National Fuel Gas Company ("National Fuel" or the "Company") NFG today announced consolidated earnings for the second quarter of its 2015 fiscal year and for the six months ended March 31, 2015, of $16.7 million, or $0.20 per share, and $101.4 million, or $1.19 per share, respectively.
HIGHLIGHTS
- Earnings for the current quarter and six months ended March 31, 2015 were reduced by a $69.5 million non-cash charge to writedown the value of Seneca Resources Corporation's ("Seneca") oil and natural gas reserves.
- Excluding Seneca's writedown and other items impacting comparability, consolidated earnings before items impacting comparability ("Operating Results") for the second quarter were $86.1 million, or $1.02 per share, compared to $97.0 million, or $1.15 per share, in the prior year's second quarter. Operating Results for the six months ended March 31, 2015, of $170.9 million, or $2.01 per share, compared to $180.1 million, or $2.13 per share, in the prior year's six-month period. Operating Results in the Company's regulated Pipeline & Storage and Utility segments increased for both the quarter and six-month period, however, this was more than offset by a decrease in the Exploration & Production segment mainly due to lower realized average commodity prices.
- In the Company's Midstream businesses (which consist of the Company's Pipeline and Storage and Gathering segments), Adjusted EBITDA for the quarter and six months ended March 31, 2015, was up $4.7 million or 7% and $14.9 million or 12%, respectively.
- Seneca's second quarter production of natural gas and crude oil was 35.7 billion cubic feet equivalent ("Bcfe"), compared to 36.9 Bcfe for the prior year's second quarter. Absent an estimated 13.5 Bcf of pricing related curtailments for the quarter, Seneca's net production would have increased 34%. Production during the quarter averaged 397 million cubic feet equivalent ("MMcfe") per day.
- In March 2015, National Fuel Gas Supply Corporation and Empire Pipeline, Inc. jointly filed a certificate application with the Federal Energy Regulatory Commission ("FERC") for its Northern Access 2016 expansion project, which is designed to transport 497,000 dekatherms per day of natural gas for Seneca from its Western Development Area ("WDA") to interconnects with major pipelines in western New York and at the Canadian border.
- A conference call is scheduled for Friday, May 1, 2015, at 11 a.m. Eastern Time.
MANAGEMENT COMMENTS
Ronald J. Tanski, President and Chief Executive Officer of National Fuel Gas Company, stated: "Persistent low crude oil and natural gas prices had a significant negative impact on our financial results, requiring us to write down the value of our oil and gas properties on our balance sheet. The low prices also caused the drop in recurring earnings. While there is little we can do to influence global commodity prices, we remain highly focused on operating our assets as efficiently as possible. In that regard, operations during the quarter went very smoothly, particularly in our Midstream businesses, which continue to capitalize on our strategic position in Appalachia, and at the Utility, where our dedicated employees met the challenge of the coldest February on record.
"While we intend to reduce the pace of our upstream capital spending in Pennsylvania and California over the near-term, we continue to proceed with our pipeline expansion plans in Appalachia. We remain confident that our infrastructure projects will help secure attractive economics for Seneca's production over the long-term and provide even further opportunities for growth in our Upstream and Midstream businesses for years to come."
SUMMARY OF RESULTS
National Fuel had consolidated earnings for the quarter ended March 31, 2015, of $16.7 million, or $0.20 per share, compared to the prior year's second quarter of $95.2 million, or $1.12 per share, a decrease of $78.5 million, or $0.92 per share. The decrease is mainly due to lower earnings in the Exploration and Production segment. (Note: All references to earnings per share are to diluted earnings per share, and all amounts used in the discussion of earnings are after tax unless otherwise noted.)
Consolidated earnings for the six months ended March 31, 2015, of $101.4 million, or $1.19 per share, decreased $76.1 million, or $0.90 per share, from the same period in the prior year where earnings were $177.5 million or $2.09 per share.
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OPERATING RESULTS |
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| Three Months | Six Months | ||||||||||||||||
| Ended March 31, | Ended March 31, | ||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| (in thousands except per share amounts) | |||||||||||||||||
| Reported GAAP earnings | $ | 16,669 | $ | 95,211 | $ | 101,409 | $ | 177,463 | |||||||||
| Items impacting comparability1: | |||||||||||||||||
| Impairment of oil and gas properties | 69,474 | 69,474 | |||||||||||||||
| Plugging and abandonment accrual | 2,445 | 3,251 | |||||||||||||||
| Deferred state income tax adjustment | 3,000 | 3,000 | |||||||||||||||
| Gain on life insurance policies | (3,635 | ) | (3,635 | ) | |||||||||||||
| Operating Results | $ | 86,143 | $ | 97,021 | $ | 170,883 | $ | 180,079 | |||||||||
| Reported GAAP earnings per share | $ | 0.20 | $ | 1.12 | $ | 1.19 | $ | 2.09 | |||||||||
| Items impacting comparability1: | |||||||||||||||||
| Impairment of oil and gas properties | 0.82 | 0.82 | |||||||||||||||
| Plugging and abandonment accrual | 0.03 | 0.04 | |||||||||||||||
| Deferred state income tax adjustment | 0.04 | 0.04 | |||||||||||||||
| Gain on life insurance policies | (0.04 | ) | (0.04 | ) | |||||||||||||
| Operating Results | $ | 1.02 | 2 | $ | 1.15 | $ | 2.01 | $ | 2.13 | ||||||||
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1 See discussion of these individual items below. |
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2 $1.01 per share when Operating Results are divided by weighted average shares. |
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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 six months ended March 31, 2015, to the comparable periods in fiscal 2014. Excluding these items, Operating Results for the current quarter of $86.1 million, or $1.02 per share, decreased $10.9 million, or $0.13 per share, from the prior year's second quarter when Operating Results were $97.0 million or $1.15 per share. Excluding these items, Operating Results for the six months ended March 31, 2015, of $170.9 million, or $2.01 per share, decreased $9.2 million, or $0.12 per share, from the same period in the prior year when Operating Results were $180.1 million or $2.13 per share. Items impacting comparability will be discussed in more detail with the discussion of segment earnings below.
DISCUSSION OF RESULTS BY SEGMENT
The following discussion of the earnings of each segment is summarized in a tabular form at pages 11 through 14 of this report. It may be helpful to refer to those tables while reviewing this discussion.
Upstream Business
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, primarily in Pennsylvania and California.
The Exploration and Production segment's loss in the second quarter of fiscal 2015 of $53.6 million, or $0.63 per share, compares to earnings of $24.4 million, or $0.29 per share, in the prior year's second quarter, a decrease of $78.0 million or $0.92 per share. The decrease was mainly due to a non-cash charge of $69.5 million to write down the value of Seneca's oil and natural gas producing properties.
Seneca uses the full cost method of accounting for determining the book value of its oil and natural gas properties. This accounting method requires that Seneca perform a quarterly "ceiling test" to compare the present value of future revenues from its oil and natural gas reserves based on an unweighted arithmetic average of the first day of the month oil and gas prices for each month within the twelve-month period prior to the end of the reporting period ("the ceiling") with the book value of those reserves at the balance sheet date. If the book value of the reserves exceeds the ceiling, a non-cash impairment charge must be recorded in order to reduce the book value of the reserves to the calculated ceiling. Unless oil and gas prices improve significantly, Seneca expects that the book value of its oil and gas reserves will also exceed the ceiling at June 30, 2015, September 30, 2015 and December 31, 2015, resulting in significant impairment charges each quarter.
In the second quarter of fiscal 2014, earnings were reduced by a $3.8 million (pre-tax) accrual for well plugging and abandonment costs associated with an offshore Gulf of Mexico mineral lease that Seneca had previously farmed out to an operator who subsequently filed for bankruptcy. As the original lessee, Seneca had become responsible for a portion of the costs to plug and abandon wells on the lease (this accrual was ultimately lowered to $0.9 million in a subsequent quarter). In addition, Seneca increased its state deferred income tax liability by $3.0 million to reflect the impact of its growing presence in Pennsylvania ($5.8 million increase) and a reduction in New York state corporate income tax rates ($2.8 million decrease).
Excluding the items above, Operating Results in the Exploration and Production segment were $15.9 million, or $0.19 per share, compared to $29.8 million, or $0.36 per share, in the prior year's second quarter, a decrease of $13.9 million or $0.17 per share. The decrease in Operating Results is mainly due to lower commodity prices realized after hedging. The weighted average natural gas price received by Seneca (after hedging) for the quarter ended March 31, 2015, was $3.65 per thousand cubic feet ("Mcf"), a decrease of $0.24 per Mcf compared to the prior year's second quarter. The weighted average crude oil price realized after hedging for the quarter ended March 31, 2015, was $67.14 per barrel ("Bbl"), a decrease of $29.71 per Bbl compared to the prior year's second quarter.
Overall production of natural gas and crude oil for the current quarter of 35.7 Bcfe decreased approximately 1.1 Bcfe, compared to the prior year's second quarter. Production from Seneca's Appalachia properties decreased 0.9 Bcfe largely due to an estimated 13.5 Bcfe of pricing related curtailments in the current year's second quarter. California production of 5.1 Bcfe decreased 0.2 Bcfe due to natural field declines.
On a per unit basis, quarterly depletion expense of $1.61 per Mcfe decreased $0.27 per Mcfe due to higher natural gas reserve balances at March 31, 2015, compared to the prior year's second quarter. On a per unit basis, lease operating and transportation expenses ("LOE") at $1.16 per Mcfe increased $0.08 per Mcfe compared to the prior year's second quarter mostly due to the decrease in Marcellus production, which carries a lower operating expense burden than Seneca's California production. Higher intercompany gathering and compression costs associated with production delivered into the Gathering segment's Trout Run and Clermont gathering systems in Seneca's Eastern Development Area ("EDA") and WDA, respectively also contributed to the increase. General and administrative expenses ("G&A") increased $0.04 per Mcfe compared to the prior year's second quarter, largely due to increased personnel related costs and lower production associated with price related curtailments.
The Exploration and Production segment's loss for the six months ended March 31, 2015 of $26.8 million, or $0.32 per share, compares to earnings of $55.5 million, or $0.65 per share, in the prior year's six-month period, a decrease of $82.3 million or $0.97 per share. Excluding the impact of the ceiling test charge from the current year's six-month period and the plugging and abandonment costs and tax adjustments from the prior year's six-month period (described above), Operating Results in the Exploration and Production segment were $42.6 million, or $0.50 per share, compared to $61.7 million, or $0.73 per share, a decrease of $19.1 million or $0.23 per share. The decrease in Operating Results is mainly due to lower commodity prices realized after hedging. The weighted average natural gas price received by Seneca (after hedging) for the six months ended March 31, 2015, was $3.42 per Mcf, a decrease of $0.37 per Mcf compared to the prior year's six-month period. The weighted average crude oil price realized after hedging for the six months ended March 31, 2015, was $72.78 per Bbl, a decrease of $22.69 per Bbl compared to the prior year's six-month period.
Overall production of natural gas and crude oil for the current six-month period of 83.9 Bcfe increased approximately 10.0 Bcfe, or 13.4 percent, compared to the prior year's six-month period. Production from Seneca's Appalachia properties increased approximately 15.5 percent and accounted for 9.8 Bcfe of the increase, largely because of Seneca's strong well results in Lycoming County and the Clermont-Rich Valley area in Seneca's EDA and WDA, respectively. California production of 10.5 Bcfe increased 1.1 percent compared to the prior year's six-month period due to development activities primarily in the East Coalinga and South Midway Sunset fields. Pricing related curtailments for the current six-month period were an estimated 19.5 Bcfe.
On a per unit basis for the six months ended March 31, 2015, depletion expense of $1.64 per Mcfe decreased $0.26 per Mcfe due to higher natural gas reserve balances at March 31, 2015. On a per unit basis, LOE at $1.05 per Mcfe increased $0.03 per Mcfe due to higher intercompany gathering and compression costs associated with production delivered into the Gathering segment's Trout Run and Clermont gathering systems in Seneca's EDA and WDA, respectively. G&A decreased $0.04 per Mcfe.
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.
The Pipeline and Storage segment's earnings of $23.4 million, or $0.27 per share, for the quarter ended March 31, 2015, increased $2.0 million, or $0.02 per share, when compared with the same period in the prior fiscal year. The increase in earnings is due to higher non-affiliated revenues from the Mercer Expansion project, which was placed in service in the current year's first quarter. The increase in earnings also reflects higher transportation revenues from additional new short-term firm transportation contracts on both pipeline systems. As a result of the ongoing pricing basis differentials in the Appalachian region, the Pipeline and Storage segment continues to see increased demand for transportation services from producers and marketers to move natural gas supplies to higher priced markets. Lower operating expenses also contributed to the increase in earnings.
The Pipeline and Storage segment's earnings of $44.2 million, or $0.52 per share, for the six months ended March 31, 2015, increased $3.6 million, or $0.04 per share, when compared with the same period in the prior fiscal year. The increase in earnings is due to higher non-affiliated revenues from the Mercer Expansion project and higher transportation revenues from additional new short-term firm transportation contracts on both pipeline systems for the reasons noted above for the quarter. Earnings also benefited from a higher allowance for funds used during construction (AFUDC) associated with various pipeline expansion projects.
Gathering Segment
The Gathering segment's operations are carried out by National Fuel Gas Midstream Corporation's ("Midstream") subsidiary limited liability companies. The Gathering segment constructs, owns and operates natural gas pipeline gathering and processing facilities in the Appalachian region and currently provides the gathering infrastructure for transporting Seneca's Marcellus Shale production to the interstate pipeline system.
The Gathering segment's earnings of $6.4 million, or $0.08 per share, for the quarter ended March 31, 2015, decreased $0.9 million, or $0.01 per share, when compared with the same period in the prior fiscal year. The decrease in earnings is mainly due to higher depreciation and operating expenses due to new facilities associated with the Clermont Gathering System being placed in service, partially offset by higher gathering revenues.
The Gathering segment's earnings of $18.0 million, or $0.21 per share, for the six months ended March 31, 2015, increased $4.6 million, or $0.05 per share, when compared with the same period in the prior fiscal year. The increase in earnings is mainly due to higher gathering revenues from Midstream's Trout Run and Clermont gathering systems. That increase in revenue is mostly attributable to the overall increase in Seneca's production volumes and a change in the mix of Seneca's production among Midstream's three major gathering systems. Higher depreciation and operating expenses partially offset the higher gathering revenues.
Downstream Businesses
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 $38.2 million, or $0.45 per share, for the quarter ended March 31, 2015, increased $2.7 million, or $0.03 per share, when compared with the same period in the prior fiscal year. The increase in earnings is due to the impact of a regulatory adjustment recorded during fiscal 2015 to recognize an under-collection from customers of a New York State regulatory assessment. Earnings were reduced by higher operating expenses mainly associated with the replacement of Distribution's customer billing system.
The Utility segment's earnings of $60.8 million, or $0.71 per share, for the six months ended March 31, 2015, increased $1.1 million, or $0.01 per share, when compared with the same period in the prior fiscal year. The increase in earnings was due to the impact of regulatory true-up adjustments, offset by higher operating expenses for the reasons noted above for the quarter.
Energy Marketing Segment
National Fuel Resources, Inc. ("NFR") comprises the Company's Energy Marketing segment. NFR markets natural gas to industrial, wholesale, commercial, public authority and residential customers primarily in western and central New York and northwestern Pennsylvania, offering competitively priced natural gas to its customers.
The Energy Marketing segment's earnings for the quarter ended March 31, 2015, of $3.4 million, or $0.04 per share, were largely unchanged from the prior year's second quarter.
The Energy Marketing segment's earnings for the six months ended March 31, 2015 of $6.2 million, or $0.07 per share, increased $0.8 million, or $0.01 per share, compared to the prior year's six-month period primarily due to higher per unit margins, which benefited from the weak pricing basis in the Northeast.
Corporate and All Other
The Corporate and All Other category primarily includes corporate operations. The category also includes the remaining operations of Seneca's Northeast division that markets high quality hardwoods from Appalachian land holdings.
The Corporate and All Other category loss of $1.2 million in the quarter ended March 31, 2015, compares to earnings of $2.8 million, in the prior year's second quarter. The Corporate and All Other category loss of $1.0 million in the six months ended March 31, 2015, compares to earnings of $2.9 million in the prior year's six-month period. The comparability of the quarterly and six-month results is impacted by a $3.6 million gain recognized on corporate-owned executive life insurance policies recorded in the prior year's second quarter.
Excluding this item, Operating Results for the quarter, a loss of $1.2 million, and for the six-month ended March 31, 2015, a loss of $1.0 million, were largely unchanged from the prior year's quarter and six-month period.
EARNINGS GUIDANCE
The Company is updating its earnings guidance range for fiscal 2015 to a range of $2.75 to $2.90 per share exclusive of any ceiling test impairment charges. The previous earnings guidance had been a range of $2.65 to $2.90 per share. The change in earnings guidance reflects the following changes in assumptions:
- Seneca's expected production for fiscal 2015 is now a range of 155 to 175 Bcfe. The previous range was 155 to 190 Bcfe. The decrease in the high end of the range is attributable to 13.5 Bcfe of price related curtailments experienced during the quarter.
- The Company is now assuming Marcellus spot pricing averages between $1.75 and $2.00 per Mcf for the remainder of the fiscal year, down $0.25 per Mcf from the previous range of $2.00 and $2.25 per Mcf.
- NYMEX natural gas prices are now assumed to average $2.75 per MMBtu for the remainder of the fiscal year, down $0.25 from the previous forecast. NYMEX crude oil prices average $60.00 per Bbl for the remainder of the fiscal year, an increase of $10.00 from the previous forecast.
- As indicated earlier in this release, non-cash ceiling test impairment charges over each of the next three quarters are expected to impact the Company's earnings.
EARNINGS TELECONFERENCE
The Company will host a conference call on Friday, May 1, 2015, at 11 a.m. Eastern Time to discuss this announcement. There are two ways to access this call. For those with Internet access, visit the investor relations page at National Fuel's website at investor.nationalfuelgas.com. For those without Internet access, access is also provided by dialing (toll-free) 1-877-703-6110, using passcode "12281744." For those unable to listen to the live conference call, a replay will be available at approximately 3 p.m. Eastern Time at the same website link and by phone at (toll-free) 1-888-286-8010, using passcode "60939904." Both the webcast and telephonic replay will be available until the close of business on Friday, May 8, 2015.
National Fuel is an integrated energy company reporting financial results for five operating segments: Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing. 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: factors affecting the Company's ability to successfully identify, drill for and produce economically viable natural gas and oil reserves, including among others geology, lease availability, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; impairments under the SEC's full cost ceiling test for natural gas and oil reserves; changes in the price of natural gas or oil; 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 and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; changes in price differentials between similar quantities of natural gas or oil 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; other changes in price differentials between similar quantities of natural gas or oil 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; uncertainty of oil and gas reserve estimates; significant differences between the Company's projected and actual production levels for natural gas or oil; 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; changes in demographic patterns and weather conditions; changes in the availability, price or accounting treatment of derivative financial instruments; financial and economic conditions, including the availability of credit, and occurrences affecting the Company's ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company's credit ratings and changes in interest rates and other capital market conditions; changes in economic conditions, including global, national or regional recessions, and their effect on the demand for, and customers' ability to pay for, the Company's products and services; the creditworthiness or performance of the Company's key suppliers, customers and counterparties; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities, acts of war, cyber attacks or pest infestation; significant differences between the Company's projected and actual capital expenditures and operating expenses; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company's pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; 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.
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS | ||||||||||||||||||||||||||||
| QUARTER ENDED MARCH 31, 2015 | ||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||
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Midstream |
Downstream |
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| Upstream |
Businesses |
Businesses |
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| Exploration & | Pipeline & | Energy | Corporate / | |||||||||||||||||||||||||
| (Thousands of Dollars) | Production | Storage | Gathering | Utility | Marketing | All Other | Consolidated* | |||||||||||||||||||||
| Second quarter 2014 GAAP earnings | $ | 24,390 | $ | 21,372 | $ | 7,324 | $ | 35,545 | $ | 3,765 | $ | 2,815 | $ | 95,211 | ||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Plugging and abandonment accrual | 2,445 | 2,445 | ||||||||||||||||||||||||||
| Deferred state income tax adjustment | 3,000 | 3,000 | ||||||||||||||||||||||||||
| Gain on life insurance policies | (3,635 | ) | (3,635 | ) | ||||||||||||||||||||||||
| Second quarter 2014 operating results | 29,835 | 21,372 | 7,324 | 35,545 | 3,765 | (820 | ) | 97,021 | ||||||||||||||||||||
| Drivers of operating results | ||||||||||||||||||||||||||||
| Higher (lower) crude oil prices | (14,023 | ) | (14,023 | ) | ||||||||||||||||||||||||
| Higher (lower) natural gas prices | (4,845 | ) | (4,845 | ) | ||||||||||||||||||||||||
| Higher (lower) natural gas production | (2,383 | ) | (2,383 | ) | ||||||||||||||||||||||||
| Higher (lower) crude oil production | (1,791 | ) | (1,791 | ) | ||||||||||||||||||||||||
| Derivative mark to market adjustments | 2,150 | 2,150 | ||||||||||||||||||||||||||
| Lower (higher) lease operating and transportation expenses | (949 | ) | (949 | ) | ||||||||||||||||||||||||
| Lower (higher) depreciation / depletion | 7,667 | (462 | ) | (2,070 | ) | 5,135 | ||||||||||||||||||||||
| Higher (lower) transportation revenues | 1,794 | 1,794 | ||||||||||||||||||||||||||
| Higher (lower) gathering and processing revenues | 1,175 | 1,175 | ||||||||||||||||||||||||||
| Lower (higher) operating expenses | (1,194 | ) | 807 | (456 | ) | (821 | ) | (1,664 | ) | |||||||||||||||||||
| Regulatory true-up adjustments | 4,011 | 4,011 | ||||||||||||||||||||||||||
| Higher (lower) margins | (385 | ) | (385 | ) | ||||||||||||||||||||||||
| Lower (higher) income tax expense / effective tax rate | 1,683 | 1,683 | ||||||||||||||||||||||||||
| All other / rounding | (238 | ) | (134 | ) | 432 | (497 | ) | (7 | ) | (342 | ) | (786 | ) | |||||||||||||||
| Second quarter 2015 operating results | 15,912 | 23,377 | 6,405 | 38,238 | 3,373 | (1,162 | ) | 86,143 | ||||||||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Impairment of oil and gas producing properties | (69,474 | ) | (69,474 | ) | ||||||||||||||||||||||||
| Second quarter 2015 GAAP earnings | $ | (53,562 | ) | $ | 23,377 | $ | 6,405 | $ | 38,238 | $ | 3,373 | $ | (1,162 | ) | $ | 16,669 | ||||||||||||
| * Amounts do not reflect intercompany eliminations | ||||||||||||||||||||||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE | ||||||||||||||||||||||||||||
| QUARTER ENDED MARCH 31, 2015 | ||||||||||||||||||||||||||||
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Midstream |
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| Exploration & | Pipeline & | Energy | Corporate / | |||||||||||||||||||||||||
| Production | Storage | Gathering | Utility | Marketing | All Other | Consolidated* | ||||||||||||||||||||||
| Second quarter 2014 GAAP earnings | $ | 0.29 | $ | 0.25 | $ | 0.09 | $ | 0.42 | $ | 0.04 | $ | 0.03 | $ | 1.12 | ||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Plugging and abandonment accrual | 0.03 | 0.03 | ||||||||||||||||||||||||||
| Deferred state income tax adjustment | 0.04 | 0.04 | ||||||||||||||||||||||||||
| Gain on life insurance policies | (0.04 | ) | (0.04 | ) | ||||||||||||||||||||||||
| Second quarter 2014 operating results | 0.36 | 0.25 | 0.09 | 0.42 | 0.04 | (0.01 | ) | 1.15 | ||||||||||||||||||||
| Drivers of operating results | ||||||||||||||||||||||||||||
| Higher (lower) crude oil prices | (0.16 | ) | (0.16 | ) | ||||||||||||||||||||||||
| Higher (lower) natural gas prices | (0.06 | ) | (0.06 | ) | ||||||||||||||||||||||||
| Higher (lower) natural gas production | (0.03 | ) | (0.03 | ) | ||||||||||||||||||||||||
| Higher (lower) crude oil production | (0.02 | ) | (0.02 | ) | ||||||||||||||||||||||||
| Derivative mark to market adjustments | 0.02 | 0.02 | ||||||||||||||||||||||||||
| Lower (higher) lease operating and transportation expenses | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
| Lower (higher) depreciation / depletion | 0.09 | (0.01 | ) | (0.02 | ) | 0.06 | ||||||||||||||||||||||
| Higher (lower) transportation revenues | 0.02 | 0.02 | ||||||||||||||||||||||||||
| Higher (lower) gathering and processing revenues | 0.01 | 0.01 | ||||||||||||||||||||||||||
| Lower (higher) operating expenses | (0.01 | ) | 0.01 | (0.01 | ) | (0.01 | ) | (0.02 | ) | |||||||||||||||||||
| Regulatory true-up adjustments | 0.05 | 0.05 | ||||||||||||||||||||||||||
| Higher (lower) margins | — | — | ||||||||||||||||||||||||||
| Lower (higher) income tax expense / effective tax rate | 0.02 | 0.02 | ||||||||||||||||||||||||||
| All other / rounding | (0.01 | ) | — | 0.01 | (0.01 | ) | — | — | (0.01 | ) | ||||||||||||||||||
| Second quarter 2015 operating results | 0.19 | 0.27 | 0.08 | 0.45 | 0.04 | (0.01 | ) | 1.02 | ||||||||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Impairment of oil and gas producing properties | (0.82 | ) | (0.82 | ) | ||||||||||||||||||||||||
| Second quarter 2015 GAAP earnings | $ | (0.63 | ) | $ | 0.27 | $ | 0.08 | $ | 0.45 | $ | 0.04 | $ | (0.01 | ) | $ | 0.20 | ||||||||||||
| * Amounts do not reflect intercompany eliminations | ||||||||||||||||||||||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS | ||||||||||||||||||||||||||||
| SIX MONTHS ENDED MARCH 31, 2015 | ||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||
|
Midstream |
Downstream |
|||||||||||||||||||||||||||
| Upstream |
Businesses |
Businesses |
||||||||||||||||||||||||||
| Exploration & | Pipeline & | Energy | Corporate / | |||||||||||||||||||||||||
| (Thousands of Dollars) | Production | Storage | Gathering | Utility | Marketing | All Other | Consolidated* | |||||||||||||||||||||
| Six months ended March 31, 2014 GAAP earnings | $ | 55,487 | $ | 40,510 | $ | 13,471 | $ | 59,760 | $ | 5,369 | $ | 2,866 | $ | 177,463 | ||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Plugging and abandonment accrual | 3,251 | 3,251 | ||||||||||||||||||||||||||
| Deferred state income tax adjustment | 3,000 | 3,000 | ||||||||||||||||||||||||||
| Gain on life insurance policies | (3,635 | ) | (3,635 | ) | ||||||||||||||||||||||||
| Six months ended March 31, 2014 operating results | 61,738 | 40,510 | 13,471 | 59,760 | 5,369 | (769 | ) | 180,079 | ||||||||||||||||||||
| Drivers of operating results | ||||||||||||||||||||||||||||
| Higher (lower) crude oil prices | (22,073 | ) | (22,073 | ) | ||||||||||||||||||||||||
| Higher (lower) natural gas prices | (18,342 | ) | (18,342 | ) | ||||||||||||||||||||||||
| Higher (lower) natural gas production | 24,140 | 24,140 | ||||||||||||||||||||||||||
| Higher (lower) crude oil production | 1,652 | 1,652 | ||||||||||||||||||||||||||
| Derivative mark to market adjustments | 1,894 | 1,894 | ||||||||||||||||||||||||||
|
Insurance settlement proceeds adjustment |
(1,261 | ) | (1,261 | ) | ||||||||||||||||||||||||
| Lower (higher) lease operating and transportation expenses | (8,513 | ) | (8,513 | ) | ||||||||||||||||||||||||
|
Lower (higher) depreciation / depletion |
1,845 | (405 | ) | (2,168 | ) | (728 | ) | |||||||||||||||||||||
| Higher (lower) transportation revenues | 3,229 | 3,229 | ||||||||||||||||||||||||||
| Higher (lower) gathering and processing revenues | 7,668 | 7,668 | ||||||||||||||||||||||||||
| Lower (higher) operating expenses | (1,592 | ) | (851 | ) | (2,036 | ) | (4,479 | ) | ||||||||||||||||||||
| Regulatory true-up adjustments | 3,058 | 3,058 | ||||||||||||||||||||||||||
| Higher (lower) margins | 871 | 871 | ||||||||||||||||||||||||||
| Higher (lower) AFUDC** | 894 | 894 | ||||||||||||||||||||||||||
| Lower (higher) interest expense | 398 | 398 | ||||||||||||||||||||||||||
| Lower (higher) income tax expense / effective tax rate | 3,056 | (483 | ) | 2,573 | ||||||||||||||||||||||||
| All other / rounding | 88 | (73 | ) | (7 | ) | 49 | (41 | ) | (193 | ) | (177 | ) | ||||||||||||||||
| Six months ended March 31, 2015 operating results | 42,632 | 44,155 | 18,028 | 60,831 | 6,199 | (962 | ) | 170,883 | ||||||||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Impairment of oil and gas producing properties | (69,474 | ) | (69,474 | ) | ||||||||||||||||||||||||
| Six months ended March 31, 2015 GAAP earnings | $ | (26,842 | ) | $ | 44,155 | $ | 18,028 | $ | 60,831 | $ | 6,199 | $ | (962 | ) | $ | 101,409 | ||||||||||||
| * Amounts do not reflect intercompany eliminations | ||||||||||||||||||||||||||||
| ** AFUDC = Allowance for Funds Used During Construction | ||||||||||||||||||||||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE | ||||||||||||||||||||||||||||
| SIX MONTHS ENDED MARCH 31, 2015 | ||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||
|
Midstream |
Downstream |
|||||||||||||||||||||||||||
| Upstream |
Businesses |
Businesses |
||||||||||||||||||||||||||
| Exploration & | Pipeline & | Energy | Corporate / | |||||||||||||||||||||||||
| Production | Storage | Gathering | Utility | Marketing | All Other | Consolidated* | ||||||||||||||||||||||
| Six months ended March 31, 2014 GAAP earnings | $ | 0.65 | $ | 0.48 | $ | 0.16 | $ | 0.70 | $ | 0.06 | $ | 0.04 | $ | 2.09 | ||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Plugging and abandonment accrual | 0.04 | 0.04 | ||||||||||||||||||||||||||
| Deferred state income tax adjustment | 0.04 | 0.04 | ||||||||||||||||||||||||||
| Gain on life insurance policies | (0.04 | ) | (0.04 | ) | ||||||||||||||||||||||||
| Six months ended March 31, 2014 operating results | 0.73 | 0.48 | 0.16 | 0.70 | 0.06 | — | 2.13 | |||||||||||||||||||||
| Drivers of operating results | ||||||||||||||||||||||||||||
| Higher (lower) crude oil prices | (0.26 | ) | (0.26 | ) | ||||||||||||||||||||||||
| Higher (lower) natural gas prices | (0.22 | ) | (0.22 | ) | ||||||||||||||||||||||||
| Higher (lower) natural gas production | 0.28 | 0.28 | ||||||||||||||||||||||||||
| Higher (lower) crude oil production | 0.02 | 0.02 | ||||||||||||||||||||||||||
| Derivative mark to market adjustments | 0.02 | 0.02 | ||||||||||||||||||||||||||
| Insurance settlement proceeds adjustment | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
| Lower (higher) lease operating and transportation expenses | (0.10 | ) | (0.10 | ) | ||||||||||||||||||||||||
| Lower (higher) depreciation / depletion | 0.02 | (0.01 | ) | (0.03 | ) | (0.02 | ) | |||||||||||||||||||||
| Higher (lower) transportation revenues | 0.04 | 0.04 | ||||||||||||||||||||||||||
| Higher (lower) gathering and processing revenues | 0.09 | 0.09 | ||||||||||||||||||||||||||
| Lower (higher) operating expenses | (0.02 | ) | (0.01 | ) | (0.02 | ) | (0.05 | ) | ||||||||||||||||||||
| Regulatory true-up adjustments | 0.03 | 0.03 | ||||||||||||||||||||||||||
| Higher (lower) margins | 0.01 | 0.01 | ||||||||||||||||||||||||||
| Higher (lower) AFUDC** | 0.01 | 0.01 | ||||||||||||||||||||||||||
| Lower (higher) interest expense | — | — | ||||||||||||||||||||||||||
| Lower (higher) income tax expense / effective tax rate | 0.04 | — | 0.04 | |||||||||||||||||||||||||
| All other / rounding | — | — | — | — | — | — | — | |||||||||||||||||||||
| Six months ended March 31, 2015 operating results | 0.50 | 0.52 | 0.21 | 0.71 | 0.07 | — | 2.01 | |||||||||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Impairment of oil and gas producing properties | (0.82 | ) | (0.82 | ) | ||||||||||||||||||||||||
| Six months ended March 31, 2015 GAAP earnings | $ | (0.32 | ) | $ | 0.52 | $ | 0.21 | 0.71 | $ | 0.07 | $ | — | $ | 1.19 | ||||||||||||||
| * Amounts do not reflect intercompany eliminations | ||||||||||||||||||||||||||||
| ** AFUDC = Allowance for Funds Used During Construction | ||||||||||||||||||||||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||
| (Thousands of Dollars, except per share amounts) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
|
SUMMARY OF OPERATIONS |
2015 | 2014 | 2015 | 2014 | ||||||||||||
| Operating Revenues | $ | 596,127 | $ | 756,242 | $ | 1,120,036 | $ | 1,306,314 | ||||||||
| Operating Expenses: | ||||||||||||||||
| Purchased Gas | 190,600 | 322,772 | 317,690 | 490,378 | ||||||||||||
| Operation and Maintenance | 133,245 | 137,716 | 245,827 | 245,562 | ||||||||||||
| Property, Franchise and Other Taxes | 24,916 | 25,704 | 45,845 | 46,630 | ||||||||||||
| Depreciation, Depletion and Amortization | 82,687 | 89,975 | 185,433 | 183,089 | ||||||||||||
| Impairment of Oil and Gas Producing Properties | 120,348 | — | 120,348 | — | ||||||||||||
| 551,796 | 576,167 | 915,143 | 965,659 | |||||||||||||
| Operating Income | 44,331 | 180,075 | 204,893 | 340,655 | ||||||||||||
| Other Income (Expense): | ||||||||||||||||
| Interest Income | 46 | 249 | 1,303 | 951 | ||||||||||||
| Other Income | 1,388 | 5,123 | 2,571 | 5,352 | ||||||||||||
| Interest Expense on Long-Term Debt | (22,376 | ) | (22,766 | ) | (44,687 | ) | (45,651 | ) | ||||||||
| Other Interest Expense | (1,584 | ) | (1,375 | ) | (2,375 | ) | (2,324 | ) | ||||||||
| Income Before Income Taxes | 21,805 | 161,306 | 161,705 | 298,983 | ||||||||||||
| Income Tax Expense | 5,136 | 66,095 | 60,296 | 121,520 | ||||||||||||
| Net Income Available for Common Stock | $ | 16,669 | $ | 95,211 | $ | 101,409 | $ | 177,463 | ||||||||
| Earnings Per Common Share: | ||||||||||||||||
| Basic | $ | 0.20 | $ | 1.14 | $ | 1.20 | $ | 2.12 | ||||||||
| Diluted | $ | 0.20 | $ | 1.12 | $ | 1.19 | $ | 2.09 | ||||||||
| Weighted Average Common Shares: | ||||||||||||||||
| Used in Basic Calculation | 84,317,508 | 83,856,120 | 84,262,471 | 83,781,085 | ||||||||||||
| Used in Diluted Calculation | 85,133,142 | 84,837,123 | 85,175,961 | 84,787,610 | ||||||||||||
|
NATIONAL FUEL GAS COMPANY |
||||||||
|
AND SUBSIDIARIES |
||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||
|
(Unaudited) |
||||||||
| March 31, | September 30, | |||||||
| (Thousands of Dollars) | 2015 | 2014 | ||||||
| ASSETS | ||||||||
| Property, Plant and Equipment | $ | 8,691,487 | $ | 8,245,791 | ||||
| Less - Accumulated Depreciation, Depletion and Amortization | 2,794,981 | 2,502,700 | ||||||
| Net Property, Plant and Equipment | 5,896,506 | 5,743,091 | ||||||
| Current Assets: | ||||||||
| Cash and Temporary Cash Investments | 69,441 | 36,886 | ||||||
| Hedging Collateral Deposits | 15,726 | 2,734 | ||||||
| Receivables - Net | 207,673 | 149,735 | ||||||
| Unbilled Revenue | 56,148 | 25,663 | ||||||
| Gas Stored Underground | 7,361 | 39,422 | ||||||
| Materials and Supplies - at average cost | 31,658 | 27,817 | ||||||
| Other Current Assets | 59,592 | 54,752 | ||||||
| Deferred Income Taxes | 39,260 | 40,323 | ||||||
| Total Current Assets | 486,859 | 377,332 | ||||||
| Other Assets: | ||||||||
| Recoverable Future Taxes | 163,976 | 163,485 | ||||||
| Unamortized Debt Expense | 13,129 | 14,304 | ||||||
| Other Regulatory Assets | 217,369 | 224,436 | ||||||
| Deferred Charges | 10,923 | 14,212 | ||||||
| Other Investments | 88,246 | 86,788 | ||||||
| Goodwill | 5,476 | 5,476 | ||||||
| Prepaid Post-Retirement Benefit Costs | 43,400 | 36,512 | ||||||
| Fair Value of Derivative Financial Instruments | 301,884 | 72,606 | ||||||
| Other | 178 | 1,355 | ||||||
| Total Other Assets | 844,581 | 619,174 | ||||||
| Total Assets | $ | 7,227,946 | $ | 6,739,597 | ||||
| CAPITALIZATION AND LIABILITIES | ||||||||
| Capitalization: | ||||||||
| Comprehensive Shareholders' Equity | ||||||||
| Common Stock, $1 Par Value Authorized - 200,000,000 | ||||||||
| Shares; Issued and Outstanding - 84,385,366 Shares | ||||||||
| and 84,157,220 Shares, Respectively | $ | 84,385 | $ | 84,157 | ||||
| Paid in Capital | 737,335 | 716,144 | ||||||
| Earnings Reinvested in the Business | 1,650,840 | 1,614,361 | ||||||
| Accumulated Other Comprehensive Income (Loss) | 126,689 | (3,979 | ) | |||||
| Total Comprehensive Shareholders' Equity | 2,599,249 | 2,410,683 | ||||||
| Long-Term Debt, Net of Current Portion | 1,649,000 | 1,649,000 | ||||||
| Total Capitalization | 4,248,249 | 4,059,683 | ||||||
| Current and Accrued Liabilities: | ||||||||
| Notes Payable to Banks and Commercial Paper | 157,500 | 85,600 | ||||||
| Current Portion of Long-Term Debt | — | — | ||||||
| Accounts Payable | 168,290 | 136,674 | ||||||
| Amounts Payable to Customers | 44,796 | 33,745 | ||||||
| Dividends Payable | 32,488 | 32,400 | ||||||
| Interest Payable on Long-Term Debt | 29,960 | 29,960 | ||||||
| Customer Advances | 270 | 19,005 | ||||||
| Customer Security Deposits | 18,463 | 15,761 | ||||||
| Other Accruals and Current Liabilities | 179,233 | 136,672 | ||||||
| Fair Value of Derivative Financial Instruments | 13,175 | 759 | ||||||
| Total Current and Accrued Liabilities | 644,175 | 490,576 | ||||||
| Deferred Credits: | ||||||||
| Deferred Income Taxes | 1,563,368 | 1,456,283 | ||||||
| Taxes Refundable to Customers | 90,214 | 91,736 | ||||||
| Unamortized Investment Tax Credit | 937 | 1,145 | ||||||
| Cost of Removal Regulatory Liability | 178,096 | 173,199 | ||||||
| Other Regulatory Liabilities | 119,631 | 81,152 | ||||||
| Pension and Other Post-Retirement Liabilities | 137,204 | 134,202 | ||||||
| Asset Retirement Obligations | 119,164 | 117,713 | ||||||
| Other Deferred Credits | 126,908 | 133,908 | ||||||
| Total Deferred Credits | 2,335,522 | 2,189,338 | ||||||
| Commitments and Contingencies | — | — | ||||||
| Total Capitalization and Liabilities | $ | 7,227,946 | $ | 6,739,597 | ||||
| NATIONAL FUEL GAS COMPANY | ||||||||
| AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| Six Months Ended | ||||||||
| March 31, | ||||||||
| (Thousands of Dollars) | 2015 | 2014 | ||||||
| Operating Activities: | ||||||||
| Net Income Available for Common Stock | $ | 101,409 | $ | 177,463 | ||||
| Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||||
| Impairment of Oil and Gas Producing Properties | 120,348 | — | ||||||
| Depreciation, Depletion and Amortization | 185,433 | 183,089 | ||||||
| Deferred Income Taxes | 10,351 | 71,939 | ||||||
| Excess Tax Benefits Associated with Stock-Based Compensation Awards | (9,024 | ) | (3,149 | ) | ||||
| Stock-Based Compensation | 5,985 | 8,045 | ||||||
| Other | 4,709 | (118 | ) | |||||
| Change in: | ||||||||
| Hedging Collateral Deposits | (12,992 | ) | 1,094 | |||||
| Receivables and Unbilled Revenue | (88,339 | ) | (198,277 | ) | ||||
| Gas Stored Underground and Materials and Supplies | 29,085 | 52,661 | ||||||
| Unrecovered Purchased Gas Costs | — | 10,583 | ||||||
| Other Current Assets | 4,184 | (443 | ) | |||||
| Accounts Payable | 62,832 | 69,379 | ||||||
| Amounts Payable to Customers | 11,051 | 11,837 | ||||||
| Customer Advances | (18,735 | ) | (21,878 | ) | ||||
| Customer Security Deposits | 2,702 | (602 | ) | |||||
| Other Accruals and Current Liabilities | 53,491 | 102,222 | ||||||
| Other Assets | 1,826 | 23,445 | ||||||
| Other Liabilities | 43,186 | 15,946 | ||||||
| Net Cash Provided by Operating Activities | $ | 507,502 | $ | 503,236 | ||||
| Investing Activities: | ||||||||
| Capital Expenditures | $ | (493,341 | ) | $ | (367,393 | ) | ||
| Other | (1,262 | ) | 4,927 | |||||
| Net Cash Used in Investing Activities | $ | (494,603 | ) | $ | (362,466 | ) | ||
| Financing Activities: | ||||||||
| Changes in Notes Payable to Banks and Commercial Paper | $ | 71,900 | $ | — | ||||
| Excess Tax Benefits Associated with Stock-Based Compensation Awards | 9,024 | 3,149 | ||||||
| Dividends Paid on Common Stock | (64,842 | ) | (62,776 | ) | ||||
| Net Proceeds From Issuance of Common Stock | 3,574 | 4,863 | ||||||
| Net Cash Provided by (Used) in Financing Activities | $ | 19,656 | $ | (54,764 | ) | |||
| Net Increase in Cash and Temporary Cash Investments | 32,555 | 86,006 | ||||||
| Cash and Temporary Cash Investments at Beginning of Period | 36,886 | 64,858 | ||||||
| Cash and Temporary Cash Investments at March 31 | $ | 69,441 | $ | 150,864 | ||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | ||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||
| UPSTREAM BUSINESS | ||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| (Thousands of Dollars, except per share amounts) | March 31, | March 31, | ||||||||||||||||||||||
|
EXPLORATION AND PRODUCTION SEGMENT |
2015 | 2014 | Variance | 2015 | 2014 | Variance | ||||||||||||||||||
| Total Operating Revenues | $ | 165,521 | $ | 199,561 | $ | (34,040 | ) | $ | 370,186 | $ | 392,607 | $ | (22,421 | ) | ||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Operation and Maintenance: | ||||||||||||||||||||||||
| General and Administrative Expense | 18,042 | 17,079 | 963 | 33,727 | 32,213 | 1,514 | ||||||||||||||||||
| Lease Operating and Transportation Expense | 41,417 | 39,957 | 1,460 | 88,224 | 75,127 | 13,097 | ||||||||||||||||||
| All Other Operation and Maintenance Expense | 4,905 | 9,033 | (4,128 | ) | 7,748 | 11,816 | (4,068 | ) | ||||||||||||||||
| Property, Franchise and Other Taxes | 5,542 | 5,854 | (312 | ) | 9,443 | 10,118 | (675 | ) | ||||||||||||||||
| Depreciation, Depletion and Amortization | 57,436 | 69,232 | (11,796 | ) | 137,503 | 140,342 | (2,839 | ) | ||||||||||||||||
| Impairment of Oil and Gas Producing Properties | 120,348 | — | 120,348 | 120,348 | — | 120,348 | ||||||||||||||||||
| 247,690 | 141,155 | 106,535 | 396,993 | 269,616 | 127,377 | |||||||||||||||||||
| Operating Income (Loss) | (82,169) | 58,406 | (140,575 | ) | (26,807 | ) | 122,991 | (149,798 | ) | |||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 663 | 405 | 258 | 1,173 | 956 | 217 | ||||||||||||||||||
| Other Interest Expense | (11,053 | ) | (10,775 | ) | (278) | (21,360 | ) | (21,500 | ) | 140 | ||||||||||||||
| Income (Loss) Before Income Taxes | (92,559 | ) | 48,036 | (140,595 | ) | (46,994 | ) | 102,447 | (149,441 | ) | ||||||||||||||
| Income Tax Expense (Benefit) | (38,997 | ) | 23,646 | (62,643 | ) | (20,152 | ) | 46,960 | (67,112 | ) | ||||||||||||||
| Net Income (Loss) | $ | (53,562 | ) | $ | 24,390 | $ | (77,952 | ) | $ | (26,842 | ) | $ | 55,487 | $ | (82,329 | ) | ||||||||
| Net Income (Loss) Per Share (Diluted) | $ | (0.63 | ) | $ | 0.29 | $ | (0.92 | ) | $ | (0.32 | ) | $ | 0.65 | $ | (0.97 | ) | ||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | ||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||
| MIDSTREAM BUSINESSES | ||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| (Thousands of Dollars, except per share amounts) | March 31, | March 31, | ||||||||||||||||||||||
|
PIPELINE AND STORAGE SEGMENT |
2015 | 2014 | Variance | 2015 | 2014 | Variance | ||||||||||||||||||
| Revenues from External Customers | $ | 55,758 | $ | 53,571 | $ | 2,187 | $ | 107,504 | $ | 104,784 | $ | 2,720 | ||||||||||||
| Intersegment Revenues | 23,054 | 22,235 | 819 | 44,515 | 42,974 | 1,541 | ||||||||||||||||||
| Total Operating Revenues | 78,812 | 75,806 | 3,006 | 152,019 | 147,758 | 4,261 | ||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Purchased Gas | 289 | 38 | 251 | 555 | 1,301 | (746 | ) | |||||||||||||||||
| Operation and Maintenance | 17,642 | 18,885 | (1,243 | ) | 35,526 | 35,770 | (244 | ) | ||||||||||||||||
| Property, Franchise and Other Taxes | 6,466 | 6,107 | 359 | 12,629 | 11,795 | 834 | ||||||||||||||||||
| Depreciation, Depletion and Amortization | 9,778 | 9,069 | 709 | 18,813 | 18,190 | 623 | ||||||||||||||||||
| 34,175 | 34,099 | 76 | 67,523 | 67,056 | 467 | |||||||||||||||||||
| Operating Income | 44,637 | 41,707 | 2,930 | 84,496 | 80,702 | 3,794 | ||||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 122 | 57 | 65 | 207 | 131 | 76 | ||||||||||||||||||
| Other Income | 332 | 192 | 140 | 889 | (1 | ) | 890 | |||||||||||||||||
| Other Interest Expense | (6,793 | ) | (6,646 | ) | (147 | ) | (13,333 | ) | (13,445 | ) | 112 | |||||||||||||
| Income Before Income Taxes | 38,298 | 35,310 | 2,988 | 72,259 | 67,387 | 4,872 | ||||||||||||||||||
| Income Tax Expense | 14,921 | 13,938 | 983 | 28,104 | 26,877 | 1,227 | ||||||||||||||||||
| Net Income | $ | 23,377 | $ | 21,372 | $ | 2,005 | $ | 44,155 | $ | 40,510 | $ | 3,645 | ||||||||||||
| Net Income Per Share (Diluted) | $ | 0.27 | $ | 0.25 | $ | 0.02 | $ | 0.52 | $ | 0.48 | $ | 0.04 | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| March 31, | March 31, | |||||||||||||||||||||||
|
GATHERING SEGMENT |
2015 | 2014 | Variance | 2015 | 2014 | Variance | ||||||||||||||||||
| Revenues from External Customers | $ | 89 | $ | 195 | $ | (106 | ) | $ | 235 | $ | 429 | $ | (194 | ) | ||||||||||
| Intersegment Revenues | 17,365 | 15,452 | 1,913 | 41,793 | 29,802 | 11,991 | ||||||||||||||||||
| Total Operating Revenues | 17,454 | 15,647 | 1,807 | 42,028 | 30,231 | 11,797 | ||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Operation and Maintenance | 2,232 | 1,530 | 702 | 4,008 | 2,697 | 1,311 | ||||||||||||||||||
| Property, Franchise and Other Taxes | 57 | 60 | (3 | ) | 92 | 92 | — | |||||||||||||||||
| Depreciation, Depletion and Amortization | 3,798 | 614 | 3,184 | 5,858 | 2,523 | 3,335 | ||||||||||||||||||
| 6,087 | 2,204 | 3,883 | 9,958 | 5,312 | 4,646 | |||||||||||||||||||
| Operating Income | 11,367 | 13,443 | (2,076 | ) | 32,070 | 24,919 | 7,151 | |||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 32 | 26 | 6 | 58 | 65 | (7 | ) | |||||||||||||||||
| Other Income | 1 | 4 | (3 | ) | 2 | 5 | (3 | ) | ||||||||||||||||
| Other Interest Expense | (132 | ) | (460 | ) | 328 | (430 | ) | (1,043 | ) | 613 | ||||||||||||||
| Income Before Income Taxes | 11,268 | 13,013 | (1,745 | ) | 31,700 | 23,946 | 7,754 | |||||||||||||||||
| Income Tax Expense | 4,863 | 5,689 | (826 | ) | 13,672 | 10,475 | 3,197 | |||||||||||||||||
| Net Income | $ | 6,405 | $ | 7,324 | $ | (919 | ) | $ | 18,028 | $ | 13,471 | $ | 4,557 | |||||||||||
| Net Income Per Share (Diluted) | $ | 0.08 | $ | 0.09 | $ | (0.01 | ) | $ | 0.21 | $ | 0.16 | $ | 0.05 | |||||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | ||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||
| DOWNSTREAM BUSINESSES | ||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| (Thousands of Dollars, except per share amounts) | March 31, | March 31, | ||||||||||||||||||||||
|
UTILITY SEGMENT |
2015 | 2014 | Variance | 2015 | 2014 | Variance | ||||||||||||||||||
| Revenues from External Customers | $ | 309,974 | $ | 377,647 | $ | (67,673 | ) | $ | 520,047 | $ | 608,100 | $ | (88,053 | ) | ||||||||||
| Intersegment Revenues | 6,521 | 8,204 | (1,683 | ) | 11,055 | 12,911 | (1,856 | ) | ||||||||||||||||
| Total Operating Revenues | 316,495 | 385,851 | (69,356 | ) | 531,102 | 621,011 | (89,909 | ) | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Purchased Gas | 161,966 | 235,784 | (73,818 | ) | 263,677 | 357,711 | (94,034 | ) | ||||||||||||||||
| Operation and Maintenance | 61,732 | 61,653 | 79 | 110,638 | 108,925 | 1,713 | ||||||||||||||||||
| Property, Franchise and Other Taxes | 12,564 | 13,370 | (806 | ) | 23,122 | 24,037 | (915 | ) | ||||||||||||||||
| Depreciation, Depletion and Amortization | 11,333 | 10,798 | 535 | 22,484 | 21,509 | 975 | ||||||||||||||||||
| 247,595 | 321,605 | (74,010 | ) | 419,921 | 512,182 | (92,261 | ) | |||||||||||||||||
| Operating Income | 68,900 | 64,246 | 4,654 | 111,181 | 108,829 | 2,352 | ||||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 7 | 73 | (66 | ) | 25 | 151 | (126 | ) | ||||||||||||||||
| Other Income | 497 | 318 | 179 | 995 | 688 | 307 | ||||||||||||||||||
| Other Interest Expense | (7,204 | ) | (7,079 | ) | (125 | ) | (14,148 | ) | (13,893 | ) | (255 | ) | ||||||||||||
| Income Before Income Taxes | 62,200 | 57,558 | 4,642 | 98,053 | 95,775 | 2,278 | ||||||||||||||||||
| Income Tax Expense | 23,962 | 22,013 | 1,949 | 37,222 | 36,015 | 1,207 | ||||||||||||||||||
| Net Income | $ | 38,238 | $ | 35,545 | $ | 2,693 | $ | 60,831 | $ | 59,760 | $ | 1,071 | ||||||||||||
| Net Income Per Share (Diluted) | $ | 0.45 | $ | 0.42 | $ | 0.03 | $ | 0.71 | $ | 0.70 | $ | 0.01 | ||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| March 31, | March 31, | |||||||||||||||||||||||
|
ENERGY MARKETING SEGMENT |
2015 | 2014 | Variance | 2015 | 2014 | Variance | ||||||||||||||||||
| Revenues from External Customers | $ | 64,167 | $ | 124,439 | $ | (60,272 | ) | $ | 120,333 | $ | 197,598 | $ | (77,265 | ) | ||||||||||
| Intersegment Revenues | 211 | 5 | 206 | 417 | 260 | 157 | ||||||||||||||||||
| Total Operating Revenues | 64,378 | 124,444 | (60,066 | ) | 120,750 | 197,858 | (77,108 | ) | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Purchased Gas | 57,142 | 116,615 | (59,473 | ) | 107,371 | 185,818 | (78,447 | ) | ||||||||||||||||
| Operation and Maintenance | 1,790 | 1,701 | 89 | 3,289 | 3,293 | (4 | ) | |||||||||||||||||
| Property, Franchise and Other Taxes | 2 | 13 | (11 | ) | 5 | 13 | (8 | ) | ||||||||||||||||
| Depreciation, Depletion and Amortization | 51 | 48 | 3 | 101 | 96 | 5 | ||||||||||||||||||
| 58,985 | 118,377 | (59,392 | ) | 110,766 | 189,220 | (78,454 | ) | |||||||||||||||||
| Operating Income | 5,393 | 6,067 | (674 | ) | 9,984 | 8,638 | 1,346 | |||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 44 | 33 | 11 | 82 | 77 | 5 | ||||||||||||||||||
| Other Income | 43 | 34 | 9 | 67 | 49 | 18 | ||||||||||||||||||
| Other Interest Expense | (12 | ) | (8 | ) | (4 | ) | (15 | ) | (17 | ) | 2 | |||||||||||||
| Income Before Income Taxes | 5,468 | 6,126 | (658 | ) | 10,118 | 8,747 | 1,371 | |||||||||||||||||
| Income Tax Expense | 2,095 | 2,361 | (266 | ) | 3,919 | 3,378 | 541 | |||||||||||||||||
| Net Income | $ | 3,373 | $ | 3,765 | $ | (392 | ) | $ | 6,199 | $ | 5,369 | $ | 830 | |||||||||||
| Net Income Per Share (Diluted) | $ | 0.04 | $ | 0.04 | $ | — | $ | 0.07 | $ | 0.06 | $ | 0.01 | ||||||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | ||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| (Thousands of Dollars, except per share amounts) | March 31, | March 31, | ||||||||||||||||||||||
|
ALL OTHER |
2015 | 2014 | Variance | 2015 | 2014 | Variance | ||||||||||||||||||
| Total Operating Revenues | $ | 388 | $ | 597 | $ | (209 | ) | $ | 1,271 | $ | 2,298 | $ | (1,027 | ) | ||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Operation and Maintenance | (47 | ) | 305 | (352 | ) | 482 | 658 | (176 | ) | |||||||||||||||
| Property, Franchise and Other Taxes | 158 | 177 | (19 | ) | 307 | 335 | (28 | ) | ||||||||||||||||
| Depreciation, Depletion and Amortization | 124 | 57 | 67 | 340 | 114 | 226 | ||||||||||||||||||
| 235 | 539 | (304 | ) | 1,129 | 1,107 | 22 | ||||||||||||||||||
| Operating Income | 153 | 58 | 95 | 142 | 1,191 | (1,049 | ) | |||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 17 | 25 | (8 | ) | 30 | 59 | (29 | ) | ||||||||||||||||
| Other Income | 1 | 378 | (377 | ) | 2 | 399 | (397 | ) | ||||||||||||||||
| Other Interest Expense | — | — | — | — | (1 | ) | 1 | |||||||||||||||||
| Income Before Income Taxes | 171 | 461 | (290 | ) | 174 | 1,648 | (1,474 | ) | ||||||||||||||||
| Income Tax Expense | 73 | 183 | (110 | ) | 81 | 694 | (613 | ) | ||||||||||||||||
| Net Income | $ | 98 | $ | 278 | $ | (180 | ) | $ | 93 | $ | 954 | $ | (861 | ) | ||||||||||
| Net Income Per Share (Diluted) | $ | — | $ | — | $ | — | $ | — | $ | 0.01 | $ | (0.01 | ) | |||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| March 31, | March 31, | |||||||||||||||||||||||
|
CORPORATE |
2015 | 2014 | Variance | 2015 | 2014 | Variance | ||||||||||||||||||
| Revenues from External Customers | $ | 230 | $ | 232 | $ | (2 | ) | $ | 460 | $ | 498 | $ | (38 | ) | ||||||||||
| Intersegment Revenues | 953 | 946 | 7 | 1,839 | 1,908 | (69 | ) | |||||||||||||||||
| Total Operating Revenues | 1,183 | 1,178 | 5 | 2,299 | 2,406 | (107 | ) | |||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Operation and Maintenance | 4,839 | 4,750 | 89 | 7,891 | 8,466 | (575 | ) | |||||||||||||||||
| Property, Franchise and Other Taxes | 127 | 123 | 4 | 247 | 240 | 7 | ||||||||||||||||||
| Depreciation, Depletion and Amortization | 167 | 157 | 10 | 334 | 315 | 19 | ||||||||||||||||||
| 5,133 | 5,030 | 103 | 8,472 | 9,021 | (549 | ) | ||||||||||||||||||
| Operating Loss | (3,950 | ) | (3,852 | ) | (98 | ) | (6,173 | ) | (6,615 | ) | 442 | |||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 24,188 | 24,028 | 160 | 49,488 | 48,635 | 853 | ||||||||||||||||||
| Other Income | 514 | 4,197 | (3,683 | ) | 616 | 4,212 | (3,596 | ) | ||||||||||||||||
| Interest Expense on Long-Term Debt | (22,376 | ) | (22,766 | ) | 390 | (44,687 | ) | (45,651 | ) | 964 | ||||||||||||||
| Other Interest Expense | (1,417 | ) | (805 | ) | (612 | ) | (2,849 | ) | (1,548 | ) | (1,301 | ) | ||||||||||||
| Income (Loss) Before Income Taxes | (3,041 | ) | 802 | (3,843 | ) | (3,605 | ) | (967 | ) | (2,638 | ) | |||||||||||||
| Income Tax Expense (Benefit) | (1,781 | ) | (1,735 | ) | (46 | ) | (2,550 | ) | (2,879 | ) | 329 | |||||||||||||
| Net Income (Loss) | $ | (1,260 | ) | $ | 2,537 | $ | (3,797 | ) | $ | (1,055 | ) | $ | 1,912 | $ | (2,967 | ) | ||||||||
| Net Income (Loss) Per Share (Diluted) | $ | (0.01 | ) | $ | 0.03 | $ | (0.04 | ) | $ | — | $ | 0.03 | $ | (0.03 | ) | |||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| March 31, | March 31, | |||||||||||||||||||||||
|
INTERSEGMENT ELIMINATIONS |
2015 | 2014 | Variance | 2015 | 2014 | Variance | ||||||||||||||||||
| Intersegment Revenues | $ | (48,104 | ) | $ | (46,842 | ) | $ | (1,262 | ) | $ | (99,619 | ) | $ | (87,855 | ) | $ | (11,764 | ) | ||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Purchased Gas | (28,797 | ) | (29,665 | ) | 868 | (53,913 | ) | (54,452 | ) | 539 | ||||||||||||||
| Operation and Maintenance | (19,307 | ) | (17,177 | ) | (2,130 | ) | (45,706 | ) | (33,403 | ) | (12,303 | ) | ||||||||||||
| (48,104 | ) | (46,842 | ) | (1,262 | ) | (99,619 | ) | (87,855 | ) | (11,764 | ) | |||||||||||||
| Operating Income | — | — | — | — | — | — | ||||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | (25,027 | ) | (24,398 | ) | (629 | ) | (49,760 | ) | (49,123 | ) | (637 | ) | ||||||||||||
| Other Interest Expense | 25,027 | 24,398 | 629 | 49,760 | 49,123 | 637 | ||||||||||||||||||
| Net Income | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Net Income Per Share (Diluted) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||||||
| SEGMENT INFORMATION (Continued) | ||||||||||||||||||||||||||||
| (Thousands of Dollars) | ||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
| March 31, | March 31, | |||||||||||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||
| Increase | Increase | |||||||||||||||||||||||||||
| 2015 | 2014 | (Decrease) | 2015 | 2014 | (Decrease) | |||||||||||||||||||||||
|
Capital Expenditures: |
||||||||||||||||||||||||||||
| Exploration and Production | $ | 143,364 | (1) | $ | 164,987 | (3) | $ | (21,623 | ) | $ | 301,076 | (1)(2) | $ | 276,328 | (3)(4) | $ | 24,748 | |||||||||||
| Pipeline and Storage | 41,643 | (1) | 19,155 | (3) | 22,488 | 57,671 | (1)(2) | 29,093 | (3)(4) | 28,578 | ||||||||||||||||||
| Gathering | 35,601 | (1) | 24,823 | (3) | 10,778 | 50,549 | (1)(2) | 48,285 | (3)(4) | 2,264 | ||||||||||||||||||
| Utility | 20,566 | (1) | 19,921 | (3) | 645 | 41,740 | (1)(2) | 41,581 | (3)(4) | 159 | ||||||||||||||||||
| Energy Marketing | 17 | 70 | (53 | ) | 92 | 113 | (21 | ) | ||||||||||||||||||||
| Total Reportable Segments | 241,191 | 228,956 | 12,235 | 451,128 | 395,400 | 55,728 | ||||||||||||||||||||||
| All Other | — | 80 | (80 | ) | — | 140 | (140 | ) | ||||||||||||||||||||
| Corporate | 43 | 54 | (11 | ) | 68 | 70 | (2 | ) | ||||||||||||||||||||
| Total Capital Expenditures | $ | 241,234 | $ | 229,090 | $ | 12,144 | $ | 451,196 | $ | 395,610 | $ | 55,586 | ||||||||||||||||
|
(1) |
Capital expenditures for the quarter and six months ended March 31, 2015, include accounts payable and accrued liabilities related to capital expenditures of $63.5 million, $8.2 million, $14.1 million, and $8.7 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 March 31, 2015, since they represent non-cash investing activities at that date. |
|
|
(2) |
Capital expenditures for the six months ended March 31, 2015, exclude capital expenditures of $80.1 million, $28.1 million, $20.1 million and $8.3 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, 2014 and paid during the six months ended March 31, 2015. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2014, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at March 31, 2015. |
|
|
|
||
|
(3) |
Capital expenditures for the quarter and six months ended March 31, 2014, include accounts payable and accrued liabilities related to capital expenditures of $90.3 million, $5.1 million, $8.7 million, and $5.3 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 March 31, 2014, since they represent non-cash investing activities at that date. |
|
|
(4) |
Capital expenditures for the six months ended March 31, 2014, exclude capital expenditures of $58.5 million, $5.6 million, $6.7 million and $10.3 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, 2013 and paid during the six months ended March 31, 2014. These amounts were excluded from the Consolidated Statements of Cash Flows at September 30, 2013, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at March 31, 2014. |
|
|
DEGREE DAYS |
|||||||||||||||
| Percent Colder | |||||||||||||||
| (Warmer) Than: | |||||||||||||||
|
Three Months Ended March 31 |
Normal | 2015 | 2014 | Normal (1) | Last Year (1) | ||||||||||
| Buffalo, NY |
3,290 |
|
3,984 |
|
3,826 |
|
21.1 |
|
4.1 |
|
|||||
| Erie, PA | 3,108 | 3,815 | 3,718 | 22.7 | 2.6 | ||||||||||
|
Six Months Ended March 31 |
|||||||||||||||
| Buffalo, NY | 5,543 | 6,120 | 6,116 | 10.4 | 0.1 | ||||||||||
| Erie, PA | 5,152 | 5,806 | 5,828 | 12.7 | (0.4 | ) | |||||||||
|
(1) |
Percents compare actual 2015 degree days to normal degree days and actual 2015 degree days to actual 2014 degree days. | |
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||
|
EXPLORATION AND PRODUCTION INFORMATION |
||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||
| March 31, | March 31, | |||||||||||||||||||||||
| Increase | Increase | |||||||||||||||||||||||
| 2015 | 2014 | (Decrease) | 2015 | 2014 | (Decrease) | |||||||||||||||||||
|
Gas Production/Prices: |
||||||||||||||||||||||||
| Production (MMcf) | ||||||||||||||||||||||||
| Appalachia | 30,592 | 31,490 | (898 | ) | 73,391 | 63,543 | 9,848 | |||||||||||||||||
| West Coast | 795 | 841 | (46 | ) | 1,567 | 1,626 | (59 | ) | ||||||||||||||||
| Total Production | 31,387 | 32,331 | (944 | ) | 74,958 | 65,169 | 9,789 | |||||||||||||||||
| Average Prices (Per Mcf) | ||||||||||||||||||||||||
| Appalachia | $ | 2.46 | $ | 4.44 | $ | (1.98 | ) | $ | 2.75 | $ | 3.86 | $ | (1.11 | ) | ||||||||||
| West Coast | 3.81 | 7.57 | (3.76 | ) | 4.70 | 6.77 | (2.07 | ) | ||||||||||||||||
| Weighted Average | 2.50 | 4.52 | (2.02 | ) | 2.79 | 3.93 | (1.14 | ) | ||||||||||||||||
| Weighted Average after Hedging | 3.65 | 3.89 | (0.24 | ) | 3.42 | 3.79 | (0.37 | ) | ||||||||||||||||
|
Oil Production/Prices: |
||||||||||||||||||||||||
| Production (Thousands of Barrels) | ||||||||||||||||||||||||
| Appalachia | 5 | 7 | (2) | 15 | 17 | (2) | ||||||||||||||||||
| West Coast | 721 | 748 | (27) | 1,482 | 1,453 | 29 | ||||||||||||||||||
| Total Production | 726 | 755 | (29) | 1,497 | 1,470 | 27 | ||||||||||||||||||
| Average Prices (Per Barrel) | ||||||||||||||||||||||||
| Appalachia | $ | 46.18 | $ | 94.15 | $ | (47.97 | ) | $ | 65.09 | $ | 95.21 | $ | (30.12 | ) | ||||||||||
| West Coast | 43.93 | 99.98 | (56.05 | ) | 55.71 | 98.75 | (43.04 | ) | ||||||||||||||||
| Weighted Average | 43.95 | 99.93 | (55.98 | ) | 55.80 | 98.71 | (42.91 | ) | ||||||||||||||||
| Weighted Average after Hedging | 67.14 | 96.85 | (29.71 | ) | 72.78 | 95.47 | (22.69 | ) | ||||||||||||||||
| Total Production (Mmcfe) | 35,743 | 36,861 | (1,118) | 83,940 | 73,989 | 9,951 | ||||||||||||||||||
|
Selected Operating Performance Statistics: |
||||||||||||||||||||||||
| General & Administrative Expense per Mcfe (1) | $ | 0.50 | $ | 0.46 | $ | 0.04 | $ | 0.40 | $ | 0.44 | $ | (0.04 | ) | |||||||||||
| Lease Operating and Transportation Expense per Mcfe (1)(2) | $ | 1.16 | $ | 1.08 | $ | 0.08 | $ | 1.05 | $ | 1.02 | $ | 0.03 | ||||||||||||
| Depreciation, Depletion & Amortization per Mcfe (1) | $ | 1.61 | $ | 1.88 | $ | (0.27 | ) | $ | 1.64 | $ | 1.90 | $ | (0.26 | ) | ||||||||||
|
(1) |
Refer to page 18 for the General and Administrative Expense, Lease Operating Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. | |
|
(2) |
Amounts include transportation expense of $0.52 and $0.45 per Mcfe for the three months ended March 31, 2015 and March 31, 2014, respectively. Amounts include transportation expense of $0.52 and $0.43 per Mcfe for the six months ended March 31, 2015 and March 31, 2014, respectively. | |
| NATIONAL FUEL GAS COMPANY | |||||||
| AND SUBSIDIARIES | |||||||
|
EXPLORATION AND PRODUCTION INFORMATION |
|||||||
| Hedging Summary for the Remaining Six Months of Fiscal 2015 | |||||||
|
Volume |
Average Hedge Price |
||||||
| Oil Swaps | |||||||
| Midway Sunset (MWSS) | 182,000 | BBL | $ | 68.62 / BBL | |||
| Brent | 510,000 | BBL | $ | 98.32 / BBL | |||
| NYMEX | 198,000 | BBL | $ | 90.14 / BBL | |||
| Total | 890,000 | BBL | $ | 90.43 / BBL | |||
| Gas Swaps | |||||||
| NYMEX | 28,920,000 | MMBTU | $ | 4.18 / MMBTU | |||
| Dominion Transmission Appalachian (DOM) | 12,420,000 | MMBTU | $ | 3.74 / MMBTU | |||
| Southern California City Gate (SoCal) | 600,000 | MMBTU | $ | 4.35 / MMBTU | |||
| Fixed Price Physical Sales | 16,800,000 | MMBTU | $ | 3.42 / MMBTU | |||
| Total | 58,740,000 | MMBTU | $ | 3.87 / MMBTU | |||
| Hedging Summary for Fiscal 2016 | |||||||
|
Volume |
Average Hedge Price |
||||||
| Oil Swaps | |||||||
| MWSS | 36,000 | BBL | $ | 92.10 / BBL | |||
| Brent | 933,000 | BBL | $ | 95.18 / BBL | |||
| NYMEX | 300,000 | BBL | $ | 86.09 / BBL | |||
| Total | 1,269,000 | BBL | $ | 92.95 / BBL | |||
| Gas Swaps | |||||||
| NYMEX | 32,350,000 | MMBTU | $ | 4.24 / MMBTU | |||
| DOM | 18,840,000 | MMBTU | $ | 3.78 / MMBTU | |||
| Michigan Consolidated City Gate (Mich Con) | 9,000,000 | MMBTU | $ | 4.10 / MMBTU | |||
| Dawn Ontario (Dawn) | 5,490,000 | MMBTU | $ | 4.36 / MMBTU | |||
| Fixed Price Physical Sales | 36,600,000 | MMBTU | $ | 3.39 / MMBTU | |||
| Total | 102,280,000 | MMBTU | $ | 3.84 / MMBTU | |||
| Hedging Summary for Fiscal 2017 | |||||||
|
Volume |
Average Hedge Price |
||||||
| Oil Swaps | |||||||
| Brent | 384,000 | BBL | $ | 92.30 / BBL | |||
| Gas Swaps | |||||||
| NYMEX | 23,130,000 | MMBTU | $ | 4.50 / MMBTU | |||
| DOM | 12,720,000 | MMBTU | $ | 3.87 / MMBTU | |||
| Mich Con | 3,000,000 | MMBTU | $ | 4.10 / MMBTU | |||
| Dawn | 7,950,000 | MMBTU | $ | 4.14 / MMBTU | |||
| Fixed Price Physical Sales | 27,350,000 | MMBTU | $ | 3.51 / MMBTU | |||
| Total | 74,150,000 | MMBTU | $ | 3.97 / MMBTU | |||
| Hedging Summary for Fiscal 2018 | |||||||
|
Volume |
Average Hedge Price |
||||||
| Oil Swaps | |||||||
| Brent | 75,000 | BBL | $ | 91.00 / BBL | |||
| Gas Swaps | |||||||
| NYMEX | 5,550,000 | MMBTU | $ | 4.59 / MMBTU | |||
| Fixed Price Physical Sales | 1,550,000 | MMBTU | $ | 3.77 / MMBTU | |||
| Total | 7,100,000 | MMBTU | $ | 4.41 / MMBTU | |||
|
NATIONAL FUEL GAS COMPANY |
|||||||
|
AND SUBSIDIARIES |
|||||||
|
EXPLORATION AND PRODUCTION INFORMATION |
|||||||
|
Gross Wells in Process of Drilling |
|||||||
|
Six Months Ended March 31, 2015 |
|||||||
| Total | |||||||
|
East |
West |
Company |
|||||
| Wells in Process - Beginning of Period | |||||||
| Exploratory | 3.000 | (1) | 0.000 | 3.000 | |||
| Developmental | 77.000 | (1) | 2.000 | 79.000 | |||
| Wells Commenced | |||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||
| Developmental | 29.000 | 37.000 | 66.000 | ||||
| Wells Completed | |||||||
| Exploratory | 3.000 | 0.000 | 3.000 | ||||
| Developmental | 20.000 | 37.000 | 57.000 | ||||
| Wells Plugged & Abandoned | |||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||
| Developmental | 2.000 | 1.000 | 3.000 | ||||
| Wells in Process - End of Period | |||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||
| Developmental | 84.000 | 1.000 | 85.000 | ||||
|
(1) Gross exploratory wells were increased by 2 and developmental wells were decreased by 2. |
|||||||
|
Net Wells in Process of Drilling |
|||||||
|
Six Months Ended March 31, 2015 |
|||||||
| Total | |||||||
|
East |
West |
Company |
|||||
| Wells in Process - Beginning of Period | |||||||
| Exploratory | 3.000 | (1) | 0.000 | 3.000 | |||
| Developmental | 62.500 | (1) | 2.000 | 64.500 | |||
| Wells Commenced | |||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||
| Developmental | 29.000 | 37.000 | 66.000 | ||||
| Wells Completed | |||||||
| Exploratory | 3.000 | 0.000 | 3.000 | ||||
| Developmental | 20.000 | 37.000 | 57.000 | ||||
| Wells Plugged & Abandoned | |||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||
| Developmental | 2.000 | 1.000 | 3.000 | ||||
| Wells in Process - End of Period | |||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||
| Developmental | 69.500 | 1.000 | 70.500 | ||||
|
(1) Net exploratory wells were increased by 2 and developmental wells were decreased by 2. |
|||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||
| Pipeline & Storage Throughput - (millions of cubic feet - MMcf) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| Increase | Increase | |||||||||||||||||
| 2015 | 2014 | (Decrease) | 2015 | 2014 | (Decrease) | |||||||||||||
| Firm Transportation - Affiliated | 50,777 | 48,163 | 2,614 | 79,863 | 77,849 | 2,014 | ||||||||||||
| Firm Transportation - Non-Affiliated | 179,534 | 176,815 | 2,719 | 336,770 | 338,785 | (2,015 | ) | |||||||||||
| Interruptible Transportation | 3,627 | 1,458 | 2,169 | 5,729 | 2,780 | 2,949 | ||||||||||||
| 233,938 | 226,436 | 7,502 | 422,362 | 419,414 | 2,948 | |||||||||||||
| Gathering Volume - (MMcf) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| Increase | Increase | |||||||||||||||||
| 2015 | 2014 | (Decrease) | 2015 | 2014 | (Decrease) | |||||||||||||
| Gathered Volume - Affiliated | 31,175 | 30,955 | 220 | 76,047 | 61,969 | 14,078 | ||||||||||||
| Utility Throughput - (MMcf) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| Increase | Increase | |||||||||||||||||
| 2015 | 2014 | (Decrease) | 2015 | 2014 | (Decrease) | |||||||||||||
| Retail Sales: | ||||||||||||||||||
| Residential Sales | 31,561 | 30,640 | 921 | 48,029 | 47,647 | 382 | ||||||||||||
| Commercial Sales | 4,813 | 4,759 | 54 | 7,097 | 7,119 | (22 | ) | |||||||||||
| Industrial Sales | 194 | 297 | (103 | ) | 282 | 389 | (107 | ) | ||||||||||
| 36,568 | 35,696 | 872 | 55,408 | 55,155 | 253 | |||||||||||||
| Off-System Sales | 2,118 | 1,832 | 286 | 3,787 | 3,810 | (23 | ) | |||||||||||
| Transportation | 33,567 | 34,157 | (590 | ) | 54,516 | 55,347 | (831 | ) | ||||||||||
| 72,253 | 71,685 | 568 | 113,711 | 114,312 | (601 | ) | ||||||||||||
| Energy Marketing Volume | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| March 31, | March 31, | |||||||||||||||||
| Increase | Increase | |||||||||||||||||
| 2015 | 2014 | (Decrease) | 2015 | 2014 | (Decrease) | |||||||||||||
| Natural Gas (MMcf) | 19,337 | 20,910 | (1,573 | ) | 31,926 | 36,918 | (4,992 | ) | ||||||||||
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 Operating Results and Adjusted EBITDA, 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, for measuring the Company's cash flow and 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 Operating Results as reported GAAP earnings before items impacting comparability. The table at page 4 of this report reconciles National Fuel's reported GAAP earnings to Operating Results for the three and six months ended March 31, 2015 and 2014.
Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, depreciation, depletion and amortization, interest and other income, impairments, items impacting comparability and income taxes.
The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and six months ended March 31, 2015 and 2014:
| Three Months Ended | Six Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Reported GAAP Earnings | $ | 16,669 | $ | 95,211 | $ | 101,409 | $ | 177,463 | ||||||||
| Depreciation, Depletion and Amortization | 82,687 | 89,975 | 185,433 | 183,089 | ||||||||||||
| Interest and Other Income | (1,434 | ) | (5,372 | ) | (3,874 | ) | (6,303 | ) | ||||||||
| Interest Expense | 23,960 | 24,141 | 47,062 | 47,975 | ||||||||||||
| Income Taxes | 5,136 | 66,095 | 60,296 | 121,520 | ||||||||||||
|
Impairment of Oil and Gas Producing Properties |
120,348 | — | 120,348 | — | ||||||||||||
| Plugging and Abandonment Accrual | — | 3,761 | — | 5,002 | ||||||||||||
| Adjusted EBITDA | $ | 247,366 | $ | 273,811 | $ | 510,674 | $ | 528,746 | ||||||||
| Adjusted EBITDA by Segment | ||||||||||||||||
| Pipeline and Storage Adjusted EBITDA | $ | 54,415 | $ | 50,776 | $ | 103,309 | $ | 98,892 | ||||||||
| Gathering Adjusted EBITDA | 15,165 | 14,057 | 37,928 | 27,442 | ||||||||||||
| Total Midstream Businesses Adjusted EBITDA | 69,580 | 64,833 | 141,237 | 126,334 | ||||||||||||
| Exploration and Production Adjusted EBITDA | 95,615 | 131,399 | 231,044 | 268,335 | ||||||||||||
| Utility Adjusted EBITDA | 80,233 | 75,044 | 133,665 | 130,338 | ||||||||||||
| Energy Marketing Adjusted EBITDA | 5,444 | 6,115 | 10,085 | 8,734 | ||||||||||||
| Corporate and All Other Adjusted EBITDA | (3,506 | ) | (3,580 | ) | (5,357 | ) | (4,995 | ) | ||||||||
| Total Adjusted EBITDA | $ | 247,366 | $ | 273,811 | $ | 510,674 | $ | 528,746 | ||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||
| AND SUBSIDIARIES | ||||||||
|
Quarter Ended March 31 (unaudited) |
2015 | 2014 | ||||||
| Operating Revenues | $ | 596,127,000 | $ |
756,242,000 |
|
|||
| Net Income Available for Common Stock | $ | 16,669,000 | $ | 95,211,000 | ||||
| Earnings Per Common Share: | ||||||||
| Basic | $ | 0.20 | $ | 1.14 | ||||
| Diluted | $ | 0.20 | $ | 1.12 | ||||
| Weighted Average Common Shares: | ||||||||
| Used in Basic Calculation | 84,317,508 | 83,856,120 | ||||||
| Used in Diluted Calculation | 85,133,142 | 84,837,123 | ||||||
|
Six Months Ended March 31 (unaudited) |
||||||||
| Operating Revenues | $ | 1,120,036,000 | $ | 1,306,314,000 | ||||
| Net Income Available for Common Stock | $ | 101,409,000 | $ | 177,463,000 | ||||
| Earnings Per Common Share: | ||||||||
| Basic | $ | 1.20 | $ | 2.12 | ||||
| Diluted | $ | 1.19 | $ | 2.09 | ||||
| Weighted Average Common Shares: | ||||||||
| Used in Basic Calculation | 84,262,471 | 83,781,085 | ||||||
| Used in Diluted Calculation | 85,175,961 | 84,787,610 | ||||||
|
Twelve Months Ended March 31 (unaudited) |
||||||||
| Operating Revenues | $ | 1,926,803,000 | $ | 2,085,185,000 | ||||
| Net Income Available for Common Stock | $ | 223,360,000 | $ | 283,800,000 | ||||
| Earnings Per Common Share: | ||||||||
| Basic | $ | 2.65 | $ | 3.39 | ||||
| Diluted | $ | 2.62 | $ | 3.35 | ||||
| Weighted Average Common Shares: | ||||||||
| Used in Basic Calculation | 84,170,033 | 83,687,056 | ||||||
| Used in Diluted Calculation | 85,102,075 | 84,601,418 | ||||||
National Fuel Gas Company
Analysts:
Brian M. Welsch,
716-857-7875
or
Media:
Karen L. Merkel, 716-857-7654
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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