NFG National Fuel Gas Co

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 �