Exhibit 99
| | | |
 National Fuel Gas Company | | Financial
News |
| | | |
| | | 6363 Main Street/Williamsville, NY 14221 |
| | | |
| | | Margaret M. Suto |
| | | Investor Relations |
| | | 716-857-6987 |
| RELEASE DATE: Immediate May 7, 2007 | | |
| | | Ronald J. Tanski |
| | | Treasurer |
| | | 716-857-6981 |
NATIONAL FUEL REPORTS SECOND QUARTER EARNINGS
Williamsville, New York: National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced results for the quarter and six months ended March 31, 2007.
HIGHLIGHTS
| • | | Reported GAAP earnings per share for the quarter of $0.92 increased $0.01 per share from the prior year’s second quarter. Earnings were higher in the Utility segment, the Energy Marketing segment and the Timber segment. Lower earnings in the Exploration and Production segment and the Pipeline and Storage segment offset those increases. |
| • | | Quarterly operating results before items impacting comparability were $0.89 per share, an increase of $0.04 from the prior year’s second quarter. |
| • | | The Company is increasing and narrowing its GAAP guidance range for fiscal 2007 earnings. The revised earnings guidance range is now $2.25 to $2.40 per share.* It had previously been $2.15 to $2.35 per share.* |
| • | | A conference call is scheduled for Tuesday, May 8, 2007, at 11:00 am Eastern Time. |
MANAGEMENT COMMENTS
Philip C. Ackerman, Chairman and Chief Executive Officer of National Fuel Gas Company stated: “We have just had another very solid quarter. In particular, extremes of weather with weekly temperatures ranging from 46% warmer than normal to 30% colder than normal emphasized the importance of storage capacity and the talents of our employees in meeting customer needs. An increase in gas production and an increase in realized oil prices were offset by a higher effective tax rate, but our Exploration and Production segment continues to make progress with increasing emphasis on Appalachia, the hiring of a new exploration and production manager and the possible sale of our Canadian operations.”
-more-
Page 2.
SUMMARY OF RESULTS
National Fuel had consolidated earnings for the quarter ended March 31, 2007 of $78.4 million, a decrease of $0.2 million from the prior year’s second quarter of $78.6 million. Consolidated earnings per share of $0.92 increased $0.01 due to a lower number of weighted average shares outstanding compared to the prior year. The decrease in weighted average shares outstanding is a result of the Company’s share repurchase program (note: all references to earnings per share are to diluted earnings per share and all amounts are stated in U.S. dollars).
Consolidated earnings for the six months ended March 31, 2007 of $133.0 million or $1.57 per share decreased $3.0 million or $0.01 per share from the prior year’s earnings. The Company’s consolidated earnings per share would have been $0.02 per share lower if not for the fact that the weighted average shares outstanding have decreased compared to the prior year, mostly due to the share repurchase program.
| | | | | | | | | | | | | | | | | |
| | | Three Months | | | Six Months | |
| | | Ended March 31, | | | Ended March 31, | |
| (in thousands except per share amounts) | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
Reported GAAP earnings | | $ | 78,447 | | | $ | 78,594 | | | $ | 132,967 | | | $ | 136,013 | |
Items impacting comparability: | | | | | | | | | | | | | | | | |
Resolution of purchased gas contingency1 | | | (2,344 | ) | | | | | | | (2,344 | ) | | | | |
Discontinuance of hedge accounting1 | | | | | | | | | | | (1,888 | ) | | | | |
Income tax adjustment1 | | | | | | | (5,080 | ) | | | | | | | (5,080 | ) |
Out-of-period symmetrical sharing adjustment1 | | | | | | | | | | | | | | | (2,551 | ) |
| | | | | | | | | | | | | |
Operating results | | $ | 76,103 | | | $ | 73,514 | | | $ | 128,735 | | | $ | 128,382 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Reported GAAP earnings per share | | $ | 0.92 | | | $ | 0.91 | | | $ | 1.57 | | | $ | 1.58 | |
Items impacting comparability: | | | | | | | | | | | | | | | | |
Resolution of purchased gas contingency1 | | | (0.03 | ) | | | | | | | (0.03 | ) | | | | |
Discontinuance of hedge accounting1 | | | | | | | | | | | (0.02 | ) | | | | |
Income tax adjustment1 | | | | | | | (0.06 | ) | | | | | | | (0.06 | ) |
Out-of-period symmetrical sharing adjustment1 | | | | | | | | | | | | | | | (0.03 | ) |
| | | | | | | | | | | | | |
Operating results | | $ | 0.89 | | | $ | 0.85 | | | $ | 1.52 | | | $ | 1.49 | |
| | | | | | | | | | | | | |
| | |
| 1 | | See discussion of these items below. |
As outlined in the table above, certain items included in GAAP earnings impacted the comparability of the Company’s operating results when comparing the second quarter and six months ended March 31, 2007 to the comparable periods in fiscal 2006. Excluding these items, operating results for the current second quarter of $76.1 million or $0.89 per share increased $2.6 million or $0.04 per share. Excluding these items, operating results for the six months ended March 31, 2007 of $128.7 million or $1.52 per share increased $0.4 million or $0.03 per share. Items impacting comparability will be discussed in more detail within the discussion of segment earnings below.
-more-
Page 3.
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.)
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 approximately $33.4 million or $0.39 per share, for the quarter ended March 31, 2007 increased $4.8 million or $0.06 per share compared to the prior year’s second quarter. In the New York division, earnings decreased $1.3 million mainly due to higher operating expenses. In the Pennsylvania division, operating results increased $6.1 million due to the impact of weather that was 16.5 percent colder than the prior year and the increase in base rates taking effect early in this quarter. On January 1, 2007, Distribution implemented the Settlement Agreement approved by the Pennsylvania Public Utility Commission, which among other things provided for a $14.3 million (before tax) annual base rate increase. A lower effective tax rate also contributed to the increase in this segment’s quarterly earnings.
The Utility segment’s earnings of $50.6 million or $0.60 per share for the six months ended March 31, 2007 increased $0.2 million compared to the six months ended March 31, 2006. Earnings in Distribution’s New York Division for the six months ended March 31, 2007 of $35.1 million decreased $5.6 million compared to the prior year. The comparability of the six month results is impacted by a $2.6 million positive out-of-period adjustment recorded in the first quarter of fiscal 2006 to correct Distribution’s calculation of the symmetrical sharing component of New York’s gas adjustment rate. Excluding this item, operating results decreased $3.1 million or $0.04 per share. This decrease is mainly due to higher bad debt and other operating expenses and higher property taxes.
For the six months ended March 31, 2007, earnings in Distribution’s Pennsylvania Division of $15.5 million or $0.18 per share, increased $5.8 million, or $0.07 per share, compared to the prior year. Earnings increased primarily due to the impact of weather that was 5.8 percent colder than the prior year, the annual $14.3 million (before taxes) increase in base rates taking effect on January 1, 2007 and a lower effective tax rate. Partially offsetting the increase was higher intercompany interest expense.
Pipeline and Storage Segment
The Pipeline and Storage segment operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire State Pipeline (“Empire”). These companies provide natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and western Pennsylvania.
-more-
Page 4.
The Pipeline and Storage segment’s earnings of $13.9 million, or $0.16 per share, for the quarter ended March 31, 2007, decreased $3.0 million, or $0.04 per share, when compared with the same period in the prior fiscal year. The decrease is primarily due to lower efficiency gas revenue resulting from lower retained volumes and lower natural gas prices compared to the prior year’s quarter. The lower volumes of efficiency gas are part of a FERC approved settlement of a complaint filed by various parties against Supply Corporation under Sections 5(a) and 13 of the Natural Gas Act (the FERC settlement) effective December 1, 2006. The FERC settlement also lowered Supply Corporation’s depreciation rates, which resulted in lower depreciation expense for the quarter. While the settlement increased Supply Corporation’s expense for postretirement benefits, this increase was substantially offset by decreases in the depreciation expense and other operating expenses.
Earnings of $27.6 million, or $0.33 per share, for the six months ended March 31, 2007, decreased $5.1 million, or $0.05 per share, when compared with the six months ended March 31, 2006. The comparability of the results for the six months ended March 31, 2007 is impacted by a $1.9 million gain associated with the prepayment in the first quarter of 2007 of the project financing debt for the Empire State Pipeline. Upon the payment of that debt, the corresponding interest rate collar no longer qualified for hedge accounting, and gains and losses could no longer be deferred. Excluding that gain, operating results decreased $7.0 million for the six months ended March 31, 2007 mainly due to lower efficiency gas revenue resulting from both lower natural gas prices and lower retained volumes due to the FERC settlement discussed above. Higher throughput realized in the first quarter of the prior year caused by the hurricanes in the fall of 2005 did not recur this year. An increase in postretirement benefits expense, also due to the FERC settlement, and higher intercompany interest expense contributed to the decline in earnings. The decrease was partially offset by lower depreciation expense, resulting from the FERC settlement, and lower other operating expenses.
Exploration and Production Segment
The Exploration and Production segment operations are carried out by Seneca Resources Corporation (“Seneca”). Seneca explores for, develops and purchases natural gas and oil reserves in California, in the Appalachian region, in the Gulf Coast region of Texas, Louisiana and Alabama, and in the western provinces of Canada.
The Exploration and Production segment’s earnings in the second quarter of fiscal 2007 decreased $6.0 million or $0.07 per share to $19.8 million or $0.23 per share, when compared with the same period in the prior fiscal year. The comparability of the quarterly results is impacted by a positive tax adjustment of $5.1 million recorded in the second quarter of fiscal 2006. This benefit to earnings resulted from an adjustment to a deferred income tax balance. Under generally accepted accounting principles, a company may recognize the benefit of certain expected future income tax deductions as a deferred tax asset only if it anticipates sufficient future taxable income to utilize those deductions. As a result of changing circumstances, Seneca increased its forecast of future taxable income in the Canadian division and, consequently, recorded a deferred tax asset for certain costs related to capital expenditures that it now expects to deduct on future income tax returns. Excluding this item, operating results in the Exploration and Production segment decreased $1.0 million or $0.01 per share. The decrease was mainly due to a higher effective tax rate as a result of higher state income taxes. Partially offsetting this
-more-
Page 5.
decrease was a 19.3 percent increase in oil prices realized after hedging that more than offset a drop in gas prices realized after hedging of 7.0 percent. For the quarter ended March 31, 2007, the weighted average oil price received by Seneca (after hedging) was $48.09/barrel (“Bbl”), an increase of $7.79/Bbl from the prior year’s quarter. This increase in the weighted average oil price was mainly due to the expiration of older hedges. The weighted average natural gas price received by Seneca (after hedging) for the quarter ended March 31, 2007 was $6.87/thousand cubic feet (“Mcf”), a decrease of $0.52/Mcf from the prior year’s quarter. Overall production for the quarter was 12.2 Bcfe, an increase of 0.1 Bcfe over the prior year’s quarter. An increase in natural gas production more than offset a drop in crude oil production.
The Exploration and Production segment’s earnings of $40.5 million, or $0.48 per share, for the six months ended March 31, 2007 decreased $2.8 million, or $0.02 per share, when compared with the six months ended March 31, 2006. The comparability of the six month results is impacted by a positive tax adjustment recorded in the second quarter of fiscal 2006 as described above. Excluding this item, operating results for the six months ended March 31, 2007 in the Exploration and Production segment increased $2.3 million, or $0.04 per share, from the prior year. This increase is mainly due to a nearly 1.0 Bcfe increase in production. A minor drop in oil production was more than offset by an increase in gas production while the drop in gas prices realized after hedging was more than offset by the increase in oil prices realized after hedging. For the six months ended March 31, 2007, the weighted average oil price received by Seneca (after hedging) was $45.90/Bbl, an increase of $9.20/Bbl from the prior year. This increase in the weighted average oil price was mainly due to the expiration of older hedges. The weighted average natural gas price received by Seneca (after hedging) was $6.90/Mcf, a decrease of $0.98/Mcf from the prior year. In addition a higher effective tax rate contributed to this decline.
Energy Marketing
National Fuel Resources, Inc. (“NFR”) comprises the Company’s Energy Marketing segment. NFR markets natural gas to industrial, commercial, public authority and residential customers in western and central New York and northwestern Pennsylvania, offering competitively priced energy and energy management services to its customers.
The Energy Marketing segment’s earnings for the quarter ended March 31, 2007 of $6.7 million or $0.08 per share increased $2.8 million or $0.04 per share compared to the second quarter of last year. The comparability of the quarterly results is impacted by a $2.3 million reversal of an accrual for purchased gas expense for which a contingency was resolved during the quarter. Excluding this item earnings for the quarter increased $0.5 million primarily due to a 15 percent increase in sales throughput during the quarter.
Earnings for the six months ended March 31, 2007 in the Energy Marketing segment of $7.2 million, or $0.08 per share, increased $2.3 million, or $0.02 per share. The comparability of the quarterly results is impacted by a $2.3 million reversal of an accrual for purchased gas expense noted above. Excluding this item earnings for the six months ended March 31, 2007 were flat compared to the prior year.
Timber Segment
-more-
Page 6
The Timber segment operations are carried out by Highland Forest Resources, Inc. (“Highland”) and Seneca’s Northeast Division. This segment markets high quality hardwoods from its New York and Pennsylvania land holdings and owns two sawmill/dry kiln operations in northwestern Pennsylvania.
The Timber segment’s earnings for the quarter ended March 31, 2007 of $3.2 million or $0.04 per share increased $1.0 million or $0.01 per share from the prior year’s second quarter. Favorable weather conditions facilitated the harvesting of both veneer and saw logs during the quarter. Although the overall volume of log and lumber sales was down, most of the current quarter’s harvest was from low or no basis Company-owned property thus resulting in an increase in gross margins from the prior year’s quarter.
Earnings for the six months ended March 31, 2007 of $3.4 million decreased $0.3 million from the prior year’s earnings. The decrease is due to unfavorable weather conditions in the first quarter that hindered the harvesting of both veneer and saw logs. This resulted in lower sales of both logs and lumber for the six months ended March 31, 2007. Harvesting from Company-owned property resulted in improved margins in the second quarter and offset some of the decline in earnings experienced in the first quarter.
Corporate and All Other
Other direct, wholly-owned subsidiaries of the Company include Horizon Energy Development, Inc., a corporation formerly engaged in the development of international power projects, Horizon LFG, Inc., a corporation engaged, through subsidiaries, in the purchase, processing, transportation and sale of landfill gas, and Horizon Power, Inc., a corporation that develops and owns independent electric generation facilities that are fueled by natural gas or landfill gas.
Earnings in the Corporate and All Other category for the quarter ended March 31, 2007 were $1.4 million, an increase of $0.3 million when compared to the prior year’s second quarter earnings of $1.1 million. The increase is due to higher earnings in Horizon LFG, Inc. and higher intercompany interest income partially offset by higher operating costs and higher interest expense.
Earnings in the Corporate and All Other category for the six months ended March 31, 2007 were $3.6 million, an increase of $2.6 million when compared to the prior year’s earnings. The increase is mainly due to higher earnings in Horizon LFG, Inc. and higher intercompany interest income partially offset by higher operating costs and higher interest expense.
EARNINGS GUIDANCE
The Company is increasing, and narrowing, its guidance range for fiscal 2007 earnings. The revised earnings guidance range is now $2.25 to $2.40 per share.* It had previously been $2.15 to $2.35 per share.* The narrowing of the range is possible because the most sensitivity to earnings variance in the Utility segment typically occurs during the first two fiscal quarters, which are now completed. The increase in the upper end of the guidance range is made possible primarily due to the certainty of pricing on planned gas sales in the Pipeline and Storage
-more-
Page 7.
segment, which are now hedged. This guidance is still based on the September 21, 2006 commodity pricing incorporated in the Company’s original guidance. To the extent that actual pricing during the remainder of the fiscal year varies from those September 21, 2006 prices, the fiscal year earnings will be affected as detailed in the earnings sensitivity table on page 24 of this release.*
EARNINGS TELECONFERENCE
The Company will host a conference call on Tuesday, May 8, 2007, at 11 a.m. (Eastern Standard Time) to discuss this announcement. There are two ways to access this call. For those with Internet access, visit National Fuel’s Web site atnationalfuelgas.com and click on the “For Investors” link at the top of the homepage. For those without Internet access, access is also provided by dialing (toll-free) 1-800-798-2796, and using the passcode “74463473.” 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 “99121557.” Both the webcast and telephonic replay will be available until the close of business on Tuesday, May 15, 2007.
National Fuel is an integrated energy company with $4.0 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: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 laws and regulations to which the Company is subject, including changes in tax, environmental, safety and employment laws and regulations; changes in economic conditions, including economic disruptions caused by terrorist activities, acts of war or major accidents; changes in demographic patterns and weather conditions, including the occurrence of severe weather, such as hurricanes; changes in the availability and/or price of natural gas or oil and the effect of such changes on the accounting treatment 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; 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 or plans, including changes in the plans of the sponsors of the proposed Millennium Pipeline with respect to that |
-more-
Page 8.
project, and the ability to obtain necessary environmental permits; the nature and projected profitability of pending and potential projects and other investments; occurrences affecting the Company’s ability to obtain funds from operations or from issuances of debt or equity securities 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; the cost and effects of legal and administrative claims against the Company; changes in actuarial assumptions and the return on assets with respect to the Company’s retirement plan and post retirement benefit plans; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide post retirement benefits; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
-more-
Page 9
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED MARCH 31, 2007
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Pipeline & | | | | | | Energy | | | | | | Corporate / | | |
| (Thousands of Dollars) | | Utility | | Storage | | E&P | | Marketing | | Timber | | All Other | | Consolidated |
| | | |
Second quarter 2006 GAAP earnings | | $ | 28,654 | | | $ | 16,892 | | | $ | 25,845 | | | $ | 3,877 | | | $ | 2,242 | | | $ | 1,084 | | | $ | 78,594 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income tax adjustment | | | | | | | | | | | (5,080 | ) | | | | | | | | | | | | | | | (5,080 | ) |
| | | |
Second quarter 2006 operating results | | | 28,654 | | | | 16,892 | | | | 20,765 | | | | 3,877 | | | | 2,242 | | | | 1,084 | | | | 73,514 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Drivers of operating results | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Colder weather in Pennsylvania | | | 1,843 | | | | | | | | | | | | | | | | | | | | | | | | 1,843 | |
| Base rate increase in Pennsylvania | | | 3,034 | | | | | | | | | | | | | | | | | | | | | | | | 3,034 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Lower efficiency gas revenues | | | | | | | (3,170 | ) | | | | | | | | | | | | | | | | | | | (3,170 | ) |
| Higher operating costs | | | (1,719 | ) | | | (516 | ) | | | | | | | | | | | | | | | (542 | ) | | | (2,777 | ) |
| Lower depreciation / depletion | | | | | | | 1,048 | | | | | | | | | | | | 484 | | | | | | | | 1,532 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher crude oil prices | | | | | | | | | | | 4,380 | | | | | | | | | | | | | | | | 4,380 | |
| Lower natural gas prices | | | | | | | | | | | (2,369 | ) | | | | | | | | | | | | | | | (2,369 | ) |
| Higher natural gas production | | | | | | | | | | | 1,518 | | | | | | | | | | | | | | | | 1,518 | |
| Lower crude oil production | | | | | | | | | | | (914 | ) | | | | | | | | | | | | | | | (914 | ) |
| Lower (higher) effective tax rate | | | 1,301 | | | | | | | | (3,829 | ) | | | | | | | | | | | | | | | (2,528 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher margins | | | | | | | | | | | | | | | 752 | | | | 629 | | | | 274 | | | | 1,655 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher interest income (expense) | | | | | | | (900 | ) | | | | | | | | | | | | | | | 1,038 | | | | 138 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| All other / rounding | | | 331 | | | | 582 | | | | 250 | | | | (267 | ) | | | (155 | ) | | | (494 | ) | | | 247 | |
| | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Second quarter 2007 operating results | | | 33,444 | | | | 13,936 | | | | 19,801 | | | | 4,362 | | | | 3,200 | | | | 1,360 | | | | 76,103 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Resolution of a purchased gas contingency | | | | | | | | | | | | | | | 2,344 | | | | | | | | | | | | 2,344 | |
| | | |
Second quarter 2007 GAAP earnings | | $ | 33,444 | | | $ | 13,936 | | | $ | 19,801 | | | $ | 6,706 | | | $ | 3,200 | | | $ | 1,360 | | | $ | 78,447 | |
| | | |
Page 10
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED MARCH 31, 2007
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Pipeline & | | | | | | Energy | | | | | | Corporate / | | |
| | | Utility | | Storage | | E&P | | Marketing | | Timber | | All Other | | Consolidated |
| | | |
Second quarter 2006 GAAP earnings | | $ | 0.33 | | | $ | 0.20 | | | $ | 0.30 | | | $ | 0.04 | | | $ | 0.03 | | | $ | 0.01 | | | $ | 0.91 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income tax adjustment | | | | | | | | | | | (0.06 | ) | | | | | | | | | | | | | | | (0.06 | ) |
| | | |
Second quarter 2006 operating results | | | 0.33 | | | | 0.20 | | | | 0.24 | | | | 0.04 | | | | 0.03 | | | | 0.01 | | | | 0.85 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Drivers of operating results | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Colder weather in Pennsylvania | | | 0.02 | | | | | | | | | | | | | | | | | | | | | | | | 0.02 | |
| Base rate increase in Pennsylvania | | | 0.04 | | | | | | | | | | | | | | | | | | | | | | | | 0.04 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Lower efficiency gas revenues | | | | | | | (0.04 | ) | | | | | | | | | | | | | | | | | | | (0.04 | ) |
| Higher operating costs | | | (0.02 | ) | | | (0.01 | ) | | | | | | | | | | | | | | | (0.01 | ) | | | (0.04 | ) |
| Lower depreciation / depletion | | | | | | | 0.01 | | | | | | | | | | | | — | | | | | | | | 0.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher crude oil prices | | | | | | | | | | | 0.05 | | | | | | | | | | | | | | | | 0.05 | |
| Lower natural gas prices | | | | | | | | | | | (0.03 | ) | | | | | | | | | | | | | | | (0.03 | ) |
| Higher natural gas production | | | | | | | | | | | 0.02 | | | | | | | | | | | | | | | | 0.02 | |
| Lower crude oil production | | | | | | | | | | | (0.01 | ) | | | | | | | | | | | | | | | (0.01 | ) |
| Lower (higher) effective tax rate | | | 0.02 | | | | | | | | (0.04 | ) | | | | | | | | | | | | | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher margins | | | | | | | | | | | | | | | 0.01 | | | | 0.01 | | | | — | | | | 0.02 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher interest income (expense) | | | | | | | (0.01 | ) | | | | | | | | | | | | | | | 0.01 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| All other / rounding | | | — | | | | 0.01 | | | | — | | | | — | | | | — | | | | 0.01 | | | | 0.02 | |
| | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Second quarter 2007 operating results | | | 0.39 | | | | 0.16 | | | | 0.23 | | | | 0.05 | | | | 0.04 | | | | 0.02 | | | | 0.89 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Resolution of a purchased gas contingency | | | | | | | | | | | | | | | 0.03 | | | | | | | | | | | | 0.03 | |
| | | |
Second quarter 2007 GAAP earnings | | $ | 0.39 | | | $ | 0.16 | | | $ | 0.23 | | | $ | 0.08 | | | $ | 0.04 | | | $ | 0.02 | | | $ | 0.92 | |
| | | |
Page 11
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
SIX MONTHS ENDED MARCH 31, 2007
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Pipeline & | | | | | | Energy | | | | | | Corporate / | | |
| (Thousands of Dollars) | | Utility | | Storage | | E&P | | Marketing | | Timber | | All Other | | Consolidated |
| | | |
Six months ended March 31, 2006 GAAP earnings | | $ | 50,407 | | | $ | 32,742 | | | $ | 43,280 | | | $ | 4,864 | | | $ | 3,706 | | | $ | 1,014 | | | $ | 136,013 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Out-of-period adjustment to symmetrical sharing | | | (2,551 | ) | | | | | | | | | | | | | | | | | | | | | | | (2,551 | ) |
| Income tax adjustment | | | | | | | | | | | (5,080 | ) | | | | | | | | | | | | | | | (5,080 | ) |
| | | |
Six months ended March 31, 2006 operating results | | | 47,856 | | | | 32,742 | | | | 38,200 | | | | 4,864 | | | | 3,706 | | | | 1,014 | | | | 128,382 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Drivers of operating results | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Colder weather in Pennsylvania | | | 2,111 | | | | | | | | | | | | | | | | | | | | | | | | 2,111 | |
| Base rate increase in Pennsylvania | | | 3,034 | | | | | | | | | | | | | | | | | | | | | | | | 3,034 | |
| Higher operating costs | | | (2,400 | ) | | | | | | | | | | | | | | | | | | | (421 | ) | | | (2,821 | ) |
| Higher property taxes | | | (554 | ) | | | | | | | | | | | | | | | | | | | | | | | (554 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Lower transportation and storage revenues | | | | | | | (1,025 | ) | | | | | | | | | | | | | | | | | | | (1,025 | ) |
| Lower efficiency gas revenues | | | | | | | (5,823 | ) | | | | | | | | | | | | | | | | | | | (5,823 | ) |
| Lower depreciation / depletion | | | | | | | 977 | | | | | | | | | | | | 902 | | | | | | | | 1,879 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher crude oil prices | | | | | | | | | | | 10,412 | | | | | | | | | | | | | | | | 10,412 | |
| Lower natural gas prices | | | | | | | | | | | (8,784 | ) | | | | | | | | | | | | | | | (8,784 | ) |
| Higher natural gas production | | | | | | | | | | | 6,397 | | | | | | | | | | | | | | | | 6,397 | |
| Lower crude oil production | | | | | | | | | | | (1,137 | ) | | | | | | | | | | | | | | | (1,137 | ) |
| Lower (higher) effective tax rate | | | 1,447 | | | | | | | | (4,090 | ) | | | | | | | | | | | | | | | (2,643 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher (lower) margins | | | | | | | | | | | | | | | 303 | | | | (1,035 | ) | | | 727 | | | | (5 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher interest income (expense) | | | (677 | ) | | | (2,030 | ) | | | | | | | | | | | | | | | 2,017 | | | | (690 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| All other / rounding | | | (199 | ) | | | 895 | | | | (475 | ) | | | (313 | ) | | | (156 | ) | | | 250 | | | | 2 | |
| | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Six months ended March 31, 2007 operating results | | | 50,618 | | | | 25,736 | | | | 40,523 | | | | 4,854 | | | | 3,417 | | | | 3,587 | | | | 128,735 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Resolution of a purchased gas contingency | | | | | | | | | | | | | | | 2,344 | | | | | | | | | | | | 2,344 | |
| Discontinuance of hedge accounting | | | | | | | 1,888 | | | | | | | | | | | | | | | | | | | | 1,888 | |
| | | |
Six months ended March 31, 2007 GAAP earnings | | $ | 50,618 | | | $ | 27,624 | | | $ | 40,523 | | | $ | 7,198 | | | $ | 3,417 | | | $ | 3,587 | | | $ | 132,967 | |
| | | |
Page 12
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
SIX MONTHS ENDED MARCH 31, 2007
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Pipeline & | | | | | | Energy | | | | | | Corporate / | | |
| | | Utility | | Storage | | E&P | | Marketing | | Timber | | All Other | | Consolidated |
| | | |
Six months ended March 31, 2006 GAAP earnings | | $ | 0.58 | | | $ | 0.38 | | | $ | 0.50 | | | $ | 0.06 | | | $ | 0.04 | | | $ | 0.02 | | | $ | 1.58 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Out-of-period adjustment to symmetrical sharing | | | (0.03 | ) | | | | | | | | | | | | | | | | | | | | | | | (0.03 | ) |
| Income tax adjustment | | | | | | | | | | | (0.06 | ) | | | | | | | | | | | | | | | (0.06 | ) |
| | | |
Six months ended March 31, 2006 operating results | | | 0.55 | | | | 0.38 | | | | 0.44 | | | | 0.06 | | | | 0.04 | | | | 0.02 | | | | 1.49 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Drivers of operating results | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Colder weather in Pennsylvania | | | 0.02 | | | | | | | | | | | | | | | | | | | | | | | | 0.02 | |
| Base rate increase in Pennsylvania | | | 0.04 | | | | | | | | | | | | | | | | | | | | | | | | 0.04 | |
| Higher operating costs | | | (0.03 | ) | | | | | | | | | | | | | | | | | | | — | | | | (0.03 | ) |
| Higher property taxes | | | (0.01 | ) | | | | | | | | | | | | | | | | | | | | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Lower transportation and storage revenues | | | | | | | (0.01 | ) | | | | | | | | | | | | | | | | | | | (0.01 | ) |
| Lower efficiency gas revenues | | | | | | | (0.07 | ) | | | | | | | | | | | | | | | | | | | (0.07 | ) |
| Lower depreciation / depletion | | | | | | | 0.01 | | | | | | | | | | | | 0.01 | | | | | | | | 0.02 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher crude oil prices | | | | | | | | | | | 0.12 | | | | | | | | | | | | | | | | 0.12 | |
| Lower natural gas prices | | | | | | | | | | | (0.10 | ) | | | | | | | | | | | | | | | (0.10 | ) |
| Higher natural gas production | | | | | | | | | | | 0.07 | | | | | | | | | | | | | | | | 0.07 | |
| Lower crude oil production | | | | | | | | | | | (0.01 | ) | | | | | | | | | | | | | | | (0.01 | ) |
| Lower (higher) effective tax rate | | | 0.02 | | | | | | | | (0.05 | ) | | | | | | | | | | | | | | | (0.03 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher (lower) margins | | | | | | | | | | | | | | | — | | | | (0.01 | ) | | | 0.01 | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Higher interest income (expense) | | | (0.01 | ) | | | (0.02 | ) | | | | | | | | | | | | | | | 0.02 | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| All other / rounding / impact of lower shares outstanding | | | 0.02 | | | | 0.02 | | | | 0.01 | | | | (0.01 | ) | | | — | | | | (0.01 | ) | | | 0.03 | |
| | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Six months ended March 31, 2007 operating results | | | 0.60 | | | | 0.31 | | | | 0.48 | | | | 0.05 | | | | 0.04 | | | | 0.04 | | | | 1.52 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Resolution of a purchased gas contingency | | | | | | | | | | | | | | | 0.03 | | | | | | | | | | | | 0.03 | |
| Discontinuance of hedge accounting | | | | | | | 0.02 | | | | | | | | | | | | | | | | | | | | 0.02 | |
| | | |
Six months ended March 31, 2007 GAAP earnings | | $ | 0.60 | | | $ | 0.33 | | | $ | 0.48 | | | $ | 0.08 | | | $ | 0.04 | | | $ | 0.04 | | | $ | 1.57 | |
| | | |
Page 13
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | March 31, | | | March 31, | |
| | | (Unaudited) | | | (Unaudited) | |
| (Thousands of Dollars, except per share amounts) | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
SUMMARY OF OPERATIONS | | | | | | | | | | | | | | | | |
| Operating Revenues | | $ | 812,156 | | | $ | 890,981 | | | $ | 1,316,396 | | | $ | 1,601,737 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | |
| Purchased Gas | | | 476,904 | | | | 566,540 | | | | 719,843 | | | | 1,003,317 | |
| Operation and Maintenance | | | 125,539 | | | | 121,076 | | | | 224,913 | | | | 224,704 | |
| Property, Franchise and Other Taxes | | | 20,233 | | | | 20,120 | | | | 37,345 | | | | 37,302 | |
| Depreciation, Depletion and Amortization | | | 42,061 | | | | 44,278 | | | | 84,886 | | | | 87,324 | |
| | | | | | | | | | | | | |
| | | | 664,737 | | | | 752,014 | | | | 1,066,987 | | | | 1,352,647 | |
| | | | | | | | | | | | | | | | | |
| Operating Income | | | 147,419 | | | | 138,967 | | | | 249,409 | | | | 249,090 | |
| | | | | | | | | | | | | | | | | |
| Other Income (Expense): | | | | | | | | | | | | | | | | |
| Income from Unconsolidated Subsidiaries | | | 942 | | | | 720 | | | | 2,173 | | | | 1,985 | |
| Interest Income | | | 885 | | | | 965 | | | | 2,248 | | | | 2,098 | |
| Other Income | | | 2,526 | | | | 248 | | | | 3,241 | | | | 989 | |
| Interest Expense on Long-Term Debt | | | (17,888 | ) | | | (18,149 | ) | | | (33,931 | ) | | | (36,367 | ) |
| Other Interest Expense | | | (1,516 | ) | | | (1,465 | ) | | | (3,366 | ) | | | (3,240 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Income Before Income Taxes | | | 132,368 | | | | 121,286 | | | | 219,774 | | | | 214,555 | |
| | | | | | | | | | | | | | | | | |
| Income Tax Expense | | | 53,921 | | | | 42,692 | | | | 86,807 | | | | 78,542 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Net Income Available for Common Stock | | $ | 78,447 | | | $ | 78,594 | | | $ | 132,967 | | | $ | 136,013 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Earnings Per Common Share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.95 | | | $ | 0.93 | | | $ | 1.61 | | | $ | 1.61 | |
| | | | | | | | | | | | | |
| Diluted | | $ | 0.92 | | | $ | 0.91 | | | $ | 1.57 | | | $ | 1.58 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Weighted Average Common Shares: | | | | | | | | | | | | | | | | |
| Used in Basic Calculation | | | 82,895,087 | | | | 84,346,733 | | | | 82,786,027 | | | | 84,385,140 | |
| | | | | | | | | | | | | |
| Used in Diluted Calculation | | | 85,033,127 | | | | 86,253,597 | | | | 84,891,742 | | | | 86,256,515 | |
| | | | | | | | | | | | | |
Page 14
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | | | | | | | |
| | | March 31, | | September 30, |
| (Thousands of Dollars) | | 2007 | | 2006 |
| |
ASSETS | | | | | | | | |
| Property, Plant and Equipment | | $ | 4,820,700 | | | $ | 4,703,040 | |
| Less — Accumulated Depreciation, Depletion and Amortization | | | 1,893,449 | | | | 1,825,314 | |
| | | |
| Net Property, Plant and Equipment | | | 2,927,251 | | | | 2,877,726 | |
| | | |
| | | | | | | | | |
| Current Assets: | | | | | | | | |
| Cash and Temporary Cash Investments | | | 121,809 | | | | 69,611 | |
| Hedging Collateral Deposits | | | 2,034 | | | | 19,676 | |
| Receivables — Net | | | 335,666 | | | | 144,254 | |
| Unbilled Utility Revenue | | | 58,850 | | | | 25,538 | |
| Gas Stored Underground | | | 17,021 | | | | 59,461 | |
| Materials and Supplies — at average cost | | | 31,853 | | | | 36,693 | |
| Unrecovered Purchased Gas Costs | | | 13,962 | | | | 12,970 | |
| Prepaid Pension and Post-Retirement Benefit Costs | | | 68,483 | | | | 64,125 | |
| Other Current Assets | | | 30,700 | | | | 63,723 | |
| Deferred Income Taxes | | | 23,951 | | | | 23,402 | |
| | | |
| Total Current Assets | | | 704,329 | | | | 519,453 | |
| | | |
| | | | | | | | | |
| Other Assets: | | | | | | | | |
| Recoverable Future Taxes | | | 79,177 | | | | 79,511 | |
| Unamortized Debt Expense | | | 14,482 | | | | 15,492 | |
| Other Regulatory Assets | | | 85,427 | | | | 76,917 | |
| Deferred Charges | | | 5,234 | | | | 3,558 | |
| Other Investments | | | 80,866 | | | | 88,414 | |
| Investments in Unconsolidated Subsidiaries | | | 15,850 | | | | 11,590 | |
| Goodwill | | | 5,476 | | | | 5,476 | |
| Intangible Assets | | | 30,423 | | | | 31,498 | |
| Fair Value of Derivative Financial Instruments | | | 1,866 | | | | 11,305 | |
| Deferred Income Taxes | | | 4,627 | | | | 9,003 | |
| Other | | | 6,010 | | | | 4,388 | |
| | | |
| Total Other Assets | | | 329,438 | | | | 337,152 | |
| | | |
| Total Assets | | $ | 3,961,018 | | | $ | 3,734,331 | |
| | | |
| | | | | | | | | |
CAPITALIZATION AND LIABILITIES | | | | | | | | |
| Capitalization: | | | | | | | | |
| Comprehensive Shareholders’ Equity | | | | | | | | |
| Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 83,132,149 Shares and 83,402,670 Shares, Respectively | | $ | 83,132 | | | $ | 83,403 | |
| Paid in Capital | | | 565,809 | | | | 543,730 | |
| Earnings Reinvested in the Business | | | 834,902 | | | | 786,013 | |
| | | |
| Total Common Shareholder Equity Before Items of Other Comprehensive Income | | | 1,483,843 | | | | 1,413,146 | |
| Accumulated Other Comprehensive Income | | | 21,733 | | | | 30,416 | |
| | | |
| Total Comprehensive Shareholders’ Equity | | | 1,505,576 | | | | 1,443,562 | |
| Long-Term Debt, Net of Current Portion | | | 999,000 | | | | 1,095,675 | |
| | | |
| Total Capitalization | | | 2,504,576 | | | | 2,539,237 | |
| | | |
| | | | | | | | | |
| Current and Accrued Liabilities: | | | | | | | | |
| Notes Payable to Banks and Commercial Paper | | | — | | | | — | |
| Current Portion of Long-Term Debt | | | 96,393 | | | | 22,925 | |
| Accounts Payable | | | 166,990 | | | | 133,034 | |
| Amounts Payable to Customers | | | 10,596 | | | | 23,935 | |
| Dividends Payable | | | 24,927 | | | | 25,008 | |
| Interest Payable on Long-Term Debt | | | 18,419 | | | | 18,420 | |
| Other Accruals and Current Liabilities | | | 176,307 | | | | 27,040 | |
| Fair Value of Derivative Financial Instruments | | | 32,122 | | | | 39,983 | |
| | | |
| Total Current and Accrued Liabilities | | | 525,754 | | | | 290,345 | |
| | | |
| | | | | | | | | |
| Deferred Credits: | | | | | | | | |
| Deferred Income Taxes | | | 556,115 | | | | 544,502 | |
| Taxes Refundable to Customers | | | 10,433 | | | | 10,426 | |
| Unamortized Investment Tax Credit | | | 5,743 | | | | 6,094 | |
| Cost of Removal Regulatory Liability | | | 87,986 | | | | 85,076 | |
| Other Regulatory Liabilities | | | 70,842 | | | | 75,456 | |
| Post-Retirement Liabilities | | | 26,953 | | | | 32,918 | |
| Asset Retirement Obligations | | | 79,609 | | | | 77,392 | |
| Other Deferred Credits | | | 93,007 | | | | 72,885 | |
| | | |
| Total Deferred Credits | | | 930,688 | | | | 904,749 | |
| | | |
| Commitments and Contingencies | | | — | | | | — | |
| | | |
| Total Capitalization and Liabilities | | $ | 3,961,018 | | | $ | 3,734,331 | |
| | | |
Page 15
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | |
| | | Six Months Ended |
| | | March 31, |
| (Thousands of Dollars) | | 2007 | | 2006 |
| |
| Operating Activities: | | | | | | | | �� |
| Net Income Available for Common Stock | | $ | 132,967 | | | $ | 136,013 | |
| Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | | | | | | | | |
| Depreciation, Depletion and Amortization | | | 84,886 | | | | 87,324 | |
| Deferred Income Taxes | | | 21,803 | | | | (1,435 | ) |
| Income from Unconsolidated Subsidiaries, Net of Cash Distributions | | | (960 | ) | | | 1,166 | |
| Excess Tax Benefits Associated with Stock-Based Compensation Awards | | | (13,689 | ) | | | (6,515 | ) |
| Other | | | 3,818 | | | | (5,297 | ) |
| Change in: | | | | | | | | |
| Hedging Collateral Deposits | | | 17,642 | | | | 60,894 | |
| Receivables and Unbilled Utility Revenue | | | (225,511 | ) | | | (249,466 | ) |
| Gas Stored Underground and Materials and Supplies | | | 47,243 | | | | 33,486 | |
| Unrecovered Purchased Gas Costs | | | (992 | ) | | | 14,817 | |
| Prepayments and Other Current Assets | | | 28,659 | | | | 24,372 | |
| Accounts Payable | | | 34,417 | | | | (9,951 | ) |
| Amounts Payable to Customers | | | (13,339 | ) | | | 11,492 | |
| Other Accruals and Current Liabilities | | | 163,928 | | | | 139,020 | |
| Other Assets | | | (3,765 | ) | | | (11,837 | ) |
| Other Liabilities | | | (2,434 | ) | | | 19,107 | |
| |
| Net Cash Provided by Operating Activities | | $ | 274,673 | | | $ | 243,190 | |
| |
| | | | | | | | | |
| Investing Activities: | | | | | | | | |
| Capital Expenditures | | $ | (132,313 | ) | | $ | (134,961 | ) |
| Investment in Partnership | | | (3,300 | ) | | | — | |
| Net Proceeds from Sale of Oil and Gas Producing Properties | | | 2,330 | | | | 4 | |
| Other | | | (339 | ) | | | (1,396 | ) |
| |
| Net Cash Used in Investing Activities | | $ | (133,622 | ) | | $ | (136,353 | ) |
| |
| | | | | | | | | |
| Financing Activities: | | | | | | | | |
| Excess Tax Benefits Associated with Stock-Based Compensation Awards | | $ | 13,689 | | | $ | 6,515 | |
| Shares Repurchased under Repurchase Plan | | | (43,344 | ) | | | (26,577 | ) |
| Reduction of Long-Term Debt | | | (23,207 | ) | | | (4,529 | ) |
| Dividends Paid on Common Stock | | | (49,808 | ) | | | (48,933 | ) |
| Proceeds From Issuance of Common Stock | | | 14,604 | | | | 7,164 | |
| |
| Net Cash Used In Financing Activities | | $ | (88,066 | ) | | $ | (66,360 | ) |
| |
| Effect of Exchange Rates on Cash | | | (787 | ) | | | 15 | |
| |
| Net Increase in Cash and Temporary Cash Investments | | $ | 52,198 | | | $ | 40,492 | |
| Cash and Temporary Cash Investments at Beginning of Period | | | 69,611 | | | | 57,607 | |
| |
| Cash and Temporary Cash Investments at March 31 | | $ | 121,809 | | | $ | 98,099 | |
| |
Page 16
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| (Thousands of Dollars, except per share amounts) | | 2007 | | 2006 | | Variance | | 2007 | | 2006 | | Variance |
| | | | | |
UTILITY SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues from External Customers | | $ | 501,473 | | | $ | 536,235 | | | $ | (34,762 | ) | | $ | 790,256 | | | $ | 967,714 | | | $ | (177,458 | ) |
| Intersegment Revenues | | | 5,941 | | | | 5,681 | | | | 260 | | | | 9,970 | | | | 9,803 | | | | 167 | |
| | | | | |
| Total Operating Revenues | | | 507,414 | | | | 541,916 | | | | (34,502 | ) | | | 800,226 | | | | 977,517 | | | | (177,291 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Purchased Gas | | | 352,864 | | | | 394,803 | | | | (41,939 | ) | | | 539,225 | | | | 715,360 | | | | (176,135 | ) |
| Operation and Maintenance | | | 67,448 | | | | 65,496 | | | | 1,952 | | | | 118,215 | | | | 117,209 | | | | 1,006 | |
| Property, Franchise and Other Taxes | | | 14,107 | | | | 14,259 | | | | (152 | ) | | | 25,298 | | | | 25,773 | | | | (475 | ) |
| Depreciation, Depletion and Amortization | | | 10,321 | | | | 10,027 | | | | 294 | | | | 20,100 | | | | 20,004 | | | | 96 | |
| | | | | |
| | | | 444,740 | | | | 484,585 | | | | (39,845 | ) | | | 702,838 | | | | 878,346 | | | | (175,508 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | | 62,674 | | | | 57,331 | | | | 5,343 | | | | 97,388 | | | | 99,171 | | | | (1,783 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Income | | | 177 | | | | 179 | | | | (2 | ) | | | 462 | | | | 380 | | | | 82 | |
| Other Income | | | 368 | | | | 192 | | | | 176 | | | | 653 | | | | 404 | | | | 249 | |
| Other Interest Expense | | | (7,269 | ) | | | (6,880 | ) | | | (389 | ) | | | (14,646 | ) | | | (13,603 | ) | | | (1,043 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income Before Income Taxes | | | 55,950 | | | | 50,822 | | | | 5,128 | | | | 83,857 | | | | 86,352 | | | | (2,495 | ) |
| Income Tax Expense | | | 22,506 | | | | 22,168 | | | | 338 | | | | 33,239 | | | | 35,945 | | | | (2,706 | ) |
| | | | | |
| Net Income | | $ | 33,444 | | | $ | 28,654 | | | $ | 4,790 | | | $ | 50,618 | | | $ | 50,407 | | | $ | 211 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income Per Share (Diluted) | | $ | 0.39 | | | $ | 0.33 | | | $ | 0.06 | | | $ | 0.60 | | | $ | 0.58 | | | $ | 0.02 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| | | 2007 | | 2006 | | Variance | | 2007 | | 2006 | | Variance |
| | | | | |
PIPELINE AND STORAGE SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues from External Customers | | $ | 34,952 | | | $ | 39,346 | | | $ | (4,394 | ) | | $ | 64,761 | | | $ | 74,085 | | | $ | (9,324 | ) |
| Intersegment Revenues | | | 20,884 | | | | 19,711 | | | | 1,173 | | | | 41,252 | | | | 41,006 | | | | 246 | |
| | | | | |
| Total Operating Revenues | | | 55,836 | | | | 59,057 | | | | (3,221 | ) | | | 106,013 | | | | 115,091 | | | | (9,078 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Purchased Gas | | | 2 | | | | 78 | | | | (76 | ) | | | (11 | ) | | | 62 | | | | (73 | ) |
| Operation and Maintenance | | | 17,744 | | | | 16,949 | | | | 795 | | | | 32,647 | | | | 32,265 | | | | 382 | |
| Property, Franchise and Other Taxes | | | 4,335 | | | | 4,010 | | | | 325 | | | | 8,613 | | | | 7,966 | | | | 647 | |
| Depreciation, Depletion and Amortization | | | 7,563 | | | | 9,176 | | | | (1,613 | ) | | | 16,855 | | | | 18,359 | | | | (1,504 | ) |
| | | | | |
| | | | 29,644 | | | | 30,213 | | | | (569 | ) | | | 58,104 | | | | 58,652 | | | | (548 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | | 26,192 | | | | 28,844 | | | | (2,652 | ) | | | 47,909 | | | | 56,439 | | | | (8,530 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Income | | | 39 | | | | 144 | | | | (105 | ) | | | 123 | | | | 196 | | | | (73 | ) |
| Other Income | | | 80 | | | | 60 | | | | 20 | | | | 264 | | | | 268 | | | | (4 | ) |
| Interest Expense on Long-Term Debt | | | (10 | ) | | | (274 | ) | | | 264 | | | | 1,829 | | | | (592 | ) | | | 2,421 | |
| Other Interest Expense | | | (2,741 | ) | | | (1,093 | ) | | | (1,648 | ) | | | (5,028 | ) | | | (2,389 | ) | | | (2,639 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income Before Income Taxes | | | 23,560 | | | | 27,681 | | | | (4,121 | ) | | | 45,097 | | | | 53,922 | | | | (8,825 | ) |
| Income Tax Expense | | | 9,624 | | | | 10,789 | | | | (1,165 | ) | | | 17,473 | | | | 21,180 | | | | (3,707 | ) |
| | | | | |
| Net Income | | $ | 13,936 | | | $ | 16,892 | | | $ | (2,956 | ) | | $ | 27,624 | | | $ | 32,742 | | | $ | (5,118 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income Per Share (Diluted) | | $ | 0.16 | | | $ | 0.20 | | | $ | (0.04 | ) | | $ | 0.33 | | | $ | 0.38 | | | $ | (0.05 | ) |
| | | | | |
Page 17
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| (Thousands of Dollars, except per share amounts) | | 2007 | | 2006 | | Variance | | 2007 | | 2006 | | Variance |
| | | | | |
EXPLORATION AND PRODUCTION SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Revenues | | $ | 92,610 | | | $ | 88,719 | | | $ | 3,891 | | | $ | 181,318 | | | $ | 170,806 | | | $ | 10,512 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Purchased Gas | | | — | | | | 4 | | | | (4 | ) | | | — | | | | 98 | | | | (98 | ) |
| Operation and Maintenance: | | | | | | | | | | | | | | | | | | | | | | | | |
| General and Administrative Expense | | | 5,949 | | | | 6,381 | | | | (432 | ) | | | 11,520 | | | | 12,682 | | | | (1,162 | ) |
| Lease Operating Expense | | | 14,945 | | | | 13,155 | | | | 1,790 | | | | 28,401 | | | | 26,694 | | | | 1,707 | |
| All Other Operation and Maintenance Expense | | | 2,070 | | | | 2,021 | | | | 49 | | | | 4,711 | | | | 3,992 | | | | 719 | |
| Property, Franchise and Other Taxes (Lease Operating Expense) | | | 1,241 | | | | 1,528 | | | | (287 | ) | | | 2,391 | | | | 2,736 | | | | (345 | ) |
| Depreciation, Depletion and Amortization | | | 22,914 | | | | 23,118 | | | | (204 | ) | | | 44,922 | | | | 44,658 | | | | 264 | |
| | | | | |
| | | | 47,119 | | | | 46,207 | | | | 912 | | | | 91,945 | | | | 90,860 | | | | 1,085 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | | 45,491 | | | | 42,512 | | | | 2,979 | | | | 89,373 | | | | 79,946 | | | | 9,427 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Income | | | 2,644 | | | | 1,940 | | | | 704 | | | | 5,188 | | | | 3,781 | | | | 1,407 | |
| Other Interest Expense | | | (12,949 | ) | | | (12,521 | ) | | | (428 | ) | | | (25,897 | ) | | | (24,950 | ) | | | (947 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income Before Income Taxes | | | 35,186 | | | | 31,931 | | | | 3,255 | | | | 68,664 | | | | 58,777 | | | | 9,887 | |
| Income Tax Expense | | | 15,385 | | | | 6,086 | | | | 9,299 | | | | 28,141 | | | | 15,497 | | | | 12,644 | |
| | | | | |
| Net Income | | $ | 19,801 | | | $ | 25,845 | | | $ | (6,044 | ) | | $ | 40,523 | | | $ | 43,280 | | | $ | (2,757 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income Per Share (Diluted) | | $ | 0.23 | | | $ | 0.30 | | | $ | (0.07 | ) | | $ | 0.48 | | | $ | 0.50 | | | $ | (0.02 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| | | 2007 | | 2006 | | Variance | | 2007 | | 2006 | | Variance |
| | | | | |
ENERGY MARKETING SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Revenues | | $ | 163,338 | | | $ | 206,061 | | | $ | (42,723 | ) | | $ | 246,656 | | | $ | 351,620 | | | $ | (104,964 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Purchased Gas | | | 151,027 | | | | 198,562 | | | | (47,535 | ) | | | 232,282 | | | | 341,391 | | | | (109,109 | ) |
| Operation and Maintenance | | | 1,218 | | | | 1,259 | | | | (41 | ) | | | 2,512 | | | | 2,489 | | | | 23 | |
| Property, Franchise and Other Taxes | | | 24 | | | | (249 | ) | | | 273 | | | | 35 | | | | (240 | ) | | | 275 | |
| Depreciation, Depletion and Amortization | | | 7 | | | | 16 | | | | (9 | ) | | | 14 | | | | 37 | | | | (23 | ) |
| | | | | |
| | | | 152,276 | | | | 199,588 | | | | (47,312 | ) | | | 234,843 | | | | 343,677 | | | | (108,834 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | | 11,062 | | | | 6,473 | | | | 4,589 | | | | 11,813 | | | | 7,943 | | | | 3,870 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Income | | | 78 | | | | 43 | | | | 35 | | | | 140 | | | | 169 | | | | (29 | ) |
| Other Income | | | 181 | | | | 121 | | | | 60 | | | | 317 | | | | 219 | | | | 98 | |
| Other Interest Expense | | | (125 | ) | | | (129 | ) | | | 4 | | | | (252 | ) | | | (191 | ) | | | (61 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income Before Income Taxes | | | 11,196 | | | | 6,508 | | | | 4,688 | | | | 12,018 | | | | 8,140 | | | | 3,878 | |
| Income Tax Expense | | | 4,490 | | | | 2,631 | | | | 1,859 | | | | 4,820 | | | | 3,276 | | | | 1,544 | |
| | | | | |
| Net Income | | $ | 6,706 | | | $ | 3,877 | | | $ | 2,829 | | | $ | 7,198 | | | $ | 4,864 | | | $ | 2,334 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income Per Share (Diluted) | | $ | 0.08 | | | $ | 0.04 | | | $ | 0.04 | | | $ | 0.08 | | | $ | 0.06 | | | $ | 0.02 | |
| | | | | |
Page 18
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| (Thousands of Dollars, except per share amounts) | | 2007 | | 2006 | | Variance | | 2007 | | 2006 | | Variance |
| | | | | |
TIMBER SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues from External Customers | | $ | 18,184 | | | $ | 19,157 | | | $ | (973 | ) | | $ | 29,947 | | | $ | 36,066 | | | $ | (6,119 | ) |
| Intersegment Revenues | | | — | | | | (23 | ) | | | 23 | | | | — | | | | — | | | | — | |
| | | | | |
| Total Operating Revenues | | | 18,184 | | | | 19,134 | | | | (950 | ) | | | 29,947 | | | | 36,066 | | | | (6,119 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Operation and Maintenance | | | 10,969 | | | | 12,746 | | | | (1,777 | ) | | | 20,111 | | | | 24,430 | | | | (4,319 | ) |
| Property, Franchise and Other Taxes | | | 426 | | | | 478 | | | | (52 | ) | | | 819 | | | | 859 | | | | (40 | ) |
| Depreciation, Depletion and Amortization | | | 883 | | | | 1,627 | | | | (744 | ) | | | 2,251 | | | | 3,638 | | | | (1,387 | ) |
| | | | | |
| | | | 12,278 | | | | 14,851 | | | | (2,573 | ) | | | 23,181 | | | | 28,927 | | | | (5,746 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | | 5,906 | | | | 4,283 | | | | 1,623 | | | | 6,766 | | | | 7,139 | | | | (373 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Income | | | 296 | | | | 164 | | | | 132 | | | | 612 | | | | 301 | | | | 311 | |
| Other Income | | | — | | | | 35 | | | | (35 | ) | | | 21 | | | | 52 | | | | (31 | ) |
| Other Interest Expense | | | (791 | ) | | | (758 | ) | | | (33 | ) | | | (1,594 | ) | | | (1,521 | ) | | | (73 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income Before Income Taxes | | | 5,411 | | | | 3,724 | | | | 1,687 | | | | 5,805 | | | | 5,971 | | | | (166 | ) |
| Income Tax Expense | | | 2,211 | | | | 1,482 | | | | 729 | | | | 2,388 | | | | 2,265 | | | | 123 | |
| | | | | |
| Net Income | | $ | 3,200 | | | $ | 2,242 | | | $ | 958 | | | $ | 3,417 | | | $ | 3,706 | | | $ | (289 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income Per Share (Diluted) | | $ | 0.04 | | | $ | 0.03 | | | $ | 0.01 | | | $ | 0.04 | | | $ | 0.04 | | | $ | — | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| | | 2007 | | 2006 | | Variance | | 2007 | | 2006 | | Variance |
| | | | | |
ALL OTHER | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues from External Customers | | $ | 1,403 | | | $ | 1,075 | | | $ | 328 | | | $ | 3,079 | | | $ | 1,058 | | | $ | 2,021 | |
| Intersegment Revenues | | | 2,090 | | | | 2,057 | | | | 33 | | | | 4,287 | | | | 6,584 | | | | (2,297 | ) |
| | | | | |
| Total Operating Revenues | | | 3,493 | | | | 3,132 | | | | 361 | | | | 7,366 | | | | 7,642 | | | | (276 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Purchased Gas | | | 1,822 | | | | 1,866 | | | | (44 | ) | | | 3,650 | | | | 4,972 | | | | (1,322 | ) |
| Operation and Maintenance | | | 950 | | | | 922 | | | | 28 | | | | 1,755 | | | | 1,795 | | | | (40 | ) |
| Property, Franchise and Other Taxes | | | 28 | | | | 23 | | | | 5 | | | | 48 | | | | 42 | | | | 6 | |
| Depreciation, Depletion and Amortization | | | 197 | | | | 197 | | | | — | | | | 393 | | | | 397 | | | | (4 | ) |
| | | | | |
| | | | 2,997 | | | | 3,008 | | | | (11 | ) | | | 5,846 | | | | 7,206 | | | | (1,360 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | | 496 | | | | 124 | | | | 372 | | | | 1,520 | | | | 436 | | | | 1,084 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
| Income from Unconsolidated Subsidiaries | | | 942 | | | | 720 | | | | 222 | | | | 2,173 | | | | 1,985 | | | | 188 | |
| Interest Income | | | 4 | | | | 7 | | | | (3 | ) | | | 7 | | | | 13 | | | | (6 | ) |
| Other Income | | | 12 | | | | 14 | | | | (2 | ) | | | 25 | | | | 16 | | | | 9 | |
| Other Interest Expense | | | (667 | ) | | | (616 | ) | | | (51 | ) | | | (1,337 | ) | | | (1,206 | ) | | | (131 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income Before Income Taxes | | | 787 | | | | 249 | | | | 538 | | | | 2,388 | | | | 1,244 | | | | 1,144 | |
| Income Tax Expense | | | 320 | | | | 203 | | | | 117 | | | | 935 | | | | 628 | | | | 307 | |
| | | | | |
| Net Income | | $ | 467 | | | $ | 46 | | | $ | 421 | | | $ | 1,453 | | | $ | 616 | | | $ | 837 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income Per Share (Diluted) | | $ | 0.01 | | | $ | — | | | $ | 0.01 | | | $ | 0.02 | | | $ | 0.01 | | | $ | 0.01 | |
| | | | | |
Page 19
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| (Thousands of Dollars, except per share amounts) | | 2007 | | 2006 | | Variance | | 2007 | | 2006 | | Variance |
| | | | | |
CORPORATE | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenues from External Customers | | $ | 196 | | | $ | 388 | | | $ | (192 | ) | | $ | 379 | | | $ | 388 | | | $ | (9 | ) |
| Intersegment Revenues | | | 912 | | | | 782 | | | | 130 | | | | 1,764 | | | | 1,475 | | | | 289 | |
| | | | | |
| Total Operating Revenues | | | 1,108 | | | | 1,170 | | | | (62 | ) | | | 2,143 | | | | 1,863 | | | | 280 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Operation and Maintenance | | | 5,262 | | | | 1,582 | | | | 3,680 | | | | 7,011 | | | | 3,450 | | | | 3,561 | |
| Property, Franchise and Other Taxes | | | 72 | | | | 71 | | | | 1 | | | | 141 | | | | 166 | | | | (25 | ) |
| Depreciation, Depletion and Amortization | | | 176 | | | | 117 | | | | 59 | | | | 351 | | | | 231 | | | | 120 | |
| | | | | |
| | | | 5,510 | | | | 1,770 | | | | 3,740 | | | | 7,503 | | | | 3,847 | | | | 3,656 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Loss | | | (4,402 | ) | | | (600 | ) | | | (3,802 | ) | | | (5,360 | ) | | | (1,984 | ) | | | (3,376 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Income | | | 22,138 | | | | 19,979 | | | | 2,159 | | | | 44,067 | | | | 39,703 | | | | 4,364 | |
| Other Income | | | 1,885 | | | | (174 | ) | | | 2,059 | | | | 1,961 | | | | 30 | | | | 1,931 | |
| Interest Expense on Long-Term Debt | | | (17,878 | ) | | | (17,875 | ) | | | (3 | ) | | | (35,760 | ) | | | (35,775 | ) | | | 15 | |
| Other Interest Expense | | | (1,465 | ) | | | (959 | ) | | | (506 | ) | | | (2,963 | ) | | | (1,825 | ) | | | (1,138 | ) |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income Before Income Taxes | | | 278 | | | | 371 | | | | (93 | ) | | | 1,945 | | | | 149 | | | | 1,796 | |
| Income Tax Benefit | | | (615 | ) | | | (667 | ) | | | 52 | | | | (189 | ) | | | (249 | ) | | | 60 | |
| | | | | |
| Net Income | | $ | 893 | | | $ | 1,038 | | | $ | (145 | ) | | $ | 2,134 | | | $ | 398 | | | $ | 1,736 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income Per Share (Diluted) | | $ | 0.01 | | | $ | 0.01 | | | $ | — | | | $ | 0.02 | | | $ | 0.01 | | | $ | 0.01 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| | | 2007 | | 2006 | | Variance | | 2007 | | 2006 | | Variance |
| | | | | |
INTERSEGMENT ELIMINATIONS | | | | | | | | | | | | | | | | | | | | | | | | |
| Intersegment Revenues | | $ | (29,827 | ) | | $ | (28,208 | ) | | $ | (1,619 | ) | | $ | (57,273 | ) | | $ | (58,868 | ) | | $ | 1,595 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
| Purchased Gas | | | (28,811 | ) | | | (28,773 | ) | | | (38 | ) | | | (55,303 | ) | | | (58,566 | ) | | | 3,263 | |
| Operation and Maintenance | | | (1,016 | ) | | | 565 | | | | (1,581 | ) | | | (1,970 | ) | | | (302 | ) | | | (1,668 | ) |
| | | | | |
| | | | (29,827 | ) | | | (28,208 | ) | | | (1,619 | ) | | | (57,273 | ) | | | (58,868 | ) | | | 1,595 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Income | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest Income | | | (24,491 | ) | | | (21,491 | ) | | | (3,000 | ) | | | (48,351 | ) | | | (42,445 | ) | | | (5,906 | ) |
| Other Interest Expense | | | 24,491 | | | | 21,491 | | | | 3,000 | | | | 48,351 | | | | 42,445 | | | | 5,906 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Income Per Share (Diluted) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | |
Page 20
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | March 31, | | | March 31, | |
| | | (Unaudited) | | | (Unaudited) | |
| | | | | | | | | | | Increase | | | | | | | | | | | Increase | |
| | | 2007 | | | 2006 | | | (Decrease) | | | 2007 | | | 2006 | | | (Decrease) | |
Capital Expenditures: | | | | | | | | | | | | | | | | | | | | | | | | |
| Utility | | $ | 12,679 | | | $ | 13,006 | | | $ | (327 | ) | | $ | 25,558 | | | $ | 25,360 | | | $ | 198 | |
| Pipeline and Storage | | | 5,201 | | | | 4,165 | | | | 1,036 | | | | 10,153 | | | | 10,328 | | | | (175 | ) |
| Exploration and Production | | | 49,277 | | | | 45,401 | | | | 3,876 | | | | 95,866 | | | | 96,324 | | | | (458 | ) |
| Energy Marketing | | | 8 | | | | 1 | | | | 7 | | | | 17 | | | | 6 | | | | 11 | |
| Timber | | | 401 | | | | 257 | | | | 144 | | | | 1,207 | | | | 752 | | | | 455 | |
| | | | | | | | | | | | | | | | | | | |
| Total Reportable Segments | | | 67,566 | | | | 62,830 | | | | 4,736 | | | | 132,801 | | | | 132,770 | | | | 31 | |
| All Other | | | 55 | | | | 56 | | | | (1 | ) | | | 84 | | | | 56 | | | | 28 | |
| Corporate | | | (610 | ) | | | 1,707 | | | | (2,317 | ) | | | (572 | ) | | | 2,135 | | | | (2,707 | ) |
| | | | | | | | | | | | | | | | | | | |
| Total Consolidated | | $ | 67,011 | | | $ | 64,593 | | | $ | 2,418 | | | $ | 132,313 | | | $ | 134,961 | | | $ | (2,648 | ) |
| | | | | | | | | | | | | | | | | | | |
DEGREE DAYS
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Percent Colder |
| | | | | | | | | | | | | | | (Warmer) Than: |
| | | Normal | | 2007 | | 2006 | | Normal | | Last Year |
| Three Months Ended March 31 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Buffalo, NY | | | 3,327 | | | | 3,327 | | | | 2,875 | | | | — | | | | 15.7 | |
| Erie, PA | | | 3,142 | | | | 3,152 | | | | 2,705 | | | | 0.3 | | | | 16.5 | |
| | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended March 31 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Buffalo, NY | | | 5,587 | | | | 5,274 | | | | 5,085 | | | | (5.6 | ) | | | 3.7 | |
| Erie, PA | | | 5,223 | | | | 5,030 | | | | 4,753 | | | | (3.7 | ) | | | 5.8 | |
Page 21
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | March 31, | | | March 31, | |
| | | | | | | | | | | Increase | | | | | | | | | | | Increase | |
| | | 2007 | | | 2006 | | | (Decrease) | | | 2007 | | | 2006 | | | (Decrease) | |
Gas Production/Prices: | | | | | | | | | | | | | | | | | | | | | | | | |
| Production (MMcf) | | | | | | | | | | | | | | | | | | | | | | | | |
| Gulf Coast | | | 2,893 | | | | 2,752 | | | | 141 | | | | 5,616 | | | | 4,419 | | | | 1,197 | |
| West Coast | | | 920 | | | | 933 | | | | (13 | ) | | | 1,865 | | | | 1,951 | | | | (86 | ) |
| Appalachia | | | 1,339 | | | | 1,246 | | | | 93 | | | | 2,732 | | | | 2,499 | | | | 233 | |
| Canada | | | 1,856 | | | | 1,761 | | | | 95 | | | | 3,577 | | | | 3,672 | | | | (95 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | 7,008 | | | | 6,692 | | | | 316 | | | | 13,790 | | | | 12,541 | | | | 1,249 | |
| | | | | | | | | | | | | | | | | | | |
| Average Prices (Per Mcf) | | | | | | | | | | | | | | | | | | | | | | | | |
| Gulf Coast | | $ | 6.42 | | | $ | 8.47 | | | $ | (2.05 | ) | | $ | 6.48 | | | $ | 9.33 | | | $ | (2.85 | ) |
| West Coast | | | 6.95 | | | | 8.02 | | | | (1.07 | ) | | | 6.51 | | | | 9.62 | | | | (3.11 | ) |
| Appalachia | | | 7.39 | | | | 10.03 | | | | (2.64 | ) | | | 7.30 | | | | 11.83 | | | | (4.53 | ) |
| Canada | | | 5.87 | | | | 7.21 | | | | (1.34 | ) | | | 6.12 | | | | 9.06 | | | | (2.94 | ) |
| Weighted Average | | | 6.53 | | | | 8.37 | | | | (1.84 | ) | | | 6.56 | | | | 9.79 | | | | (3.23 | ) |
| Weighted Average after Hedging | | | 6.87 | | | | 7.39 | | | | (0.52 | ) | | | 6.90 | | | | 7.88 | | | | (0.98 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Oil Production/Prices: | | | | | | | | | | | | | | | | | | | | | | | | |
| Production (Thousands of Barrels) | | | | | | | | | | | | | | | | | | | | | | | | |
| Gulf Coast | | | 174 | | | | 181 | | | | (7 | ) | | | 376 | | | | 288 | | | | 88 | |
| West Coast | | | 599 | | | | 639 | | | | (40 | ) | | | 1,190 | | | | 1,324 | | | | (134 | ) |
| Appalachia | | | 31 | | | | 12 | | | | 19 | | | | 58 | | | | 22 | | | | 36 | |
| Canada | | | 61 | | | | 68 | | | | (7 | ) | | | 117 | | | | 155 | | | | (38 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | 865 | | | | 900 | | | | (35 | ) | | | 1,741 | | | | 1,789 | | | | (48 | ) |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Average Prices (Per Barrel) | | | | | | | | | | | | | | | | | | | | | | | | |
| Gulf Coast | | $ | 57.21 | | | $ | 58.69 | | | $ | (1.48 | ) | | $ | 56.84 | | | $ | 58.39 | | | $ | (1.55 | ) |
| West Coast | | | 49.99 | | | | 53.65 | | | | (3.66 | ) | | | 50.55 | | | | 52.46 | | | | (1.91 | ) |
| Appalachia | | | 57.88 | | | | 60.28 | | | | (2.40 | ) | | | 58.76 | | | | 60.84 | | | | (2.08 | ) |
| Canada | | | 49.98 | | | | 48.63 | | | | 1.35 | | | | 46.45 | | | | 45.57 | | | | 0.88 | |
| Weighted Average | | | 51.73 | | | | 54.37 | | | | (2.64 | ) | | | 51.91 | | | | 52.92 | | | | (1.01 | ) |
| Weighted Average after Hedging | | | 48.09 | | | | 40.30 | | | | 7.79 | | | | 45.90 | | | | 36.70 | | | | 9.20 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Production (Mmcfe) | | | 12,198 | | | | 12,092 | | | | 106 | | | | 24,236 | | | | 23,275 | | | | 961 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Selected Operating Performance Statistics: | | | | | | | | | | | | | | | | | | | | | | | | |
General & Administrative Expense per Mcfe(1) | | $ | 0.49 | | | $ | 0.53 | | | $ | (0.04 | ) | | $ | 0.48 | | | $ | 0.54 | | | $ | (0.06 | ) |
Lease Operating Expense per Mcfe(1) | | $ | 1.33 | | | $ | 1.21 | | | $ | 0.12 | | | $ | 1.27 | | | $ | 1.26 | | | $ | 0.01 | |
Depreciation, Depletion & Amortization per Mcfe(1) | | $ | 1.88 | | | $ | 1.91 | | | $ | (0.03 | ) | | $ | 1.85 | | | $ | 1.92 | | | $ | (0.07 | ) |
| | |
| (1) | | Refer to page 17 for the General and Administrative Expense, Lease Operating Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. |
Page 22
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Hedging Summary for Fiscal 2007
| | | | | | | | | |
| SWAPS | | Volume | | Average Hedge Price |
| Oil | | 0.4 MMBBL | | $37.86 / BBL |
| Gas | | 6.3 BCF | | $7.38 / MCF |
| | | | | | | | | | | | | |
| No-cost Collars | | Volume | | Floor Price | | Ceiling Price |
| Oil | | 0.1 MMBBL | | $70.00 / BBL | | $77.00 / BBL |
| Gas | | 2.5 BCF | | $7.42 / MCF | | $16.42 / MCF |
Hedging Summary for Fiscal 2008
| | | | | | | | | |
| SWAPS | | Volume | | Average Hedge Price |
| Oil | | 0.6 MMBBL | | $52.45 / BBL |
| Gas | | 7.9 BCF | | $8.38 / MCF |
| | | | | | | | | | | | | |
| No-cost Collars | | Volume | | Floor Price | | Ceiling Price |
| Gas | | 1.4 BCF | | $8.83 / MCF | | $16.45 / MCF |
Hedging Summary for Fiscal 2009
| | | | | | | | | |
| SWAPS | | Volume | | Average Hedge Price |
| Oil | | 0.2 MMBBL | | $54.70 / BBL |
Gross Wells in Process of Drilling
Six Months Ended March 31, 2007
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Total | | | | | | Total |
| | | Gulf | | West | | East | | U.S. | | Canada | | Company |
Wells in Process — Beginning Period | | | | | | | | | | | | | | | | | | | | | | | | |
| Exploratory | | | 4.00 | | | | 1.00 | | | | 10.00 | | | | 15.00 | | | | 5.00 | | | | 20.00 | |
| Developmental | | | 1.00 | | | | 5.00 | | | | 44.00 | | | | 50.00 | | | | 0.00 | | | | 50.00 | |
Wells Commenced | | | | | | | | | | | | | | | | | | | | | | | | |
| Exploratory | | | 4.00 | | | | 0.00 | | | | 9.00 | | | | 13.00 | | | | 6.00 | | | | 19.00 | |
| Developmental | | | 0.00 | | | | 36.00 | | | | 46.00 | | | | 82.00 | | | | 3.00 | | | | 85.00 | |
Wells Completed | | | | | | | | | | | | | | | | | | | | | | | | |
| Exploratory | | | 1.00 | | | | 1.00 | | | | 2.00 | | | | 4.00 | | | | 4.00 | | | | 8.00 | |
| Developmental | | | 0.00 | | | | 36.00 | | | | 67.00 | | | | 103.00 | | | | 2.00 | | | | 105.00 | |
Wells Plugged & Abandoned | | | | | | | | | | | | | | | | | | | | | | | | |
| Exploratory | | | 3.00 | | | | 0.00 | | | | 0.00 | | | | 3.00 | | | | 0.00 | | | | 3.00 | |
| Developmental | | | 0.00 | | | | 0.00 | | | | 1.00 | | | | 1.00 | | | | 0.00 | | | | 1.00 | |
Wells in Process — End of Period | | | | | | | | | | | | | | | | | | | | | | | | |
| Exploratory | | | 4.00 | | | | 0.00 | | | | 17.00 | | | | 21.00 | | | | 7.00 | | | | 28.00 | |
| Developmental | | | 1.00 | | | | 5.00 | | | | 22.00 | | | | 28.00 | | | | 1.00 | | | | 29.00 | |
Net Wells in Process of Drilling
Six Months Ended March 31, 2007
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Total | | | | | | Total |
| | | Gulf | | West | | East | | U.S. | | Canada | | Company |
Wells in Process — Beginning Period | | | | | | | | | | | | | | | | | | | | | | | | |
| Exploratory | | | 2.02 | | | | 0.50 | | | | 10.00 | | | | 12.52 | | | | 2.13 | | | | 14.65 | |
| Developmental | | | 0.67 | | | | 5.00 | | | | 44.00 | | | | 49.67 | | | | 0.00 | | | | 49.67 | |
Wells Commenced | | | | | | | | | | | | | | | | | | | | | | | | |
| Exploratory | | | 1.90 | | | | 0.00 | | | | 8.10 | | | | 10.00 | | | | 3.95 | | | | 13.95 | |
| Developmental | | | 0.00 | | | | 36.00 | | | | 44.00 | | | | 80.00 | | | | 1.80 | | | | 81.80 | |
Wells Completed | | | | | | | | | | | | | | | | | | | | | | | | |
| Exploratory | | | 0.35 | | | | 0.50 | | | | 1.60 | | | | 2.45 | | | | 2.75 | | | | 5.20 | |
| Developmental | | | 0.00 | | | | 36.00 | | | | 65.00 | | | | 101.00 | | | | 0.80 | | | | 101.80 | |
Wells Plugged & Abandoned | | | | | | | | | | | | | | | | | | | | | | | | |
| Exploratory | | | 1.42 | | | | 0.00 | | | | 0.00 | | | | 1.42 | | | | 0.00 | | | | 1.42 | |
| Developmental | | | 0.00 | | | | 0.00 | | | | 1.00 | | | | 1.00 | | | | 0.00 | | | | 1.00 | |
Wells in Process — End of Period | | | | | | | | | | | | | | | | | | | | | | | | |
| Exploratory | | | 2.15 | | | | 0.00 | | | | 16.50 | | | | 18.65 | | | | 3.33 | | | | 21.98 | |
| Developmental | | | 0.67 | | | | 5.00 | | | | 22.00 | | | | 27.67 | | | | 1.00 | | | | 28.67 | |
Page 23
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Utility Throughput — (millions of cubic feet — MMcf)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| | | | | | | | | | | Increase | | | | | | | | | | Increase |
| | | 2007 | | 2006 | | (Decrease) | | 2007 | | 2006 | | (Decrease) |
| Retail Sales: | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential Sales | | | 29,372 | | | | 26,807 | | | | 2,565 | | | | 46,050 | | | | 46,331 | | | | (281 | ) |
| Commercial Sales | | | 5,428 | | | | 5,038 | | | | 390 | | | | 8,296 | | | | 8,481 | | | | (185 | ) |
| Industrial Sales | | | 323 | | | | 459 | | | | (136 | ) | | | 514 | | | | 786 | | | | (272 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 35,123 | | | | 32,304 | | | | 2,819 | | | | 54,860 | | | | 55,598 | | | | (738 | ) |
| Transportation | | | 24,723 | | | | 22,119 | | | | 2,604 | | | | 40,576 | | | | 36,461 | | | | 4,115 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 59,846 | | | | 54,423 | | | | 5,423 | | | | 95,436 | | | | 92,059 | | | | 3,377 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Pipeline & Storage Throughput — (MMcf)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| | | | | | | | | | | Increase | | | | | | | | | | Increase |
| | | 2007 | | 2006 | | (Decrease) | | 2007 | | 2006 | | (Decrease) |
| Firm Transportation — Affiliated | | | 51,016 | | | | 43,637 | | | | 7,379 | | | | 80,746 | | | | 76,862 | | | | 3,884 | |
| Firm Transportation — Non-Affiliated | | | 69,615 | | | | 71,191 | | | | (1,576 | ) | | | 114,312 | | | | 140,788 | | | | (26,476 | ) |
| Interruptible Transportation | | | 932 | | | | 1,831 | | | | (899 | ) | | | 1,927 | | | | 5,554 | | | | (3,627 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 121,563 | | | | 116,659 | | | | 4,904 | | | | 196,985 | | | | 223,204 | | | | (26,219 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Energy Marketing Volumes
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| | | | | | | | | | | Increase | | | | | | | | | | Increase |
| | | 2007 | | 2006 | | (Decrease) | | 2007 | | 2006 | | (Decrease) |
| Natural Gas (MMcf) | | | 19,935 | | | | 17,332 | | | | 2,603 | | | | 31,049 | | | | 27,306 | | | | 3,743 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Timber Board Feet (Thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Six Months Ended |
| | | March 31, | | March 31, |
| | | | | | | | | | | Increase | | | | | | | | | | Increase |
| | | 2007 | | 2006 | | (Decrease) | | 2007 | | 2006 | | (Decrease) |
| Log Sales | | | 3,025 | | | | 3,282 | | | | (257 | ) | | | 4,734 | | | | 5,774 | | | | (1,040 | ) |
| Green Lumber Sales | | | 2,380 | | | | 2,982 | | | | (602 | ) | | | 3,910 | | | | 4,956 | | | | (1,046 | ) |
| Kiln Dry Lumber Sales | | | 3,794 | | | | 4,512 | | | | (718 | ) | | | 6,952 | | | | 8,998 | | | | (2,046 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | 9,199 | | | | 10,776 | | | | (1,577 | ) | | | 15,596 | | | | 19,728 | | | | (4,132 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Page 24
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
FISCAL 2007 EARNINGS GUIDANCE AND SENSITIVITIES
| | | | | | | | | | | | | | | | | | | |
| | | | | Earnings per share sensitivity to changes |
| Fiscal 2007 (Diluted earnings per share guidance*) | | from NYMEX prices used in guidance*^ |
| | | | | $1 change per MMBtu gas | | $5 change per Bbl oil |
| | | Range | | Increase | | Decrease | | Increase | | Decrease |
| Consolidated Earnings | | $2.25 - $2.40 | | | + $0.06 | | | | - $0.05 | | | | + $0.05 | | | | - $0.05 | |
| | | | | | | | | |
| NYMEX Settlement Prices at September 21, 2006 |
| | | Natural Gas | | Oil |
| | | ($ per MMBtu) | | ($ per Bbl) |
| Apr-07 | | $ | 7.166 | | | $ | 65.18 | |
| May-07 | | $ | 7.126 | | | $ | 65.61 | |
| Jun-07 | | $ | 7.221 | | | $ | 65.96 | |
| Jul-07 | | $ | 7.311 | | | $ | 66.25 | |
| Aug-07 | | $ | 7.391 | | | $ | 66.49 | |
| Sep-07 | | $ | 7.476 | | | $ | 66.67 | |
| |
| Average | | $ | 7.282 | | | $ | 66.03 | |
| | |
| * | | Please refer to forward looking statement footnote at page 8 of this document. |
| |
| ^ | | This sensitivity table is current as of May 1, 2007 and only considers revenue from the Exploration and Production segment’s crude oil and natural gas sales. 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 NYMEX hedge contracts at their maturity. |
Page 25
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
| | | | | | | | | |
| | | 2007 | | | 2006 | |
Quarter Ended March 31 (unaudited) | | | | | | | | |
| | | | | | | | | |
| Operating Revenues | | $ | 812,156,000 | | | $ | 890,981,000 | |
| | | | | | | |
| | | | | | | | | |
| Net Income Available for Common Stock | | $ | 78,447,000 | | | $ | 78,594,000 | |
| | | | | | | |
| | | | | | | | | |
| Earnings Per Common Share: | | | | | | | | |
| Basic | | $ | 0.95 | | | $ | 0.93 | |
| | | | | | | |
| Diluted | | $ | 0.92 | | | $ | 0.91 | |
| | | | | | | |
| | | | | | | | | |
| Weighted Average Common Shares: | | | | | | | | |
| Used in Basic Calculation | | | 82,895,087 | | | | 84,346,733 | |
| | | | | | | |
| Used in Diluted Calculation | | | 85,033,127 | | | | 86,253,597 | |
| | | | | | | |
| | | | | | | | | |
Six Months Ended March 31 (unaudited) | | | | | | | | |
| | | | | | | | | |
| Operating Revenues | | $ | 1,316,396,000 | | | $ | 1,601,737,000 | |
| | | | | | | |
| | | | | | | | | |
| Net Income Available for Common Stock | | $ | 132,967,000 | | | $ | 136,013,000 | |
| | | | | | | |
| | | | | | | | | |
| Earnings Per Common Share: | | | | | | | | |
| Basic | | $ | 1.61 | | | $ | 1.61 | |
| | | | | | | |
| Diluted | | $ | 1.57 | | | $ | 1.58 | |
| | | | | | | |
| | | | | | | | | |
| Weighted Average Common Shares: | | | | | | | | |
| Used in Basic Calculation | | | 82,786,027 | | | | 84,385,140 | |
| | | | | | | |
| Used in Diluted Calculation | | | 84,891,742 | | | | 86,256,515 | |
| | | | | | | |
| | | | | | | | | |
Twelve Months Ended March 31 (unaudited) | | | | | | | | |
| | | | | | | | | |
| Operating Revenues | | $ | 2,026,317,000 | | | $ | 2,289,160,000 | |
| | | | | | | |
| | | | | | | | | |
| Income from Continuing Operations | | $ | 135,045,000 | | | $ | 180,717,000 | |
| Income from Discontinued Operations, Net of Tax | | | — | | | | 23,663,000 | |
| | | | | | | |
| Net Income Available for Common Stock | | $ | 135,045,000 | | | $ | 204,380,000 | |
| | | | | | | |
| | | | | | | | | |
| Earnings Per Common Share: | | | | | | | | |
| Basic: | | | | | | | | |
| Income from Continuing Operations | | $ | 1.62 | | | $ | 2.15 | |
| Income from Discontinued Operations | | | — | | | | 0.28 | |
| | | | | | | |
| Net Income Available for Common Stock | | $ | 1.62 | | | $ | 2.43 | |
| | | | | | | |
| | | | | | | | | |
| Diluted: | | | | | | | | |
| Income from Continuing Operations | | $ | 1.58 | | | $ | 2.11 | |
| Income from Discontinued Operations | | | — | | | | 0.27 | |
| | | | | | | |
| Net Income Available for Common Stock | | $ | 1.58 | | | $ | 2.38 | |
| | | | | | | |
| | | | | | | | | |
| Weighted Average Common Shares: | | | | | | | | |
| Used in Basic Calculation | | | 83,232,743 | | | | 84,116,896 | |
| | | | | | | |
| Used in Diluted Calculation | | | 85,352,796 | | | | 85,810,270 | |
| | | | | | | |
