MANAGEMENT COMMENTS
Ronald J. Tanski, President and Chief Executive Officer of National Fuel Gas Company, stated: “The third quarter was another strong quarter for National Fuel. All of our business segments delivered impressive operating results, which translated into a 35 percent increase in consolidated quarterly earnings.
“The connection of new multi-well pads to our midstream production pipelines, and robust production from Seneca’s Pennsylvania wells in Tioga and Lycoming counties helped deliver a 54 percent increase in production over last year’s third quarter. Our program to evaluate the Marcellus Shale formation across our substantial legacy acreage position also made great strides during the quarter. Seneca achieved very promising initial results from four new delineation wells across Elk County, Pa. While the success of these wells is certainly important for the ongoing growth of our upstream exploration and production business, continued development of this Western Development Area acreage will also create additional expansion opportunities for our midstream pipeline businesses.
“As we look forward to fiscal 2014, we are in a great position to achieve continued success. With our solid financial position and considerable growth opportunities, we will remain focused on developing Seneca’s oil and natural gas reserves and building out our pipeline infrastructure to get those reserves to market. We believe that these assets will produce long-term value for our shareholders.”
SUMMARY OF RESULTS
National Fuel had consolidated earnings for the quarter ended June 30, 2013, of $58.5 million, or $0.69 per share, compared to the prior year’s third quarter of $43.2 million, or $0.52 per share, an increase of $15.3 million or $0.17 per share. The increase is due to higher earnings in all segments and the All Other category. (Note: All references to earnings per share are to diluted earnings per share, all amounts are stated in U.S. dollars and all amounts used in the discussion of earnings are after tax unless otherwise noted.)
Consolidated earnings for the nine months ended June 30, 2013, of $212.2 million, or $2.52 per share, increased $40.9 million, or $0.47 per share, from the same period in the prior year where earnings were $171.3 million or $2.05 per share.
OPERATING RESULTS
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| | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | Ended June 30, | | Ended June 30, |
| | 2013 | | 2012 | | 2013 | | 2012 |
(in thousands except per share amounts) | | | | | | | | | | | | |
Reported GAAP earnings | | $ | 58,495 | | $ | 43,184 | | $ | 212,159 | | $ | 171,275 |
Items impacting comparability1: | | | | | | | | | | | | |
Pennsylvania impact fee | | | | | | | | | | | | 4,034 |
| | | | | | | | | | | | |
Operating Results | | $ | 58,495 | | $ | 43,184 | | $ | 212,159 | | $ | 175,309 |
| | | | | | | | | | | | |
Reported GAAP earnings per share | | $ | 0.69 | | $ | 0.52 | | $ | 2.52 | | $ | 2.05 |
Items impacting comparability1: | | | | | | | | | | | | |
Pennsylvania impact fee | | | | | | | | | | | | 0.05 |
| | | | | | | | | | | | |
Operating Results | | $ | 0.69 | | $ | 0.52 | | $ | 2.52 | | $ | 2.10 |
1See discussion of these individual items below.
As outlined in the table above, certain items included in GAAP earnings impacted the comparability of the Company’s financial results when comparing the nine months ended June 30, 2013, to the comparable periods in fiscal 2012. Excluding one item in the prior fiscal year, Operating Results for the nine months ended June 30, 2013, of $175.3 million, or $2.10 per share, increased $36.9 million, or $0.42 per share, compared to the same period in the prior year. Items impacting comparability will be discussed in more detail within the discussion of segment earnings below.
DISCUSSION OF RESULTS BY SEGMENT
The following discussion of the earnings of each segment is summarized in a tabular form at pages 9 through 12 of this report. It may be helpful to refer to those tables while reviewing this discussion.
Exploration and Production Segment
The Exploration and Production segment operations are carried out by Seneca Resources Corporation (“Seneca”). Seneca explores for, develops and produces natural gas and oil reserves in Appalachia and California.
The Exploration and Production segment’s earnings in the third quarter of fiscal 2013 of $31.7 million, or $0.38 per share, increased $9.8 million, or $0.12 per share, when compared with the prior year’s third quarter.
Overall production of natural gas and crude oil for the current quarter of 34.1 Bcfe increased approximately 11.9 Bcfe, or 54.0 percent, compared to the prior year’s third quarter. Production from Seneca’s Appalachia properties increased approximately 12.2
Bcfe largely because of Seneca’s strong well results in Lycoming County. California production of 5.0 Bcfe decreased 5.8 percent compared to the prior year’s third quarter primarily due to a temporary gas transportation issue and natural field decline.
Changes in commodity prices realized after hedging also impacted earnings. The weighted average natural gas price received by Seneca (after hedging) for the quarter ended June 30, 2013, was $4.16 per thousand cubic feet (“Mcf”), an increase of $0.09 per Mcf compared to the prior year’s third quarter. Higher crude oil prices realized after hedging increased earnings. The weighted average oil price received by Seneca (after hedging) for the quarter ended June 30, 2013, was $97.90 per Bbl, an increase of $8.20 per Bbl.
Depletion expense for the current year’s third quarter increased over last year’s third quarter due to the higher production activity discussed above. On a per unit basis, depletion decreased $0.40 per thousand cubic feet equivalent (“Mcfe”) due to higher natural gas reserve balances at June 30, 2013, compared to the prior year. Lease operating and transportation expenses (“LOE”) increased due to higher production costs in Appalachia and well repair and workover costs and steam fuel costs in California. On a per unit basis, LOE increased $0.08 per Mcfe. General and administrative expenses (“G&A”) increased over the prior year’s third quarter due to higher labor expenses; however, on a per unit basis G&A decreased $0.13 per Mcfe. Earnings were also impacted by higher interest expense due to a higher outstanding debt balance and higher state income taxes due to increased production in Pennsylvania.
The Exploration and Production segment’s earnings of $86.1 million, or $1.02 per share, for the nine months ended June 30, 2013, increased $11.7 million, or $0.13 per share, when compared with the nine months ended June 30, 2012.
In February 2012, the Commonwealth of Pennsylvania passed legislation that included a “natural gas impact fee.” The fee was retroactive and applied to wells drilled before and after the legislation was passed. The impact fee recorded in the second quarter of fiscal 2012 that related to prior fiscal years was $6.2 million (pre-tax). Excluding this amount from the prior year’s results, Operating Results for the nine months ended June 30, 2013, of $86.1 million, or $1.02 per share, compared to Operating Results of $78.5 million, or $0.94 per share for the prior year’s nine-month period.
Overall production for the nine months ended June 30, 2013, increased approximately 48.7 percent to 87.4 Bcfe. Production from Seneca’s Appalachia properties increased approximately 29.3 Bcfe. California production of 14.8 Bcfe decreased slightly compared with the prior year’s nine-month period for the reasons noted above.
Changes in commodity prices realized after hedging also impacted earnings. The weighted average natural gas price received by Seneca (after hedging) for the nine months ended June 30, 2013, was $4.13 per Mcf, a decrease of $0.44 per Mcf compared to the prior year’s nine-month period. Higher crude oil prices realized after hedging increased earnings. The weighted average oil price received by Seneca (after hedging) for the nine months ended June 30, 2013, was $97.88 per Bbl, an increase of $6.38 per Bbl.
Depletion, LOE and G&A for the nine months ended June 30, 2013, increased compared to the prior year’s nine-month period due to the higher production activity discussed above. On a per unit basis, depletion, LOE and G&A decreased $0.28 per Mcfe, $0.02 per Mcfe and $0.16 per Mcfe, respectively. Earnings were also impacted by higher interest expense due to a higher outstanding debt balance and higher state income taxes as noted above for the quarter.
Pipeline and Storage Segment
The Pipeline and Storage segment 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 western Pennsylvania.
The Pipeline and Storage segment’s earnings of $14.1 million, or $0.17 per share, for the quarter ended June 30, 2013, increased $1.4 million, or $0.02 per share, when compared with the same period in the prior fiscal year. The increase in earnings is mainly due to higher non-affiliated transportation revenues from the Northern Access and Line N 2012 Expansion projects, which were completed and placed in service in the current year’s first quarter. Earnings also increased due to lower depreciation expense, which was largely driven by a reduction in Supply Corporation’s depreciation rates as required by its 2012 rate case settlement. Earnings were reduced by higher operating expenses, higher income taxes and a lower allowance for funds used during construction (due to the completion of the expansion projects mentioned above).
The Pipeline and Storage segment’s earnings of $47.8 million, or $0.57 per share, for the nine months ended June 30, 2013, increased $12.4 million, or $0.15 per share, when compared with the same period in the prior fiscal year. The increase was mostly due to higher non-affiliated transportation revenues from the Northern Access and Line N 2012 Expansion projects and lower depreciation expense as required by Supply Corporation’s 2012 rate case settlement. Earnings were reduced by higher operating expenses, higher income taxes and lower AFUDC as noted above for the quarter.
Utility Segment
The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania.
The Utility segment’s earnings of $7.6 million, or $0.09 per share, for the quarter ended June 30, 2013, increased $2.5 million or $0.03 per share. Colder weather combined with higher usage in Pennsylvania was the primary reason for the increase in earnings in the current year’s third quarter. Temperatures in Pennsylvania were 5.3 percent colder in the current year’s third quarter than the third quarter of 2012. In New York, the impact of weather variations on earnings is mitigated by that jurisdiction’s weather normalization clause.
The Utility segment’s earnings of $65.0 million, or $0.77 per share, for the nine months ended June 30, 2013, increased from earnings of $52.7 million, or $0.63 per share, for the nine months ended June 30, 2012. Colder weather in Pennsylvania was the main reason for the increase in earnings in the current nine-month period. Temperatures in Pennsylvania were 18.1 percent colder in the nine months ended June 30, 2013, than in the prior year’s nine-month period. Lower operating expenses (mainly attributable to a decrease in bad debt expense), lower interest expense (mainly due to a lower outstanding debt balance) and a lower effective tax rate (as a result of a settlement with taxing authorities), also contributed to higher earnings in the Utility segment.
Energy Marketing Segment
National Fuel Resources, Inc. (“NFR”) comprises the Company’s Energy Marketing segment. NFR markets natural gas to industrial, wholesale, commercial, public authority and residential customers primarily in western and central New York and northwestern Pennsylvania, offering competitively priced natural gas to its customers.
The Energy Marketing segment’s earnings for the quarter ended June 30, 2013, of $1.0 million increased by less than $0.1 million from the prior year’s third quarter earnings. Earnings for the nine months ended June 30, 2013, of $5.7 million increased $1.1 million compared to the prior year’s nine-month period. The increase in earnings for the nine-month period was mainly due to higher average margins largely driven by a greater benefit derived from the Energy Marketing segment’s contracts for storage capacity.
Corporate and All Other
The Corporate and All Other category includes the following active, wholly owned subsidiaries of the Company: National Fuel Gas Midstream Corporation (“Midstream”), formed to build, own and operate natural gas processing and pipeline gathering facilities in the Appalachian region and the Northeast division of Seneca Resources Corporation that markets high quality hardwoods from Appalachian land holdings.
The Corporate and All Other category earnings of $4.1 million, for the quarter ended June 30, 2013, increased $1.5 million compared to the prior year’s third quarter. Earnings for the nine months ended June 30, 2013, of $7.5 million increased $3.4 million compared to the prior year’s nine-month period. The increase in earnings in both the current quarter and nine-month period is mainly due to higher earnings from Midstream’s pipeline gathering and natural gas processing operation. Midstream’s Trout Run gathering system in Lycoming County, Pa., and its Covington gathering system in Tioga County, Pa., have provided the critical gathering infrastructure for transporting Seneca’s Marcellus Shale production to the interstate pipeline system.
EARNINGS GUIDANCE
The Company is updating and narrowing its GAAP earnings guidance range for fiscal 2013 to a range of $3.00 to $3.10 per share. The previous earnings guidance had been a range of $2.95 to $3.10 per share. This revised guidance assumes flat NYMEX
equivalent pricing of $3.50 per MMBtu for natural gas (Henry Hub) and $100 per Bbl for crude oil (West Texas Intermediate) for unhedged production for the remainder of the fiscal year. Production for the entire 2013 fiscal year is projected to be between 118 and 124 Bcfe. The previous guidance for projected production was between 110 and 118 Bcfe.
The Company’s preliminary GAAP earnings guidance for fiscal 2014 is in the range of $3.05 to $3.30 per share. This includes oil and gas production for the Exploration and Production segment in the range of 134 to 146 Bcfe and is based on an assumed flat NYMEX price of $4.00 per MMBtu for natural gas and $90 per Bbl for crude oil.
EARNINGS TELECONFERENCE
The Company will host a conference call on Friday, August 9, 2013, at 11 a.m. (Eastern Time) to discuss this announcement. There are two ways to access this call. For those with Internet access, visit the investor relations page at National Fuel’s website at investor.nationalfuelgas.com. For those without Internet access, access is also provided by dialing (toll-free) 1-866-788-0542, and using the passcode “45174998.” For those unable to listen to the live conference call, a replay will be available at approximately 2 p.m. (Eastern Time) at the same website link and by phone at (toll-free) 1-888-286-8010 using passcode “99154741.” Both the webcast and telephonic replay will be available until the close of business on Friday, August 16, 2013.
National Fuel is an integrated energy company with $6.3 billion in assets comprised of the following four operating segments: Exploration and Production, Pipeline and Storage, Utility, and Energy Marketing. Additional information about National Fuel is available at: www.nationalfuelgas.com.
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Analyst Contact: | Timothy J. Silverstein | (716) 857-6987 |
Media Contact: | Karen L. Merkel | (716) 857-7654 |
Certain statements contained herein, including statements identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions, and statements which are other than statements of historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: 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; 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; changes in the price of natural gas or oil; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; 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; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, allowed rates of return, rate design and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; 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; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; changes in 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; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities, acts of war, cyber attacks or pest infestation; changes in price differential between similar quantities of natural gas at different geographic locations, and the effect of such changes on the demand for pipeline transportation capacity to or from such locations; other changes in price differentials between similar quantities of oil or natural gas having different quality, heating value, geographic location or delivery date; significant differences between the Company’s projected and actual capital expenditures and operating expenses; 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; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.
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NATIONAL FUEL GAS COMPANY |
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS |
QUARTER ENDED JUNE 30, 2013 |
| | | | | | | | | | | | | | | | | | |
| | | Exploration & | | | Pipeline & | | | | | | Energy | | | Corporate / | | | |
(Thousands of Dollars) | | | Production | | | Storage | | | Utility | | | Marketing | | | All Other | | | Consolidated* |
| | | | | | | | | | | | | | | | | | |
Third quarter 2012 GAAP earnings | | $ | 21,915 | | $ | 12,627 | | $ | 5,096 | | $ | 923 | | $ | 2,623 | | $ | 43,184 |
| | | | | | | | | | | | | | | | | | |
Drivers of operating results | | | | | | | | | | | | | | | | | | |
Higher (lower) crude oil prices | | | 3,780 | | | | | | | | | | | | | | | 3,780 |
Higher (lower) natural gas prices | | | 1,824 | | | | | | | | | | | | | | | 1,824 |
Higher (lower) natural gas production | | | 31,784 | | | | | | | | | | | | | | | 31,784 |
Higher (lower) crude oil production | | | (696) | | | | | | | | | | | | | | | (696) |
Lower (higher) lease operating and transportation expenses | | | (8,761) | | | | | | | | | | | | | | | (8,761) |
Lower (higher) depreciation / depletion | | | (9,602) | | | 489 | | | | | | | | | (346) | | | (9,459) |
| | | | | | | | | | | | | | | | | | |
Higher (lower) transportation and storage revenues | | | | | | 3,986 | | | | | | | | | | | | 3,986 |
Higher (lower) gathering and processing revenues | | | | | | | | | | | | | | | 3,960 | | | 3,960 |
Lower (higher) operating expenses | | | (1,983) | | | (1,160) | | | | | | | | | (1,348) | | | (4,491) |
| | | | | | | | | | | | | | | | | | |
Colder weather | | | | | | | | | 423 | | | | | | | | | 423 |
Higher (lower) usage | | | | | | | | | 985 | | | | | | | | | 985 |
| | | | | | | | | | | | | | | | | | |
Higher (lower) AFUDC** | | | | | | (647) | | | | | | | | | | | | (647) |
| | | | | | | | | | | | | | | | | | |
(Higher) lower interest expense | | | (1,346) | | | | | | 608 | | | | | | | | | (738) |
| | | | | | | | | | | | | | | | | | |
Lower (higher) income tax expense / effective tax rate | | | (5,128) | | | (1,337) | | | | | | | | | (883) | | | (7,348) |
| | | | | | | | | | | | | | | | | | |
All other / rounding | | | (53) | | | 117 | | | 518 | | | 40 | | | 87 | | | 709 |
| | | | | | | | | | | | | | | | | | |
Third quarter 2013 GAAP earnings | | $ | 31,734 | | $ | 14,075 | | $ | 7,630 | | $ | 963 | | $ | 4,093 | | $ | 58,495 |
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* Amounts do not reflect intercompany eliminations | | | | | | | | | | | | | | | | | | |
** AFUDC = Allowance for Funds Used During Construction | | | | | | | | | | | | | | | | | | |
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NATIONAL FUEL GAS COMPANY |
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE |
QUARTER ENDED JUNE 30, 2013 |
| | | | | | | | | | | | | | | | | | |
| | | Exploration & | | | Pipeline & | | | | | | Energy | | | Corporate / | | | |
| | | Production | | | Storage | | | Utility | | | Marketing | | | All Other | | | Consolidated* |
| | | | | | | | | | | | | | | | | | |
Third quarter 2012 GAAP earnings | | $ | 0.26 | | $ | 0.15 | | $ | 0.06 | | $ | 0.01 | | $ | 0.04 | | $ | 0.52 |
| | | | | | | | | | | | | | | | | | |
Drivers of operating results | | | | | | | | | | | | | | | | | | |
Higher (lower) crude oil prices | | | 0.04 | | | | | | | | | | | | | | | 0.04 |
Higher (lower) natural gas prices | | | 0.02 | | | | | | | | | | | | | | | 0.02 |
Higher (lower) natural gas production | | | 0.38 | | | | | | | | | | | | | | | 0.38 |
Higher (lower) crude oil production | | | (0.01) | | | | | | | | | | | | | | | (0.01) |
Lower (higher) lease operating and transportation expenses | | | (0.10) | | | | | | | | | | | | | | | (0.10) |
Lower (higher) depreciation / depletion | | | (0.11) | | | 0.01 | | | | | | | | | - | | | (0.10) |
| | | | | | | | | | | | | | | | | | |
Higher (lower) transportation and storage revenues | | | | | | 0.05 | | | | | | | | | | | | 0.05 |
Higher (lower) gathering and processing revenues | | | | | | | | | | | | | | | 0.05 | | | 0.05 |
Lower (higher) operating expenses | | | (0.02) | | | (0.01) | | | | | | | | | (0.02) | | | (0.05) |
| | | | | | | | | | | | | | | | | | |
Colder weather | | | | | | | | | 0.01 | | | | | | | | | 0.01 |
Higher (lower) usage | | | | | | | | | 0.01 | | | | | | | | | 0.01 |
| | | | | | | | | | | | | | | | | | |
Higher (lower) AFUDC** | | | | | | (0.01) | | | | | | | | | | | | (0.01) |
| | | | | | | | | | | | | | | | | | |
(Higher) lower interest expense | | | (0.02) | | | | | | 0.01 | | | | | | | | | (0.01) |
| | | | | | | | | | | | | | | | | | |
Lower (higher) income tax expense / effective tax rate | | | (0.06) | | | (0.02) | | | | | | | | | (0.01) | | | (0.09) |
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All other / rounding | | | - | | | - | | | - | | | - | | | (0.02) | | | (0.02) |
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Third quarter 2013 GAAP earnings | | $ | 0.38 | | $ | 0.17 | | $ | 0.09 | | $ | 0.01 | | $ | 0.04 | | $ | 0.69 |
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* Amounts do not reflect intercompany eliminations | | | | | | | | | | | | | | | | | | |
** AFUDC = Allowance for Funds Used During Construction | | | | | | | | | | | | | | | | | | |
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NATIONAL FUEL GAS COMPANY |
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS |
NINE MONTHS ENDED JUNE 30, 2013 |
| | | | | | | | | | | | | | | | | | |
| | | Exploration & | | | Pipeline & | | | | | | Energy | | | Corporate / | | | |
(Thousands of Dollars) | | | Production | | | Storage | | | Utility | | | Marketing | | | All Other | | | Consolidated* |
| | | | | | | | | | | | | | | | | | |
Nine months ended June 30, 2012 GAAP earnings | | $ | 74,422 | | $ | 35,428 | | $ | 52,725 | | $ | 4,662 | | $ | 4,038 | | $ | 171,275 |
Items impacting comparability: | | | | | | | | | | | | | | | | | | |
Pennsylvania impact fee | | | 4,034 | | | | | | | | | | | | | | | 4,034 |
Nine months ended June 30, 2012 operating results | | | 78,456 | | | 35,428 | | | 52,725 | | | 4,662 | | | 4,038 | | | 175,309 |
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Drivers of operating results | | | | | | | | | | | | | | | | | | |
Higher (lower) crude oil prices | | | 8,766 | | | | | | | | | | | | | | | 8,766 |
Higher (lower) natural gas prices | | | (21,308) | | | | | | | | | | | | | | | (21,308) |
Higher (lower) natural gas production | | | 86,084 | | | | | | | | | | | | | | | 86,084 |
Higher (lower) crude oil production | | | (3,015) | | | | | | | | | | | | | | | (3,015) |
Lower (higher) lease operating and transportation expenses | | | (17,845) | | | | | | | | | | | | | | | (17,845) |
Lower (higher) depreciation / depletion | | | (27,313) | | | 2,202 | | | | | | | | | (1,564) | | | (26,675) |
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Higher (lower) transportation and storage revenues | | | | | | 14,288 | | | | | | | | | | | | 14,288 |
Higher (lower) gathering and processing revenues | | | | | | | | | | | | | | | 8,505 | | | 8,505 |
Lower (higher) operating expenses | | | (6,804) | | | (1,048) | | | 1,444 | | | 279 | | | (1,718) | | | (7,847) |
Lower (higher) property, franchise and other taxes | | | 577 | | | | | | | | | | | | | | | 577 |
| | | | | | | | | | | | | | | | | | |
Colder weather | | | | | | | | | 6,796 | | | | | | | | | 6,796 |
Higher (lower) usage | | | | | | | | | 500 | | | | | | | | | 500 |
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Higher (lower) margins | | | | | | | | | | | | 869 | | | | | | 869 |
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Higher (lower) AFUDC** | | | | | | (508) | | | | | | | | | | | | (508) |
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Lower (higher) interest expense | | | (5,405) | | | | | | 1,440 | | | | | | | | | (3,965) |
| | | | | | | | | | | | | | | | | | |
Lower (higher) income tax expense / effective tax rate | | | (5,360) | | | (2,313) | | | 2,029 | | | | | | (1,207) | | | (6,851) |
| | | | | | | | | | | | | | | | | | |
All other / rounding | | | (708) | | | (246) | | | 90 | | | (69) | | | (588) | | | (1,521) |
| | | | | | | | | | | | | | | | | | |
Nine months ended June 30, 2013 GAAP earnings | | $ | 86,125 | | $ | 47,803 | | $ | 65,024 | | $ | 5,741 | | $ | 7,466 | | $ | 212,159 |
| | | | | | | | | | | | | | | | | | |
*Amounts do not reflect intercompany eliminations | | | | | | | | | | | | | | | | | | |
** AFUDC = Allowance for Funds Used During Construction | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
NATIONAL FUEL GAS COMPANY |
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE |
NINE MONTHS ENDED JUNE 30, 2013 |
| | | | | | | | | | | | | | | | | | |
| | | Exploration & | | | Pipeline & | | | | | | Energy | | | Corporate / | | | |
| | | Production | | | Storage | | | Utility | | | Marketing | | | All Other | | | Consolidated* |
| | | | | | | | | | | | | | | | | | |
Nine months ended June 30, 2012 GAAP earnings | | $ | 0.89 | | $ | 0.42 | | $ | 0.63 | | $ | 0.06 | | $ | 0.05 | | $ | 2.05 |
Items impacting comparability: | | | | | | | | | | | | | | | | | | |
Pennsylvania impact fee | | | 0.05 | | | | | | | | | | | | | | | 0.05 |
Nine months ended June 30, 2012 operating results | | | 0.94 | | | 0.42 | | | 0.63 | | | 0.06 | | | 0.05 | | | 2.10 |
| | | | | | | | | | | | | | | | | | |
Drivers of operating results | | | | | | | | | | | | | | | | | | |
Higher (lower) crude oil prices | | | 0.10 | | | | | | | | | | | | | | | 0.10 |
Higher (lower) natural gas prices | | | (0.25) | | | | | | | | | | | | | | | (0.25) |
Higher (lower) natural gas production | | | 1.02 | | | | | | | | | | | | | | | 1.02 |
Higher (lower) crude oil production | | | (0.04) | | | | | | | | | | | | | | | (0.04) |
Lower (higher) lease operating and transportation expenses | | | (0.21) | | | | | | | | | | | | | | | (0.21) |
Lower (higher) depreciation / depletion | | | (0.32) | | | 0.03 | | | | | | | | | (0.02) | | | (0.31) |
| | | | | | | | | | | | | | | | | | |
Higher (lower) transportation and storage revenues | | | | | | 0.17 | | | | | | | | | | | | 0.17 |
Higher (lower) gathering and processing revenues | | | | | | | | | | | | | | | 0.10 | | | 0.10 |
Lower (higher) operating expenses | | | (0.08) | | | (0.01) | | | 0.02 | | | - | | | (0.02) | | | (0.09) |
Lower (higher) property, franchise and other taxes | | | 0.01 | | | | | | | | | | | | | | | 0.01 |
| | | | | | | | | | | | | | | | | | |
Colder weather | | | | | | | | | 0.08 | | | | | | | | | 0.08 |
Higher (lower) usage | | | | | | | | | 0.01 | | | | | | | | | 0.01 |
| | | | | | | | | | | | | | | | | | |
Higher (lower) margins | | | | | | | | | | | | 0.01 | | | | | | 0.01 |
| | | | | | | | | | | | | | | | | | |
Higher (lower) AFUDC** | | | | | | (0.01) | | | | | | | | | | | | (0.01) |
| | | | | | | | | | | | | | | | | | |
Lower (higher) interest expense | | | (0.06) | | | | | | 0.02 | | | | | | | | | (0.04) |
| | | | | | | | | | | | | | | | | | |
Lower (higher) income tax expense / effective tax rate | | | (0.06) | | | (0.03) | | | 0.02 | | | | | | (0.01) | | | (0.08) |
| | | | | | | | | | | | | | | | | | |
All other / rounding | | | (0.03) | | | - | | | (0.01) | | | - | | | (0.01) | | | (0.05) |
| | | | | | | | | | | | | | | | | | |
Nine months ended June 30, 2013 GAAP earnings | | $ | 1.02 | | $ | 0.57 | | $ | 0.77 | | $ | 0.07 | | $ | 0.09 | | $ | 2.52 |
| | | | | | | | | | | | | | | | | | |
*Amounts do not reflect intercompany eliminations | | | | | | | | | | | | | | | | | | |
** AFUDC = Allowance for Funds Used During Construction | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
| | | | | | | | | | | | |
(Thousands of Dollars, except per share amounts) | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | June 30, | | June 30, |
| | (Unaudited) | | (Unaudited) |
SUMMARY OF OPERATIONS | | 2013 | | 2012 | | | 2013 | | | 2012 |
Operating Revenues | | $ | 440,008 | | $ | 328,861 | | $ | 1,490,688 | | $ | 1,313,593 |
| | | | | | | | | | | | |
Operating Expenses: | | | | | | | | | | | | |
Purchased Gas | | | 95,164 | | | 50,160 | | | 426,900 | | | 390,889 |
Operation and Maintenance | | | 108,497 | | | 93,749 | | | 338,533 | | | 311,857 |
Property, Franchise and Other Taxes | | | 21,201 | | | 20,432 | | | 63,550 | | | 70,138 |
Depreciation, Depletion and Amortization | | | 88,142 | | | 74,227 | | | 240,503 | | | 199,925 |
| | | 313,004 | | | 238,568 | | | 1,069,486 | | | 972,809 |
| | | | | | | | | | | | |
Operating Income | | | 127,004 | | | 90,293 | | | 421,202 | | | 340,784 |
| | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | |
Interest Income | | | 317 | | | 390 | | | 1,844 | | | 1,686 |
Other Income | | | 1,163 | | | 1,086 | | | 3,666 | | | 4,076 |
Interest Expense on Long-Term Debt | | | (22,998) | | | (21,529) | | | (67,232) | | | (60,594) |
Other Interest Expense | | | (1,303) | | | (828) | | | (2,898) | | | (2,851) |
| | | | | | | | | | | | |
Income Before Income Taxes | | | 104,183 | | | 69,412 | | | 356,582 | | | 283,101 |
| | | | | | | | | | | | |
Income Tax Expense | | | 45,688 | | | 26,228 | | | 144,423 | | | 111,826 |
| | | | | | | | | | | | |
Net Income Available for Common Stock | | $ | 58,495 | | $ | 43,184 | | $ | 212,159 | | $ | 171,275 |
| | | | | | | | | | | | |
Earnings Per Common Share: | | | | | | | | | | | | |
Basic | | $ | 0.70 | | $ | 0.52 | | $ | 2.54 | | $ | 2.06 |
Diluted | | $ | 0.69 | | $ | 0.52 | | $ | 2.52 | | $ | 2.05 |
| | | | | | | | | | | | |
Weighted Average Common Shares: | | | | | | | | | | | | |
Used in Basic Calculation | | | 83,557,968 | | | 83,227,602 | | | 83,481,849 | | | 83,068,083 |
Used in Diluted Calculation | | | 84,325,465 | | | 83,674,823 | | | 84,242,128 | | | 83,690,436 |
| | | | | | | | |
| | | | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
| | | | |
| | | June 30, | | | September 30, |
(Thousands of Dollars) | | | 2013 | | | 2012 |
| | | | | | | | |
ASSETS | | | | | | | | |
Property, Plant and Equipment | | | $ | 7,102,369 | | | $ | 6,615,813 |
Less - Accumulated Depreciation, Depletion and Amortization | | | | 2,088,337 | | | | 1,876,010 |
Net Property, Plant and Equipment | | | | 5,014,032 | | | | 4,739,803 |
| | | | | | | | |
Current Assets: | | | | | | | | |
Cash and Temporary Cash Investments | | | | 134,582 | | | | 74,494 |
Hedging Collateral Deposits | | | | 694 | | | | 364 |
Receivables - Net | | | | 165,047 | | | | 115,818 |
Unbilled Utility Revenue | | | | 13,643 | | | | 19,652 |
Gas Stored Underground | | | | 22,180 | | | | 49,795 |
Materials and Supplies - at average cost | | | | 31,641 | | | | 28,577 |
Other Current Assets | | | | 46,205 | | | | 56,121 |
Deferred Income Taxes | | | | 15,148 | | | | 10,755 |
Total Current Assets | | | | 429,140 | | | | 355,576 |
| | | | | | | | |
Other Assets: | | | | | | | | |
Recoverable Future Taxes | | | | 152,122 | | | | 150,941 |
Unamortized Debt Expense | | | | 17,227 | | | | 13,409 |
Other Regulatory Assets | | | | 556,449 | | | | 546,851 |
Deferred Charges | | | | 8,051 | | | | 7,591 |
Other Investments | | | | 93,749 | | | | 86,774 |
Goodwill | | | | 5,476 | | | | 5,476 |
Fair Value of Derivative Financial Instruments | | | | 65,170 | | | | 27,616 |
Other | | | | 2,524 | | | | 1,105 |
Total Other Assets | | | | 900,768 | | | | 839,763 |
Total Assets | | | $ | 6,343,940 | | | $ | 5,935,142 |
| | | | | | | | |
CAPITALIZATION AND LIABILITIES | | | | | | | | |
Capitalization: | | | | | | | | |
Comprehensive Shareholders' Equity | | | | | | | | |
Common Stock, $1 Par Value Authorized - 200,000,000 | | | | | | | | |
Shares; Issued and Outstanding - 83,587,858 Shares | | | | | | | | |
and 83,330,140 Shares, Respectively | | | $ | 83,588 | | | $ | 83,330 |
Paid in Capital | | | | 686,038 | | | | 669,501 |
Earnings Reinvested in the Business | | | | 1,426,148 | | | | 1,306,284 |
Accumulated Other Comprehensive Loss | | | | (58,609) | | | | (99,020) |
Total Comprehensive Shareholders' Equity | | | | 2,137,165 | | | | 1,960,095 |
Long-Term Debt, Net of Current Portion | | | | 1,649,000 | | | | 1,149,000 |
Total Capitalization | | | | 3,786,165 | | | | 3,109,095 |
| | | | | | | | |
Current and Accrued Liabilities: | | | | | | | | |
Notes Payable to Banks and Commercial Paper | | | | - | | | | 171,000 |
Current Portion of Long-Term Debt | | | | - | | | | 250,000 |
Accounts Payable | | | | 77,466 | | | | 87,985 |
Amounts Payable to Customers | | | | 12,386 | | | | 19,964 |
Dividends Payable | | | | 31,346 | | | | 30,416 |
Interest Payable on Long-Term Debt | | | | 18,976 | | | | 29,491 |
Customer Advances | | | | 246 | | | | 24,055 |
Customer Security Deposits | | | | 16,830 | | | | 17,942 |
Other Accruals and Current Liabilities | | | | 109,933 | | | | 79,099 |
Fair Value of Derivative Financial Instruments | | | | 2,217 | | | | 24,527 |
Total Current and Accrued Liabilities | | | | 269,400 | | | | 734,479 |
| | | | | | | | |
Deferred Credits: | | | | | | | | |
Deferred Income Taxes | | | | 1,237,727 | | | | 1,065,757 |
Taxes Refundable to Customers | | | | 65,069 | | | | 66,392 |
Unamortized Investment Tax Credit | | | | 1,685 | | | | 2,005 |
Cost of Removal Regulatory Liability | | | | 151,846 | | | | 139,611 |
Other Regulatory Liabilities | | | | 33,247 | | | | 21,014 |
Pension and Other Post-Retirement Liabilities | | | | 511,516 | | | | 516,197 |
Asset Retirement Obligations | | | | 126,879 | | | | 119,246 |
Other Deferred Credits | | | | 160,406 | | | | 161,346 |
Total Deferred Credits | | | | 2,288,375 | | | | 2,091,568 |
Commitments and Contingencies | | | | - | | | | - |
Total Capitalization and Liabilities | | | $ | 6,343,940 | | | $ | 5,935,142 |
| | | | | | |
| | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Unaudited) |
| | Nine Months Ended |
| | June 30, |
(Thousands of Dollars) | | 2013 | | 2012 |
| | | | | | |
Operating Activities: | | | | | | |
Net Income Available for Common Stock | | $ | 212,159 | | $ | 171,275 |
Adjustments to Reconcile Net Income to Net Cash | | | | | | |
Provided by Operating Activities: | | | | | | |
Depreciation, Depletion and Amortization | | | 240,503 | | | 199,925 |
Deferred Income Taxes | | | 141,007 | | | 104,948 |
Excess Tax Benefits Associated with Stock-Based Compensation Awards | | | (4,314) | | | (1,511) |
Other | | | 19,744 | | | 6,618 |
Change in: | | | | | | |
Hedging Collateral Deposits | | | (330) | | | 16,309 |
Receivables and Unbilled Utility Revenue | | | (43,138) | | | 23,008 |
Gas Stored Underground and Materials and Supplies | | | 24,551 | | | 30,853 |
Unrecovered Purchased Gas Costs | | | - | | | (2,100) |
Other Current Assets | | | 14,228 | | | 18,190 |
Accounts Payable | | | 11,241 | | | (5,825) |
Amounts Payable to Customers | | | (7,578) | | | 2,242 |
Customer Advances | | | (23,809) | | | (19,328) |
Customer Security Deposits | | | (1,112) | | | (474) |
Other Accruals and Current Liabilities | | | 3,534 | | | 17,083 |
Other Assets | | | (5,010) | | | (1,538) |
Other Liabilities | | | 5,557 | | | 14,080 |
Net Cash Provided by Operating Activities | | $ | 587,233 | | $ | 573,755 |
| | | | | | |
Investing Activities: | | | | | | |
Capital Expenditures | | $ | (513,399) | | $ | (809,661) |
Other | | | (3,885) | | | (1,267) |
Net Cash Used in Investing Activities | | $ | (517,284) | | $ | (810,928) |
| | | | | | |
Financing Activities: | | | | | | |
Changes in Notes Payable to Banks and Commercial Paper | | $ | (171,000) | | $ | 30,200 |
Excess Tax Benefits Associated with Stock-Based Compensation Awards | | | 4,314 | | | 1,511 |
Reduction of Long-Term Debt | | | (250,000) | | | (150,000) |
Net Proceeds From Issuance of Long-Term Debt | | | 495,415 | | | 496,085 |
Dividends Paid on Common Stock | | | (91,364) | | | (88,404) |
Net Proceeds From Issuance of Common Stock | | | 2,774 | | | 8,168 |
Net Cash Provided By (Used in) Financing Activities | | $ | (9,861) | | $ | 297,560 |
Net Increase in Cash and Temporary | | | | | | |
Cash Investments | | | 60,088 | | | 60,387 |
Cash and Temporary Cash Investments | | | | | | |
at Beginning of Period | | | 74,494 | | | 80,428 |
Cash and Temporary Cash Investments | | | | | | |
at June 30 | | $ | 134,582 | | $ | 140,815 |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
| | | | | | | | | | | | | | | | | | |
SEGMENT OPERATING RESULTS AND STATISTICS |
(UNAUDITED) |
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
(Thousands of Dollars, except per share amounts) | | June 30, | | June 30, |
EXPLORATION AND PRODUCTION SEGMENT | | | 2013 | | | 2012 | | | Variance | | | 2013 | | | 2012 | | | Variance |
Total Operating Revenues | | $ | 195,213 | | $ | 138,549 | | $ | 56,664 | | $ | 518,742 | | $ | 411,449 | | $ | 107,293 |
| | | | | | | | | | | | | | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | |
Operation and Maintenance: | | | | | | | | | | | | | | | | | | |
General and Administrative Expense | | | 15,716 | | | 12,952 | | | 2,764 | | | 47,089 | | | 41,253 | | | 5,836 |
Lease Operating and Transportation Expense | | | 33,717 | | | 20,238 | | | 13,479 | | | 87,275 | | | 59,821 | | | 27,454 |
All Other Operation and Maintenance Expense | | | 2,077 | | | 1,790 | | | 287 | | | 9,497 | | | 4,865 | | | 4,632 |
Property, Franchise and Other Taxes | | | 4,471 | | | 4,264 | | | 207 | | | 11,904 | | | 18,998 | | | (7,094) |
Depreciation, Depletion and Amortization | | | 67,213 | | | 52,440 | | | 14,773 | | | 178,282 | | | 136,262 | | | 42,020 |
| | | 123,194 | | | 91,684 | | | 31,510 | | | 334,047 | | | 261,199 | | | 72,848 |
| | | | | | | | | | | | | | | | | | |
Operating Income | | | 72,019 | | | 46,865 | | | 25,154 | | | 184,695 | | | 150,250 | | | 34,445 |
| | | | | | | | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | |
Interest Income | | | 315 | | | 403 | | | (88) | | | 1,191 | | | 1,070 | | | 121 |
Other Interest Expense | | | (10,443) | | | (8,372) | | | (2,071) | | | (29,180) | | | (20,864) | | | (8,316) |
| | | | | | | | | | | | | | | | | | |
Income Before Income Taxes | | | 61,891 | | | 38,896 | | | 22,995 | | | 156,706 | | | 130,456 | | | 26,250 |
Income Tax Expense | | | 30,157 | | | 16,981 | | | 13,176 | | | 70,581 | | | 56,034 | | | 14,547 |
Net Income | | $ | 31,734 | | $ | 21,915 | | $ | 9,819 | | $ | 86,125 | | $ | 74,422 | | $ | 11,703 |
| | | | | | | | | | | | | | | | | | |
Net Income Per Share (Diluted) | | $ | 0.38 | | $ | 0.26 | | $ | 0.12 | | $ | 1.02 | | $ | 0.89 | | $ | 0.13 |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | June 30, | | June 30, |
PIPELINE AND STORAGE SEGMENT | | | 2013 | | | 2012 | | | Variance | | | 2013 | | | 2012 | | | Variance |
Revenues from External Customers | | $ | 43,055 | | $ | 36,631 | | $ | 6,424 | | $ | 132,897 | | $ | 113,976 | | $ | 18,921 |
Intersegment Revenues | | | 21,708 | | | 22,076 | | | (368) | | | 68,216 | | | 64,434 | | | 3,782 |
Total Operating Revenues | | | 64,763 | | | 58,707 | | | 6,056 | | | 201,113 | | | 178,410 | | | 22,703 |
| | | | | | | | | | | | | | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | |
Purchased Gas | | | (47) | | | 65 | | | (112) | | | 1,048 | | | 193 | | | 855 |
Operation and Maintenance | | | 20,269 | | | 18,486 | | | 1,783 | | | 60,142 | | | 58,529 | | | 1,613 |
Property, Franchise and Other Taxes | | | 5,464 | | | 5,319 | | | 145 | | | 16,582 | | | 16,232 | | | 350 |
Depreciation, Depletion and Amortization | | | 8,810 | | | 9,563 | | | (753) | | | 26,158 | | | 29,546 | | | (3,388) |
| | | 34,496 | | | 33,433 | | | 1,063 | | | 103,930 | | | 104,500 | | | (570) |
| | | | | | | | | | | | | | | | | | |
Operating Income | | | 30,267 | | | 25,274 | | | 4,993 | | | 97,183 | | | 73,910 | | | 23,273 |
| | | | | | | | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | |
Interest Income | | | 34 | | | 46 | | | (12) | | | 154 | | | 137 | | | 17 |
Other Income | | | 151 | | | 524 | | | (373) | | | 1,601 | | | 2,031 | | | (430) |
Other Interest Expense | | | (6,707) | | | (6,381) | | | (326) | | | (19,542) | | | (19,279) | | | (263) |
| | | | | | | | | | | | | | | | | | |
Income Before Income Taxes | | | 23,745 | | | 19,463 | | | 4,282 | | | 79,396 | | | 56,799 | | | 22,597 |
Income Tax Expense | | | 9,670 | | | 6,836 | | | 2,834 | | | 31,593 | | | 21,371 | | | 10,222 |
Net Income | | $ | 14,075 | | $ | 12,627 | | $ | 1,448 | | $ | 47,803 | | $ | 35,428 | | $ | 12,375 |
| | | | | | | | | | | | | | | | | | |
Net Income Per Share (Diluted) | | $ | 0.17 | | $ | 0.15 | | $ | 0.02 | | $ | 0.57 | | $ | 0.42 | | $ | 0.15 |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
| | | | | | | | | | | | | | | | | | |
SEGMENT OPERATING RESULTS AND STATISTICS |
(UNAUDITED) |
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
(Thousands of Dollars, except per share amounts) | | June 30, | | June 30, |
UTILITY SEGMENT | | | 2013 | | | 2012 | | | Variance | | | 2013 | | | 2012 | | | Variance |
Revenues from External Customers | | $ | 141,257 | | $ | 117,240 | | $ | 24,017 | | $ | 653,211 | | $ | 622,836 | | $ | 30,375 |
Intersegment Revenues | | | 3,305 | | | 2,703 | | | 602 | | | 14,012 | | | 12,643 | | | 1,369 |
Total Operating Revenues | | | 144,562 | | | 119,943 | | | 24,619 | | | 667,223 | | | 635,479 | | | 31,744 |
| | | | | | | | | | | | | | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | |
Purchased Gas | | | 63,369 | | | 41,628 | | | 21,741 | | | 337,453 | | | 316,877 | | | 20,576 |
Operation and Maintenance | | | 41,065 | | | 40,719 | | | 346 | | | 142,657 | | | 144,701 | | | (2,044) |
Property, Franchise and Other Taxes | | | 10,515 | | | 10,057 | | | 458 | | | 32,924 | | | 32,627 | | | 297 |
Depreciation, Depletion and Amortization | | | 10,791 | | | 11,437 | | | (646) | | | 32,036 | | | 32,503 | | | (467) |
| | | 125,740 | | | 103,841 | | | 21,899 | | | 545,070 | | | 526,708 | | | 18,362 |
| | | | | | | | | | | | | | | | | | |
Operating Income | | | 18,822 | | | 16,102 | | | 2,720 | | | 122,153 | | | 108,771�� | | | 13,382 |
| | | | | | | | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | |
Interest Income | | | 42 | | | 99 | | | (57) | | | 994 | | | 820 | | | 174 |
Other Income | | | 260 | | | (5) | | | 265 | | | 701 | | | 671 | | | 30 |
Other Interest Expense | | | (7,175) | | | (8,110) | | | 935 | | | (22,294) | | | (24,509) | | | 2,215 |
| | | | | | | | | | | | | | | | | | |
Income Before Income Taxes | | | 11,949 | | | 8,086 | | | 3,863 | | | 101,554 | | | 85,753 | | | 15,801 |
Income Tax Expense | | | 4,319 | | | 2,990 | | | 1,329 | | | 36,530 | | | 33,028 | | | 3,502 |
Net Income | | $ | 7,630 | | $ | 5,096 | | $ | 2,534 | | $ | 65,024 | | $ | 52,725 | | $ | 12,299 |
| | | | | | | | | | | | | | | | | | |
Net Income Per Share (Diluted) | | $ | 0.09 | | $ | 0.06 | | $ | 0.03 | | $ | 0.77 | | $ | 0.63 | | $ | 0.14 |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | June 30, | | June 30, |
ENERGY MARKETING SEGMENT | | | 2013 | | | 2012 | | | Variance | | | 2013 | | | 2012 | | | Variance |
Revenues from External Customers | | $ | 59,128 | | $ | 35,377 | | $ | 23,751 | | $ | 182,282 | | $ | 161,822 | | $ | 20,460 |
Intersegment Revenues | | | 446 | | | 579 | | | (133) | | | 1,080 | | | 1,135 | | | (55) |
Total Operating Revenues | | | 59,574 | | | 35,956 | | | 23,618 | | | 183,362 | | | 162,957 | | | 20,405 |
| | | | | | | | | | | | | | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | |
Purchased Gas | | | 56,821 | | | 33,114 | | | 23,707 | | | 169,543 | | | 150,475 | | | 19,068 |
Operation and Maintenance | | | 1,246 | | | 1,347 | | | (101) | | | 4,490 | | | 4,920 | | | (430) |
Property, Franchise and Other Taxes | | | 10 | | | 36 | | | (26) | | | 77 | | | 60 | | | 17 |
Depreciation, Depletion and Amortization | | | 31 | | | 22 | | | 9 | | | 76 | | | 69 | | | 7 |
| | | 58,108 | | | 34,519 | | | 23,589 | | | 174,186 | | | 155,524 | | | 18,662 |
| | | | | | | | | | | | | | | | | | |
Operating Income | | | 1,466 | | | 1,437 | | | 29 | | | 9,176 | | | 7,433 | | | 1,743 |
| | | | | | | | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | |
Interest Income | | | 40 | | | 59 | | | (19) | | | 137 | | | 127 | | | 10 |
Other Income | | | 24 | | | 25 | | | (1) | | | 52 | | | 88 | | | (36) |
Other Interest Expense | | | (8) | | | (9) | | | 1 | | | (29) | | | (17) | | | (12) |
| | | | | | | | | | | | | | | | | | |
Income Before Income Taxes | | | 1,522 | | | 1,512 | | | 10 | | | 9,336 | | | 7,631 | | | 1,705 |
Income Tax Expense | | | 559 | | | 589 | | | (30) | | | 3,595 | | | 2,969 | | | 626 |
Net Income | | $ | 963 | | $ | 923 | | $ | 40 | | $ | 5,741 | | $ | 4,662 | | $ | 1,079 |
| | | | | | | | | | | | | | | | | | |
Net Income Per Share (Diluted) | | $ | 0.01 | | $ | 0.01 | | $ | - | | $ | 0.07 | | $ | 0.06 | | $ | 0.01 |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
| | | | | | | | | | | | | | | | | | |
SEGMENT OPERATING RESULTS AND STATISTICS |
(UNAUDITED) |
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
(Thousands of Dollars, except per share amounts) | | June 30, | | June 30, |
ALL OTHER | | | 2013 | | | 2012 | | | Variance | | | 2013 | | | 2012 | | | Variance |
Revenues from External Customers | | $ | 1,121 | | $ | 824 | | $ | 297 | | $ | 2,898 | | $ | 2,784 | | $ | 114 |
Intersegment Revenues | | | 10,244 | | | 4,307 | | | 5,937 | | | 23,622 | | | 10,828 | | | 12,794 |
Total Operating Revenues | | | 11,365 | | | 5,131 | | | 6,234 | | | 26,520 | | | 13,612 | | | 12,908 |
| | | | | | | | | | | | | | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | |
Operation and Maintenance | | | 1,606 | | | 876 | | | 730 | | | 4,189 | | | 2,794 | | | 1,395 |
Property, Franchise and Other Taxes | | | 199 | | | 205 | | | (6) | | | 713 | | | 569 | | | 144 |
Depreciation, Depletion and Amortization | | | 1,097 | | | 567 | | | 530 | | | 3,351 | | | 959 | | | 2,392 |
| | | 2,902 | | | 1,648 | | | 1,254 | | | 8,253 | | | 4,322 | | | 3,931 |
| | | | | | | | | | | | | | | | | | |
Operating Income | | | 8,463 | | | 3,483 | | | 4,980 | | | 18,267 | | | 9,290 | | | 8,977 |
| | | | | | | | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | |
Interest Income | | | 44 | | | 38 | | | 6 | | | 126 | | | 136 | | | (10) |
Other Income | | | (10) | | | (70) | | | 60 | | | (47) | | | (220) | | | 173 |
Other Interest Expense | | | (648) | | | (427) | | | (221) | | | (1,695) | | | (1,290) | | | (405) |
| | | | | | | | | | | | | | | | | | |
Income Before Income Taxes | | | 7,849 | | | 3,024 | | | 4,825 | | | 16,651 | | | 7,916 | | | 8,735 |
Income Tax Expense | | | 3,350 | | | 209 | | | 3,141 | | | 7,202 | | | 2,359 | | | 4,843 |
Net Income | | $ | 4,499 | | $ | 2,815 | | $ | 1,684 | | $ | 9,449 | | $ | 5,557 | | $ | 3,892 |
| | | | | | | | | | | | | | | | | | |
Net Income Per Share (Diluted) | | $ | 0.05 | | $ | 0.04 | | $ | 0.01 | | $ | 0.11 | | $ | 0.07 | | $ | 0.04 |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
| | | | | | | | | | | | | | | | | | |
SEGMENT OPERATING RESULTS AND STATISTICS |
(UNAUDITED) |
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
(Thousands of Dollars, except per share amounts) | | June 30, | | June 30, |
CORPORATE | | | 2013 | | | 2012 | | | Variance | | | 2013 | | | 2012 | | | Variance |
Revenues from External Customers | | $ | 234 | | $ | 240 | | $ | (6) | | $ | 658 | | $ | 726 | | $ | (68) |
Intersegment Revenues | | | 957 | | | 780 | | | 177 | | | 2,462 | | | 2,837 | | | (375) |
Total Operating Revenues | | | 1,191 | | | 1,020 | | | 171 | | | 3,120 | | | 3,563 | | | (443) |
| | | | | | | | | | | | | | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | |
Operation and Maintenance | | | 4,482 | | | 3,139 | | | 1,343 | | | 11,442 | | | 10,195 | | | 1,247 |
Property, Franchise and Other Taxes | | | 542 | | | 551 | | | (9) | | | 1,350 | | | 1,652 | | | (302) |
Depreciation, Depletion and Amortization | | | 200 | | | 198 | | | 2 | | | 600 | | | 586 | | | 14 |
| | | 5,224 | | | 3,888 | | | 1,336 | | | 13,392 | | | 12,433 | | | 959 |
| | | | | | | | | | | | | | | | | | |
Operating Loss | | | (4,033) | | | (2,868) | | | (1,165) | | | (10,272) | | | (8,870) | | | (1,402) |
| | | | | | | | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | |
Interest Income | | | 24,054 | | | 22,799 | | | 1,255 | | | 71,249 | | | 65,568 | | | 5,681 |
Other Income | | | 738 | | | 612 | | | 126 | | | 1,359 | | | 1,506 | | | (147) |
Interest Expense on Long-Term Debt | | | (22,998) | | | (21,529) | | | (1,469) | | | (67,232) | | | (60,594) | | | (6,638) |
Other Interest Expense | | | (534) | | | (583) | | | 49 | | | (2,165) | | | (3,064) | | | 899 |
| | | | | | | | | | | | | | | | | | |
Loss Before Income Taxes | | | (2,773) | | | (1,569) | | | (1,204) | | | (7,061) | | | (5,454) | | | (1,607) |
Income Tax Benefit | | | (2,367) | | | (1,377) | | | (990) | | | (5,078) | | | (3,935) | | | (1,143) |
Net Loss | | $ | (406) | | $ | (192) | | $ | (214) | | $ | (1,983) | | $ | (1,519) | | $ | (464) |
| | | | | | | | | | | | | | | | | | |
Net Loss Per Share (Diluted) | | $ | (0.01) | | $ | - | | $ | (0.01) | | $ | (0.02) | | $ | (0.02) | | $ | - |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | June 30, | | June 30, |
INTERSEGMENT ELIMINATIONS | | | 2013 | | | 2012 | | | Variance | | | 2013 | | | 2012 | | | Variance |
Intersegment Revenues | | $ | (36,660) | | $ | (30,445) | | $ | (6,215) | | $ | (109,392) | | $ | (91,877) | | $ | (17,515) |
| | | | | | | | | | | | | | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | |
Purchased Gas | | | (24,979) | | | (24,647) | | | (332) | | | (81,144) | | | (76,656) | | | (4,488) |
Operation and Maintenance | | | (11,681) | | | (5,798) | | | (5,883) | | | (28,248) | | | (15,221) | | | (13,027) |
| | | (36,660) | | | (30,445) | | | (6,215) | | | (109,392) | | | (91,877) | | | (17,515) |
| | | | | | | | | | | | | | | | | | |
Operating Income | | | - | | | - | | | - | | | - | | | - | | | - |
| | | | | | | | | | | | | | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | |
Interest Income | | | (24,212) | | | (23,054) | | | (1,158) | | | (72,007) | | | (66,172) | | | (5,835) |
Other Interest Expense | | | 24,212 | | | 23,054 | | | 1,158 | | | 72,007 | | | 66,172 | | | 5,835 |
| | | | | | | | | | | | | | | | | | |
Net Income | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - |
| | | | | | | | | | | | | | | | | | |
Net Income Per Share (Diluted) | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
| | | | �� | | | | | | | | | | | | | | |
SEGMENT INFORMATION (Continued) |
(Thousands of Dollars) |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended |
| | | June 30, | | | June 30, |
| | | (Unaudited) | | | (Unaudited) |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | Increase | | | | | | | | | Increase |
| | | 2013 | | | 2012 | | | (Decrease) | | | 2013 | | | 2012 | | | (Decrease) |
| | | | | | | | | | | | | | | | | | |
Capital Expenditures: | | | | | | | | | | | | | | | | | | |
Exploration and Production | | $ | 124,471 | (1) | $ | 189,429 | (3) | $ | (64,958) | | $ | 385,009 | (1)(2) | $ | 598,560 | (3)(4) | $ | (213,551) |
Pipeline and Storage | | | 3,635 | (1) | | 34,032 | (3) | | (30,397) | | | 41,000 | (1)(2) | | 97,253 | (3)(4) | | (56,253) |
Utility | | | 14,472 | (1) | | 14,518 | (3) | | (46) | | | 42,968 | (1)(2) | | 39,858 | (3)(4) | | 3,110 |
Energy Marketing | | | 224 | | | 154 | | | 70 | | | 528 | | | 420 | | | 108 |
Total Reportable Segments | | | 142,802 | | | 238,133 | | | (95,331) | | | 469,505 | | | 736,091 | | | (266,586) |
All Other | | | 12,323 | (1) | | 23,151 | (3) | | (10,828) | | | 34,939 | (1)(2) | | 66,788 | (3)(4) | | (31,849) |
Corporate | | | 76 | | | 121 | | | (45) | | | 84 | | | 291 | | | (207) |
Total Capital Expenditures | | $ | 155,201 | | $ | 261,405 | | $ | (106,204) | | $ | 504,528 | | $ | 803,170 | | $ | (298,642) |
(1) | Capital expenditures for the quarter and nine months ended June 30, 2013 include accounts payable and accrued liabilities related to capital expenditures of $49.1 million, $6.9 million, $0.2 million, and $2.4 million in the Exploration and Production segment, Pipeline and Storage segment, Utility segment and the All Other category, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at June 30, 2013 since they represent non-cash investing activities at that date. |
(2) Capital expenditures for the nine months ended June 30, 2013 exclude capital expenditures of $38.9 million, $12.7 million, $3.2 million and $12.7 million in the Exploration and Production segment, Pipeline and Storage segment, Utility segment and the All Other category, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2012 and paid during the nine months ended June 30, 2013. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2012 since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at June 30, 2013.
(3) Capital expenditures for the quarter and nine months ended June 30, 2012 include accounts payable and accrued liabilities related to capital expenditures of $92.2 million, $8.6 million, $1.0 million and $16.8 million in the Exploration and Production segment, Pipeline and Storage segment, Utility segment and the All Other category, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at June 30, 2012 since they represented non-cash investing activities at that date.
(4) Capital expenditures for the nine months ended June 30, 2012 exclude capital expenditures of $103.3 million, $16.4 million, $2.3 million and $3.1 million in the Exploration and Production segment, Pipeline and Storage segment, Utility segment and the All Other category, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2011 and paid during the nine months ended June 30, 2012. These amounts were excluded from the Consolidated Statements of Cash Flows at September 30, 2011 since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at June 30, 2012.
| | | | | | | | | | | | | | | |
DEGREE DAYS | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | Percent Colder |
| | | | | | | | | | | | (Warmer) Than: |
Three Months Ended June 30 | | | Normal | | | 2013 | | | 2012 | | | Normal (1) | | | Last Year (1) |
| | | | | | | | | | | | | | | |
Buffalo, NY | | | 912 | | | 790 | | | 751 | | | (13.4) | | | 5.2 |
Erie, PA | | | 871 | | | 791 | | | 751 | | | (9.2) | | | 5.3 |
| | | | | | | | | | | | | | | |
Nine Months Ended June 30 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Buffalo, NY | | | 6,455 | | | 5,971 | | | 5,171 | | | (7.5) | | | 15.5 |
Erie, PA | | | 6,023 | | | 5,756 | | | 4,875 | | | (4.4) | | | 18.1 |
| | | | | | | | | | | | | | | |
(1) | Percents compare actual 2013 degree days to normal degree days and actual 2013 degree days to actual 2012 degree days.
|
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| | | | | | | | | | | | | | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
| | | | | | | | | | | | | | | | | | |
EXPLORATION AND PRODUCTION INFORMATION |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended |
| | | June 30, | | | June 30, |
| | | | | | | | | Increase | | | | | | | | | Increase |
| | | 2013 | | | 2012 | | | (Decrease) | | | 2013 | | | 2012 | | | (Decrease) |
| | | | | | | | | | | | | | | | | | |
Gas Production/Prices: | | | | | | | | | | | | | | | | | | |
Production (MMcf) | | | | | | | | | | | | | | | | | | |
Appalachia | | | 29,038 | | | 16,778 | | | 12,260 | | | 72,518 | | | 43,125 | | | 29,393 |
West Coast | | | 780 | | | 1,025 | | | (245) | | | 2,240 | | | 2,670 | | | (430) |
Total Production | | | 29,818 | | | 17,803 | | | 12,015 | | | 74,758 | | | 45,795 | | | 28,963 |
| | | | | | | | | | | | | | | | | | |
Average Prices (Per Mcf) | | | | | | | | | | | | | | | | | | |
Appalachia | | $ | 3.97 | | $ | 2.14 | | $ | 1.83 | | $ | 3.58 | | $ | 2.70 | | $ | 0.88 |
West Coast (3) | | | 6.73 | | | 5.42 | | | 1.31 | | | 6.50 | | | 6.64 | | | (0.14) |
Weighted Average | | | 4.04 | | | 2.33 | | | 1.71 | | | 3.67 | | | 2.93 | | | 0.74 |
Weighted Average after Hedging | | | 4.16 | | | 4.07 | | | 0.09 | | | 4.13 | | | 4.57 | | | (0.44) |
| | | | | | | | | | | | | | | | | | |
Oil Production/Prices: | | | | | | | | | | | | | | | | | | |
Production (Thousands of Barrels) | | | | | | | | | | | | | | | | | | |
Appalachia | | | 9 | | | 11 | | | (2) | | | 21 | | | 29 | | | (8) |
West Coast | | | 700 | | | 710 | | | (10) | | | 2,093 | | | 2,136 | | | (43) |
Total Production | | | 709 | | | 721 | | | (12) | | | 2,114 | | | 2,165 | | | (51) |
| | | | | | | | | | | | | | | | | | |
Average Prices (Per Barrel) | | | | | | | | | | | | | | | | | | |
Appalachia | | $ | 95.06 | | $ | 95.43 | | $ | (0.37) | | $ | 93.18 | | $ | 94.24 | | $ | (1.06) |
West Coast | | | 101.05 | | | 104.24 | | | (3.19) | | | 102.44 | | | 108.56 | | | (6.12) |
Weighted Average | | | 100.98 | | | 104.11 | | | (3.13) | | | 102.35 | | | 108.37 | | | (6.02) |
Weighted Average after Hedging | | | 97.90 | | | 89.70 | | | 8.20 | | | 97.88 | | | 91.50 | | | 6.38 |
| | | | | | | | | | | | | | | | | | |
Total Production (Mmcfe) | | | 34,072 | | | 22,129 | | | 11,943 | | | 87,442 | | | 58,785 | | | 28,657 |
| | | | | | | | | | | | | | | | | | |
Selected Operating Performance Statistics: | | | | | | | | | | | | | | | | | | |
General & Administrative Expense per Mcfe (1) | | $ | 0.46 | | $ | 0.59 | | $ | (0.13) | | $ | 0.54 | | $ | 0.70 | | $ | (0.16) |
Lease Operating and Transportation Expense per Mcfe (1)(2) | | $ | 0.99 | | $ | 0.91 | | $ | 0.08 | | $ | 1.00 | | $ | 1.02 | | $ | (0.02) |
Depreciation, Depletion & Amortization per Mcfe (1) | | $ | 1.97 | | $ | 2.37 | | $ | (0.40) | | $ | 2.04 | | $ | 2.32 | | $ | (0.28) |
(1) | Refer to page 16 for the General and Administrative Expense, Lease Operating Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. |
(2) | Amounts include transportation expense of $0.36 and $0.23 per Mcfe for the three months ended June 30, 2013 and June 30, 2012, respectively. Amounts include transportation expense of $0.35 and $0.22 per Mcfe for the nine months ended June 30, 2013 and June 30, 2012, respectively. |
(3) | Prices reflect revenues from gas produced on the West Coast, including natural gas liquids. |
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| | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
| | | | | | |
EXPLORATION AND PRODUCTION INFORMATION |
| | | | | | |
Hedging Summary for the Remaining Three Months of Fiscal 2013 |
| | | | | | |
SWAPS | | | Volume | | | Average Hedge Price |
Oil | | | 0.4 MMBBL | | $ | 94.92 / BBL |
Gas | | | 19.4 BCF | | $ | 4.49 / MCF |
| | | | | | |
Hedging Summary for Fiscal 2014 | | | | | | |
| | | | | | |
SWAPS | | | Volume | | | Average Hedge Price |
Oil | | | 2.0 MMBBL | | $ | 100.22 / BBL |
Gas | | | 63.8 BCF | | $ | 4.28 / MCF |
| | | | | | |
Hedging Summary for Fiscal 2015 | | | | | | |
| | | | | | |
SWAPS | | | Volume | | | Average Hedge Price |
Oil | | | 1.1 MMBBL | | $ | 94.95 / BBL |
Gas | | | 42.5 BCF | | $ | 4.29 / MCF |
| | | | | | |
Hedging Summary for Fiscal 2016 | | | | | | |
| | | | | | |
SWAPS | | | Volume | | | Average Hedge Price |
Oil | | | 0.8 MMBBL | | $ | 91.60 / BBL |
Gas | | | 38.2 BCF | | $ | 4.35 / MCF |
| | | | | | |
Hedging Summary for Fiscal 2017 | | | | | | |
| | | | | | |
SWAPS | | | Volume | | | Average Hedge Price |
Oil | | | 0.2 MMBBL | | $ | 91.50 / BBL |
Gas | | | 38.8 BCF | | $ | 4.45 / MCF |
| | | | | | |
Hedging Summary for Fiscal 2018 | | | | | | |
| | | | | | |
SWAPS | | | Volume | | | Average Hedge Price |
Oil | | | 0.05 MMBBL | | $ | 91.00 / BBL |
Gas | | | 5.3 BCF | | $ | 4.81 / MCF |
| | | | | | |
| | | | | | |
Gross Wells in Process of Drilling | | | | | | |
Nine Months Ended June 30, 2013 | | | | | | |
| | | | | | Total |
| East | | West | | | Company |
Wells in Process - Beginning of Period | | | | | | |
Exploratory | 1.000 | | 1.000 | | | 2.000 |
Developmental | 82.000 | | 0.000 | | | 82.000 |
Wells Commenced | | | | | | |
Exploratory | 0.000 | | 4.000 | | | 4.000 |
Developmental | 33.000 | | 69.000 | | | 102.000 |
Wells Completed | | | | | | |
Exploratory | 0.000 | | 5.000 | | | 5.000 |
Developmental | 34.000 | | 67.000 | | | 101.000 |
Wells Plugged & Abandoned | | | | | | |
Exploratory | 1.000 | | 0.000 | | | 1.000 |
Developmental | 0.000 | | 0.000 | | | 0.000 |
Wells in Process - End of Period | | | | | | |
Exploratory | 0.000 | | 0.000 | | | 0.000 |
Developmental | 81.000 | | 2.000 | | | 83.000 |
| | | | | | |
| | | | | | |
| | | | | | |
Net Wells in Process of Drilling | | | | | | |
Nine Months Ended June 30, 2013 | | | | | | |
| | | | | | Total |
| East | | West | | | Company |
Wells in Process - Beginning of Period | | | | | | |
Exploratory | 1.000 | | 0.125 | | | 1.125 |
Developmental | 59.500 | | 0.000 | | | 59.500 |
Wells Commenced | | | | | | |
Exploratory | 0.000 | | 0.500 | | | 0.500 |
Developmental | 33.000 | | 68.996 | | | 101.996 |
Wells Completed | | | | | | |
Exploratory | 0.000 | | 0.625 | | | 0.625 |
Developmental | 31.500 | | 66.996 | | | 98.496 |
Wells Plugged & Abandoned | | | | | | |
Exploratory | 1.000 | | 0.000 | | | 1.000 |
Developmental | 0.000 | | 0.000 | | | 0.000 |
Wells in Process - End of Period | | | | | | |
Exploratory | 0.000 | | 0.000 | | | 0.000 |
Developmental | 61.000 | | 2.000 | | | 63.000 |
| | | |
| | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
| | | |
EXPLORATION AND PRODUCTION INFORMATION |
| | | |
Updated Fiscal 2014 Financial & Operating Guidance |
| | | |
| | | Guidance |
| | | |
| Total Production (Bcfe) | | 134 - 146 |
| | | |
| Production by Division (Bcfe) | | |
| East | | 114 - 124 |
| West | | 20 - 22 |
| | | |
| Cost and Expenses $ per Mcfe | | |
| Lease Operating and Transportation Expenses | | $0.90 - $1.10 |
| Depreciation, Depletion and Amortization | | $1.95 - $2.05 |
| Other Taxes | | $0.10 - $0.20 |
| General and Administrative | | $0.45 - $0.50 |
| | | |
| Other Operating Expenses (in millions) | | $8 - $10 |
| | | |
| Capital Investment by Division (in millions) | | |
| | | |
| East Division | | $460 - $520 |
| West Division | | $90 - $130 |
| Exploration & Production Segment Total | | $550 - $650 |
| | | |
Updated Pricing Guidance for Fiscal 2014 |
| | | |
| Guidance Based on Average Crude Oil NYMEX Price ($/Bbl) (without hedges) of $90.00 |
| | | |
| Forecast price differentials | | |
| West | | $0.00 to +$10.00 |
| | | |
| Guidance Based on Average Natural Gas NYMEX Price ($/MMBtu) (without hedges) of $4.00 |
| | | |
| Forecast price differentials | | |
| East | | -$0.10 to -$0.20 |
| West | | +$0.80 to +$0.90 |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Earnings per share sensitivity to changes from prices used in guidance* ^ |
| | | | | | | | | | | | | | | | | |
| $0.50 change per MMBtu gas | | $5 change per Bbl oil | | | | | | |
| Increase | | Decrease | | Increase | | Decrease | | | | | | |
| | | | | | | | | | | | | | | | | |
| +$ | 0.20 | | -$ | 0.20 | | +$ | 0.03 | | -$ | 0.03 | | | | | | |
* Please refer to forward looking statement footnote beginning at page 7 of document.
^ This sensitivity table is current as of August 8, 2013 and only considers revenue from the Exploration and Production segment's crude oil and natural gas sales. This revenue is based upon pricing used in the Company's earnings forecast. For its fiscal 2014 earnings forecast, the Company is utilizing flat NYMEX equivalent commodity pricing, exclusive of basis differential, of $4.00 per MMBtu for natural gas and $90 per Bbl for crude oil. The sensitivities will become obsolete with the passage of time, changes in Seneca's production forecast, changes in basis differential, as additional hedging contracts are entered into, and with the settling of hedge contracts at their maturity.
| | | | | | | | | | | | |
| | | | | | | | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Pipeline & Storage Throughput - (millions of cubic feet - MMcf) |
| | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | June 30, | | June 30, |
| | | | | | Increase | | | | | | Increase |
| | 2013 | | 2012 | | (Decrease) | | 2013 | | 2012 | | (Decrease) |
Firm Transportation - Affiliated | | 15,177 | | 17,507 | | (2,330) | | 86,638 | | 81,174 | | 5,464 |
Firm Transportation - Non-Affiliated | | 113,844 | | 62,414 | | 51,430 | | 340,571 | | 200,405 | | 140,166 |
Interruptible Transportation | | 540 | | 247 | | 293 | | 2,506 | | 1,511 | | 995 |
| | 129,561 | | 80,168 | | 49,393 | | 429,715 | | 283,090 | | 146,625 |
| | | | | | | | | | | | |
Utility Throughput - (MMcf) |
| | Three Months Ended | | Nine Months Ended |
| | June 30, | | June 30, |
| | | | | | Increase | | | | | | Increase |
| | 2013 | | 2012 | | (Decrease) | | 2013 | | 2012 | | (Decrease) |
Retail Sales: | | | | | | | | | | | | |
Residential Sales | | 8,600 | | 7,543 | | 1,057 | | 49,124 | | 43,476 | | 5,648 |
Commercial Sales | | 1,187 | | 954 | | 233 | | 7,025 | | 6,109 | | 916 |
Industrial Sales | | 113 | | 168 | | (55) | | 820 | | 456 | | 364 |
| | 9,900 | | 8,665 | | 1,235 | | 56,969 | | 50,041 | | 6,928 |
Off-System Sales | | - | | - | | - | | 6,716 | | 9,544 | | (2,828) |
Transportation | | 13,282 | | 12,016 | | 1,266 | | 59,536 | | 51,663 | | 7,873 |
| | 23,182 | | 20,681 | | 2,501 | | 123,221 | | 111,248 | | 11,973 |
| | | | | | | | | | | | |
Energy Marketing Volumes |
| | Three Months Ended | | Nine Months Ended |
| | June 30, | | June 30, |
| | | | | | Increase | | | | | | Increase |
| | 2013 | | 2012 | | (Decrease) | | 2013 | | 2012 | | (Decrease) |
Natural Gas (MMcf) | | 12,508 | | 10,818 | | 1,690 | | 40,266 | | 38,857 | | 1,409 |
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
ADJUSTED EBITDA
In addition to financial measures calculated in accordance with generally accepted accounting principles (GAAP), this press release contains information regarding Adjusted EBITDA, which is a non-GAAP financial measure. The Company believes that this non-GAAP financial measure is useful to investors because it provides an alternative method for assessing the Company's ongoing operating results. The Company's management uses this non-GAAP financial measure 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 EBITDA as reported GAAP earnings before the following items: interest expense, depreciation, depletion and amortization, interest and other income, impairments, items impacting comparability and income taxes. Management believes Adjusted EBITDA is an important measure of the Company’s cash flow and liquidity, and a key measure for comparing the Company’s financial performance to other companies.
The following tables reconcile National Fuel's net income to Adjusted EBITDA for the three and nine months ended June 30, 2013:
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | Ended June 30, | | Ended June 30, |
| | 2013 | | 2012 | | 2013 | | 2012 |
(in thousands) | | | | | | | | | | | | |
Reported GAAP Earnings | | $ | 58,495 | | $ | 43,184 | | $ | 212,159 | | $ | 171,275 |
Depreciation, Depletion and Amortization | | | 88,142 | | | 74,227 | | | 240,503 | | | 199,925 |
Interest and Other Income | | | (1,480) | | | (1,476) | | | (5,510) | | | (5,762) |
Interest Expense | | | 24,301 | | | 22,357 | | | 70,130 | | | 63,445 |
Income Taxes | | | 45,688 | | | 26,228 | | | 144,423 | | | 111,826 |
Pennsylvania Impact Fee | | | - | | | - | | | - | | | 6,206 |
Adjusted EBITDA | | $ | 215,146 | | $ | 164,520 | | $ | 661,705 | | $ | 546,915 |
| | | | | | |
| | | | | | |
NATIONAL FUEL GAS COMPANY |
AND SUBSIDIARIES |
| | | | | | |
| | | | | | |
Quarter Ended June 30 (unaudited) | | 2013 | | 2012 |
| | | | | | |
Operating Revenues | | $ | 440,008,000 | | $ | 328,861,000 |
| | | | | | |
Net Income Available for Common Stock | | $ | 58,495,000 | | $ | 43,184,000 |
| | | | | | |
Earnings Per Common Share: | | | | | | |
Basic | | $ | 0.70 | | $ | 0.52 |
Diluted | | $ | 0.69 | | $ | 0.52 |
| | | | | | |
Weighted Average Common Shares: | | | | | | |
Used in Basic Calculation | | | 83,557,968 | | | 83,227,602 |
Used in Diluted Calculation | | | 84,325,465 | | | 83,674,823 |
| | | | | | |
Nine Months Ended June 30 (unaudited) | | | | | | |
| | | | | | |
Operating Revenues | | $ | 1,490,688,000 | | $ | 1,313,593,000 |
| | | | | | |
Net Income Available for Common Stock | | $ | 212,159,000 | | $ | 171,275,000 |
| | | | | | |
Earnings Per Common Share: | | | | | | |
Basic | | $ | 2.54 | | $ | 2.06 |
Diluted | | $ | 2.52 | | $ | 2.05 |
| | | | | | |
Weighted Average Common Shares: | | | | | | |
Used in Basic Calculation | | | 83,481,849 | | | 83,068,083 |
Used in Diluted Calculation | | | 84,242,128 | | | 83,690,436 |
| | | | | | |
Twelve Months Ended June 30 (unaudited) | | | | | | |
| | | | | | |
Operating Revenues | | $ | 1,803,948,000 | | $ | 1,599,626,000 |
| | | | | | |
Net Income Available for Common Stock | | $ | 260,961,000 | | $ | 208,631,000 |
| | | | | | |
Earnings Per Common Share: | | | | | | |
Basic | | $ | 3.13 | | $ | 2.51 |
Diluted | | $ | 3.10 | | $ | 2.49 |
| | | | | | |
Weighted Average Common Shares: | | | | | | |
Used in Basic Calculation | | | 83,437,479 | | | 82,986,564 |
Used in Diluted Calculation | | | 84,147,383 | | | 83,717,869 |
