted Average
Common Shares: Used in Basic Calculation � 81,342,788 � 83,483,718
� Used in Diluted Calculation � 83,712,193 � 85,668,055 � � � Nine
Months Ended June 30 (unaudited) � Operating Revenues $
2,002,503,000 $ 1,737,537,000 � � Income from Continuing Operations
$ 225,463,000 $ 167,380,000 Income from Discontinued Operations,
Net of Tax � - � 12,385,000 � Net Income Available for Common Stock
$ 225,463,000 $ 179,765,000 � � Earnings Per Common Share: Basic:
Income from Continuing Operations $ 2.72 $ 2.02 Income from
Discontinued Operations � - � 0.15 � Net Income Available for
Common Stock $ 2.72 $ 2.17 � � Diluted: Income from Continuing
Operations $ 2.65 $ 1.96 Income from Discontinued Operations � - �
0.15 � Net Income Available for Common Stock $ 2.65 $ 2.11 � �
Weighted Average Common Shares: Used in Basic Calculation �
82,789,748 � 83,018,583 � Used in Diluted Calculation � 85,000,381
� 85,192,777 � � � Twelve Months Ended June 30 (unaudited) �
Operating Revenues $ 2,304,533,000 $ 2,018,043,000 � � Income from
Continuing Operations $ 259,757,000 $ 195,965,000 Income (Loss)
from Discontinued Operations, Net of Tax � 123,395,000 �
(14,232,000 ) Net Income Available for Common Stock $ 383,152,000 $
181,733,000 � � Earnings Per Common Share: Basic: Income from
Continuing Operations $ 3.13 $ 2.36 Income (Loss) from Discontinued
Operations � 1.49 � (0.17 ) Net Income Available for Common Stock $
4.62 $ 2.19 � � Diluted: Income from Continuing Operations $ 3.05 $
2.30 Income (Loss) from Discontinued Operations � 1.45 � (0.17 )
Net Income Available for Common Stock $ 4.50 $ 2.13 � � Weighted
Average Common Shares: Used in Basic Calculation � 82,969,977 �
83,122,932 � Used in Diluted Calculation � 85,150,920 � 85,290,812
�
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