National Fuel Gas Company (“National Fuel” or the “Company”)
(NYSE:NFG) today announced consolidated results for the first
quarter of its 2020 fiscal year.
FISCAL 2020 FIRST QUARTER
SUMMARY
- GAAP earnings of $86.6 million, or $1.00 per share, compared to
$102.7 million, or $1.18 per share, in the prior year
- Adjusted operating results of $87.4 million, or $1.01 per
share, compared to $97.5 million, or $1.12 per share, in the prior
year (see non-GAAP reconciliation below)
- Adjusted EBITDA of $222.9 million, an increase of $3.5 million
from $219.4 million in the prior year (non-GAAP reconciliation on
page 21)
- E&P segment net production of 58.4 Bcfe, an increase of 19%
from the prior year
- Average natural gas prices, after the impact of hedging, of
$2.32 per Mcf, down $0.29 per Mcf from the prior year
- Average oil prices, after the impact of hedging, of $62.92 per
Bbl, up $1.22 per Bbl from the prior year
- Gathering revenues of $34.8 million, an increase of $5.1
million, or 17%, on higher throughput from E&P segment
- Due to low natural gas prices, the Company is reducing drilling
activity; E&P segment completed the planned drop of a drilling
rig in Appalachia in January and intends to drop an additional
drilling rig in the summer of 2020
- Revising fiscal 2020 earnings guidance to a range of $2.95 to
$3.15 per share to reflect lower natural gas prices
| |
|
RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING
RESULTS |
| |
|
|
|
|
| |
|
Three Months Ended |
| |
|
December 31, |
| (in thousands except per share
amounts) |
|
2019 |
|
2018 |
|
Reported GAAP Earnings |
|
$ |
86,591 |
|
|
$ |
102,660 |
|
|
Items impacting comparability |
|
|
|
|
|
Remeasurement of deferred income taxes under 2017 Tax Reform |
|
— |
|
|
(5,000 |
) |
|
Mark-to-market adjustments due to hedge ineffectiveness
(E&P) |
|
— |
|
|
(6,505 |
) |
|
Tax impact of mark-to-market adjustments due to hedge
ineffectiveness |
|
— |
|
|
1,366 |
|
|
Unrealized loss on other investments (Corporate / All Other) |
|
1,019 |
|
|
6,347 |
|
|
Tax impact of unrealized loss on other investments |
|
(214 |
) |
|
(1,333 |
) |
| Adjusted Operating
Results |
|
$ |
87,396 |
|
|
$ |
97,535 |
|
| |
|
|
|
|
| Reported GAAP Earnings
per share |
|
$ |
1.00 |
|
|
$ |
1.18 |
|
|
Items impacting comparability |
|
|
|
|
|
Remeasurement of deferred income taxes under 2017 Tax Reform |
|
— |
|
|
(0.06 |
) |
|
Mark-to-market adjustments due to hedge ineffectiveness, net of tax
(E&P) |
|
— |
|
|
(0.06 |
) |
|
Unrealized loss on other investments, net of tax (Corporate / All
Other) |
|
0.01 |
|
|
0.06 |
|
| Adjusted Operating
Results per share |
|
$ |
1.01 |
|
|
$ |
1.12 |
|
| |
|
|
|
|
|
|
|
|
MANAGEMENT COMMENTS
David P. Bauer, President and Chief Executive
Officer of National Fuel Gas Company, stated: “Though low natural
gas prices weighed on National Fuel’s first quarter earnings, the
Company saw strong operational results across our integrated,
diversified business that position us well for future
success. At the Utility, our ongoing system modernization
program continues to enhance the safety and reliability of our
distribution system, while at the same time modestly growing rate
base and earnings. Our Pipeline and Storage business is
focused on the execution of our significant expansion
opportunities, including the Line N project placed into service in
November and the Empire North project, which is on schedule for a
late summer in-service date. Lastly, our Exploration and
Production business continues to successfully develop its assets in
Pennsylvania and California at a steady pace while navigating the
headwinds in the commodity markets.”
FISCAL 2020 GUIDANCE AND BUSINESS
UPDATE
National Fuel is revising its fiscal 2020
earnings guidance to reflect the results of the first quarter and
updated forecast assumptions and projections. The Company is
now projecting that earnings will be within the range of $2.95 to
$3.15 per share, or $3.05 per share at the midpoint of the
range. Substantially all of the decrease in expected earnings
is due to the decline in natural gas prices that has occurred since
the Company’s guidance was updated in November 2019, which is
expected to lower the price realizations on Seneca’s Appalachian
production. The Company’s other earnings guidance
assumptions, including production, remain largely unchanged from
the previous guidance.
The revised earnings guidance now assumes that
NYMEX natural gas prices will average $2.05 per MMBtu for the
remaining nine months of fiscal 2020, a decrease of $0.35 per MMBtu
from the $2.40 per MMBtu assumed in the previous guidance. The
Company is also lowering its Appalachian spot price forecast to
$1.70 per MMBtu for the remainder of the fiscal year. These price
assumptions are intended to reflect the current NYMEX forward
markets for natural gas and oil and consider the impact of local
sales point differentials. The Company currently has financial
hedges and fixed price physical firm sales contracts in place on
approximately 60% of Seneca’s remaining expected fiscal 2020
natural gas production that, on average, lock-in a price
realization after the cost of transportation of $2.28 per Mcf.
As planned, the Company dropped a rig in January
after completing its latest development pad in Tioga County, Pa. In
response to the sustained decline in NYMEX pricing and regional
pricing basis, the Company plans to further reduce its development
activity level in Appalachia by dropping down to a single drilling
rig during the summer of 2020 and deferring some completion
activity in the Eastern Development Area to fiscal 2021.
Coupled with lower service costs, Seneca’s reduced activity level
is expected to result in lower capital expenditures in fiscal 2020
and going forward. The Company now expects Exploration and
Production capital expenditures in fiscal 2020 to be in the range
of $375 to $410 million, at the midpoint a reduction of $42.5
million from the previous guidance. The reduction in activity level
is not expected to have a material impact on Seneca’s production in
fiscal 2020.
Mr. Bauer added: “Facing the continued
deterioration of natural gas prices, we are slowing down our
development pace in Appalachia and intend to move to a single-rig
drilling program this summer. This lower activity level
will allow us to reduce our capital expenditures at Seneca by
approximately $100 million from fiscal 2019 levels, maintaining our
focus on the balance sheet. Overall, we remain steadfast in
our commitment to the responsible development of our integrated
Appalachian asset base, with responsible capital allocation at the
heart of our financial decisions.”
Additional details on the Company's updated
forecast assumptions and business segment guidance for fiscal 2020
are outlined in the table on page 7.
DISCUSSION OF FIRST QUARTER RESULTS BY
SEGMENT
The following earnings discussion of each
operating segment for the quarter ended December 31, 2019, is
summarized in a tabular form on pages 8 and 9 of this report.
It may be helpful to refer to those tables while reviewing this
discussion. As of the quarter ended September 30, 2019, the
Company is no longer reporting the Energy Marketing operations as a
reportable segment. The Energy Marketing operations have been
included in the All Other category in the disclosures and tables
that follow below. Prior year segment information has been
restated to reflect this change in presentation.
Note that management defines Adjusted Operating
Results as reported GAAP earnings adjusted for items impacting
comparability, and Adjusted EBITDA as reported GAAP earnings before
the following items: interest expense, income taxes, depreciation,
depletion and amortization, other income and deductions,
impairments, and other items reflected in operating income that
impact comparability.
Upstream Business
Exploration and Production Segment
The Exploration and Production segment
operations are carried out by Seneca Resources Company, LLC
("Seneca"). Seneca explores for, develops and produces
natural gas and oil reserves, primarily in Pennsylvania and
California.
| |
Three Months Ended |
| |
December 31, |
| (in thousands) |
2019 |
|
2018 |
|
Variance |
| GAAP
Earnings |
$ |
23,977 |
|
|
$ |
38,214 |
|
|
$ |
(14,237 |
) |
| Remeasurement of deferred
taxes under 2017 Tax Reform |
— |
|
|
(990 |
) |
|
990 |
|
| Mark-to-market adjustments due
to hedge ineffectiveness, net of tax |
— |
|
|
(5,139 |
) |
|
5,139 |
|
| Adjusted Operating
Results |
$ |
23,977 |
|
|
$ |
32,085 |
|
|
$ |
(8,108 |
) |
| |
|
|
|
|
|
| Adjusted EBITDA |
$ |
92,100 |
|
|
$ |
89,896 |
|
|
$ |
2,204 |
|
Seneca’s first quarter GAAP earnings decreased
$14.2 million versus the prior year, which includes the net impact
of non-cash mark-to-market adjustments recorded in the prior year
relating to hedge ineffectiveness and the impact of a remeasurement
in Seneca’s deferred income taxes under 2017 Tax Reform that
lowered income tax expense and benefited earnings in the prior year
(see table above). Excluding these items, Seneca’s first
quarter earnings decreased $8.1 million as the positive impacts of
higher production and better realized crude oil prices were more
than offset by the negative impacts of lower realized natural gas
prices, higher operating expenses, higher interest expense, and a
higher effective tax rate.
Seneca produced 58.4 Bcfe during the first
quarter, an increase of 9.1 Bcfe, or 19%, from the prior year.
Natural gas production increased 9.0 Bcf, or 20%, due primarily to
production from new Marcellus and Utica wells completed and
connected to sales in Appalachia. Net production increased 3.8 Bcf
to 24.9 Bcf in Seneca’s Western Development Area and increased 5.2
Bcf to 29.3 Bcf in the Eastern Development Area during the first
quarter. Oil production for the first quarter increased 29,000 Bbls
from the prior year as new production continues to come online from
Seneca’s development of the Pioneer and 17N assets in the Midway
Sunset area of California.
Seneca's average realized natural gas price,
after the impact of hedging and transportation costs, was $2.32 per
Mcf, a decrease of $0.29 per Mcf from the prior year. This decline
was largely due to lower NYMEX prices and lower spot pricing at
local sales points in Pennsylvania. Seneca's average realized oil
price, after the impact of hedging, was $62.92 per Bbl, an increase
of $1.22 per Bbl over the prior year. The improvement in oil
price realizations was due primarily to stronger hedge prices on
Brent oil swaps that settled during the quarter when compared to
the prior year.
The $16.8 million increase in Seneca’s total
operating expenses was largely due to the higher production during
the quarter. Lease operating and transportation (“LOE”)
expense, which increased $8.2 million, includes the fees paid to
the Company’s Gathering segment for gathering and compression
services used to connect Seneca’s Marcellus and Utica production to
sales points along interstate pipelines. In addition to higher
production, the $9.4 million increase in depreciation, depletion
and amortization (“DD&A”) expense was also due to a higher
DD&A rate, which was driven by an increase in capitalized costs
in Seneca’s full cost pool. Other taxes decreased $1.7 million in
large part due to lower impact fees in Pennsylvania. The
Pennsylvania impact fee, which is assessed on a per well basis,
increases and decreases along with the changes in historical NYMEX
natural gas prices. Additionally, Seneca’s general and
administrative (“G&A”) costs have remained relatively flat as
it has increased production. On a unit of production basis, G&A
expenses during the quarter decreased $0.05 per Mcfe to $0.26 per
Mcfe.
The increase in Seneca’s effective tax rate,
excluding the impact of the prior year remeasurement of deferred
income taxes discussed above, was largely driven by the prior year
impact of the Enhanced Oil Recovery tax credit, which was not
available in the current year.
Midstream Businesses
Pipeline and Storage Segment
The Pipeline and Storage segment’s operations
are carried out by National Fuel Gas Supply Corporation (“Supply
Corporation”) and Empire Pipeline, Inc. (“Empire”). The
Pipeline and Storage segment provides natural gas transportation
and storage services to affiliated and non-affiliated companies
through an integrated system of pipelines and underground natural
gas storage fields in western New York and Pennsylvania.
| |
Three Months Ended |
| |
December 31, |
| (in thousands) |
2019 |
|
2018 |
|
Variance |
| GAAP
Earnings |
$ |
18,105 |
|
|
$ |
25,102 |
|
|
$ |
(6,997 |
) |
| |
|
|
|
|
|
| Adjusted EBITDA |
$ |
42,942 |
|
|
$ |
47,824 |
|
|
$ |
(4,882 |
) |
The Pipeline and Storage segment’s first quarter
GAAP earnings decreased $7.0 million versus the prior year as lower
operating revenues, higher property taxes, and the impact of a
higher effective income tax rate were only partially offset by
lower operation and maintenance (“O&M”) expenses. The
$4.8 million decrease in operating revenues was due largely to the
expiration of a significant firm transportation contract on the
Empire system in December 2018. Property, franchise and other
taxes increased $1.0 million due primarily to the scheduled phase
out of tax incentives in certain jurisdictions along the Empire
system. The increase in the effective income tax rate, which
lowered first quarter earnings by $2.5 million, was largely due to
differences in the book and tax treatment of stock
compensation. O&M expense decreased $0.7 million due
primarily to lower personnel expenses and lower compressor and
facility maintenance costs.
Gathering Segment
The Gathering segment’s operations are carried
out by National Fuel Gas Midstream Company, LLC’s limited liability
companies. The Gathering segment constructs, owns and operates
natural gas gathering pipelines and compression facilities in the
Appalachian region, which currently deliver Seneca’s gross
Appalachian production to the interstate pipeline system.
| |
Three Months Ended |
| |
December 31, |
| (in thousands) |
2019 |
|
2018 |
|
Variance |
| GAAP
Earnings |
$ |
15,944 |
|
|
$ |
14,183 |
|
|
$ |
1,761 |
|
| Remeasurement of deferred
taxes under 2017 Tax Reform |
— |
|
|
(500 |
) |
|
500 |
|
| Adjusted Operating
Results |
$ |
15,944 |
|
|
$ |
13,683 |
|
|
$ |
2,261 |
|
| |
|
|
|
|
|
| Adjusted EBITDA |
$ |
29,431 |
|
|
$ |
25,948 |
|
|
$ |
3,483 |
|
The Gathering segment’s first quarter GAAP
earnings increased $1.8 million versus the prior year, which
includes the impact of a remeasurement in the Gathering segment’s
deferred income taxes under 2017 Tax Reform that lowered income tax
expense and benefited earnings in the prior year (see table
above). Excluding this item, the Gathering segment’s earnings
increased $2.3 million. The increase was driven primarily by higher
operating revenues, which were partially offset by higher O&M
expense and a modest increase in DD&A expense. Operating
revenues increased $5.1 million, or 17%, due primarily to a 9.7 Bcf
increase in gathered volumes from Seneca’s Appalachian natural gas
production. The $1.6 million increase in O&M expense was due to
an increase in compressor station operating and preventative
maintenance activity during the quarter. The $0.5 million increase
in DD&A expense was due primarily to higher average plant
assets in-service versus the prior year.
Downstream Businesses
Utility Segment
The Utility segment operations are carried out
by National Fuel Gas Distribution Corporation (“Distribution”),
which sells or transports natural gas to customers located in
western New York and northwestern Pennsylvania.
| |
Three Months Ended |
| |
December 31, |
| (in thousands) |
2019 |
|
2018 |
|
Variance |
| GAAP
Earnings |
$ |
26,583 |
|
|
$ |
25,649 |
|
|
$ |
934 |
|
| |
|
|
|
|
|
| Adjusted EBITDA |
$ |
59,463 |
|
|
$ |
57,569 |
|
|
$ |
1,894 |
|
The Utility segment’s first quarter GAAP
earnings increased $0.9 million over the prior year as an increase
in customer margin (operating revenues less purchased gas sold) was
partially offset by the impact of a higher effective income tax
rate. The $1.3 million increase in customer margin was due
primarily to higher revenues earned through the Company’s system
modernization tracking mechanism and the positive impact of
adjustments related to regulatory rate and cost recovery mechanisms
subject to annual reconciliation. Warmer weather in the Utility
segment’s service territories was not a significant driver of
customer margin or earnings for the quarter. In New York, which
represented 73% of the Utility segment’s residential and commercial
customer throughput during the quarter, the impact of weather
variations on customer margin and earnings is largely mitigated by
that jurisdiction’s weather normalization clause (“WNC”). The
modest earnings impact of warmer weather in Pennsylvania, which
does not have a WNC, was partially offset by the impact of customer
growth in New York. The increase in the effective income tax
rate was largely due to differences in the book and tax treatment
of stock compensation.
Corporate and All Other
The Company’s operations that are included in
Corporate and All Other, which now include the Company’s energy
marketing business, generated combined earnings of $2.0 million in
the current year first quarter, which was a $2.5 million increase
over the combined loss of $0.5 million generated in the prior year
first quarter. The increase in earnings was driven primarily
by lower unrealized losses coupled with an increase in realized
gains on investment securities sold in the current year. These
positive items were partially offset by the impact of the prior
year remeasurement of deferred income taxes under 2017 Tax Reform
that lowered income tax expense.
EARNINGS TELECONFERENCE
The Company will host a conference call on
Friday, January 31, 2020, 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 “8154487”. 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 “8154487”. Both the webcast and a
telephonic replay will be available until the close of business on
Friday, February 7, 2020.
National Fuel is an integrated energy company
reporting financial results for four operating segments:
Exploration and Production, Pipeline and Storage, Gathering, and
Utility. Additional information about National Fuel is
available at www.nationalfuelgas.com.
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Analyst Contact: |
Kenneth E. Webster |
716-857-7067 |
|
Media Contact: |
Karen L. Merkel |
716-857-7654 |
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|
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: changes in the price of natural gas or oil; impairments
under the SEC’s full cost ceiling test for natural gas and oil
reserves; changes in laws, regulations or judicial interpretations
to which the Company is subject, including those involving
derivatives, taxes, safety, employment, climate change, other
environmental matters, real property, and exploration and
production activities such as hydraulic fracturing; delays or
changes in costs or plans with respect to Company projects or
related projects of other companies, including difficulties or
delays in obtaining necessary governmental approvals, permits or
orders or in obtaining the cooperation of interconnecting facility
operators; governmental/regulatory actions, initiatives and
proceedings, including those involving rate cases (which address,
among other things, target rates of return, rate design and
retained natural gas), environmental/safety requirements, affiliate
relationships, industry structure, and franchise renewal; changes
in price differentials between similar quantities of natural gas or
oil sold at different geographic locations, and the effect of such
changes on commodity production, revenues and demand for pipeline
transportation capacity to or from such locations; 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; 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; 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 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.
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NATIONAL FUEL GAS COMPANYAND
SUBSIDIARIES |
|
|
|
GUIDANCE SUMMARY |
| |
| As discussed on
page 2, the Company is revising its earnings guidance for fiscal
2020. Additional details on the Company's forecast
assumptions and business segment guidance are outlined in the table
below. |
| |
|
|
Updated FY 2020 Guidance |
|
Previous FY 2020 Guidance |
| Consolidated Earnings
per Share |
$2.95 to $3.15 |
|
$3.00 to $3.30 |
| Consolidated Effective
Tax Rate |
~ 25% |
|
~ 25% |
| |
|
|
|
| Capital
Expenditures (Millions) |
|
|
|
|
Exploration and Production |
$375 - $410 |
|
$415 - $455 |
|
Pipeline and Storage |
$180 - $215 |
|
$180 - $215 |
|
Gathering |
$50 - $60 |
|
$40 - $50 |
|
Utility |
$90 - $100 |
|
$90 - $100 |
|
Consolidated Capital Expenditures |
$695 - $785 |
|
$725 - $820 |
| |
|
|
|
| Exploration &
Production Segment Guidance |
|
|
|
| |
|
|
|
|
Commodity Price Assumptions |
|
|
|
|
NYMEX natural gas price |
$2.05 /MMBtu |
|
$2.40 /MMBtu |
|
Appalachian basin spot price (winter | summer) |
$1.70 /MMBtu | $1.70 /MMBtu |
|
$2.20 /MMBtu | $2.00 /MMBtu |
|
NYMEX (WTI) crude oil price |
$55.00 /Bbl |
|
$55.00 /Bbl |
|
California oil price premium (% of WTI) |
104% |
|
106% |
|
|
|
|
|
|
Production (Bcfe) |
|
|
|
|
East Division - Appalachia |
219 to 229 |
|
219 to 229 |
|
West Division - California |
~ 16 |
|
~ 16 |
|
Total Production |
235 to 245 |
|
235 to 245 |
|
|
|
|
|
|
E&P Operating Costs ($/Mcfe) |
|
|
|
|
LOE |
$0.85 - $0.89 |
|
$0.85 - $0.89 |
|
G&A |
$0.27 - $0.30 |
|
$0.27 - $0.30 |
|
DD&A |
$0.73 - $0.77 |
|
$0.73 - $0.77 |
| |
|
|
|
| Other Business Segment
Guidance (Millions) |
|
|
|
|
Gathering Segment Revenues |
$135 - $145 |
|
$135 - $145 |
|
Pipeline and Storage Segment Revenues |
$290 - $295 |
|
$290 - $295 |
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
|
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP
EARNINGS |
|
QUARTER ENDED DECEMBER 31, 2019 |
|
(Unaudited) |
| |
|
|
|
|
|
|
|
|
|
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|
| |
Upstream |
|
Midstream |
|
Downstream |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Exploration & |
|
Pipeline & |
|
|
|
|
|
Corporate / |
|
|
| (Thousands of Dollars) |
Production |
|
Storage |
|
Gathering |
|
Utility |
|
All Other |
|
Consolidated* |
| |
|
|
|
|
|
|
|
|
|
|
|
|
First quarter 2019 GAAP earnings |
$ |
38,214 |
|
|
$ |
25,102 |
|
|
$ |
14,183 |
|
|
$ |
25,649 |
|
|
$ |
(488 |
) |
|
$ |
102,660 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
| Remeasurement of deferred
taxes under 2017 Tax Reform |
(990 |
) |
|
|
|
(500 |
) |
|
|
|
(3,510 |
) |
|
(5,000 |
) |
| Mark-to-market adjustments due
to hedge ineffectiveness |
(6,505 |
) |
|
|
|
|
|
|
|
|
|
(6,505 |
) |
| Tax impact of mark-to-market
adjustments due to hedge ineffectiveness |
1,366 |
|
|
|
|
|
|
|
|
|
|
1,366 |
|
| Unrealized (gain) loss on
other investments |
|
|
|
|
|
|
|
|
6,347 |
|
|
6,347 |
|
| Tax impact of unrealized
(gain) loss on other investments |
|
|
|
|
|
|
|
|
(1,333 |
) |
|
(1,333 |
) |
| First quarter 2019
adjusted operating results |
32,085 |
|
|
25,102 |
|
|
13,683 |
|
|
25,649 |
|
|
1,016 |
|
|
97,535 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Drivers of adjusted
operating results** |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Upstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower) natural gas
production |
18,513 |
|
|
|
|
|
|
|
|
|
|
18,513 |
|
| Higher (lower) crude oil
production |
1,454 |
|
|
|
|
|
|
|
|
|
|
1,454 |
|
| Higher (lower) realized
natural gas prices, after hedging |
(12,597 |
) |
|
|
|
|
|
|
|
|
|
(12,597 |
) |
| Higher (lower) realized crude
oil prices, after hedging |
581 |
|
|
|
|
|
|
|
|
|
|
581 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Midstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower) operating
revenues |
|
|
(3,831 |
) |
|
4,027 |
|
|
|
|
|
|
196 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Downstream
Margins*** |
|
|
|
|
|
|
|
|
|
|
|
| System modernization tracker
revenues |
|
|
|
|
|
|
344 |
|
|
|
|
344 |
|
| Regulatory revenue
adjustments |
|
|
|
|
|
|
935 |
|
|
|
|
935 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
| Lower (higher) lease operating
and transportation expenses |
(6,508 |
) |
|
|
|
|
|
|
|
|
|
(6,508 |
) |
| Lower (higher) operating
expenses |
(622 |
) |
|
555 |
|
|
(1,288 |
) |
|
|
|
|
|
(1,355 |
) |
| Lower (higher) property,
franchise and other taxes |
1,312 |
|
|
(827 |
) |
|
|
|
|
|
|
|
485 |
|
| Lower (higher) depreciation /
depletion |
(7,464 |
) |
|
|
|
|
|
|
|
|
|
(7,464 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
| (Higher) lower other
deductions |
|
|
|
|
|
|
|
|
1,461 |
|
|
1,461 |
|
| (Higher) lower interest
expense |
(706 |
) |
|
|
|
|
|
|
|
|
|
(706 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Income
Taxes |
|
|
|
|
|
|
|
|
|
|
|
| Lower (higher) income tax
expense / effective tax rate |
(1,332 |
) |
|
(2,457 |
) |
|
(216 |
) |
|
(785 |
) |
|
(288 |
) |
|
(5,078 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| All other / rounding |
(739 |
) |
|
(437 |
) |
|
(262 |
) |
|
440 |
|
|
598 |
|
|
(400 |
) |
| First quarter 2020
adjusted operating results |
23,977 |
|
|
18,105 |
|
|
15,944 |
|
|
26,583 |
|
|
2,787 |
|
|
87,396 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
| Unrealized gain (loss) on
other investments |
|
|
|
|
|
|
|
|
(1,019 |
) |
|
(1,019 |
) |
| Tax impact of unrealized gain
(loss) on other investments |
|
|
|
|
|
|
|
|
214 |
|
|
214 |
|
| First quarter 2020
GAAP earnings |
$ |
23,977 |
|
|
$ |
18,105 |
|
|
$ |
15,944 |
|
|
$ |
26,583 |
|
|
$ |
1,982 |
|
|
$ |
86,591 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| * Amounts do not reflect
intercompany eliminations |
|
|
|
|
|
|
|
|
|
|
|
| ** Operating
results have been calculated using the 21% federal statutory rate
effective for the 2019 fiscal year. |
| *** Downstream
margin defined as operating revenues less purchased gas
expense. |
| |
|
NATIONAL FUEL GAS COMPANY |
|
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER
SHARE |
|
QUARTER ENDED DECEMBER 31, 2019 |
|
(Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Upstream |
|
Midstream |
|
Downstream |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Exploration & |
|
Pipeline & |
|
|
|
|
|
Corporate / |
|
|
| |
Production |
|
Storage |
|
Gathering |
|
Utility |
|
All Other |
|
Consolidated* |
| |
|
|
|
|
|
|
|
|
|
|
|
|
First quarter 2019 GAAP earnings per share |
$ |
0.44 |
|
|
$ |
0.29 |
|
|
$ |
0.16 |
|
|
$ |
0.30 |
|
|
$ |
(0.01 |
) |
|
$ |
1.18 |
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
| Remeasurement of deferred
taxes under 2017 Tax Reform |
(0.01 |
) |
|
|
|
(0.01 |
) |
|
|
|
(0.04 |
) |
|
(0.06 |
) |
| Mark-to-market adjustments due
to hedge ineffectiveness, net of tax |
(0.06 |
) |
|
|
|
|
|
|
|
|
|
(0.06 |
) |
| Unrealized (gain) loss on
other investments, net of tax |
|
|
|
|
|
|
|
|
0.06 |
|
|
0.06 |
|
| Rounding |
|
|
|
|
0.01 |
|
|
|
|
(0.01 |
) |
|
— |
|
| First quarter 2019
adjusted operating results per share |
0.37 |
|
|
0.29 |
|
|
0.16 |
|
|
0.30 |
|
|
— |
|
|
1.12 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Drivers of adjusted
operating results** |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Upstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower) natural gas
production |
0.21 |
|
|
|
|
|
|
|
|
|
|
0.21 |
|
| Higher (lower) crude oil
production |
0.02 |
|
|
|
|
|
|
|
|
|
|
0.02 |
|
| Higher (lower) realized
natural gas prices, after hedging |
(0.14 |
) |
|
|
|
|
|
|
|
|
|
(0.14 |
) |
| Higher (lower) realized crude
oil prices, after hedging |
0.01 |
|
|
|
|
|
|
|
|
|
|
0.01 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Midstream
Revenues |
|
|
|
|
|
|
|
|
|
|
|
| Higher (lower) operating
revenues |
|
|
(0.04 |
) |
|
0.05 |
|
|
|
|
|
|
0.01 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Downstream
Margins*** |
|
|
|
|
|
|
|
|
|
|
|
| System modernization tracker
revenues |
|
|
|
|
|
|
— |
|
|
|
|
— |
|
| Regulatory revenue
adjustments |
|
|
|
|
|
|
0.01 |
|
|
|
|
0.01 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
| Lower (higher) lease operating
and transportation expenses |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
(0.07 |
) |
| Lower (higher) operating
expenses |
(0.01 |
) |
|
0.01 |
|
|
(0.01 |
) |
|
|
|
|
|
(0.01 |
) |
| Lower (higher) property,
franchise and other taxes |
0.02 |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
0.01 |
|
| Lower (higher) depreciation /
depletion |
(0.09 |
) |
|
|
|
|
|
|
|
|
|
(0.09 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
| (Higher) lower other
deductions |
|
|
|
|
|
|
|
|
0.02 |
|
|
0.02 |
|
| (Higher) lower interest
expense |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
(0.01 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| Income
Taxes |
|
|
|
|
|
|
|
|
|
|
|
| Lower (higher) income tax
expense / effective tax rate |
(0.02 |
) |
|
(0.03 |
) |
|
— |
|
|
(0.01 |
) |
|
— |
|
|
(0.06 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
| All other / rounding |
(0.01 |
) |
|
(0.01 |
) |
|
(0.02 |
) |
|
0.01 |
|
|
0.01 |
|
|
(0.02 |
) |
| First quarter 2020
adjusted operating results per share |
0.28 |
|
|
0.21 |
|
|
0.18 |
|
|
0.31 |
|
|
0.03 |
|
|
1.01 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Items impacting
comparability: |
|
|
|
|
|
|
|
|
|
|
|
| Unrealized gain (loss) on
other investments, net of tax |
|
|
|
|
|
|
|
|
(0.01 |
) |
|
(0.01 |
) |
| First quarter 2020
GAAP earnings per share |
$ |
0.28 |
|
|
$ |
0.21 |
|
|
$ |
0.18 |
|
|
$ |
0.31 |
|
|
$ |
0.02 |
|
|
$ |
1.00 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| * Amounts do not reflect
intercompany eliminations |
|
|
|
|
|
|
|
|
|
|
|
| ** Operating
results have been calculated using the 21% federal statutory rate
effective for the 2019 fiscal year. |
| *** Downstream
margin defined as operating revenues less purchased gas
expense. |
| |
|
NATIONAL FUEL GAS COMPANY |
|
AND SUBSIDIARIES |
| |
|
|
|
| (Thousands of Dollars, except
per share amounts) |
|
|
|
| |
Three Months Ended |
| |
December 31, |
| |
(Unaudited) |
| SUMMARY OF
OPERATIONS |
2019 |
|
2018 |
| Operating Revenues: |
|
|
|
|
Utility and Energy Marketing Revenues |
$ |
228,026 |
|
|
$ |
272,092 |
|
|
Exploration and Production and Other Revenues |
167,193 |
|
|
163,937 |
|
|
Pipeline and Storage and Gathering Revenues |
48,969 |
|
|
54,218 |
|
| |
444,188 |
|
|
490,247 |
|
| Operating Expenses: |
|
|
|
|
Purchased Gas |
92,272 |
|
|
138,660 |
|
|
Operation and Maintenance: |
|
|
|
|
Utility and Energy Marketing |
43,256 |
|
|
43,915 |
|
|
Exploration and Production and Other |
36,693 |
|
|
32,795 |
|
|
Pipeline and Storage and Gathering |
25,885 |
|
|
24,934 |
|
|
Property, Franchise and Other Taxes |
23,144 |
|
|
24,005 |
|
|
Depreciation, Depletion and Amortization |
74,918 |
|
|
64,255 |
|
| |
296,168 |
|
|
328,564 |
|
| |
|
|
|
| Operating Income |
148,020 |
|
|
161,683 |
|
| |
|
|
|
| Other Income (Expense): |
|
|
|
|
Other Income (Deductions) |
(3,040 |
) |
|
(9,602 |
) |
|
Interest Expense on Long-Term Debt |
(25,443 |
) |
|
(25,439 |
) |
|
Other Interest Expense |
(1,551 |
) |
|
(1,073 |
) |
| |
|
|
|
| Income Before Income
Taxes |
117,986 |
|
|
125,569 |
|
| |
|
|
|
| Income Tax Expense |
31,395 |
|
|
22,909 |
|
| |
|
|
|
| Net Income Available for
Common Stock |
$ |
86,591 |
|
|
$ |
102,660 |
|
| |
|
|
|
| Earnings Per Common Share |
|
|
|
|
Basic |
$ |
1.00 |
|
|
$ |
1.19 |
|
|
Diluted |
$ |
1.00 |
|
|
$ |
1.18 |
|
|
|
|
|
|
| Weighted Average
Common Shares: |
|
|
|
| Used in Basic Calculation |
86,378,450 |
|
86,032,729 |
| Used in Diluted
Calculation |
86,883,152 |
|
86,708,814 |
| |
|
|
|
|
NATIONAL FUEL GAS COMPANY |
|
AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
(Unaudited) |
| |
|
| |
December 31, |
|
September 30, |
|
(Thousands of Dollars) |
2019 |
|
2019 |
| |
|
|
|
| ASSETS |
|
|
|
|
Property, Plant and Equipment |
$ |
11,402,308 |
|
|
$ |
11,204,838 |
|
| Less -
Accumulated Depreciation, Depletion and Amortization |
|
5,756,084 |
|
|
|
5,695,328 |
|
|
Net Property, Plant and Equipment |
|
5,646,224 |
|
|
|
5,509,510 |
|
| |
|
|
|
|
|
|
|
| Current Assets: |
|
|
|
|
|
|
|
| Cash and Temporary Cash
Investments |
|
34,966 |
|
|
|
20,428 |
|
| Hedging Collateral
Deposits |
|
9,666 |
|
|
|
6,832 |
|
| Receivables - Net |
|
158,944 |
|
|
|
139,956 |
|
| Unbilled Revenue |
|
58,306 |
|
|
|
18,758 |
|
| Gas Stored Underground |
|
29,991 |
|
|
|
36,632 |
|
| Materials and Supplies - at
average cost |
|
40,373 |
|
|
|
40,717 |
|
| Unrecovered Purchased Gas
Costs |
|
1,619 |
|
|
|
2,246 |
|
| Other Current Assets |
|
96,831 |
|
|
|
97,054 |
|
|
Total Current Assets |
|
430,696 |
|
|
|
362,623 |
|
| |
|
|
|
| Other Assets: |
|
|
|
| Recoverable Future Taxes |
|
116,188 |
|
|
|
115,197 |
|
| Unamortized Debt Expense |
|
13,578 |
|
|
|
14,005 |
|
| Other Regulatory Assets |
|
165,409 |
|
|
|
167,320 |
|
| Deferred Charges |
|
56,936 |
|
|
|
33,843 |
|
| Other Investments |
|
141,229 |
|
|
|
144,917 |
|
| Goodwill |
|
5,476 |
|
|
|
5,476 |
|
| Prepaid Post-Retirement
Benefit Costs |
|
64,999 |
|
|
|
60,517 |
|
| Fair Value of Derivative
Financial Instruments |
|
40,569 |
|
|
|
48,669 |
|
|
Other |
|
21,354 |
|
|
|
80 |
|
|
Total Other Assets |
|
625,738 |
|
|
|
590,024 |
|
| Total
Assets |
$ |
6,702,658 |
|
|
$ |
6,462,157 |
|
| |
|
|
|
|
|
|
|
| CAPITALIZATION AND
LIABILITIES |
|
|
|
|
|
|
|
| Capitalization: |
|
|
|
|
|
|
|
| Comprehensive Shareholders'
Equity |
|
|
|
|
|
|
|
| Common Stock, $1 Par Value
Authorized - 200,000,000 Shares; Issued and |
|
|
|
|
|
|
|
| Outstanding - 86,551,528
Shares and 86,315,287 Shares, Respectively |
$ |
86,552 |
|
|
$ |
86,315 |
|
| Paid in Capital |
|
831,146 |
|
|
|
832,264 |
|
| Earnings Reinvested in the
Business |
|
1,320,592 |
|
|
|
1,272,601 |
|
|
Accumulated Other Comprehensive Loss |
|
(56,150 |
) |
|
|
(52,155 |
) |
| Total Comprehensive
Shareholders' Equity |
|
2,182,140 |
|
|
|
2,139,025 |
|
|
Long-Term Debt, Net of Current Portion and Unamortized Discount and
Debt Issuance Costs |
|
2,134,339 |
|
|
|
2,133,718 |
|
|
Total Capitalization |
|
4,316,479 |
|
|
|
4,272,743 |
|
| |
|
|
|
| Current and Accrued
Liabilities: |
|
|
|
| Notes Payable to Banks and
Commercial Paper |
|
139,800 |
|
|
|
55,200 |
|
| Current Portion of Long-Term
Debt |
|
— |
|
|
|
— |
|
| Accounts Payable |
|
126,985 |
|
|
|
132,208 |
|
| Amounts Payable to
Customers |
|
3,444 |
|
|
|
4,017 |
|
| Dividends Payable |
|
37,650 |
|
|
|
37,547 |
|
| Interest Payable on Long-Term
Debt |
|
29,461 |
|
|
|
18,508 |
|
| Customer Advances |
|
13,727 |
|
|
|
13,044 |
|
| Customer Security
Deposits |
|
15,510 |
|
|
|
16,210 |
|
| Other Accruals and Current
Liabilities |
|
173,603 |
|
|
|
139,600 |
|
| Fair
Value of Derivative Financial Instruments |
|
6,282 |
|
|
|
5,574 |
|
|
Total Current and Accrued Liabilities |
|
546,462 |
|
|
|
421,908 |
|
| |
|
|
|
| Deferred Credits: |
|
|
|
| Deferred Income Taxes |
|
708,774 |
|
|
|
653,382 |
|
| Taxes Refundable to
Customers |
|
361,556 |
|
|
|
366,503 |
|
| Cost of Removal Regulatory
Liability |
|
222,172 |
|
|
|
221,699 |
|
| Other Regulatory
Liabilities |
|
148,350 |
|
|
|
142,367 |
|
| Pension and Other
Post-Retirement Liabilities |
|
129,616 |
|
|
|
133,729 |
|
| Asset Retirement
Obligations |
|
128,382 |
|
|
|
127,458 |
|
| Other
Deferred Credits |
|
140,867 |
|
|
|
122,368 |
|
|
Total Deferred Credits |
|
1,839,717 |
|
|
|
1,767,506 |
|
|
Commitments and Contingencies |
|
— |
|
|
|
— |
|
| Total
Capitalization and Liabilities |
$ |
6,702,658 |
|
|
$ |
6,462,157 |
|
| |
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
|
AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(Unaudited) |
| |
Three Months Ended |
| |
December 31, |
|
(Thousands of Dollars) |
2019 |
|
2018 |
| |
|
|
|
| Operating Activities: |
|
|
|
|
Net Income Available for Common Stock |
$ |
86,591 |
|
|
$ |
102,660 |
|
| Adjustments to Reconcile Net
Income to Net Cash |
|
|
|
|
Provided by Operating Activities: |
|
|
|
|
Depreciation, Depletion and Amortization |
74,918 |
|
|
64,255 |
|
|
Deferred Income Taxes |
51,366 |
|
|
64,175 |
|
|
Stock-Based Compensation |
3,266 |
|
|
5,311 |
|
|
Other |
1,911 |
|
|
2,182 |
|
|
Change in: |
|
|
|
|
Receivables and Unbilled Revenue |
(58,655 |
) |
|
(101,541 |
) |
|
Gas Stored Underground and Materials and Supplies |
6,985 |
|
|
8,353 |
|
|
Unrecovered Purchased Gas Costs |
627 |
|
|
(4,496 |
) |
|
Other Current Assets |
14 |
|
|
(1,195 |
) |
|
Accounts Payable |
8,280 |
|
|
1,502 |
|
|
Amounts Payable to Customers |
(573 |
) |
|
(3,394 |
) |
|
Customer Advances |
683 |
|
|
(6,258 |
) |
|
Customer Security Deposits |
(700 |
) |
|
(1,861 |
) |
|
Other Accruals and Current Liabilities |
15,438 |
|
|
38,412 |
|
|
Other Assets |
(28,259 |
) |
|
(42,400 |
) |
|
Other Liabilities |
5,857 |
|
|
(21,333 |
) |
|
Net Cash Provided by Operating Activities |
$ |
167,749 |
|
|
$ |
104,372 |
|
| |
|
|
|
| Investing Activities: |
|
|
|
| Capital Expenditures |
$ |
(198,495 |
) |
|
$ |
(177,567 |
) |
|
Other |
5,212 |
|
|
(2,549 |
) |
|
Net Cash Used in Investing Activities |
$ |
(193,283 |
) |
|
$ |
(180,116 |
) |
| |
|
|
|
| Financing Activities: |
|
|
|
| Changes in Notes Payable to
Banks and Commercial Paper |
$ |
84,600 |
|
|
$ |
— |
|
| Dividends Paid on Common
Stock |
(37,547 |
) |
|
(36,532 |
) |
| Net
Repurchases of Common Stock |
(4,147 |
) |
|
(8,233 |
) |
|
Net Cash Provided by (Used in) Financing Activities |
$ |
42,906 |
|
|
$ |
(44,765 |
) |
| |
|
|
|
| Net Increase (Decrease) in
Cash, Cash Equivalents, and Restricted Cash |
17,372 |
|
|
(120,509 |
) |
| Cash,
Cash Equivalents, and Restricted Cash at Beginning of Period |
27,260 |
|
|
233,047 |
|
| Cash,
Cash Equivalents, and Restricted Cash at December 31 |
$ |
44,632 |
|
|
$ |
112,538 |
|
| |
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
|
AND SUBSIDIARIES |
| |
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS |
|
(UNAUDITED) |
| |
|
|
|
|
|
|
UPSTREAM BUSINESS |
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
Three Months Ended |
| (Thousands of Dollars, except
per share amounts) |
December 31, |
| EXPLORATION AND
PRODUCTION SEGMENT |
2019 |
|
2018 |
|
Variance |
|
Total Operating Revenues |
$ |
165,939 |
|
|
$ |
162,876 |
|
|
$ |
3,063 |
|
| |
|
|
|
|
|
| Operating Expenses: |
|
|
|
|
|
|
Operation and Maintenance: |
|
|
|
|
|
|
General and Administrative Expense |
15,380 |
|
|
15,198 |
|
|
182 |
|
|
Lease Operating and Transportation Expense |
50,800 |
|
|
42,562 |
|
|
8,238 |
|
|
All Other Operation and Maintenance Expense |
2,958 |
|
|
2,353 |
|
|
605 |
|
|
Property, Franchise and Other Taxes |
4,701 |
|
|
6,362 |
|
|
(1,661 |
) |
|
Depreciation, Depletion and Amortization |
44,148 |
|
|
34,700 |
|
|
9,448 |
|
| |
117,987 |
|
|
101,175 |
|
|
16,812 |
|
| |
|
|
|
|
|
| Operating Income |
47,952 |
|
|
61,701 |
|
(13,749 |
) |
| |
|
|
|
|
|
| Other Income (Expense): |
|
|
|
|
|
|
Non-Service Pension and Post-Retirement Benefit Costs |
(395 |
) |
|
(4 |
) |
|
(391 |
) |
|
Interest and Other Income |
234 |
|
|
282 |
|
|
(48 |
) |
|
Interest Expense |
(14,057 |
) |
|
(13,163 |
) |
|
(894 |
) |
| |
|
|
|
|
|
| Income Before Income
Taxes |
33,734 |
|
|
48,816 |
|
|
(15,082 |
) |
| Income Tax Expense |
9,757 |
|
|
10,602 |
|
|
(845 |
) |
| Net Income |
$ |
23,977 |
|
|
$ |
38,214 |
|
|
$ |
(14,237 |
) |
| |
|
|
|
|
|
| Net Income Per Share
(Diluted) |
$ |
0.28 |
|
|
$ |
0.44 |
|
|
$ |
(0.16 |
) |
| |
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
|
AND SUBSIDIARIES |
| |
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS |
|
(UNAUDITED) |
| |
|
|
|
|
|
|
MIDSTREAM BUSINESSES |
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
Three Months Ended |
| (Thousands of Dollars, except
per share amounts) |
December 31, |
| PIPELINE AND STORAGE
SEGMENT |
2019 |
|
2018 |
|
Variance |
|
Revenues from External Customers |
$ |
48,969 |
|
|
$ |
54,218 |
|
|
$ |
(5,249 |
) |
| Intersegment Revenues |
23,251 |
|
|
22,851 |
|
|
400 |
|
| Total Operating Revenues |
72,220 |
|
|
77,069 |
|
|
(4,849 |
) |
| |
|
|
|
|
|
| Operating Expenses: |
|
|
|
|
|
| Purchased Gas |
(7 |
) |
|
304 |
|
|
(311 |
) |
| Operation and Maintenance |
20,930 |
|
|
21,633 |
|
|
(703 |
) |
| Property, Franchise and Other
Taxes |
8,355 |
|
|
7,308 |
|
|
1,047 |
|
| Depreciation, Depletion and
Amortization |
11,605 |
|
|
11,114 |
|
|
491 |
|
| |
40,883 |
|
|
40,359 |
|
|
524 |
|
| |
|
|
|
|
|
| Operating Income |
31,337 |
|
|
36,710 |
|
|
(5,373 |
) |
| |
|
|
|
|
|
| Other Income (Expense): |
|
|
|
|
|
|
Non-Service Pension and Post-Retirement Benefit (Costs) Credit |
(174 |
) |
|
467 |
|
|
(641 |
) |
|
Interest and Other Income |
1,552 |
|
|
1,459 |
|
|
93 |
|
|
Interest Expense |
(7,112 |
) |
|
(7,286 |
) |
|
174 |
|
| |
|
|
|
|
|
| Income Before Income
Taxes |
25,603 |
|
|
31,350 |
|
|
(5,747 |
) |
| Income Tax Expense |
7,498 |
|
|
6,248 |
|
|
1,250 |
|
| Net Income |
$ |
18,105 |
|
|
$ |
25,102 |
|
|
$ |
(6,997 |
) |
| |
|
|
|
|
|
| Net Income Per Share
(Diluted) |
$ |
0.21 |
|
|
$ |
0.29 |
|
|
$ |
(0.08 |
) |
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
Three Months Ended |
| |
December 31, |
| GATHERING
SEGMENT |
2019 |
|
2018 |
|
Variance |
| Revenues from External
Customers |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Intersegment Revenues |
34,788 |
|
|
29,690 |
|
|
5,098 |
|
| Total Operating Revenues |
34,788 |
|
|
29,690 |
|
|
5,098 |
|
| |
|
|
|
|
|
| Operating Expenses: |
|
|
|
|
|
|
Operation and Maintenance |
5,342 |
|
|
3,711 |
|
|
1,631 |
|
|
Property, Franchise and Other Taxes |
15 |
|
|
31 |
|
|
(16 |
) |
|
Depreciation, Depletion and Amortization |
5,138 |
|
|
4,679 |
|
|
459 |
|
| |
10,495 |
|
|
8,421 |
|
|
2,074 |
|
| |
|
|
|
|
|
| Operating Income |
24,293 |
|
|
21,269 |
|
|
3,024 |
|
| |
|
|
|
|
|
| Other Income (Expense): |
|
|
|
|
|
|
Non-Service Pension and Post-Retirement Benefit Costs |
(71 |
) |
|
(82 |
) |
|
11 |
|
|
Interest and Other Income |
68 |
|
|
125 |
|
|
(57 |
) |
|
Interest Expense |
(2,219 |
) |
|
(2,377 |
) |
|
158 |
|
| |
|
|
|
|
|
| Income Before Income
Taxes |
22,071 |
|
|
18,935 |
|
|
3,136 |
|
| Income Tax Expense |
6,127 |
|
|
4,752 |
|
|
1,375 |
|
| Net Income |
$ |
15,944 |
|
|
$ |
14,183 |
|
|
$ |
1,761 |
|
| |
|
|
|
|
|
| Net Income Per Share
(Diluted) |
$ |
0.18 |
|
|
$ |
0.16 |
|
|
$ |
0.02 |
|
| |
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
|
AND SUBSIDIARIES |
| |
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS |
|
(UNAUDITED) |
| |
|
|
|
|
|
|
DOWNSTREAM BUSINESS |
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
Three Months Ended |
| (Thousands of Dollars, except
per share amounts) |
December 31, |
| UTILITY
SEGMENT |
2019 |
|
2018 |
|
Variance |
|
Revenues from External Customers |
$ |
194,910 |
|
|
$ |
220,012 |
|
|
$ |
(25,102 |
) |
| Intersegment Revenues |
1,915 |
|
|
2,645 |
|
|
(730 |
) |
| Total Operating Revenues |
196,825 |
|
|
222,657 |
|
|
(25,832 |
) |
| |
|
|
|
|
|
| Operating Expenses: |
|
|
|
|
|
|
Purchased Gas |
84,705 |
|
|
111,880 |
|
|
(27,175 |
) |
|
Operation and Maintenance |
42,843 |
|
|
43,155 |
|
|
(312 |
) |
|
Property, Franchise and Other Taxes |
9,814 |
|
|
10,053 |
|
|
(239 |
) |
|
Depreciation, Depletion and Amortization |
13,630 |
|
|
13,290 |
|
|
340 |
|
| |
150,992 |
|
|
178,378 |
|
|
(27,386 |
) |
| |
|
|
|
|
|
| Operating Income |
45,833 |
|
|
44,279 |
|
|
1,554 |
|
| |
|
|
|
|
|
| Other Income (Expense): |
|
|
|
|
|
|
Non-Service Pension and Post-Retirement Benefit Costs |
(6,764 |
) |
|
(6,928 |
) |
|
164 |
|
|
Interest and Other Income |
950 |
|
|
712 |
|
|
238 |
|
|
Interest Expense |
(5,673 |
) |
|
(5,893 |
) |
|
220 |
|
| |
|
|
|
|
|
| Income Before Income
Taxes |
34,346 |
|
|
32,170 |
|
|
2,176 |
|
| Income Tax Expense |
7,763 |
|
|
6,521 |
|
|
1,242 |
|
| Net Income |
$ |
26,583 |
|
|
$ |
25,649 |
|
|
$ |
934 |
|
| |
|
|
|
|
|
| Net Income Per Share
(Diluted) |
$ |
0.31 |
|
|
$ |
0.30 |
|
|
$ |
0.01 |
|
| |
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
|
AND SUBSIDIARIES |
| |
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS |
|
(UNAUDITED) |
| |
|
|
|
|
|
| |
Three Months Ended |
| (Thousands of Dollars, except
per share amounts) |
December 31, |
| ALL
OTHER |
2019 |
|
2018 |
|
Variance |
|
Revenues from External Customers |
$ |
34,235 |
|
|
$ |
53,087 |
|
|
$ |
(18,852 |
) |
| Intersegment Revenues |
177 |
|
|
332 |
|
|
(155 |
) |
| Total Operating Revenues |
34,412 |
|
|
53,419 |
|
|
(19,007 |
) |
| Operating Expenses: |
|
|
|
|
|
|
Purchased Gas |
32,033 |
|
|
51,516 |
|
|
(19,483 |
) |
|
Operation and Maintenance |
1,703 |
|
|
1,878 |
|
|
(175 |
) |
|
Property, Franchise and Other Taxes |
142 |
|
|
135 |
|
|
7 |
|
|
Depreciation, Depletion and Amortization |
203 |
|
|
282 |
|
|
(79 |
) |
| |
34,081 |
|
|
53,811 |
|
|
(19,730 |
) |
| |
|
|
|
|
|
| Operating Income (Loss) |
331 |
|
|
(392 |
) |
|
723 |
|
| |
|
|
|
|
|
| Other Income (Expense): |
|
|
|
|
|
|
Non-Service Pension and Post-Retirement Benefit Costs |
(69 |
) |
|
(122 |
) |
|
53 |
|
|
Interest and Other Income |
278 |
|
|
305 |
|
|
(27 |
) |
|
Interest Expense |
(18 |
) |
|
(5 |
) |
|
(13 |
) |
| |
|
|
|
|
|
| Income (Loss) Before Income
Taxes |
522 |
|
|
(214 |
) |
|
736 |
|
| Income Tax Expense
(Benefit) |
151 |
|
|
(296 |
) |
|
447 |
|
| Net Income |
$ |
371 |
|
|
$ |
82 |
|
|
$ |
289 |
|
| Net Income Per Share
(Diluted) |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| |
|
| |
Three Months Ended |
| |
December 31, |
|
CORPORATE |
2019 |
|
2018 |
|
Variance |
| Revenues from External
Customers |
$ |
135 |
|
|
$ |
54 |
|
|
$ |
81 |
|
| Intersegment Revenues |
1,094 |
|
|
1,165 |
|
|
(71 |
) |
| Total Operating Revenues |
1,229 |
|
|
1,219 |
|
|
10 |
|
| Operating Expenses: |
|
|
|
|
|
|
Operation and Maintenance |
2,644 |
|
|
2,797 |
|
|
(153 |
) |
|
Property, Franchise and Other Taxes |
117 |
|
|
116 |
|
|
1 |
|
|
Depreciation, Depletion and Amortization |
194 |
|
|
190 |
|
|
4 |
|
| |
2,955 |
|
|
3,103 |
|
|
(148 |
) |
| |
|
|
|
|
|
| Operating Loss |
(1,726 |
) |
|
(1,884 |
) |
|
158 |
|
| |
|
|
|
|
|
| Other Income (Expense): |
|
|
|
|
|
|
Non-Service Pension and Post-Retirement Benefit Costs |
(775 |
) |
|
(738 |
) |
|
(37 |
) |
|
Interest and Other Income |
31,073 |
|
|
23,617 |
|
|
7,456 |
|
|
Interest Expense on Long-Term Debt |
(25,443 |
) |
|
(25,439 |
) |
|
(4 |
) |
|
Other Interest Expense |
(1,419 |
) |
|
(1,044 |
) |
|
(375 |
) |
| |
|
|
|
|
|
| Income (Loss) before Income
Taxes |
1,710 |
|
|
(5,488 |
) |
|
7,198 |
|
| Income Tax Expense
(Benefit) |
99 |
|
|
(4,918 |
) |
|
5,017 |
|
| Net Income (Loss) |
$ |
1,611 |
|
|
$ |
(570 |
) |
|
$ |
2,181 |
|
| Net Income (Loss) Per Share
(Diluted) |
$ |
0.02 |
|
|
$ |
(0.01 |
) |
|
$ |
0.03 |
|
| |
|
|
|
|
|
| |
|
|
|
|
|
| |
Three Months Ended |
| |
December 31, |
| INTERSEGMENT
ELIMINATIONS |
2019 |
|
2018 |
|
Variance |
| Intersegment Revenues |
$ |
(61,225 |
) |
|
$ |
(56,683 |
) |
|
$ |
(4,542 |
) |
| Operating Expenses: |
|
|
|
|
|
|
Purchased Gas |
(24,459 |
) |
|
(25,040 |
) |
|
581 |
|
|
Operation and Maintenance |
(36,766 |
) |
|
(31,643 |
) |
|
(5,123 |
) |
| |
(61,225 |
) |
|
(56,683 |
) |
|
(4,542 |
) |
| |
|
|
|
|
|
| Operating Income |
— |
|
|
— |
|
|
— |
|
| |
|
|
|
|
|
| Other Income (Expense): |
|
|
|
|
|
|
Interest and Other Deductions |
(28,947 |
) |
|
(28,695 |
) |
|
(252 |
) |
|
Interest Expense |
28,947 |
|
|
28,695 |
|
|
252 |
|
| Net Income (Loss) |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| Net Income (Loss) Per Share
(Diluted) |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY |
|
AND SUBSIDIARIES |
| |
|
|
|
|
|
|
|
|
SEGMENT INFORMATION (Continued) |
|
(Thousands of Dollars) |
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Three Months Ended |
| |
December 31, |
| |
(Unaudited) |
| |
|
|
|
|
|
|
Increase |
| |
2019 |
|
|
2018 |
|
|
(Decrease) |
| |
|
|
|
|
|
|
|
| Capital
Expenditures: |
|
|
|
|
|
|
|
|
Exploration and Production |
$ |
126,918 |
|
(1)(2) |
|
$ |
120,214 |
|
(3)(4) |
|
$ |
6,704 |
|
| Pipeline and Storage |
57,084 |
|
(1)(2) |
|
29,964 |
|
(3)(4) |
|
27,120 |
|
| Gathering |
9,838 |
|
(1)(2) |
|
8,790 |
|
(3)(4) |
|
1,048 |
|
| Utility |
17,165 |
|
(1)(2) |
|
15,923 |
|
(3)(4) |
|
1,242 |
|
| Total Reportable Segments |
211,005 |
|
|
|
174,891 |
|
|
|
36,114 |
|
| All Other |
22 |
|
|
|
20 |
|
|
|
2 |
|
| Corporate |
185 |
|
|
|
17 |
|
|
|
168 |
|
|
Total Capital Expenditures |
$ |
211,212 |
|
|
|
$ |
174,928 |
|
|
|
$ |
36,284 |
|
|
(1) |
Capital
expenditures for the three months ended December 31, 2019, include
accounts payable and accrued liabilities related to capital
expenditures of $62.3 million, $22.7 million, $5.3 million, and
$3.5 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 December 31, 2019, since
they represent non-cash investing activities at that date. |
| |
|
| (2) |
Capital expenditures for the three months ended December 31,
2019, exclude capital expenditures of $38.0 million, $23.8 million,
$6.6 million and $12.7 million in the Exploration and Production
segment, Pipeline and Storage segment, Gathering segment and
Utility segment, respectively. These amounts were in accounts
payable and accrued liabilities at September 30, 2019 and paid
during the three months ended December 31, 2019. These
amounts were excluded from the Consolidated Statement of Cash Flows
at September 30, 2019, since they represented non-cash investing
activities at that date. These amounts have been included in
the Consolidated Statement of Cash Flows at December 31, 2019. |
| |
|
| (3) |
Capital expenditures for the three months ended December 31,
2018, include accounts payable and accrued liabilities related to
capital expenditures of $66.1 million, $12.9 million, $4.4 million,
and $2.8 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 December 31, 2018,
since they represent non-cash investing activities at that
date. |
| |
|
| (4) |
Capital expenditures for the three months ended December
31, 2018, 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 three months ended December 31, 2018. 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 December 31, 2018. |
| DEGREE
DAYS |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
Percent Colder |
| |
|
|
|
|
|
|
(Warmer) Than: |
| Three Months Ended December
31 |
Normal |
|
2019 |
|
2018 |
|
Normal (1) |
|
Last Year (1) |
| |
|
|
|
|
|
|
|
|
|
|
Buffalo, NY |
2,253 |
|
2,232 |
|
2,325 |
|
(0.9 |
) |
|
(4.0 |
) |
|
Erie, PA |
2,044 |
|
1,906 |
|
2,030 |
|
(6.8 |
) |
|
(6.1 |
) |
| |
|
|
|
|
|
|
|
|
|
|
(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 |
| |
|
December 31, |
| |
|
|
|
|
|
Increase |
| |
|
2019 |
|
2018 |
|
(Decrease) |
| |
|
|
|
|
|
|
| Gas
Production/Prices: |
|
|
|
|
|
|
| Production (MMcf) |
|
|
|
|
|
|
|
Appalachia |
|
54,284 |
|
|
45,305 |
|
|
8,979 |
|
|
West Coast |
|
487 |
|
|
502 |
|
|
(15 |
) |
| Total Production |
|
54,771 |
|
|
45,807 |
|
|
8,964 |
|
| |
|
|
|
|
|
|
| Average Prices (Per Mcf) |
|
|
|
|
|
|
|
Appalachia |
|
$ |
2.16 |
|
|
$ |
2.93 |
|
|
$ |
(0.77 |
) |
|
West Coast |
|
4.98 |
|
|
6.73 |
|
|
(1.75 |
) |
|
Weighted Average |
|
2.19 |
|
|
2.97 |
|
|
(0.78 |
) |
|
Weighted Average after Hedging |
|
2.32 |
|
|
2.61 |
|
|
(0.29 |
) |
| |
|
|
|
|
|
|
| Oil
Production/Prices: |
|
|
|
|
|
|
| Production (Thousands of
Barrels) |
|
|
|
|
|
|
| Appalachia |
|
— |
|
|
1 |
|
|
(1 |
) |
| West Coast |
|
601 |
|
|
571 |
|
|
30 |
|
| Total Production |
|
601 |
|
|
572 |
|
|
29 |
|
| |
|
|
|
|
|
|
| Average Prices (Per
Barrel) |
|
|
|
|
|
|
|
Appalachia |
|
$ |
54.49 |
|
|
$ |
66.31 |
|
|
$ |
(11.82 |
) |
|
West Coast |
|
62.63 |
|
|
65.71 |
|
|
(3.08 |
) |
|
Weighted Average |
|
62.63 |
|
|
65.71 |
|
|
(3.08 |
) |
|
Weighted Average after Hedging |
|
62.92 |
|
|
61.70 |
|
|
1.22 |
|
| |
|
|
|
|
|
|
| Total Production (MMcfe) |
|
58,377 |
|
|
49,239 |
|
|
9,138 |
|
| |
|
|
|
|
|
|
| Selected Operating
Performance Statistics: |
|
|
|
|
|
|
| General & Administrative
Expense per Mcfe (1) |
|
$ |
0.26 |
|
|
$ |
0.31 |
|
|
$ |
(0.05 |
) |
| Lease Operating and
Transportation Expense per Mcfe (1)(2) |
|
$ |
0.87 |
|
|
$ |
0.86 |
|
|
$ |
0.01 |
|
| Depreciation, Depletion &
Amortization per Mcfe (1) |
|
$ |
0.76 |
|
|
$ |
0.70 |
|
|
$ |
0.06 |
|
|
(1) |
Refer to page 13 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 $0.57 and $0.54 per Mcfe for the three months ended
December 31, 2019 and December 31, 2018, respectively. |
|
NATIONAL FUEL GAS COMPANY |
|
AND SUBSIDIARIES |
| |
|
|
|
|
|
|
|
EXPLORATION AND PRODUCTION INFORMATION |
| |
| Hedging Summary for
Remaining Nine Months of Fiscal 2020 |
|
Volume |
|
|
Average Hedge
Price |
| Oil Swaps |
|
|
|
|
|
|
|
Brent |
|
1,035,000 |
|
BBL |
|
$ |
64.55 / BBL |
|
NYMEX |
|
243,000 |
|
BBL |
|
$ |
50.52 / BBL |
|
Total |
|
1,278,000 |
|
BBL |
|
$ |
61.88 /
BBL |
| |
|
|
|
|
|
|
| Gas Swaps |
|
|
|
|
|
|
|
NYMEX |
|
66,150,000 |
|
MMBTU |
|
$ |
2.69 / MMBTU |
|
DAWN |
|
5,400,000 |
|
MMBTU |
|
$ |
3.00 / MMBTU |
| Fixed Price Physical
Sales |
|
33,588,417 |
|
MMBTU |
|
$ |
2.35 / MMBTU |
| Total |
|
105,138,417 |
|
MMBTU |
|
$ |
2.60 /
MMBTU |
| |
|
|
|
|
|
|
| Hedging Summary for
Fiscal 2021 |
|
Volume |
|
|
Average Hedge
Price |
| Oil Swaps |
|
|
|
|
|
|
|
Brent |
|
696,000 |
|
BBL |
|
$ |
64.29 / BBL |
|
NYMEX |
|
156,000 |
|
BBL |
|
$ |
51.00 / BBL |
|
Total |
|
852,000 |
|
BBL |
|
$ |
61.86 /
BBL |
| |
|
|
|
|
|
|
| Gas Swaps |
|
|
|
|
|
|
|
NYMEX |
|
14,750,000 |
|
MMBTU |
|
$ |
2.73 / MMBTU |
|
DAWN |
|
600,000 |
|
MMBTU |
|
$ |
3.00 / MMBTU |
| Fixed Price Physical
Sales |
|
42,052,246 |
|
MMBTU |
|
$ |
2.22 / MMBTU |
| Total |
|
57,402,246 |
|
MMBTU |
|
$ |
2.36 /
MMBTU |
| |
|
|
|
|
|
|
| Hedging Summary for
Fiscal 2022 |
|
Volume |
|
|
Average Hedge
Price |
| Oil Swaps |
|
|
|
|
|
|
|
Brent |
|
300,000 |
|
BBL |
|
$ |
60.07 / BBL |
|
NYMEX |
|
156,000 |
|
BBL |
|
$ |
51.00 / BBL |
|
Total |
|
456,000 |
|
BBL |
|
$ |
56.97 /
BBL |
| |
|
|
|
|
|
|
| Gas Swaps |
|
|
|
|
|
|
|
NYMEX |
|
200,000 |
|
MMBTU |
|
$ |
2.50 / MMBTU |
| Fixed Price Physical
Sales |
|
40,328,564 |
|
MMBTU |
|
$ |
2.23 / MMBTU |
|
Total |
|
40,528,564 |
|
MMBTU |
|
$ |
2.23 /
MMBTU |
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Hedging Summary for
Fiscal 2023 |
|
Volume |
|
|
Average Hedge
Price |
| Fixed Price Physical
Sales |
|
36,961,007 |
|
MMBTU |
|
$ |
2.26 / MMBTU |
| |
|
|
|
|
|
|
| Hedging Summary for
Fiscal 2024 |
|
Volume |
|
|
Average Hedge
Price |
| Fixed Price Physical
Sales |
|
20,801,194 |
|
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 |
| |
|
December 31, |
| |
|
|
|
|
|
Increase |
| |
|
2019 |
|
2018 |
|
(Decrease) |
|
Firm Transportation - Affiliated |
|
34,667 |
|
|
35,700 |
|
|
(1,033 |
) |
| Firm Transportation -
Non-Affiliated |
|
173,981 |
|
|
156,201 |
|
|
17,780 |
|
| Interruptible
Transportation |
|
714 |
|
|
916 |
|
|
(202 |
) |
| |
|
209,362 |
|
|
192,817 |
|
|
16,545 |
|
| |
|
|
|
|
|
|
| Gathering Volume -
(MMcf) |
|
|
|
|
|
|
| |
|
Three Months Ended |
| |
|
December 31, |
| |
|
|
|
|
|
Increase |
| |
|
2019 |
|
2018 |
|
(Decrease) |
| Gathered Volume -
Affiliated |
|
64,392 |
|
|
54,688 |
|
|
9,704 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| Utility Throughput -
(MMcf) |
|
|
|
|
|
|
| |
|
Three Months Ended |
| |
|
December 31, |
| |
|
|
|
|
|
Increase |
| |
|
2019 |
|
2018 |
|
(Decrease) |
| Retail Sales: |
|
|
|
|
|
|
|
Residential Sales |
|
19,476 |
|
|
19,780 |
|
|
(304 |
) |
|
Commercial Sales |
|
2,812 |
|
|
2,846 |
|
|
(34 |
) |
|
Industrial Sales |
|
217 |
|
|
204 |
|
|
13 |
|
| |
|
22,505 |
|
|
22,830 |
|
|
(325 |
) |
| Transportation |
|
20,556 |
|
|
22,270 |
|
|
(1,714 |
) |
| |
|
43,061 |
|
|
45,100 |
|
|
(2,039 |
) |
| |
|
|
|
|
|
|
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 months ended
December 31, 2019 and 2018:
| |
|
Three Months Ended |
| |
|
December 31, |
| (in thousands except per share
amounts) |
|
2019 |
|
2018 |
|
Reported GAAP Earnings |
|
$ |
86,591 |
|
|
$ |
102,660 |
|
|
Items impacting comparability |
|
|
|
|
|
Remeasurement of deferred income taxes under 2017 Tax Reform |
|
— |
|
|
(5,000 |
) |
|
Mark-to-market adjustments due to hedge ineffectiveness
(E&P) |
|
— |
|
|
(6,505 |
) |
|
Tax impact of mark-to-market adjustments due to hedge
ineffectiveness |
|
— |
|
|
1,366 |
|
|
Unrealized loss on other investments (Corporate/All Other) |
|
1,019 |
|
|
6,347 |
|
|
Tax impact of unrealized loss on other investments |
|
(214 |
) |
|
(1,333 |
) |
| Adjusted Operating
Results |
|
$ |
87,396 |
|
|
$ |
97,535 |
|
| |
|
|
|
|
| Reported GAAP Earnings
per share |
|
$ |
1.00 |
|
|
$ |
1.18 |
|
|
Items impacting comparability |
|
|
|
|
|
Remeasurement of deferred income taxes under 2017 Tax Reform |
|
— |
|
|
(0.06 |
) |
|
Mark-to-market adjustments due to hedge ineffectiveness, net of tax
(E&P) |
|
— |
|
|
(0.06 |
) |
|
Unrealized loss on other investments, net of tax (Corporate/All
Other) |
|
0.01 |
|
|
0.06 |
|
| Adjusted Operating
Results per share |
|
$ |
1.01 |
|
|
$ |
1.12 |
|
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 months ended December 31, 2019 and 2018:
| |
|
Three Months Ended |
| |
|
December 31, |
| (in thousands) |
|
2019 |
|
2018 |
|
Reported GAAP Earnings |
|
$ |
86,591 |
|
|
$ |
102,660 |
|
|
Depreciation, Depletion and Amortization |
|
74,918 |
|
|
64,255 |
|
|
Other (Income) Deductions |
|
3,040 |
|
|
9,602 |
|
|
Interest Expense |
|
26,994 |
|
|
26,512 |
|
|
Income Taxes |
|
31,395 |
|
|
22,909 |
|
|
Mark-to-Market Adjustments due to Hedge Ineffectiveness |
|
— |
|
|
(6,505 |
) |
| Adjusted
EBITDA |
|
$ |
222,938 |
|
|
$ |
219,433 |
|
| |
|
|
|
|
| Adjusted EBITDA by
Segment |
|
|
|
|
| Pipeline and Storage Adjusted
EBITDA |
|
$ |
42,942 |
|
|
$ |
47,824 |
|
| Gathering Adjusted EBITDA |
|
29,431 |
|
|
25,948 |
|
| Total Midstream Businesses
Adjusted EBITDA |
|
72,373 |
|
|
73,772 |
|
| Exploration and Production
Adjusted EBITDA |
|
92,100 |
|
|
89,896 |
|
| Utility Adjusted EBITDA |
|
59,463 |
|
|
57,569 |
|
| Corporate and All Other
Adjusted EBITDA |
|
(998 |
) |
|
(1,804 |
) |
| Total Adjusted
EBITDA |
|
$ |
222,938 |
|
|
$ |
219,433 |
|
| |
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANYAND
SUBSIDIARIESNON-GAAP FINANCIAL
MEASURES SEGMENT ADJUSTED
EBITDA |
| |
|
|
| |
|
Three Months Ended |
| |
|
December 31, |
| (in thousands) |
|
2019 |
|
2018 |
| Exploration and
Production Segment |
|
|
|
|
|
Reported GAAP Earnings |
|
$ |
23,977 |
|
|
$ |
38,214 |
|
|
Depreciation, Depletion and Amortization |
|
44,148 |
|
|
34,700 |
|
|
Other (Income) Deductions |
|
161 |
|
|
(278 |
) |
|
Interest Expense |
|
14,057 |
|
|
13,163 |
|
|
Income Taxes |
|
9,757 |
|
|
10,602 |
|
|
Mark-to-Market Adjustments due to Hedge Ineffectiveness |
|
— |
|
|
(6,505 |
) |
| Adjusted EBITDA |
|
$ |
92,100 |
|
|
$ |
89,896 |
|
| |
|
|
|
|
| Pipeline and Storage
Segment |
|
|
|
|
| Reported GAAP Earnings |
|
$ |
18,105 |
|
|
$ |
25,102 |
|
|
Depreciation, Depletion and Amortization |
|
11,605 |
|
|
11,114 |
|
|
Other (Income) Deductions |
|
(1,378 |
) |
|
(1,926 |
) |
|
Interest Expense |
|
7,112 |
|
|
7,286 |
|
|
Income Taxes |
|
7,498 |
|
|
6,248 |
|
| Adjusted EBITDA |
|
$ |
42,942 |
|
|
$ |
47,824 |
|
| |
|
|
|
|
| Gathering
Segment |
|
|
|
|
| Reported GAAP Earnings |
|
$ |
15,944 |
|
|
$ |
14,183 |
|
|
Depreciation, Depletion and Amortization |
|
5,138 |
|
|
4,679 |
|
|
Other (Income) Deductions |
|
3 |
|
|
(43 |
) |
|
Interest Expense |
|
2,219 |
|
|
2,377 |
|
|
Income Taxes |
|
6,127 |
|
|
4,752 |
|
| Adjusted EBITDA |
|
$ |
29,431 |
|
|
$ |
25,948 |
|
| |
|
|
|
|
| Utility
Segment |
|
|
|
|
| Reported GAAP Earnings |
|
$ |
26,583 |
|
|
$ |
25,649 |
|
|
Depreciation, Depletion and Amortization |
|
13,630 |
|
|
13,290 |
|
|
Other (Income) Deductions |
|
5,814 |
|
|
6,216 |
|
|
Interest Expense |
|
5,673 |
|
|
5,893 |
|
|
Income Taxes |
|
7,763 |
|
|
6,521 |
|
| Adjusted EBITDA |
|
$ |
59,463 |
|
|
$ |
57,569 |
|
| |
|
|
|
|
| Corporate and All
Other |
|
|
|
|
| Reported GAAP Earnings |
|
$ |
1,982 |
|
|
$ |
(488 |
) |
|
Depreciation, Depletion and Amortization |
|
397 |
|
|
472 |
|
|
Other (Income) Deductions |
|
(1,560 |
) |
|
5,633 |
|
|
Interest Expense |
|
(2,067 |
) |
|
(2,207 |
) |
|
Income Taxes |
|
250 |
|
|
(5,214 |
) |
| Adjusted EBITDA |
|
$ |
(998 |
) |
|
$ |
(1,804 |
) |
| |
|
|
|
|
|
|
|
|
(3)(4)
Kenneth E. Webster
Investor Relations
716-857-7067
Karen M. Camiolo
Treasurer
716-857-7344
National Fuel Gas (NYSE:NFG)
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