National Fuel Reports Fourth Quarter and Full Year Fiscal 2022 Earnings

Post to Reddit

WILLIAMSVILLE, N.Y., Nov. 03, 2022 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the three months and fiscal year ended September 30, 2022.

FISCAL 2022 FOURTH QUARTER SUMMARY

  • GAAP net income of $158.1 million, or $1.71 per share, compared to GAAP net income of $87.0 million, or $0.95 per share, in the prior year, an increase of 80% per share.
  • Adjusted operating results of $109.3 million, or $1.19 per share, an increase of 25%, compared to $0.95 per share, in the prior year (see non-GAAP reconciliation on page 2).
  • Adjusted EBITDA of $271.9 million, an increase of 26%, compared to $215.9 million in the prior year (see non-GAAP reconciliation on page 26).

FISCAL 2022 HIGHLIGHTS

  • GAAP net income of $566.0 million, or $6.15 per share, an increase of 55% per share from the prior year.
  • Adjusted operating results of $541.6 million, or $5.88 per share, an increase of 37% per share from the prior year (see non-GAAP reconciliation on page 2).
  • Adjusted EBITDA of $1.2 billion, an increase of 23% from the prior year (see non-GAAP reconciliation on page 26).
  • E&P segment net production increased by 8% from the prior year, which includes the impact of the divestiture of our California operations.
  • Gathering segment revenues increased by 11% from the prior year.
  • Pipeline & Storage segment revenues increased by 10% from the prior year, primarily driven by the completion of the Company's FM100 project.
  • Utility segment invested $82.6 million in system modernization and reliability, replacing over 150 miles of older vintage mains and services, and bringing 5-year total to over $377 million.
  • Increased shareholder dividend for the 52nd consecutive year to an annual rate of $1.90 per share, an increase of 4.4%, continuing our long history of consecutive dividend increases and our 120th year of uninterrupted dividend payments.
  • Achieved an "A" certification grade under the MiQ Standard for Methane Emissions Performance, the highest available certification level, for 100% of the Company's natural gas production.
  • Continued to enhance sustainability disclosures with the publication of the inaugural Climate Report and the third annual Corporate Responsibility Report.

MANAGEMENT COMMENTS

David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “The fourth quarter was a terrific ending to a very strong fiscal year for National Fuel. Adjusted operating results for the quarter were up more than 25% compared to last year as a result of higher production at Seneca and the tailwind of improved natural gas prices.

“As we enter fiscal 2023, the outlook for National Fuel is excellent. Continued production growth at Seneca, combined with a strong outlook for natural gas prices, should translate to significant free cash flow, which will be used to deleverage the balance sheet, pursue future growth opportunities, and return capital to shareholders.”

RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

         
  Three Months Ended Fiscal Year Ended
   September 30,  September 30,
(in thousands except per share amounts)  2022   2021   2022   2021 
Reported GAAP Earnings $158,143  $86,962  $566,021  $363,647 
Items impacting comparability:        
Items impacting comparability from West Coast asset sale (E&P) (1)        41,589    
Tax impact of items impacting comparability from West Coast asset sale (1)        (10,533)   
Unrealized (gain) loss on derivative asset (E&P)  4,395      4,395    
Tax impact of unrealized (gain) loss on derivative asset  (1,203)     (1,203)   
Reversal of deferred tax valuation allowance  (24,850)     (24,850)   
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction  (28,406)     (28,406)   
Reduction of other post-retirement regulatory liability (Utility)        (18,533)   
Tax impact of reduction of other post-retirement regulatory liability        3,892    
Unrealized (gain) loss on other investments (Corporate / All Other)  1,532   395   11,625   (181)
Tax impact of unrealized (gain) loss on other investments  (322)  (83)  (2,441)  38 
Impairment of oil and gas properties (E&P)           76,152 
Tax impact of impairment of oil and gas properties           (20,980)
Gain on sale of timber properties (Corporate / All Other)           (51,066)
Tax impact of gain on sale of timber properties           14,069 
Premium paid on early redemption of debt           15,715 
Tax impact of premium paid on early redemption of debt          —                   —                   —                   (4,321)
Adjusted Operating Results $109,289  $87,274  $541,556  $393,073 
         
Reported GAAP Earnings Per Share $1.71  $0.95  $6.15  $3.97 
Items impacting comparability:        
Items impacting comparability from West Coast asset sale, net of tax (E&P) (1)        0.34    
Unrealized (gain) loss on derivative asset, net of tax (E&P)  0.03      0.03    
Reversal of deferred tax valuation allowance  (0.27)     (0.27)   
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction  (0.31)     (0.31)   
Reduction of other post-retirement regulatory liability, net of tax (Utility)        (0.16)   
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)  0.01      0.10    
Impairment of oil and gas properties, net of tax (E&P)           0.60 
Gain on sale of timber properties, net of tax (Corporate / All Other)           (0.40)
Premium paid on early redemption of debt, net of tax           0.12 
Rounding  0.02          
Adjusted Operating Results Per Share $1.19  $0.95  $5.88  $4.29 


(1) Refer to non-GAAP reconciliation on page 25 for a separate breakout of items impacting comparability from the West Coast asset sale.

FISCAL 2023 GUIDANCE UPDATE

National Fuel is revising its fiscal 2023 earnings guidance to reflect updated forecast assumptions and projections, including the impact of revised natural gas price expectations since the Company’s preliminary guidance was announced in August 2022. The Company is now projecting that earnings will be within the range of $6.40 to $6.90 per share, an increase of 13% from the Company’s 2022 adjusted operating results at the midpoint of the updated guidance range.

The Company is now assuming that NYMEX natural gas prices will average $6.00 per MMBtu for the first six months of fiscal 2023 (October-March) and $4.75 per MMBtu for the second half of fiscal 2023 (April-September). For guidance purposes, the Company’s updated natural gas price projections approximate the current NYMEX forward curve and consider the impact of local sales point differentials and new physical firm sales, transportation, and financial hedge contracts.

Consistent with preliminary guidance, the Exploration and Production segment’s fiscal 2023 net production guidance range of 370 to 390 Bcfe remains unchanged. Seneca currently has firm sales contracts in place for approximately 88% of its projected fiscal 2023 Appalachian production, limiting its exposure to in-basin markets. Approximately 67% of Seneca’s expected Appalachian production is either matched by a financial hedge, including a combination of swaps and no-cost collars, or were entered into at a fixed price.

The Company’s consolidated and individual segment capital expenditures guidance also remain unchanged from the preliminary guidance. Other guidance assumptions remain largely unchanged from the previous guidance. The details are outlined in the table on page 8.

DISCUSSION OF FOURTH QUARTER RESULTS BY SEGMENT

The following earnings discussion of each operating segment for the quarter ended September 30, 2022 is summarized in a tabular form on pages 9 and 10 of this report (earnings drivers for the fiscal year ended September 30, 2022 are summarized on pages 11 and 12). It may be helpful to refer to those tables while reviewing this discussion.

Note that management defines Adjusted Operating Results as reported GAAP earnings adjusted for items impacting comparability, and Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability.

Upstream Business

Exploration and Production Segment

The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC ("Seneca"). Seneca explores for, develops and produces primarily natural gas reserves in Pennsylvania.

 Three Months Ended
 September 30,
(in thousands) 2022   2021 Variance
GAAP Earnings$116,077  $55,703 $60,374 
Unrealized (gain) loss on derivative asset, net of tax 3,192     3,192 
Reversal of deferred tax valuation allowance (28,589)    (28,589)
Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction (16,152)    (16,152)
Adjusted Operating Results$74,528  $55,703 $18,825 
      
Adjusted EBITDA$166,238  $120,588 $45,650 

Seneca’s fourth quarter GAAP earnings, which increased $60.4 million versus the prior year, include the impact of several items noted in the table above. In particular, Seneca reversed a valuation allowance of $28.6 million on deferred tax assets related to certain state net operating loss and credit carryforwards as these deferred tax assets are now expected to be realized in the future. Seneca also recorded an income tax benefit of $16.2 million from the remeasurement of deferred state income taxes related to a prospective series of reductions in the Pennsylvania state corporate income tax rate that was signed into law in July 2022. In addition, during the fourth quarter, Seneca recognized an unrealized loss of $4.4 million ($3.2 million after-tax) due to a reduction in the implied fair value of an asset related to contingent consideration in connection with the June 2022 sale of Seneca's California assets.

Excluding these items noted above, Seneca’s earnings increased $18.8 million primarily due to higher realized natural gas prices and higher natural gas production, which were partially offset by the loss of earnings from Seneca's California assets that were sold in June, as well as higher Appalachian operating expenses, higher interest expense and a higher effective income tax rate.

Seneca produced 87.9 Bcfe during the fourth quarter, an increase of 8.3 Bcfe, or 10%, from the prior year. This is a result of an 11.6 Bcf increase in natural gas production primarily due to growth from Seneca's development program in Appalachia. Seneca's crude oil production decreased 545 MBbls versus the prior year due to Seneca's aforementioned sale of its California assets in June 2022.

Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.84 per Mcf, an increase of $0.47 per Mcf from the prior year. This increase was primarily due to higher NYMEX prices and higher spot prices at local sales points in Pennsylvania.

Lease operating and transportation ("LOE") expense was $0.71 per Mcfe, a decrease of $0.14 per Mcfe from the prior year. General and administrative expense was $0.18 per Mcfe, a decrease of $0.03 per Mcfe from the prior year. Depreciation, depletion and amortization ("DD&A") expense was $0.60 per Mcfe, an increase of $0.03 per Mcfe from the prior year.

On an absolute basis, LOE expense decreased $5.3 million primarily due to the impact of the third quarter sale of Seneca's California assets, partly offset by increases in LOE expense from higher transportation and gathering costs in Appalachia as a result of increased production, as well as higher workover and rental expenses in Appalachia. LOE expense includes $52.1 million in intercompany expense for gathering and compression services used to connect Seneca's Appalachian production to sales points along interstate pipelines. The decrease in Seneca's other operating expenses of $3.1 million was also primarily due to the impact of the third quarter sale of Seneca's California assets. DD&A expense increased $7.8 million due to higher natural gas production and a higher per unit DD&A rate, which was driven by an increase in capitalized costs in Seneca's full cost pool.

Interest expense increased $2.5 million due primarily to a higher weighted average interest rate on intercompany short-term borrowings. Excluding the impact of the elimination of the valuation allowance and remeasurement of deferred income taxes from the reduction in the state income tax rate in Pennsylvania, both of which are discussed above, Seneca's effective income tax rate increased. This increase was primarily driven by a reduction to the valuation allowance recorded in the fiscal 2021 fourth quarter.

Proved Reserves Year-End Update

Seneca’s total proved reserves at September 30, 2022 were 4,172 Bcfe, an increase of 319 Bcfe, or 8%, from September 30, 2021. Seneca sold 154 Bcfe of proved reserves (81% of which were oil reserves) with the sale of its California assets, which represented substantially all of Seneca's oil reserves. As a result of the sale, the proved reserves base is now comprised of approximately 100% natural gas. Seneca also sold another 21 Bcfe of proved reserves during fiscal 2022 related to the sale of certain gas assets in Tioga County, Pennsylvania. Seneca’s proved developed reserves at the end of fiscal 2022 were 3,314 Bcfe, representing 79% of total proved reserves, compared to 84% a year ago. In fiscal 2022, Seneca recorded 839 Bcfe of proved reserve extensions and discoveries, and 8 Bcfe of net positive revisions due primarily to certain price-related revisions, improvements in well performance and changes in development plans. Adjusting for sales, Seneca replaced 240% of its fiscal 2022 production.

Midstream Businesses

Pipeline and Storage Segment

The Pipeline and Storage segment’s operations are carried out by National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and Pennsylvania.

 Three Months Ended
 September 30,
(in thousands)2022 2021 Variance
GAAP Earnings$25,320 $21,482 $3,838
      
Adjusted EBITDA$59,819 $49,131 $10,688

The Pipeline and Storage segment’s fourth quarter GAAP earnings increased $3.8 million versus the prior year primarily due to an increase in operating revenues, partially offset by higher operation and maintenance ("O&M") expense, higher DD&A expense and a higher effective income tax rate. The increase in operating revenues of $12.7 million was primarily attributable to higher transportation revenues from Supply Corporation's FM100 Project, which was placed in service in December 2021. O&M expense increased $2.1 million primarily due to an increase in personnel costs and compressor station maintenance costs. The increase in DD&A expense of $1.7 million was primarily attributable to incremental depreciation expense from the FM100 Project. The increase in the Pipeline and Storage segment's effective income tax rate was primarily driven by a reduction in benefits associated with the tax sharing agreement with affiliated companies combined with higher state income taxes due to higher pre-tax earnings.

Gathering Segment

The Gathering segment’s operations are carried out by National Fuel Gas Midstream Company, LLC’s limited liability companies. The Gathering segment constructs, owns and operates natural gas gathering pipelines and compression facilities in the Appalachian region, which primarily delivers Seneca’s gross Appalachian production to the interstate pipeline system.

 Three Months Ended
 September 30,
(in thousands) 2022   2021 Variance
GAAP Earnings$31,224  $18,597 $12,627 
Reversal of deferred tax valuation allowance 3,739     3,739 
Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction (11,856)    (11,856)
Adjusted Operating Results$23,107  $18,597 $4,510 
      
Adjusted EBITDA$43,335  $37,858 $5,477 

The Gathering segment’s fourth quarter GAAP earnings increased $12.6 million versus the prior year. Earnings were positively impacted by an $11.9 million income tax benefit recorded due to the remeasurement of deferred income taxes related to the aforementioned reduction in the Pennsylvania corporate income tax rate. Earnings were also impacted by the Gathering segment's recognition of a $3.7 million increase in income tax expense that was recorded as an offset to the reversal of a valuation allowance described above in the Exploration and Production segment due to the Gathering and Exploration and Production segments' subsidiaries filing a combined state tax return. Excluding these items, the Gathering segment's earnings increased $4.5 million. The increase was primarily driven by higher operating revenues, which were partially offset by higher O&M expense. Operating revenues increased $6.7 million, or 14%, primarily driven by a 14.0 Bcf increase in gathered volumes due to an increase in natural gas production from both Seneca and non-affiliated parties. The increase in O&M expense of $1.3 million was primarily due to higher costs for materials and higher compression leasing expenses, which are both primarily attributable to higher throughput, as well as an increase in personnel costs.

Downstream Business

Utility Segment

The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania.

 Three Months Ended
 September 30,
(in thousands) 2022   2021  Variance
GAAP Earnings$(10,852) $(5,587) $(5,265)
      
Adjusted EBITDA$6,270  $11,093  $(4,823)

The Utility segment’s fourth quarter net loss was $5.3 million higher than the net loss in the prior-year fourth quarter primarily due to higher O&M and interest expense, partially offset by higher customer margin (operating revenues less purchased gas sold) and a decrease in non-service post-retirement benefit costs recorded in other income (deductions). The increase in O&M expense of $6.5 million was primarily attributable to higher personnel costs and higher pipeline integrity expenses. Interest expense increased $1.7 million due primarily to a higher weighted average interest rate on intercompany short-term borrowings. The increase in customer margin was due primarily to the positive impact of adjustments related to certain regulatory rate and cost recovery mechanisms subject to annual reconciliation, partially offset by a reduction in base rates in Pennsylvania as a result of a rate proceeding that concluded in the second quarter whereby the Utility agreed to lower the amount of other post-employment benefit (“OPEB”) expense it recovers in rates. With the elimination of OPEB expenses in rates, there was also a decrease in non-service post-retirement benefit costs recorded in other income (deductions).

Corporate and All Other

The Company’s operations that are included in Corporate and All Other generated a combined net loss of $3.6 million in the current year fourth quarter, which was $0.4 million higher than the combined net loss of $3.2 million in the prior-year fourth quarter. The increase in net loss was primarily driven by a higher amount of unrealized losses on investment securities recognized in the current quarter as compared to the prior-year fourth quarter.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, November 4, 2022, at 11 a.m. Eastern Time to discuss this announcement. To pre-register for this call (recommended), please visit https://www.netroadshow.com/events/login?show=d40ff074&confId=42546. After registering, you will receive your access details via email. To join by telephone on the day of the call, dial U.S. toll free 1-844–200–6205 and provide Access Code 879958. The teleconference will be simultaneously webcast online and can be accessed on the NFG Investor Relations website at investor.nationalfuelgas.com. An audio replay of the teleconference call will be available until Friday November 11, 2022. To access the telephone replay, dial U.S. toll free 866-813-9403 and provide Access Code 533110.

National Fuel is an integrated energy company reporting financial results for four operating segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility. Additional information about National Fuel is available at www.nationalfuelgas.com

 

Certain statements contained herein, including statements identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions, and statements which are other than statements of historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: changes in laws, regulations or judicial interpretations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, real property, and exploration and production activities such as hydraulic fracturing; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design, retained natural gas and system modernization), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; the Company’s ability to estimate accurately the time and resources necessary to meet emissions targets; governmental/regulatory actions and/or market pressures to reduce or eliminate reliance on natural gas; changes in economic conditions, including inflationary pressures, supply chain issues, liquidity challenges, and global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; changes in the price of natural gas; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; 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; impairments under the SEC’s full cost ceiling test for natural gas reserves; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; the Company's ability to complete planned strategic transactions; the Company's ability to successfully integrate acquired assets and achieve expected cost synergies; changes in price differentials between similar quantities of natural gas sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; the impact of information technology disruptions, cybersecurity or data security breaches; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; other changes in price differentials between similar quantities of natural gas having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; negotiations with the collective bargaining units representing the Company's workforce, including potential work stoppages during negotiations; uncertainty of gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas; changes in demographic patterns and weather conditions (including those related to climate change); changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

GUIDANCE SUMMARY

As discussed on page 2, the Company is revising its earnings guidance for fiscal 2023. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below.

While the Company expects to record certain adjustments to unrealized gain or loss on a derivative asset and unrealized gain or loss on investments during the fiscal year ending September 30, 2023, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.

 Preliminary FY 2023 Guidance Updated FY 2023 Guidance
Consolidated Earnings per Share, excluding items impacting comparability$7.25 to $7.75 $6.40 to $6.90
Consolidated Effective Tax Rate~ 25.5 - 26% ~ 25.5 - 26%
    
Capital Expenditures (Millions)   
Exploration and Production$525 - $575 $525 - $575
Pipeline and Storage$110 - $130 $110 - $130
Gathering$85 - $105 $85 - $105
Utility$110 - $130 $110 - $130
Consolidated Capital Expenditures$830 - $940 $830 - $940
    
Exploration & Production Segment Guidance   
    
Commodity Price Assumptions   
NYMEX natural gas price (Oct - Mar | Apr - Sep)$7.50 /MMBtu l $5.00 /MMBtu $6.00 /MMBtu l $4.75 /MMBtu
Appalachian basin spot price (Oct - Mar | Apr - Sep)$6.50 /MMBtu l $3.90 /MMBtu $4.95 /MMBtu l $3.55 /MMBtu
    
Production (Bcfe)370 to 390 370 to 390
    
E&P Operating Costs ($/Mcfe)   
LOE$0.67 - $0.69 $0.67 - $0.69
G&A$0.17 - $0.19 $0.17 - $0.19
DD&A$0.60 - $0.64 $0.60 - $0.64
    
Other Business Segment Guidance (Millions)   
Gathering Segment Revenues$235 - $250 $230 - $245
Pipeline and Storage Segment Revenues$360 - $380 $360 - $380


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED SEPTEMBER 30, 2022
(Unaudited)
            
 Upstream Midstream Downstream    
            
 Exploration & Pipeline &     Corporate /  
(Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated*
            
Fourth quarter 2021 GAAP earnings$55,703  $21,482  $18,597  $(5,587) $(3,233) $86,962 
Items impacting comparability:           
Unrealized (gain) loss on other investments         395   395 
Tax impact of unrealized (gain) loss on other investments         (83)  (83)
Fourth quarter 2021 adjusted operating results 55,703   21,482   18,597   (5,587)  (2,921)  87,274 
Drivers of adjusted operating results**           
Upstream Revenues           
Higher (lower) natural gas production 21,670           21,670 
Higher (lower) crude oil production         (25,805)                  (25,805)
Higher (lower) realized natural gas prices, after hedging 32,485           32,485 
Midstream Revenues           
Higher (lower) operating revenues   10,052   5,330       15,382 
Downstream Margins***           
Impact of usage and weather       507     507 
Impact of new rates       (465)    (465)
Regulatory revenue adjustments       1,108     1,108 
Operating Expenses           
Lower (higher) lease operating and transportation expenses 4,201           4,201 
Lower (higher) operating expenses 2,410   (1,694)  (1,003)  (4,960)  (762)  (6,009)
Lower (higher) property, franchise and other taxes 653           653 
Lower (higher) depreciation / depletion (6,180)  (1,309)        (7,489)
Other Income (Expense)           
(Higher) lower other deductions 1,093       939   (1,386)  646 
(Higher) lower interest expense (2,000)  (1,032)    (1,314)  1,934   (2,412)
Income Taxes           
Lower (higher) income tax expense / effective tax rate (10,151)  (1,844)  441   (669)  374   (11,849)
All other / rounding 449   (335)  (258)  (411)  (53)  (608)
Fourth quarter 2022 adjusted operating results 74,528   25,320   23,107   (10,852)  (2,814)  109,289 
Items impacting comparability:           
Unrealized gain (loss) on derivative asset (4,395)          (4,395)
Tax impact of unrealized gain (loss) on derivative asset 1,203           1,203 
Reversal of deferred tax valuation allowance 28,589     (3,739)      24,850 
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction 16,152     11,856     398   28,406 
Unrealized gain (loss) on other investments                 (1,532)          (1,532)
Tax impact of unrealized gain (loss) on other investments         322   322 
Fourth quarter 2022 GAAP earnings$116,077  $25,320  $31,224  $(10,852) $(3,626) $158,143 
            
* Amounts do not reflect intercompany eliminations.           
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED SEPTEMBER 30, 2022
(Unaudited)
            
 Upstream Midstream Downstream     
            
 Exploration & Pipeline &     Corporate /  
 Production Storage Gathering Utility All Other Consolidated*
            
Fourth quarter 2021 GAAP earnings per share$0.61  $0.23  $0.20  $(0.06) $(0.03) $0.95 
Items impacting comparability:           
Unrealized (gain) loss on other investments, net of tax                 —                   —         
Fourth quarter 2021 adjusted operating results per share 0.61   0.23   0.20   (0.06)  (0.03)  0.95 
Drivers of adjusted operating results**           
Upstream Revenues           
Higher (lower) natural gas production 0.24           0.24 
Higher (lower) crude oil production (0.28)          (0.28)
Higher (lower) realized natural gas prices, after hedging 0.35           0.35 
Midstream Revenues           
Higher (lower) operating revenues   0.11   0.06       0.17 
Downstream Margins***           
Impact of usage and weather       0.01     0.01 
Impact of new rates       (0.01)    (0.01)
Regulatory revenue adjustments       0.01     0.01 
Operating Expenses           
Lower (higher) lease operating and transportation expenses 0.05           0.05 
Lower (higher) operating expenses 0.03   (0.02)  (0.01)  (0.05)  (0.01)  (0.06)
Lower (higher) property, franchise and other taxes 0.01                   0.01 
Lower (higher) depreciation / depletion (0.07)  (0.01)                (0.08)
Other Income (Expense)           
(Higher) lower other deductions 0.01       0.01   (0.02)   
(Higher) lower interest expense (0.02)  (0.01)    (0.01)  0.02   (0.02)
Income Taxes           
Lower (higher) income tax expense / effective tax rate (0.11)  (0.02)     (0.01)     (0.14)
All other / rounding (0.01)  (0.01)     (0.01)  0.02   (0.01)
Fourth quarter 2022 adjusted operating results per share 0.81   0.27   0.25   (0.12)  (0.02)  1.19 
Items impacting comparability:           
Unrealized gain (loss) on derivative asset, net of tax (0.03)          (0.03)
Reversal of deferred tax valuation allowance 0.31     (0.04)      0.27 
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction 0.18     0.13        0.31 
Unrealized gain (loss) on other investments, net of tax                 (0.01)          (0.01)
Rounding (0.01)        (0.01)  (0.02)
Fourth quarter 2022 GAAP earnings per share$1.26  $0.27  $0.34  $(0.12) $(0.04) $1.71 
            
* Amounts do not reflect intercompany eliminations.           
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 2022
(Unaudited)
            
 Upstream Midstream Downstream    
            
 Exploration & Pipeline &     Corporate /  
(Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated*
Fiscal 2021 GAAP earnings$101,916  $92,542  $80,274  $54,335  $34,580  $363,647 
Items impacting comparability:           
Impairment of oil and gas properties 76,152           76,152 
Tax impact of impairment of oil and gas properties (20,980)          (20,980)
Gain on sale of timber properties         (51,066)  (51,066)
Tax impact of gain on sale of timber properties         14,069   14,069 
Premium paid on early redemption of debt 14,772     943       15,715 
Tax impact of premium paid on early redemption of debt (4,062)    (259)      (4,321)
Unrealized (gain) loss on other investments         (181)  (181)
Tax impact of unrealized (gain) loss on other investments         38   38 
Fiscal 2021 adjusted operating results 167,798   92,542   80,958   54,335   (2,560)  393,073 
Drivers of adjusted operating results**           
Upstream Revenues           
Higher (lower) natural gas production 51,264           51,264 
Higher (lower) crude oil production (28,169)          (28,169)
Higher (lower) realized natural gas prices, after hedging 126,330           126,330 
Higher (lower) realized crude oil prices, after hedging 18,071           18,071 
Higher (lower) other operating revenues 5,037           5,037 
Midstream Revenues           
Higher (lower) operating revenues   25,738   17,047       42,785 
Downstream Margins***           
Impact of usage and weather       2,887     2,887 
Impact of new rates       (5,596)    (5,596)
System modernization tracker revenues       3,585     3,585 
Higher (lower) energy marketing margins         1,287   1,287 
Operating Expenses           
Lower (higher) lease operating and transportation expenses (13,112)          (13,112)
Lower (higher) operating expenses (5,432)  (7,571)  (3,181)  (9,502)  995   (24,691)
Lower (higher) property, franchise and other taxes (2,484)  (800)        (3,284)
Lower (higher) depreciation / depletion (20,268)  (4,163)  (1,302)      (25,733)
Other Income (Expense)           
(Higher) lower other deductions 1,676       9,767   (3,262)  8,181 
(Higher) lower interest expense 1,176   (1,198)    (1,992)  2,030   16 
Income Taxes           
Lower (higher) income tax expense / effective tax rate (6,318)  (2,279)  (578)  574   (2,569)  (11,170)
All other / rounding 2   288   50   249   206   795 
Fiscal 2022 adjusted operating results 295,571   102,557   92,994   54,307   (3,873)  541,556 
Items impacting comparability:           
Reduction of other post-retirement regulatory liability       18,533     18,533 
Tax impact of reduction of other post-retirement regulatory liability       (3,892)    (3,892)
Gain on sale of West Coast assets 12,736           12,736 
Tax impact of gain on sale of West Coast assets (3,225)          (3,225)
Loss from discontinuance of crude oil cash flow hedges (44,632)          (44,632)
Tax impact of loss from discontinuance of crude oil cash flow hedges 11,303           11,303 
Transaction and severance costs related to West Coast asset sale (9,693)          (9,693)
Tax impact of transaction and severance costs related to West Cost asset sale 2,455           2,455 
Unrealized gain (loss) on derivative asset (4,395)          (4,395)
Tax impact of unrealized gain (loss) on derivative asset 1,203           1,203 
Reversal of deferred tax valuation allowance 28,589     (3,739)      24,850 
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction 16,152     11,856     398   28,406 
Unrealized gain (loss) on other investments         (11,625)  (11,625)
Tax impact of unrealized gain (loss) on other investments         2,441   2,441 
Fiscal 2022 GAAP earnings$306,064  $102,557  $101,111  $68,948  $(12,659) $566,021 
            
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
TWELVE MONTHS ENDED SEPTEMBER 30, 2022
(Unaudited)
            
 Upstream Midstream Downstream    
            
 Exploration & Pipeline &     Corporate /  
 Production Storage Gathering Utility All Other Consolidated*
Fiscal 2021 GAAP earnings per share$1.11  $1.01  $0.88  $0.59  $0.38  $3.97 
Items impacting comparability:           
Impairment of oil and gas properties, net of tax 0.60           0.60 
Gain on sale of timber properties, net of tax         (0.40)  (0.40)
Premium paid on early redemption of debt, net of tax 0.12            0.12 
Unrealized (gain) loss on other investments, net of tax             
Fiscal 2021 adjusted operating results per share 1.83   1.01   0.88   0.59   (0.02)  4.29 
Drivers of adjusted operating results**           
Upstream Revenues           
Higher (lower) natural gas production 0.56           0.56 
Higher (lower) crude oil production (0.31)          (0.31)
Higher (lower) realized natural gas prices, after hedging 1.37           1.37 
Higher (lower) realized crude oil prices, after hedging 0.20           0.20 
Higher (lower) other operating revenues 0.05           0.05 
Midstream Revenues           
Higher (lower) operating revenues   0.28   0.19       0.47 
Downstream Margins***           
Impact of usage and weather       0.03     0.03 
Impact of new rates       (0.06)    (0.06)
System modernization tracker revenues       0.04     0.04 
Higher (lower) energy marketing margins         0.01   0.01 
Operating Expenses           
Lower (higher) lease operating and transportation expenses (0.14)          (0.14)
Lower (higher) operating expenses (0.06)  (0.08)  (0.03)  (0.10)  0.01   (0.26)
Lower (higher) property, franchise and other taxes         (0.03)          (0.01)                (0.04)
Lower (higher) depreciation / depletion         (0.22)          (0.05)          (0.01)              (0.28)
Other Income (Expense)           
(Higher) lower other deductions 0.02       0.11   (0.04)  0.09 
(Higher) lower interest expense 0.01   (0.01)    (0.02)  0.02    
Income Taxes           
Lower (higher) income tax expense / effective tax rate (0.07)  (0.02)  (0.01)  0.01   (0.03)  (0.12)
All other / rounding    (0.01)  (0.01)  (0.01)  0.01   (0.02)
Fiscal 2022 adjusted operating results per share 3.21   1.11   1.01   0.59   (0.04)  5.88 
Items impacting comparability:           
Reduction of other post-retirement regulatory liability, net of tax       0.16     0.16 
Gain on sale of West Coast assets, net of tax 0.10           0.10 
Loss from discontinuance of crude oil cash flow hedges, net of tax (0.36)          (0.36)
Transaction and severance costs related to West Coast asset sale, net of tax (0.08)          (0.08)
Unrealized gain (loss) on derivative asset, net of tax (0.03)          (0.03)
Reversal of deferred tax valuation allowance 0.31     (0.04)      0.27 
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction 0.18     0.13        0.31 
Unrealized gain (loss) on other investments, net of tax         (0.10)  (0.10)
Rounding (0.01)        0.01    
Fiscal 2022 GAAP earnings per share$3.32  $1.11  $1.10  $0.75  $(0.13) $6.15 
            
* Amounts do not reflect intercompany eliminations.           
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.


         
         
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
         
(Thousands of Dollars, except per share amounts)        
 Three Months Ended Twelve Months Ended 
 September 30, September 30, 
 (Unaudited) (Unaudited) 
SUMMARY OF OPERATIONS 2022   2021   2022   2021  
Operating Revenues:        
Utility and Energy Marketing Revenues$112,252  $80,302  $897,916  $667,549  
Exploration and Production and Other Revenues 252,035   215,664   1,010,629   837,597  
Pipeline and Storage and Gathering Revenues 70,859   60,022   277,501   237,513  
  435,146   355,988   2,186,046   1,742,659  
Operating Expenses:        
Purchased Gas 22,925   (5,190)  392,093   171,827  
Operation and Maintenance:        
Utility and Energy Marketing 46,535   40,026   193,058   179,547  
Exploration and Production and Other 31,554   46,007   191,572   173,041  
Pipeline and Storage and Gathering 39,138   35,747   136,571   123,218  
Property, Franchise and Other Taxes 23,089   23,454   101,182   94,713  
Depreciation, Depletion and Amortization 94,109   83,671   369,790   335,303  
Impairment of Oil and Gas Producing Properties          76,152  
  257,350   223,715   1,384,266   1,153,801  
Gain on Sale of Assets       12,736   51,066  
Operating Income 177,796   132,273   814,516   639,924  
         
Other Expense:        
Other Income (Deductions)         (4,800)          (160)          (1,509)          (15,238) 
Interest Expense on Long-Term Debt         (30,207)          (30,161)          (120,507)          (141,457) 
Other Interest Expense         (3,289)          (270)          (9,850)          (4,900) 
         
Income Before Income Taxes 139,500   101,682   682,650   478,329  
         
Income Tax Expense (Benefit) (18,643)  14,720   116,629   114,682  
         
Net Income Available for Common Stock$158,143  $86,962  $566,021  $363,647  
         
Earnings Per Common Share        
Basic$1.73  $0.95  $6.19  $3.99  
Diluted$1.71  $0.95  $6.15  $3.97  
         
Weighted Average Common Shares:        
Used in Basic Calculation 91,476,535   91,181,292   91,410,625   91,130,941  
Used in Diluted Calculation 92,218,581   91,851,443   92,107,066   91,684,583  


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
  
 September 30, September 30,
(Thousands of Dollars) 2022   2021 
ASSETS   
Property, Plant and Equipment$12,551,909  $13,103,639 
Less - Accumulated Depreciation, Depletion and Amortization 5,985,432   6,719,356 
Net Property, Plant and Equipment 6,566,477   6,384,283 
Current Assets:   
Cash and Temporary Cash Investments 46,048   31,528 
Hedging Collateral Deposits 91,670   88,610 
Receivables - Net 361,626   205,294 
Unbilled Revenue 30,075   17,000 
Gas Stored Underground 32,364   33,669 
Materials, Supplies and Emission Allowances 40,637   53,560 
Unrecovered Purchased Gas Costs 99,342   33,128 
Other Current Assets 59,369   59,660 
Total Current Assets 761,131   522,449 
Other Assets:   
Recoverable Future Taxes 106,247   121,992 
Unamortized Debt Expense 8,884   10,589 
Other Regulatory Assets 67,101   60,145 
Deferred Charges 77,472   59,939 
Other Investments 95,025   149,632 
Goodwill 5,476   5,476 
Prepaid Pension and Post-Retirement Benefit Costs 196,597   149,151 
Fair Value of Derivative Financial Instruments 9,175    
Other 2,677   1,169 
Total Other Assets 568,654   558,093 
Total Assets$7,896,262  $7,464,825 
CAPITALIZATION AND LIABILITIES   
Capitalization:   
Comprehensive Shareholders' Equity   
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and   
Outstanding - 91,478,064 Shares and 91,181,549 Shares, Respectively$91,478  $91,182 
Paid in Capital 1,027,066   1,017,446 
Earnings Reinvested in the Business 1,587,085   1,191,175 
Accumulated Other Comprehensive Loss (625,733)  (513,597)
Total Comprehensive Shareholders' Equity 2,079,896   1,786,206 
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs 2,083,409   2,628,687 
Total Capitalization 4,163,305   4,414,893 
Current and Accrued Liabilities:   
Notes Payable to Banks and Commercial Paper 60,000   158,500 
Current Portion of Long-Term Debt 549,000    
Accounts Payable 178,945   171,655 
Amounts Payable to Customers 419   21 
Dividends Payable 43,452   41,487 
Interest Payable on Long-Term Debt 17,376   17,376 
Customer Advances 26,108   17,223 
Customer Security Deposits 24,283   19,292 
Other Accruals and Current Liabilities 257,327   194,169 
Fair Value of Derivative Financial Instruments 785,659   616,410 
Total Current and Accrued Liabilities 1,942,569   1,236,133 
Other Liabilities:   
Deferred Income Taxes 698,229   660,420 
Taxes Refundable to Customers 362,098   354,089 
Cost of Removal Regulatory Liability 259,947   245,636 
Other Regulatory Liabilities 188,803   200,643 
Pension and Other Post-Retirement Liabilities 3,065   7,526 
Asset Retirement Obligations 161,545   209,639 
Other Liabilities 116,701   135,846 
Total Other Liabilities 1,790,388   1,813,799 
Commitments and Contingencies     
Total Capitalization and Liabilities$7,896,262  $7,464,825 


     
     
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
  Twelve Months Ended
  September 30,
(Thousands of Dollars)  2022   2021 
     
Operating Activities:    
Net Income Available for Common Stock $566,021  $363,647 
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
    
Gain on Sale of Assets  (12,736)  (51,066)
Impairment of Oil and Gas Producing Properties     76,152 
Depreciation, Depletion and Amortization  369,790   335,303 
Deferred Income Taxes  104,415   105,993 
Premium Paid on Early Redemption of Debt     15,715 
Stock-Based Compensation  19,506   17,065 
Reduction of Other Post-Retirement Regulatory Liability  (18,533)   
Other  31,983   10,896 
Change in:    
Receivables and Unbilled Revenue  (168,769)  (61,413)
Gas Stored Underground and Materials, Supplies and Emission Allowances  3,109   (2,014)
Unrecovered Purchased Gas Costs          (66,214)          (33,128)
Other Current Assets  291   (11,972)
Accounts Payable  11,907   31,352 
Amounts Payable to Customers  398   (10,767)
Customer Advances  8,885   1,904 
Customer Security Deposits  4,991   2,093 
Other Accruals and Current Liabilities  34,260   34,314 
Other Assets  (58,924)  1,250 
Other Liabilities  (17,859)  (33,771)
Net Cash Provided by Operating Activities $812,521  $791,553 
     
Investing Activities:    
Capital Expenditures $(811,826) $(751,734)
Net Proceeds from Sale of Oil and Gas Producing Properties  254,439    
Net Proceeds from Sale of Timber Properties     104,582 
Sale of Fixed Income Mutual Fund Shares in Grantor Trust  30,000    
Other  8,683   13,935 
Net Cash Used in Investing Activities $(518,704) $(633,217)
     
Financing Activities:    
Changes in Notes Payable to Banks and Commercial Paper $(98,500) $128,500 
Reduction of Long-Term Debt     (515,715)
Dividends Paid on Common Stock  (168,147)  (163,089)
Net Proceeds From Issuance of Long-Term Debt     495,267 
Net Repurchases of Common Stock  (9,590)  (3,702)
Net Cash Used in Financing Activities $(276,237) $(58,739)
     
Net Increase in Cash, Cash Equivalents, and Restricted Cash  17,580   99,597 
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period  120,138   20,541 
Cash, Cash Equivalents, and Restricted Cash at September 30 $137,718  $120,138 


          
          
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
          
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
          
UPSTREAM BUSINESS
          
          
 Three Months Ended Twelve Months Ended
(Thousands of Dollars, except per share amounts)September 30, September 30,
EXPLORATION AND PRODUCTION SEGMENT2022 2021 Variance 2022 2021 Variance
Total Operating Revenues$252,035  $215,581  $36,454  $1,010,464 $836,697 $173,767 
Operating Expenses:         
Operation and Maintenance:         
General and Administrative Expense 15,664   16,957   (1,293)  79,061  67,973  11,088 
Lease Operating and Transportation Expense 62,701   68,019   (5,318)  283,914  267,316  16,598 
All Other Operation and Maintenance Expense 1,957   3,715   (1,758)  20,140  14,659  5,481 
Property, Franchise and Other Taxes 5,475   6,302   (827)  25,364  22,220  3,144 
Depreciation, Depletion and Amortization 52,958   45,135   7,823   208,148  182,492  25,656 
Impairment of Oil and Gas Producing Properties            76,152  (76,152)
  138,755   140,128   (1,373)  616,627  630,812  (14,185)
Gain on Sale of Assets          12,736    12,736 
Operating Income 113,280   75,453   37,827   406,573  205,885  200,688 
          
Other Income (Expense):         
Non-Service Pension and Post-Retirement Benefit Costs (186)  (289)  103   (744) (1,148) 404 
Interest and Other Income (3,080)  35   (3,115)  (2,466) 211  (2,677)
Interest Expense on Long-Term Debt            (15,119) 15,119 
Interest Expense (14,474)  (11,942)  (2,532)  (53,401) (54,543) 1,142 
Income Before Income Taxes 95,540   63,257   32,283   349,962  135,286  214,676 
Income Tax Expense (Benefit) (20,537)  7,554   (28,091)  43,898  33,370  10,528 
Net Income$116,077  $55,703  $60,374  $306,064 $101,916 $204,148 
Net Income Per Share (Diluted)$1.26  $0.61  $0.65  $3.32 $1.11 $2.21 
          


          
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
          
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
          
MIDSTREAM BUSINESSES
          
 Three Months Ended Twelve Months Ended
(Thousands of Dollars, except per share amounts)September 30, September 30,
PIPELINE AND STORAGE SEGMENT 2022   2021  Variance  2022  2021  Variance
Revenues from External Customers$68,836  $58,515  $10,321  $265,415 $234,397 $31,018 
Intersegment Revenues 28,913   26,510   2,403   111,629  109,160  2,469 
Total Operating Revenues 97,749   85,025   12,724   377,044  343,557  33,487 
Operating Expenses:         
Purchased Gas 592   764   (172)  1,890  983  907 
Operation and Maintenance 28,868   26,724   2,144   100,117  90,533  9,584 
Property, Franchise and Other Taxes 8,470   8,406   64   34,133  33,120  1,013 
Depreciation, Depletion and Amortization 17,283   15,626   1,657   67,701  62,431  5,270 
  55,213   51,520   3,693   203,841  187,067  16,774 
          
Operating Income 42,536   33,505   9,031   173,203  156,490  16,713 
          
Other Income (Expense):         
Non-Service Pension and Post-Retirement Benefit Credit 767   125   642   3,069  501  2,568 
Interest and Other Income 1,490   2,180   (690)  3,820  5,339  (1,519)
Interest Expense (10,929)  (9,623)  (1,306)  (42,492) (40,976) (1,516)
Income Before Income Taxes 33,864   26,187   7,677   137,600  121,354  16,246 
Income Tax Expense 8,544   4,705   3,839   35,043  28,812  6,231 
Net Income$25,320  $21,482  $3,838  $102,557 $92,542 $10,015 
Net Income Per Share (Diluted)$0.27  $0.23  $0.04  $1.11 $1.01 $0.10 
          
          
 Three Months Ended Twelve Months Ended
 September 30, September 30,
GATHERING SEGMENT 2022   2021  Variance  2022  2021 Variance
Revenues from External Customers$2,023  $1,507  $516  $12,086 $3,116 $8,970 
Intersegment Revenues 52,061   45,830   6,231   202,757  190,148  12,609 
Total Operating Revenues 54,084   47,337   6,747   214,843  193,264  21,579 
Operating Expenses:         
Operation and Maintenance 10,725   9,456   1,269   38,234  34,207  4,027 
Property, Franchise and Other Taxes 24   23   1   37  52  (15)
Depreciation, Depletion and Amortization 8,656   8,219   437   33,998  32,350  1,648 
  19,405   17,698   1,707   72,269  66,609  5,660 
          
Operating Income 34,679   29,639   5,040   142,574  126,655  15,919 
          
Other Income (Expense):         
Non-Service Pension and Post-Retirement Benefit Costs (56)  (68)  12   (224) (271) 47 
Interest and Other Income 117   6   111   198  259  (61)
Interest Expense on Long-Term Debt            (965) 965 
Interest Expense (4,105)  (4,093)  (12)  (16,488) (16,528) 40 
Income Before Income Taxes 30,635   25,484   5,151   126,060  109,150  16,910 
Income Tax Expense (Benefit) (589)  6,887   (7,476)  24,949  28,876  (3,927)
Net Income$31,224  $18,597  $12,627  $101,111 $80,274 $20,837 
Net Income Per Share (Diluted)$0.34  $0.20  $0.14  $1.10 $0.88 $0.22 
          


          
          
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
          
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
          
DOWNSTREAM BUSINESS
          
          
 Three Months Ended Twelve Months Ended
(Thousands of Dollars, except per share amounts)September 30, September 30,
UTILITY SEGMENT 2022   2021  Variance  2022  2021 Variance
Revenues from External Customers$112,252  $80,302  $31,950  $897,916 $666,920 $230,996 
Intersegment Revenues 60   60      305  331  (26)
Total Operating Revenues 112,312   80,362   31,950   898,221  667,251  230,970 
Operating Expenses:         
Purchased Gas 49,692   19,826   29,866   497,959  274,837  223,122 
Operation and Maintenance 47,369   40,855   6,514   196,254  182,266  13,988 
Property, Franchise and Other Taxes 8,981   8,588   393   41,137  38,769  2,368 
Depreciation, Depletion and Amortization 15,167   14,646   521   59,760  57,457  2,303 
  121,209   83,915   37,294   795,110  553,329  241,781 
          
Operating Income (Loss) (8,897)  (3,553)  (5,344)  103,111  113,922  (10,811)
          
Other Income (Expense):         
Non-Service Pension and Post-Retirement Benefit (Costs) Credit         (492)          (1,985)  1,493   5,526          (26,659)         32,185         
Interest and Other Income 429   733   (304)  1,591  2,874  (1,283)
Interest Expense (7,000)  (5,337)  (1,663)  (24,115) (21,795) (2,320)
Income (Loss) Before Income Taxes (15,960)  (10,142)  (5,818)  86,113  68,342  17,771 
Income Tax Expense (Benefit) (5,108)  (4,555)  (553)  17,165  14,007  3,158 
Net Income (Loss)$(10,852) $(5,587) $(5,265) $68,948 $54,335 $14,613 
Net Income (Loss) Per Share (Diluted)$(0.12) $(0.06) $(0.06) $0.75 $0.59 $0.16 
          


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
          
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
          
 Three Months Ended Twelve Months Ended
(Thousands of Dollars, except per share amounts)September 30, September 30,
ALL OTHER 2022   2021  Variance  2022  2021 Variance
Revenues from External Customers$  $  $  $ $1,173 $(1,173)
Intersegment Revenues    26   (26)  6  49  (43)
Total Operating Revenues    26   (26)  6  1,222  (1,216)
Operating Expenses:         
Purchased Gas    9   (9)  6  2,306  (2,300)
Operation and Maintenance    (20)  20   5  682  (677)
Property, Franchise and Other Taxes            47  (47)
Depreciation, Depletion and Amortization            394  (394)
     (11)  11   11  3,429  (3,418)
Gain on Sale of Assets            51,066  (51,066)
Operating Income (Loss)    37   (37)  (5) 48,859  (48,864)
Other Income (Expense):         
Non-Service Pension and Post-Retirement Benefit Costs            (7) 7 
Interest and Other Income 1   2   (1)  3  231  (228)
Interest Expense (4)     (4)  (4)   (4)
Income (Loss) before Income Taxes (3)  39   (42)  (6) 49,083  (49,089)
Income Tax Expense (Benefit) (1)  10   (11)  3  11,438  (11,435)
Net Income (Loss)$(2) $29  $(31) $(9)$37,645 $(37,654)
Net Income (Loss) Per Share (Diluted)$  $  $  $ $0.41 $(0.41)
      
 Three Months Ended Twelve Months Ended
 September 30, September 30,
CORPORATE 2022   2021  Variance  2022  2021 Variance
Revenues from External Customers$  $83  $(83) $165 $356 $(191)
Intersegment Revenues 1,183   1,146   37   4,430  3,864  566 
Total Operating Revenues 1,183   1,229   (46)  4,595  4,220  375 
Operating Expenses:         
Operation and Maintenance 4,801   3,857   944   14,841  15,423  (582)
Property, Franchise and Other Taxes 139   135   4   511  505  6 
Depreciation, Depletion and Amortization 45   45      183  179  4 
  4,985   4,037   948   15,535  16,107  (572)
          
Operating Loss (3,802)  (2,808)  (994)  (10,940) (11,887) 947 
Other Income (Expense):         
Non-Service Pension and Post-Retirement Benefit Costs (1,017)  (923)  (94)  (4,069) (3,692) (377)
Interest and Other Income 33,712   31,154   2,558   126,648  138,882  (12,234)
Interest Expense on Long-Term Debt (30,207)  (30,161)  (46)  (120,507) (125,373) 4,866 
Other Interest Expense (3,262)  (405)  (2,857)  (8,211) (2,816) (5,395)
Loss before Income Taxes (4,576)  (3,143)  (1,433)  (17,079) (4,886) (12,193)
Income Tax Expense (Benefit) (952)  119   (1,071)  (4,429) (1,821) (2,608)
Net Loss$(3,624) $(3,262) $(362) $(12,650)$(3,065)$(9,585)
Net Loss Per Share (Diluted)$(0.04) $(0.03) $(0.01) $(0.13)$(0.03)$(0.10)
          
          
 Three Months Ended Twelve Months Ended
 September 30, September 30,
INTERSEGMENT ELIMINATIONS 2022   2021  Variance  2022  2021 Variance
Intersegment Revenues$        (82,217) $        (73,572) $        (8,645) $        (319,127)$        (303,552)$        (15,575)
Operating Expenses:         
Purchased Gas         (27,359)          (25,789)          (1,570)          (107,762)         (106,299)         (1,463)
Operation and Maintenance         (54,858)          (47,783)          (7,075)          (211,365)         (197,253)         (14,112)
          (82,217)          (73,572)          (8,645)          (319,127)         (303,552)         (15,575)
Operating Income         —                   —                   —                   —                  —                  —         
Other Income (Expense):         
Interest and Other Deductions         (36,485)          (31,130)          (5,355)          (134,861)         (131,758)         (3,103)
Interest Expense 36,485   31,130   5,355   134,861  131,758  3,103 
Net Income$  $  $  $ $ $ 
Net Income Per Share (Diluted)$  $  $  $ $ $ 


            
            
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
            
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
            
            
 Three Months Ended Twelve Months Ended
 September 30, September 30,
 (Unaudited) (Unaudited)
     Increase     Increase
  2022  2021 (Decrease)  2022  2021 (Decrease)
            
Capital Expenditures:           
Exploration and Production$160,056(1)$117,646(2)$42,410  $565,791(1)(2)$381,408(2)(3)$184,383 
Pipeline and Storage 37,563(1) 96,760(2) (59,197)  95,806(1)(2) 252,316(2)(3) (156,510)
Gathering 26,957(1) 9,041(2) 17,916   55,546(1)(2) 34,669(2)(3) 20,877 
Utility 40,061(1) 34,154(2) 5,907   111,033(1)(2) 100,845(2)(3) 10,188 
Total Reportable Segments 264,637  257,601  7,036   828,176  769,238  58,938 
All Other             
Corporate 549  231  318   1,212  450  762 
Eliminations   2,341  (2,341)    223  (223)
Total Capital Expenditures$265,186 $260,173 $5,013  $829,388 $769,911 $59,477 


(1) Capital expenditures for the quarter and year ended September 30, 2022, include accounts payable and accrued liabilities related to capital expenditures of $83.0 million, $15.2 million, $10.7 million, and $11.4 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at September 30, 2022, since they represent non-cash investing activities at that date.
   
(2) Capital expenditures for the year ended September 30, 2022, exclude capital expenditures of $47.9 million, $39.4 million, $4.8 million and $10.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2021 and paid during the year ended September 30, 2022. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2021, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2022.
   
(3) Capital expenditures for the year ended September 30, 2021, exclude capital expenditures of $45.8 million, $17.3 million, $13.5 million and $10.7 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2020 and paid during the year ended September 30, 2021. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2020, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2021.

   

          
DEGREE DAYS         
       Percent Colder
       (Warmer) Than:
Three Months Ended September 30,Normal 2022 2021 Normal (1) Last Year (1)
Buffalo, NY162 107 38         (34.0) 181.6
Erie, PA124 94 33         (24.2) 184.8
          
Twelve Months Ended September 30,         
Buffalo, NY6,617 5,769 5,731         (12.8) 0.7
Erie, PA6,147 5,368 5,221         (12.7) 2.8
          


(1) Percents compare actual 2022 degree days to normal degree days and actual 2022 degree days to actual 2021 degree days.

   

             
             
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
             
EXPLORATION AND PRODUCTION INFORMATION
             
             
  Three Months Ended Twelve Months Ended
  September 30, September 30,
      Increase     Increase
   2022  2021 (Decrease)  2022  2021 (Decrease)
             
Gas Production/Prices:            
Production (MMcf)            
Appalachia  87,858  75,871  11,987   341,700  312,300  29,400 
West Coast  1  420  (419)  1,211  1,720  (509)
Total Production  87,859  76,291  11,568   342,911  314,020  28,891 
             
Average Prices (Per Mcf)            
Appalachia $6.16 $3.14 $3.02  $5.03 $2.46 $2.57 
West Coast N/M  7.93 N/M   10.03  6.34  3.69 
Weighted Average  6.16  3.16  3.00   5.05  2.49  2.56 
Weighted Average after Hedging  2.84  2.37  0.47   2.71  2.25  0.46 
             
Oil Production/Prices:            
Production (Thousands of Barrels)            
Appalachia  7  1  6   16  2  14 
West Coast    551  (551)  1,588  2,233  (645)
Total Production  7  552  (545)  1,604  2,235  (631)
             
Average Prices (Per Barrel)            
Appalachia $90.22 $66.34 $23.88  $97.82 $48.02 $49.80 
West Coast N/M  71.46 N/M   94.06  60.50  33.56 
Weighted Average  90.93  71.45  19.48   94.10  60.49  33.61 
Weighted Average after Hedging (1)  90.86  60.04  30.82   70.80  56.54  14.26 
             
Total Production (MMcfe)  87,901  79,603  8,298   352,535  327,430  25,105 
             
Selected Operating Performance Statistics:            
General & Administrative Expense per Mcfe (2) $0.18 $0.21 $(0.03) $0.20 $0.21 $(0.01)
Lease Operating and Transportation Expense per Mcfe (2)(3) $0.71 $0.85 $(0.14) $0.81 $0.82 $(0.01)
Depreciation, Depletion & Amortization per Mcfe (2) $0.60 $0.57 $0.03  $0.59 $0.56 $0.03 
             

N/M Not Meaningful (as a result of the sale of Seneca's West Coast assets in June 2022)        

(1) Weighted average oil price after hedging for the twelve months ended September 30, 2022 excludes a loss on discontinuance of crude oil cash flow hedges of $44,632.
   
(2) Refer to page 16 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. General and Administrative Expense per Mcfe for the twelve months ended September 30, 2022 excludes transaction and severance costs related to the California asset sale.
   
(3) Amounts include transportation expense of $0.58 and $0.55 per Mcfe for the three months ended September 30, 2022 and September 30, 2021, respectively. Amounts include transportation expense of $0.57 and $0.57 per Mcfe for the twelve months ended September 30, 2022 and September 30, 2021, respectively.
   

   

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
       
EXPLORATION AND PRODUCTION INFORMATION
 
Hedging Summary for Fiscal 2023 Volume  Average Hedge Price
Gas Swaps      
NYMEX        116,200,000       MMBTU $2.79 / MMBTU
No Cost Collars         70,400,000        MMBTU $3.11 / MMBTU (Floor) / $3.64 / MMBTU (Ceiling)
Fixed Price Physical Sales         73,283,422        MMBTU $2.44 / MMBTU
Total      259,883,422         MMBTU   
Hedging Summary for Fiscal 2024 Volume  Average Hedge Price
Gas Swaps      
NYMEX         67,680,000        MMBTU $2.98 / MMBTU
No Cost Collars         59,200,000        MMBTU $3.20 / MMBTU (Floor) / $3.78 / MMBTU (Ceiling)
Fixed Price Physical Sales         66,115,483        MMBTU $2.39 / MMBTU
Total       192,995,483        MMBTU   
Hedging Summary for Fiscal 2025 Volume  Average Hedge Price
Gas Swaps      
NYMEX         27,560,000        MMBTU $3.07 / MMBTU
No Cost Collars         43,960,000        MMBTU $3.49 / MMBTU (Floor) / $4.65 / MMBTU (Ceiling)
Fixed Price Physical Sales         64,600,416        MMBTU $2.43 / MMBTU
Total       136,120,416        MMBTU   
Hedging Summary for Fiscal 2026 Volume  Average Hedge Price
Gas Swaps      
NYMEX         2,020,000        MMBTU $3.09 / MMBTU
No Cost Collars       42,720,000        MMBTU $3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)
Fixed Price Physical Sales       62,983,519        MMBTU $2.37 / MMBTU
Total     107,723,519        MMBTU   
Hedging Summary for Fiscal 2027 Volume  Average Hedge Price
No Cost Collars         3,560,000        MMBTU $3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)
Fixed Price Physical Sales        46,003,865        MMBTU $2.39 / MMBTU
Total         49,563,865       MMBTU   
Hedging Summary for Fiscal 2028 Volume  Average Hedge Price
Fixed Price Physical Sales         11,850,451       MMBTU $2.48 / MMBTU
Hedging Summary for Fiscal 2029 Volume  Average Hedge Price
Fixed Price Physical Sales              766,673       MMBTU $2.54 / MMBTU


     
     
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
     
EXPLORATION AND PRODUCTION INFORMATION
     
Reserve Quantity Information
(Unaudited)
     
     
  Gas MMcf
  U.S.
  AppalachianWest CoastTotal
  RegionRegionCompany
Proved Developed and Undeveloped Reserves:    
September 30, 2021 3,693,148 30,285 3,723,433 
Extensions and Discoveries 837,510  837,510 
Revisions of Previous Estimates 2,882 71 2,953 
Production (341,700)(1,211)(342,911)
Sales of Minerals in Place (21,178)(29,145)(50,323)
September 30, 2022 4,170,662  4,170,662 
     
Proved Developed Reserves:    
September 30, 2021 3,061,178 30,285 3,091,463 
September 30, 2022 3,312,568  3,312,568 
     
     
  Oil Mbbl
  U.S.
  AppalachianWest CoastTotal
  RegionRegionCompany
Proved Developed and Undeveloped Reserves:    
September 30, 2021 11 21,526 21,537 
Extensions and Discoveries  296 296 
Revisions of Previous Estimates 255 532 787 
Production (16)(1,588)(1,604)
Sales of Minerals in Place  (20,766)(20,766)
September 30, 2022 250  250 
     
Proved Developed Reserves:    
September 30, 2021 11 20,932 20,943 
September 30, 2022 250  250 
     


             
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
             
             
             
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)    
             
  Three Months Ended Twelve Months Ended
  September 30, September 30,
      Increase     Increase
  2022 2021 (Decrease) 2022 2021 (Decrease)
Firm Transportation - Affiliated 16,943 14,916 2,027  111,157 107,206 3,951 
Firm Transportation - Non-Affiliated 171,983 168,619 3,364  679,260 663,078 16,182 
Interruptible Transportation 3,886 256 3,630  5,612 1,460 4,152 
  192,812 183,791 9,021  796,029 771,744 24,285 
             
Gathering Volume - (MMcf)            
  Three Months Ended Twelve Months Ended
  September 30, September 30,
      Increase     Increase
  2022 2021 (Decrease) 2022 2021 (Decrease)
Gathered Volume 104,707 90,750 13,957  419,332 366,033 53,299 
             
             
Utility Throughput - (MMcf)            
  Three Months Ended Twelve Months Ended
  September 30, September 30,
      Increase     Increase
  2022 2021 (Decrease) 2022 2021 (Decrease)
Retail Sales:            
Residential Sales 4,146 3,797 349  64,011 61,038 2,973 
Commercial Sales 644 535 109  9,621 8,741 880 
Industrial Sales 75 33 42  541 475 66 
  4,865 4,365 500  74,173 70,254 3,919 
Transportation 9,720 10,197 (477) 65,993 66,012 (19)
  14,585 14,562 23  140,166 136,266 3,900 
             



NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES

In addition to financial measures calculated in accordance with generally accepted accounting principles (GAAP), this press release contains information regarding Adjusted Operating Results, Adjusted EBITDA and free cash flow, which are non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company's ongoing operating results or liquidity and for comparing the Company’s financial performance to other companies. The Company's management uses these non-GAAP financial measures for the same purpose, and for planning and forecasting purposes. The presentation of non-GAAP financial measures is not meant to be a substitute for financial measures in accordance with GAAP.

Management defines Adjusted Operating Results as reported GAAP earnings before items impacting comparability. The following table reconciles National Fuel's reported GAAP earnings to Adjusted Operating Results for the three and twelve months ended September 30, 2022 and 2021:

  Three Months Ended Twelve Months Ended
  September 30, September 30,
(in thousands except per share amounts)  2022   2021   2022   2021 
Reported GAAP Earnings $158,143  $86,962  $566,021  $363,647 
Items impacting comparability:        
Items related to West Coast asset sale:        
Gain on sale of West Coast assets (E&P)        (12,736)   
Tax impact of gain on sale of West Coast assets        3,225    
Loss from discontinuance of crude oil cash flow hedges (E&P)        44,632    
Tax impact of loss from discontinuance of crude oil cash flow hedges        (11,303)   
Transaction and severance costs (E&P)        9,693    
Tax impact of transaction and severance costs        (2,455)   
Total items impacting comparability related to West Coast asset sale        31,056    
         
Unrealized (gain) loss on derivative asset (E&P)  4,395      4,395    
Tax impact of unrealized (gain) loss on derivative asset  (1,203)     (1,203)   
Reversal of deferred tax valuation allowance  (24,850)     (24,850)   
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction  (28,406)     (28,406)   
Reduction of other post-retirement regulatory liability (Utility)        (18,533)   
Tax impact of reduction of other post-retirement regulatory liability        3,892    
Unrealized (gain) loss on other investments (Corporate / All Other)  1,532   395   11,625   (181)
Tax impact of unrealized (gain) loss on other investments  (322)  (83)  (2,441)  38 
Impairment of oil and gas properties (E&P)           76,152 
Tax impact of impairment of oil and gas properties           (20,980)
Gain on sale of timber properties (Corporate / All Other)           (51,066)
Tax impact of gain on sale of timber properties           14,069 
Premium paid on early redemption of debt           15,715 
Tax impact of premium paid on early redemption of debt           (4,321)
Adjusted Operating Results $109,289  $87,274  $541,556  $393,073 
         
Reported GAAP Earnings Per Share $1.71  $0.95  $6.15  $3.97 
Items impacting comparability:        
Items related to West Coast asset sale:        
Gain on sale of West Coast assets, net of tax (E&P)        (0.10)   
Loss from discontinuance of crude oil cash flow hedges, net of tax (E&P)        0.36    
Transaction and severance costs, net of tax (E&P)        0.08    
Total items impacting comparability related to West Coast asset sale        0.34    
         
Unrealized (gain) loss on derivative asset, net of tax (E&P)  0.03      0.03    
Reversal of deferred tax valuation allowance  (0.27)     (0.27)   
Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction  (0.31)     (0.31)   
Reduction of other post-retirement regulatory liability, net of tax (Utility)        (0.16)   
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)  0.01      0.10    
Impairment of oil and gas properties, net of tax (E&P)           0.60 
Gain on sale of timber properties, net of tax (Corporate / All Other)           (0.40)
Premium paid on early redemption of debt, net of tax           0.12 
Rounding  0.02          
Adjusted Operating Results Per Share $1.19  $0.95  $5.88  $4.29 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES (Continued)

Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and twelve months ended September 30, 2022 and 2021:

  Three Months Ended Twelve Months Ended
  September 30, September 30,
(in thousands)  2022   2021   2022   2021 
Reported GAAP Earnings $158,143  $86,962  $566,021  $363,647 
Depreciation, Depletion and Amortization  94,109   83,671   369,790   335,303 
Other (Income) Deductions  4,800   160   1,509   15,238 
Interest Expense  33,496   30,431   130,357   146,357 
Income Taxes  (18,643)  14,720   116,629   114,682 
Impairment of Oil and Gas Producing Properties           76,152 
Gain on Sale of Assets        (12,736)  (51,066)
Loss from Discontinuance of Crude Oil Cash Flow Hedges (E&P)        44,632    
Transaction and Severance Costs related to West Coast Asset Sale (E&P)        9,693    
Adjusted EBITDA $271,905  $215,944  $1,225,895  $1,000,313 
         
Adjusted EBITDA by Segment        
Pipeline and Storage Adjusted EBITDA $59,819  $49,131  $240,904  $218,921 
Gathering Adjusted EBITDA  43,335   37,858   176,572   159,005 
Total Midstream Businesses Adjusted EBITDA  103,154   86,989   417,476   377,926 
Exploration and Production Adjusted EBITDA  166,238   120,588   656,310   464,529 
Utility Adjusted EBITDA  6,270   11,093   162,871   171,379 
Corporate and All Other Adjusted EBITDA  (3,757)  (2,726)  (10,762)  (13,521)
Total Adjusted EBITDA $271,905  $215,944  $1,225,895  $1,000,313 
 

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
SEGMENT ADJUSTED EBITDA

  Three Months Ended Twelve Months Ended
  September 30, September 30,
(in thousands)  2022   2021   2022   2021 
Exploration and Production Segment        
Reported GAAP Earnings $116,077  $55,703  $306,064  $101,916 
Depreciation, Depletion and Amortization  52,958   45,135   208,148   182,492 
Other (Income) Deductions  3,266   254   3,210   937 
Interest Expense  14,474   11,942   53,401   69,662 
Income Taxes  (20,537)  7,554   43,898   33,370 
Impairment of Oil and Gas Producing Properties           76,152 
Gain on Sale of West Coast Assets        (12,736)   
Loss from Discontinuance of Crude Oil Cash Flow Hedges        44,632    
Transaction and Severance Costs related to West Coast Asset Sale        9,693    
Adjusted EBITDA $166,238  $120,588  $656,310  $464,529 
         
Pipeline and Storage Segment        
Reported GAAP Earnings $25,320  $21,482  $102,557  $92,542 
Depreciation, Depletion and Amortization  17,283   15,626   67,701   62,431 
Other (Income) Deductions  (2,257)  (2,305)  (6,889)  (5,840)
Interest Expense  10,929   9,623   42,492   40,976 
Income Taxes  8,544   4,705   35,043   28,812 
Adjusted EBITDA $59,819  $49,131  $240,904  $218,921 
         
Gathering Segment        
Reported GAAP Earnings $31,224  $18,597  $101,111  $80,274 
Depreciation, Depletion and Amortization  8,656   8,219   33,998   32,350 
Other (Income) Deductions  (61)  62   26   12 
Interest Expense  4,105   4,093   16,488   17,493 
Income Taxes  (589)  6,887   24,949   28,876 
Adjusted EBITDA $43,335  $37,858  $176,572  $159,005 
         
Utility Segment        
Reported GAAP Earnings $(10,852) $(5,587) $68,948  $54,335 
Depreciation, Depletion and Amortization  15,167   14,646   59,760   57,457 
Other (Income) Deductions  63   1,252   (7,117)  23,785 
Interest Expense  7,000   5,337   24,115   21,795 
Income Taxes  (5,108)  (4,555)  17,165   14,007 
Adjusted EBITDA $6,270  $11,093  $162,871  $171,379 
         
Corporate and All Other        
Reported GAAP Earnings $(3,626) $(3,233) $(12,659) $34,580 
Depreciation, Depletion and Amortization  45   45   183   573 
Other (Income) Deductions  3,789   897   12,279   (3,656)
Interest Expense  (3,012)  (564)  (6,139)  (3,569)
Income Taxes  (953)  129   (4,426)  9,617 
Gain on Sale of Timber Properties           (51,066)
Adjusted EBITDA $(3,757) $(2,726) $(10,762) $(13,521)

Management defines free cash flow as funds from operations (net cash provided by operating activities less changes in working capital) less capital expenditures. The Company is unable to provide a reconciliation of projected free cash flow as described in this release to its comparable financial measure calculated in accordance with GAAP without unreasonable efforts. This is due to our inability to calculate the comparable GAAP projected metrics, including operating income and total production costs, given the unknown effect, timing, and potential significance of certain income statement items.


View source version on GlobeNewswire.com