WILLIAMSVILLE, N.Y.--(BUSINESS WIRE)--National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated earnings for the first quarter of its 2014 fiscal year (the quarter ended December 31, 2013).
HIGHLIGHTS
- Earnings for the first quarter of fiscal 2014 of $82.3 million, or $0.97 per share, increased $14.4 million, or $0.16 per share, compared to $67.9 million, or $0.81 per share, for the prior year’s first quarter. The increase is due to higher earnings across all segments.
- Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) for the first quarter of fiscal 2014 were $253.7 million compared to $203.5 million for the prior year’s first quarter, an increase of 25%.
- Seneca Resources Corporation’s (“Seneca”) first quarter production of natural gas and crude oil was 37.1 billion cubic feet equivalent (“Bcfe”), or 404 million cubic feet equivalent (“MMcfe”) per day, an increase of 12.6 Bcfe or approximately 51%, over the prior year’s first quarter.
- The Company is reiterating its previous fiscal 2014 production guidance range of 145 to 165 Bcfe. This represents a 20% to 37% increase over fiscal 2013 production.
- The Company is revising its GAAP earnings guidance range for fiscal 2014 to a range of $3.20 to $3.40 per share. The previous earnings guidance had been a range of $3.10 to $3.40 per share. This guidance assumes a flat NYMEX price of $4.00 per MMBtu for natural gas and $90 per Bbl for crude oil for unhedged production for the remainder of the fiscal year.
- A conference call is scheduled for Friday, February 7, 2014, at 11 a.m. Eastern Time.
MANAGEMENT COMMENTS
Ronald J. Tanski, President and Chief Executive Officer of National Fuel Gas Company, stated: “National Fuel’s financial and operating results for the first quarter reflect the quality of our assets and the focused work of our employees. Growth across all of our business segments contributed to a 21 percent increase in consolidated earnings over the prior year’s first quarter.
“Seneca Resources delivered significant growth, increasing production 51 percent compared to the prior year’s first quarter and 12 percent compared to the fourth quarter of last year. Notwithstanding Seneca’s tremendous operating performance, ongoing volatility in natural gas prices in the Appalachian region dampened Seneca’s financial results. Since these regional pricing issues are expected to persist for the next few years, Seneca and our midstream subsidiaries continue to evaluate long-term solutions to help deliver natural gas to markets with more stable pricing that correlates more closely with long-term NYMEX pricing. To that end, during the quarter, Seneca acquired long-term firm transportation capacity on Tennessee Gas Pipeline’s Niagara Expansion project, which is designed to export Marcellus Shale production to Canada, in part by using new capacity that our Supply Corporation will build and lease to Tennessee.
“Our Utility employees remained focused on safe and reliable service during a winter that has been much colder than recent years, and our midstream subsidiaries have easily handled the increased throughput resulting from our ongoing pipeline capacity expansion. Combined with Seneca’s substantial production growth, fiscal 2014 is off to a strong start.”
EXPLORATION AND PRODUCTION SEGMENT OPERATIONS UPDATE
Seneca’s activities during the first quarter were primarily focused on multi-well pads in DCNR Tract 100 in Lycoming County, Pa., in the Eastern Development Area (“EDA”) and its Greater Clermont Area in Elk and Cameron counties, located in its Western Development Area (“WDA”).
Recently, Seneca brought 6 new wells on line in Tract 100 with 24-hour peak production rates that averaged 15.6 million cubic feet (“MMcf”) per day per well. These wells, which were spud in early fiscal 2013, had an average lateral length of 4,872 feet. Each well was completed using a reduced cluster spacing (“RCS”) design, averaging 32 stages per well with an average of 10 stages completed per day. The estimated capital cost to drill and complete each of these wells averaged $6.9 million.
In its Greater Clermont Area, Seneca drilled all 9 wells on its first multi-well development pad in the WDA. These wells had an average lateral length of approximately 5,600 feet, and will be completed prior to the Clermont Gathering System going in service, which is targeted to occur in the fourth quarter of fiscal 2014.
Today, Seneca has two horizontal drilling rigs operating in the WDA, with one currently located on a 6-well development pad in the Greater Clermont Area, and the other drilling the first of 5 delineation wells scheduled for fiscal 2014. A third rig, located in the EDA, remains focused on development drilling in Lycoming County.
SUMMARY OF RESULTS
National Fuel had consolidated earnings for the quarter ended December 31, 2013, of $82.3 million, or $0.97 per share, compared to the prior year’s first quarter of $67.9 million, or $0.81 per share, an increase of $14.4 million or $0.16 per share. Higher earnings across all segments contributed to the increase. (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.)
DISCUSSION OF RESULTS BY SEGMENT
The following discussion of the earnings of each segment is summarized in a tabular form at pages 8 and 9 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 in Pennsylvania, California and Kansas.
The Exploration and Production segment’s earnings in the first quarter of fiscal 2014 of $31.1 million, or $0.37 per share, increased $4.4 million, or $0.05 per share, when compared with the prior year’s first quarter.
Overall production of natural gas and crude oil for the current quarter of 37.1 Bcfe increased approximately 12.6 Bcfe, or 51.4 percent, compared to the prior year’s first quarter. Production from Seneca’s Appalachia properties increased approximately 64.4 percent and accounted for the entire 12.6 Bcfe increase, largely because of Seneca’s strong well results in Lycoming County. California production of 5.0 Bcfe was consistent with the prior year’s first quarter.
Lower commodity prices realized after hedging also impacted earnings. The weighted average natural gas price received by Seneca (after hedging) for the quarter ended December 31, 2013, was $3.70 per thousand cubic feet (“Mcf”), a decrease of $0.49 per Mcf compared to the prior year’s first quarter. The weighted average crude oil price realized after hedging for the quarter ended December 31, 2013, was $94.00 per Bbl, a decrease of $2.69 per Bbl compared to the prior year’s first quarter.
On a per unit basis, depletion decreased $0.20 per thousand cubic feet equivalent (“Mcfe”) due to higher natural gas reserve balances at December 31, 2013, compared to the prior year’s first quarter. On a per unit basis, lease operating and transportation expenses (“LOE”) at $0.95 per Mcfe decreased $0.10 per Mcfe compared to the prior year’s first quarter due to higher production. General and administrative expenses (“G&A”) decreased $0.18 per Mcfe compared to the prior year’s first quarter also due to higher production. Earnings were also impacted by higher interest expense due to a higher outstanding debt balance.
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 $19.1 million, or $0.23 per share, for the quarter ended December 31, 2013, increased $2.2 million, or $0.03 per share, when compared with the same period in the prior fiscal year. The increase in earnings is mainly due to higher non-affiliated transportation revenues from the Northern Access and Line N 2012 Expansion projects, which were placed in service in the prior year’s first quarter, and lower operating expenses due to lower pension and other post retirement benefit costs. Earnings were reduced by a lower allowance for funds used during construction due to the completion of the expansion projects mentioned above.
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 critical gathering infrastructure for transporting Seneca’s Marcellus Shale production to the interstate pipeline system.
The Gathering segment’s earnings of $6.1 million, or $0.07 per share, for the quarter ended December 31, 2013, increased $4.2 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 gathering system in Lycoming County, Pa.
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 $24.2 million, or $0.28 per share, for the quarter ended December 31, 2013, increased $1.3 million, or $0.01 per share, when compared with the same period in the prior fiscal year. Colder weather in Pennsylvania was a major reason for the increase in earnings in the current year’s first quarter. Temperatures in Pennsylvania were 11.2 percent colder in the quarter ended December 31, 2013, than in the prior year’s first quarter. In New York, the impact of weather variations on earnings is mitigated by that jurisdiction’s weather normalization clause. Lower interest expense (mainly due to a lower outstanding debt balance) and regulatory true-up adjustments also contributed to higher earnings in the Utility segment. Higher operating expenses, consisting mostly of higher pension related costs, which were the result of the settlement of the rate proceeding in New York, reduced earnings in the current year’s first 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 December 31, 2013, of $1.6 million increased $1.1 million compared to the prior year’s first quarter earnings of $0.5 million. The increase in earnings is due to the impact of recording unbilled revenues and related margins as of December 31, 2013. In prior periods, revenues and related purchased gas costs for the Energy Marketing segment were recorded when billed, resulting in a one month lag.
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 earnings of $0.1 million, for the quarter ended December 31, 2013, compares to a loss of $1.0 million for the prior year’s first quarter. The increase in the earnings is largely due to the receipt of insurance proceeds and higher proceeds from the sale of certain timber stumpage tracts by Seneca’s land and timber division in the current year’s first quarter.
EARNINGS GUIDANCE
The Company is revising its GAAP earnings guidance range for fiscal 2014 to a range of $3.20 to $3.40 per share. The previous earnings guidance had been a range of $3.10 to $3.40 per share. This guidance includes forecast oil and gas production for fiscal 2014 in the range between 145 to 165 Bcfe, hedges currently in place and a flat NYMEX price of $4.00 per MMBtu for natural gas and $90 per Bbl for crude oil for unhedged production for the remainder of the fiscal year.
EARNINGS TELECONFERENCE
The Company will host a conference call on Friday, February 7, 2014, 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) 1-866-383-8009, using passcode “80323087.” 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 “73413175.” Both the webcast and telephonic replay will be available until the close of business on Friday, February 14, 2014.
National Fuel is an integrated energy company with $6.3 billion in assets comprised of the following 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; 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, allowed rates of return, rate design and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; changes in the price of natural gas or oil; changes in price differential 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 and oil having different quality, heating value, hydrocarbon mix or delivery date; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; changes in demographic patterns and weather conditions; changes in the availability, price or accounting treatment of derivative financial instruments; 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; 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; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.
| NATIONAL FUEL GAS COMPANY | |||||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS | |||||||||||||||||||||||||||||
| QUARTER ENDED DECEMBER 31, 2013 | |||||||||||||||||||||||||||||
| Upstream | Midstream Businesses | Downstream Businesses | |||||||||||||||||||||||||||
| Exploration & | Pipeline & | Energy | Corporate / | ||||||||||||||||||||||||||
| (Thousands of Dollars) | Production | Storage | Gathering | Utility | Marketing | All Other | Consolidated* | ||||||||||||||||||||||
| First quarter 2013 GAAP earnings | $ | 26,680 | $ | 16,933 | $ | 1,942 | $ | 22,878 | $ | 495 | $ | (984 | ) | $ | 67,944 | ||||||||||||||
| Drivers of operating results | |||||||||||||||||||||||||||||
| Higher (lower) crude oil prices | (1,248 | ) | (1,248 | ) | |||||||||||||||||||||||||
| Higher (lower) natural gas prices | (10,413 | ) | (10,413 | ) | |||||||||||||||||||||||||
| Higher (lower) natural gas production | 34,319 | 34,319 | |||||||||||||||||||||||||||
| Higher (lower) crude oil production | 91 | 91 | |||||||||||||||||||||||||||
| Derivative mark to market adjustments | 1,204 | 1,204 | |||||||||||||||||||||||||||
| Lower (higher) lease operating and transportation expenses | (6,159 | ) | (6,159 | ) | |||||||||||||||||||||||||
| Lower (higher) depreciation / depletion | (12,472 | ) | (799 | ) | (13,271 | ) | |||||||||||||||||||||||
| Higher (lower) transportation and storage revenues | 3,682 | 3,682 | |||||||||||||||||||||||||||
| Higher (lower) gathering and processing revenues | 5,786 | 5,786 | |||||||||||||||||||||||||||
| Lower (higher) operating expenses | 1,310 | 1,660 | (2,416 | ) | (393 | ) | 161 | ||||||||||||||||||||||
| Lower (higher) property, franchise and other taxes | (653 | ) | (653 | ) | |||||||||||||||||||||||||
| Regulatory true-up adjustments | 1,093 | 1,093 | |||||||||||||||||||||||||||
| Colder weather | 1,907 | 1,907 | |||||||||||||||||||||||||||
| Higher (lower) margins | 1,153 | 505 | 1,658 | ||||||||||||||||||||||||||
| Higher (lower) AFUDC** | (1,534 | ) | (1,534 | ) | |||||||||||||||||||||||||
| (Higher) lower interest expense | (1,319 | ) | 922 | (397 | ) | ||||||||||||||||||||||||
| Lower (higher) income tax expense / effective tax rate | (778 | ) | (899 | ) | (660 | ) | (2,337 | ) | |||||||||||||||||||||
| All other / rounding | 535 | (704 | ) | (122 | ) | (169 | ) | (44 | ) | 923 | 419 | ||||||||||||||||||
| First quarter 2014 GAAP earnings | $ | 31,097 | $ | 19,138 | $ | 6,147 | $ | 24,215 | $ | 1,604 | $ | 51 | $ | 82,252 | |||||||||||||||
| * 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 | ||||||||||||||||||||||||||||
| QUARTER ENDED December 31, 2013 | ||||||||||||||||||||||||||||
| Upstream | Midstream Businesses | Downstream Businesses | ||||||||||||||||||||||||||
| Exploration & | Pipeline & | Energy | Corporate / | |||||||||||||||||||||||||
| Production | Storage | Gathering | Utility | Marketing | All Other | Consolidated* | ||||||||||||||||||||||
| First quarter 2013 GAAP earnings | $ | 0.32 | $ | 0.20 | $ | 0.02 | $ | 0.27 | $ | 0.01 | $ | (0.01 | ) | $ | 0.81 | |||||||||||||
| Drivers of operating results | ||||||||||||||||||||||||||||
| Higher (lower) crude oil prices | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
| Higher (lower) natural gas prices | (0.12 | ) | (0.12 | ) | ||||||||||||||||||||||||
| Higher (lower) natural gas production | 0.41 | 0.41 | ||||||||||||||||||||||||||
| Higher (lower) crude oil production | - | - | ||||||||||||||||||||||||||
| Derivative mark to market adjustments | 0.01 | 0.01 | ||||||||||||||||||||||||||
| Lower (higher) lease operating and transportation expenses | (0.07 | ) | (0.07 | ) | ||||||||||||||||||||||||
| Lower (higher) depreciation / depletion | (0.15 | ) | (0.01 | ) | (0.16 | ) | ||||||||||||||||||||||
| Higher (lower) transportation and storage revenues | 0.04 | 0.04 | ||||||||||||||||||||||||||
| Higher (lower) gathering and processing revenues | 0.07 | 0.07 | ||||||||||||||||||||||||||
| Lower (higher) operating expenses | 0.02 | 0.02 | (0.03 | ) | - | 0.01 | ||||||||||||||||||||||
| Lower (higher) property, franchise and other taxes | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
| Regulatory true-up adjustments | 0.01 | 0.01 | ||||||||||||||||||||||||||
| Colder weather | 0.02 | 0.02 | ||||||||||||||||||||||||||
| Higher (lower) margins | 0.01 | 0.01 | 0.02 | |||||||||||||||||||||||||
| Higher (lower) AFUDC** | (0.02 | ) | (0.02 | ) | ||||||||||||||||||||||||
| (Higher) lower interest expense | (0.02 | ) | 0.01 | (0.01 | ) | |||||||||||||||||||||||
| Lower (higher) income tax expense / effective tax rate | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.03 | ) | ||||||||||||||||||||
| All other / rounding | - | - | - | - | - | - | - | |||||||||||||||||||||
| First quarter 2014 GAAP earnings | $ | 0.37 | $ | 0.23 | $ | 0.07 | $ | 0.28 | $ | 0.02 | $ | - | $ | 0.97 | ||||||||||||||
| * 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 | |||||||||||
| December 31, | |||||||||||
| (Unaudited) | |||||||||||
|
SUMMARY OF OPERATIONS |
2013 | 2012 | |||||||||
| Operating Revenues | $ | 550,072 | $ | 452,854 | |||||||
| Operating Expenses: | |||||||||||
| Purchased Gas | 167,605 | 121,919 | |||||||||
| Operation and Maintenance | 107,846 | 107,732 | |||||||||
| Property, Franchise and Other Taxes | 20,926 | 19,664 | |||||||||
| Depreciation, Depletion and Amortization | 93,114 | 72,331 | |||||||||
| 389,491 | 321,646 | ||||||||||
| Operating Income | 160,581 | 131,208 | |||||||||
| Other Income (Expense): | |||||||||||
| Interest Income | 702 | 1,386 | |||||||||
| Other Income | 228 | 1,415 | |||||||||
| Interest Expense on Long-Term Debt | (22,885 | ) | (21,448 | ) | |||||||
| Other Interest Expense | (949 | ) | (1,068 | ) | |||||||
| Income Before Income Taxes | 137,677 | 111,493 | |||||||||
| Income Tax Expense | 55,425 | 43,549 | |||||||||
| Net Income Available for Common Stock | $ | 82,252 | $ | 67,944 | |||||||
| Earnings Per Common Share: | |||||||||||
| Basic | $ | 0.98 | $ | 0.81 | |||||||
| Diluted | $ | 0.97 | $ | 0.81 | |||||||
| Weighted Average Common Shares: | |||||||||||
| Used in Basic Calculation | 83,707,687 | 83,390,278 | |||||||||
| Used in Diluted Calculation | 84,659,001 | 84,006,050 | |||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||
| AND SUBSIDIARIES | ||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (Unaudited) | ||||||||||||
| December 31, | September 30, | |||||||||||
| (Thousands of Dollars) | 2013 | 2013 | ||||||||||
| ASSETS | ||||||||||||
| Property, Plant and Equipment |
$ |
7,468,200 |
$ |
7,313,203 | ||||||||
| Less - Accumulated Depreciation, Depletion and Amortization | 2,242,521 | 2,161,477 | ||||||||||
| Net Property, Plant and Equipment | 5,225,679 | 5,151,726 | ||||||||||
| Current Assets: | ||||||||||||
| Cash and Temporary Cash Investments | 23,880 | 64,858 | ||||||||||
| Hedging Collateral Deposits | - | 1,094 | ||||||||||
| Receivables - Net | 164,074 | 133,182 | ||||||||||
| Unbilled Revenue | 80,828 | 19,483 | ||||||||||
| Gas Stored Underground | 36,047 | 51,484 | ||||||||||
| Materials and Supplies - at average cost | 27,364 | 29,904 | ||||||||||
| Unrecovered Purchased Gas Costs | 9,001 | 12,408 | ||||||||||
| Other Current Assets | 45,197 | 56,905 | ||||||||||
| Deferred Income Taxes | 23,127 | 79,359 | ||||||||||
| Total Current Assets | 409,518 | 448,677 | ||||||||||
| Other Assets: | ||||||||||||
| Recoverable Future Taxes | 162,296 | 163,355 | ||||||||||
| Unamortized Debt Expense | 16,065 | 16,645 | ||||||||||
| Other Regulatory Assets | 257,697 | 252,568 | ||||||||||
| Deferred Charges | 9,818 | 9,382 | ||||||||||
| Other Investments | 99,433 | 96,308 | ||||||||||
| Goodwill | 5,476 | 5,476 | ||||||||||
| Prepaid Post-Retirement Benefit Costs | 24,865 | 22,774 | ||||||||||
| Fair Value of Derivative Financial Instruments | 53,678 | 48,989 | ||||||||||
| Other | 459 | 2,447 | ||||||||||
| Total Other Assets | 629,787 | 617,944 | ||||||||||
| Total Assets | $ | 6,264,984 | $ | 6,218,347 | ||||||||
| CAPITALIZATION AND LIABILITIES | ||||||||||||
| Capitalization: | ||||||||||||
| Comprehensive Shareholders' Equity | ||||||||||||
| Common Stock, $1 Par Value Authorized - 200,000,000 | ||||||||||||
| Shares; Issued and Outstanding - 83,741,402 Shares | ||||||||||||
| and 83,661,969 Shares, Respectively | $ | 83,741 | $ | 83,662 | ||||||||
| Paid in Capital | 695,571 | 687,684 | ||||||||||
| Earnings Reinvested in the Business | 1,493,466 | 1,442,617 | ||||||||||
| Accumulated Other Comprehensive Loss | (22,038 | ) | (19,234 | ) | ||||||||
| Total Comprehensive Shareholders' Equity | 2,250,740 | 2,194,729 | ||||||||||
| Long-Term Debt, Net of Current Portion | 1,649,000 | 1,649,000 | ||||||||||
| Total Capitalization | 3,899,740 | 3,843,729 | ||||||||||
| Current and Accrued Liabilities: | ||||||||||||
| Notes Payable to Banks and Commercial Paper | - | - | ||||||||||
| Current Portion of Long-Term Debt | - | - | ||||||||||
| Accounts Payable | 121,615 | 105,283 | ||||||||||
| Amounts Payable to Customers | 8,884 | 12,828 | ||||||||||
| Dividends Payable | 31,403 | 31,373 | ||||||||||
| Interest Payable on Long-Term Debt | 18,195 | 29,960 | ||||||||||
| Customer Advances | 18,678 | 21,959 | ||||||||||
| Customer Security Deposits | 15,690 | 16,183 | ||||||||||
| Other Accruals and Current Liabilities | 102,709 | 83,946 | ||||||||||
| Fair Value of Derivative Financial Instruments | 7,161 | 639 | ||||||||||
| Total Current and Accrued Liabilities | 324,335 | 302,171 | ||||||||||
| Deferred Credits: | ||||||||||||
| Deferred Income Taxes | 1,318,577 | 1,347,007 | ||||||||||
| Taxes Refundable to Customers | 84,781 | 85,655 | ||||||||||
| Unamortized Investment Tax Credit | 1,470 | 1,579 | ||||||||||
| Cost of Removal Regulatory Liability | 163,238 | 157,622 | ||||||||||
| Other Regulatory Liabilities | 69,897 | 61,549 | ||||||||||
| Pension and Other Post-Retirement Liabilities | 139,664 | 158,014 | ||||||||||
| Asset Retirement Obligations | 120,122 | 119,511 | ||||||||||
| Other Deferred Credits | 143,160 | 141,510 | ||||||||||
| Total Deferred Credits | 2,040,909 | 2,072,447 | ||||||||||
| Commitments and Contingencies | - | - | ||||||||||
| Total Capitalization and Liabilities | $ | 6,264,984 | $ | 6,218,347 | ||||||||
| NATIONAL FUEL GAS COMPANY | |||||||||||
| AND SUBSIDIARIES | |||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended | |||||||||||
| December 31, | |||||||||||
| (Thousands of Dollars) | 2013 | 2012 | |||||||||
| Operating Activities: | |||||||||||
| Net Income Available for Common Stock |
$ |
82,252 |
$ |
67,944 | |||||||
| Adjustments to Reconcile Net Income to Net Cash | |||||||||||
| Provided by Operating Activities: | |||||||||||
| Depreciation, Depletion and Amortization | 93,114 | 72,331 | |||||||||
| Deferred Income Taxes | 30,093 | 41,000 | |||||||||
| Excess Tax Benefits Associated with Stock-Based Compensation Awards | (3,149 | ) | - | ||||||||
| Stock-Based Compensation | 2,960 | 3,302 | |||||||||
| Other | (2,095 | ) | 4,621 | ||||||||
| Change in: | |||||||||||
| Hedging Collateral Deposits | 1,094 | 364 | |||||||||
| Receivables and Unbilled Revenue | (92,261 | ) | (55,261 | ) | |||||||
| Gas Stored Underground and Materials and Supplies | 17,977 | 3,941 | |||||||||
| Unrecovered Purchased Gas Costs | 3,407 | - | |||||||||
| Other Current Assets | 12,764 | 7,013 | |||||||||
| Accounts Payable | 39,382 | 6,163 | |||||||||
| Amounts Payable to Customers | (3,944 | ) | (4,686 | ) | |||||||
| Customer Advances | (3,281 | ) | (1,987 | ) | |||||||
| Customer Security Deposits | (493 | ) | 984 | ||||||||
| Other Accruals and Current Liabilities | 12,347 | (5,667 | ) | ||||||||
| Other Assets | (6,268 | ) | (597 | ) | |||||||
| Other Liabilities | (7,205 | ) | 6,495 | ||||||||
| Net Cash Provided by Operating Activities | $ | 176,694 | $ | 145,960 | |||||||
| Investing Activities: | |||||||||||
| Capital Expenditures | $ | (194,920 | ) | $ | (162,981 | ) | |||||
| Other | 3,615 | (3,533 | ) | ||||||||
| Net Cash Used in Investing Activities | $ | (191,305 | ) | $ | (166,514 | ) | |||||
| Financing Activities: | |||||||||||
| Changes in Notes Payable to Banks and Commercial Paper | $ | - | $ | 67,000 | |||||||
| Excess Tax Benefits Associated with Stock-Based Compensation Awards | 3,149 | - | |||||||||
| Dividends Paid on Common Stock | (31,373 | ) | (60,879 | ) | |||||||
| Net Proceeds From Issuance of Common Stock | 1,857 | 956 | |||||||||
| Net Cash Provided By (Used in) Financing Activities | $ | (26,367 | ) | $ | 7,077 | ||||||
| Net Decrease in Cash and Temporary | |||||||||||
| Cash Investments | (40,978 | ) | (13,477 | ) | |||||||
| Cash and Temporary Cash Investments | |||||||||||
| at Beginning of Period | 64,858 | 74,494 | |||||||||
| Cash and Temporary Cash Investments | |||||||||||
| at December 31 | $ | 23,880 | $ | 61,017 | |||||||
| 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 |
2013 | 2012 | Variance | ||||||||||||
| Total Operating Revenues |
$ |
193,046 |
$ |
155,450 |
$ |
37,596 |
|||||||||
| Operating Expenses: | |||||||||||||||
| Operation and Maintenance: | |||||||||||||||
| General and Administrative Expense | 15,134 | 14,433 | 701 | ||||||||||||
| Lease Operating and Transportation Expense | 35,171 | 25,696 | 9,475 | ||||||||||||
| All Other Operation and Maintenance Expense | 2,782 | 5,498 | (2,716 | ) | |||||||||||
| Property, Franchise and Other Taxes | 4,263 | 3,257 | 1,006 | ||||||||||||
| Depreciation, Depletion and Amortization | 71,110 | 51,922 | 19,188 | ||||||||||||
| 128,460 | 100,806 | 27,654 | |||||||||||||
| Operating Income | 64,586 | 54,644 | 9,942 | ||||||||||||
| Other Income (Expense): | |||||||||||||||
| Interest Income | 551 | 470 | 81 | ||||||||||||
| Other Interest Expense | (10,726 | ) | (8,696 | ) | (2,030 | ) | |||||||||
| Income Before Income Taxes | 54,411 | 46,418 | 7,993 | ||||||||||||
| Income Tax Expense | 23,314 | 19,738 | 3,576 | ||||||||||||
| Net Income | $ | 31,097 | $ | 26,680 | $ | 4,417 | |||||||||
| Net Income Per Share (Diluted) | $ | 0.37 | $ | 0.32 | $ | 0.05 | |||||||||
| 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 |
2013 | 2012 | Variance | ||||||||||||
| Revenues from External Customers |
$ |
51,212 |
$ |
43,459 |
$ |
7,753 | |||||||||
| Intersegment Revenues | 20,739 | 22,797 | (2,058 | ) | |||||||||||
| Total Operating Revenues | 71,951 | 66,256 | 5,695 | ||||||||||||
| Operating Expenses: | |||||||||||||||
| Purchased Gas | 1,262 | 786 | 476 | ||||||||||||
| Operation and Maintenance | 16,885 | 19,439 | (2,554 | ) | |||||||||||
| Property, Franchise and Other Taxes | 5,688 | 5,433 | 255 | ||||||||||||
| Depreciation, Depletion and Amortization | 9,121 | 8,525 | 596 | ||||||||||||
| 32,956 | 34,183 | (1,227 | ) | ||||||||||||
| Operating Income | 38,995 | 32,073 | 6,922 | ||||||||||||
| Other Income (Expense): | |||||||||||||||
| Interest Income | 75 | 64 | 11 | ||||||||||||
| Other Income | (193 | ) | 1,343 | (1,536 | ) | ||||||||||
| Other Interest Expense | (6,800 | ) | (6,177 | ) | (623 | ) | |||||||||
| Income Before Income Taxes | 32,077 | 27,303 | 4,774 | ||||||||||||
| Income Tax Expense | 12,939 | 10,370 | 2,569 | ||||||||||||
| Net Income | $ | 19,138 | $ | 16,933 | $ | 2,205 | |||||||||
| Net Income Per Share (Diluted) | $ | 0.23 | $ | 0.20 | $ | 0.03 | |||||||||
| Three Months Ended | |||||||||||||||
| December 31, | |||||||||||||||
|
GATHERING SEGMENT |
2013 | 2012 | Variance | ||||||||||||
| Revenues from External Customers | $ | 235 | $ | 202 | $ | 33 | |||||||||
| Intersegment Revenues | 14,350 | 5,480 | 8,870 | ||||||||||||
| Total Operating Revenues | 14,585 | 5,682 | 8,903 | ||||||||||||
| Operating Expenses: | |||||||||||||||
| Operation and Maintenance | 1,167 | 943 | 224 | ||||||||||||
| Property, Franchise and Other Taxes | 32 | 141 | (109 | ) | |||||||||||
| Depreciation, Depletion and Amortization | 1,909 | 680 | 1,229 | ||||||||||||
| 3,108 | 1,764 | 1,344 | |||||||||||||
| Operating Income | 11,477 | 3,918 | 7,559 | ||||||||||||
| Other Income (Expense): | |||||||||||||||
| Interest Income | 38 | - | 38 | ||||||||||||
| Other Income | 1 | - | 1 | ||||||||||||
| Other Interest Expense | (583 | ) | (468 | ) | (115 | ) | |||||||||
| Income Before Income Taxes | 10,933 | 3,450 | 7,483 | ||||||||||||
| Income Tax Expense | 4,786 | 1,508 | 3,278 | ||||||||||||
| Net Income | $ | 6,147 | $ | 1,942 | $ | 4,205 | |||||||||
| Net Income Per Share (Diluted) | $ | 0.07 | $ | 0.02 | $ | 0.05 | |||||||||
| NATIONAL FUEL GAS COMPANY | |||||||||||||||
| AND SUBSIDIARIES | |||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| DOWNSTREAM BUSINESSES | |||||||||||||||
| Three Months Ended | |||||||||||||||
| (Thousands of Dollars, except per share amounts) | December 31, | ||||||||||||||
|
UTILITY SEGMENT |
2013 | 2012 | Variance | ||||||||||||
| Revenues from External Customers |
$ |
230,453 |
$ |
208,563 |
$ |
21,890 | |||||||||
| Intersegment Revenues | 4,706 | 4,311 | 395 | ||||||||||||
| Total Operating Revenues | 235,159 | 212,874 | 22,285 | ||||||||||||
| Operating Expenses: | |||||||||||||||
| Purchased Gas | 121,926 | 105,942 | 15,984 | ||||||||||||
| Operation and Maintenance | 47,271 | 43,261 | 4,010 | ||||||||||||
| Property, Franchise and Other Taxes | 10,667 | 10,355 | 312 | ||||||||||||
| Depreciation, Depletion and Amortization | 10,711 | 10,508 | 203 | ||||||||||||
| 190,575 | 170,066 | 20,509 | |||||||||||||
| Operating Income | 44,584 | 42,808 | 1,776 | ||||||||||||
| Other Income (Expense): | |||||||||||||||
| Interest Income | 77 | 886 | (809 | ) | |||||||||||
| Other Income | 370 | 219 | 151 | ||||||||||||
| Other Interest Expense | (6,814 | ) | (8,233 | ) | 1,419 | ||||||||||
| Income Before Income Taxes | 38,217 | 35,680 | 2,537 | ||||||||||||
| Income Tax Expense | 14,002 | 12,802 | 1,200 | ||||||||||||
| Net Income | $ | 24,215 | $ | 22,878 | $ | 1,337 | |||||||||
| Net Income Per Share (Diluted) | $ | 0.28 | $ | 0.27 | $ | 0.01 | |||||||||
| Three Months Ended | |||||||||||||||
| December 31, | |||||||||||||||
|
ENERGY MARKETING SEGMENT |
2013 | 2012 | Variance | ||||||||||||
| Revenues from External Customers | $ | 73,159 | $ | 44,166 | $ | 28,993 | |||||||||
| Intersegment Revenues | 255 | 426 | (171 | ) | |||||||||||
| Total Operating Revenues | 73,414 | 44,592 | 28,822 | ||||||||||||
| Operating Expenses: | |||||||||||||||
| Purchased Gas | 69,204 | 42,156 | 27,048 | ||||||||||||
| Operation and Maintenance | 1,593 | 1,594 | (1 | ) | |||||||||||
| Property, Franchise and Other Taxes | - | 58 | (58 | ) | |||||||||||
| Depreciation, Depletion and Amortization | 48 | 23 | 25 | ||||||||||||
| 70,845 | 43,831 | 27,014 | |||||||||||||
| Operating Income | 2,569 | 761 | 1,808 | ||||||||||||
| Other Income (Expense): | |||||||||||||||
| Interest Income | 45 | 53 | (8 | ) | |||||||||||
| Other Income | 15 | 12 | 3 | ||||||||||||
| Other Interest Expense | (8 | ) | (10 | ) | 2 | ||||||||||
| Income Before Income Taxes | 2,621 | 816 | 1,805 | ||||||||||||
| Income Tax Expense | 1,017 | 321 | 696 | ||||||||||||
| Net Income | $ | 1,604 | $ | 495 | $ | 1,109 | |||||||||
| Net Income Per Share (Diluted) | $ | 0.02 | $ | 0.01 | $ | 0.01 | |||||||||
| 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 |
2013 | 2012 | Variance | ||||||||||||
| Total Operating Revenues |
$ |
1,700 |
$ |
813 |
$ |
887 | |||||||||
| Operating Expenses: | |||||||||||||||
| Operation and Maintenance | 353 | 283 | 70 | ||||||||||||
| Property, Franchise and Other Taxes | 157 | 157 | - | ||||||||||||
| Depreciation, Depletion and Amortization | 58 | 473 | (415 | ) | |||||||||||
| 568 | 913 | (345 | ) | ||||||||||||
| Operating Income (Loss) | 1,132 | (100 | ) | 1,232 | |||||||||||
| Other Income (Expense): | |||||||||||||||
| Interest Income | 34 | 39 | (5 | ) | |||||||||||
| Other Income | 21 | (34 | ) | 55 | |||||||||||
| Other Interest Expense | (1 | ) | (1 | ) | - | ||||||||||
| Income (Loss) Before Income Taxes | 1,186 | (96 | ) | 1,282 | |||||||||||
| Income Tax Expense (Benefit) | 511 | (39 | ) | 550 | |||||||||||
| Net Income (Loss) | $ | 675 | $ | (57 | ) | $ | 732 | ||||||||
| Net Income (Loss) Per Share (Diluted) | $ | 0.01 | $ | - | $ | 0.01 | |||||||||
| Three Months Ended | |||||||||||||||
| December 31, | |||||||||||||||
|
CORPORATE |
2013 | 2012 | Variance | ||||||||||||
| Revenues from External Customers | $ | 267 | $ | 201 | $ | 66 | |||||||||
| Intersegment Revenues | 963 | 547 | 416 | ||||||||||||
| Total Operating Revenues | 1,230 | 748 | 482 | ||||||||||||
| Operating Expenses: | |||||||||||||||
| Operation and Maintenance | 3,716 | 3,181 | 535 | ||||||||||||
| Property, Franchise and Other Taxes | 119 | 263 | (144 | ) | |||||||||||
| Depreciation, Depletion and Amortization | 157 | 200 | (43 | ) | |||||||||||
| 3,992 | 3,644 | 348 | |||||||||||||
| Operating Loss | (2,762 | ) | (2,896 | ) | 134 | ||||||||||
| Other Income (Expense): | |||||||||||||||
| Interest Income | 24,607 | 23,304 | 1,303 | ||||||||||||
| Other Income | 14 | (125 | ) | 139 | |||||||||||
| Interest Expense on Long-Term Debt | (22,885 | ) | (21,448 | ) | (1,437 | ) | |||||||||
| Other Interest Expense | (742 | ) | (913 | ) | 171 | ||||||||||
| Loss Before Income Taxes | (1,768 | ) | (2,078 | ) | 310 | ||||||||||
| Income Tax Benefit | (1,144 | ) | (1,151 | ) | 7 | ||||||||||
| Net Loss | $ | (624 | ) | $ | (927 | ) | $ | 303 | |||||||
| Net Loss Per Share (Diluted) | $ | (0.01 | ) | $ | (0.01 | ) | $ | - | |||||||
| Three Months Ended | |||||||||||||||
| December 31, | |||||||||||||||
|
INTERSEGMENT ELIMINATIONS |
2013 | 2012 | Variance | ||||||||||||
| Intersegment Revenues | $ | (41,013 | ) | $ | (33,561 | ) | $ | (7,452 | ) | ||||||
| Operating Expenses: | |||||||||||||||
| Purchased Gas | (24,787 | ) | (26,965 | ) | 2,178 | ||||||||||
| Operation and Maintenance | (16,226 | ) | (6,596 | ) | (9,630 | ) | |||||||||
| (41,013 | ) | (33,561 | ) | (7,452 | ) | ||||||||||
| Operating Income | - | - | - | ||||||||||||
| Other Income (Expense): | |||||||||||||||
| Interest Income | (24,725 | ) | (23,430 | ) | (1,295 | ) | |||||||||
| Other Interest Expense | 24,725 | 23,430 | 1,295 | ||||||||||||
| 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 | |||||||||||||||
| 2013 | 2012 | (Decrease) | |||||||||||||
|
Capital Expenditures: |
|||||||||||||||
| Exploration and Production |
$ |
111,341 |
(1)(2) |
$ |
127,652 | (3)(4) |
$ |
(16,311 |
) |
||||||
| Pipeline and Storage | 9,939 | (1)(2) | 25,751 | (3)(4) |
(15,812 |
) |
|||||||||
| Gathering | 23,463 | (1)(2) | 13,559 | (3)(4) | 9,904 | ||||||||||
| Utility | 21,660 | (1)(2) | 14,363 | (3)(4) | 7,297 | ||||||||||
| Energy Marketing | 43 | 183 |
(140 |
) |
|||||||||||
| Total Reportable Segments | 166,446 | 181,508 |
(15,062 |
) |
|||||||||||
| All Other | 59 | 106 |
(47 |
) |
|||||||||||
| Corporate | 15 | 8 | 7 | ||||||||||||
| Total Capital Expenditures |
$ |
166,520 | $ | 181,622 | $ |
(15,102 |
) |
||||||||
|
(1) |
Capital expenditures for the three months ended December 31, 2013 include accounts payable and accrued liabilities related to capital expenditures of $38.4 million, $0.6 million, $8.8 million, and $4.9 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, 2013 since they represent non-cash investing activities at that date. | |||
|
(2) |
Capital expenditures for the three months ended December 31, 2013 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 three months ended December 31, 2013. These amounts were excluded from the Consolidated Statement 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 December 31, 2013. | |||
|
(3) |
Capital expenditures for the three months ended December 31, 2012 include accounts payable and accrued liabilities related to capital expenditures of $73.4 million, $10.5 million, $2.1 million, and $0.1 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, 2012 since they represent non-cash investing activities at that date. | |||
|
(4) |
Capital expenditures for the three months ended December 31, 2012 exclude capital expenditures of $38.9 million, $12.7 million, $12.7 million and $3.2 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, 2012 and paid during the three months ended December 31, 2012. These amounts were excluded from the Consolidated Statements of Cash Flows at September 30, 2012 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, 2012. | |||
|
DEGREE DAYS |
|||||||||||||||||
| Percent Colder | |||||||||||||||||
| (Warmer) Than: | |||||||||||||||||
|
Three Months Ended December 31 |
Normal | 2013 | 2012 | Normal (1) | Last Year (1) | ||||||||||||
| Buffalo, NY | 2,253 | 2,290 | 2,036 | 1.6 | 12.5 | ||||||||||||
| Erie, PA | 2,044 | 2,110 | 1,898 | 3.2 | 11.2 | ||||||||||||
| (1) | Percents compare actual 2013 degree days to normal degree days and actual 2013 degree days to actual 2012 degree days. | |||
| NATIONAL FUEL GAS COMPANY | |||||||||||||
| AND SUBSIDIARIES | |||||||||||||
|
EXPLORATION AND PRODUCTION INFORMATION |
|||||||||||||
| Three Months Ended | |||||||||||||
| December 31, | |||||||||||||
| Increase | |||||||||||||
| 2013 | 2012 | (Decrease) | |||||||||||
|
Gas Production/Prices: |
|||||||||||||
| Production (MMcf) | |||||||||||||
| Appalachia | 32,052 | 19,496 | 12,556 | ||||||||||
| West Coast | 786 | 745 | 41 | ||||||||||
| Total Production | 32,838 | 20,241 | 12,597 | ||||||||||
| Average Prices (Per Mcf) | |||||||||||||
| Appalachia |
$ |
3.28 |
$ |
3.35 |
$ |
(0.07 | ) | ||||||
| West Coast (3) | 5.93 | 6.53 | (0.60 | ) | |||||||||
| Weighted Average | 3.35 | 3.47 | (0.12 | ) | |||||||||
| Weighted Average after Hedging | 3.70 | 4.19 | (0.49 | ) | |||||||||
|
Oil Production/Prices: |
|||||||||||||
| Production (Thousands of Barrels) | |||||||||||||
| Appalachia | 9 | 6 | 3 | ||||||||||
| West Coast | 706 | 708 | (2 | ) | |||||||||
| Total Production | 715 | 714 | 1 | ||||||||||
| Average Prices (Per Barrel) | |||||||||||||
| Appalachia | $ | 96.03 | $ | 87.83 | $ | 8.20 | |||||||
| West Coast | 97.45 | 100.10 | (2.65 | ) | |||||||||
| Weighted Average | 97.43 | 100.01 | (2.58 | ) | |||||||||
| Weighted Average after Hedging | 94.00 | 96.69 | (2.69 | ) | |||||||||
| Total Production (Mmcfe) | 37,128 | 24,525 | 12,603 | ||||||||||
|
Selected Operating Performance Statistics: |
|||||||||||||
| General & Administrative Expense per Mcfe (1) | $ | 0.41 | $ | 0.59 | $ | (0.18 | ) | ||||||
| Lease Operating and Transportation Expense per Mcfe (1)(2) | $ | 0.95 | $ | 1.05 | $ | (0.10 | ) | ||||||
| Depreciation, Depletion & Amortization per Mcfe (1) | $ | 1.92 | $ | 2.12 | $ | (0.20 | ) | ||||||
| (1) | Refer to page 13 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 $0.41 and $0.32 per Mcfe for the three months ended December 31, 2013 and December 31, 2012, respectively. | |||
| (3) | Prices reflect revenues from gas produced on the West Coast, including natural gas liquids. | |||
| NATIONAL FUEL GAS COMPANY | |||||||||||
| AND SUBSIDIARIES | |||||||||||
|
EXPLORATION AND PRODUCTION INFORMATION |
|||||||||||
| Hedging Summary for the Remaining Nine Months of Fiscal 2014 | |||||||||||
|
SWAPS |
Volume |
Average Hedge Price |
|||||||||
| Oil | |||||||||||
| Midway Sunset (MWSS) | 0.47 | MMBBL | $ | 95.68 / BBL | |||||||
| Brent | 1.01 | MMBBL | $ | 102.32 / BBL | |||||||
| Total | 1.48 | MMBBL | $ | 100.22 / BBL | |||||||
| Gas | |||||||||||
| NYMEX | 61.51 | BCF | $ | 4.27 / MCF | |||||||
| Dominion Transmission Appalachian (DOM) | 20.57 | BCF | $ | 4.26 / MCF | |||||||
| Southern California City Gate (SoCal) | 0.86 | BCF | $ | 4.57 / MCF | |||||||
| Total | 82.94 | BCF | $ | 4.27 / MCF | |||||||
| Hedging Summary for Fiscal 2015 | |||||||||||
|
SWAPS |
Volume |
Average Hedge Price |
|||||||||
| Oil | |||||||||||
| Brent | 0.90 | MMBBL | $ | 98.42 / BBL | |||||||
| NYMEX | 0.40 | MMBBL | $ | 90.14 / BBL | |||||||
| Total | 1.30 | MMBBL | $ | 95.90 / BBL | |||||||
| Gas | |||||||||||
| NYMEX | 58.94 | BCF | $ | 4.32 / MCF | |||||||
| DOM | 17.83 | BCF | $ | 4.07 / MCF | |||||||
| SoCal | 1.14 | BCF | $ | 4.57 / MCF | |||||||
| Total | 77.91 | BCF | $ | 4.27 / MCF | |||||||
| Hedging Summary for Fiscal 2016 | |||||||||||
|
SWAPS |
Volume |
Average Hedge Price |
|||||||||
| Oil | |||||||||||
| Brent | 0.93 | MMBBL | $ | 95.18 / BBL | |||||||
| NYMEX | 0.30 | MMBBL | $ | 86.09 / BBL | |||||||
| Total | 1.23 | MMBBL | $ | 92.97 / BBL | |||||||
| Gas | |||||||||||
| NYMEX | 35.66 | BCF | $ | 4.46 / MCF | |||||||
| DOM | 17.94 | BCF | $ | 4.07 / MCF | |||||||
| Total | 53.60 | BCF | $ | 4.33 / MCF | |||||||
| Hedging Summary for Fiscal 2017 | |||||||||||
|
SWAPS |
Volume |
Average Hedge Price |
|||||||||
| Oil | |||||||||||
| Brent | 0.38 | MMBBL | $ | 92.30 / BBL | |||||||
| Gas | |||||||||||
| NYMEX | 23.77 | BCF | $ | 4.71 / MCF | |||||||
| DOM | 17.94 | BCF | $ | 4.07 / MCF | |||||||
| Total | 41.71 | BCF | $ | 4.44 / MCF | |||||||
| Hedging Summary for Fiscal 2018 | |||||||||||
|
SWAPS |
Volume |
Average Hedge Price |
|||||||||
| Oil | |||||||||||
| Brent | 0.08 | MMBBL | $ | 91.00 / BBL | |||||||
| Gas | |||||||||||
| NYMEX | 5.29 | BCF | $ | 4.81 / MCF | |||||||
| NATIONAL FUEL GAS COMPANY | |||||||||||
| AND SUBSIDIARIES | |||||||||||
|
EXPLORATION AND PRODUCTION INFORMATION |
|||||||||||
|
Gross Wells in Process of Drilling |
|||||||||||
|
Quarter Ended December 31, 2013 |
|||||||||||
| Total | |||||||||||
|
East |
West |
Company |
|||||||||
| Wells in Process - Beginning of Period | |||||||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||||||
| Developmental | 76.000 | 0.000 | 76.000 | ||||||||
| Wells Commenced | |||||||||||
| Exploratory | 0.000 | 1.000 | 1.000 | ||||||||
| Developmental | 14.000 | 18.000 | 32.000 | ||||||||
| Wells Completed | |||||||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||||||
| Developmental | 14.000 | 17.000 | 31.000 | ||||||||
| Wells Plugged & Abandoned | |||||||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||||||
| Developmental | 1.000 | 0.000 | 1.000 | ||||||||
| Wells in Process - End of Period | |||||||||||
| Exploratory | 0.000 | 1.000 | 1.000 | ||||||||
| Developmental | 75.000 | 1.000 | 76.000 | ||||||||
|
Net Wells in Process of Drilling |
|||||||||||
|
Quarter Ended December 31, 2013 |
|||||||||||
| Total | |||||||||||
|
East |
West |
Company |
|||||||||
| Wells in Process - Beginning of Period | |||||||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||||||
| Developmental | 61.000 | 0.000 | 61.000 | ||||||||
| Wells Commenced | |||||||||||
| Exploratory | 0.000 | 0.766 | 0.766 | ||||||||
| Developmental | 14.000 | 18.000 | 32.000 | ||||||||
| Wells Completed | |||||||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||||||
| Developmental | 14.000 | 17.000 | 31.000 | ||||||||
| Wells Plugged & Abandoned | |||||||||||
| Exploratory | 0.000 | 0.000 | 0.000 | ||||||||
| Developmental | 1.000 | 0.000 | 1.000 | ||||||||
| Wells in Process - End of Period | |||||||||||
| Exploratory | 0.000 | 0.766 | 0.766 | ||||||||
| Developmental | 60.000 | 1.000 | 61.000 | ||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||
| AND SUBSIDIARIES | ||||||||||
| Pipeline & Storage Throughput - (millions of cubic feet - MMcf) | ||||||||||
| Three Months Ended | ||||||||||
| December 31, | ||||||||||
| Increase | ||||||||||
| 2013 | 2012 | (Decrease) | ||||||||
| Firm Transportation - Affiliated | 29,686 | 28,234 | 1,452 | |||||||
| Firm Transportation - Non-Affiliated | 161,970 | 95,179 | 66,791 | |||||||
| Interruptible Transportation | 1,322 | 1,252 | 70 | |||||||
| 192,978 | 124,665 | 68,313 | ||||||||
| Gathering Volume - (MMcf) | ||||||||||
| Three Months Ended | ||||||||||
| December 31, | ||||||||||
| Increase | ||||||||||
| 2013 | 2012 | (Decrease) | ||||||||
| Gathered Volume - Affiliated | 31,014 | 16,811 | 14,203 | |||||||
| Utility Throughput - (MMcf) | ||||||||||
| Three Months Ended | ||||||||||
| December 31, | ||||||||||
| Increase | ||||||||||
| 2013 | 2012 | (Decrease) | ||||||||
| Retail Sales: | ||||||||||
| Residential Sales | 17,008 | 15,153 | 1,855 | |||||||
| Commercial Sales | 2,360 | 1,967 | 393 | |||||||
| Industrial Sales | 91 | 301 | (210 | ) | ||||||
| 19,459 | 17,421 | 2,038 | ||||||||
| Off-System Sales | 1,978 | 2,429 | (451 | ) | ||||||
| Transportation | 21,190 | 18,637 | 2,553 | |||||||
| 42,627 | 38,487 | 4,140 | ||||||||
| Energy Marketing Volume | ||||||||||
| Three Months Ended | ||||||||||
| December 31, | ||||||||||
| Increase | ||||||||||
| 2013 | 2012 | (Decrease) | ||||||||
| Natural Gas (MMcf) | 16,008 | 10,365 | 5,643 | |||||||
| NATIONAL FUEL GAS COMPANY | |||||||||||||||||||||||
| AND SUBSIDIARIES | |||||||||||||||||||||||
| FISCAL 2014 EARNINGS GUIDANCE AND SENSITIVITIES | |||||||||||||||||||||||
| Earnings per share sensitivity to changes | |||||||||||||||||||||||
| Fiscal 2014 (Diluted earnings per share guidance*) | from prices used in guidance* ^ | ||||||||||||||||||||||
|
$0.50 change per MMBtu |
$5 change per Bbl oil | ||||||||||||||||||||||
| Range | Increase | Decrease | Increase | Decrease | |||||||||||||||||||
| Consolidated Earnings | $ | 3.20 | - | $ | 3.40 | +$ |
0.07 |
-$ |
0.07 |
+$ | 0.03 | -$ | 0.03 | ||||||||||
* Please refer to forward looking statement footnote beginning at page 6 of document.
^ This sensitivity table is current as of February 6, 2014 and only considers revenue from the Exploration and Production segment's crude oil and natural gas sales. This revenue is based upon pricing used in the Company's earnings forecast. For its fiscal 2014 earnings forecast, the Company is utilizing flat NYMEX equivalent commodity pricing, exclusive of basis differential, of $4.00 per MMBtu for natural gas and $90 per Bbl for crude oil. The sensitivities will become obsolete with the passage of time, changes in Seneca's production forecast, changes in basis differential, as additional hedging contracts are entered into, and with the settling of hedge contracts at their maturity.
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
In addition to financial measures calculated in accordance with generally accepted accounting principles (GAAP), this press release contains information regarding Adjusted EBITDA, which is a non-GAAP financial measure. The Company believes that this non-GAAP financial measure is useful to investors because it provides 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 this non-GAAP financial measure 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 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 months ended December 31, 2013:
| Three Months | |||||||||||
| Ended December 31, | |||||||||||
| 2013 | 2012 | ||||||||||
| (in thousands) | |||||||||||
| Reported GAAP Earnings |
$ |
82,252 |
$ |
67,944 | |||||||
| Depreciation, Depletion and Amortization | 93,114 | 72,331 | |||||||||
| Interest and Other Income | (930 | ) | (2,801 | ) | |||||||
| Interest Expense | 23,834 | 22,516 | |||||||||
| Income Taxes | 55,425 | 43,549 | |||||||||
| Adjusted EBITDA | $ | 253,695 | $ | 203,539 | |||||||
| NATIONAL FUEL GAS COMPANY | |||||||||
| AND SUBSIDIARIES | |||||||||
|
Quarter Ended December 31 (unaudited) |
2013 | 2012 | |||||||
| Operating Revenues |
$ |
550,072,000 |
$ |
452,854,000 | |||||
| Net Income Available for Common Stock | $ | 82,252,000 | $ | 67,944,000 | |||||
| Earnings Per Common Share: | |||||||||
| Basic | $ | 0.98 | $ | 0.81 | |||||
| Diluted | $ | 0.97 | $ | 0.81 | |||||
| Weighted Average Common Shares: | |||||||||
| Used in Basic Calculation | 83,707,687 | 83,390,278 | |||||||
| Used in Diluted Calculation | 84,659,001 | 84,006,050 | |||||||
|
Twelve Months Ended December 31 (unaudited) |
|||||||||
| Operating Revenues | $ | 1,926,768,000 | $ | 1,647,284,000 | |||||
| Net Income Available for Common Stock | $ | 274,309,000 | $ | 227,322,000 | |||||
| Earnings Per Common Share: | |||||||||
| Basic | $ | 3.28 | $ | 2.73 | |||||
| Diluted | $ | 3.25 | $ | 2.71 | |||||
| Weighted Average Common Shares: | |||||||||
| Used in Basic Calculation | 83,598,868 | 83,258,386 | |||||||
| Used in Diluted Calculation | 84,411,007 | 83,800,341 | |||||||
