Exhibit 99
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 | | National Fuel Gas Company | | Financial News |
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Release Date: Immediate August 4, 2011 | | 6363 Main Street/Williamsville, NY 14221 Timothy J. Silverstein Investor Relations 716-857-6987 David P. Bauer Treasurer 716-857-7318 |
NATIONAL FUEL REPORTS THIRD QUARTER EARNINGS
WILLIAMSVILLE, N.Y. – National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated earnings for the third quarter of fiscal 2011 and for the nine months ended June 30, 2011.
HIGHLIGHTS
| • | | Earnings for the third quarter were $46.9 million or $0.56 per share, an increase of $4.3 million, or $0.05 per share, compared to the prior year’s third quarter earnings of $42.6 million, or $0.51 per share. The increase is mainly due to higher earnings in the Exploration and Production, Utility, and Energy Marketing segments and the All Other category. |
| • | | Compared to the prior year’s third quarter, production of crude oil and natural gas increased approximately 3.6 billion cubic feet equivalent (“Bcfe”), or 27.5%, to 16.9 Bcfe. Appalachian production increased 152.5% to 12.2 Bcfe, including production from the Marcellus Shale of 10.3 Bcfe. The Company’s production for the entire 2011 fiscal year is expected to be between 68 and 71 Bcfe. |
| • | | The Company is increasing and narrowing its GAAP earnings guidance range for fiscal 2011 to a range of $3.00 to $3.10 per share. The previous earnings guidance had been a range between $2.83 to $2.98 per share, (inclusive of the $0.37 per share gain on the sale of the Company’s landfill gas electric generation assets) and had assumed flat NYMEX pricing of $4.00 per (“MMBtu”) for natural gas and $80.00 per barrel (“Bbl”) for crude oil. The revised guidance assumes flat NYMEX pricing of $4.00 per MMBtu for natural gas and $90.00 per Bbl for crude oil for unhedged production for the remainder of the fiscal year. |
| • | | The Company’s preliminary GAAP earnings guidance for fiscal 2012 is in the range of $2.85 to $3.15 per share. The 2012 preliminary guidance includes oil and gas production for the Exploration and Production segment in the range of 87 to 101 Bcfe and is based on an assumed flat NYMEX price of $4.50 per MMBtu for natural gas and $95.00 per Bbl for crude oil. |
| • | | A conference call is scheduled for Friday, August 5, 2011, at 11 a.m. Eastern Time. |
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MANAGEMENT COMMENTS
David F. Smith, Chairman and Chief Executive Officer of National Fuel Gas Company stated: “The third quarter was another great quarter for National Fuel. Even with the sale of our offshore Gulf of Mexico properties, consolidated production grew by more than 27 percent from the prior year largely due to the continuing growth of Seneca’s Marcellus operations. In July, we added a fifth Seneca-operated rig, which should increase the pace of our drilling even further.
“In the Pipeline and Storage segment, our expansion initiatives are moving along as planned. Construction is under way on the Supply Corporation Line N Expansion and the Empire Pipeline Tioga County Extension projects, both of which will go in service this fall. These projects, along with several other upcoming expansions, will make National Fuel one of the preeminent infrastructure companies serving shippers and producers throughout the region.
“Combining our rapid growth in Marcellus production with significant pipeline expansion opportunities and the earnings stability provided by our Utility segment, we are well positioned to deliver long-term value for all of our stakeholders.”
SUMMARY OF RESULTS
National Fuel had consolidated earnings for the quarter ended June 30, 2011, of $46.9 million, or $0.56 per share, compared to the prior year’s third quarter earnings of $42.6 million, or $0.51 per share, an increase of $4.3 million or $0.05 per share.
Consolidated earnings for the nine months ended June 30, 2011, of $221.0 million, or $2.64 per share, increased $33.5 million, or $0.37 per share, from the same period in the prior year, where earnings were $187.5 million or $2.27 per share. (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 and operating results before items impacting comparability (“Operating Results”) are after tax unless otherwise noted.)
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| | | | | | | | | | | | | | | | |
| | | Three Months | | | Nine Months | |
| | | Ended June 30, | | | Ended June 30, | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
| (in thousands except per share amounts) | | | | | | | | | | | | |
Reported GAAP earnings | | $ | 46,891 | | | $ | 42,585 | | | $ | 221,045 | | | $ | 187,512 | |
Items impacting comparability1: | | | | | | | | | | | | | | | | |
Gain on sale of landfill gas electric generation investments | | | | | | | | | | | (31,418 | ) | | | | |
(Income) Loss from discontinued operations | | | | | | | 57 | | | | | | | | (771 | ) |
| | | | | | | | | | | | | | | | |
Operating Results | | $ | 46,891 | | | $ | 42,642 | | | $ | 189,627 | | | $ | 186,741 | |
| | | | | | | | | | | | | | | | |
| | | | |
Reported GAAP earnings per share | | $ | 0.56 | | | $ | 0.51 | | | $ | 2.64 | | | $ | 2.27 | |
Items impacting comparability1: | | | | | | | | | | | | | | | | |
Gain on sale of landfill gas electric generation investments | | | | | | | | | | | (0.37 | ) | | | | |
(Income) Loss from discontinued operations | | | | | | | 0.00 | | | | | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | |
Operating Results | | $ | 0.56 | | | $ | 0.51 | | | $ | 2.27 | | | $ | 2.26 | |
| | | | | | | | | | | | | | | | |
| 1 | See 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 quarter and nine months ended June 30, 2011, to the comparable periods in 2010. Excluding these items, Operating Results for the current quarter of $46.9 million or $0.56 per share increased $4.2 million, or $0.05 per share, from the prior year’s third quarter where Operating Results were $42.6 million or $0.51 per share. Excluding these items, Operating Results for the nine months ended June 30, 2011, of $189.6 million, or $2.27 per share, compared to Operating Results of $186.7 million or $2.26 per share. 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 earnings for each segment is summarized in a tabular form at pages 10 through 13 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 California and Appalachia. Seneca completed the sale of its Gulf of Mexico assets in April 2011.
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The Exploration and Production segment’s earnings in the third quarter of fiscal 2011 of $32.8 million, or $0.39 per share, increased $4.9 million, or $0.06 per share, when compared with the prior year’s third quarter. The increase was mainly due to natural gas production that was 4.5 Bcf higher than the third quarter of fiscal 2010.
Overall production of natural gas and crude oil for the current quarter of 16.9 Bcfe increased approximately 3.6 Bcfe, or 27.5 percent, compared to the prior year’s third quarter. Production from Seneca’s Appalachia properties increased approximately 153 percent to 12.2 Bcfe, mainly due to a 7.8 Bcfe increase in production from Marcellus wells. Gulf of Mexico production decreased 3.6 Bcfe due to the April 2011 sale of Seneca’s offshore assets. Production in California was relatively flat.
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, 2011, was $5.48 per thousand cubic feet (“Mcf”), a decrease of $0.26 per Mcf compared to the prior year’s third quarter. Higher crude oil prices realized after hedging contributed to the increase in earnings. The weighted average crude oil price received by Seneca (after hedging) for the quarter ended June 30, 2011, was $84.37 per Bbl, an increase of $9.14 per Bbl.
Depletion, lease operating expenses (“LOE”), and general and administrative (“G&A”) expenses for the current year’s third quarter increased over last year’s third quarter due to the higher production activity discussed above. However on a per unit basis, LOE decreased $0.17 per thousand cubic feet equivalent (“Mcfe”) largely due to the increase in Marcellus production which has a lower LOE rate than our Upper Devonian or California production. Depletion was unchanged. G&A increased $0.04 per Mcfe due to higher labor expenses, including additional staffing and relocation costs related to the opening of the Pittsburgh office in the East division during the quarter.
The Exploration and Production segment’s earnings of $93.5 million, or $1.12 per share, for the nine months ended June 30, 2011, increased $8.4 million, or $0.09 per share, when compared with the nine months ended June 30, 2010. The increase was primarily due to natural gas production that was 15.7 Bcf higher than the prior year’s nine-month period.
Overall production for the nine months ended June 30, 2011, increased 38.8 percent to 50.8 Bcfe, an increase of 14.2 Bcfe compared to the prior year’s nine-month period. Production from Seneca’s Appalachia properties increased approximately 177 percent to 31.2 Bcfe, mainly due to a 20.9 Bcfe increase in production from Marcellus wells. In the Gulf of Mexico, production decreased by 5.2 Bcfe due to the April sale of Seneca’s offshore assets. Production in California was relatively flat.
Changes in commodity prices realized after hedging also impacted earnings. The weighted average natural gas price received by Seneca (after hedging) for the nine-month period ended June 30, 2011, was $5.36 per Mcf, a decrease of $0.80 per Mcf from last year’s third quarter. Higher crude oil prices realized after hedging contributed to the increase in earnings. The weighted average crude oil price received by Seneca (after hedging) for the nine-month period ended June 30, 2011, was $80.78 per Bbl, an increase of $5.13 per Bbl.
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Depletion, LOE and G&A expenses for the nine months ended June 30, 2011, increased compared to the prior year’s nine-month period due to the higher production activity discussed above. However, on a per unit basis, LOE decreased $0.14 per Mcfe for the reason described above and G&A expense was unchanged. Depletion increased $0.03 per Mcfe.
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 $4.5 million, or $0.05 per share, for the quarter ended June 30, 2011, decreased $2.7 million, or $0.04 per share, when compared with the same period in the prior fiscal year. The decrease was mostly due to increased operating expenses mainly due to increased pension expense, compressor station maintenance and preliminary survey costs associated with expansion projects and lower firm transportation revenues due to the continued impact of capacity turnbacks at Niagara. Although more volumes of natural gas were transported for shippers under their firm transportation contracts, largely due to colder weather, the impact to revenues was minimal given Supply and Empire’s straight-fixed variable rate design. A higher allowance for funds used during construction (“AFUDC”) associated with the Line N and Tioga expansion projects partially offset the decrease in earnings.
The Pipeline and Storage segment’s earnings of $24.0 million, or $0.29 per share, for the nine months ended June 30, 2011, decreased $6.0 million, or $0.08 per share, when compared with the nine months ended June 30, 2010. The decrease in earnings for the current nine-month period was due to higher operating expenses and lower firm transportation revenues for the reasons described above. Higher depreciation expense and higher property taxes also reduced earnings in the current nine-month period. Higher AFUDC associated with expansion projects had a positive impact on earnings.
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 $6.3 million, or $0.08 per share, for the quarter ended June 30, 2011, increased $0.4 million, or $0.01 per share, compared to the quarter ended June 30, 2010. Colder weather and higher customer usage in Pennsylvania and lower operating expenses in both the New York and Pennsylvania divisions had a positive impact on earnings. The impact of weather variations on earnings in New York is mitigated by that jurisdiction’s weather normalization clause. Higher property taxes, the impact of a change in the calculation of certain regulatory expenses and higher income taxes partially offset the positive impact of the above items.
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The Utility segment’s earnings of $62.4 million, or $0.74 per share, for the nine months ended June 30, 2011, were consistent with earnings of $62.3 million, or $0.75 per share, for the nine months ended June 30, 2010. Colder weather and higher customer usage in Pennsylvania was offset by the impact of a New York regulatory adjustment regarding the timing of collection of certain regulatory expenses. Depreciation expense, property taxes, and income taxes in both jurisdictions were higher than the previous year.
Energy Marketing
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, 2011, of $1.9 million increased $0.5 million compared to the third quarter of the prior year primarily due to lower operating expenses. Earnings for the nine months ended June 30, 2011, in the Energy Marketing segment of $9.1 million increased $0.7 million compared to the prior year’s nine-month period. The increase is due to higher volumes sold to retail customers, improved average margins per Mcf, and lower operating expenses compared to the same period in fiscal 2010.
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.
Earnings in the Corporate and All Other category for the quarter ended June 30, 2011, were $1.4 million compared to the prior year’s third quarter earnings of $0.1 million. The comparability of the results for the quarters ended June 30, 2011, and June 30, 2010, was impacted by the following item. On September 1, 2010, the Company completed the sale of its landfill gas operations. As a result of this transaction, the Company is presenting the landfill gas operations as discontinued operations. Earnings in the third quarter of fiscal 2010 include a loss from discontinued operations of $0.1 million.
Excluding discontinued operations, Operating Results in the Corporate and All Other category of $1.4 million in the current year third quarter increased $1.2 million from the prior year’s third quarter. Higher earnings from Midstream’s pipeline gathering and natural gas processing operations and sales of standing timber resulted in increased Operating Results. Corporate operating expenses and state franchise taxes were higher than the previous year.
Earnings in the Corporate and All Other category for the nine months ended June 30, 2011, were $32.0 million, an increase of $30.3 million compared to earnings of $1.7 million in the prior year nine-month period. The comparability of the results for the nine months ended June 30, 2011, and the prior year’s nine-month period was impacted by $0.8 million of income from discontinued operations as a result of the sale of the Company’s landfill gas operations described
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above and a $31.4 million gain realized on the of February 2011 Horizon Power, Inc. sale of its interest in certain entities that owned landfill gas electric generation assets.
Excluding these items, Operating Results for the nine months ended June 30, 2011, of $0.6 million decreased $0.3 million from the prior year’s nine-month period. Lower earnings from timber sales (due to the sale of the sawmill operations), lower income from unconsolidated subsidiaries (due to the sale of landfill gas electric generation assets described above), higher corporate operating expenses and higher state franchise taxes more than offset higher earnings from Midstream’s pipeline gathering and natural gas processing operations.
EARNINGS GUIDANCE
The Company is increasing and narrowing its GAAP earnings guidance range for fiscal 2011 to a range of $3.00 to $3.10 per share. The previous guidance range had been $2.83 to $2.98 per share, (inclusive of the $0.37 per share gain on the sale of the Company’s landfill gas electric generation assets) and had assumed flat NYMEX pricing of $4.00 per MMBtu for natural gas and $80.00 per Bbl for crude oil. The revised guidance includes oil and gas production for fiscal 2011 for the Exploration and Production segment in a range between 68 and 71 Bcfe, hedges currently in place, and flat NYMEX commodity pricing on unhedged volumes of $4.00 per MMBtu for natural gas and $90.00 per Bbl for crude oil.
The Company’s preliminary GAAP earnings guidance for fiscal 2012 is in the range of $2.85 to $3.15 per share. This includes oil and gas production for the Exploration and Production segment in the range of 87 to 101 Bcfe and is based on an assumed flat NYMEX price of $4.50 per MMBtu for natural gas and $95.00 per Bbl for crude oil.
EARNINGS TELECONFERENCE
The Company will host a conference call on Friday, August 5, 2011, 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 on National Fuel’s website atinvestor.nationalfuelgas.com. For those without Internet access, access is also provided by dialing (toll-free) 1-800-901-5259, using the passcode “63064116.” 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 “46229014.” Both the webcast and telephonic replay will be available until the close of business on Friday, August 12, 2011.
National Fuel is an integrated energy company with $5.1 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 atwww.nationalfuelgas.com or through its investor information service at 1-800-334-2188.
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| | | | |
Analyst Contact: | | Timothy J. Silverstein | | 716-857-6987 |
Media Contact: | | Donna L. DeCarolis | | 716-857-7872 |
Certain statements contained herein, including those regarding estimated future earnings, and statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” 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: 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 terrorist activities, acts of war, major accidents, fires, severe weather, pest infestation or natural disasters; 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, 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 and regulations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, and exploration and production activities such as hydraulic fracturing; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; significant changes in market dynamics or competitive factors affecting the Company’s ability to retain existing customers or obtain new customers; changes in demographic patterns and weather conditions; changes in the availability and/or price of natural gas or oil and the effect of such changes on the accounting treatment of derivative financial instruments; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; changes in the availability and/or cost of derivative financial instruments; changes in the 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 or geographic location; changes in the projected profitability of pending or potential projects, investments or transactions; significant differences between the Company’s projected and actual capital expenditures and operating expenses; delays or changes in costs or plans with respect to Company projects or related projects of other companies, including difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; governmental/regulatory actions, initiatives and proceedings, including those involving derivatives, acquisitions, financings, rate cases (which address, among other things, allowed rates of return, rate design and retained natural gas), affiliate relationships, industry structure, franchise renewal, and environmental/safety requirements; unanticipated impacts of restructuring initiatives in the natural gas and electric industries; ability to successfully identify and finance acquisitions or other investments and ability to operate and integrate existing and any subsequently acquired business or properties; changes in 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; significant
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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 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, 2011
| | | | | | | | | | | | | | | | | | | | | | | | |
| (Thousands of Dollars) | | Exploration &
Production | | | Pipeline &
Storage | | | Utility | | | Energy
Marketing | | | Corporate /
All Other ** | | | Consolidated*** | |
| | | | | | |
Third quarter 2010 GAAP earnings | | $ | 27,883 | | | $ | 7,234 | | | $ | 5,969 | | | $ | 1,411 | | | $ | 88 | | | $ | 42,585 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | |
Loss from discontinued operations | | | | | | | | | | | | | | | | | | | 57 | | | $ | 57 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Third quarter 2010 operating results | | | 27,883 | | | | 7,234 | | | | 5,969 | | | | 1,411 | | | | 145 | | | | 42,642 | |
| | | | | | |
Drivers of operating results | | | | | | | | | | | | | | | | | | | | | | | | |
Higher (lower) crude oil prices | | | 3,950 | | | | | | | | | | | | | | | | | | | | 3,950 | |
Higher (lower) natural gas prices | | | (2,234 | ) | | | | | | | | | | | | | | | | | | | (2,234 | ) |
Higher (lower) natural gas production | | | 16,838 | | | | | | | | | | | | | | | | | | | | 16,838 | |
Higher (lower) crude oil production | | | (7,091 | ) | | | | | | | | | | | | | | | | | | | (7,091 | ) |
Lower (higher) lease operating expenses | | | (947 | ) | | | | | | | | | | | | | | | | | | | (947 | ) |
Lower (higher) depreciation / depletion | | | (5,203 | ) | | | (436 | ) | | | | | | | | | | | 1,324 | | | | (4,315 | ) |
Higher (lower) processing plant revenues | | | 272 | | | | | | | | | | | | | | | | | | | | 272 | |
| | | | | | |
Higher (lower) transportation revenues | | | | | | | (852 | ) | | | | | | | | | | | | | | | (852 | ) |
Higher (lower) gathering and processing revenues | | | | | | | — | | | | | | | | | | | | 1,182 | | | | 1,182 | |
Lower (higher) operating expenses | | | (1,212 | ) | | | (2,105 | ) | | | 506 | | | | 282 | | | | (292 | ) | | | (2,821 | ) |
Lower (higher) property, franchise and other taxes | | | 497 | | | | — | | | | (358 | ) | | | | | | | (912 | ) | | | (773 | ) |
| | | | | | |
Usage | | | | | | | | | | | 600 | | | | | | | | | | | | 600 | |
Colder weather in Pennsylvania | | | | | | | | | | | 1,355 | | | | | | | | | | | | 1,355 | |
Regulatory true-up adjustments | | | | | | | | | | | (580 | ) | | | | | | | | | | | (580 | ) |
| | | | | | |
Higher (lower) income from unconsolidated subsidiaries | | | | | | | | | | | | | | | | | | | (455 | ) | | | (455 | ) |
| | | | | | |
Higher (lower) margins | | | | | | | | | | | | | | | | | | | (684 | ) | | | (684 | ) |
| | | | | | |
Higher AFUDC * | | | | | | | 502 | | | | | | | | | | | | | | | | 502 | |
Higher (lower) interest income | | | | | | | — | | | | | | | | | | | | (2,353 | ) | | | (2,353 | ) |
Lower (higher) interest expense | | | 2,156 | | | | | | | | — | | | | | | | | 2,439 | | | | 4,595 | |
| | | | | | |
Lower (higher) income tax expense/effective tax rate | | | (2,169 | ) | | | 264 | | | | (905 | ) | | | 131 | | | | 647 | | | | (2,032 | ) |
| | | | | | |
All other / rounding | | | 44 | | | | (104 | ) | | | (259 | ) | | | 67 | | | | 344 | | | | 92 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Third quarter 2011 GAAP earnings | | $ | 32,784 | | | $ | 4,503 | | | $ | 6,328 | | | $ | 1,891 | | | $ | 1,385 | | | $ | 46,891 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| * | AFUDC = Allowance for Funds Used During Construction |
| ** | Includes discontinued operations |
| *** | Amounts do not reflect intercompany eliminations |
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NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED JUNE 30, 2011
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Exploration &
Production | | | Pipeline &
Storage | | | Utility | | | Energy
Marketing | | | Corporate /
All Other ** | | | Consolidated*** | |
| | | | | | |
Third quarter 2010 GAAP earnings | | $ | 0.33 | | | $ | 0.09 | | | $ | 0.07 | | | $ | 0.02 | | | $ | — | | | $ | 0.51 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | |
Loss from discontinued operations | | | | | | | | | | | | | | | | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Third quarter 2010 operating results | | | 0.33 | | | | 0.09 | | | | 0.07 | | | | 0.02 | | | | — | | | | 0.51 | |
| | | | | | |
Drivers of operating results | | | | | | | | | | | | | | | | | | | | | | | | |
Higher (lower) crude oil prices | | | 0.05 | | | | | | | | | | | | | | | | | | | | 0.05 | |
Higher (lower) natural gas prices | | | (0.03 | ) | | | | | | | | | | | | | | | | | | | (0.03 | ) |
Higher (lower) natural gas production | | | 0.20 | | | | | | | | | | | | | | | | | | | | 0.20 | |
Higher (lower) crude oil production | | | (0.08 | ) | | | | | | | | | | | | | | | | | | | (0.08 | ) |
Lower (higher) lease operating expenses | | | (0.01 | ) | | | | | | | | | | | | | | | | | | | (0.01 | ) |
Lower (higher) depreciation / depletion | | | (0.06 | ) | | | (0.01 | ) | | | | | | | | | | | 0.02 | | | | (0.05 | ) |
Higher (lower) processing plant revenues | | | — | | | | | | | | | | | | | | | | | | | | — | |
| | | | | | |
Higher (lower) transportation revenues | | | | | | | (0.01 | ) | | | | | | | | | | | | | | | (0.01 | ) |
Higher (lower) gathering and processing revenues | | | | | | | — | | | | | | | | | | | | 0.01 | | | | 0.01 | |
Lower (higher) operating expenses | | | (0.01 | ) | | | (0.03 | ) | | | 0.01 | | | | — | | | | — | | | | (0.03 | ) |
Lower (higher) property, franchise and other taxes | | | 0.01 | | | | — | | | | — | | | | | | | | (0.01 | ) | | | — | |
| | | | | | |
Usage | | | | | | | | | | | 0.01 | | | | | | | | | | | | 0.01 | |
Colder weather in Pennsylvania | | | | | | | | | | | 0.02 | | | | | | | | | | | | 0.02 | |
Regulatory true-up adjustments | | | | | | | | | | | (0.01 | ) | | | | | | | | | | | (0.01 | ) |
| | | | | | |
Higher (lower) income from unconsolidated subsidiaries | | | | | | | | | | | | | | | | | | | (0.01 | ) | | | (0.01 | ) |
| | | | | | |
Higher (lower) margins | | | | | | | | | | | | | | | | | | | (0.01 | ) | | | (0.01 | ) |
| | | | | | |
Higher AFUDC * | | | | | | | 0.01 | | | | | | | | | | | | | | | | 0.01 | |
Higher (lower) interest income | | | | | | | — | | | | | | | | | | | | (0.03 | ) | | | (0.03 | ) |
Lower (higher) interest expense | | | 0.03 | | | | | | | | — | | | | | | | | 0.03 | | | | 0.06 | |
| | | | | | |
Lower (higher) income tax expense/effective tax rate | | | (0.03 | ) | | | — | | | | (0.01 | ) | | | — | | | | 0.01 | | | | (0.03 | ) |
| | | | | | |
All other / rounding | | | (0.01 | ) | | | — | | | | (0.01 | ) | | | — | | | | 0.01 | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Third quarter 2011 GAAP earnings | | $ | 0.39 | | | $ | 0.05 | | | $ | 0.08 | | | $ | 0.02 | | | $ | 0.02 | | | $ | 0.56 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| * | AFUDC = Allowance for Funds Used During Construction |
| ** | Includes discontinued operations |
| *** | Amounts do not reflect intercompany eliminations |
Page 11
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
NINE MONTHS ENDED JUNE 30, 2011
| | | | | | | | | | | | | | | | | | | | | | | | |
| (Thousands of Dollars) | | Exploration &
Production | | | Pipeline &
Storage | | | Utility | | | Energy
Marketing | | | Corporate /
All Other ** | | | Consolidated*** | |
| | | | | | |
Nine months ended June 30, 2010 GAAP earnings | | $ | 85,046 | | | $ | 30,036 | | | $ | 62,254 | | | $ | 8,472 | | | $ | 1,704 | | | $ | 187,512 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | |
Income from discontinued operations | | | | | | | | | | | | | | | | | | | (771 | ) | | | (771 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended June 30, 2010 operating results | | | 85,046 | | | | 30,036 | | | | 62,254 | | | | 8,472 | | | | 933 | | | | 186,741 | |
| | | | | | |
Drivers of operating results | | | | | | | | | | | | | | | | | | | | | | | | |
Higher (lower) crude oil prices | | | 7,278 | | | | | | | | | | | | | | | | | | | | 7,278 | |
Higher (lower) natural gas prices | | | (19,755 | ) | | | | | | | | | | | | | | | | | | | (19,755 | ) |
Higher (lower) natural gas production | | | 62,885 | | | | | | | | | | | | | | | | | | | | 62,885 | |
Higher (lower) crude oil production | | | (12,292 | ) | | | | | | | | | | | | | | | | | | | (12,292 | ) |
Lower (higher) lease operating expenses | | | (6,397 | ) | | | | | | | | | | | | | | | | | | | (6,397 | ) |
Lower (higher) depreciation / depletion | | | (20,705 | ) | | | (766 | ) | | | (559 | ) | | | | | | | 3,384 | | | | (18,646 | ) |
Higher (lower) processing plant revenues | | | 1,127 | | | | | | | | | | | | | | | | | | | | 1,127 | |
| | | | | | |
Higher (lower) transportation revenues | | | | | | | (2,536 | ) | | | | | | | | | | | | | | | (2,536 | ) |
Higher (lower) gathering and processing revenues | | | | | | | — | | | | | | | | | | | | 3,805 | | | | 3,805 | |
Lower (higher) operating costs | | | (5,272 | ) | | | (3,939 | ) | | | — | | | | 110 | | | | (988 | ) | | | (10,089 | ) |
Lower (higher) property, franchise and other taxes | | | (1,139 | ) | | | (367 | ) | | | (892 | ) | | | | | | | (1,243 | ) | | | (3,641 | ) |
| | | | | | |
Usage | | | | | | | | | | | 2,100 | | | | | | | | | | | | 2,100 | |
Colder weather in Pennsylvania | | | | | | | | | | | 2,365 | | | | | | | | | | | | 2,365 | |
Regulatory true-up adjustments | | | | | | | | | | | (2,019 | ) | | | | | | | | | | | (2,019 | ) |
| | | | | | |
Higher (lower) income from unconsolidated subsidiaries | | | | | | | | | | | | | | | | | | | (1,556 | ) | | | (1,556 | ) |
| | | | | | |
Higher (lower) margins | | | | | | | | | | | | | | | 345 | | | | (5,682 | ) | | | (5,337 | ) |
| | | | | | |
Higher AFUDC * | | | | | | | 973 | | | | | | | | | | | | | | | | 973 | |
Higher (lower) interest income | | | — | | | | — | | | | | | | | | | | | (5,699 | ) | | | (5,699 | ) |
Lower (higher) interest expense | | | 5,750 | | | | — | | | | 524 | | | | | | | | 5,952 | | | | 12,226 | |
| | | | | | |
Lower (higher) income tax expense/effective tax rate | | | (2,899 | ) | | | 670 | | | | (1,568 | ) | | | 166 | | | | 552 | | | | (3,079 | ) |
| | | | | | |
All other / rounding | | | (172 | ) | | | (35 | ) | | | 194 | | | | 29 | | | | 1,157 | | | | 1,173 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Nine months ended June 30, 2011 operating results | | | 93,455 | | | | 24,036 | | | | 62,399 | | | | 9,122 | | | | 615 | | | | 189,627 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | |
Gain on sale of unconsolidated subsidiaries | | | | | | | | | | | | | | | | | | | 31,418 | | | | 31,418 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended June 30, 2011 GAAP earnings | | $ | 93,455 | | | $ | 24,036 | | | $ | 62,399 | | | $ | 9,122 | | | $ | 32,033 | | | $ | 221,045 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| * | AFUDC = Allowance for Funds Used During Construction |
| ** | Includes discontinued operations |
| *** | Amounts do not reflect intercompany eliminations |
Page 12
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
NINE MONTHS ENDED JUNE 30, 2011
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Exploration &
Production | | | Pipeline &
Storage | | | Utility | | | Energy
Marketing | | | Corporate /
All Other ** | | | Consolidated*** | |
| | | | | | |
Nine months ended June 30, 2010 GAAP earnings | | $ | 1.03 | | | $ | 0.37 | | | $ | 0.75 | | | $ | 0.10 | | | $ | 0.02 | | | $ | 2.27 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | |
Income from discontinued operations | | | | | | | | | | | | | | | | | | | (0.01 | ) | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended June 30, 2010 operating results | | | 1.03 | | | | 0.37 | | | | 0.75 | | | | 0.10 | | | | 0.01 | | | | 2.26 | |
| | | | | | |
Drivers of operating results | | | | | | | | | | | | | | | | | | | | | | | | |
Higher (lower) crude oil prices | | | 0.09 | | | | | | | | | | | | | | | | | | | | 0.09 | |
Higher (lower) natural gas prices | | | (0.24 | ) | | | | | | | | | | | | | | | | | | | (0.24 | ) |
Higher (lower) natural gas production | | | 0.75 | | | | | | | | | | | | | | | | | | | | 0.75 | |
Higher (lower) crude oil production | | | (0.15 | ) | | | | | | | | | | | | | | | | | | | (0.15 | ) |
Lower (higher) lease operating expenses | | | (0.08 | ) | | | | | | | | | | | | | | | | | | | (0.08 | ) |
Lower (higher) depreciation / depletion | | | (0.25 | ) | | | (0.01 | ) | | | (0.01 | ) | | | | | | | 0.04 | | | | (0.23 | ) |
Higher (lower) processing plant revenues | | | 0.01 | | | | | | | | | | | | | | | | | | | | 0.01 | |
| | | | | | |
Higher (lower) transportation revenues | | | | | | | (0.03 | ) | | | | | | | | | | | | | | | (0.03 | ) |
Higher (lower) gathering and processing revenues | | | | | | | — | | | | | | | | | | | | 0.05 | | | | 0.05 | |
Lower (higher) operating costs | | | (0.06 | ) | | | (0.05 | ) | | | — | | | | — | | | | (0.01 | ) | | | (0.12 | ) |
Lower (higher) property, franchise and other taxes | | | (0.01 | ) | | | — | | | | (0.01 | ) | | | | | | | (0.01 | ) | | | (0.03 | ) |
| | | | | | |
Usage | | | | | | | | | | | 0.03 | | | | | | | | | | | | 0.03 | |
Colder weather in Pennsylvania | | | | | | | | | | | 0.03 | | | | | | | | | | | | 0.03 | |
Regulatory true-up adjustments | | | | | | | | | | | (0.02 | ) | | | | | | | | | | | (0.02 | ) |
| | | | | | |
Higher (lower) income from unconsolidated subsidiaries | | | | | | | | | | | | | | | | | | | (0.02 | ) | | | (0.02 | ) |
| | | | | | |
Higher (lower) margins | | | | | | | | | | | | | | | — | | | | (0.07 | ) | | | (0.07 | ) |
| | | | | | |
Higher AFUDC * | | | | | | | 0.01 | | | | | | | | | | | | | | | | 0.01 | |
Higher (lower) interest income | | | — | | | | — | | | | | | | | | | | | (0.07 | ) | | | (0.07 | ) |
Lower (higher) interest expense | | | 0.07 | | | | — | | | | 0.01 | | | | | | | | 0.07 | | | | 0.15 | |
| | | | | | |
Lower (higher) income tax expense/effective tax rate | | | (0.03 | ) | | | 0.01 | | | | (0.02 | ) | | | — | | | | 0.01 | | | | (0.03 | ) |
| | | | | | |
All other / rounding | | | (0.01 | ) | | | (0.01 | ) | | | (0.02 | ) | | | 0.01 | | | | 0.01 | | | | (0.02 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Nine months ended June 30, 2011 operating results | | | 1.12 | | | | 0.29 | | | | 0.74 | | | | 0.11 | | | | 0.01 | | | | 2.27 | |
Items impacting comparability: | | | | | | | | | | | | | | | | | | | | | | | | |
Gain on sale of unconsolidated subsidiaries | | | | | | | | | | | | | | | | | | | 0.37 | | | | 0.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Nine months ended June 30, 2011 GAAP earnings | | $ | 1.12 | | | $ | 0.29 | | | $ | 0.74 | | | $ | 0.11 | | | $ | 0.38 | | | $ | 2.64 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| * | AFUDC = Allowance for Funds Used During Construction |
| ** | Includes discontinued operations |
| *** | Amounts do not reflect intercompany eliminations |
Page 13
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
| | | | | | | | | | | | | | | | |
| (Thousands of Dollars, except per share amounts) | | Three Months Ended
June 30,
(Unaudited) | | | Nine Months Ended
June 30,
(Unaudited) | |
| | | 2011 | | | 2010 | | | 2011 | | | 2010 | |
SUMMARY OF OPERATIONS | | | | | | | | | | | | | | | | |
Operating Revenues | | $ | 380,979 | | | $ | 351,992 | | | $ | 1,492,808 | | | $ | 1,474,107 | |
| | | | | | | | | | | | | | | | |
| | | | |
Operating Expenses: | | | | | | | | | | | | | | | | |
Purchased Gas | | | 112,725 | | | | 97,195 | | | | 582,358 | | | | 601,408 | |
Operation and Maintenance | | | 95,977 | | | | 96,593 | | | | 310,148 | | | | 306,624 | |
Property, Franchise and Other Taxes | | | 20,179 | | | | 18,594 | | | | 63,714 | | | | 57,684 | |
Depreciation, Depletion and Amortization | | | 57,293 | | | | 50,422 | | | | 170,617 | | | | 141,935 | |
| | | | | | | | | | | | | | | | |
| | | 286,174 | | | | 262,804 | | | | 1,126,837 | | | | 1,107,651 | |
| | | | |
Operating Income | | | 94,805 | | | | 89,188 | | | | 365,971 | | | | 366,456 | |
| | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | |
Income (Loss) from Unconsolidated Subsidiaries | | | (77 | ) | | | 624 | | | | (698 | ) | | | 1,696 | |
Gain on Sale of Unconsolidated Subsidiaries | | | — | | | | — | | | | 50,879 | | | | — | |
Other Income | | | 1,890 | | | | 851 | | | | 4,828 | | | | 2,473 | |
Interest Income | | | 325 | | | | 568 | | | | 1,277 | | | | 2,048 | |
Interest Expense on Long-Term Debt | | | (17,876 | ) | | | (21,115 | ) | | | (55,994 | ) | | | (65,238 | ) |
Other Interest Expense | | | (1,159 | ) | | | (1,866 | ) | | | (4,014 | ) | | | (5,245 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Income from Continuing Operations Before Income Taxes | | | 77,908 | | | | 68,250 | | | | 362,249 | | | | 302,190 | |
| | | | |
Income Tax Expense | | | 31,017 | | | | 25,608 | | | | 141,204 | | | | 115,449 | |
| | | | | | | | | | | | | | | | |
| | | | |
Income from Continuing Operations | | | 46,891 | | | | 42,642 | | | | 221,045 | | | | 186,741 | |
| | | | |
Income (Loss) from Discontinued Operations, Net of Tax | | | — | | | | (57 | ) | | | — | | | | 771 | |
| | | | | | | | | | | | | | | | |
| | | | |
Net Income Available for Common Stock | | $ | 46,891 | | | $ | 42,585 | | | $ | 221,045 | | | $ | 187,512 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings Per Common Share: | | | | | | | | | | | | | | | | |
Basic: | | | | | | | | | | | | | | | | |
Income from Continuing Operations | | $ | 0.57 | | | $ | 0.52 | | | $ | 2.68 | | | $ | 2.30 | |
Income (Loss) from Discontinued Operations | | | — | | | | — | | | | — | | | | 0.01 | |
| | | | | | | | | | | | | | | | |
Net Income Available for Common Stock | | $ | 0.57 | | | $ | 0.52 | | | $ | 2.68 | | | $ | 2.31 | |
| | | | | | | | | | | | | | | | |
| | | | |
Diluted: | | | | | | | | | | | | | | | | |
Income from Continuing Operations | | $ | 0.56 | | | $ | 0.51 | | | $ | 2.64 | | | $ | 2.26 | |
Income (Loss) from Discontinued Operations | | | — | | | | — | | | | — | | | | 0.01 | |
| | | | | | | | | | | | | | | | |
Net Income Available for Common Stock | | $ | 0.56 | | | $ | 0.51 | | | $ | 2.64 | | | $ | 2.27 | |
| | | | | | | | | | | | | | | | |
| | | | |
Weighted Average Common Shares: | | | | | | | | | | | | | | | | |
Used in Basic Calculation | | | 82,687,467 | | | | 81,801,377 | | | | 82,436,603 | | | | 81,178,000 | |
| | | | | | | | | | | | | | | | |
Used in Diluted Calculation | | | 83,782,493 | | | | 82,970,921 | | | | 83,649,498 | | | | 82,556,730 | |
| | | | | | | | | | | | | | | | |
Page 14
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | | | | | | |
(Thousands of Dollars) | | June 30,
2011 | | | September 30,
2010 | |
| | |
ASSETS | | | | | | | | |
Property, Plant and Equipment | | $ | 5,392,065 | | | $ | 5,637,498 | |
Less - Accumulated Depreciation, Depletion and Amortization | | | 1,607,088 | | | | 2,187,269 | |
| | | | | | | | |
Net Property, Plant and Equipment | | | 3,784,977 | | | | 3,450,229 | |
| | | | | | | | |
| | |
Current Assets: | | | | | | | | |
Cash and Temporary Cash Investments | | | 184,710 | | | | 397,171 | |
Hedging Collateral Deposits | | | 37,984 | | | | 11,134 | |
Receivables - Net | | | 165,576 | | | | 132,136 | |
Unbilled Utility Revenue | | | 13,399 | | | | 20,920 | |
Gas Stored Underground | | | 22,525 | | | | 48,584 | |
Materials and Supplies - at average cost | | | 28,923 | | | | 24,987 | |
Other Current Assets | | | 44,786 | | | | 115,969 | |
Deferred Income Taxes | | | 22,885 | | | | 24,476 | |
| | | | | | | | |
Total Current Assets | | | 520,788 | | | | 775,377 | |
| | | | | | | | |
| | |
Other Assets: | | | | | | | | |
Recoverable Future Taxes | | | 151,142 | | | | 149,712 | |
Unamortized Debt Expense | | | 11,058 | | | | 12,550 | |
Other Regulatory Assets | | | 524,355 | | | | 542,801 | |
Deferred Charges | | | 4,989 | | | | 9,646 | |
Other Investments | | | 84,118 | | | | 77,839 | |
Investments in Unconsolidated Subsidiaries | | | 1,367 | | | | 14,828 | |
Goodwill | | | 5,476 | | | | 5,476 | |
Fair Value of Derivative Financial Instruments | | | 43,347 | | | | 65,184 | |
Other | | | 1,648 | | | | 1,983 | |
| | | | | | | | |
Total Other Assets | | | 827,500 | | | | 880,019 | |
| | | | | | | | |
Total Assets | | $ | 5,133,265 | | | $ | 5,105,625 | |
| | | | | | | | |
| | |
CAPITALIZATION AND LIABILITIES | | | | | | | | |
Capitalization: | | | | | | | | |
Comprehensive Shareholders’ Equity | | | | | | | | |
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 82,700,177 Shares and 82,075,470 Shares, Respectively | | $ | 82,700 | | | $ | 82,075 | |
Paid in Capital | | | 644,945 | | | | 645,619 | |
Earnings Reinvested in the Business | | | 1,198,064 | | | | 1,063,262 | |
| | | | | | | | |
Total Common Shareholders’ Equity Before Items of Other Comprehensive Loss | | | 1,925,709 | | | | 1,790,956 | |
Accumulated Other Comprehensive Loss | | | (75,098 | ) | | | (44,985 | ) |
| | | | | | | | |
Total Comprehensive Shareholders’ Equity | | | 1,850,611 | | | | 1,745,971 | |
Long-Term Debt, Net of Current Portion | | | 899,000 | | | | 1,049,000 | |
| | | | | | | | |
Total Capitalization | | | 2,749,611 | | | | 2,794,971 | |
| | | | | | | | |
| | |
Current and Accrued Liabilities: | | | | | | | | |
Notes Payable to Banks and Commercial Paper | | | — | | | | — | |
Current Portion of Long-Term Debt | | | 150,000 | | | | 200,000 | |
Accounts Payable | | | 95,182 | | | | 89,677 | |
Amounts Payable to Customers | | | 25,661 | | | | 38,109 | |
Dividends Payable | | | 29,358 | | | | 28,316 | |
Interest Payable on Long-Term Debt | | | 15,953 | | | | 30,512 | |
Customer Advances | | | 1,021 | | | | 27,638 | |
Customer Security Deposits | | | 17,672 | | | | 18,320 | |
Other Accruals and Current Liabilities | | | 133,856 | | | | 71,592 | |
Fair Value of Derivative Financial Instruments | | | 44,607 | | | | 20,160 | |
| | | | | | | | |
Total Current and Accrued Liabilities | | | 513,310 | | | | 524,324 | |
| | | | | | | | |
| | |
Deferred Credits: | | | | | | | | |
Deferred Income Taxes | | | 919,145 | | | | 800,758 | |
Taxes Refundable to Customers | | | 70,343 | | | | 69,585 | |
Unamortized Investment Tax Credit | | | 2,761 | | | | 3,288 | |
Cost of Removal Regulatory Liability | | | 133,759 | | | | 124,032 | |
Other Regulatory Liabilities | | | 92,811 | | | | 89,334 | |
Pension and Other Post-Retirement Liabilities | | | 435,517 | | | | 446,082 | |
Asset Retirement Obligations | | | 65,583 | | | | 101,618 | |
Other Deferred Credits | | | 150,425 | | | | 151,633 | |
| | | | | | | | |
Total Deferred Credits | | | 1,870,344 | | | | 1,786,330 | |
| | | | | | | | |
Commitments and Contingencies | | | — | | | | — | |
| | | | | | | | |
Total Capitalization and Liabilities | | | 5,133,265 | | | $ | 5,105,625 | |
| | | | | | | | |
Page 15
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | |
| | | Nine Months Ended June 30, | |
(Thousands of Dollars) | | 2011 | | | 2010 | |
| | |
Operating Activities: | | | | | | | | |
Net Income Available for Common Stock | | $ | 221,045 | | | $ | 187,512 | |
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | | | | | | | | |
Gain on Sale of Unconsolidated Subsidiaries | | | (50,879 | ) | | | — | |
Depreciation, Depletion and Amortization | | | 170,617 | | | | 142,433 | |
Deferred Income Taxes | | | 140,326 | | | | 63,813 | |
(Income) Loss from Unconsolidated Subsidiaries, Net of Cash Distributions | | | 4,976 | | | | 904 | |
Excess Tax Costs (Benefits) Associated with Stock-Based Compensation Awards | | | 1,224 | | | | (13,207 | ) |
Other | | | 2,375 | | | | 7,884 | |
Change in: | | | | | | | | |
Hedging Collateral Deposits | | | (26,850 | ) | | | (7,374 | ) |
Receivables and Unbilled Utility Revenue | | | (25,919 | ) | | | 6,676 | |
Gas Stored Underground and Materials and Supplies | | | 22,387 | | | | 20,384 | |
Prepayments and Other Current Assets | | | 69,960 | | | | 39,043 | |
Accounts Payable | | | 5,506 | | | | 127 | |
Amounts Payable to Customers | | | (12,448 | ) | | | (54,764 | ) |
Customer Advances | | | (26,617 | ) | | | (23,526 | ) |
Customer Security Deposits | | | (648 | ) | | | 1,188 | |
Other Accruals and Current Liabilities | | | 36,743 | | | | 30,961 | |
Other Assets | | | 20,255 | | | | 29,197 | |
Other Liabilities | | | (15,771 | ) | | | (11,358 | ) |
| | | | | | | | |
Net Cash Provided by Operating Activities | | $ | 536,282 | | | $ | 419,893 | |
| | | | | | | | |
| | |
Investing Activities: | | | | | | | | |
Capital Expenditures | | ($ | 583,739 | ) | | ($ | 327,513 | ) |
Net Proceeds from Sale of Unconsolidated Subsidiaries | | | 59,365 | | | | — | |
Net Proceeds from Sale of Oil and Gas Producing Properties | | | 69,435 | | | | — | |
Other | | | (2,908 | ) | | | (273 | ) |
| | | | | | | | |
Net Cash Used in Investing Activities | | ($ | 457,847 | ) | | ($ | 327,786 | ) |
| | | | | | | | |
| | |
Financing Activities: | | | | | | | | |
Excess Tax (Costs) Benefits Associated with Stock-Based Compensation Awards | | ($ | 1,224 | ) | | $ | 13,207 | |
Reduction of Long-Term Debt | | | (200,000 | ) | | | — | |
Dividends Paid on Common Stock | | | (85,201 | ) | | | (81,318 | ) |
Net Proceeds From Issuance (Repurchase) of Common Stock | | | (4,471 | ) | | | 26,798 | |
| | | | | | | | |
Net Cash Used in Financing Activities | | ($ | 290,896 | ) | | ($ | 41,313 | ) |
| | | | | | | | |
Net Increase (Decrease) in Cash and Temporary Cash Investments | | | (212,461 | ) | | | 50,794 | |
Cash and Temporary Cash Investments at October 1 | | | 397,171 | | | | 408,053 | |
| | | | | | | | |
Cash and Temporary Cash Investments at June 30 | | $ | 184,710 | | | $ | 458,847 | |
| | | | | | | | |
Page 16
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, | |
| | | 2011 | | | 2010 | | | Variance | | | 2011 | | | 2010 | | | Variance | |
EXPLORATION AND PRODUCTION SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Revenues | | $ | 130,974 | | | $ | 112,802 | | | $ | 18,172 | | | $ | 388,571 | | | $ | 328,312 | | | $ | 60,259 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Operation and Maintenance: | | | | | | | | | | | | | | | | | | | | | | | | |
General and Administrative Expense | | | 11,342 | | | | 8,353 | | | | 2,989 | | | | 35,330 | | | | 25,700 | | | | 9,630 | |
Lease Operating Expense | | | 17,421 | | | | 15,964 | | | | 1,457 | | | | 53,736 | | | | 43,895 | | | | 9,841 | |
All Other Operation and Maintenance Expense | | | 1,252 | | | | 2,400 | | | | (1,148 | ) | | | 5,196 | | | | 6,734 | | | | (1,538 | ) |
Property, Franchise and Other Taxes | | | 2,114 | | | | 2,878 | | | | (764 | ) | | | 9,634 | | | | 7,881 | | | | 1,753 | |
Depreciation, Depletion and Amortization | | | 36,964 | | | | 28,959 | | | | 8,005 | | | | 110,615 | | | | 78,762 | | | | 31,853 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 69,093 | | | | 58,554 | | | | 10,539 | | | | 214,511 | | | | 162,972 | | | | 51,539 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Income | | | 61,881 | | | | 54,248 | | | | 7,633 | | | | 174,060 | | | | 165,340 | | | | 8,720 | |
| | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Income | | | (10 | ) | | | 190 | | | | (200 | ) | | | (11 | ) | | | 500 | | | | (511 | ) |
Other Income | | | 1 | | | | — | | | | 1 | | | | 1 | | | | — | | | | 1 | |
Other Interest Expense | | | (3,817 | ) | | | (7,259 | ) | | | 3,442 | | | | (13,825 | ) | | | (23,013 | ) | | | 9,188 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Income Before Income Taxes | | | 58,055 | | | | 47,179 | | | | 10,876 | | | | 160,225 | | | | 142,827 | | | | 17,398 | |
Income Tax Expense | | | 25,271 | | | | 19,296 | | | | 5,975 | | | | 66,770 | | | | 57,781 | | | | 8,989 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Income | | $ | 32,784 | | | $ | 27,883 | | | $ | 4,901 | | | $ | 93,455 | | | $ | 85,046 | | | $ | 8,409 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net Income Per Share (Diluted) | | $ | 0.39 | | | $ | 0.33 | | | $ | 0.06 | | | $ | 1.12 | | | $ | 1.03 | | | $ | 0.09 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2011 | | | 2010 | | | Variance | | | 2011 | | | 2010 | | | Variance | |
PIPELINE AND STORAGE SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues from External Customers | | $ | 29,933 | | | $ | 32,086 | | | $ | (2,153 | ) | | $ | 103,115 | | | $ | 107,560 | | | $ | (4,445 | ) |
Intersegment Revenues | | | 20,324 | | | | 19,466 | | | | 858 | | | | 60,838 | | | | 60,289 | | | | 549 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Revenues | | | 50,257 | | | | 51,552 | | | | (1,295 | ) | | | 163,953 | | | | 167,849 | | | | (3,896 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased Gas | | | 11 | | | | 67 | | | | (56 | ) | | | (14 | ) | | | 139 | | | | (153 | ) |
Operation and Maintenance | | | 21,643 | | | | 18,404 | | | | 3,239 | | | | 61,627 | | | | 55,566 | | | | 6,061 | |
Property, Franchise and Other Taxes | | | 5,173 | | | | 5,119 | | | | 54 | | | | 15,781 | | | | 15,216 | | | | 565 | |
Depreciation, Depletion and Amortization | | | 9,567 | | | | 8,895 | | | | 672 | | | | 27,796 | | | | 26,617 | | | | 1,179 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 36,394 | | | | 32,485 | | | | 3,909 | | | | 105,190 | | | | 97,538 | | | | 7,652 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Income | | | 13,863 | | | | 19,067 | | | | (5,204 | ) | | | 58,763 | | | | 70,311 | | | | (11,548 | ) |
| | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Income | | | 73 | | | | 65 | | | | 8 | | | | 252 | | | | 117 | | | | 135 | |
Other Income | | | 621 | | | | 119 | | | | 502 | | | | 1,336 | | | | 365 | | | | 971 | |
Other Interest Expense | | | (6,423 | ) | | | (6,507 | ) | | | 84 | | | | (19,505 | ) | | | (19,684 | ) | | | 179 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Income Before Income Taxes | | | 8,134 | | | | 12,744 | | | | (4,610 | ) | | | 40,846 | | | | 51,109 | | | | (10,263 | ) |
Income Tax Expense | | | 3,631 | | | | 5,510 | | | | (1,879 | ) | | | 16,810 | | | | 21,073 | | | | (4,263 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Income | | $ | 4,503 | | | $ | 7,234 | | | $ | (2,731 | ) | | $ | 24,036 | | | $ | 30,036 | | | $ | (6,000 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net Income Per Share (Diluted) | | $ | 0.05 | | | $ | 0.09 | | | $ | (0.04 | ) | | $ | 0.29 | | | $ | 0.37 | | | $ | (0.08 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Page 17
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, | |
| | | 2011 | | | 2010 | | | Variance | | | 2011 | | | 2010 | | | Variance | |
UTILITY SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues from External Customers | | $ | 146,215 | | | $ | 126,326 | | | $ | 19,889 | | | $ | 750,802 | | | $ | 707,323 | | | $ | 43,479 | |
Intersegment Revenues | | | 3,475 | | | | 2,653 | | | | 822 | | | | 14,680 | | | | 13,315 | | | | 1,365 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Revenues | | | 149,690 | | | | 128,979 | | | | 20,711 | | | | 765,482 | | | | 720,638 | | | | 44,844 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased Gas | | | 68,667 | | | | 50,404 | | | | 18,263 | | | | 429,716 | | | | 389,992 | | | | 39,724 | |
Operation and Maintenance | | | 42,524 | | | | 42,899 | | | | (375 | ) | | | 146,549 | | | | 146,327 | | | | 222 | |
Property, Franchise and Other Taxes | | | 11,031 | | | | 10,140 | | | | 891 | | | | 34,933 | | | | 33,142 | | | | 1,791 | |
Depreciation, Depletion and Amortization | | | 10,363 | | | | 10,129 | | | | 234 | | | | 30,986 | | | | 30,125 | | | | 861 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 132,585 | | | | 113,572 | | | | 19,013 | | | | 642,184 | | | | 599,586 | | | | 42,598 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Income | | | 17,105 | | | | 15,407 | | | | 1,698 | | | | 123,298 | | | | 121,052 | | | | 2,246 | |
| | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Income | | | 38 | | | | 164 | | | | (126 | ) | | | 485 | | | | 1,018 | | | | (533 | ) |
Other Income | | | 300 | | | | 267 | | | | 33 | | | | 897 | | | | 780 | | | | 117 | |
Other Interest Expense | | | (8,659 | ) | | | (8,998 | ) | | | 339 | | | | (26,247 | ) | | | (27,053 | ) | | | 806 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Income Before Income Taxes | | | 8,784 | | | | 6,840 | | | | 1,944 | | | | 98,433 | | | | 95,797 | | | | 2,636 | |
Income Tax Expense | | | 2,456 | | | | 871 | | | | 1,585 | | | | 36,034 | | | | 33,543 | | | | 2,491 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Income | | $ | 6,328 | | | $ | 5,969 | | | $ | 359 | | | $ | 62,399 | | | $ | 62,254 | | | $ | 145 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net Income Per Share (Diluted) | | $ | 0.08 | | | $ | 0.07 | | | $ | 0.01 | | | $ | 0.74 | | | $ | 0.75 | | | $ | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2011 | | | 2010 | | | Variance | | | 2011 | | | 2010 | | | Variance | |
ENERGY MARKETING SEGMENT | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues from External Customers | | $ | 71,746 | | | $ | 72,830 | | | $ | (1,084 | ) | | $ | 246,719 | | | $ | 303,103 | | | $ | (56,384 | ) |
Intersegment Revenues | | | 156 | | | | — | | | | 156 | | | | 156 | | | | — | | | | 156 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Revenues | | | 71,902 | | | | 72,830 | | | | (928 | ) | | | 246,875 | | | | 303,103 | | | | (56,228 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased Gas | | | 67,711 | | | | 68,704 | | | | (993 | ) | | | 227,716 | | | | 284,473 | | | | (56,757 | ) |
Operation and Maintenance | | | 1,415 | | | | 1,847 | | | | (432 | ) | | | 4,553 | | | | 4,723 | | | | (170 | ) |
Property, Franchise and Other Taxes | | | 8 | | | | 7 | | | | 1 | | | | 34 | | | | 24 | | | | 10 | |
Depreciation, Depletion and Amortization | | | 9 | | | | 11 | | | | (2 | ) | | | 28 | | | | 32 | | | | (4 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 69,143 | | | | 70,569 | | | | (1,426 | ) | | | 232,331 | | | | 289,252 | | | | (56,921 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Income | | | 2,759 | | | | 2,261 | | | | 498 | | | | 14,544 | | | | 13,851 | | | | 693 | |
| | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Income | | | 36 | | | | 15 | | | | 21 | | | | 72 | | | | 28 | | | | 44 | |
Other Income | | | 27 | | | | 12 | | | | 15 | | | | 61 | | | | 58 | | | | 3 | |
Other Interest Expense | | | (4 | ) | | | (6 | ) | | | 2 | | | | (15 | ) | | | (21 | ) | | | 6 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Income Before Income Taxes | | | 2,818 | | | | 2,282 | | | | 536 | | | | 14,662 | | | | 13,916 | | | | 746 | |
Income Tax Expense | | | 927 | | | | 871 | | | | 56 | | | | 5,540 | | | | 5,444 | | | | 96 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Income | | $ | 1,891 | | | $ | 1,411 | | | $ | 480 | | | $ | 9,122 | | | $ | 8,472 | | | $ | 650 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net Income Per Share (Diluted) | | $ | 0.02 | | | $ | 0.02 | | | $ | — | | | $ | 0.11 | | | $ | 0.10 | | | $ | 0.01 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Page 18
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, | |
| | | 2011 | | | 2010 | | | Variance | | | 2011 | | | 2010 | | | Variance | |
ALL OTHER | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues from External Customers | | $ | 1,873 | | | $ | 7,724 | | | $ | (5,851 | ) | | $ | 2,895 | | | $ | 27,157 | | | $ | (24,262 | ) |
Intersegment Revenues | | | 2,810 | | | | 1,418 | | | | 1,392 | | | | 7,026 | | | | 1,418 | | | | 5,608 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Revenues | | | 4,683 | | | | 9,142 | | | | (4,459 | ) | | | 9,921 | | | | 28,575 | | | | (18,654 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased Gas | | | — | | | | — | | | | — | | | | 48 | | | | — | | | | 48 | |
Operation and Maintenance | | | 944 | | | | 6,316 | | | | (5,372 | ) | | | 3,130 | | | | 18,413 | | | | (15,283 | ) |
Property, Franchise and Other Taxes | | | 90 | | | | 381 | | | | (291 | ) | | | 490 | | | | 1,211 | | | | (721 | ) |
Depreciation, Depletion and Amortization | | | 203 | | | | 2,250 | | | | (2,047 | ) | | | 630 | | | | 5,872 | | | | (5,242 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 1,237 | | | | 8,947 | | | | (7,710 | ) | | | 4,298 | | | | 25,496 | | | | (21,198 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Income (Loss) | | | 3,446 | | | | 195 | | | | 3,251 | | | | 5,623 | | | | 3,079 | | | | 2,544 | |
| | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
Income (Loss) from Unconsolidated Subsidiaries | | | (77 | ) | | | 624 | | | | (701 | ) | | | (698 | ) | | | 1,696 | | | | (2,394 | ) |
Gain on Sale of Unconsolidated Subsidiaries | | | — | | | | — | | | | — | | | | 50,879 | | | | — | | | | 50,879 | |
Interest Income | | | 48 | | | | 39 | | | | 9 | | | | 197 | | | | 95 | | | | 102 | |
Other Income | | | 254 | | | | (7 | ) | | | 261 | | | | 289 | | | | 32 | | | | 257 | |
Other Interest Expense | | | (541 | ) | | | (541 | ) | | | — | | | | (1,637 | ) | | | (1,610 | ) | | | (27 | ) |
| | | | | | | | | | | | | | | | | | | | | �� | | | |
| | | | | | |
Income from Continuing Operations Before Income Taxes | | | 3,130 | | | | 310 | | | | 2,820 | | | | 54,653 | | | | 3,292 | | | | 51,361 | |
Income Tax Expense | | | 417 | | | | 67 | | | | 350 | | | | 20,333 | | | | 1,138 | | | | 19,195 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Income from Continuing Operations | | | 2,713 | | | | 243 | | | | 2,470 | | | | 34,320 | | | | 2,154 | | | | 32,166 | |
| | | | | | |
Income (Loss) from Discontinued Operations, Net of Tax | | | — | | | | (57 | ) | | | 57 | | | | — | | | | 771 | | | | (771 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net Income | | $ | 2,713 | | | $ | 186 | | | $ | 2,527 | | | $ | 34,320 | | | $ | 2,925 | | | $ | 31,395 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Income from Continuing Operations Per Share (Diluted) | | $ | 0.03 | | | $ | — | | | $ | 0.03 | | | $ | 0.41 | | | $ | 0.03 | | | $ | 0.38 | |
Income (Loss) from Discontinued Operations, Net of Tax, Per Share (Diluted) | | | — | | | | — | | | | — | | | | — | | | | 0.01 | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Income Per Share (Diluted) | | $ | 0.03 | | | $ | — | | | $ | 0.03 | | | $ | 0.41 | | | $ | 0.04 | | | $ | 0.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Page 19
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, | |
| | | 2011 | | | 2010 | | | Variance | | | 2011 | | | 2010 | | | Variance | |
CORPORATE | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues from External Customers | | $ | 238 | | | $ | 224 | | | $ | 14 | | | $ | 706 | | | $ | 652 | | | $ | 54 | |
Intersegment Revenues | | | 1,028 | | | | 1,003 | | | | 25 | | | | 2,955 | | | | 2,545 | | | | 410 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Operating Revenues | | | 1,266 | | | | 1,227 | | | | 39 | | | | 3,661 | | | | 3,197 | | | | 464 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Operation and Maintenance | | | 3,565 | | | | 2,970 | | | | 595 | | | | 10,574 | | | | 9,637 | | | | 937 | |
Property, Franchise and Other Taxes | | | 1,763 | | | | 69 | | | | 1,694 | | | | 2,842 | | | | 210 | | | | 2,632 | |
Depreciation, Depletion and Amortization | | | 187 | | | | 178 | | | | 9 | | | | 562 | | | | 527 | | | | 35 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 5,515 | | | | 3,217 | | | | 2,298 | | | | 13,978 | | | | 10,374 | | | | 3,604 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Loss | | | (4,249 | ) | | | (1,990 | ) | | | (2,259 | ) | | | (10,317 | ) | | | (7,177 | ) | | | (3,140 | ) |
| | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Income | | | 18,897 | | | | 22,525 | | | | (3,628 | ) | | | 58,717 | | | | 67,587 | | | | (8,870 | ) |
Other Income | | | 687 | | | | 460 | | | | 227 | | | | 2,244 | | | | 1,238 | | | | 1,006 | |
Interest Expense on Long-Term Debt | | | (17,876 | ) | | | (21,115 | ) | | | 3,239 | | | | (55,994 | ) | | | (65,238 | ) | | | 9,244 | |
Other Interest Expense | | | (472 | ) | | | (985 | ) | | | 513 | | | | (1,220 | ) | | | (1,161 | ) | | | (59 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Loss Before Income Taxes | | | (3,013 | ) | | | (1,105 | ) | | | (1,908 | ) | | | (6,570 | ) | | | (4,751 | ) | | | (1,819 | ) |
Income Tax Benefit | | | (1,685 | ) | | | (1,007 | ) | | | (678 | ) | | | (4,283 | ) | | | (3,530 | ) | | | (753 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Loss | | $ | (1,328 | ) | | $ | (98 | ) | | $ | (1,230 | ) | | $ | (2,287 | ) | | $ | (1,221 | ) | | $ | (1,066 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net Loss Per Share (Diluted) | | $ | (0.01 | ) | | $ | — | | | $ | (0.01 | ) | | $ | (0.03 | ) | | $ | (0.02 | ) | | $ | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | | Three Months Ended
June 30, | | | Nine Months Ended
June 30, | |
| | | 2011 | | | 2010 | | | Variance | | | 2011 | | | 2010 | | | Variance | |
INTERSEGMENT ELIMINATIONS | | | | | | | | | | | | | | | | | | | | | | | | |
Intersegment Revenues | | $ | (27,793 | ) | | $ | (24,540 | ) | | $ | (3,253 | ) | | $ | (85,655 | ) | | $ | (77,567 | ) | | $ | (8,088 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Expenses: | | | | | | | | | | | | | | | | | | | | | | | | |
Purchased Gas | | | (23,664 | ) | | | (21,980 | ) | | | (1,684 | ) | | | (75,108 | ) | | | (73,196 | ) | | | (1,912 | ) |
Operation and Maintenance | | | (4,129 | ) | | | (2,560 | ) | | | (1,569 | ) | | | (10,547 | ) | | | (4,371 | ) | | | (6,176 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (27,793 | ) | | | (24,540 | ) | | | (3,253 | ) | | | (85,655 | ) | | | (77,567 | ) | | | (8,088 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Operating Income | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | |
Other Income (Expense): | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Income | | | (18,757 | ) | | | (22,430 | ) | | | 3,673 | | | | (58,435 | ) | | | (67,297 | ) | | | 8,862 | |
Other Interest Expense | | | 18,757 | | | | 22,430 | | | | (3,673 | ) | | | 58,435 | | | | 67,297 | | | | (8,862 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net Income | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net Income Per Share (Diluted) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Page 20
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30,
(Unaudited) | | | Nine Months Ended
June 30,
(Unaudited) | |
| | | 2011 | | | 2010 | | | Increase
(Decrease) | | | 2011 | | | 2010 | | | Increase
(Decrease) | |
| | | | | | |
Capital Expenditures: | | | | | | | | | | | | | | | | | | | | | | | | |
Exploration and Production | | $ | 158,321 | (1) | | $ | 82,863 | (4) | | $ | 75,458 | | | $ | 473,515 | (1)(2) | | $ | 273,849 | (4)(5) | | $ | 199,666 | |
Pipeline and Storage | | | 35,471 | (3) | | | 6,765 | | | | 28,706 | | | | 74,969 | (3) | | | 22,243 | | | | 52,726 | |
Utility | | | 13,994 | | | | 13,988 | | | | 6 | | | | 39,429 | | | | 39,513 | | | | (84 | ) |
Energy Marketing | | | 68 | | | | 140 | | | | (72 | ) | | | 329 | | | | 239 | | | | 90 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Reportable Segments | | | 207,854 | | | | 103,756 | | | | 104,098 | | | | 588,242 | | | | 335,844 | | | | 252,398 | |
All Other | | | 4,018 | | | | 2,083 | | | | 1,935 | | | | 6,287 | | | | 5,866 | (5) | | | 421 | |
Corporate | | | 193 | | | | 68 | | | | 125 | | | | 208 | | | | 202 | | | | 6 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Expenditures from Continuing Operations | | | 212,065 | | | | 105,907 | | | | 106,158 | | | | 594,737 | | | | 341,912 | | | | 252,825 | |
Discontinued Operations | | | — | | | | 68 | | | | (68 | ) | | | — | | | | 122 | | | | (122 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Capital Expenditures | | $ | 212,065 | | | $ | 105,975 | | | $ | 106,090 | | | $ | 594,737 | | | $ | 342,034 | | | $ | 252,703 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Amount for the quarter and nine months ended June 30, 2011 includes $60.7 million of accrued capital expenditures, the majority of which was in the Appalachian region. This amount has been excluded from the Consolidated Statement of Cash Flows at June 30, 2011 since it represents a non-cash investing activity at that date. |
| (2) | Capital expenditures for the Exploration and Production segment for the nine months ended June 30, 2011 exclude $55.5 million of capital expenditures, the majority of which was in the Appalachian region. This amount was accrued at September 30, 2010 and paid during the nine months ended June 30, 2011. This amount was excluded from the Consolidated Statements of Cash Flows at September 30, 2010 since it represented a non-cash investing activity at that date. This amount has been included in the Consolidated Statement of Cash Flows at June 30, 2011. |
| (3) | Amount for the quarter and nine months ended June 30, 2011 includes $5.9 million of accrued capital expenditures. This amount has been excluded from the Consolidated Statement of Cash Flows at June 30, 2011 since it represents a non-cash investing activity at that date. |
| (4) | Amount for the quarter and nine months ended June 30, 2010 includes $24.3 million of accrued capital expenditures, the majority of which was in the Appalachian region. This amount has been excluded from the Consolidated Statement of Cash Flows at June 30, 2010 since it represents a non-cash investing activity at that date. |
| (5) | Capital expenditures for the Exploration and Production segment for the nine months ended June 30, 2010 exclude $9.1 million of capital expenditures, the majority of which was in the Appalachian region. Capital expenditures for All Other for the nine months ended June 30, 2010 exclude $0.7 million of capital expenditures related to the construction of the Midstream Covington Gathering System. Both of these amounts were accrued at September 30, 2009 and paid during the nine months ended June 30, 2010. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2009 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, 2010. |
DEGREE DAYS
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Percent Colder (Warmer) Than: | |
| | | Normal | | | 2011 | | | 2010 | | | Normal (1) | | | Last Year (1) | |
| | | | | |
Three Months Ended June 30 | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Buffalo, NY | | | 927 | | | | 848 | | | | 665 | | | | (8.5 | ) | | | 27.5 | |
Erie, PA | | | 885 | | | | 812 | | | | 631 | | | | (8.2 | ) | | | 28.7 | |
| | | | | |
Nine Months Ended June 30 | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Buffalo, NY | | | 6,514 | | | | 6,674 | | | | 6,152 | | | | 2.5 | | | | 8.5 | |
Erie, PA | | | 6,108 | | | | 6,284 | | | | 5,842 | | | | 2.9 | | | | 7.6 | |
| (1) | Percents compare actual 2011 degree days to normal degree days and actual 2011 degree days to actual 2010 degree days. |
Page 21
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2011 | | | 2010 | | | Increase
(Decrease) | | | 2011 | | | 2010 | | | Increase
(Decrease) | |
| | | | | | |
Gas Production/Prices: | | | | | | | | | | | | | | | | | | | | | | | | |
Production (MMcf) | | | | | | | | | | | | | | | | | | | | | | | | |
Gulf Coast | | | 22 | | | | 2,745 | | | | (2,723 | ) | | | 4,092 | | | | 8,079 | | | | (3,987 | ) |
West Coast | | | 826 | | | | 940 | | | | (114 | ) | | | 2,616 | | | | 2,866 | | | | (250 | ) |
Appalachia | | | 12,090 | | | | 4,741 | | | | 7,349 | | | | 31,020 | | | | 11,084 | | | | 19,936 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Production | | | 12,938 | | | | 8,426 | | | | 4,512 | | | | 37,728 | | | | 22,029 | | | | 15,699 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Average Prices (Per Mcf) | | | | | | | | | | | | | | | | | | | | | | | | |
Gulf Coast | | | N/M | | | $ | 4.95 | | | | N/M | | | $ | 5.02 | | | $ | 5.26 | | | $ | (0.24 | ) |
West Coast | | $ | 4.87 | | | | 4.38 | | | $ | 0.49 | | | | 4.40 | | | | 4.92 | | | | (0.52 | ) |
Appalachia | | | 4.55 | | | | 4.45 | | | | 0.10 | | | | 4.36 | | | | 5.10 | | | | (0.74 | ) |
Weighted Average | | | 4.67 | | | | 4.61 | | | | 0.06 | | | | 4.44 | | | | 5.13 | | | | (0.69 | ) |
Weighted Average after Hedging | | | 5.48 | | | | 5.74 | | | | (0.26 | ) | | | 5.36 | | | | 6.16 | | | | (0.80 | ) |
| | | | | | |
Oil Production/Prices: | | | | | | | | | | | | | | | | | | | | | | | | |
Production (Thousands of Barrels) | | | | | | | | | | | | | | | | | | | | | | | | |
Gulf Coast | | | (9 | )(1) | | | 135 | | | | (144 | ) | | | 187 | | | | 389 | | | | (202 | ) |
West Coast | | | 661 | | | | 661 | | | | — | | | | 1,958 | | | | 2,007 | | | | (49 | ) |
Appalachia | | | 13 | | | | 13 | | | | — | | | | 35 | | | | 34 | | | | 1 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Production | | | 665 | | | | 809 | | | | (144 | ) | | | 2,180 | | | | 2,430 | | | | (250 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Average Prices (Per Barrel) | | | | | | | | | | | | | | | | | | | | | | | | |
Gulf Coast | | | N/M | | | $ | 76.42 | | | | N/M | | | $ | 88.57 | | | $ | 78.64 | | | $ | 9.93 | |
West Coast | | $ | 108.30 | | | | 71.92 | | | $ | 36.38 | | | | 94.74 | | | | 71.79 | | | | 22.95 | |
Appalachia | | | 92.89 | | | | 74.90 | | | | 17.99 | | | | 87.36 | | | | 77.77 | | | | 9.59 | |
Weighted Average | | | 107.97 | | | | 72.72 | | | | 35.25 | | | | 94.10 | | | | 72.97 | | | | 21.13 | |
Weighted Average after Hedging | | | 84.37 | | | | 75.23 | | | | 9.14 | | | | 80.78 | | | | 75.65 | | | | 5.13 | |
| | | | | | |
Total Production (Mmcfe) | | | 16,928 | | | | 13,280 | | | | 3,648 | | | | 50,808 | | | | 36,609 | | | | 14,199 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Selected Operating Performance Statistics: | | | | | | | | | | | | | | | | | | | | | | | | |
General & Administrative Expense per Mcfe(2) | | $ | 0.67 | | | $ | 0.63 | | | $ | 0.04 | | | $ | 0.70 | | | $ | 0.70 | | | $ | — | |
Lease Operating Expense per Mcfe(2) | | $ | 1.03 | | | $ | 1.20 | | | $ | (0.17 | ) | | $ | 1.06 | | | $ | 1.20 | | | $ | (0.14 | ) |
Depreciation, Depletion & Amortization per Mcfe(2) | | $ | 2.18 | | | $ | 2.18 | | | $ | — | | | $ | 2.18 | | | $ | 2.15 | | | $ | 0.03 | |
| (1) | The sale of Gulf Coast properties in April 2011 and various adjustments to prior months’ production resulted in negative oil production. |
| (2) | 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. |
N/M Not Meaningful
Page 22
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Hedging Summary for the Remaining Three Months of Fiscal 2011
| | | | | | |
SWAPS | | Volume | | Average Hedge Price | |
Oil | | 0.4 MMBBL | | $ | 70.93 / BBL | |
Gas | | 10.6 BCF | | $ | 5.77/ MCF | |
Hedging Summary for Fiscal 2012
| | | | | | |
SWAPS | | Volume | | Average Hedge Price | |
Oil | | 1.6 MMBBL | | $ | 77.03 / BBL | |
Gas | | 35.0 BCF | | $ | 5.89 / MCF | |
Hedging Summary for Fiscal 2013
| | | | | | |
SWAPS | | Volume | | Average Hedge Price | |
Oil | | 0.9 MMBBL | | $ | 86.21 / BBL | |
Gas | | 23.9 BCF | | $ | 5.67 / MCF | |
Hedging Summary for Fiscal 2014
| | | | | | |
SWAPS | | Volume | | Average Hedge Price | |
Oil | | 0.2 MMBBL | | $ | 94.90 / BBL | |
Gas | | 4.6 BCF | | $ | 5.89 / MCF | |
Gross Wells in Process of Drilling
Nine Months Ended June 30, 2011
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | East | | | | |
| | | Gulf | | | West | | | Marcellus
Shale | | | Upper
Devonian | | | Total
Company | |
| | | | | |
Wells in Process - Beginning Period | | | | | | | | | | | | | | | | | | | | |
Exploratory | | | 0.00 | | | | 0.00 | | | | 4.00 | | | | 23.00 | | | | 27.00 | |
Developmental | | | 1.00 | | | | 0.00 | | | | 58.00 | (1) | | | 19.00 | | | | 78.00 | |
Wells Commenced | | | | | | | | | | | | | | | | | | | | |
Exploratory | | | 0.00 | | | | 1.00 | | | | 7.00 | | | | 0.00 | | | | 8.00 | |
Developmental | | | 1.00 | | | | 43.00 | | | | 64.00 | | | | 3.00 | | | | 111.00 | |
Wells Completed | | | | | | | | | | | | | | | | | | | | |
Exploratory | | | 0.00 | | | | 1.00 | | | | 8.00 | | | | 3.00 | | | | 12.00 | |
Developmental | | | 2.00 | | | | 41.00 | | | | 38.00 | | | | 3.00 | | | | 84.00 | |
Wells Plugged & Abandoned | | | | | | | | | | | | | | | | | | | | |
Exploratory | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 5.00 | | | | 5.00 | |
Developmental | | | 0.00 | | | | 1.00 | | | | 0.00 | | | | 7.00 | | | | 8.00 | |
Wells in Process - End of Period | | | | | | | | | | | | | | | | | | | | |
Exploratory | | | 0.00 | | | | 0.00 | | | | 3.00 | | | | 15.00 | | | | 18.00 | |
Developmental | | | 0.00 | | | | 1.00 | | | | 84.00 | | | | 12.00 | | | | 97.00 | |
| (1) | Amount increased by 19 for wells overlooked in the prior year. |
Net Wells in Process of Drilling
Nine Months Ended June 30, 2011
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | East | | | | |
| | | Gulf | | | West | �� | | Marcellus
Shale | | | Upper
Devonian | | | Total
Company | |
Wells in Process - Beginning Period | | | | | | | | | | | | | | | | | | | | |
Exploratory | | | 0.00 | | | | 0.00 | | | | 4.00 | | | | 22.00 | | | | 26.00 | |
Developmental | | | 0.20 | | | | 0.00 | | | | 36.50 | (2) | | | 18.00 | | | | 54.70 | |
Wells Commenced | | | | | | | | | | | | | | | | | | | | |
Exploratory | | | 0.00 | | | | 0.13 | | | | 7.00 | | | | 0.00 | | | | 7.13 | |
Developmental | | | 0.20 | | | | 42.31 | | | | 49.16 | | | | 2.60 | | | | 94.27 | |
Wells Completed | | | | | | | | | | | | | | | | | | | | |
Exploratory | | | 0.00 | | | | 0.13 | | | | 8.00 | | | | 3.00 | | | | 11.13 | |
Developmental | | | 0.40 | | | | 40.31 | | | | 30.16 | | | | 2.60 | | | | 73.47 | |
Wells Plugged & Abandoned | | | | | | | | | | | | | | | | | | | | |
Exploratory | | | 0.00 | | | | 0.00 | | | | 0.00 | | | | 5.00 | | | | 5.00 | |
Developmental | | | 0.00 | | | | 1.00 | | | | 0.00 | | | | 7.00 | | | | 8.00 | |
Wells in Process - End of Period | | | | | | | | | | | | | | | | | | | | |
Exploratory | | | 0.00 | | | | 0.00 | | | | 3.00 | | | | 14.00 | | | | 17.00 | |
Developmental | | | 0.00 | | | | 1.00 | | | | 55.50 | | | | 11.00 | | | | 67.50 | |
| (2) | Marcellus Shale net developmental wells were increased by 1.88 due to the acquisition of a joint venture partner’s working interest in seven wells, which totaled 1.88 net wells. In addition, this amount increased by 12 for wells overlooked in the prior year. |
Page 23
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Fiscal 2012 Financial & Operating Guidance
| | | | |
Total Production (Bcfe) | | | 87 - 101 | |
| |
Production by Division (Bcfe) | | | | |
East | | | 68 - 80 | |
West | | | 19 - 21 | |
Guidance Based on Crude Oil Average 2011 NYMEX Price ($/Bbl) (without hedges) of $95.00
| | | | |
Forecast price differentials | | | | |
West | | | -$3.00 to +$3.00 | |
Guidance Based on Natural Gas Average 2011 NYMEX Price ($/MMBtu) (without hedges) of $4.50
| | |
Forecast price differentials | | |
East | | -$0.10 to +$0.10 |
West | | -$0.10 to -$0.30 |
| |
Cost and Expenses $ per Mcfe | | |
Lease Operating Expenses | | $0.85 - $1.00 |
Depreciation, Depletion and Amortization | | $2.20 - $2.30 |
Other Taxes | | $0.10 - $0.20 |
| |
Other Operating Expenses | | $7MM - $9MM |
General and Administrative | | $54MM - $58MM |
Capital Investment by Division
| | | | | | |
| | | | | Number of Gross Wells to be Drilled |
| | | | | Horizontal | | Vertical |
East | | $740MM - $820MM | | 115 - 140 | | 10 - 20 |
West | | $45MM - $55MM | | | | 55 - 80 |
Total | | $785MM - $875MM | | | | |
Earnings per share sensitivity to changes from prices used in guidance* ^
| | | | | | |
| $1 change per MMBtu gas | | $5 change per Bbl oil |
Increase | | Decrease | | Increase | | Decrease |
| | | |
| + $0.31 | | - $0.31 | | + $0.04 | | - $0.04 |
| * | Please refer to forward looking statement footnote beginning at page 8 of this document. |
| ^ | This sensitivity table is current as of August 4, 2011 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 2012 earnings forecast, the Company is utilizing flat NYMEX equivalent commodity pricing, exclusive of basis differential, of $4.50 per MMBtu for natural gas and $95 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. |
Page 24
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Pipeline & Storage Throughput- (millions of cubic feet - MMcf)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | June 30, | | | June 30, | |
| | | 2011 | | | 2010 | | | Increase
(Decrease) | | | 2011 | | | 2010 | | | Increase
(Decrease) | |
Firm Transportation - Affiliated | | | 17,538 | | | | 15,438 | | | | 2,100 | | | | 95,884 | | | | 89,201 | | | | 6,683 | |
Firm Transportation - Non-Affiliated | | | 35,788 | | | | 37,010 | | | | (1,222 | ) | | | 170,661 | | | | 156,032 | | | | 14,629 | |
Interruptible Transportation | | | 489 | | | | 1,016 | | | | (527 | ) | | | 1,709 | | | | 3,575 | | | | (1,866 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 53,815 | | | | 53,464 | | | | 351 | | | | 268,254 | | | | 248,808 | | | | 19,446 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Utility Throughput - (MMcf)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, | | | Nine Months Ended
June 30, | |
| | | 2011 | | | 2010 | | | Increase
(Decrease) | | | 2011 | | | 2010 | | | Increase
(Decrease) | |
Retail Sales: | | | | | | | | | | | | | | | | | | | | | | | | |
Residential Sales | | | 8,867 | | | | 7,055 | | | | 1,812 | | | | 54,075 | | | | 50,292 | | | | 3,783 | |
Commercial Sales | | | 1,203 | | | | 920 | | | | 283 | | | | 8,044 | | | | 7,666 | | | | 378 | |
Industrial Sales | | | 79 | | | | 66 | | | | 13 | | | | 618 | | | | 512 | | | | 106 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 10,149 | | | | 8,041 | | | | 2,108 | | | | 62,737 | | | | 58,470 | | | | 4,267 | |
Off-System Sales | | | 867 | | | | 1,124 | | | | (257 | ) | | | 6,188 | | | | 4,034 | | | | 2,154 | |
Transportation | | | 12,335 | | | | 10,530 | | | | 1,805 | | | | 57,916 | | | | 51,957 | | | | 5,959 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 23,351 | | | | 19,695 | | | | 3,656 | | | | 126,841 | | | | 114,461 | | | | 12,380 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Energy Marketing Volumes
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, | | | Nine Months Ended
June 30, | |
| | | 2011 | | | 2010 | | | Increase
(Decrease) | | | 2011 | | | 2010 | | | Increase
(Decrease) | |
Natural Gas (MMcf) | | | 13,508 | | | | 13,047 | | | | 461 | | | | 45,863 | | | | 51,144 | | | | (5,281 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Page 25
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
| | | | | | | | |
| | | 2011 | | | 2010 | |
Quarter Ended June 30 (unaudited) | | | | | | | | |
| | |
Operating Revenues | | $ | 380,979,000 | | | $ | 351,992,000 | |
| | | | | | | | |
| | |
Income from Continuing Operations | | $ | 46,891,000 | | | $ | 42,642,000 | |
Loss from Discontinued Operations, Net of Tax | | | — | | | | (57,000 | ) |
| | | | | | | | |
Net Income Available for Common Stock | | $ | 46,891,000 | | | $ | 42,585,000 | |
| | | | | | | | |
| | |
Earnings Per Common Share: | | | | | | | | |
Basic: | | | | | | | | |
Income from Continuing Operations | | $ | 0.57 | | | $ | 0.52 | |
Loss from Discontinued Operations | | | — | | | | — | |
| | | | | | | | |
Net Income Available for Common Stock | | $ | 0.57 | | | $ | 0.52 | |
| | | | | | | | |
| | |
Diluted: | | | | | | | | |
Income from Continuing Operations | | $ | 0.56 | | | $ | 0.51 | |
Loss from Discontinued Operations | | | — | | | | — | |
| | | | | | | | |
Net Income Available for Common Stock | | $ | 0.56 | | | $ | 0.51 | |
| | | | | | | | |
| | |
Weighted Average Common Shares: | | | | | | | | |
Used in Basic Calculation | | | 82,687,467 | | | | 81,801,377 | |
| | | | | | | | |
Used in Diluted Calculation | | | 83,782,493 | | | | 82,970,921 | |
| | | | | | | | |
| | |
Nine Months Ended June 30 (unaudited) | | | | | | | | |
| | |
Operating Revenues | | $ | 1,492,808,000 | | | $ | 1,474,107,000 | |
| | | | | | | | |
| | |
Income from Continuing Operations | | $ | 221,045,000 | | | $ | 186,741,000 | |
Income from Discontinued Operations, Net of Tax | | | — | | | | 771,000 | |
| | | | | | | | |
Net Income Available for Common Stock | | $ | 221,045,000 | | | $ | 187,512,000 | |
| | | | | | | | |
| | |
Earnings Per Common Share: | | | | | | | | |
Basic: | | | | | | | | |
Income from Continuing Operations | | $ | 2.68 | | | $ | 2.30 | |
Income from Discontinued Operations | | | — | | | | 0.01 | |
| | | | | | | | |
Net Income Available for Common Stock | | $ | 2.68 | | | $ | 2.31 | |
| | | | | | | | |
| | |
Diluted: | | | | | | | | |
Income from Continuing Operations | | $ | 2.64 | | | $ | 2.26 | |
Income from Discontinued Operations | | | — | | | | 0.01 | |
| | | | | | | | |
Net Income Available for Common Stock | | $ | 2.64 | | | $ | 2.27 | |
| | | | | | | | |
| | |
Weighted Average Common Shares: | | | | | | | | |
Used in Basic Calculation | | | 82,436,603 | | | | 81,178,000 | |
| | | | | | | | |
Used in Diluted Calculation | | | 83,649,498 | | | | 82,556,730 | |
| | | | | | | | |
| | |
Twelve Months Ended June 30 (unaudited) | | | | | | | | |
| | |
Operating Revenues | | $ | 1,779,205,000 | | | $ | 1,750,902,000 | |
| | | | | | | | |
| | |
Income from Continuing Operations | | $ | 253,438,000 | | | $ | 216,684,000 | |
Income (Loss) from Discontinued Operations, Net of Tax | | | 6,009,000 | | | | (2,174,000 | ) |
| | | | | | | | |
Net Income Available for Common Stock | | | 259,447,000 | | | $ | 214,510,000 | |
| | | | | | | | |
| | |
Earnings Per Common Share: | | | | | | | | |
Basic: | | | | | | | | |
Income from Continuing Operations | | $ | 3.08 | | | $ | 2.68 | |
Income (Loss) from Discontinued Operations | | | 0.07 | | | | (0.03 | ) |
| | | | | | | | |
Net Income Available for Common Stock | | $ | 3.15 | | | $ | 2.65 | |
| | | | | | | | |
| | |
Diluted: | | | | | | | | |
Income from Continuing Operations | | $ | 3.04 | | | $ | 2.63 | |
Income (Loss) from Discontinued Operations | | | 0.07 | | | | (0.02 | ) |
| | | | | | | | |
Net Income Available for Common Stock | | $ | 3.11 | | | $ | 2.61 | |
| | | | | | | | |
| | |
Weighted Average Common Shares: | | | | | | | | |
Used in Basic Calculation | | | 82,321,791 | | | | 80,941,793 | |
| | | | | | | | |
Used in Diluted Calculation | | | 83,508,416 | | | | 82,335,561 | |
| | | | | | | | |
Page 26
