National Fuel Gas Company (“National Fuel” or the “Company”)
(NYSE:NFG) today announced consolidated results for the second
quarter of its 2019 fiscal year and for the six months ended March
31, 2019.
FISCAL 2019 SECOND QUARTER
SUMMARY
- GAAP earnings of $90.6 million, or $1.04 per share, compared to
$91.8 million, or $1.06 per share, in the prior year
- Adjusted operating results of $92.9 million, or $1.07 per
share, compared to $95.6 million, or $1.11 per share, in the prior
year (see non-GAAP reconciliation below)
- Consolidated Adjusted EBITDA of $225.8 million compared to
$232.4 million in the prior year (see non-GAAP reconciliation on
page 24)
- E&P segment net production of 48.8 Bcfe, an increase of 6%
from the prior year
- Appalachian net natural gas production of 499 MMcf/d, up 8%
from the prior year and up 1% from the first quarter
- Average natural gas prices, after the impact of hedging, of
$2.58 per Mcf, up $0.06 per Mcf from the prior year
- Average oil prices, after the impact of hedging, of $61.01 per
Bbl, up $2.70 per Bbl from the prior year
- Gathering segment operating revenues increased $1.6 million on
5% increase in gathered volumes
- Utility segment net income increased $2.2 million, or 7%, on
higher customer margins and lower interest expense
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Three Months Ended |
|
Six Months Ended |
| |
|
March 31, |
|
March 31, |
| (in thousands except
per share amounts) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
| Reported GAAP
Earnings |
|
$ |
90,595 |
|
|
$ |
91,847 |
|
|
$ |
193,256 |
|
|
$ |
290,501 |
|
|
Items impacting comparability |
|
|
|
|
|
|
|
|
|
Remeasurement of deferred income taxes under 2017 Tax Reform |
|
— |
|
|
4,000 |
|
|
(5,000 |
) |
|
(107,000 |
) |
|
Unrealized (gain) loss on hedge ineffectiveness (E&P) |
|
6,742 |
|
|
(335 |
) |
|
237 |
|
|
98 |
|
| Tax
impact of unrealized (gain) loss on hedge ineffectiveness |
|
(1,416 |
) |
|
82 |
|
|
(50 |
) |
|
(24 |
) |
|
Unrealized (gain) loss on other investments (Corporate / All
Other) |
|
(3,831 |
) |
|
— |
|
|
2,516 |
|
|
— |
|
| Tax
impact of unrealized (gain) loss on other investments |
|
805 |
|
|
— |
|
|
(528 |
) |
|
— |
|
| Adjusted
Operating Results |
|
$ |
92,895 |
|
|
$ |
95,594 |
|
|
$ |
190,431 |
|
|
$ |
183,575 |
|
| |
|
|
|
|
|
|
|
|
| Reported GAAP
Earnings per share |
|
$ |
1.04 |
|
|
$ |
1.06 |
|
|
$ |
2.23 |
|
|
$ |
3.37 |
|
|
Items impacting comparability |
|
|
|
|
|
|
|
|
|
Remeasurement of deferred income taxes under 2017 Tax Reform |
|
— |
|
|
0.05 |
|
|
(0.06 |
) |
|
(1.24 |
) |
|
Unrealized (gain) loss on hedge ineffectiveness (E&P) |
|
0.08 |
|
|
— |
|
|
— |
|
|
— |
|
| Tax
impact of unrealized (gain) loss on hedge ineffectiveness |
|
(0.02 |
) |
|
— |
|
|
— |
|
|
— |
|
|
Unrealized (gain) loss on other investments (Corporate / All
Other) |
|
(0.04 |
) |
|
— |
|
|
0.03 |
|
|
— |
|
| Tax
impact of unrealized (gain) loss on other investments |
|
0.01 |
|
|
— |
|
|
(0.01 |
) |
|
— |
|
|
Rounding |
|
— |
|
|
— |
|
|
0.01 |
|
|
— |
|
| Adjusted
Operating Results per share |
|
$ |
1.07 |
|
|
$ |
1.11 |
|
|
$ |
2.20 |
|
|
$ |
2.13 |
|
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MANAGEMENT COMMENTS
Ronald J. Tanski, President and Chief Executive
Officer of National Fuel Gas Company, stated: “The Company’s second
fiscal quarter results evidence the value of our integrated
business model, where the consistent earnings from each of our
major operating segments contributed to our balanced consolidated
earnings. Our financial results were in line with our
forecast for the quarter, and keep us on track to deliver results
in line with our fiscal year earnings guidance, which remains
unchanged.
“Financial results in our regulated businesses
were consistent with the prior year, where higher earnings in the
utility business offset a portion of the expected decline in the
interstate pipeline business caused by the expiration of a large
transportation contract. In our Exploration & Production
business, we experienced a few operational delays during the
quarter, which deferred a portion of our production that was
scheduled to come online this quarter into the latter part of
fiscal 2019. We still expect, however, that our steady,
three-rig drilling program will deliver average production growth
of 15 to 20 percent through our fiscal 2022 forecast period.
Given our large undeveloped acreage position, our production growth
can be sustained throughout the next decade.
“We are excited that that our various Pipeline
& Storage projects under development continue to take
meaningful strides forward, including the recent receipt of the
FERC Certificate for our Empire North project, positive legal and
regulatory developments on our Northern Access project, and the
commencement of construction on our Line N to Monaca project.
Each of these projects will help to meet the increasing regional
demand for domestic and abundant natural gas supplies. As the
nation’s electric grid continues to decrease reliance on aging
coal-fired plants and integrate more intermittent renewable
generation facilities, more reliance will be placed on natural gas
electric generation, much like many of our residential customers
depend on their gas-powered back-up generators.”
FISCAL 2019 GUIDANCE
National Fuel is reaffirming its full year
earnings guidance for fiscal 2019. The Company projects that
earnings on a non-GAAP basis will be within the range of $3.45 to
$3.65 per share, or $3.55 per share at the midpoint of the range.
The Company’s earnings guidance range reflects the impact of actual
results for the six months ended March 31, 2019, an update to the
Company’s commodity price assumptions to reflect the current
futures market, including a $10 per barrel increase in NYMEX crude
oil, offset by the consolidated impact of the reduction in its
production guidance discussed below. Further changes in NYMEX
or Appalachian basin spot natural gas prices are not expected to
have a significant impact on current year earnings as the
realizations on a large portion of the Company’s remaining natural
gas production are locked in with firm sales and financial hedges.
Projections for consolidated and individual segment capital
expenditures are unchanged.
The Company is revising its Exploration and
Production segment’s fiscal 2019 net production guidance to be in
the range of 205 to 215 billion cubic feet equivalent
(“Bcfe”). At the midpoint of the range, the Company’s revised
fiscal 2019 production guidance represents an 18 percent increase
over fiscal 2018.
The 10 Bcfe, or 5 percent, decrease from the
midpoint of the Company’s previous guidance range is primarily due
to the following factors:
- Drilling and completion delays at DCNR tracts 007 and 100 in
the EDA, which has deferred forecasted production online
dates;
- The impact of the Company's ongoing testing efforts to optimize
its Utica drilling and completion design in the WDA; and
- The Company's continued trend towards drilling longer laterals,
which is expected to benefit the program's economics, but defers
the online dates related to future development pads beyond the
previous plan.
While the delays in new well turn on dates have
the effect of pushing production to future periods, they are not
expected to have a material impact on the ultimate recovery of the
Company’s reserves or the economics of its Marcellus and Utica
programs.
The Company’s earnings guidance range does not
include the impact of certain items that impacted the comparability
of earnings during the six months ended March 31, 2019, including:
(1) the remeasurement of deferred income taxes resulting from the
2017 Tax Reform Act, which reduced the Company’s income tax expense
and benefited consolidated earnings in the six months ended March
31, 2019 by $0.06 per share; (2) the full year impact of the
Exploration and Production segment’s unrealized gain on hedging
ineffectiveness; and (3) the unrealized loss on other investments
due to the change in an accounting rule discussed on page 6, which
lowered earnings by $0.02 per share. While the Company
expects to record additional adjustments to one or more of these
items during the remaining six months ending September 30, 2019,
the amounts of these and other potential adjustments are not
reasonably determinable at this time. As such, the
Company is unable to provide earnings guidance other than on a
non-GAAP basis.
Additional details on the Company's forecast
assumptions and business segment guidance for fiscal 2019 are
outlined in the table on page 8.
DISCUSSION OF RESULTS BY
SEGMENT
The following discussion of earnings of each
operating segment for the quarter ended March 31, 2019 is
summarized in a tabular form on pages 9 and 10 of this report
(earnings drivers for the six months ended March 31, 2019 are
summarized on pages 11 and 12). It may be helpful to refer to
those tables while reviewing this discussion. Note that
management defines Adjusted Operating Results as reported GAAP
earnings adjusted for items impacting comparability, and Adjusted
EBITDA as reported GAAP earnings before the following items:
interest expense, income taxes, depreciation, depletion and
amortization, other income and deductions, impairments, and other
items reflected in operating income that impact comparability.
Upstream Business
Exploration and Production Segment
The Exploration and Production segment
operations are carried out by Seneca Resources Company, LLC
("Seneca"). Seneca explores for, develops and produces
natural gas and oil reserves, primarily in Pennsylvania and
California.
| |
Three Months Ended |
| |
March 31, |
| (in thousands) |
2019 |
|
2018 |
|
Variance |
| GAAP Earnings |
$ |
21,873 |
|
|
$ |
26,537 |
|
|
$ |
(4,664 |
) |
| Remeasurement of
deferred taxes under 2017 Tax Reform |
$ |
— |
|
|
$ |
790 |
|
|
$ |
(790 |
) |
| Unrealized (gain) loss
on hedge ineffectiveness |
$ |
6,742 |
|
|
$ |
(335 |
) |
|
$ |
7,077 |
|
| Tax impact of
unrealized (gain) loss on hedge ineffectiveness |
$ |
(1,416 |
) |
|
$ |
82 |
|
|
$ |
(1,498 |
) |
| Adjusted Operating
Results |
$ |
27,199 |
|
|
$ |
27,074 |
|
|
$ |
125 |
|
| |
|
|
|
|
|
| Adjusted EBITDA |
$ |
83,580 |
|
|
$ |
78,728 |
|
|
$ |
4,852 |
|
The Exploration and Production segment’s second
quarter GAAP earnings decreased $4.7 million versus the prior year,
driven primarily by the net impact of unrealized gains and losses
that were recognized due to hedge accounting ineffectiveness and an
$0.8 million adjustment recorded in the prior year second quarter
relating to the remeasurement of deferred income taxes under the
2017 Tax Reform Act. Excluding these items (see table above),
the Exploration and Production segment’s second quarter earnings
increased $0.1 million as the positive impacts of higher natural
gas production and better realized natural gas and crude oil prices
were offset by lower crude oil production, higher lease operating
and transportation (“LOE”) expense, higher depreciation, depletion
and amortization (“DD&A”) expense, and the impact of income
taxes.
Seneca’s second quarter net production was 48.8
Bcfe, an increase of 2.7 Bcfe, or 6 percent, from the prior
year. Natural gas production increased 3.3 billion cubic feet
(“Bcf”), or 8 percent, due primarily to production from new
Marcellus and Utica wells completed and connected to sales in
Appalachia. Seneca increased production in the WDA-Clermont
area by 4.4 Bcf, where Seneca has increased development activity.
Seneca's average realized natural gas price, after the impact of
hedging and transportation costs, was $2.58 per thousand cubic feet
("Mcf"), an increase of $0.06 per Mcf from the prior year. The
improvement was driven primarily by higher NYMEX pricing and local
spot pricing in Pennsylvania, which benefited realizations on
Seneca’s unhedged production.
Seneca’s oil production for the second quarter
decreased 99 thousand barrels ("Mbbl") due largely to the impact of
the sale of Seneca’s Sespe properties in California in the third
quarter of fiscal 2018. Seneca's average realized oil price,
after the impact of hedging, was $61.01 per barrel ("Bbl"), an
increase of $2.70 per Bbl over the prior year. The
improvement in oil price realizations was due primarily to stronger
price differentials relative to West Texas Intermediate (WTI) index
prices at local sales points in California.
LOE expense increased $2.1 million due mostly to
higher gathering expenses in Appalachia resulting from the increase
in natural gas production coupled with an increase in well repairs,
contract labor and steam fuel costs in the West Coast region,
partially offset by lower operating costs in California following
the sale of Seneca’s Sespe properties. DD&A expense
increased $3.9 million due to the increase in production and a
higher unit depletion rate.
The 2017 Tax Reform Act lowered the Company’s
statutory federal income tax rate from a blended 24.5 percent in
fiscal 2018 to 21 percent in fiscal 2019, which decreased the
segment’s income tax expense on current period income by $1.0
million. The impact of the lower federal rate on current
quarter income was more than offset by the net effect of other
items that increased income tax expense by $1.9 million.
Midstream Businesses
Pipeline and Storage Segment
The Pipeline and Storage segment’s operations
are carried out by National Fuel Gas Supply Corporation (“Supply
Corporation”) and Empire Pipeline, Inc. (“Empire”). The
Pipeline and Storage segment provides natural gas transportation
and storage services to affiliated and non-affiliated companies
through an integrated system of pipelines and underground natural
gas storage fields in western New York and Pennsylvania.
| |
Three Months Ended |
| |
March 31, |
| (in thousands) |
2019 |
|
2018 |
|
Variance |
|
GAAP Earnings |
$ |
17,749 |
|
|
$ |
22,724 |
|
|
$ |
(4,975 |
) |
| |
|
|
|
|
|
| Adjusted EBITDA |
$ |
41,281 |
|
|
$ |
49,786 |
|
|
$ |
(8,505 |
) |
The Pipeline and Storage segment’s second
quarter GAAP earnings decreased $5.0 million versus the prior
year. The decrease was driven primarily by lower operating
revenues and higher operation and maintenance (“O&M”) expenses,
which were partially offset by lower income tax expense due to the
impact of the 2017 Tax Reform Act. The $4.4 million
decrease in operating revenues was due largely to the anticipated
expiration of a significant firm transportation contract on the
Empire system in December 2018. The impact of the contract
expiration was partially offset by an increase in Empire’s
transportation rates following the Company’s rate case settlement
effective January 1, 2019. The settlement remains subject to
FERC approval. O&M expense increased $3.1 million due
primarily to an increase in compressor and facility maintenance
activity during the quarter and higher personnel costs.
The 2017 Tax Reform Act lowered the Company’s
statutory federal income tax rate from a blended 24.5 percent in
fiscal 2018 to 21 percent in fiscal 2019, which decreased the
Pipeline and Storage segment’s income tax expense on current period
income by $0.8 million.
Gathering Segment
The Gathering segment’s operations are carried
out by National Fuel Gas Midstream Company, LLC’s limited liability
companies. The Gathering segment constructs, owns and operates
natural gas gathering pipelines and compression facilities in the
Appalachian region which currently delivers Seneca’s gross
Appalachian production to the interstate pipeline system.
| |
Three Months Ended |
| |
March 31, |
| (in thousands) |
2019 |
|
2018 |
|
Variance |
| GAAP Earnings |
$ |
12,690 |
|
|
$ |
11,770 |
|
|
$ |
920 |
|
| Remeasurement of
deferred taxes under 2017 Tax Reform |
$ |
— |
|
|
$ |
400 |
|
|
$ |
(400 |
) |
| Adjusted Operating
Results |
$ |
12,690 |
|
|
$ |
12,170 |
|
|
$ |
520 |
|
| |
|
|
|
|
|
| Adjusted EBITDA |
$ |
24,598 |
|
|
$ |
24,220 |
|
|
$ |
378 |
|
The $0.9 million increase in the Gathering
segment’s second quarter GAAP earnings was driven primarily by
higher operating revenues and the net impact of the 2017 Tax Reform
Act, which were partially offset by higher O&M expenses.
Operating revenues increased $1.6 million, or 6 percent, due
primarily to a 2.8 Bcf increase in gathered volume from Seneca’s
Appalachian natural gas production. O&M expenses
increased $1.3 million in the second quarter due largely to the
operation of additional compression facilities along the Covington
gathering system, which were acquired from affiliate Seneca in
March 2018, and an increase in normal-course preventative
compressor maintenance activity at the Clermont gathering
system.
The 2017 Tax Reform Act lowered the Company’s
statutory federal income tax rate from a blended 24.5 percent in
fiscal 2018 to 21 percent in fiscal 2019, which decreased the
segment’s income tax expense on current period income by $0.6
million. Additionally, the Gathering segment recorded a $0.4
million adjustment in the prior year second quarter to the
remeasurement of deferred income taxes under the 2017 Tax Reform
Act, which increased income tax expense and lowered earnings in the
prior year.
Downstream Businesses
Utility Segment
The Utility segment operations are carried out
by National Fuel Gas Distribution Corporation (“Distribution”),
which sells or transports natural gas to customers located in
western New York and northwestern Pennsylvania.
| |
Three Months Ended |
| |
March 31, |
| (in thousands) |
2019 |
|
2018 |
|
Variance |
|
GAAP Earnings |
$ |
35,589 |
|
|
$ |
33,360 |
|
|
$ |
2,229 |
|
| |
|
|
|
|
|
| Adjusted EBITDA |
$ |
78,688 |
|
|
$ |
80,591 |
|
|
$ |
(1,903 |
) |
The $2.2 million increase in the Utility
segment’s second quarter GAAP earnings was due primarily to higher
customer margins and lower interest expense partially offset by the
net impact of the 2017 Tax Reform Act. Higher customer usage,
an increase in revenues relating to a system modernization tracking
mechanism, and the impact of regulatory adjustments contributed to
the increase in customer margins. Interest expense decreased $0.6
million due primarily to the Company’s early refinancing of an 8.75
percent coupon 10-year note that was set to mature in May 2019. The
$1.9 million increase in O&M expense was substantially offset
by the $2.3 million decrease in other deductions, which was largely
a result of non-service pension and postretirement benefit costs
that are now reported separately from O&M expenses following
the adoption of new accounting guidance in the current year.
The 2017 Tax Reform Act lowered the Company’s
statutory federal income tax rate from a blended 24.5 percent in
fiscal 2018 to 21 percent in fiscal 2019, which decreased income
tax expense on current period income by $1.5 million. In
accordance with state regulatory orders, the Utility segment has
been recording a refund provision to return the net effect of the
2017 Tax Reform Act to its customers. The refund provision
recorded during the quarter as a reduction to operating revenues
was $3.7 million higher than the refund provision recorded in the
prior year, reducing second quarter earnings by $2.8 million and
offsetting the benefit of the lower federal income tax rate.
Energy Marketing Segment
The Energy Marketing segment's operations are
carried out by National Fuel Resources, Inc. (“NFR”). NFR
markets natural gas to industrial, wholesale, commercial, public
authority, and residential customers primarily in western and
central New York and northwestern Pennsylvania, offering
competitively priced natural gas to its customers.
| |
Three Months Ended |
| |
March 31, |
| (in thousands) |
2019 |
|
2018 |
|
Variance |
|
GAAP Earnings |
$ |
544 |
|
|
$ |
578 |
|
|
$ |
(34 |
) |
| Remeasurement of
deferred taxes under 2017 Tax Reform |
$ |
— |
|
|
$ |
159 |
|
|
$ |
(159 |
) |
| Adjusted Operating
Results |
$ |
544 |
|
|
$ |
737 |
|
|
$ |
(193 |
) |
| |
|
|
|
|
|
| Adjusted EBITDA |
$ |
620 |
|
|
$ |
1,048 |
|
|
$ |
(428 |
) |
The Energy Marketing segment’s second quarter
GAAP earnings were largely unchanged versus the prior year, as the
slight decline in customer margins (operating revenues less
purchased gas sold) was offset by the impact of an adjustment made
in the prior year second quarter to the segment’s remeasurement of
deferred income taxes under the 2017 Tax Reform Act.
Corporate and All Other
Corporate and All Other operations had combined
earnings of $2.2 million in the current year second quarter, which
was $5.3 million higher than the loss of $3.1 million in the prior
year second quarter. The increase in earnings was primarily
attributable to the impact of the 2017 Tax Reform Act, which
resulted in a remeasurement of deferred income taxes that increased
the prior year’s second quarter income tax expense by $2.7 million,
and the impact of $3.8 million in unrealized gains on investments
in equity securities recorded during the quarter ($3.0 million
after-tax). Unrealized gains and losses on investments in
equity securities are now recognized in earnings following the
adoption of new accounting guidance in the current year.
These unrealized gains and losses had been previously recorded as
other comprehensive income. These increases were partially offset
by lower operating revenues from the sale of standing timber by the
Company’s land and timber operations.
EARNINGS TELECONFERENCE
The Company will host a conference call on
Friday, May 3, 2019, 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 NFG Investor Relations
News & Events page at National Fuel’s website at
investor.nationalfuelgas.com. For those without Internet
access, audio access is also provided by dialing (toll-free)
833-287-0795, using conference ID number “6683755”. For those
unable to listen to the live conference call, an audio replay will
be available approximately two hours following the teleconference
at the same website link and by phone at (toll-free) 800-585-8367
using conference ID number “6683755”. Both the webcast and a
telephonic replay will be available until the close of business on
Friday, May 10, 2019.
National Fuel is an integrated energy company
reporting financial results for five operating segments:
Exploration and Production, Pipeline and Storage, Gathering,
Utility, and Energy Marketing. Additional information about
National Fuel is available at www.nationalfuelgas.com.
| Analyst
Contact: |
Kenneth E.
Webster |
716-857-7067 |
| Media
Contact: |
Karen L.
Merkel |
716-857-7654 |
Certain statements contained herein, including
statements identified by the use of the words “anticipates,”
“estimates,” “expects,” “forecasts,” “intends,” “plans,”
“predicts,” “projects,” “believes,” “seeks,” “will,” “may” and
similar expressions, and statements which are other than statements
of historical facts, are “forward-looking statements” as defined by
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve risks and uncertainties, which
could cause actual results or outcomes to differ materially from
those expressed in the forward-looking statements. The Company’s
expectations, beliefs and projections contained herein are
expressed in good faith and are believed to have a reasonable
basis, but there can be no assurance that such expectations,
beliefs or projections will result or be achieved or accomplished.
In addition to other factors, the following are important factors
that could cause actual results to differ materially from those
discussed in the forward-looking statements: delays or changes in
costs or plans with respect to Company projects or related projects
of other companies, including difficulties or delays in obtaining
necessary governmental approvals, permits or orders or in obtaining
the cooperation of interconnecting facility operators;
governmental/regulatory actions, initiatives and proceedings,
including those involving rate cases (which address, among other
things, target rates of return, rate design and retained natural
gas), environmental/safety requirements, affiliate relationships,
industry structure, and franchise renewal; changes in laws,
regulations or judicial interpretations to which the Company is
subject, including those involving derivatives, taxes, safety,
employment, climate change, other environmental matters, real
property, and exploration and production activities such as
hydraulic fracturing; financial and economic conditions, including
the availability of credit, and occurrences affecting the Company’s
ability to obtain financing on acceptable terms for working
capital, capital expenditures and other investments, including any
downgrades in the Company’s credit ratings and changes in interest
rates and other capital market conditions; changes in the price of
natural gas or oil; impairments under the SEC’s full cost ceiling
test for natural gas and oil reserves; factors affecting the
Company’s ability to successfully identify, drill for and produce
economically viable natural gas and oil reserves, including among
others geology, lease availability, title disputes, weather
conditions, shortages, delays or unavailability of equipment and
services required in drilling operations, insufficient gathering,
processing and transportation capacity, the need to obtain
governmental approvals and permits, and compliance with
environmental laws and regulations; increasing health care costs
and the resulting effect on health insurance premiums and on the
obligation to provide other post-retirement benefits; changes in
price differentials between similar quantities of natural gas or
oil sold at different geographic locations, and the effect of such
changes on commodity production, revenues and demand for pipeline
transportation capacity to or from such locations; other changes in
price differentials between similar quantities of natural gas or
oil having different quality, heating value, hydrocarbon mix or
delivery date; the cost and effects of legal and administrative
claims against the Company or activist shareholder campaigns to
effect changes at the Company; uncertainty of oil and gas reserve
estimates; significant differences between the Company’s projected
and actual production levels for natural gas or oil; changes in
demographic patterns and weather conditions; changes in the
availability, price or accounting treatment of derivative financial
instruments; changes in laws, actuarial assumptions, the interest
rate environment and the return on plan/trust assets related to the
Company’s pension and other post-retirement benefits, which can
affect future funding obligations and costs and plan liabilities;
changes in economic conditions, including global, national or
regional recessions, and their effect on the demand for, and
customers’ ability to pay for, the Company’s products and services;
the creditworthiness or performance of the Company’s key suppliers,
customers and counterparties; the impact of potential information
technology, cybersecurity or data security breaches; economic
disruptions or uninsured losses resulting from major accidents,
fires, severe weather, natural disasters, terrorist activities or
acts of war; significant differences between the Company’s
projected and actual capital expenditures and operating expenses;
or increasing costs of insurance, changes in coverage and the
ability to obtain insurance. The Company disclaims any obligation
to update any forward-looking statements to reflect events or
circumstances after the date thereof.
NATIONAL FUEL GAS
COMPANYAND SUBSIDIARIES
GUIDANCE SUMMARY
As discussed on page 2, the Company is revising
its earnings guidance for fiscal 2019. Additional details on
the Company's forecast assumptions and business segment guidance
for fiscal 2019 are outlined in the table below.
The Company's earnings guidance range does not
include the impact of certain items that impacted the comparability
of earnings during the six months ended March 31, 2019, including:
(1) the remeasurement of deferred income taxes resulting from the
2017 Tax Reform Act, which reduced the Company’s income tax expense
and benefited consolidated earnings in the six months ended March
31, 2019 by $0.06 per share; (2) the full year impact of the
Exploration and Production segment’s unrealized gain on hedging
ineffectiveness; and (3) the unrealized loss on other investments
due to the change in an accounting rule discussed on page 6, which
lowered earnings by $0.02 per share. While the Company
expects to record additional adjustments to one or more of these
items during the remaining six months ending September 30, 2019,
the amounts of these and other potential adjustments are not
reasonably determinable at this time. As such, the Company is
unable to provide earnings guidance other than on a non-GAAP
basis.
| |
Updated FY 2019 Guidance |
|
Previous FY 2019 Guidance |
| Consolidated
Earnings per Share |
$3.45 to $3.65 |
|
$3.45 to $3.65 |
| |
|
|
|
| Consolidated
Effective Tax Rate |
~ 24% |
|
24% to 25% |
| |
|
|
|
| Capital
Expenditures (Millions) |
|
|
|
| Exploration and
Production |
$460 - $495 |
|
$460 - $495 |
| Pipeline and
Storage |
$120 - $150 |
|
$120 - $150 |
| Gathering |
$55 - $65 |
|
$55 - $65 |
| Utility |
$90 - $100 |
|
$90 - $100 |
|
Consolidated Capital Expenditures |
$725 - $810 |
|
$725 - $810 |
| |
|
|
|
| Exploration
& Production Segment Guidance |
|
|
|
| |
|
|
|
|
Commodity Price Assumptions (1) |
|
|
|
| NYMEX natural
gas price |
$2.60 /MMBtu |
|
$3.25 /MMBtu | $2.75 /MMBtu |
| Appalachian
basin spot price |
$2.10 /MMBtu |
|
$2.75 /MMBtu | $2.25 /MMBtu |
| NYMEX (WTI)
crude oil price |
$65.00 /Bbl |
|
$55.00 /Bbl |
| California oil
price (% of WTI) |
108 |
% |
|
102 |
% |
| |
|
|
|
|
Production (Bcfe) |
|
|
|
| East Division -
Appalachia |
189 to 199 |
|
194 to 214 |
| West Division -
California |
~ 16 |
|
~ 16 |
| Total
Production |
205 to 215 |
|
210 to 230 |
| |
|
|
|
| E&P
Operating Costs ($/Mcfe) |
|
|
|
| LOE |
$0.85 - $0.90 |
|
$0.85 - $0.90 |
| G&A |
$0.25 - $0.35 |
|
$0.25 - $0.35 |
| DD&A |
$0.70 - $0.75 |
|
$0.70 - $0.75 |
| |
|
|
|
| Other Business
Segment Guidance (Millions) |
|
|
|
| Gathering
Segment Revenues |
$125 - $130 |
|
$130 - $140 |
| Pipeline and
Storage Segment Revenues |
~$285 |
|
~$285 |
(1) Revised commodity price assumptions reflect the
Company's forecast for the remainder of fiscal 2019.
| |
| NATIONAL FUEL GAS COMPANY |
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP
EARNINGS |
| QUARTER ENDED MARCH 31, 2019 |
| (Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Upstream |
|
Midstream Businesses |
|
Downstream Businesses |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Exploration & |
|
Pipeline & |
|
|
|
|
|
Energy |
|
Corporate / |
|
|
| (Thousands of
Dollars) |
Production |
|
Storage |
|
Gathering |
|
Utility |
|
Marketing |
|
All Other |
|
Consolidated* |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Second quarter
2018 GAAP earnings |
$ |
26,537 |
|
|
$ |
22,724 |
|
|
$ |
11,770 |
|
|
$ |
33,360 |
|
|
$ |
578 |
|
|
$ |
(3,122 |
) |
|
$ |
91,847 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Remeasurement of
deferred taxes under 2017 Tax Reform |
790 |
|
|
|
|
400 |
|
|
|
|
159 |
|
|
2,651 |
|
|
4,000 |
|
| Unrealized (gain) loss
on hedge ineffectiveness |
(335 |
) |
|
|
|
|
|
|
|
|
|
|
|
(335 |
) |
| Tax impact of
unrealized gain) loss on hedge ineffectiveness |
82 |
|
|
|
|
|
|
|
|
|
|
|
|
82 |
|
| Second quarter
2018 adjusted operating results |
27,074 |
|
|
22,724 |
|
|
12,170 |
|
|
33,360 |
|
|
737 |
|
|
(471 |
) |
|
95,594 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Drivers of
adjusted operating results** |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Upstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower) natural
gas production |
6,261 |
|
|
|
|
|
|
|
|
|
|
|
|
6,261 |
|
| Higher (lower) crude
oil production |
(4,359 |
) |
|
|
|
|
|
|
|
|
|
|
|
(4,359 |
) |
| Higher (lower) realized
natural gas prices, after hedging |
2,018 |
|
|
|
|
|
|
|
|
|
|
|
|
2,018 |
|
| Higher (lower) realized
crude oil prices, after hedging |
1,154 |
|
|
|
|
|
|
|
|
|
|
|
|
1,154 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Midstream and
All Other Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower)
operating revenues |
|
|
(3,336 |
) |
|
1,234 |
|
|
|
|
|
|
(699 |
) |
|
(2,801 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Downstream
Margins*** |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Impact of higher usage
and weather |
|
|
|
|
|
|
618 |
|
|
|
|
|
|
618 |
|
| System modernization
tracker revenues |
|
|
|
|
|
|
680 |
|
|
|
|
|
|
680 |
|
| Lower (higher) refund
provision on tax rate change |
|
|
|
|
|
|
(2,827 |
) |
|
|
|
|
|
(2,827 |
) |
| Regulatory true-up
adjustments |
|
|
|
|
|
|
886 |
|
|
|
|
|
|
886 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Lower (higher) lease
operating and transportation expenses |
(1,610 |
) |
|
|
|
|
|
|
|
|
|
|
|
(1,610 |
) |
| Lower (higher)
operating expenses |
|
|
(2,359 |
) |
|
(953 |
) |
|
(1,255 |
) |
|
|
|
|
|
(4,567 |
) |
| Lower (higher)
depreciation / depletion |
(2,946 |
) |
|
|
|
|
|
|
|
|
|
|
|
(2,946 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Higher) lower other
deductions |
|
|
|
|
|
|
1,746 |
|
|
|
|
|
|
1,746 |
|
| (Higher) lower interest
expense |
(127 |
) |
|
283 |
|
|
123 |
|
|
448 |
|
|
(6 |
) |
|
276 |
|
|
997 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income
Taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Impact of tax rate
reduction due to 2017 Tax Reform |
1,010 |
|
|
822 |
|
|
564 |
|
|
1,535 |
|
|
23 |
|
|
22 |
|
|
3,976 |
|
| Lower (higher) income
tax expense / effective tax rate |
(1,910 |
) |
|
81 |
|
|
(4 |
) |
|
(44 |
) |
|
11 |
|
|
(10 |
) |
|
(1,876 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| All other /
rounding |
634 |
|
|
(466 |
) |
|
(444 |
) |
|
442 |
|
|
(221 |
) |
|
6 |
|
|
(49 |
) |
| Second quarter
2019 adjusted operating results |
27,199 |
|
|
17,749 |
|
|
12,690 |
|
|
35,589 |
|
|
544 |
|
|
(876 |
) |
|
92,895 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unrealized gain (loss)
on hedge ineffectiveness |
(6,742 |
) |
|
|
|
|
|
|
|
|
|
|
|
(6,742 |
) |
| Tax impact of
unrealized gain (loss) on hedge ineffectiveness |
1,416 |
|
|
|
|
|
|
|
|
|
|
|
|
1,416 |
|
| Unrealized gain (loss)
on other investments |
|
|
|
|
|
|
|
|
|
|
3,831 |
|
|
3,831 |
|
| Tax impact of
unrealized gain (loss) on other investments |
|
|
|
|
|
|
|
|
|
|
(805 |
) |
|
(805 |
) |
| Second quarter
2019 GAAP earnings |
$ |
21,873 |
|
|
$ |
17,749 |
|
|
$ |
12,690 |
|
|
$ |
35,589 |
|
|
$ |
544 |
|
|
$ |
2,150 |
|
|
$ |
90,595 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| * Amounts do not
reflect intercompany eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
|
| **
Operating results have been calculated using the 24.5% federal
statutory rate effective for the 2018 fiscal year. The impact of
the change to a 21% federal statutory rate for the 2019 fiscal year
is broken out separately under the caption "Income Taxes". |
| ***
Downstream margin defined as operating revenues less purchased gas
expense. |
| NATIONAL FUEL GAS COMPANY |
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP
EARNINGS PER SHARE |
| QUARTER ENDED MARCH 31, 2019 |
| (Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Upstream |
|
Midstream Businesses |
|
Downstream Businesses |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Exploration & |
|
Pipeline & |
|
|
|
|
|
Energy |
|
Corporate / |
|
|
| |
Production |
|
Storage |
|
Gathering |
|
Utility |
|
Marketing |
|
All Other |
|
Consolidated* |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Second quarter
2018 GAAP earnings per share |
$ |
0.31 |
|
|
$ |
0.26 |
|
|
$ |
0.14 |
|
|
$ |
0.39 |
|
|
$ |
0.01 |
|
|
$ |
(0.05 |
) |
|
$ |
1.06 |
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Remeasurement of
deferred taxes under 2017 Tax Reform |
0.01 |
|
|
|
|
0.01 |
|
|
|
|
— |
|
|
0.03 |
|
|
0.05 |
|
| Unrealized (gain) loss
on hedge ineffectiveness |
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
| Tax impact of
unrealized (gain) loss on hedge ineffectiveness |
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
| Rounding |
(0.01 |
) |
|
— |
|
|
(0.01 |
) |
|
— |
|
|
— |
|
|
0.02 |
|
|
— |
|
| Second quarter
2018 adjusted operating results per share |
0.31 |
|
|
0.26 |
|
|
0.14 |
|
|
0.39 |
|
|
0.01 |
|
|
— |
|
|
1.11 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Drivers of
adjusted operating results** |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Upstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower) natural
gas production |
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
0.07 |
|
| Higher (lower) crude
oil production |
(0.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
(0.05 |
) |
| Higher (lower) realized
natural gas prices, after hedging |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
0.02 |
|
| Higher (lower) realized
crude oil prices, after hedging |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
0.01 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Midstream and
All Other Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower)
operating revenues |
|
|
(0.04 |
) |
|
0.01 |
|
|
|
|
|
|
(0.01 |
) |
|
(0.04 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Downstream
Margins*** |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Impact of higher usage
and weather |
|
|
|
|
|
|
0.01 |
|
|
|
|
|
|
0.01 |
|
| System modernization
tracker revenues |
|
|
|
|
|
|
0.01 |
|
|
|
|
|
|
0.01 |
|
| Lower (higher) refund
provision on tax rate change |
|
|
|
|
|
|
(0.03 |
) |
|
|
|
|
|
(0.03 |
) |
| Regulatory true-up
adjustments |
|
|
|
|
|
|
0.01 |
|
|
|
|
|
|
0.01 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Lower (higher) lease
operating and transportation expenses |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
(0.02 |
) |
| Lower (higher)
operating expenses |
|
|
(0.03 |
) |
|
(0.01 |
) |
|
(0.01 |
) |
|
|
|
|
|
(0.05 |
) |
| Lower (higher)
depreciation / depletion |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
(0.03 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Higher) lower other
deductions |
|
|
|
|
|
|
0.02 |
|
|
|
|
|
|
0.02 |
|
| (Higher) lower interest
expense |
— |
|
|
— |
|
|
— |
|
|
0.01 |
|
|
— |
|
|
— |
|
|
0.01 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income
Taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Impact of tax rate
reduction due to 2017 Tax Reform |
0.01 |
|
|
0.01 |
|
|
0.01 |
|
|
0.02 |
|
|
— |
|
|
— |
|
|
0.05 |
|
| Lower (higher) income
tax expense / effective tax rate |
(0.02 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.02 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| All other /
rounding |
0.01 |
|
|
— |
|
|
— |
|
|
(0.02 |
) |
|
— |
|
|
— |
|
|
(0.01 |
) |
| Second quarter
2019 adjusted operating results per share |
0.31 |
|
|
0.20 |
|
|
0.15 |
|
|
0.41 |
|
|
0.01 |
|
|
(0.01 |
) |
|
1.07 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Unrealized gain (loss)
on hedge ineffectiveness |
(0.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
(0.08 |
) |
| Tax impact of
unrealized gain (loss) on hedge ineffectiveness |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
0.02 |
|
| Unrealized gain (loss)
on other investments |
|
|
|
|
|
|
|
|
|
|
0.04 |
|
|
0.04 |
|
| Tax impact of
unrealized gain (loss) on other investments |
|
|
|
|
|
|
|
|
|
|
(0.01 |
) |
|
(0.01 |
) |
| Second quarter
2019 GAAP earnings per share |
$ |
0.25 |
|
|
$ |
0.20 |
|
|
$ |
0.15 |
|
|
$ |
0.41 |
|
|
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
1.04 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| * Amounts do not
reflect intercompany eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
|
| **
Operating results have been calculated using the 24.5% federal
statutory rate effective for the 2018 fiscal year. The impact of
the change to a 21% federal statutory rate for the 2019 fiscal year
is broken out separately under the caption "Income Taxes". |
| ***
Downstream margin defined as operating revenues less purchased gas
expense. |
| NATIONAL FUEL GAS COMPANY |
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP
EARNINGS |
| SIX MONTHS ENDED MARCH 31, 2019 |
| (Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Upstream |
|
Midstream Businesses |
|
Downstream Businesses |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Exploration & |
|
Pipeline & |
|
|
|
|
|
Energy |
|
Corporate / |
|
|
| (Thousands of
Dollars) |
Production |
|
Storage |
|
Gathering |
|
Utility |
|
Marketing |
|
All Other |
|
Consolidated* |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six months
ended March 31, 2018 GAAP earnings |
$ |
133,235 |
|
|
$ |
61,186 |
|
|
$ |
57,169 |
|
|
$ |
54,353 |
|
|
$ |
1,624 |
|
|
$ |
(17,066 |
) |
|
$ |
290,501 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Remeasurement of
deferred taxes under 2017 Tax Reform |
(76,510 |
) |
|
(14,100 |
) |
|
(34,500 |
) |
|
|
|
359 |
|
|
17,751 |
|
|
(107,000 |
) |
| Unrealized (gain) loss
on hedge ineffectiveness |
98 |
|
|
|
|
|
|
|
|
|
|
|
|
98 |
|
| Tax impact of
unrealized (gain) loss on hedge ineffectiveness |
(24 |
) |
|
|
|
|
|
|
|
|
|
|
|
(24 |
) |
| Six months
ended March 31, 2018 adjusted operating results |
56,799 |
|
|
47,086 |
|
|
22,669 |
|
|
54,353 |
|
|
1,983 |
|
|
685 |
|
|
183,575 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Drivers of
adjusted operating results** |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Upstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower) natural
gas production |
25,603 |
|
|
|
|
|
|
|
|
|
|
|
|
25,603 |
|
| Higher (lower) crude
oil production |
(8,915 |
) |
|
|
|
|
|
|
|
|
|
|
|
(8,915 |
) |
| Higher (lower) realized
natural gas prices, after hedging |
(989 |
) |
|
|
|
|
|
|
|
|
|
|
|
(989 |
) |
| Higher (lower) realized
crude oil prices, after hedging |
1,973 |
|
|
|
|
|
|
|
|
|
|
|
|
1,973 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Midstream and
All Other Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower)
operating revenues |
|
|
(1,997 |
) |
|
5,655 |
|
|
|
|
|
|
(764 |
) |
|
2,894 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Downstream
Margins*** |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Impact of higher usage
and weather |
|
|
|
|
|
|
2,220 |
|
|
|
|
|
|
2,220 |
|
| System modernization
tracker revenues |
|
|
|
|
|
|
1,568 |
|
|
|
|
|
|
1,568 |
|
| Lower (higher) refund
provision on tax rate change |
|
|
|
|
|
|
(2,414 |
) |
|
|
|
|
|
(2,414 |
) |
| Higher (lower)
marketing margins |
|
|
|
|
|
|
|
|
(2,110 |
) |
|
|
|
(2,110 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Lower (higher) lease
operating and transportation expenses |
(3,811 |
) |
|
|
|
|
|
|
|
|
|
|
|
(3,811 |
) |
| Lower (higher)
operating expenses |
(1,328 |
) |
|
(5,350 |
) |
|
(1,502 |
) |
|
(880 |
) |
|
|
|
|
|
(9,060 |
) |
| Lower (higher)
property, franchise and other taxes |
(1,684 |
) |
|
(539 |
) |
|
|
|
|
|
|
|
|
|
(2,223 |
) |
| Lower (higher)
depreciation / depletion |
(8,439 |
) |
|
(735 |
) |
|
(782 |
) |
|
|
|
|
|
|
|
(9,956 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Higher) lower other
deductions |
|
|
|
|
|
|
2,103 |
|
|
|
|
|
|
2,103 |
|
| (Higher) lower interest
expense |
32 |
|
|
729 |
|
|
94 |
|
|
1,161 |
|
|
(1 |
) |
|
550 |
|
|
2,565 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income
Taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Impact of tax rate
reduction due to 2017 Tax Reform |
2,603 |
|
|
1,618 |
|
|
1,150 |
|
|
2,542 |
|
|
(7 |
) |
|
(196 |
) |
|
7,710 |
|
| Lower (higher) income
tax expense / effective tax rate |
(3,094 |
) |
|
1,715 |
|
|
(604 |
) |
|
(75 |
) |
|
172 |
|
|
97 |
|
|
(1,789 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| All other /
rounding |
534 |
|
|
324 |
|
|
(308 |
) |
|
659 |
|
|
8 |
|
|
270 |
|
|
1,487 |
|
| Six months
ended March 31, 2019 adjusted operating results |
59,284 |
|
|
42,851 |
|
|
26,372 |
|
|
61,237 |
|
|
45 |
|
|
642 |
|
|
190,431 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Remeasurement of
deferred taxes under 2017 Tax Reform |
990 |
|
|
|
|
500 |
|
|
|
|
198 |
|
|
3,312 |
|
|
5,000 |
|
| Unrealized gain (loss)
on hedge ineffectiveness |
(237 |
) |
|
|
|
|
|
|
|
|
|
|
|
(237 |
) |
| Tax impact of
unrealized gain (loss) on hedge ineffectiveness |
50 |
|
|
|
|
|
|
|
|
|
|
|
|
50 |
|
| Unrealized gain (loss)
on other investments |
|
|
|
|
|
|
|
|
|
|
(2,516 |
) |
|
(2,516 |
) |
| Tax impact of
unrealized gain (loss) on other investments |
|
|
|
|
|
|
|
|
|
|
528 |
|
|
528 |
|
| Six months
ended March 31, 2019 GAAP earnings |
$ |
60,087 |
|
|
$ |
42,851 |
|
|
$ |
26,872 |
|
|
$ |
61,237 |
|
|
$ |
243 |
|
|
$ |
1,966 |
|
|
$ |
193,256 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| * Amounts do not
reflect intercompany eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
|
| **
Operating results have been calculated using the 24.5% federal
statutory rate effective for the 2018 fiscal year. The impact of
the change to a 21% federal statutory rate for the 2019 fiscal year
is broken out separately under the caption "Income Taxes". |
| ***
Downstream margin defined as operating revenues less purchased gas
expense. |
| NATIONAL FUEL GAS COMPANY |
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP
EARNINGS PER SHARE |
| SIX MONTHS ENDED MARCH 31, 2019 |
| (Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Upstream |
|
Midstream Businesses |
|
Downstream Businesses |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Exploration & |
|
Pipeline & |
|
|
|
|
|
Energy |
|
Corporate / |
|
|
| |
Production |
|
Storage |
|
Gathering |
|
Utility |
|
Marketing |
|
All Other |
|
Consolidated* |
| Six months
ended March 31, 2018 GAAP earnings per share |
$ |
1.54 |
|
|
$ |
0.71 |
|
|
$ |
0.66 |
|
|
$ |
0.63 |
|
|
$ |
0.02 |
|
|
$ |
(0.19 |
) |
|
$ |
3.37 |
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Remeasurement of
deferred taxes under 2017 Tax Reform |
(0.89 |
) |
|
(0.16 |
) |
|
(0.40 |
) |
|
|
|
— |
|
|
0.21 |
|
|
(1.24 |
) |
| Unrealized (gain) loss
on hedge ineffectiveness |
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
| Tax impact of
unrealized (gain) loss on hedge ineffectiveness |
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
| Rounding |
0.01 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.01 |
) |
|
— |
|
| Six months
ended March 31, 2018 adjusted operating results per
share |
0.66 |
|
|
0.55 |
|
|
0.26 |
|
|
0.63 |
|
|
0.02 |
|
|
0.01 |
|
|
2.13 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Drivers of
adjusted operating results** |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Upstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower) natural
gas production |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
0.30 |
|
| Higher (lower) crude
oil production |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
(0.10 |
) |
| Higher (lower) realized
natural gas prices, after hedging |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
(0.01 |
) |
| Higher (lower) realized
crude oil prices, after hedging |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
0.02 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Midstream and
All Other Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower)
operating revenues |
|
|
(0.02 |
) |
|
0.07 |
|
|
|
|
|
|
(0.01 |
) |
|
0.04 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Downstream
Margins*** |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Impact of higher usage
and weather |
|
|
|
|
|
|
0.03 |
|
|
|
|
|
|
0.03 |
|
| System modernization
tracker revenues |
|
|
|
|
|
|
0.02 |
|
|
|
|
|
|
0.02 |
|
| Lower (higher) refund
provision on tax rate change |
|
|
|
|
|
|
(0.03 |
) |
|
|
|
|
|
(0.03 |
) |
| Higher (lower)
marketing margins |
|
|
|
|
|
|
|
|
(0.02 |
) |
|
|
|
(0.02 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Lower (higher) lease
operating and transportation expenses |
(0.04 |
) |
|
|
|
|
|
|
|
|
|
|
|
(0.04 |
) |
| Lower (higher)
operating expenses |
(0.02 |
) |
|
(0.06 |
) |
|
(0.02 |
) |
|
(0.01 |
) |
|
|
|
|
|
(0.11 |
) |
| Lower (higher)
property, franchise and other taxes |
(0.02 |
) |
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
(0.03 |
) |
| Lower (higher)
depreciation / depletion |
(0.10 |
) |
|
(0.01 |
) |
|
(0.01 |
) |
|
|
|
|
|
|
|
(0.12 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Higher) lower other
deductions |
|
|
|
|
|
|
0.02 |
|
|
|
|
|
|
0.02 |
|
| (Higher) lower interest
expense |
— |
|
|
0.01 |
|
|
— |
|
|
0.01 |
|
|
— |
|
|
0.01 |
|
|
0.03 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income
Taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Impact of tax rate
reduction due to 2017 Tax Reform |
0.03 |
|
|
0.02 |
|
|
0.01 |
|
|
0.03 |
|
|
— |
|
|
— |
|
|
0.09 |
|
| Lower (higher) income
tax expense / effective tax rate |
(0.04 |
) |
|
0.02 |
|
|
(0.01 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(0.03 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| All other /
rounding |
— |
|
|
(0.01 |
) |
|
— |
|
|
0.01 |
|
|
— |
|
|
0.01 |
|
|
0.01 |
|
| Six months
ended March 31, 2019 adjusted operating results per
share |
0.68 |
|
|
0.49 |
|
|
0.30 |
|
|
0.71 |
|
|
— |
|
|
0.02 |
|
|
2.20 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Remeasurement of
deferred taxes under 2017 Tax Reform |
0.01 |
|
|
|
|
0.01 |
|
|
|
|
— |
|
|
0.04 |
|
|
0.06 |
|
| Unrealized gain (loss)
on hedge ineffectiveness |
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
| Tax impact of
unrealized gain (loss) on hedge ineffectiveness |
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
| Unrealized gain (loss)
on other investments |
|
|
|
|
|
|
|
|
|
|
(0.03 |
) |
|
(0.03 |
) |
| Tax impact of
unrealized gain (loss) on other investments |
|
|
|
|
|
|
|
|
|
|
0.01 |
|
|
0.01 |
|
| Rounding |
|
|
|
|
|
|
|
|
|
|
(0.01 |
) |
|
(0.01 |
) |
| Six months
ended March 31, 2019 GAAP earnings per share |
$ |
0.69 |
|
|
$ |
0.49 |
|
|
$ |
0.31 |
|
|
$ |
0.71 |
|
|
$ |
— |
|
|
$ |
0.03 |
|
|
$ |
2.23 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| * Amounts do not
reflect intercompany eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
|
| **
Operating results have been calculated using the 24.5% federal
statutory rate effective for the 2018 fiscal year. The impact of
the change to a 21% federal statutory rate for the 2019 fiscal year
is broken out separately under the caption "Income Taxes". |
| ***
Downstream margin defined as operating revenues less purchased gas
expense. |
| NATIONAL FUEL GAS COMPANY |
| AND SUBSIDIARIES |
| |
|
|
|
|
|
|
|
|
| (Thousands of Dollars,
except per share amounts) |
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
|
| |
March 31, |
|
March 31, |
|
| |
(Unaudited) |
|
(Unaudited) |
|
| SUMMARY OF
OPERATIONS |
2019 |
|
2018 |
|
2019 |
|
2018 |
|
| Operating
Revenues: |
|
|
|
|
|
|
|
|
| Utility
and Energy Marketing Revenues |
$ |
357,654 |
|
|
$ |
339,422 |
|
|
$ |
629,747 |
|
|
$ |
565,147 |
|
|
|
Exploration and Production and Other Revenues |
146,467 |
|
|
147,868 |
|
|
310,403 |
|
|
288,318 |
|
|
| Pipeline
and Storage and Gathering Revenues |
48,423 |
|
|
53,615 |
|
|
102,641 |
|
|
107,096 |
|
|
| |
552,544 |
|
|
540,905 |
|
|
1,042,791 |
|
|
960,561 |
|
|
| Operating
Expenses: |
|
|
|
|
|
|
|
|
| Purchased
Gas |
195,037 |
|
|
176,608 |
|
|
333,697 |
|
|
270,642 |
|
|
| Operation
and Maintenance: |
|
|
|
|
|
|
|
|
|
Utility and Energy Marketing |
48,559 |
|
|
46,708 |
|
|
92,475 |
|
|
90,789 |
|
|
|
Exploration and Production and Other |
40,141 |
|
|
39,127 |
|
|
72,936 |
|
|
74,209 |
|
|
|
Pipeline and Storage and Gathering |
27,249 |
|
|
22,916 |
|
|
52,182 |
|
|
43,227 |
|
|
| Property,
Franchise and Other Taxes |
22,535 |
|
|
22,802 |
|
|
46,540 |
|
|
43,650 |
|
|
|
Depreciation, Depletion and Amortization |
65,664 |
|
|
61,155 |
|
|
129,918 |
|
|
116,985 |
|
|
| |
399,185 |
|
|
369,316 |
|
|
727,748 |
|
|
639,502 |
|
|
| |
|
|
|
|
|
|
|
|
| Operating Income |
153,359 |
|
|
171,589 |
|
|
315,043 |
|
|
321,059 |
|
|
| |
|
|
|
|
|
|
|
|
| Other Income
(Expense): |
|
|
|
|
|
|
|
|
| Other
Income (Deductions) |
(5,919 |
) |
|
(13,092 |
) |
|
(15,521 |
) |
|
(16,594 |
) |
|
| Interest
Expense on Long-Term Debt |
(25,273 |
) |
|
(27,148 |
) |
|
(50,713 |
) |
|
(55,235 |
) |
|
| Other
Interest Expense |
(1,787 |
) |
|
(1,233 |
) |
|
(2,860 |
) |
|
(1,736 |
) |
|
| |
|
|
|
|
|
|
|
|
| Income Before Income
Taxes |
120,380 |
|
|
130,116 |
|
|
245,949 |
|
|
247,494 |
|
|
| |
|
|
|
|
|
|
|
|
| Income Tax Expense
(Benefit) |
29,785 |
|
|
38,269 |
|
|
52,693 |
|
|
(43,007 |
) |
|
| |
|
|
|
|
|
|
|
|
| Net Income Available
for Common Stock |
$ |
90,595 |
|
|
$ |
91,847 |
|
|
$ |
193,256 |
|
|
$ |
290,501 |
|
|
| |
|
|
|
|
|
|
|
|
| Earnings Per Common
Share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.05 |
|
|
$ |
1.07 |
|
|
$ |
2.24 |
|
|
$ |
3.39 |
|
|
|
Diluted |
$ |
1.04 |
|
|
$ |
1.06 |
|
|
$ |
2.23 |
|
|
$ |
3.37 |
|
|
| |
|
|
|
|
|
|
|
|
| Weighted
Average Common Shares: |
|
|
|
|
|
|
|
|
| Used in Basic
Calculation |
86,290,047 |
|
85,809,233 |
|
86,159,932 |
|
85,718,779 |
|
| Used in Diluted
Calculation |
86,767,673 |
|
86,323,636 |
|
86,738,809 |
|
86,318,892 |
|
| NATIONAL FUEL GAS COMPANY |
| AND SUBSIDIARIES |
| CONSOLIDATED BALANCE SHEETS |
| (Unaudited) |
| |
|
| |
March 31, |
|
September 30, |
|
(Thousands of Dollars) |
|
2019 |
|
|
2018 |
| |
|
|
|
|
ASSETS |
|
|
|
| Property, Plant and
Equipment |
$ |
10,788,894 |
|
|
$ |
10,439,839 |
|
| Less -
Accumulated Depreciation, Depletion and Amortization |
|
5,573,020 |
|
|
|
5,462,696 |
|
|
Net Property, Plant and Equipment |
|
5,215,874 |
|
|
|
4,977,143 |
|
| |
|
|
|
| Current Assets: |
|
|
|
| Cash and Temporary Cash
Investments |
|
100,643 |
|
|
|
229,606 |
|
| Hedging Collateral
Deposits |
|
1,983 |
|
|
|
3,441 |
|
| Receivables - Net |
|
235,586 |
|
|
|
141,498 |
|
| Unbilled Revenue |
|
60,196 |
|
|
|
24,182 |
|
| Gas Stored
Underground |
|
6,848 |
|
|
|
37,813 |
|
| Materials and Supplies
- at average cost |
|
37,695 |
|
|
|
35,823 |
|
| Unrecovered Purchased
Gas Costs |
|
5,760 |
|
|
|
4,204 |
|
| Other Current
Assets |
|
57,586 |
|
|
|
68,024 |
|
|
Total Current Assets |
|
506,297 |
|
|
|
544,591 |
|
| |
|
|
|
| Other Assets: |
|
|
|
| Recoverable Future
Taxes |
|
113,441 |
|
|
|
115,460 |
|
| Unamortized Debt
Expense |
|
14,922 |
|
|
|
15,975 |
|
| Other Regulatory
Assets |
|
108,193 |
|
|
|
112,918 |
|
| Deferred Charges |
|
39,634 |
|
|
|
40,025 |
|
| Other Investments |
|
135,022 |
|
|
|
132,545 |
|
| Goodwill |
|
5,476 |
|
|
|
5,476 |
|
| Prepaid Post-Retirement
Benefit Costs |
|
86,802 |
|
|
|
82,733 |
|
| Fair Value of
Derivative Financial Instruments |
|
11,130 |
|
|
|
9,518 |
|
|
Other |
|
42,184 |
|
|
|
102 |
|
|
Total Other Assets |
|
556,804 |
|
|
|
514,752 |
|
| Total
Assets |
$ |
6,278,975 |
|
|
$ |
6,036,486 |
|
| |
|
|
|
| CAPITALIZATION
AND LIABILITIES |
|
|
|
| Capitalization: |
|
|
|
| Comprehensive
Shareholders' Equity |
|
|
|
| Common Stock, $1 Par
Value Authorized - 200,000,000 Shares; Issued and |
|
|
|
| Outstanding -
86,300,675 Shares and 85,956,814 Shares, Respectively |
$ |
86,301 |
|
|
$ |
85,957 |
|
| Paid in Capital |
|
821,837 |
|
|
|
820,223 |
|
| Earnings Reinvested in
the Business |
|
1,236,657 |
|
|
|
1,098,900 |
|
|
Accumulated Other Comprehensive Loss |
|
(54,286 |
) |
|
|
(67,750 |
) |
| Total Comprehensive
Shareholders' Equity |
|
2,090,509 |
|
|
|
1,937,330 |
|
| Long-Term
Debt, Net of Current Portion and Unamortized Discount and Debt
Issuance Costs |
|
2,132,488 |
|
|
|
2,131,365 |
|
|
Total Capitalization |
|
4,222,997 |
|
|
|
4,068,695 |
|
| |
|
|
|
| Current and Accrued
Liabilities: |
|
|
|
| Notes Payable to Banks
and Commercial Paper |
|
— |
|
|
|
— |
|
| Current Portion of
Long-Term Debt |
|
— |
|
|
|
— |
|
| Accounts Payable |
|
141,851 |
|
|
|
160,031 |
|
| Amounts Payable to
Customers |
|
15,463 |
|
|
|
3,394 |
|
| Dividends Payable |
|
36,678 |
|
|
|
36,532 |
|
| Interest Payable on
Long-Term Debt |
|
18,508 |
|
|
|
19,062 |
|
| Customer Advances |
|
433 |
|
|
|
13,609 |
|
| Customer Security
Deposits |
|
18,519 |
|
|
|
25,703 |
|
| Other Accruals and
Current Liabilities |
|
195,797 |
|
|
|
132,693 |
|
| Fair
Value of Derivative Financial Instruments |
|
5,749 |
|
|
|
49,036 |
|
|
Total Current and Accrued Liabilities |
|
432,998 |
|
|
|
440,060 |
|
| |
|
|
|
| Deferred Credits: |
|
|
|
| Deferred Income
Taxes |
|
618,850 |
|
|
|
512,686 |
|
| Taxes Refundable to
Customers |
|
365,380 |
|
|
|
370,628 |
|
| Cost of Removal
Regulatory Liability |
|
215,864 |
|
|
|
212,311 |
|
| Other Regulatory
Liabilities |
|
156,722 |
|
|
|
146,743 |
|
| Pension and Other
Post-Retirement Liabilities |
|
49,213 |
|
|
|
66,103 |
|
| Asset Retirement
Obligations |
|
104,138 |
|
|
|
108,235 |
|
| Other
Deferred Credits |
|
112,813 |
|
|
|
111,025 |
|
|
Total Deferred Credits |
|
1,622,980 |
|
|
|
1,527,731 |
|
|
Commitments and Contingencies |
|
— |
|
|
|
— |
|
| Total
Capitalization and Liabilities |
$ |
6,278,975 |
|
|
$ |
6,036,486 |
|
| NATIONAL FUEL GAS COMPANY |
| AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF CASH
FLOWS |
| (Unaudited) |
| |
|
Six Months Ended |
| |
|
March 31, |
|
(Thousands of Dollars) |
|
2019 |
|
2018 |
| |
|
|
|
|
| Operating
Activities: |
|
|
|
|
| Net Income Available
for Common Stock |
|
$ |
193,256 |
|
|
$ |
290,501 |
|
| Adjustments to
Reconcile Net Income to Net CashProvided by Operating
Activities: |
|
|
|
|
|
Depreciation, Depletion and Amortization |
|
129,918 |
|
|
116,985 |
|
| Deferred
Income Taxes |
|
90,468 |
|
|
(62,459 |
) |
|
Stock-Based Compensation |
|
10,731 |
|
|
7,862 |
|
|
Other |
|
7,997 |
|
|
8,052 |
|
| Change
in: |
|
|
|
|
|
Receivables and Unbilled Revenue |
|
(130,377 |
) |
|
(123,954 |
) |
| Gas
Stored Underground and Materials and Supplies |
|
29,093 |
|
|
28,004 |
|
|
Unrecovered Purchased Gas Costs |
|
(1,556 |
) |
|
4,197 |
|
| Other
Current Assets |
|
10,438 |
|
|
(8,819 |
) |
| Accounts
Payable |
|
10,226 |
|
|
10,838 |
|
| Amounts
Payable to Customers |
|
12,069 |
|
|
12,083 |
|
| Customer
Advances |
|
(13,176 |
) |
|
(15,547 |
) |
| Customer
Security Deposits |
|
(7,184 |
) |
|
(1,399 |
) |
| Other
Accruals and Current Liabilities |
|
48,028 |
|
|
37,646 |
|
| Other
Assets |
|
(38,686 |
) |
|
(9,541 |
) |
|
Other Liabilities |
|
(10,410 |
) |
|
(5,767 |
) |
|
Net Cash Provided by Operating Activities |
|
$ |
340,835 |
|
|
$ |
288,682 |
|
| |
|
|
|
|
| Investing
Activities: |
|
|
|
|
| Capital
Expenditures |
|
$ |
(386,579 |
) |
|
$ |
(261,720 |
) |
| Net Proceeds from Sale
of Oil and Gas Producing Properties |
|
— |
|
|
17,310 |
|
|
Other |
|
(2,616 |
) |
|
5,355 |
|
|
Net Cash Used in Investing Activities |
|
$ |
(389,195 |
) |
|
$ |
(239,055 |
) |
| |
|
|
|
|
| Financing
Activities: |
|
|
|
|
| Reduction of Long-Term
Debt |
|
$ |
— |
|
|
$ |
(307,047 |
) |
| Dividends Paid on
Common Stock |
|
(73,197 |
) |
|
(71,091 |
) |
| Net
Proceeds from Issuance (Repurchase) of Common Stock |
|
(8,864 |
) |
|
2,891 |
|
|
Net Cash Used in Financing Activities |
|
$ |
(82,061 |
) |
|
$ |
(375,247 |
) |
| |
|
|
|
|
| Net Decrease in Cash,
Cash Equivalents, and Restricted Cash |
|
(130,421 |
) |
|
(325,620 |
) |
| Cash,
Cash Equivalents, and Restricted Cash at Beginning of Period |
|
233,047 |
|
|
557,271 |
|
| Cash,
Cash Equivalents, and Restricted Cash at March 31 |
|
$ |
102,626 |
|
|
$ |
231,651 |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| NATIONAL FUEL GAS COMPANY |
| AND SUBSIDIARIES |
| |
|
|
|
|
|
|
|
|
|
| SEGMENT OPERATING RESULTS AND
STATISTICS |
| (UNAUDITED) |
| |
|
|
|
|
|
|
|
|
|
| UPSTREAM BUSINESS |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| (Thousands of Dollars,
except per share amounts) |
March 31, |
|
March 31, |
| EXPLORATION AND
PRODUCTION SEGMENT |
2019 |
|
2018 |
|
Variance |
|
2019 |
2018 |
Variance |
| Total Operating
Revenues |
$ |
146,102 |
|
|
$ |
146,411 |
|
|
$ |
(309 |
) |
|
$ |
308,978 |
|
$ |
285,552 |
|
$ |
23,426 |
|
| |
|
|
|
|
|
|
|
|
|
| Operating
Expenses: |
|
|
|
|
|
|
|
|
|
| Operation
and Maintenance: |
|
|
|
|
|
|
|
|
|
| General
and Administrative Expense |
17,113 |
|
|
16,748 |
|
|
365 |
|
|
32,312 |
|
30,350 |
|
1,962 |
|
| Lease
Operating and Transportation Expense |
45,941 |
|
|
43,808 |
|
|
2,133 |
|
|
88,503 |
|
83,455 |
|
5,048 |
|
| All Other
Operation and Maintenance Expense |
2,900 |
|
|
2,919 |
|
|
(19 |
) |
|
5,252 |
|
5,454 |
|
(202 |
) |
| Property,
Franchise and Other Taxes |
3,310 |
|
|
3,873 |
|
|
(563 |
) |
|
9,673 |
|
7,443 |
|
2,230 |
|
|
Depreciation, Depletion and Amortization |
35,888 |
|
|
31,986 |
|
|
3,902 |
|
|
70,588 |
|
59,411 |
|
11,177 |
|
| |
105,152 |
|
|
99,334 |
|
|
5,818 |
|
|
206,328 |
|
186,113 |
|
20,215 |
|
| |
|
|
|
|
|
|
|
|
|
| Operating Income |
40,950 |
|
|
47,077 |
|
(6,127 |
) |
|
102,650 |
|
99,439 |
3,211 |
|
| |
|
|
|
|
|
|
|
|
|
| Other Income
(Expense): |
|
|
|
|
|
|
|
|
|
| Other
Income (Deductions) |
275 |
|
|
12 |
|
|
263 |
|
|
554 |
|
15 |
|
539 |
|
| Other
Interest Expense |
(13,548 |
) |
|
(13,380 |
) |
|
(168 |
) |
|
(26,711 |
) |
(26,753 |
) |
42 |
|
| |
|
|
|
|
|
|
|
|
|
| Income Before Income
Taxes |
27,677 |
|
|
33,709 |
|
|
(6,032 |
) |
|
76,493 |
|
72,701 |
|
3,792 |
|
| Income Tax Expense
(Benefit) |
5,804 |
|
|
7,172 |
|
|
(1,368 |
) |
|
16,406 |
|
(60,534 |
) |
76,940 |
|
| Net Income |
$ |
21,873 |
|
|
$ |
26,537 |
|
|
$ |
(4,664 |
) |
|
$ |
60,087 |
|
$ |
133,235 |
|
$ |
(73,148 |
) |
| |
|
|
|
|
|
|
|
|
|
| Net Income Per Share
(Diluted) |
$ |
0.25 |
|
|
$ |
0.31 |
|
|
$ |
(0.06 |
) |
|
$ |
0.69 |
|
$ |
1.54 |
|
$ |
(0.85 |
) |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| NATIONAL FUEL GAS COMPANY |
| AND SUBSIDIARIES |
| |
|
|
|
|
|
|
|
|
|
| SEGMENT OPERATING RESULTS AND
STATISTICS |
| (UNAUDITED) |
| |
|
|
|
|
|
|
|
|
|
| MIDSTREAM BUSINESSES |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| (Thousands of Dollars,
except per share amounts) |
March 31, |
|
March 31, |
| PIPELINE AND
STORAGE SEGMENT |
2019 |
|
2018 |
|
Variance |
|
2019 |
2018 |
Variance |
| Revenues from External
Customers |
$ |
48,421 |
|
|
$ |
53,714 |
|
|
$ |
(5,293 |
) |
|
$ |
102,639 |
|
$ |
107,025 |
|
$ |
(4,386 |
) |
| Intersegment
Revenues |
23,918 |
|
|
23,044 |
|
|
874 |
|
|
46,769 |
|
45,028 |
|
1,741 |
|
| Total Operating
Revenues |
72,339 |
|
|
76,758 |
|
|
(4,419 |
) |
|
149,408 |
|
152,053 |
|
(2,645 |
) |
| |
|
|
|
|
|
|
|
|
|
| Operating
Expenses: |
|
|
|
|
|
|
|
|
|
| Purchased Gas |
510 |
|
|
55 |
|
|
455 |
|
|
813 |
|
161 |
|
652 |
|
| Operation and
Maintenance |
22,907 |
|
|
19,782 |
|
|
3,125 |
|
|
44,540 |
|
37,454 |
|
7,086 |
|
| Property, Franchise and
Other Taxes |
7,641 |
|
|
7,135 |
|
|
506 |
|
|
14,949 |
|
14,235 |
|
714 |
|
| Depreciation, Depletion
and Amortization |
11,293 |
|
|
10,838 |
|
|
455 |
|
|
22,407 |
|
21,434 |
|
973 |
|
| |
42,351 |
|
|
37,810 |
|
|
4,541 |
|
|
82,709 |
|
73,284 |
|
9,425 |
|
| |
|
|
|
|
|
|
|
|
|
| Operating Income |
29,988 |
|
|
38,948 |
|
|
(8,960 |
) |
|
66,699 |
|
78,769 |
|
(12,070 |
) |
| |
|
|
|
|
|
|
|
|
|
| Other Income
(Expense): |
|
|
|
|
|
|
|
|
|
| Other
Income (Deductions) |
1,973 |
|
|
1,173 |
|
|
800 |
|
|
3,899 |
|
2,819 |
|
1,080 |
|
| Interest
Expense |
(7,500 |
) |
|
(7,875 |
) |
|
375 |
|
|
(14,786 |
) |
(15,752 |
) |
966 |
|
| |
|
|
|
|
|
|
|
|
|
| Income Before Income
Taxes |
24,461 |
|
|
32,246 |
|
|
(7,785 |
) |
|
55,812 |
|
65,836 |
|
(10,024 |
) |
| Income Tax Expense |
6,712 |
|
|
9,522 |
|
|
(2,810 |
) |
|
12,961 |
|
4,650 |
|
8,311 |
|
| Net Income |
$ |
17,749 |
|
|
$ |
22,724 |
|
|
$ |
(4,975 |
) |
|
$ |
42,851 |
|
$ |
61,186 |
|
$ |
(18,335 |
) |
| |
|
|
|
|
|
|
|
|
|
| Net Income Per Share
(Diluted) |
$ |
0.20 |
|
|
$ |
0.26 |
|
|
$ |
(0.06 |
) |
|
$ |
0.49 |
|
$ |
0.71 |
|
$ |
(0.22 |
) |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
March 31, |
|
March 31, |
| GATHERING
SEGMENT |
2019 |
|
2018 |
|
Variance |
|
2019 |
2018 |
Variance |
| Revenues from External
Customers |
$ |
2 |
|
|
$ |
(99 |
) |
|
$ |
101 |
|
|
$ |
2 |
|
$ |
71 |
|
$ |
(69 |
) |
| Intersegment
Revenues |
29,366 |
|
|
27,832 |
|
|
1,534 |
|
|
59,056 |
|
51,497 |
|
7,559 |
|
| Total Operating
Revenues |
29,368 |
|
|
27,733 |
|
|
1,635 |
|
|
59,058 |
|
51,568 |
|
7,490 |
|
| |
|
|
|
|
|
|
|
|
|
| Operating
Expenses: |
|
|
|
|
|
|
|
|
|
| Operation
and Maintenance |
4,752 |
|
|
3,490 |
|
|
1,262 |
|
|
8,464 |
|
6,474 |
|
1,990 |
|
| Property,
Franchise and Other Taxes |
18 |
|
|
23 |
|
|
(5 |
) |
|
48 |
|
61 |
|
(13 |
) |
|
Depreciation, Depletion and Amortization |
4,673 |
|
|
4,227 |
|
|
446 |
|
|
9,351 |
|
8,315 |
|
1,036 |
|
| |
9,443 |
|
|
7,740 |
|
|
1,703 |
|
|
17,863 |
|
14,850 |
|
3,013 |
|
| |
|
|
|
|
|
|
|
|
|
| Operating Income |
19,925 |
|
|
19,993 |
|
|
(68 |
) |
|
41,195 |
|
36,718 |
|
4,477 |
|
| |
|
|
|
|
|
|
|
|
|
| Other Income
(Expense): |
|
|
|
|
|
|
|
|
|
| Other
Income (Deductions) |
189 |
|
|
337 |
|
|
(148 |
) |
|
232 |
|
651 |
|
(419 |
) |
| Interest
Expense |
(2,345 |
) |
|
(2,508 |
) |
|
163 |
|
|
(4,723 |
) |
(4,847 |
) |
124 |
|
| |
|
|
|
|
|
|
|
|
|
| Income Before Income
Taxes |
17,769 |
|
|
17,822 |
|
|
(53 |
) |
|
36,704 |
|
32,522 |
|
4,182 |
|
| Income Tax Expense
(Benefit) |
5,079 |
|
|
6,052 |
|
|
(973 |
) |
|
9,832 |
|
(24,647 |
) |
34,479 |
|
| Net Income |
$ |
12,690 |
|
|
$ |
11,770 |
|
|
$ |
920 |
|
|
$ |
26,872 |
|
$ |
57,169 |
|
$ |
(30,297 |
) |
| |
|
|
|
|
|
|
|
|
|
| Net Income Per Share
(Diluted) |
$ |
0.15 |
|
|
$ |
0.14 |
|
|
$ |
0.01 |
|
|
$ |
0.31 |
|
$ |
0.66 |
|
$ |
(0.35 |
) |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| NATIONAL FUEL GAS COMPANY |
| AND SUBSIDIARIES |
| |
|
|
|
|
|
|
|
|
|
| SEGMENT OPERATING RESULTS AND
STATISTICS |
| (UNAUDITED) |
| |
|
|
|
|
|
|
|
|
|
| DOWNSTREAM BUSINESSES |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| (Thousands of Dollars,
except per share amounts) |
March 31, |
|
March 31, |
| UTILITY
SEGMENT |
2019 |
|
2018 |
|
Variance |
|
2019 |
2018 |
Variance |
| Revenues from External
Customers |
$ |
298,636 |
|
|
$ |
283,778 |
|
|
$ |
14,858 |
|
|
$ |
518,647 |
|
$ |
470,867 |
|
$ |
47,780 |
|
| Intersegment
Revenues |
4,394 |
|
|
5,700 |
|
|
(1,306 |
) |
|
7,040 |
|
7,882 |
|
(842 |
) |
| Total Operating
Revenues |
303,030 |
|
|
289,478 |
|
|
13,552 |
|
|
525,687 |
|
478,749 |
|
46,938 |
|
| |
|
|
|
|
|
|
|
|
|
| Operating
Expenses: |
|
|
|
|
|
|
|
|
|
| Purchased
Gas |
165,235 |
|
|
151,493 |
|
|
13,742 |
|
|
277,115 |
|
233,418 |
|
43,697 |
|
| Operation
and Maintenance |
47,795 |
|
|
45,885 |
|
|
1,910 |
|
|
90,950 |
|
89,203 |
|
1,747 |
|
| Property,
Franchise and Other Taxes |
11,312 |
|
|
11,509 |
|
|
(197 |
) |
|
21,365 |
|
21,388 |
|
(23 |
) |
|
Depreciation, Depletion and Amortization |
13,365 |
|
|
13,340 |
|
|
25 |
|
|
26,656 |
|
26,665 |
|
(9 |
) |
| |
237,707 |
|
|
222,227 |
|
|
15,480 |
|
|
416,086 |
|
370,674 |
|
45,412 |
|
| |
|
|
|
|
|
|
|
|
|
| Operating Income |
65,323 |
|
|
67,251 |
|
|
(1,928 |
) |
|
109,601 |
|
108,075 |
|
1,526 |
|
| |
|
|
|
|
|
|
|
|
|
| Other Income
(Expense): |
|
|
|
|
|
|
|
|
|
| Other
Income (Deductions) |
(11,618 |
) |
|
(13,930 |
) |
|
2,312 |
|
|
(17,834 |
) |
(20,620 |
) |
2,786 |
|
| Interest
Expense |
(6,263 |
) |
|
(6,857 |
) |
|
594 |
|
|
(12,157 |
) |
(13,695 |
) |
1,538 |
|
| |
|
|
|
|
|
|
|
|
|
| Income Before Income
Taxes |
47,442 |
|
|
46,464 |
|
|
978 |
|
|
79,610 |
|
73,760 |
|
5,850 |
|
| Income Tax Expense |
11,853 |
|
|
13,104 |
|
|
(1,251 |
) |
|
18,373 |
|
19,407 |
|
(1,034 |
) |
| Net Income |
$ |
35,589 |
|
|
$ |
33,360 |
|
|
$ |
2,229 |
|
|
$ |
61,237 |
|
$ |
54,353 |
|
$ |
6,884 |
|
| |
|
|
|
|
|
|
|
|
|
| Net Income Per Share
(Diluted) |
$ |
0.41 |
|
|
$ |
0.39 |
|
|
$ |
0.02 |
|
|
$ |
0.71 |
|
$ |
0.63 |
|
$ |
0.08 |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
March 31, |
|
March 31, |
| ENERGY
MARKETING SEGMENT |
2019 |
|
2018 |
|
Variance |
|
2019 |
2018 |
Variance |
| Revenues from External
Customers |
$ |
59,018 |
|
|
$ |
55,644 |
|
|
$ |
3,374 |
|
|
$ |
111,100 |
|
$ |
94,280 |
|
$ |
16,820 |
|
| Intersegment
Revenues |
43 |
|
|
(51 |
) |
|
94 |
|
|
375 |
|
76 |
|
299 |
|
| Total Operating
Revenues |
59,061 |
|
|
55,593 |
|
|
3,468 |
|
|
111,475 |
|
94,356 |
|
17,119 |
|
| |
|
|
|
|
|
|
|
|
|
| Operating
Expenses: |
|
|
|
|
|
|
|
|
|
| Purchased
Gas |
56,820 |
|
|
52,980 |
|
|
3,840 |
|
|
108,337 |
|
88,423 |
|
19,914 |
|
| Operation
and Maintenance |
1,621 |
|
|
1,565 |
|
|
56 |
|
|
3,239 |
|
3,079 |
|
160 |
|
|
Depreciation, Depletion and Amortization |
71 |
|
|
68 |
|
|
3 |
|
|
141 |
|
138 |
|
3 |
|
| |
58,512 |
|
|
54,613 |
|
|
3,899 |
|
|
111,717 |
|
91,640 |
|
20,077 |
|
| |
|
|
|
|
|
|
|
|
|
| Operating Income
(Loss) |
549 |
|
|
980 |
|
|
(431 |
) |
|
(242 |
) |
2,716 |
|
(2,958 |
) |
| |
|
|
|
|
|
|
|
|
|
| Other Income
(Expense): |
|
|
|
|
|
|
|
|
|
| Other
Income (Deductions) |
198 |
|
|
59 |
|
|
139 |
|
|
245 |
|
72 |
|
173 |
|
| Interest
Expense |
(8 |
) |
|
— |
|
|
(8 |
) |
|
(13 |
) |
(12 |
) |
(1 |
) |
| |
|
|
|
|
|
|
|
|
|
| Income (Loss) Before
Income Taxes |
739 |
|
|
1,039 |
|
|
(300 |
) |
|
(10 |
) |
2,776 |
|
(2,786 |
) |
| Income Tax Expense
(Benefit) |
195 |
|
|
461 |
|
|
(266 |
) |
|
(253 |
) |
1,152 |
|
(1,405 |
) |
| Net Income |
$ |
544 |
|
|
$ |
578 |
|
|
$ |
(34 |
) |
|
$ |
243 |
|
$ |
1,624 |
|
$ |
(1,381 |
) |
| |
|
|
|
|
|
|
|
|
|
| Net Income Per Share
(Diluted) |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
0.02 |
|
$ |
(0.02 |
) |
| |
|
|
|
|
|
|
|
|
|
| NATIONAL FUEL GAS COMPANY |
| AND SUBSIDIARIES |
| |
|
|
|
|
|
|
|
|
|
| SEGMENT OPERATING RESULTS AND
STATISTICS |
| (UNAUDITED) |
| |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| (Thousands of Dollars,
except per share amounts) |
March 31, |
|
March 31, |
| ALL
OTHER |
2019 |
|
2018 |
|
Variance |
|
2019 |
2018 |
Variance |
| Total Operating
Revenues |
$ |
310 |
|
|
$ |
1,232 |
|
|
$ |
(922 |
) |
|
$ |
1,316 |
|
$ |
2,328 |
|
$ |
(1,012 |
) |
| Operating
Expenses: |
|
|
|
|
|
|
|
|
|
| Operation
and Maintenance |
323 |
|
|
357 |
|
|
(34 |
) |
|
583 |
|
671 |
|
(88 |
) |
| Property,
Franchise and Other Taxes |
134 |
|
|
145 |
|
|
(11 |
) |
|
270 |
|
288 |
|
(18 |
) |
|
Depreciation, Depletion and Amortization |
183 |
|
|
506 |
|
|
(323 |
) |
|
395 |
|
645 |
|
(250 |
) |
| |
640 |
|
|
1,008 |
|
|
(368 |
) |
|
1,248 |
|
1,604 |
|
(356 |
) |
| |
|
|
|
|
|
|
|
|
|
| Operating Income
(Loss) |
(330 |
) |
|
224 |
|
|
(554 |
) |
|
68 |
|
724 |
|
(656 |
) |
| |
|
|
|
|
|
|
|
|
|
| Other Income
(Expense): |
|
|
|
|
|
|
|
|
|
| Other
Income (Deductions) |
151 |
|
|
81 |
|
|
70 |
|
|
288 |
|
143 |
|
145 |
|
| |
|
|
|
|
|
|
|
|
|
| Income (Loss) Before
Income Taxes |
(179 |
) |
|
305 |
|
|
(484 |
) |
|
356 |
|
867 |
|
(511 |
) |
| Income Tax Expense
(Benefit) |
(51 |
) |
|
98 |
|
|
(149 |
) |
|
100 |
|
1,378 |
|
(1,278 |
) |
| Net Income (Loss) |
$ |
(128 |
) |
|
$ |
207 |
|
|
$ |
(335 |
) |
|
$ |
256 |
|
$ |
(511 |
) |
$ |
767 |
|
| |
|
|
|
|
|
|
|
|
|
| Net Income (Loss) Per
Share (Diluted) |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.01 |
|
$ |
— |
|
$ |
0.01 |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
March 31, |
|
March 31, |
|
CORPORATE |
2019 |
|
2018 |
|
Variance |
|
2019 |
2018 |
Variance |
| Revenues from External
Customers |
$ |
55 |
|
|
$ |
225 |
|
|
$ |
(170 |
) |
|
$ |
109 |
|
$ |
438 |
|
$ |
(329 |
) |
| Intersegment
Revenues |
1,165 |
|
|
999 |
|
|
166 |
|
|
2,329 |
|
1,999 |
|
330 |
|
| Total Operating
Revenues |
1,220 |
|
|
1,224 |
|
|
(4 |
) |
|
2,438 |
|
2,437 |
|
1 |
|
| Operating
Expenses: |
|
|
|
|
|
|
|
|
|
| Operation
and Maintenance |
3,955 |
|
|
3,801 |
|
|
154 |
|
|
6,751 |
|
7,207 |
|
(456 |
) |
| Property,
Franchise and Other Taxes |
120 |
|
|
117 |
|
|
3 |
|
|
235 |
|
235 |
|
— |
|
|
Depreciation, Depletion and Amortization |
191 |
|
|
190 |
|
|
1 |
|
|
380 |
|
377 |
|
3 |
|
| |
4,266 |
|
|
4,108 |
|
|
158 |
|
|
7,366 |
|
7,819 |
|
(453 |
) |
| |
|
|
|
|
|
|
|
|
|
| Operating Loss |
(3,046 |
) |
|
(2,884 |
) |
|
(162 |
) |
|
(4,928 |
) |
(5,382 |
) |
454 |
|
| |
|
|
|
|
|
|
|
|
|
| Other Income
(Expense): |
|
|
|
|
|
|
|
|
|
| Other
Income (Deductions) |
32,114 |
|
|
30,122 |
|
|
1,992 |
|
|
54,992 |
|
62,591 |
|
(7,599 |
) |
| Interest
Expense on Long-Term Debt |
(25,273 |
) |
|
(27,148 |
) |
|
1,875 |
|
|
(50,713 |
) |
(55,235 |
) |
4,522 |
|
| Other
Interest Expense |
(1,324 |
) |
|
(1,559 |
) |
|
235 |
|
|
(2,367 |
) |
(2,942 |
) |
575 |
|
| |
|
|
|
|
|
|
|
|
|
| Income (Loss) before
Income Taxes |
2,471 |
|
|
(1,469 |
) |
|
3,940 |
|
|
(3,016 |
) |
(968 |
) |
(2,048 |
) |
| Income Tax Expense
(Benefit) |
193 |
|
|
1,860 |
|
|
(1,667 |
) |
|
(4,726 |
) |
15,587 |
|
(20,313 |
) |
| Net Income (Loss) |
$ |
2,278 |
|
|
$ |
(3,329 |
) |
|
$ |
5,607 |
|
|
$ |
1,710 |
|
$ |
(16,555 |
) |
$ |
18,265 |
|
| |
|
|
|
|
|
|
|
|
|
| Net Income (Loss) Per
Share (Diluted) |
$ |
0.02 |
|
|
$ |
(0.05 |
) |
|
$ |
0.07 |
|
|
$ |
0.02 |
|
$ |
(0.19 |
) |
$ |
0.21 |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
March 31, |
|
March 31, |
| INTERSEGMENT
ELIMINATIONS |
2019 |
|
2018 |
|
Variance |
|
2019 |
2018 |
Variance |
| Intersegment
Revenues |
$ |
(58,886 |
) |
|
$ |
(57,524 |
) |
|
$ |
(1,362 |
) |
|
$ |
(115,569 |
) |
$ |
(106,482 |
) |
$ |
(9,087 |
) |
| Operating
Expenses: |
|
|
|
|
|
|
|
|
|
| Purchased
Gas |
(27,528 |
) |
|
(27,920 |
) |
|
392 |
|
|
(52,568 |
) |
(51,360 |
) |
(1,208 |
) |
| Operation
and Maintenance |
(31,358 |
) |
|
(29,604 |
) |
|
(1,754 |
) |
|
(63,001 |
) |
(55,122 |
) |
(7,879 |
) |
| |
(58,886 |
) |
|
(57,524 |
) |
|
(1,362 |
) |
|
(115,569 |
) |
(106,482 |
) |
(9,087 |
) |
| |
|
|
|
|
|
|
|
|
|
| Operating Income |
— |
|
|
— |
|
|
— |
|
|
— |
|
— |
|
— |
|
| |
|
|
|
|
|
|
|
|
|
| Other Income
(Expense): |
|
|
|
|
|
|
|
|
|
| Other
Income (Deductions) |
(29,201 |
) |
|
(30,946 |
) |
|
1,745 |
|
|
(57,897 |
) |
(62,265 |
) |
4,368 |
|
| Interest
Expense |
29,201 |
|
|
30,946 |
|
|
(1,745 |
) |
|
57,897 |
|
62,265 |
|
(4,368 |
) |
| Net Income |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
| Net Income Per Share
(Diluted) |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| NATIONAL FUEL GAS COMPANY |
| AND SUBSIDIARIES |
| |
|
|
|
|
|
|
|
|
|
|
|
| SEGMENT INFORMATION (Continued) |
| (Thousands of Dollars) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Six Months Ended |
| |
March 31, |
|
March 31, |
| |
(Unaudited) |
|
(Unaudited) |
| |
|
|
|
|
Increase |
|
|
|
|
|
Increase |
| |
2019 |
|
2018 |
|
(Decrease) |
|
2019 |
|
2018 |
|
(Decrease) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Capital
Expenditures: |
|
|
|
|
|
|
|
|
|
|
|
| Exploration and
Production |
$ |
142,571 |
|
(1) |
$ |
84,559 |
|
(3) |
$ |
58,012 |
|
|
$ |
262,786 |
|
(1)(2) |
$ |
159,285 |
|
(3)(4) |
$ |
103,501 |
|
| Pipeline and
Storage |
22,674 |
|
(1) |
15,167 |
|
(3) |
7,507 |
|
|
52,638 |
|
(1)(2) |
37,440 |
|
(3)(4) |
15,198 |
|
| Gathering |
12,680 |
|
(1) |
19,352 |
|
(3) |
(6,672 |
) |
|
21,470 |
|
(1)(2) |
32,283 |
|
(3)(4) |
(10,813 |
) |
| Utility |
19,735 |
|
(1) |
15,755 |
|
(3) |
3,980 |
|
|
35,657 |
|
(1)(2) |
32,290 |
|
(3)(4) |
3,367 |
|
| Energy Marketing |
22 |
|
|
4 |
|
|
18 |
|
|
41 |
|
|
22 |
|
|
19 |
|
| Total Reportable
Segments |
197,682 |
|
|
134,837 |
|
|
62,845 |
|
|
372,592 |
|
|
261,320 |
|
|
111,272 |
|
| All Other |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
(1 |
) |
| Corporate |
85 |
|
|
15 |
|
|
70 |
|
|
103 |
|
|
44 |
|
|
59 |
|
| Eliminations |
— |
|
|
(19,922 |
) |
|
19,922 |
|
|
— |
|
|
(19,922 |
) |
|
19,922 |
|
| Total
Capital Expenditures |
$ |
197,767 |
|
|
$ |
114,930 |
|
|
$ |
82,837 |
|
|
$ |
372,695 |
|
|
$ |
241,443 |
|
|
$ |
131,252 |
|
(1) Capital
expenditures for the quarter and six months ended March 31, 2019,
include accounts payable and accrued liabilities related to capital
expenditures of $53.4 million, $10.7 million, $7.4 million, and
$3.4 million in the Exploration and Production segment, Pipeline
and Storage segment, Gathering segment and Utility segment,
respectively. These amounts have been excluded from the
Consolidated Statement of Cash Flows at March 31, 2019, since they
represent non-cash investing activities at that date.
(2) Capital
expenditures for the six months ended March 31, 2019, exclude
capital expenditures of $51.3 million, $21.9 million, $6.1 million
and $9.5 million in the Exploration and Production segment,
Pipeline and Storage segment, Gathering segment and Utility
segment, respectively. These amounts were in accounts payable
and accrued liabilities at September 30, 2018 and paid during the
six months ended March 31, 2019. These amounts were excluded
from the Consolidated Statement of Cash Flows at September 30,
2018, since they represented non-cash investing activities at that
date. These amounts have been included in the Consolidated
Statement of Cash Flows at March 31, 2019.
(3) Capital
expenditures for the quarter and six months ended March 31, 2018,
include accounts payable and accrued liabilities related to capital
expenditures of $38.8 million, $9.0 million, $1.6 million, and $2.5
million in the Exploration and Production segment, Pipeline and
Storage segment, Gathering segment and Utility segment,
respectively. These amounts have been excluded from the
Consolidated Statement of Cash Flows at March 31, 2018, since they
represent non-cash investing activities at that date.
(4) Capital
expenditures for the six months ended March 31, 2018, exclude
capital expenditures of $36.5 million, $25.1 million, $3.9 million
and $6.7 million in the Exploration and Production segment,
Pipeline and Storage segment, Gathering segment and Utility
segment, respectively. These amounts were in accounts payable
and accrued liabilities at September 30, 2017 and paid during the
six months ended March 31, 2018. These amounts were excluded
from the Consolidated Statement of Cash Flows at September 30,
2017, since they represented non-cash investing activities at that
date. These amounts have been included in the Consolidated
Statement of Cash Flows at March 31, 2018.
| |
|
|
|
|
|
|
|
|
|
| DEGREE
DAYS |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Percent Colder |
| |
|
|
|
|
|
|
(Warmer) Than: |
| Three Months Ended
March 31 |
Normal |
|
2019 |
|
2018 |
|
Normal (1) |
|
Last Year (1) |
| |
|
|
|
|
|
|
|
|
|
| Buffalo,
NY |
3,290 |
|
3,372 |
|
3,208 |
|
2.5 |
|
5.1 |
| Erie,
PA |
3,108 |
|
3,096 |
|
3,075 |
|
(0.4) |
|
0.7 |
| |
|
|
|
|
|
|
|
|
|
| Six Months Ended March
31 |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Buffalo,
NY |
5,543 |
|
5,697 |
|
5,435 |
|
2.8 |
|
4.8 |
| Erie,
PA |
5,152 |
|
5,126 |
|
5,104 |
|
(0.5) |
|
0.4 |
| |
|
|
|
|
|
|
|
|
|
(1) Percents compare actual
2019 degree days to normal degree days and actual 2019 degree days
to actual 2018 degree days.
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| NATIONAL FUEL GAS COMPANY |
| AND SUBSIDIARIES |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| EXPLORATION AND PRODUCTION
INFORMATION |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
March 31, |
|
March 31, |
| |
|
|
|
|
|
Increase |
|
|
|
|
|
Increase |
| |
|
2019 |
|
2018 |
|
(Decrease) |
|
2019 |
|
2018 |
|
(Decrease) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Gas
Production/Prices: |
|
|
|
|
|
|
|
|
|
|
|
|
| Production (MMcf) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Appalachia |
|
44,883 |
|
|
41,403 |
|
|
3,480 |
|
|
90,188 |
|
|
76,817 |
|
|
13,371 |
|
| West
Coast |
|
487 |
|
|
675 |
|
|
(188 |
) |
|
989 |
|
|
1,370 |
|
|
(381 |
) |
| Total Production |
|
45,370 |
|
|
42,078 |
|
|
3,292 |
|
|
91,177 |
|
|
78,187 |
|
|
12,990 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Average Prices (Per
Mcf) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Appalachia |
|
$ |
2.65 |
|
|
$ |
2.46 |
|
|
$ |
0.19 |
|
|
$ |
2.79 |
|
|
$ |
2.41 |
|
|
$ |
0.38 |
|
| West
Coast |
|
6.06 |
|
|
4.40 |
|
|
1.66 |
|
|
6.40 |
|
|
4.70 |
|
|
1.70 |
|
| Weighted
Average |
|
2.69 |
|
|
2.49 |
|
|
0.20 |
|
|
2.83 |
|
|
2.45 |
|
|
0.38 |
|
| Weighted
Average after Hedging |
|
2.58 |
|
|
2.52 |
|
|
0.06 |
|
|
2.60 |
|
|
2.61 |
|
|
(0.01 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Oil
Production/Prices: |
|
|
|
|
|
|
|
|
|
|
|
|
| Production (Thousands
of Barrels) |
|
|
|
|
|
|
|
|
|
|
|
|
| Appalachia |
|
1 |
|
|
1 |
|
|
— |
|
|
2 |
|
|
2 |
|
|
— |
|
| West Coast |
|
563 |
|
|
662 |
|
|
(99 |
) |
|
1,134 |
|
|
1,334 |
|
|
(200 |
) |
| Total Production |
|
564 |
|
|
663 |
|
|
(99 |
) |
|
1,136 |
|
|
1,336 |
|
|
(200 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Average Prices (Per
Barrel) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Appalachia |
|
$ |
47.54 |
|
|
$ |
58.54 |
|
|
$ |
(11.00 |
) |
|
$ |
55.93 |
|
|
$ |
49.82 |
|
|
$ |
6.11 |
|
| West
Coast |
|
61.85 |
|
|
65.39 |
|
|
(3.54 |
) |
|
63.79 |
|
|
61.61 |
|
|
2.18 |
|
| Weighted
Average |
|
61.82 |
|
|
65.39 |
|
|
(3.57 |
) |
|
63.78 |
|
|
61.60 |
|
|
2.18 |
|
| Weighted
Average after Hedging |
|
61.01 |
|
|
58.31 |
|
|
2.70 |
|
|
61.36 |
|
|
59.05 |
|
|
2.31 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Total Production
(MMcfe) |
|
48,754 |
|
|
46,056 |
|
|
2,698 |
|
|
97,993 |
|
|
86,203 |
|
|
11,790 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Selected
Operating Performance Statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
| General &
Administrative Expense per Mcfe (1) |
|
$ |
0.35 |
|
|
$ |
0.36 |
|
|
$ |
(0.01 |
) |
|
$ |
0.33 |
|
|
$ |
0.35 |
|
|
$ |
(0.02 |
) |
| Lease Operating and
Transportation Expense per Mcfe (1)(2) |
|
$ |
0.94 |
|
|
$ |
0.95 |
|
|
$ |
(0.01 |
) |
|
$ |
0.90 |
|
|
$ |
0.97 |
|
|
$ |
(0.07 |
) |
| Depreciation, Depletion
& Amortization per Mcfe (1) |
|
$ |
0.74 |
|
|
$ |
0.69 |
|
|
$ |
0.05 |
|
|
$ |
0.72 |
|
|
$ |
0.69 |
|
|
$ |
0.03 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Refer to
page 16 for the General and Administrative Expense, Lease Operating
and Transportation Expense and Depreciation, Depletion, and
Amortization Expense for the Exploration and Production
segment.
(2) Amounts
include transportation expense of $0.56 and $0.54 per Mcfe for the
three months ended March 31, 2019 and March 31, 2018, respectively.
Amounts include transportation expense of $0.55 and $0.54 per Mcfe
for the six months ended March 31, 2019 and March 31, 2018,
respectively.
| |
| NATIONAL FUEL GAS COMPANY |
| AND SUBSIDIARIES |
| |
|
|
|
|
|
|
| EXPLORATION AND PRODUCTION
INFORMATION |
| |
|
Hedging Summary for Remaining Six Months of Fiscal
2019 |
Volume |
|
|
Average Hedge
Price |
| Oil Swaps |
|
|
|
|
|
|
|
Brent |
|
372,000 |
|
BBL |
|
$ |
63.52 / BBL |
|
NYMEX |
|
534,000 |
|
BBL |
|
$ |
53.42 / BBL |
|
Total |
|
906,000 |
|
BBL |
|
$ |
57.57 /
BBL |
| |
|
|
|
|
|
|
| Gas Swaps |
|
|
|
|
|
|
|
NYMEX |
|
40,080,000 |
|
MMBTU |
|
$ |
2.93 / MMBTU |
| DAWN |
|
3,600,000 |
|
MMBTU |
|
$ |
3.00 / MMBTU |
| Fixed Price Physical
Sales |
|
37,356,436 |
|
MMBTU |
|
$ |
2.61 / MMBTU |
|
Total |
|
81,036,436 |
|
MMBTU |
|
$ |
2.78 /
MMBTU |
| |
|
|
|
|
|
|
| Hedging Summary
for Fiscal 2020 |
|
Volume |
|
|
Average Hedge
Price |
| Oil Swaps |
|
|
|
|
|
|
|
Brent |
|
1,128,000 |
|
BBL |
|
$ |
64.26 / BBL |
|
NYMEX |
|
324,000 |
|
BBL |
|
$ |
50.52 / BBL |
|
Total |
|
1,452,000 |
|
BBL |
|
$ |
61.20 /
BBL |
| |
|
|
|
|
|
|
| Gas Swaps |
|
|
|
|
|
|
|
NYMEX |
|
40,990,000 |
|
MMBTU |
|
$ |
2.92 / MMBTU |
| DAWN |
|
7,200,000 |
|
MMBTU |
|
$ |
3.00 / MMBTU |
| Fixed Price Physical
Sales |
|
45,816,742 |
|
MMBTU |
|
$ |
2.35 / MMBTU |
|
Total |
|
94,006,742 |
|
MMBTU |
|
$ |
2.64 /
MMBTU |
| |
|
|
|
|
|
|
| Hedging Summary
for Fiscal 2021 |
|
Volume |
|
|
Average Hedge
Price |
| Oil Swaps |
|
|
|
|
|
|
|
Brent |
|
576,000 |
|
BBL |
|
$ |
64.48 / BBL |
|
NYMEX |
|
156,000 |
|
BBL |
|
$ |
51.00 / BBL |
|
Total |
|
732,000 |
|
BBL |
|
$ |
61.61 /
BBL |
| |
|
|
|
|
|
|
| Gas Swaps |
|
|
|
|
|
|
|
NYMEX |
|
6,790,000 |
|
MMBTU |
|
$ |
2.95 / MMBTU |
| DAWN |
|
600,000 |
|
MMBTU |
|
$ |
3.00 / MMBTU |
| Fixed Price Physical
Sales |
|
41,567,229 |
|
MMBTU |
|
$ |
2.22 / MMBTU |
|
Total |
|
48,957,229 |
|
MMBTU |
|
$ |
2.33 /
MMBTU |
| |
|
|
|
|
|
|
| Hedging Summary
for Fiscal 2022 |
|
Volume |
|
|
Average Hedge
Price |
| Oil Swaps |
|
|
|
|
|
|
|
Brent |
|
300,000 |
|
BBL |
|
$ |
60.07 / BBL |
|
NYMEX |
|
156,000 |
|
BBL |
|
$ |
51.00 / BBL |
|
Total |
|
456,000 |
|
BBL |
|
$ |
56.97 /
BBL |
| |
|
|
|
|
|
|
| Fixed Price Physical
Sales |
|
40,683,056 |
|
MMBTU |
|
$ |
2.23 / MMBTU |
| |
|
|
|
|
|
|
| Hedging Summary
for Fiscal 2023 |
|
Volume |
|
|
Average Hedge
Price |
| Fixed Price Physical
Sales |
|
37,225,983 |
|
MMBTU |
|
$ |
2.26 / MMBTU |
| |
|
|
|
|
|
|
| Hedging Summary
for Fiscal 2024 |
|
Volume |
|
|
Average Hedge
Price |
| Fixed Price Physical
Sales |
|
21,074,815 |
|
MMBTU |
|
$ |
2.25 / MMBTU |
| |
|
|
|
|
|
|
| Hedging Summary
for Fiscal 2025 |
|
Volume |
|
|
Average Hedge
Price |
| Fixed Price Physical
Sales |
|
2,293,200 |
|
MMBTU |
|
$ |
2.18 / MMBTU |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| NATIONAL FUEL GAS COMPANY |
| AND SUBSIDIARIES |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pipeline & Storage Throughput - (millions of cubic feet
- MMcf) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
March 31, |
|
March 31, |
| |
|
|
|
|
|
Increase |
|
|
|
|
|
Increase |
| |
|
2019 |
|
2018 |
|
(Decrease) |
|
2019 |
|
2018 |
|
(Decrease) |
| Firm Transportation -
Affiliated |
|
50,967 |
|
|
47,551 |
|
|
3,416 |
|
|
86,668 |
|
|
82,392 |
|
|
4,276 |
|
| Firm Transportation -
Non-Affiliated |
|
148,653 |
|
|
152,128 |
|
|
(3,475 |
) |
|
304,855 |
|
|
323,989 |
|
|
(19,134 |
) |
| Interruptible
Transportation |
|
750 |
|
|
1,165 |
|
|
(415 |
) |
|
1,665 |
|
|
2,046 |
|
|
(381 |
) |
| |
|
200,370 |
|
|
200,844 |
|
|
(474 |
) |
|
393,188 |
|
|
408,427 |
|
|
(15,239 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Gathering
Volume - (MMcf) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
March 31, |
|
March 31, |
| |
|
|
|
|
|
Increase |
|
|
|
|
|
Increase |
| |
|
2019 |
|
2018 |
|
(Decrease) |
|
2019 |
|
2018 |
|
(Decrease) |
| Gathered Volume -
Affiliated |
|
54,157 |
|
|
51,374 |
|
|
2,783 |
|
|
108,845 |
|
|
94,536 |
|
|
14,309 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Utility
Throughput - (MMcf) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
March 31, |
|
March 31, |
| |
|
|
|
|
|
Increase |
|
|
|
|
|
Increase |
| |
|
2019 |
|
2018 |
|
(Decrease) |
|
2019 |
|
2018 |
|
(Decrease) |
| Retail Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential Sales |
|
30,906 |
|
|
28,568 |
|
|
2,338 |
|
|
50,686 |
|
|
46,415 |
|
|
4,271 |
|
|
Commercial Sales |
|
4,712 |
|
|
4,500 |
|
|
212 |
|
|
7,558 |
|
|
7,096 |
|
|
462 |
|
|
Industrial Sales |
|
284 |
|
|
287 |
|
|
(3 |
) |
|
488 |
|
|
431 |
|
|
57 |
|
| |
|
35,902 |
|
|
33,355 |
|
|
2,547 |
|
|
58,732 |
|
|
53,942 |
|
|
4,790 |
|
| Off-System Sales |
|
— |
|
|
119 |
|
|
(119 |
) |
|
— |
|
|
141 |
|
|
(141 |
) |
| Transportation |
|
28,928 |
|
|
29,624 |
|
|
(696 |
) |
|
51,198 |
|
|
51,051 |
|
|
147 |
|
| |
|
64,830 |
|
|
63,098 |
|
|
1,732 |
|
|
109,930 |
|
|
105,134 |
|
|
4,796 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Energy
Marketing Volume |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
March 31, |
|
March 31, |
| |
|
|
|
|
|
Increase |
|
|
|
|
|
Increase |
| |
|
2019 |
|
2018 |
|
(Decrease) |
|
2019 |
|
2018 |
|
(Decrease) |
| Natural Gas (MMcf) |
|
16,191 |
|
|
16,112 |
|
|
79 |
|
|
28,610 |
|
|
28,091 |
|
|
519 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS
COMPANYAND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
In addition to financial measures calculated in
accordance with generally accepted accounting principles (GAAP),
this press release contains information regarding Adjusted
Operating Results and Adjusted EBITDA, which are non-GAAP financial
measures. The Company believes that these non-GAAP financial
measures are useful to investors because they provide an
alternative method for assessing the Company's ongoing operating
results and for comparing the Company’s financial performance to
other companies. The Company's management uses these non-GAAP
financial measures for the same purpose, and for planning and
forecasting purposes. The presentation of non-GAAP financial
measures is not meant to be a substitute for financial measures in
accordance with GAAP.
Management defines Adjusted Operating Results as
reported GAAP earnings before items impacting comparability.
The following table reconciles National Fuel's reported GAAP
earnings to Adjusted Operating Results for the three and six months
ended March 31, 2019 and 2018:
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
March 31, |
|
March 31, |
| (in thousands except
per share amounts) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
| Reported GAAP
Earnings |
|
$ |
90,595 |
|
|
$ |
91,847 |
|
|
$ |
193,256 |
|
|
$ |
290,501 |
|
|
Items impacting comparability |
|
|
|
|
|
|
|
|
|
Remeasurement of deferred income taxes under 2017 Tax Reform |
|
— |
|
|
4,000 |
|
|
(5,000 |
) |
|
(107,000 |
) |
|
Unrealized (gain) loss on hedge ineffectiveness (E&P) |
|
6,742 |
|
|
(335 |
) |
|
237 |
|
|
98 |
|
| Tax
impact of unrealized (gain) loss on hedge ineffectiveness |
|
(1,416 |
) |
|
82 |
|
|
(50 |
) |
|
(24 |
) |
|
Unrealized (gain) loss on other investments (Corporate/All
Other) |
|
(3,831 |
) |
|
— |
|
|
2,516 |
|
|
— |
|
| Tax
impact of unrealized (gain) loss on other investments |
|
805 |
|
|
— |
|
|
(528 |
) |
|
— |
|
| Adjusted
Operating Results |
|
$ |
92,895 |
|
|
$ |
95,594 |
|
|
$ |
190,431 |
|
|
$ |
183,575 |
|
| |
|
|
|
|
|
|
|
|
| Reported GAAP
Earnings per share |
|
$ |
1.04 |
|
|
$ |
1.06 |
|
|
$ |
2.23 |
|
|
$ |
3.37 |
|
|
Items impacting comparability |
|
|
|
|
|
|
|
|
|
Remeasurement of deferred income taxes under 2017 Tax Reform |
|
— |
|
|
0.05 |
|
|
(0.06 |
) |
|
(1.24 |
) |
|
Unrealized (gain) loss on hedge ineffectiveness (E&P) |
|
0.08 |
|
|
— |
|
|
— |
|
|
— |
|
| Tax
impact of unrealized (gain) loss on hedge ineffectiveness |
|
(0.02 |
) |
|
— |
|
|
— |
|
|
— |
|
|
Unrealized (gain) loss on other investments (Corporate/All
Other) |
|
(0.04 |
) |
|
— |
|
|
0.03 |
|
|
— |
|
| Tax
impact of unrealized (gain) loss on other investments |
|
0.01 |
|
|
— |
|
|
(0.01 |
) |
|
— |
|
|
Rounding |
|
— |
|
|
— |
|
|
0.01 |
|
|
— |
|
| Adjusted
Operating Results per share |
|
$ |
1.07 |
|
|
$ |
1.11 |
|
|
$ |
2.20 |
|
|
$ |
2.13 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management defines Adjusted EBITDA as reported
GAAP earnings before the following items: interest expense,
income taxes, depreciation, depletion and amortization, other
income and deductions, impairments, and other items reflected in
operating income that impact comparability. The following
tables reconcile National Fuel's reported GAAP earnings to Adjusted
EBITDA for the three and six months ended March 31, 2019 and
2018:
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
March 31, |
|
March 31, |
| |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
| (in thousands) |
|
|
|
|
|
|
|
|
| Reported GAAP
Earnings |
|
$ |
90,595 |
|
|
$ |
91,847 |
|
|
$ |
193,256 |
|
|
$ |
290,501 |
|
|
Depreciation, Depletion and Amortization |
|
65,664 |
|
|
61,155 |
|
|
129,918 |
|
|
116,985 |
|
| Other
(Income) Deductions |
|
5,919 |
|
|
13,092 |
|
|
15,521 |
|
|
16,594 |
|
| Interest
Expense |
|
27,060 |
|
|
28,381 |
|
|
53,573 |
|
|
56,971 |
|
| Income
Taxes |
|
29,785 |
|
|
38,269 |
|
|
52,693 |
|
|
(43,007 |
) |
|
Unrealized (Gain) Loss on Hedge Ineffectiveness |
|
6,742 |
|
|
(335 |
) |
|
237 |
|
|
98 |
|
| Adjusted
EBITDA |
|
$ |
225,765 |
|
|
$ |
232,409 |
|
|
$ |
445,198 |
|
|
$ |
438,142 |
|
| |
|
|
|
|
|
|
|
|
| Adjusted EBITDA
by Segment |
|
|
|
|
|
|
|
|
| Pipeline and Storage
Adjusted EBITDA |
|
$ |
41,281 |
|
|
$ |
49,786 |
|
|
$ |
89,106 |
|
|
$ |
100,203 |
|
| Gathering Adjusted
EBITDA |
|
24,598 |
|
|
24,220 |
|
|
50,546 |
|
|
45,033 |
|
| Total Midstream
Businesses Adjusted EBITDA |
|
65,879 |
|
|
74,006 |
|
|
139,652 |
|
|
145,236 |
|
| Exploration and
Production Adjusted EBITDA |
|
83,580 |
|
|
78,728 |
|
|
173,475 |
|
|
158,948 |
|
| Utility Adjusted
EBITDA |
|
78,688 |
|
|
80,591 |
|
|
136,257 |
|
|
134,740 |
|
| Energy Marketing
Adjusted EBITDA |
|
620 |
|
|
1,048 |
|
|
(101 |
) |
|
2,854 |
|
| Corporate and All Other
Adjusted EBITDA |
|
(3,002 |
) |
|
(1,964 |
) |
|
(4,085 |
) |
|
(3,636 |
) |
| Total Adjusted
EBITDA |
|
$ |
225,765 |
|
|
$ |
232,409 |
|
|
$ |
445,198 |
|
|
$ |
438,142 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS
COMPANYAND SUBSIDIARIESNON-GAAP
FINANCIAL MEASURES SEGMENT ADJUSTED
EBITDA
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
March 31, |
|
March 31, |
| (in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
| Exploration and
Production Segment |
|
|
|
|
|
|
|
|
| Reported GAAP
Earnings |
|
$ |
21,873 |
|
|
$ |
26,537 |
|
|
$ |
60,087 |
|
|
$ |
133,235 |
|
|
Depreciation, Depletion and Amortization |
|
35,888 |
|
|
31,986 |
|
|
70,588 |
|
|
59,411 |
|
| Other
(Income) Deductions |
|
(275 |
) |
|
(12 |
) |
|
(554 |
) |
|
(15 |
) |
| Interest
Expense |
|
13,548 |
|
|
13,380 |
|
|
26,711 |
|
|
26,753 |
|
| Income
Taxes |
|
5,804 |
|
|
7,172 |
|
|
16,406 |
|
|
(60,534 |
) |
|
Unrealized (Gain) Loss on Hedge Ineffectiveness |
|
6,742 |
|
|
(335 |
) |
|
237 |
|
|
98 |
|
| Adjusted EBITDA |
|
$ |
83,580 |
|
|
$ |
78,728 |
|
|
$ |
173,475 |
|
|
$ |
158,948 |
|
| |
|
|
|
|
|
|
|
|
| Pipeline and
Storage Segment |
|
|
|
|
|
|
|
|
| Reported GAAP
Earnings |
|
$ |
17,749 |
|
|
$ |
22,724 |
|
|
$ |
42,851 |
|
|
$ |
61,186 |
|
|
Depreciation, Depletion and Amortization |
|
11,293 |
|
|
10,838 |
|
|
22,407 |
|
|
21,434 |
|
| Other
(Income) Deductions |
|
(1,973 |
) |
|
(1,173 |
) |
|
(3,899 |
) |
|
(2,819 |
) |
| Interest
Expense |
|
7,500 |
|
|
7,875 |
|
|
14,786 |
|
|
15,752 |
|
| Income
Taxes |
|
6,712 |
|
|
9,522 |
|
|
12,961 |
|
|
4,650 |
|
| Adjusted EBITDA |
|
$ |
41,281 |
|
|
$ |
49,786 |
|
|
$ |
89,106 |
|
|
$ |
100,203 |
|
| |
|
|
|
|
|
|
|
|
| Gathering
Segment |
|
|
|
|
|
|
|
|
| Reported GAAP
Earnings |
|
$ |
12,690 |
|
|
$ |
11,770 |
|
|
$ |
26,872 |
|
|
$ |
57,169 |
|
|
Depreciation, Depletion and Amortization |
|
4,673 |
|
|
4,227 |
|
|
9,351 |
|
|
8,315 |
|
| Other
(Income) Deductions |
|
(189 |
) |
|
(337 |
) |
|
(232 |
) |
|
(651 |
) |
| Interest
Expense |
|
2,345 |
|
|
2,508 |
|
|
4,723 |
|
|
4,847 |
|
| Income
Taxes |
|
5,079 |
|
|
6,052 |
|
|
9,832 |
|
|
(24,647 |
) |
| Adjusted EBITDA |
|
$ |
24,598 |
|
|
$ |
24,220 |
|
|
$ |
50,546 |
|
|
$ |
45,033 |
|
| |
|
|
|
|
|
|
|
|
| Utility
Segment |
|
|
|
|
|
|
|
|
| Reported GAAP
Earnings |
|
$ |
35,589 |
|
|
$ |
33,360 |
|
|
$ |
61,237 |
|
|
$ |
54,353 |
|
|
Depreciation, Depletion and Amortization |
|
13,365 |
|
|
13,340 |
|
|
26,656 |
|
|
26,665 |
|
| Other
(Income) Deductions |
|
11,618 |
|
|
13,930 |
|
|
17,834 |
|
|
20,620 |
|
| Interest
Expense |
|
6,263 |
|
|
6,857 |
|
|
12,157 |
|
|
13,695 |
|
| Income
Taxes |
|
11,853 |
|
|
13,104 |
|
|
18,373 |
|
|
19,407 |
|
| Adjusted EBITDA |
|
$ |
78,688 |
|
|
$ |
80,591 |
|
|
$ |
136,257 |
|
|
$ |
134,740 |
|
| |
|
|
|
|
|
|
|
|
| Energy
Marketing Segment |
|
|
|
|
|
|
|
|
| Reported GAAP
Earnings |
|
$ |
544 |
|
|
$ |
578 |
|
|
$ |
243 |
|
|
$ |
1,624 |
|
|
Depreciation, Depletion and Amortization |
|
71 |
|
|
68 |
|
|
141 |
|
|
138 |
|
| Other
(Income) Deductions |
|
(198 |
) |
|
(59 |
) |
|
(245 |
) |
|
(72 |
) |
| Interest
Expense |
|
8 |
|
|
— |
|
|
13 |
|
|
12 |
|
| Income
Taxes |
|
195 |
|
|
461 |
|
|
(253 |
) |
|
1,152 |
|
| Adjusted EBITDA |
|
$ |
620 |
|
|
$ |
1,048 |
|
|
$ |
(101 |
) |
|
$ |
2,854 |
|
| |
|
|
|
|
|
|
|
|
| Corporate and
All Other |
|
|
|
|
|
|
|
|
| Reported GAAP
Earnings |
|
$ |
2,150 |
|
|
$ |
(3,122 |
) |
|
$ |
1,966 |
|
|
$ |
(17,066 |
) |
|
Depreciation, Depletion and Amortization |
|
374 |
|
|
696 |
|
|
775 |
|
|
1,022 |
|
| Other
(Income) Deductions |
|
(3,064 |
) |
|
743 |
|
|
2,617 |
|
|
(469 |
) |
| Interest
Expense |
|
(2,604 |
) |
|
(2,239 |
) |
|
(4,817 |
) |
|
(4,088 |
) |
| Income
Taxes |
|
142 |
|
|
1,958 |
|
|
(4,626 |
) |
|
16,965 |
|
| Adjusted EBITDA |
|
$ |
(3,002 |
) |
|
$ |
(1,964 |
) |
|
$ |
(4,085 |
) |
|
$ |
(3,636 |
) |
Kenneth E. WebsterInvestor Relations 716-857-7067
David P. BauerTreasurer 716-857-7318
National Fuel Gas (NYSE:NFG)
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National Fuel Gas (NYSE:NFG)
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From Jul 2023 to Jul 2024
