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National Fuel Reports First Quarter Earnings
来源: Nasdaq GlobeNewswire / 02 2月 2023 15:45:42 America/Chicago
WILLIAMSVILLE, N.Y., Feb. 02, 2023 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the first quarter of its 2023 fiscal year.
FISCAL 2023 FIRST QUARTER SUMMARY
- GAAP net income of $169.7 million, or $1.84 per share, compared to GAAP net income of $132.4 million, or $1.44 per share, in the prior year, an increase of 28% per share.
- Adjusted operating results of $169.5 million, or $1.84 per share, an increase of 24%, compared to $1.48 per share, in the prior year (see non-GAAP reconciliation on page 2).
- Adjusted EBITDA of $351.0 million, an increase of 18%, compared to $298.2 million in the prior year (see non-GAAP reconciliation on page 21).
- Net cash provided by operating activities of $327.3 million, an increase of 91%, compared to $171.5 million in the prior year.
- Pipeline & Storage segment Adjusted EBITDA of $64.5 million, an increase of 13%, compared to $57.2 million in the prior year.
- E&P segment Adjusted EBITDA of $190.3 million, an increase of 29%, compared to $147.0 million in the prior year.
- E&P segment net Appalachian natural gas production of 90.6 Bcfe, an increase of 9.2 Bcfe, or 11%, higher than prior year and 3% higher than fiscal 2022 fourth quarter.
- Average realized natural gas prices of $3.02 per Mcf, up $0.50 per Mcf from the prior year.
- Company is revising its fiscal 2023 earnings guidance to a range of $5.35 to $5.75 per share.
MANAGEMENT COMMENTS
David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “First, I want to share my appreciation for the exceptional performance of our employees during Winter Storm Elliott in Buffalo, NY. In the face of extreme weather conditions, they went the extra mile to ensure that safe, reliable natural gas service continued uninterrupted when it was needed most.
“Despite this weather challenge, National Fuel had a terrific start to fiscal 2023, with all four segments contributing to a 24% increase in adjusted operating results. Our upstream business led the way, with 11% growth in Appalachian natural gas production and the tailwind of strong natural gas pricing, driving a large portion of the increase over last year.
“While our outlook for the remainder of fiscal 2023 has been impacted by the recent reduction in natural gas prices, the strength of our integrated model, underpinned by our rate-regulated businesses, provides a measure of earnings and cash flow stability. Longer-term, we are very well positioned to generate significant free cash flow, which we expect will further strengthen our investment grade balance sheet and provide flexibility to deliver additional value to our shareholders in the years ahead.”
RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS
Three Months Ended December 31, (in thousands except per share amounts) 2022 2021 Reported GAAP Earnings $ 169,689 $ 132,392 Items impacting comparability: Unrealized (gain) loss on other investments (Corporate / All Other) (209 ) 4,490 Tax impact of unrealized (gain) loss on other investments 44 (943 ) Adjusted Operating Results $ 169,524 $ 135,939 Reported GAAP Earnings Per Share $ 1.84 $ 1.44 Items impacting comparability: Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) — 0.04 Adjusted Operating Results Per Share $ 1.84 $ 1.48 FISCAL 2023 GUIDANCE UPDATE
National Fuel is revising its fiscal 2023 earnings guidance to reflect the results of the first quarter, along with updated forecast assumptions and projections. The Company is now projecting that earnings will be within the range of $5.35 to $5.75 per share, a decrease of $1.10 per share from the midpoint of the Company’s prior guidance range. The decrease from the Company’s prior earnings guidance primarily reflects the impact of lower natural gas price expectations, as the rest of the Company's assumptions and projections are largely unchanged.
The Company is now assuming that NYMEX natural gas prices will average $3.25 per MMBtu for the remainder of fiscal 2023, a decrease of $1.92 per MMBtu from the $5.17 per MMBtu average ($6.00 per MMBtu in January through March and $4.75 per MMBtu in April through September) assumed in the previous guidance over the remaining nine months of the fiscal year. 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.
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 90% of its projected remaining fiscal 2023 production, limiting its exposure to in-basin markets. Approximately 68% of Seneca’s expected remaining production is either matched by a financial hedge, including a combination of swaps and no-cost collars, or was entered into at a fixed price.
The Company’s consolidated and individual segment capital expenditures and other guidance assumptions remain largely unchanged from the previous guidance. The details are outlined in the table on page 7.
DISCUSSION OF FIRST QUARTER RESULTS BY SEGMENT
The following earnings discussion of each operating segment for the quarter ended December 31, 2022 is summarized in a tabular form on pages 8 and 9 of this report. 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 December 31, (in thousands) 2022 2021 Variance GAAP Earnings $ 91,192 $ 62,369 $ 28,823 Adjusted EBITDA $ 190,330 $ 146,999 $ 43,331 Seneca’s first quarter GAAP earnings increased $28.8 million versus the prior year primarily due to higher realized natural gas prices and natural gas production. These increases were partially offset by the loss of earnings from Seneca’s California assets that were sold in June 2022, higher Appalachian operating expenses and higher income tax expense.
Seneca produced 90.6 Bcfe during the first quarter, an increase of 5.5 Bcfe, or 7%, from the prior year. This is a result of a 9.2 Bcf increase, or 11%, in Appalachian natural gas production from Seneca’s development program, offset by a 3.7 Bcfe decrease in production related to the aforementioned California sale.
Seneca’s average realized natural gas price, after the impact of hedging and transportation costs, was $3.02 per Mcf, an increase of $0.50 per Mcf from the prior year. This increase was primarily due to higher NYMEX prices, higher spot prices at local sales points in Pennsylvania, and an increase in the weighted average hedge price compared to the prior year first quarter.
On an absolute basis, lease operating and transportation expense (“LOE”) decreased $7.6 million primarily due to the California sale. Partly offsetting that decrease were increases in LOE from higher transportation and gathering costs as a result of increased production, as well as higher repair, rental and personnel costs in Appalachia. LOE expense includes $53.8 million in intercompany expense for gathering and compression services used to connect Seneca’s production to sales points along interstate pipelines. On a per unit basis, LOE was $0.68 per Mcfe, a decrease of $0.13 per Mcfe from the prior year.
General and administrative (“G&A”) expense decreased by $2.2 million largely due to the California sale. On a per unit basis, G&A expense was $0.17 per Mcfe, a decrease of $0.04 per Mcfe from the prior year.
The decrease in Seneca’s other operating expenses of $2.1 million was also primarily due to the impact of the sale of Seneca’s California assets.
Depreciation, depletion and amortization (“DD&A”) expense increased $6.1 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. DD&A expense was $0.61 per Mcfe, an increase of $0.03 per Mcfe from the prior year.
The increase in Seneca’s income tax expense was primarily driven by a prior year first quarter benefit realized from the Enhanced Oil Recovery tax credit, which did not recur in the current year as a result of the sale of the California assets.
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 December 31, (in thousands) 2022 2021 Variance GAAP Earnings $ 29,476 $ 25,168 $ 4,308 Adjusted EBITDA $ 64,528 $ 57,150 $ 7,378 The Pipeline and Storage segment’s first quarter GAAP earnings increased $4.3 million versus the prior year primarily due to an increase in operating revenues, partially offset by higher operation and maintenance (“O&M”) expense and higher DD&A expense. The increase in operating revenues of $9.3 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 $1.8 million primarily due to an increase in personnel and pipeline integrity costs. The increase in DD&A expense of $1.6 million was primarily attributable to incremental depreciation expense from the FM100 Project.
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 and other non-affiliated Appalachian production to the interstate pipeline system.
Three Months Ended December 31, (in thousands) 2022 2021 Variance GAAP Earnings $ 24,738 $ 23,137 $ 1,601 Adjusted EBITDA $ 46,715 $ 44,032 $ 2,683 The Gathering segment’s first quarter GAAP earnings increased $1.6 million versus the prior year primarily due to higher operating revenues, partially offset by higher O&M expense. Operating revenues increased $4.2 million, or 8%, which was the result of a 6.9 Bcf increase in gathered volumes due to an increase in Seneca’s natural gas production. The increase in O&M expense of $1.5 million was due to higher compression leasing expenses, as well as increases in personnel and preventative maintenance expenses.
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 December 31, (in thousands) 2022 2021 Variance GAAP Earnings $ 23,817 $ 22,130 $ 1,687 Adjusted EBITDA $ 51,577 $ 52,028 $ (451 ) The Utility segment’s first quarter GAAP earnings increased $1.7 million versus the prior year primarily due to higher customer margin (operating revenues less purchased gas sold) and a decrease in non-service pension and post-retirement benefit (“OPEB”) costs, partially offset by higher O&M and interest expense. The increase in customer margin was mainly due to increased customer usage, largely attributable to weather that was 27% colder on average than last year in Distribution’s Pennsylvania service territory (where the Company does not have a Weather Normalization Clause), combined with higher revenues from the Company’s system modernization tracking mechanism in its New York service territory. These factors were partially offset by a reduction in base rates in New York as a result of a rate proceeding that became effective October 1, 2022 which temporarily reduced the Utility’s recovery of pension and OPEB expenses to zero. In addition to lowering rates, the proceeding mandated a corresponding decrease in pension and OPEB expense, most of which had been previously recorded in “below the line” non-service pension and post-retirement benefit costs. O&M expense increased by $3.8 million largely due to higher personnel costs. An increase in the accrual for uncollectible accounts, which was generally in line with the increase in the Utility segment’s revenue, also contributed to higher O&M expense for the quarter. Interest expense increased $2.5 million due primarily to a higher weighted average interest rate on intercompany short-term borrowings.
Corporate and All Other
The Company’s operations that are included in Corporate and All Other generated combined earnings of $0.5 million in the current year first quarter, which was a $0.9 million increase over the combined net loss of $0.4 million in the prior-year first quarter. The increase in earnings was primarily driven by unrealized gains on investment securities recognized in the current quarter compared to unrealized losses on investment securities recognized in the prior-year first quarter, partially offset by a lower amount of realized gains on investment securities sold in the current quarter as compared to the prior-year first quarter.
EARNINGS TELECONFERENCE
The Company will host a conference call on Friday, February 3, 2023, 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=3963c6bd&confld=46096. 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 276256. 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, February 10, 2023. To access the telephone replay, dial U.S. toll free 1-866-813-9403 and provide Access Code 856816.
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.nationalfuel.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; 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 natural 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 SUBSIDIARIESGUIDANCE 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 investments during the nine months 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.
Previous FY 2023 Guidance Updated FY 2023 Guidance Consolidated Earnings per Share, excluding items impacting comparability $6.40 to $6.90 $5.35 to $5.75 Consolidated Effective Tax Rate ~ 25.5 - 26% ~ 25 - 25.5% 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) $6.00 /MMBtu l $4.75 /MMBtu $3.25 /MMBtu Appalachian basin spot price (Oct - Mar | Apr - Sep) $4.95 /MMBtu l $3.55 /MMBtu $2.25 /MMBtu Production (Bcfe) 370 to 390 370 to 390 E&P Operating Costs ($/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 $230 - $245 $230 - $245 Pipeline and Storage Segment Revenues $360 - $380 $360 - $380 * Commodity price assumptions are for the remaining 9 months of the fiscal year. Previous guidance included separate pricing assumptions for October - March and April - September.
NATIONAL FUEL GAS COMPANY RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS QUARTER ENDED DECEMBER 31, 2022 (Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / (Thousands of Dollars) Production Storage Gathering Utility All Other Consolidated* First quarter 2022 GAAP earnings $ 62,369 $ 25,168 $ 23,137 $ 22,130 $ (412 ) $ 132,392 Items impacting comparability: Unrealized (gain) loss on other investments 4,490 4,490 Tax impact of unrealized (gain) loss on other investments (943 ) (943 ) First quarter 2022 adjusted operating results 62,369 25,168 23,137 22,130 3,135 135,939 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 17,445 17,445 Higher (lower) crude oil production (27,438 ) (27,438 ) Higher (lower) realized natural gas prices, after hedging 35,798 35,798 Midstream Revenues Higher (lower) operating revenues 7,351 3,309 10,660 Downstream Margins*** Impact of usage and weather 3,268 3,268 Impact of new rates**** (3,726 ) (3,726 ) System modernization tracker revenues 868 868 Regulatory revenue adjustments 170 170 Higher (lower) other operating revenues 1,023 1,023 Operating Expenses Lower (higher) lease operating and transportation expenses 5,996 5,996 Lower (higher) operating expenses 3,325 (1,458 ) (1,184 ) (2,390 ) (1,707 ) Lower (higher) property, franchise and other taxes (981 ) (981 ) Lower (higher) depreciation / depletion (4,781 ) (1,274 ) (6,055 ) Other Income (Expense) (Higher) lower other deductions 1,428 593 4,135 (4,441 ) 1,715 (Higher) lower interest expense (871 ) (648 ) (2,028 ) 1,721 (1,826 ) Income Taxes Lower (higher) income tax expense / effective tax rate (1,185 ) (191 ) (552 ) (67 ) 47 (1,948 ) All other / rounding 87 (65 ) 28 434 (161 ) 323 First quarter 2023 adjusted operating results 91,192 29,476 24,738 23,817 301 169,524 Items impacting comparability: Unrealized gain (loss) on other investments 209 209 Tax impact of unrealized gain (loss) on other investments (44 ) (44 ) First quarter 2023 GAAP earnings $ 91,192 $ 29,476 $ 24,738 $ 23,817 $ 466 $ 169,689 * 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. **** Amount is offset by corresponding decrease in other deductions and will have no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANY RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE QUARTER ENDED DECEMBER 31, 2022 (Unaudited) Upstream Midstream Downstream Exploration & Pipeline & Corporate / Production Storage Gathering Utility All Other Consolidated* First quarter 2022 GAAP earnings per share $ 0.68 $ 0.27 $ 0.25 $ 0.24 $ — $ 1.44 Items impacting comparability: Unrealized (gain) loss on other investments, net of tax 0.04 0.04 First quarter 2022 adjusted operating results per share 0.68 0.27 0.25 0.24 0.04 1.48 Drivers of adjusted operating results** Upstream Revenues Higher (lower) natural gas production 0.19 0.19 Higher (lower) crude oil production (0.30 ) (0.30 ) Higher (lower) realized natural gas prices, after hedging 0.39 0.39 Midstream Revenues Higher (lower) operating revenues 0.08 0.04 0.12 Downstream Margins*** Impact of usage and weather 0.04 0.04 Impact of new rates**** (0.04 ) (0.04 ) System modernization tracker revenues 0.01 0.01 Regulatory revenue adjustments — — Higher (lower) other operating revenues 0.01 0.01 Operating Expenses Lower (higher) lease operating and transportation expenses 0.06 0.06 Lower (higher) operating expenses 0.04 (0.02 ) (0.01 ) (0.03 ) (0.02 ) Lower (higher) property, franchise and other taxes (0.01 ) (0.01 ) Lower (higher) depreciation / depletion (0.05 ) (0.01 ) (0.06 ) Other Income (Expense) (Higher) lower other deductions 0.02 0.01 0.04 (0.05 ) 0.02 (Higher) lower interest expense (0.01 ) (0.01 ) (0.02 ) 0.02 (0.02 ) Income Taxes Lower (higher) income tax expense / effective tax rate (0.01 ) — (0.01 ) — — (0.02 ) All other / rounding (0.01 ) — — 0.01 (0.01 ) (0.01 ) First quarter 2023 adjusted operating results per share 0.99 0.32 0.27 0.26 — 1.84 Items impacting comparability: Unrealized gain (loss) on other investments, net of tax — — First quarter 2023 GAAP earnings per share $ 0.99 $ 0.32 $ 0.27 $ 0.26 $ — $ 1.84 * 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. **** Amount is offset by corresponding decrease in other deductions and will have no earnings impact for the year ended September 30, 2023. NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES (Thousands of Dollars, except per share amounts) Three Months Ended December 31, (Unaudited) SUMMARY OF OPERATIONS 2022 2021 Operating Revenues: Utility Revenues $ 311,619 $ 236,684 Exploration and Production and Other Revenues 276,973 244,281 Pipeline and Storage and Gathering Revenues 70,267 65,592 658,859 546,557 Operating Expenses: Purchased Gas 171,197 101,628 Operation and Maintenance: Utility 50,352 46,644 Exploration and Production and Other 26,874 45,619 Pipeline and Storage and Gathering 33,261 29,928 Property, Franchise and Other Taxes 26,205 24,501 Depreciation, Depletion and Amortization 96,600 88,578 404,489 336,898 Operating Income 254,370 209,659 Other Income (Expense): Other Income (Deductions) 6,318 (1,079 ) Interest Expense on Long-Term Debt (29,604 ) (30,130 ) Other Interest Expense (3,843 ) (1,161 ) Income Before Income Taxes 227,241 177,289 Income Tax Expense 57,552 44,897 Net Income Available for Common Stock $ 169,689 $ 132,392 Earnings Per Common Share Basic $ 1.85 $ 1.45 Diluted $ 1.84 $ 1.44 Weighted Average Common Shares: Used in Basic Calculation 91,579,814 91,266,300 Used in Diluted Calculation 92,268,210 92,032,775 NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) December 31, September 30, (Thousands of Dollars) 2022 2022 ASSETS Property, Plant and Equipment $ 12,773,470 $ 12,551,909 Less - Accumulated Depreciation, Depletion and Amortization 6,074,626 5,985,432 Net Property, Plant and Equipment 6,698,844 6,566,477 Current Assets: Cash and Temporary Cash Investments 244,475 46,048 Hedging Collateral Deposits 1,600 91,670 Receivables - Net 332,410 361,626 Unbilled Revenue 87,110 30,075 Gas Stored Underground 23,780 32,364 Materials and Supplies - at average cost 43,599 40,637 Unrecovered Purchased Gas Costs 78,739 99,342 Other Current Assets 61,117 59,369 Total Current Assets 872,830 761,131 Other Assets: Recoverable Future Taxes 107,467 106,247 Unamortized Debt Expense 8,473 8,884 Other Regulatory Assets 73,321 67,101 Deferred Charges 75,253 77,472 Other Investments 72,870 95,025 Goodwill 5,476 5,476 Prepaid Pension and Post-Retirement Benefit Costs 206,629 196,597 Fair Value of Derivative Financial Instruments 12,170 9,175 Other 1,581 2,677 Total Other Assets 563,240 568,654 Total Assets $ 8,134,914 $ 7,896,262 CAPITALIZATION AND LIABILITIES Capitalization: Comprehensive Shareholders' Equity Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and Outstanding - 91,786,806 Shares and 91,478,064 Shares, Respectively $ 91,787 $ 91,478 Paid in Capital 1,025,639 1,027,066 Earnings Reinvested in the Business 1,713,176 1,587,085 Accumulated Other Comprehensive Loss (293,746 ) (625,733 ) Total Comprehensive Shareholders' Equity 2,536,856 2,079,896 Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs 2,084,363 2,083,409 Total Capitalization 4,621,219 4,163,305 Current and Accrued Liabilities: Notes Payable to Banks and Commercial Paper 250,000 60,000 Current Portion of Long-Term Debt 399,000 549,000 Accounts Payable 168,387 178,945 Amounts Payable to Customers 154 419 Dividends Payable 43,598 43,452 Interest Payable on Long-Term Debt 43,142 17,376 Customer Advances 31,314 26,108 Customer Security Deposits 28,829 24,283 Other Accruals and Current Liabilities 239,097 257,327 Fair Value of Derivative Financial Instruments 331,521 785,659 Total Current and Accrued Liabilities 1,535,042 1,942,569 Other Liabilities: Deferred Income Taxes 879,676 698,229 Taxes Refundable to Customers 360,276 362,098 Cost of Removal Regulatory Liability 263,707 259,947 Other Regulatory Liabilities 191,499 188,803 Other Post-Retirement Liabilities 2,998 3,065 Asset Retirement Obligations 161,221 161,545 Other Liabilities 119,276 116,701 Total Other Liabilities 1,978,653 1,790,388 Commitments and Contingencies — — Total Capitalization and Liabilities $ 8,134,914 $ 7,896,262 NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended December 31, (Thousands of Dollars) 2022 2021 Operating Activities: Net Income Available for Common Stock $ 169,689 $ 132,392 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation, Depletion and Amortization 96,600 88,578 Deferred Income Taxes 53,457 44,122 Stock-Based Compensation 5,575 5,487 Other 4,078 4,675 Change in: Receivables and Unbilled Revenue (29,522 ) (98,688 ) Gas Stored Underground and Materials, Supplies and Emission Allowances 5,622 17,111 Unrecovered Purchased Gas Costs 20,603 526 Other Current Assets (1,748 ) (4,654 ) Accounts Payable 6,091 (10,888 ) Amounts Payable to Customers (265 ) 15 Customer Advances 5,206 (2,603 ) Customer Security Deposits 4,546 981 Other Accruals and Current Liabilities 4,523 5,044 Other Assets (20,238 ) (6,838 ) Other Liabilities 3,122 (3,777 ) Net Cash Provided by Operating Activities $ 327,339 $ 171,483 Investing Activities: Capital Expenditures $ (233,473 ) $ (213,491 ) Sale of Fixed Income Mutual Fund Shares in Grantor Trust 10,000 30,000 Other 14,637 13,781 Net Cash Used in Investing Activities $ (208,836 ) $ (169,710 ) Financing Activities: Proceeds from Issuance of Short-Term Note Payable to Bank $ 250,000 $ — Net Change in Other Short-Term Notes Payable to Banks and Commercial Paper (60,000 ) 7,500 Reduction of Long-Term Debt (150,000 ) — Dividends Paid on Common Stock (43,452 ) (41,487 ) Net Repurchases of Common Stock (6,694 ) (8,859 ) Net Cash Used in Financing Activities $ (10,146 ) $ (42,846 ) Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash 108,357 (41,073 ) Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 137,718 120,138 Cash, Cash Equivalents, and Restricted Cash at December 31 $ 246,075 $ 79,065 NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS (UNAUDITED) UPSTREAM BUSINESS Three Months Ended (Thousands of Dollars, except per share amounts) December 31, EXPLORATION AND PRODUCTION SEGMENT 2022 2021 Variance Total Operating Revenues $ 276,973 $ 244,198 $ 32,775 Operating Expenses: Operation and Maintenance: General and Administrative Expense 15,598 17,756 (2,158 ) Lease Operating and Transportation Expense 61,546 69,136 (7,590 ) All Other Operation and Maintenance Expense 2,523 4,573 (2,050 ) Property, Franchise and Other Taxes 6,976 5,734 1,242 Depreciation, Depletion and Amortization 55,558 49,506 6,052 142,201 146,705 (4,504 ) Operating Income 134,772 97,493 37,279 Other Income (Expense): Non-Service Pension and Post-Retirement Benefit (Costs) Credit 347 (186 ) 533 Interest and Other Income 1,331 56 1,275 Interest Expense (13,234 ) (12,132 ) (1,102 ) Income Before Income Taxes 123,216 85,231 37,985 Income Tax Expense 32,024 22,862 9,162 Net Income $ 91,192 $ 62,369 $ 28,823 Net Income Per Share (Diluted) $ 0.99 $ 0.68 $ 0.31 NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS (UNAUDITED) MIDSTREAM BUSINESSES Three Months Ended (Thousands of Dollars, except per share amounts) December 31, PIPELINE AND STORAGE SEGMENT 2022 2021 Variance Revenues from External Customers $ 67,621 $ 61,547 $ 6,074 Intersegment Revenues 30,034 26,803 3,231 Total Operating Revenues 97,655 88,350 9,305 Operating Expenses: Purchased Gas 425 448 (23 ) Operation and Maintenance 24,018 22,172 1,846 Property, Franchise and Other Taxes 8,684 8,580 104 Depreciation, Depletion and Amortization 17,414 15,801 1,613 50,541 47,001 3,540 Operating Income 47,114 41,349 5,765 Other Income (Expense): Non-Service Pension and Post-Retirement Benefit Credit 1,330 767 563 Interest and Other Income 1,864 1,402 462 Interest Expense (10,952 ) (10,132 ) (820 ) Income Before Income Taxes 39,356 33,386 5,970 Income Tax Expense 9,880 8,218 1,662 Net Income $ 29,476 $ 25,168 $ 4,308 Net Income Per Share (Diluted) $ 0.32 $ 0.27 $ 0.05 Three Months Ended December 31, GATHERING SEGMENT 2022 2021 Variance Revenues from External Customers $ 2,646 $ 4,045 $ (1,399 ) Intersegment Revenues 53,767 48,180 5,587 Total Operating Revenues 56,413 52,225 4,188 Operating Expenses: Operation and Maintenance 9,687 8,188 1,499 Property, Franchise and Other Taxes 11 5 6 Depreciation, Depletion and Amortization 8,709 8,391 318 18,407 16,584 1,823 Operating Income 38,006 35,641 2,365 Other Income (Expense): Non-Service Pension and Post-Retirement Benefit (Costs) Credit 37 (56 ) 93 Interest and Other Income 170 9 161 Interest Expense (4,042 ) (4,148 ) 106 Income Before Income Taxes 34,171 31,446 2,725 Income Tax Expense 9,433 8,309 1,124 Net Income $ 24,738 $ 23,137 $ 1,601 Net Income Per Share (Diluted) $ 0.27 $ 0.25 $ 0.02 NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS (UNAUDITED) DOWNSTREAM BUSINESS Three Months Ended (Thousands of Dollars, except per share amounts) December 31, UTILITY SEGMENT 2022 2021 Variance Revenues from External Customers $ 311,619 $ 236,684 $ 74,935 Intersegment Revenues 62 75 (13 ) Total Operating Revenues 311,681 236,759 74,922 Operating Expenses: Purchased Gas 198,420 127,212 71,208 Operation and Maintenance 51,276 47,461 3,815 Property, Franchise and Other Taxes 10,408 10,058 350 Depreciation, Depletion and Amortization 14,874 14,831 43 274,978 199,562 75,416 Operating Income 36,703 37,197 (494 ) Other Income (Expense): Non-Service Pension and Post-Retirement Benefit Costs (8 ) (4,326 ) 4,318 Interest and Other Income 1,440 525 915 Interest Expense (8,043 ) (5,524 ) (2,519 ) Income Before Income Taxes 30,092 27,872 2,220 Income Tax Expense 6,275 5,742 533 Net Income $ 23,817 $ 22,130 $ 1,687 Net Income Per Share (Diluted) $ 0.26 $ 0.24 $ 0.02 NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES SEGMENT OPERATING RESULTS AND STATISTICS (UNAUDITED) Three Months Ended (Thousands of Dollars, except per share amounts) December 31, ALL OTHER 2022 2021 Variance Revenues from External Customers $ — $ — $ — Intersegment Revenues — 6 (6 ) Total Operating Revenues — 6 (6 ) Operating Expenses: Purchased Gas — 6 (6 ) Operation and Maintenance 21 5 16 21 11 10 Operating Loss (21 ) (5 ) (16 ) Other Income (Expense): Interest and Other Income (324 ) 2 (326 ) Interest Expense (21 ) — (21 ) Loss before Income Taxes (366 ) (3 ) (363 ) Income Tax Expense (Benefit) (86 ) 4 (90 ) Net Loss $ (280 ) $ (7 ) $ (273 ) Net Loss Per Share (Diluted) $ (0.01 ) $ — $ (0.01 ) Three Months Ended December 31, CORPORATE 2022 2021 Variance Revenues from External Customers $ — $ 83 $ (83 ) Intersegment Revenues 1,152 1,082 70 Total Operating Revenues 1,152 1,165 (13 ) Operating Expenses: Operation and Maintenance 3,185 3,008 177 Property, Franchise and Other Taxes 126 124 2 Depreciation, Depletion and Amortization 45 49 (4 ) 3,356 3,181 175 Operating Loss (2,204 ) (2,016 ) (188 ) Other Income (Expense): Non-Service Pension and Post-Retirement Benefit Costs (354 ) (1,017 ) 663 Interest and Other Income 37,877 33,177 4,700 Interest Expense on Long-Term Debt (29,604 ) (30,130 ) 526 Other Interest Expense (4,943 ) (657 ) (4,286 ) Net Income (Loss) before Income Taxes 772 (643 ) 1,415 Income Tax Expense (Benefit) 26 (238 ) 264 Net Income (Loss) $ 746 $ (405 ) $ 1,151 Net Income (Loss) Per Share (Diluted) $ 0.01 $ — $ 0.01 Three Months Ended December 31, INTERSEGMENT ELIMINATIONS 2022 2021 Variance Intersegment Revenues $ (85,015 ) $ (76,146 ) $ (8,869 ) Operating Expenses: Purchased Gas (27,648 ) (26,038 ) (1,610 ) Operation and Maintenance (57,367 ) (50,108 ) (7,259 ) (85,015 ) (76,146 ) (8,869 ) Operating Income — — — Other Income (Expense): Interest and Other Deductions (37,392 ) (31,432 ) (5,960 ) Interest Expense 37,392 31,432 5,960 Net Income $ — $ — $ — Net Income Per Share (Diluted) $ — $ — $ — NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES SEGMENT INFORMATION (Continued) (Thousands of Dollars) Three Months Ended December 31, (Unaudited) Increase 2022 2021 (Decrease) Capital Expenditures: Exploration and Production $ 168,505 (1)(2) $ 139,212 (3)(4) $ 29,293 Pipeline and Storage 16,427 (1)(2) 24,061 (3)(4) (7,634 ) Gathering 13,293 (1)(2) 8,920 (3)(4) 4,373 Utility 25,288 (1)(2) 19,383 (3)(4) 5,905 Total Reportable Segments 223,513 191,576 31,937 All Other — — — Corporate 12 225 (213 ) Total Capital Expenditures $ 223,525 $ 191,801 $ 31,724 (1) Capital expenditures for the quarter ended December 31, 2022, include accounts payable and accrued liabilities related to capital expenditures of $102.9 million, $2.1 million, $1.1 million, and $4.2 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 December 31, 2022, since they represent non-cash investing activities at that date. (2) Capital expenditures for the quarter ended December 31, 2022, exclude 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 were in accounts payable and accrued liabilities at September 30, 2022 and paid during the quarter ended December 31, 2022. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2022, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at December 31, 2022. (3) Capital expenditures for the quarter ended December 31, 2021, include accounts payable and accrued liabilities related to capital expenditures of $69.9 million, $5.4 million, $2.6 million, and $3.1 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 December 31, 2021, since they represent non-cash investing activities at that date. (4) Capital expenditures for the quarter ended December 31, 2021, 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 quarter ended December 31, 2021. 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 December 31, 2021. DEGREE DAYS Percent Colder (Warmer) Than: Three Months Ended December 31, Normal 2022 2021 Normal(1) Last Year(1) Buffalo, NY 2,253 2,048 1,704 (9.1 ) 20.2 Erie, PA 2,044 1,987 1,560 (2.8 ) 27.4 (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 December 31, Increase 2022 2021 (Decrease) Gas Production/Prices: Production (MMcf) Appalachia 90,574 81,389 9,185 West Coast — 408 (408 ) Total Production 90,574 81,797 8,777 Average Prices (Per Mcf) Appalachia $ 4.77 $ 4.39 $ 0.38 West Coast N/M 9.79 N/M Weighted Average 4.77 4.42 0.35 Weighted Average after Hedging 3.02 2.52 0.50 Oil Production/Prices: Production (Thousands of Barrels) Appalachia 8 — 8 West Coast — 548 (548 ) Total Production 8 548 (540 ) Average Prices (Per Barrel) Appalachia $ 82.09 $ 70.86 $ 11.23 West Coast N/M 77.34 N/M Weighted Average 82.09 77.34 4.75 Weighted Average after Hedging 82.09 64.29 17.80 Total Production (MMcfe) 90,622 85,085 5,537 Selected Operating Performance Statistics: General & Administrative Expense per Mcfe(1) $ 0.17 $ 0.21 $ (0.04 ) Lease Operating and Transportation Expense per Mcfe(1)(2) $ 0.68 $ 0.81 $ (0.13 ) Depreciation, Depletion & Amortization per Mcfe(1) $ 0.61 $ 0.58 $ 0.03 N/M Not Meaningful (as a result of the sale of Seneca's West Coast assets in June 2022) (1) Refer to page 13 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. (2) Amounts include transportation expense of $0.59 and $0.56 per Mcfe for the three months ended December 31, 2022 and December 31, 2021, respectively. NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES EXPLORATION AND PRODUCTION INFORMATION Hedging Summary for Remaining Nine Months of Fiscal 2023 Volume Average Hedge Price Gas Swaps NYMEX 80,460,000 MMBTU $ 2.80 / MMBTU No Cost Collars 67,080,000 MMBTU $ 3.34 / MMBTU (Floor) / $3.99 / MMBTU (Ceiling) Fixed Price Physical Sales 54,466,307 MMBTU $ 2.47 / MMBTU Total 202,006,307 MMBTU Hedging Summary for Fiscal 2024 Volume Average Hedge Price Gas Swaps NYMEX 67,680,000 MMBTU $ 2.98 / MMBTU No Cost Collars 65,280,000 MMBTU $ 3.33 / MMBTU (Floor) / $4.17 / MMBTU (Ceiling) Fixed Price Physical Sales 65,607,429 MMBTU $ 2.38 / MMBTU Total 198,567,429 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 64,221,273 MMBTU $ 2.43 / MMBTU Total 135,741,273 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 62,453,675 MMBTU $ 2.37 / MMBTU Total 107,193,675 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 45,517,002 MMBTU $ 2.39 / MMBTU Total 49,077,002 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 Pipeline & Storage Throughput - (millions of cubic feet - MMcf) Three Months Ended December 31, Increase 2022 2021 (Decrease) Firm Transportation - Affiliated 38,469 28,197 10,272 Firm Transportation - Non-Affiliated 186,154 165,397 20,757 Interruptible Transportation 1,308 767 541 225,931 194,361 31,570 Gathering Volume - (MMcf) Three Months Ended December 31, Increase 2022 2021 (Decrease) Gathered Volume 108,027 101,094 6,933 Utility Throughput - (MMcf) Three Months Ended December 31, Increase 2022 2021 (Decrease) Retail Sales: Residential Sales 20,153 17,496 2,657 Commercial Sales 2,994 2,543 451 Industrial Sales 151 123 28 23,298 20,162 3,136 Transportation 18,310 17,593 717 41,608 37,755 3,853
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIESNON-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 months ended December 31, 2022 and 2021:
Three Months Ended December 31, (in thousands except per share amounts) 2022 2021 Reported GAAP Earnings $ 169,689 $ 132,392 Items impacting comparability: Unrealized (gain) loss on other investments (Corporate / All Other) (209 ) 4,490 Tax impact of unrealized (gain) loss on other investments 44 (943 ) Adjusted Operating Results $ 169,524 $ 135,939 Reported GAAP Earnings Per Share $ 1.84 $ 1.44 Items impacting comparability: Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) — 0.04 Adjusted Operating Results Per Share $ 1.84 $ 1.48 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 months ended December 31, 2022 and 2021:
Three Months Ended December 31, (in thousands) 2022 2021 Reported GAAP Earnings $ 169,689 $ 132,392 Depreciation, Depletion and Amortization 96,600 88,578 Other (Income) Deductions (6,318 ) 1,079 Interest Expense 33,447 31,291 Income Taxes 57,552 44,897 Adjusted EBITDA $ 350,970 $ 298,237 Adjusted EBITDA by Segment Pipeline and Storage Adjusted EBITDA $ 64,528 $ 57,150 Gathering Adjusted EBITDA 46,715 44,032 Total Midstream Businesses Adjusted EBITDA 111,243 101,182 Exploration and Production Adjusted EBITDA 190,330 146,999 Utility Adjusted EBITDA 51,577 52,028 Corporate and All Other Adjusted EBITDA (2,180 ) (1,972 ) Total Adjusted EBITDA $ 350,970 $ 298,237
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
SEGMENT ADJUSTED EBITDAThree Months Ended December 31, (in thousands) 2022 2021 Exploration and Production Segment Reported GAAP Earnings $ 91,192 $ 62,369 Depreciation, Depletion and Amortization 55,558 49,506 Other (Income) Deductions (1,678 ) 130 Interest Expense 13,234 12,132 Income Taxes 32,024 22,862 Adjusted EBITDA $ 190,330 $ 146,999 Pipeline and Storage Segment Reported GAAP Earnings $ 29,476 $ 25,168 Depreciation, Depletion and Amortization 17,414 15,801 Other (Income) Deductions (3,194 ) (2,169 ) Interest Expense 10,952 10,132 Income Taxes 9,880 8,218 Adjusted EBITDA $ 64,528 $ 57,150 Gathering Segment Reported GAAP Earnings $ 24,738 $ 23,137 Depreciation, Depletion and Amortization 8,709 8,391 Other (Income) Deductions (207 ) 47 Interest Expense 4,042 4,148 Income Taxes 9,433 8,309 Adjusted EBITDA $ 46,715 $ 44,032 Utility Segment Reported GAAP Earnings $ 23,817 $ 22,130 Depreciation, Depletion and Amortization 14,874 14,831 Other (Income) Deductions (1,432 ) 3,801 Interest Expense 8,043 5,524 Income Taxes 6,275 5,742 Adjusted EBITDA $ 51,577 $ 52,028 Corporate and All Other Reported GAAP Earnings $ 466 $ (412 ) Depreciation, Depletion and Amortization 45 49 Other (Income) Deductions 193 (730 ) Interest Expense (2,824 ) (645 ) Income Taxes (60 ) (234 ) Adjusted EBITDA $ (2,180 ) $ (1,972 ) 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.
Brandon J. Haspett Investor Relations 716-857-7697 Karen M. Camiolo Treasurer 716-857-7344