the Pipeline and Storage segment exclude a $2.6 million gain from the FERC approved sale of base gas from Supply’s jointly-owned Ellisburg Storage field.
For the fiscal year ended September 30, 2004, the earnings from continuing operations before non-recurring items were $156.8 million for the Company, $48.9 million for the Utility segment, $49.7 million for the Pipeline and Storage segment, $50.5 million for the Exploration and Production segment, $5.9 million for the Energy Marketing segment, $6.5 million for the Timber segment and a loss of $4.7 million in Corporate and All Other. These earnings exclude an adjustment to the Seneca Northeast Division’s fiscal 2003 sale of timber properties, which decreased the gain by $0.8 million (Timber segment), $6.4 million of expense associated with the settlement of a pension obligation (allocated to all segments) and a $4.6 million benefit to earnings related to the Seneca’s September 2003 sale of Canadian oil properties (Exploration and Production segment).
Including those non-recurring items, earnings from continuing operations for the fiscal year ended September 30, 2004 were $154.27 for the Company, $46.72 million for the Utility segment, $47.73 million for the Pipeline and Storage segment, $54.34 million for the Exploration and Production segment, $5.54 million for the Energy Marketing segment, $5.64 million for the Timber segment and a loss of $5.70 million in Corporate and All Other. Compared with these earnings, the Company’s earnings from continuing operations for fiscal 2005 were down $0.75 million to $153.52 million, for the Utility segment were down $7.52 million to $39.20 million, for the Pipeline and Storage segment were up $12.72 million to $60.45 million, for the Exploration and Production segment were down $3.68 million to $50.66 million, for the Energy Marketing segment were down $0.46 million to $5.08 million, for the Timber segment were down $0.61 million to $5.03 million and for Corporate and All Other were down $1.20 million to a loss of $6.90 million.
The Company reaffirms its previously provided fiscal 2006 earnings per share guidance of $2.30 to $2.50 per diluted share.* Earnings per share guidance on a consolidated and segment basis is provided in the table at page 21 of this document. A table (current as of October 28, 2005) is also included on page 21 that shows how projected earnings are expected to change in response to changes from commodity pricing on which the guidance is based.
The Company will host a conference call on Friday, October 28, 2005 at 11:00 a.m. (Eastern Time) to discuss this announcement. There are two ways to access this call. For those with Internet access, you may go to National Fuel’s Web site at http://www.nationalfuelgas.com and click on the “For Investors” link at the top of the homepage. For those without Internet access, you may access the live call by dialing (toll-free) 1-866-700-0133, and use the passcode “65763084”. For those unable to listen to the live conference call, a replay will be available approximately one hour after the conclusion of the call at the same Web site link and by phone at (toll-free) 888-286-8010 using passcode “16926875.” Both the webcast and telephonic replay will be available until the close of business on Friday, November 4, 2005.
Page 9.
National Fuel is an integrated energy company with $3.7 billion in assets comprised of the following five operating segments: Utility, Pipeline and Storage, Exploration and Production, Energy Marketing, and Timber. Additional information about National Fuel is available on its Internet Web site:http://www.nationalfuelgas.com or through its investor information service at 1-800-334-2188.
Analyst Contact: | Margaret M. Suto | (716) 857-6987 |
Media Contact: | Julie Coppola Cox | (716) 857-7079 |
* Certain statements contained herein, including those which are designated with an asterisk (“*”) and those which use words such as “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” and similar expressions, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: changes in economic conditions, including economic disruptions caused by terrorist activities or acts of war; changes in demographic patterns or weather conditions, including the occurrence of severe weather; changes from expectations with respect to the extent of damage caused by recent hurricanes or the amount of time necessary for repairs to be made to Seneca’s facilities or those of third parties; disputes with insurance providers; increasing costs of insurance, changes in coverage and the ability to obtain insurance; changes in the availability and/or price of natural gas or oil and the effect of such changes on the accounting treatment or valuation of derivative financial instruments or the Company's natural gas and oil reserves; impairments under the Securities and Exchange Commission’s full cost ceiling test for natural gas and oil reserves; changes in the availability and/or price of derivative financial instruments; changes in the price differentials between various types of oil; failure of the price differential between heavy sour crude oil and light sweet crude oil to return to its historical norm; inability to obtain new customers or retain existing ones; significant changes in competitive factors affecting the Company; governmental/regulatory actions, initiatives and proceedings, including those involving acquisitions, financings, rate cases (which address, among other things, allowed rates of return, rate design and retained gas), affiliate relationships, industry structure, franchise renewal, and environmental/safety requirements; unanticipated impacts of restructuring initiatives in the natural gas and electric industries; significant changes from expectations in actual capital expenditures and operating expenses and unanticipated project delays or changes in project costs; the nature and projected profitability of pending and potential projects and other investments; occurrences affecting the Company’s ability to obtain funds from operations, debt or equity to finance needed capital expenditures and other investments, including any downgrades in the Company’s credit ratings; uncertainty of oil and gas reserve estimates; ability to successfully identify and finance acquisitions or other investments and ability to operate and integrate existing and any subsequently acquired business or properties; ability to successfully identify, drill for and produce economically viable natural gas and oil reserves; significant changes from expectations in the Company's actual production levels for natural gas or oil; regarding foreign operations, changes in trade and monetary policies, inflation and exchange rates, taxes, operating conditions, laws and regulations related to foreign operations, and political and governmental changes; significant changes in tax rates or policies or in rates of inflation or interest; significant changes in the Company’s relationship with its employees or contractors and the potential adverse effects if labor disputes, grievances or shortages were to occur; changes in accounting principles or the application of such principles to the Company; changes in laws and regulations to which the Company is subject, including tax, environmental, safety and employment laws and regulations; the cost and effects of legal and administrative claims against the Company; changes in actuarial assumptions and the return on assets with respect to the Company’s retirement plan and post-retirement benefits; or increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide post-retirement benefits. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
- more -
Page 10 |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
RECONCILIATION TO REPORTED EARNINGS |
| | | | | | | | | |
| | Three Months | | Three Months | | | Twelve Months | | Twelve Months |
(Thousands of Dollars) | | Ended | | Ended | | | Ended | | Ended |
| | September 30, 2005 | | September 30, 2004 | | | September 30, 2005 | | September 30, 2004 |
| | (unaudited) | | (unaudited) | | | (unaudited) | | (unaudited) |
Utility | | | | | | | | | |
Reported earnings | | $ (6,073) | | $ (7,054) | | | $ 39,197 | | $ 46,718 |
Pension settlement loss | | - | | - | | | - | | 2,193 |
Earnings before non-recurring items | | (6,073) | | (7,054) | | | 39,197 | | 48,911 |
| | | | | | | | | |
| | | | | | | | | |
Pipeline and Storage | | | | | | | | | |
Reported earnings | | 18,877 | | 11,493 | | | 60,454 | | 47,726 |
Pension settlement loss | | - | | - | | | - | | 1,967 |
Gain associated with insurance proceeds | | (3,885) | | - | | | (3,885) | | - |
Base gas sale | | - | | - | | | (2,636) | | - |
Earnings before non-recurring items | | 14,992 | | 11,493 | | | 53,933 | | 49,693 |
| | | | | | | | | |
| | | | | | | | | |
Exploration and Production | | | | | | | | | |
Reported earnings | | 11,676 | | 10,278 | | | 50,659 | | 54,344 |
Gain on sale of oil and gas producing properties | | - | | - | | | - | | (4,645) |
Pension settlement loss | | - | | - | | | - | | 851 |
Earnings before non-recurring items | | 11,676 | | 10,278 | | | 50,659 | | 50,550 |
| | | | | | | | | |
| | | | | | | | | |
Energy Marketing | | | | | | | | | |
Reported earnings | | 168 | | (52) | | | 5,077 | | 5,535 |
Pension settlement loss | | - | | - | | | - | | 323 |
Earnings before non-recurring items | | 168 | | (52) | | | 5,077 | | 5,858 |
| | | | | | | | | |
| | | | | | | | | |
Timber | | | | | | | | | |
Reported earnings | | 830 | | 1,765 | | | 5,032 | | 5,637 |
Loss on sale of timber properties | | - | | - | | | - | | 764 |
Pension settlement loss | | - | | - | | | - | | 78 |
Earnings before non-recurring items | | 830 | | 1,765 | | | 5,032 | | 6,479 |
| | | | | | | | | |
| | | | | | | | | |
Corporate and All Other | | | | | | | | | |
Reported earnings | | (7,167) | | (2,598) | | | (6,904) | | (5,695) |
Pension settlement loss | | - | | - | | | - | | 994 |
Earnings before non-recurring items | | (7,167) | | (2,598) | | | (6,904) | | (4,701) |
| | | | | | | | | |
| | | | | | | | | |
Consolidated Earnings from Continuing Operations | | | | | | | | | |
Reported earnings from continuing operations | | 18,311 | | 13,832 | | | 153,515 | | 154,265 |
Total non-recurring items from above | | (3,885) | | - | | | (6,521) | | 2,525 |
Earnings from continuing operations before non-recurring items | | $ 14,426 | | $ 13,832 | | | $ 146,994 | | $ 156,790 |
| | | | | | | | | |
Discontinued Operations | | | | | | | | | |
Reported earnings from discontinued operations | | 30,900 | | (6,078) | | | 35,973 | | 12,321 |
| | | | | | | | | |
Consolidated | | | | | | | | | |
Reported earnings | | $ 49,211 | | $ 7,754 | | | $ 189,488 | | $ 166,586 |
Page 11
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
RECONCILIATION TO REPORTED EARNINGS
Three Months Three Months Twelve Months Twelve Months
(Diluted Earnings Per Share) Ended Ended Ended Ended
September 30, 2005 September 30, 2004 September 30, 2005 September 30, 2004
(unaudited) (unaudited) (unaudited) (unaudited)
---------------- ---------------- ---------------- ----------------
Utility
Reported earnings $ (0.07) $ (0.08) $ 0.46 $ 0.56
Pension settlement loss - - - 0.03
---------------- ---------------- ---------------- ----------------
Earnings before non-recurring items (0.07) (0.08) 0.46 0.59
---------------- ---------------- ---------------- ----------------
Pipeline and Storage
Reported earnings 0.22 0.14 0.71 0.58
Pension settlement loss - - - 0.02
Gain associated with insurance proceeds (0.05) - (0.05) -
Base gas sale - - (0.03) -
---------------- ---------------- ---------------- ----------------
Earnings before non-recurring items 0.17 0.14 0.63 0.60
---------------- ---------------- ---------------- ----------------
Exploration and Production
Reported earnings 0.13 0.12 0.60 0.66
Gain on sale of oil and gas producing properties - - - (0.06)
Pension settlement loss - - - 0.01
---------------- ---------------- ---------------- ----------------
Earnings before non-recurring items 0.13 0.12 0.60 0.61
---------------- ---------------- ---------------- ----------------
Energy Marketing
Reported earnings - - 0.06 0.07
Pension settlement loss - - - -
---------------- ---------------- ---------------- ----------------
Earnings before non-recurring items - - 0.06 0.07
---------------- ---------------- ---------------- ----------------
Timber
Reported earnings 0.01 0.02 0.06 0.06
Loss on sale of timber properties - - - 0.01
Pension settlement loss - - - -
---------------- ---------------- ---------------- ----------------
Earnings before non-recurring items 0.01 0.02 0.06 0.07
---------------- ---------------- ---------------- ----------------
Corporate and All Other
Reported earnings (including rounding) (0.08) (0.04) (0.08) (0.07)
Pension settlement loss (including rounding) - - - 0.02
---------------- ---------------- ---------------- ----------------
Earnings before non-recurring items (0.08) (0.04) (0.08) (0.05)
---------------- ---------------- ---------------- ----------------
Consolidated Earnings from Continuing Operations
Reported earnings from continuing operations 0.21 0.16 1.81 1.86
Total non-recurring items from above (0.05) - (0.08) 0.03
---------------- ---------------- ---------------- ----------------
Earnings from continuing operations before non-recurring items $ 0.16 $ 0.16 $ 1.73 $ 1.89
================ ================ ================ ================
Discontinued Operations
Reported earnings from discontinued operations 0.36 (0.07) 0.42 0.15
---------------- ---------------- ---------------- ----------------
Consolidated
Reported earnings $ 0.57 $ 0.09 $ 2.23 $ 2.01
================ ================ ================ ================
Page 12
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
(Thousands of Dollars, except per share amounts)
Three Months Ended Twelve Months Ended
September 30, September 30,
(Unaudited) (Unaudited)
------------------------------ -------------------------------
SUMMARY OF OPERATIONS 2005 2004 2005 2004
------------- -------------- ------------- ---------------
Operating Revenues $ 287,064 $ 267,495 $ 1,923,549 $ 1,907,968
------------- -------------- ------------- ---------------
Operating Expenses:
Purchased Gas 82,316 77,859 959,827 949,452
Operation and Maintenance 106,968 92,149 404,517 385,519
Property, Franchise and Other Taxes 15,525 15,184 69,076 68,978
Depreciation, Depletion and Amortization 47,329 43,939 179,767 174,289
------------- -------------- ------------- ---------------
252,138 229,131 1,613,187 1,578,238
Loss on Sale of Timber Properties - - - (1,252)
Gain on Sale of Oil and Gas Producing Properties - - - 4,645
------------- -------------- ------------- ---------------
Operating Income 34,926 38,364 310,362 333,123
Other Income (Expense):
Income from Unconsolidated Subsidiaries 1,447 402 3,362 805
Impairment of Investment in Partnership (4,158) - (4,158) -
Other Income 6,764 733 12,744 2,908
Interest Income 4,714 524 6,496 1,771
Interest Expense on Long-Term Debt (18,255) (18,999) (73,244) (82,989)
Other Interest Expense (158) (1,933) (9,069) (6,763)
------------- -------------- ------------- ---------------
Income from Continuing Operations Before Income Taxes 25,280 19,091 246,493 248,855
Income Tax Expense 6,969 5,259 92,978 94,590
------------- -------------- ------------- ---------------
Income from Continuing Operations 18,311 13,832 153,515 154,265
Discontinued Operations:
Income (Loss) from Operations, Net of Tax 5,126 (6,078) 10,199 12,321
Gain on Disposal, Net of Tax 25,774 - 25,774 -
------------- -------------- ------------- ---------------
Income (Loss) from Discontinued Operations, Net of Tax 30,900 (6,078) 35,973 12,321
------------- -------------- ------------- ---------------
Net Income Available for Common Stock $ 49,211 $ 7,754 $ 189,488 $ 166,586
============= ============== ============= ===============
Earnings Per Common Share:
Basic:
Income from Continuing Operations $ 0.22 $ 0.17 $ 1.84 $ 1.88
Income (Loss) from Discontinued Operations 0.36 (0.08) 0.43 0.15
------------- -------------- ------------- ---------------
Net Income Available for Common Stock $ 0.58 $ 0.09 $ 2.27 $ 2.03
============= ============== ============= ===============
Diluted:
Income from Continuing Operations $ 0.21 $ 0.16 $ 1.81 $ 1.86
Income (Loss) from Discontinued Operations 0.36 (0.07) 0.42 0.15
------------- -------------- ------------- ---------------
Net Income Available for Common Stock $ 0.57 $ 0.09 $ 2.23 $ 2.01
============= ============== ============= ===============
Weighted Average Common Shares:
Used in Basic Calculation 84,128,929 82,633,724 83,541,627 82,045,535
============= ============== ============= ===============
Used in Diluted Calculation 85,784,654 83,851,467 85,029,131 82,900,438
============= ============== ============= ===============
Page 13
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, September 30,
(Thousands of Dollars) 2005 2004
- --------------------------------------------------------------------------------------------
ASSETS
Property, Plant and Equipment $4,423,255 $4,602,779
Less - Accumulated Depreciation, Depletion and Amortization 1,583,955 1,596,015
- ---------------------------------------------------------------- --------------------------
Net Property, Plant and Equipment 2,839,300 3,006,764
- ---------------------------------------------------------------- --------------------------
Current Assets:
Cash and Temporary Cash Investments 135,391 66,153
Receivables - Net 155,064 129,825
Unbilled Utility Revenue 20,465 18,574
Gas Stored Underground 64,529 68,511
Materials and Supplies - at average cost 44,777 43,922
Unrecovered Purchased Gas Costs 14,817 7,532
Prepayments 54,817 38,760
Fair Value of Derivative Financial Instruments - 23
- ---------------------------------------------------------------- --------------------------
Total Current Assets 489,860 373,300
- ---------------------------------------------------------------- --------------------------
Other Assets:
Recoverable Future Taxes 85,000 83,847
Unamortized Debt Expense 17,567 19,573
Other Regulatory Assets 82,842 66,862
Deferred Charges 4,474 3,411
Other Investments 80,394 72,556
Investments in Unconsolidated Subsidiaries 12,658 16,444
Goodwill 5,476 5,476
Intangible Assets 42,302 45,994
Other 4,167 17,571
- ---------------------------------------------------------------- --------------------------
Total Other Assets 334,880 331,734
- ---------------------------------------------------------------- --------------------------
Total Assets $3,664,040 $3,711,798
- ---------------------------------------------------------------- --------------------------
CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized - 200,000,000
Shares; Issued and Outstanding - 84,356,748 Shares
and 82,990,340 Shares, Respectively $84,357 $82,990
Paid in Capital 529,834 506,560
Earnings Reinvested in the Business 813,020 718,926
- ---------------------------------------------------------------- --------------------------
Total Common Shareholders' Equity Before
Items of Other Comprehensive Loss 1,427,211 1,308,476
Accumulated Other Comprehensive Loss (197,628) (54,775)
- ---------------------------------------------------------------- --------------------------
Total Comprehensive Shareholders' Equity 1,229,583 1,253,701
Long-Term Debt, Net of Current Portion 1,119,012 1,133,317
- ---------------------------------------------------------------- --------------------------
Total Capitalization 2,348,595 2,387,018
- ---------------------------------------------------------------- --------------------------
- ---------------------------------------------------------------- --------------------------
Minority Interest in Foreign Subsidiaries - 37,048
- ---------------------------------------------------------------- --------------------------
Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper - 156,800
Current Portion of Long-Term Debt 9,393 14,260
Accounts Payable 155,485 115,979
Amounts Payable to Customers 1,158 3,154
Other Accruals and Current Liabilities 65,753 63,594
Fair Value of Derivative Financial Instruments 209,072 95,099
- ---------------------------------------------------------------- --------------------------
Total Current and Accrued Liabilities 440,861 448,886
- ---------------------------------------------------------------- --------------------------
Deferred Credits:
Accumulated Deferred Income Taxes 397,896 458,095
Taxes Refundable to Customers 11,009 11,065
Unamortized Investment Tax Credit 6,796 7,498
Cost of Removal Regulatory Liability 90,396 82,020
Other Regulatory Liabilities 71,495 67,669
Pension and Post-Employment Benefit Liabilities 200,585 119,157
Asset Retirement Obligation 41,411 32,292
Other Deferred Credits 54,996 61,050
- ---------------------------------------------------------------- --------------------------
Total Deferred Credits 874,584 838,846
- ---------------------------------------------------------------- --------------------------
Commitments and Contingencies - -
- ---------------------------------------------------------------- --------------------------
Total Capitalization and Liabilities $3,664,040 $3,711,798
- ---------------------------------------------------------------- --------------------------
Page 14
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Twelve Months Ended
September 30,
(Thousands of Dollars) 2005 2004
- --------------------------------------------------------------------------------------------------------------------
Operating Activities:
Net Income Available for Common Stock $189,488 $166,586
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Gain on Sale of Discontinued Operations (27,274) -
Loss on Sale of Timber Properties - 1,252
Gain on Sale of Oil and Gas Producing Properties - (4,645)
Depreciation, Depletion and Amortization 193,144 189,538
Deferred Income Taxes 32,338 40,329
Income from Unconsolidated Subsidiaries, Net of Cash Distributions (1,372) (19)
Impairment of Investment in Partnership 4,158 -
Minority Interest in Foreign Subsidiaries 2,645 1,933
Other 7,390 9,839
Change in:
Receivables and Unbilled Utility Revenue (31,246) 4,840
Gas Stored Underground and Materials and
Supplies (1,171) 9,860
Unrecovered Purchased Gas Costs (7,285) 21,160
Prepayments (16,455) 8,146
Accounts Payable 48,089 (5,134)
Amounts Payable to Customers (1,996) 2,462
Other Accruals and Current Liabilities 3,637 25,857
Other Assets (12,918) (10,693)
Other Liabilities 4,694 (17,011)
- --------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities $385,866 $444,300
- --------------------------------------------------------------------------------------------------------------------
Investing Activities:
Capital Expenditures ($218,271) ($172,341)
Net Proceeds from Sale of Foreign Subsidiary 111,619 -
Net Proceeds from Sale of Oil and Gas Producing Properties 90 7,162
Other 3,890 1,974
- --------------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities ($102,672) ($163,205)
- --------------------------------------------------------------------------------------------------------------------
Financing Activities:
Change in Notes Payable to Banks and
Commercial Paper ($115,359) $38,600
Reduction of Long-Term Debt (13,317) (243,085)
Dividends Paid on Common Stock (94,159) (89,092)
Dividends Paid to Minority Interest (12,676) -
Proceeds From Issuance of Common Stock 20,279 23,763
- --------------------------------------------------------------------------------------------------------------------
Net Cash Used In Financing Activities ($215,232) ($269,814)
- --------------------------------------------------------------------------------------------------------------------
Effect of Exchange Rates on Cash 1,276 3,451
- --------------------------------------------------------------------------------------------------------------------
Net Increase in Cash and Temporary
Cash Investments 69,238 14,732
Cash and Temporary Cash Investments
at Beginning of Period 66,153 51,421
- --------------------------------------------------------------------------------------------------------------------
Cash and Temporary Cash Investments
at September 30 $135,391 $66,153
- --------------------------------------------------------------------------------------------------------------------
Page 15
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION
(Thousands of Dollars)
Three Months Ended Twelve Months Ended
September 30, September 30,
(Unaudited) (Unaudited)
---------------------------------------------- ---------------------------------------------
Increase Increase
2005 2004 (Decrease) 2005 2004 (Decrease)
-------------- -------------- -------------- -------------- -------------- -------------
Operating Revenues
Utility $ 112,684 $ 109,516 $ 3,168 $ 1,117,067 $ 1,152,641 $ (35,574)
Pipeline and Storage 54,671 51,662 3,009 215,859 209,707 6,152
Exploration and Production 73,898 68,105 5,793 293,425 293,698 (273)
Energy Marketing 53,608 43,617 9,991 329,714 284,349 45,365
Timber 14,291 14,346 (55) 61,286 55,970 5,316
-------------- -------------- -------------- -------------- -------------- -------------
Total Reportable Segments 309,152 287,246 21,906 2,017,351 1,996,365 20,986
All Other 3,140 3,227 (87) 13,354 13,695 (341)
Corporate 811 628 183 2,824 2,513 311
Intersegment Eliminations (26,039) (23,606) (2,433) (109,980) (104,605) (5,375)
-------------- -------------- -------------- -------------- -------------- -------------
Total Consolidated $ 287,064 $ 267,495 $ 19,569 $ 1,923,549 $ 1,907,968 $ 15,581
============== ============== ============== ============== ============== =============
Operating Income (Loss)
Utility $ (14,920) $ (9,554) $ (5,366) $ 80,389 $ 98,642 $ (18,253)
Pipeline and Storage 24,830 19,492 5,338 96,178 88,748 7,430
Exploration and Production 30,118 27,759 2,359 123,208 132,053 (8,845)
Energy Marketing (170) (29) (141) 7,288 8,749 (1,461)
Timber 1,358 3,217 (1,859) 9,556 10,802 (1,246)
-------------- -------------- -------------- -------------- -------------- -------------
Total Reportable Segments 41,216 40,885 331 316,619 338,994 (22,375)
All Other (3,604) (187) (3,417) (1,996) 2,367 (4,363)
Corporate (2,686) (2,334) (352) (4,261) (8,238) 3,977
-------------- -------------- -------------- -------------- -------------- -------------
Total Consolidated $ 34,926 $ 38,364 $ (3,438) $ 310,362 $ 333,123 $ (22,761)
============== ============== ============== ============== ============== =============
Income (Loss) from
Continuing Operations
Utility $ (6,073) $ (7,054) $ 981 $ 39,197 $ 46,718 $ (7,521)
Pipeline and Storage 18,877 11,493 7,384 60,454 47,726 12,728
Exploration and Production 11,676 10,278 1,398 50,659 54,344 (3,685)
Energy Marketing 168 (52) 220 5,077 5,535 (458)
Timber 830 1,765 (935) 5,032 5,637 (605)
-------------- -------------- -------------- -------------- -------------- -------------
Total Reportable Segments 25,478 16,430 9,048 160,419 159,960 459
All Other (4,137) 181 (4,318) (2,616) 1,530 (4,146)
Corporate (3,030) (2,779) (251) (4,288) (7,225) 2,937
-------------- -------------- -------------- -------------- -------------- -------------
Total Consolidated $ 18,311 $ 13,832 $ 4,479 $ 153,515 $ 154,265 $ (750)
============== ============== ============== ============== ============== =============
Page 16
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
| | Three Months Ended
September 30,
(Unaudited) | Twelve Months Ended
September 30,
(Unaudited) |
|---|
| |
2005 |
2004 | Increase
(Decrease) | 2005 | 2004 | Increase
(Decrease) |
|---|
| Depreciation, Depletion | | | | | | | | | | | | | | | | | | | | |
| and Amortization: | | |
| Utility | | | $ | 10,079 | | $ | 10,131 | | $ | (52 | ) | $ | 40,159 | | $ | 39,101 | | $ | 1,058 | |
| Pipeline and Storage | | | | 9,134 | | | 10,462 | | | (1,328 | ) | | 38,050 | | | 37,345 | | | 705 | |
| Exploration and Production | | | | 23,368 | | | 21,202 | | | 2,166 | | | 90,912 | | | 89,943 | | | 969 | |
| Energy Marketing | | | | (24 | ) | | 23 | | | (47 | ) | | 41 | | | 102 | | | (61 | ) |
| Timber | | | | 1,697 | | | 1,502 | | | 195 | | | 6,601 | | | 6,277 | | | 324 | |
|
| |
| |
| |
| |
| |
| |
| Total Reportable Segments | | | | 44,254 | | | 43,320 | | | 934 | | | 175,763 | | | 172,768 | | | 2,995 | |
| All Other | | | | 2,957 | | | 513 | | | 2,444 | | | 3,537 | | | 1,071 | | | 2,466 | |
| Corporate | | | | 118 | | | 106 | | | 12 | | | 467 | | | 450 | | | 17 | |
|
| |
| |
| |
| |
| |
| |
| Total Consolidated | | | $ | 47,329 | | $ | 43,939 | | $ | 3,390 | | $ | 179,767 | | $ | 174,289 | | $ | 5,478 | |
|
| |
| |
| |
| |
| |
| |
| Expenditures for | | |
| Long-Lived Assets | | |
| Utility | | | $ | 15,078 | | $ | 16,746 | | $ | (1,668 | ) | $ | 50,071 | | $ | 55,449 | | $ | (5,378 | ) |
| Pipeline and Storage | | | | 7,977 | | | 9,514 | | | (1,537 | ) | | 21,099 | | | 23,196 | | | (2,097 | ) |
| Exploration and Production | | | | 35,143 | | | 19,577 | | | 15,566 | | | 121,191 | | | 77,654 | | | 43,537 | |
| Energy Marketing | | | | 12 | | | — | | | 12 | | | 58 | | | 10 | | | 48 | |
| Timber | | | | 193 | | | 649 | | | (456 | ) | | 18,894 | | | 2,823 | | | 16,071 | |
|
| |
| |
| |
| |
| |
| |
| Total Reportable Segments | | | | 58,403 | | | 46,486 | | | 11,917 | | | 211,313 | | | 159,132 | | | 52,181 | |
| All Other | | | | 293 | | | 107 | | | 186 | | | 463 | | | 200 | | | 263 | |
| Corporate | | | | 512 | | | 98 | | | 414 | | | 618 | | | 5,511 | | | (4,893 | ) |
|
| |
| |
| |
| |
| |
| |
| Total Expenditures from | | |
| Continuing Operations | | | $ | 59,208 | | $ | 46,691 | | $ | 12,517 | | $ | 212,394 | | $ | 164,843 | | $ | 47,551 | |
|
| |
| |
| |
| |
| |
| |
UTILITY
CUSTOMER ACCOUNTS RECEIVABLE SUMMARY
| | 2005
| 2004
| 2003
| 2002
| 2001
|
|---|
| Current to 29 days | | | $ | 10,830 | | $ | 11,136 | | $ | 17,294 | | $ | 4,135 | | $ | 12,041 | |
| 30-59 days | | | | 8,967 | | | 8,270 | | | 7,866 | | | 5,398 | | | 7,909 | |
| 60-89 days | | | | 6,466 | | | 5,949 | | | 5,594 | | | 3,659 | | | 5,673 | |
| 90-119 days | | | | 6,304 | | | 5,376 | | | 5,843 | | | 3,404 | | | 5,617 | |
| Over 120 days | | | | 54,449 | | | 48,411 | | | 43,809 | | | 28,969 | | | 48,226 | |
|
| |
| |
| |
| |
| |
| Total | | | $ | 87,016 | | $ | 79,142 | | $ | 80,406 | | $ | 45,565 | | $ | 79,466 | |
|
| |
| |
| |
| |
| |
| Reserve for Bad Debt | | | $ | 25,124 | | $ | 12,903 | | $ | 12,666 | | $ | 13,297 | | $ | 15,246 | |
|
| |
| |
| |
| |
| |
DEGREE DAYS
| | Percent Colder
(Warmer) Than: |
|---|
Three Months Ended September 30
| Normal
| 2005
| 2004
| Normal
| Last Year
|
|---|
| Buffalo, NY | | 178 | | 36 | | 98 | | (79 | .8) | (63 | .3) |
Erie, PA
| | 135 | | 32 | | 95 | | (76 | .3) | (66 | .3) |
Twelve Months Ended September 30
| |
| Buffalo, NY | | 6,692 | | 6,587 | | 6,572 | | (1 | .6) | 0 | .2 |
| Erie, PA | | 6,243 | | 6,247 | | 6,086 | | 0 | .1 | 2 | .6 |
Page 17
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Three Months Ended Twelve Months Ended
September 30, September 30,
-------------------------------------- -------------------------------------
Increase Increase
2005 2004 (Decrease) 2005 2004 (Decrease)
----------- ----------- ------------ ----------- ---------- ------------
Gas Production/Prices:
Production (MMcf)
Gulf Coast 3,035 3,545 (510) 12,468 17,596 (5,128)
West Coast 1,052 1,040 12 4,052 4,057 (5)
Appalachia 1,150 1,238 (88) 4,650 5,132 (482)
Canada 2,050 1,354 696 8,009 6,228 1,781
----------- ----------- ------------ ----------- ---------- ------------
7,287 7,177 110 29,179 33,013 (3,834)
=========== =========== ============ =========== ========== ============
Average Prices (Per Mcf)
Gulf Coast $ 8.07 $ 5.96 $ 2.11 $ 7.05 $ 5.61 $ 1.44
West Coast 7.73 5.85 1.88 6.85 5.54 1.31
Appalachia 8.93 6.01 2.92 7.60 5.91 1.69
Canada 7.47 4.94 2.53 6.15 4.87 1.28
Weighted Average 7.99 5.76 2.23 6.86 5.51 1.35
Weighted Average after Hedging 6.77 5.14 1.63 6.23 5.06 1.17
Oil Production/Prices:
Production (Thousands of Barrels)
Gulf Coast 188 351 (163) 989 1,534 (545)
West Coast 628 637 (9) 2,544 2,650 (106)
Appalachia 13 5 8 36 20 16
Canada 71 70 1 300 324 (24)
----------- ----------- ------------ ----------- ---------- ------------
900 1,063 (163) 3,869 4,528 (659)
=========== =========== ============ =========== ========== ============
Average Prices (Per Barrel)
Gulf Coast $58.53 $ 41.64 $ 16.89 $49.78 $ 35.31 $ 14.47
West Coast 54.52 37.04 17.48 42.91 31.89 11.02
Appalachia 51.06 36.75 14.31 48.28 31.30 16.98
Canada 51.29 36.13 15.16 42.97 30.94 12.03
Weighted Average 55.06 38.49 16.57 44.72 32.98 11.74
Weighted Average after Hedging 30.70 27.79 2.91 27.86 26.40 1.46
Total Production (Mmcfe) 12,687 13,555 (868) 52,393 60,181 (7,788)
=========== =========== ============ =========== ========== ============
Selected Operating Performance Statistics:
General & Administrative Expense per Mcfe $ 0.36 $ 0.43 $ (0.07) $ 0.41 $ 0.38 $ 0.03
Lease Operating Expense per Mcfe $ 1.09 $ 0.91 $ 0.18 $ 0.98 $ 0.80 $ 0.18
Depreciation, Depletion & Amortization per Mcfe $ 1.84 $ 1.56 $ 0.28 $ 1.74 $ 1.49 $ 0.25
Page 18
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Hedging Summary for Fiscal 2006
SWAPS Volume Average Hedge Price
Oil 1.9 MMBBL $34.14 / BBL
Gas 9.2 BCF $6.17 / MCF
No-cost Collars Volume Floor Price Ceiling Price
Gas 6.7 BCF $7.45 / MCF $11.59 / MCF
Hedging Summary for Fiscal 2007
SWAPS Volume Average Hedge Price
Oil 0.9 MMBBL $37.03 / BBL
Gas 0.7 BCF $5.84 / MCF
No-cost Collars Volume Floor Price Ceiling Price
Gas 2.4 BCF $7.45 / MCF $10.74 / MCF
Drilling Program
Twelve Months Ended September 30, 2005:
Gross Wells Drilled
Gulf West East Canada Total
------------- ------------ ------------- ------------ -------------
Exploratory
Successful 7 0 2 24 33
Unsuccessful 1 0 1 3 5
Developmental
Successful 3 115 78 7 203
Unsuccessful 0 0 0 0 0
Total
Successful 10 115 80 31 236
Unsuccessful 1 0 1 3 5
Success Ratio 91% 100% 99% 91% 98%
Page 19
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Reserve Quantity Information
Gas MMcf
-------------------------------------------------------------------------------
U.S.
-------------------------------------------------------
Gulf Coast West Coast Appalachian Total Total
Region Region Region U.S. Canada Company
-------------------------------------------------------------------------------
Proved Developed and
Undeveloped Reserves:
September 30, 2004 27,734 67,444 78,760 173,938 50,846 224,784
Extensions and Discoveries 17,165 - 5,461 22,626 4,849 27,475
Revisions of Previous Estimates 6,039 7,067 3,733 16,839 (1,600) 15,239
Production (12,468) (4,052) (4,650) (21,170) (8,009) (29,179)
Sales of Minerals in Place - - (179) (179) - (179)
-------------------------------------------------------------------------------
September 30, 2005 38,470 70,459 83,125 192,054 46,086 238,140
Proved Developed Reserves:
September 30, 2004 25,827 53,035 78,760 157,622 46,223 203,845
September 30, 2005 23,108 58,692 83,125 164,925 43,980 208,905
Oil Mbbl
-------------------------------------------------------------------------------
U.S.
-------------------------------------------------------
Gulf Coast West Coast Appalachian Total Total
Region Region Region U.S. Canada Company
-------------------------------------------------------------------------------
Proved Developed and
Undeveloped Reserves:
September 30, 2004 2,080 60,882 147 63,109 2,104 65,213
Extensions and Discoveries 99 - 63 162 204 366
Revisions of Previous Estimates 105 (1,253) 3 (1,145) (186) (1,331)
Production (989) (2,544) (36) (3,569) (300) (3,869)
Sales of Minerals in Place - - - - (122) (122)
-------------------------------------------------------------------------------
September 30, 2005 1,295 57,085 177 58,557 1,700 60,257
Proved Developed Reserves:
September 30, 2004 2,061 38,631 148 40,840 2,104 42,944
September 30, 2005 1,229 41,701 177 43,107 1,700 44,807
Page 20
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Utility Throughput - (millions of cubic feet - MMcf)
Three Months Ended Twelve Months Ended
September 30, September 30,
--------------------------------------- ----------------------------------------
Increase Increase
2005 2004 (Decrease) 2005 2004 (Decrease)
------------ ---------- ----------- ------------ ----------- ------------
Retail Sales:
Residential Sales 3,778 4,317 (539) 66,903 70,109 (3,206)
Commercial Sales 643 733 (90) 11,984 12,752 (768)
Industrial Sales 666 211 455 1,387 2,261 (874)
------------ ---------- ----------- ------------ ----------- ------------
5,087 5,261 (174) 80,274 85,122 (4,848)
------------ ---------- ----------- ------------ ----------- ------------
Off-System Sales - 2,585 (2,585) - 16,839 (16,839)
Transportation 9,426 8,968 458 59,770 60,565 (795)
------------ ---------- ----------- ------------ ----------- ------------
14,513 16,814 (2,301) 140,044 162,526 (22,482)
============ ========== =========== ============ =========== ============
Pipeline & Storage Throughput- (MMcf)
Three Months Ended Twelve Months Ended
September 30, September 30,
--------------------------------------- ----------------------------------------
Increase Increase
2005 2004 (Decrease) 2005 2004 (Decrease)
------------ ---------- ----------- ------------ ----------- ------------
Firm Transportation - Affiliated 10,442 8,746 1,696 113,242 116,768 (3,526)
Firm Transportation - Non-Affiliated 62,606 45,894 16,712 244,343 222,223 22,120
Interruptible Transportation 4,790 1,801 2,989 14,794 12,692 2,102
------------ ---------- ----------- ------------ ----------- ------------
77,838 56,441 21,397 372,379 351,683 20,696
============ ========== =========== ============ =========== ============
Energy Marketing Volumes
Three Months Ended Twelve Months Ended
September 30, September 30,
--------------------------------------- ----------------------------------------
Increase Increase
2005 2004 (Decrease) 2005 2004 (Decrease)
------------ ---------- ----------- ------------ ----------- ------------
Natural Gas (MMcf) 6,567 5,743 824 40,683 41,651 (968)
============ ========== =========== ============ =========== ============
Timber Board Feet (Thousands)
Three Months Ended Twelve Months Ended
September 30, September 30,
--------------------------------------- ----------------------------------------
Increase Increase
2005 2004 (Decrease) 2005 2004 (Decrease)
------------ ---------- ----------- ------------ ----------- ------------
Log Sales 1,668 1,640 28 7,601 6,848 753
Green Lumber Sales 2,310 2,398 (88) 10,489 9,552 937
Kiln Dry Lumber Sales 4,118 4,111 7 15,491 15,020 471
------------ ---------- ----------- ------------ ----------- ------------
8,096 8,149 (53) 33,581 31,420 2,161
============ ========== =========== ============ =========== ============
Page 21
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
FISCAL 2006 SEGMENT EARNINGS GUIDANCE AND SENSITIVITIES
Earnings per share sensitivity to changes
Fiscal 2006 earnings per share guidance by segment* from September 13, 2005 NYMEX prices* ^
------------------------------------------------------
$1 change per MMBtu gas $1 change per Bbl oil
-------------------------- -------------------------
Range Increase Decrease Increase Decrease
---------------------------------
Utility $0.52 $0.59 - $0.01 + $0.01 - -
Pipeline & Storage $0.60 $0.63 + $0.02 - $0.02 - -
Exploration & Production $1.10 $1.20 + $0.11 - $0.11 + $0.01 - $0.01
Energy Marketing $0.02 $0.02 - - - -
Timber $0.05 $0.05 - - - -
Corporate & Other $0.01 $0.01 - - - -
Consolidated $2.30 $2.50 + $0.12 - $0.12 + $0.01 - $0.01
NYMEX Settlement Prices at September 13, 2005
------------------------------------------------
Natural Gas Oil
($ per MMBtu) ($ per Bbl)
Oct-05 $10.763 $63.11
Nov-05 $11.371 $63.78
Dec-05 $11.866 $64.38
Jan-06 $12.156 $64.83
Feb-06 $12.046 $65.19
Mar-06 $11.751 $65.41
Apr-06 $9.551 $65.48
May-06 $9.191 $65.44
Jun-06 $9.216 $65.35
Jul-06 $9.257 $65.23
Aug-06 $9.300 $65.10
Sep-06 $9.276 $64.96
Average $10.479 $64.86
* Please refer to forward looking statement footnote at page 9 of this document.
^ This sensitivity table is current as of October 28, 2005, but will become obsolete with the passage of time,
changes in Seneca's production forecast, changes in customer use per account, as additional hedging
contracts are entered into, and the settling of NYMEX hedge contracts at their maturity.
Page 22
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Quarter Ended September 30 (unaudited) 2005 2004
-------------------- --------------------
Operating Revenues $ 287,064,000 $ 267,495,000
==================== ====================
Income from Continuing Operations $ 18,311,000 $ 13,832,000
Income (Loss) from Discontinued Operations, Net of Tax 30,900,000 (6,078,000)
-------------------- --------------------
Net Income Available for Common Stock $ 49,211,000 $ 7,754,000
-------------------- --------------------
Earnings Per Common Share:
Basic:
Income from Continuing Operations $ 0.22 $ 0.17
Income (Loss) from Discontinued Operations 0.36 (0.08)
-------------------- --------------------
Net Income Available for Common Stock $ 0.58 $ 0.09
==================== ====================
Diluted:
Income from Continuing Operations $ 0.21 $ 0.16
Income (Loss) from Discontinued Operations 0.36 (0.07)
-------------------- --------------------
Net Income Available for Common Stock $ 0.57 $ 0.09
==================== ====================
Weighted Average Common Shares:
Used in Basic Calculation 84,128,929 82,633,724
==================== ====================
Used in Diluted Calculation 85,784,654 83,851,467
==================== ====================
Twelve Months Ended September 30 (unaudited)
Operating Revenues $ 1,923,549,000 $ 1,907,968,000
==================== ====================
Income from Continuing Operations $ 153,515,000 $ 154,265,000
Income from Discontinued Operations, Net of Tax 35,973,000 12,321,000
-------------------- --------------------
Net Income Available for Common Stock $ 189,488,000 $ 166,586,000
==================== ====================
Earnings Per Common Share:
Basic:
Income from Continuing Operations $ 1.84 $ 1.88
Income from Discontinued Operations 0.43 0.15
-------------------- --------------------
Net Income Available for Common Stock $ 2.27 $ 2.03
==================== ====================
Diluted:
Income from Continuing Operations $ 1.81 $ 1.86
Income from Discontinued Operations 0.42 0.15
-------------------- --------------------
Net Income Available for Common Stock $ 2.23 $ 2.01
==================== ====================
Weighted Average Common Shares:
Used in Basic Calculation 83,541,627 82,045,535
==================== ====================
Used in Diluted Calculation 85,029,131 82,900,438
==================== ====================
