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06.11.2008 22:30:00
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National Fuel Reports 2008 Earnings
National Fuel Gas Company ("National Fuel” or the "Company”) (NYSE:NFG) today announced consolidated earnings for its fiscal year and fourth quarter ended September 30, 2008, of $268.7 million or $3.18 per share, and $43.3 million or $0.52 per share, respectively.
FINANCIAL HIGHLIGHTS
- Operating results before items impacting comparability ("Operating Results”) for the fiscal year of $3.17 per share were up over 40% from the prior year, an increase of $0.91 per share. Increased earnings in the Exploration and Production segment provided the majority of the increase. Higher average commodity prices realized and increased natural gas production were the main drivers of the higher earnings. Operating Results also increased in the Pipeline and Storage, Utility and Energy Marketing segments.
- Quarterly Operating Results increased 30% to $0.52 per share, an increase of $0.12 per share from the prior year’s fourth quarter. Operating Results increased in the Exploration and Production and Utility segments from the prior year’s fourth quarter.
- The Company is revising its earnings guidance for fiscal 2009 to reflect a change in pricing assumptions for natural gas and crude oil. The revised earnings guidance range is $2.60 to $2.80 per share. This includes oil and gas production for the Exploration and Production segment in the range of 38 to 44 billion cubic feet equivalent ("Bcfe”) and is based on hedges currently in place and flat pricing on production not hedged, exclusive of basis differential, of $7.00 per Million British Thermal Units ("MMBtu”) for natural gas and $70 per barrel ("Bbl”) for crude oil. This guidance for fiscal 2009 does not take into account any impacts resulting from the possible sale of certain landfill gas related assets.
- A conference call is scheduled for Friday, November 7, 2008, at 11:00 a.m. Eastern Time.
OPERATING HIGHLIGHTS
- Seneca Resources Corporation ("Seneca”) increased total annual production by approximately 4%, and absent the extraordinary hurricane related curtailment of approximately 1.0 Bcfe, production would have increased over 6%. Seneca’s overall reserve replacement was 130%.
- In Seneca’s East (Appalachia) Division, fiscal year production of 7.9 Bcfe increased more than 25% compared to last year, and 361% of fiscal 2008 production was replaced.
- Seneca was the successful bidder on 24,000 acres on four large blocks located in the Marcellus Shale trend. These leases in Lycoming County, and Tioga County, Pennsylvania have 10 year primary terms, and are incremental to the 425,000 acres high-graded in this play previously disclosed. This action illustrates our long-term commitment to the Appalachian basin, as we look to continue expansion of Seneca’s drilling program in Appalachia, both in the shallow Devonian Sandstone and Marcellus Shale trends.
- Seneca and EOG Resources ("EOG”) have modified the terms of their joint venture in the Marcellus Shale. EOG is now required to select all prospect acreage by March 2009. While the drilling requirements and acreage commitments are unchanged, this alteration will more quickly free up the non-selected acreage and allow Seneca additional flexibility to evaluate, explore and develop the remaining acreage independently or with other partners.
- Construction of the Empire Connector is nearly complete and the pipeline will be ready to be placed in-service in December. The Empire Connector is a 77-mile pipeline designed to deliver up to 250 million cubic feet of natural gas per day from the existing Empire Pipeline to Corning, NY.
MANAGEMENT COMMENTS
David F. Smith, Chief Executive Officer and President of National Fuel Gas Company stated: "This was another outstanding year for the Company, with record operating results for both the fourth quarter and fiscal year. While we cannot control the extreme recent volatility in both the commodity and capital markets, we can control how we operate our business. We can, and we will, continue our long-standing philosophy of investing in three complementary segments of the natural gas industry. As our results show, it is this commitment to our well-head to burner-tip model that makes possible the solid and steady operating performance of National Fuel Gas Company and its subsidiaries, even during these turbulent times.
We have carefully reviewed our capital spending and operating expense forecasts in each of our segments and have only modestly pared them back. Frankly, we have always controlled costs and focused on limiting risk, particularly in our regulated segments. Our capital spending is conservative and is designed to allow us to be within our cash flow. In this regard our regulated assets and our California producing assets provide a stable source of funds to both continue our dividend and grow our business despite the current difficulties in the capital markets. Once again, our diversified business model is working to the benefit of our shareholders.
Falling commodity prices will certainly cause us to re-examine some of the exploration projects that we had planned, mainly in the high cost drilling environment in the Gulf of Mexico. However, we are in the business for the long term and are well positioned to extract value from our assets in our Exploration and Production segment.
Looking forward to 2009, we have a solid balance sheet, strong projected cash flows and a liquidity position that will allow us to move forward with our business plan. During the past month, we have confirmed the availability of each of our lines of credit with our lending banks and we are pleased to say that we continue to have in place a $300 million committed credit facility, and additional discretionary lines of credit totaling $420 million. As always, we will use this working capital wisely during our 2009 fiscal year.
There is no doubt that we will see continued volatility in the financial and commodity markets over at least the next few quarters. We believe that our conservative style, the strength of our company and the solid assets in which our capital is invested will allow us to continue to prosper and weather any storms on the horizon.”
SUMMARY OF RESULTS
National Fuel had consolidated earnings for the quarter ended September 30, 2008, of $43.3 million, or $0.52 per share, a decrease of $114.4 million, or $1.32 per share, from the prior year’s fourth quarter (note: all references to earnings per share are to diluted earnings per share, all amounts are stated in U.S. dollars and all amounts used in the earnings and Operating Results discussions are after tax unless otherwise noted).
Consolidated earnings for the fiscal year ended September 30, 2008, of $268.7 million, or $3.18 per share, decreased $68.7 million, or $0.78 per share, from the same period in the prior year.
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Three Months | Year Ended | |||||||||||||
| Ended September 30, | Ended September 30, | ||||||||||||||
| 2008 | 2007 | 2008 | 2007 | ||||||||||||
| (in thousands except per share amounts) | |||||||||||||||
| Reported GAAP earnings | $ | 43,266 | $ | 157,690 | $ | 268,728 | $ | 337,455 | |||||||
| Items impacting comparability1: | |||||||||||||||
| Gain on sale of turbine | (586 | ) | |||||||||||||
| Gain on disposal of Canadian operations | (120,301 | ) | (120,301 | ) | |||||||||||
| Income from discontinued operations | (3,094 | ) | (15,479 | ) | |||||||||||
| Reversal of reserve for preliminary project costs | (4,787 | ) | |||||||||||||
| Resolution of purchased gas contingency | (2,344 | ) | |||||||||||||
| Discontinuation of hedge accounting | (1,888 | ) | |||||||||||||
| Operating Results | $ | 43,266 | $ | 34,295 | $ | 268,142 | $ | 192,656 | |||||||
| Reported GAAP earnings per share | $ | 0.52 | $ | 1.84 | $ | 3.18 | $ | 3.96 | |||||||
| Items impacting comparability1: | |||||||||||||||
| Gain on sale of turbine | (0.01 | ) | |||||||||||||
| Gain on disposal of Canadian operations | (1.41 | ) | (1.41 | ) | |||||||||||
| Income from discontinued operations | (0.03 | ) | (0.18 | ) | |||||||||||
| Reversal of reserve for preliminary project costs | (0.06 | ) | |||||||||||||
| Resolution of purchased gas contingency | (0.03 | ) | |||||||||||||
| Discontinuation of hedge accounting | (0.02 | ) | |||||||||||||
| Operating Results | $ | 0.52 | $ | 0.40 | $ | 3.17 | $ | 2.26 | |||||||
1 See discussion of these individual items below.
As outlined in the table above, certain items included in GAAP earnings impacted the comparability of the Company’s financial results when comparing the 2008 fourth quarter and fiscal year to the comparable periods in fiscal 2007. Excluding fourth quarter items, most of which occurred in fiscal 2007, Operating Results for the current fourth quarter of $43.3 million, or $0.52 per share, increased $9.0 million, or $0.12 per share. Operating Results for the fiscal year ended September 30, 2008 of $268.1 million, or $3.17 per share, increased $75.5 million, or $0.91 per share. Items impacting comparability will be discussed in more detail within the discussion of segment earnings below.
DISCUSSION OF RESULTS BY SEGMENT
(The following discussion of earnings for each segment is summarized in a tabular form in this report. It may be helpful to refer to those tables while reviewing this discussion.)
Exploration and Production Segment
The Exploration and Production segment operations are carried out by Seneca. Seneca explores for, develops and purchases natural gas and oil reserves in California, in the Appalachian region, and in the Gulf of Mexico. Seneca previously had Canadian Exploration and Production operations, which it sold on August 31, 2007. As a result of that sale, the Company has presented the Canadian operations as discontinued operations.
The Exploration and Production segment’s earnings in the fourth quarter of fiscal 2008 of $38.2 million, or $0.46 per share, decreased $107.5 million, or $1.24 per share, when compared with the prior year’s fourth quarter. Excluding earnings from discontinued operations discussed below, Operating Results in the Exploration and Production segment increased $15.9 million, or $0.20 per share, for the fourth quarter of fiscal 2008. The increase was primarily due to higher crude oil and natural gas prices realized after hedging. For the quarter ended September 30, 2008, the weighted average oil price received by Seneca (after hedging) was $87.29 per Bbl, an increase of $25.94 per Bbl, from the prior year’s quarter. The weighted average natural gas price received by Seneca (after hedging) for the quarter ended September 30, 2008, was $9.41 per thousand cubic feet ("Mcf”), an increase of $2.28 per Mcf. Lower interest expense, a lower effective tax rate, and a net positive mark-to-market adjustment to recognize hedge ineffectiveness on certain derivative financial instruments used to hedge prices on Seneca’s oil and gas production during the quarter also contributed to the growth in operating results.
Overall production for the quarter ended September 30, 2008 was 9.4 Bcfe, a decrease of 0.6 Bcfe compared to the prior year’s quarter (excluding 2007 production from discontinued operations). Hurricane related shut-ins reduced the production of Seneca’s Gulf division by approximately 1.0 Bcfe. While Seneca’s properties sustained only superficial damage from the hurricanes, approximately 50 percent of the pre-hurricane production remains shut-in due to repair work on third party pipelines and onshore processing facilities. The majority of this production is anticipated to return by December 1, 2008. Production increased in the West and East (Appalachia) Divisions.
Other items impacting Operating Results for the quarter were higher lease operating expenses ("LOE”), higher other operating expenses and lower interest income. The increase in LOE is due to higher steaming costs in California (especially the higher cost of natural gas purchased, and transported to the on-site boiler to generate that steam) and an increase in costs associated with a higher number of producing properties in Appalachia. The increase in other operating expenses was due to the recognition of actual plugging costs in excess of amounts previously accrued.
The Exploration and Production segment’s earnings of $146.6 million, or $1.73 per share, for the fiscal year ended September 30, 2008, decreased $64.1 million, or $0.74 per share, when compared with the fiscal year ended September 30, 2007. Excluding earnings from discontinued operations, Operating Results for the fiscal year ended September 30, 2008, in the Exploration and Production segment increased $71.7 million, or $0.85 per share from the prior year. The increase was primarily due to higher crude oil and natural gas prices realized after hedging and was also significantly impacted by higher natural gas production. For the fiscal year ended September 30, 2008, the weighted average oil price received by Seneca (after hedging) was $81.75 per Bbl, an increase of $30.07 per Bbl, from the prior fiscal year. The weighted average natural gas price received by Seneca (after hedging) for the fiscal year ended September 30, 2008, was $9.05 per Mcf, an increase of $1.80. Overall production for the 2008 fiscal year was 40.8 Bcfe, an increase of 1.5 Bcfe, compared to the prior fiscal year (excluding 2007 production from discontinued operations). An increase in natural gas production more than offset a decline in crude oil production. Higher interest income and lower interest expense during the 2008 fiscal year also contributed to the increase in Operating Results.
Other items impacting Operating Results for the fiscal year ended September 30, 2008, were higher depletion expense, LOE, general and administrative ("G&A”) expenses, other operating expenses and state income taxes. The increase in depletion expense was caused by higher production and the increase in the depletable base. The increase in LOE is due to the High Island 24L field that began production in October 2007, higher steaming costs in California, and an increase in costs associated with a higher number of producing properties in Appalachia. The largest contributor to the higher G&A costs was the increase in staffing and associated costs for the growing East Division. The increase in other operating expenses was due to the recognition of actual plugging costs in excess of previously accrued amounts.
Pipeline and Storage Segment
The Pipeline and Storage segment operations are carried out by National Fuel Gas Supply Corporation ("Supply Corporation”) and Empire State Pipeline ("Empire”). These companies provide natural gas transportation and storage services to affiliated and non-affiliated companies through an integrated system of pipelines and underground natural gas storage fields in western New York and western Pennsylvania.
The Pipeline and Storage segment’s earnings of $13.2 million, or $0.16 per share, for the quarter ended September 30, 2008, decreased $0.1 million, or less than $0.01 per share, when compared with the same period in the prior fiscal year. The decrease was due to lower efficiency gas revenues, higher operating expenses and higher interest expense in this year’s fourth quarter compared to the prior year’s fourth quarter. The negative earnings impact of these items was mostly offset by an increase in the allowance for funds used during construction ("AFUDC”) related to the construction of the Empire Connector.
Earnings of $54.1 million, or $0.64 per share, for the fiscal year ended September 30, 2008, decreased $2.2 million, or $0.02 per share, when compared with the fiscal year ended September 30, 2007. The comparability of the results for the fiscal year ended September 30, 2008, is impacted by the reversal in the prior year of a $4.8 million reserve for preliminary project costs on the Empire Connector project, and a $1.9 million gain associated with the prepayment in the first quarter of 2007 of the project financing debt for the Empire State Pipeline. Excluding those items, Operating Results increased $4.4 million, or $0.06 per share, for the fiscal year ended September 30, 2008, mainly due to higher transportation and storage revenues and higher efficiency gas revenues. Higher AFUDC related to construction of the Empire Connector also contributed to the increase in Operating Results. Higher operating expenses and interest expense during the fiscal year ended September 30, 2008, partially offset these items.
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 loss of $0.8 million, or $0.01 per share for the quarter ended September 30, 2008, decreased $2.7 million, or $0.03 per share, compared to the prior year’s fourth quarter loss; however, the results are not directly comparable to the prior year’s fourth quarter due to a rate design change in the New York Division discussed below.
In the New York Division, the loss decreased $1.7 million or $0.02 per share. On December 21, 2007, the New York State Public Service Commission issued an order allowing Distribution to increase annual revenues by $1.8 million. In addition to the revenue increase, the order approved a rate design change, which allows Distribution to recover a greater amount of its operating costs in the minimum bill charge. This results in shifting more than $4.3 million of earnings from the second quarter of fiscal 2008 and spreading it to the following three fiscal quarters. As a result of this change, the loss for the fourth quarter of fiscal 2008 decreased when compared to the fourth quarter of fiscal 2007. Also contributing to the lower fourth quarter loss in fiscal 2008 was a higher non-cash accrual of interest income on a pension-related regulatory asset, lower depreciation and interest expense and higher usage per customer in the current quarter. The impact of regulatory true-up adjustments, higher bad debt and other operating expense during the current quarter had a negative impact on the loss for the quarter. In the Pennsylvania Division, the loss decreased $1.0 million primarily due to a lower effective tax rate.
The Utility segment’s earnings of $61.5 million, or $0.73 per share, for the fiscal year ended September 30, 2008, increased $10.6 million, or $0.13 per share, compared to the fiscal year ended September 30, 2007. Earnings of $40.7 million in Distribution’s New York Division for the fiscal year ended September 30, 2008, increased $6.9 million, or $0.09 per share, compared to the prior year. The increase is mainly due to lower postretirement benefits and bad debt expense, lower property and other taxes, and a higher non-cash accrual of interest income on a pension-related regulatory asset. Higher usage per customer, lower depreciation and interest expense, and a lower effective tax rate this fiscal year also contributed to the increase in earnings. The impact of these items more than offset the effect of the rate design change described above and the negative impact of certain regulatory true-up adjustments in the current fiscal year’s earnings.
For the fiscal year ended September 30, 2008, earnings of $20.8 million in Distribution’s Pennsylvania Division, or $0.25 per share, increased $3.7 million, or $0.04 per share, compared to the prior year. Earnings increased primarily due to an increase in base rates, higher usage per customer and a decrease in bad debt expense. On January 1, 2007, Distribution implemented a Settlement Agreement approved by the Pennsylvania Public Utility Commission that provided for a $14.3 million (before tax) annual base rate increase. Warmer weather during the fiscal year ended September 30, 2008, partially offset the increase in earnings.
Energy Marketing
National Fuel Resources, Inc. ("NFR”) comprises the Company’s Energy Marketing segment. NFR markets natural gas to industrial, wholesale, commercial, public authority and residential customers primarily in western and central New York and northwestern Pennsylvania, offering competitively priced natural gas to its customers.
The Energy Marketing segment’s net loss for the fourth quarter of fiscal 2008 of $1.2 million, or $0.01 per share, increased $0.4 million compared to the prior year’s fourth quarter loss of $0.8 million, due to lower margins. The lower margins were primarily driven by higher pipeline reservation charges related to additional storage capacity, as well as unfavorable pipeline imbalance resolution due to falling prices during the quarter. The margin decrease was partially offset by a lower effective tax rate.
Even though NFR’s reported sales volumes for the fourth quarter were 2.2 Bcf higher than the prior year’s fourth quarter, overall margins for the current quarter were lower. The increase in sales volume was primarily due to sales transactions that NFR undertook to offset certain basis risks that NFR was exposed to under certain commodity purchase contracts. Such offsetting transactions had the effect of increasing revenue and volumes sold, but the impact on earnings was minimal.
Earnings for the fiscal year ended September 30, 2008, of $5.9 million, or $0.07 per share, decreased $1.8 million, or $0.02 per share, compared to the fiscal year ended September 30, 2007. The comparability of the results is impacted by the reversal in 2007 of a $2.3 million accrual for purchased gas expense for which a contingency was resolved during the second quarter of that year. Excluding this item, Operating Results for the fiscal year ended September 30, 2008, increased $0.6 million, or $0.01 per share, compared to the prior year, mainly due to increased sales volumes. NFR also benefited from the profitable sale of certain gas held as inventory and from the marketing flexibility that it derives from its contracts for significant storage capacity. Lower income tax expense during fiscal 2008 also contributed to the increase in Operating Results. Higher bad debt expense and lower interest income partially offset these items.
Timber Segment
The Timber segment operations are carried out by Highland Forest Resources, Inc. and Seneca’s Northeast Division. This segment markets high quality hardwoods from its New York and Pennsylvania land holdings, and owns two sawmill/dry kiln operations in northwestern Pennsylvania.
The Timber segment experienced a loss of $2.1 million, or $0.03 per share for the quarter ended September 30, 2008, compared to earnings of $0.7 million or $0.01 per share for the quarter ended September 30, 2007. Earnings for the fiscal year ended September 30, 2008, of $0.1 million reflects a decrease of $3.6 million from the prior year’s earnings. The decrease in earnings for the quarter and fiscal year ended September 30, 2008 is mainly due to lower sales volumes and lower market prices in the current fiscal period. The most significant decrease in volumes occurred in high margin cherry veneer logs and cherry kiln dry lumber. The lower sales volumes are the result of depressed market conditions and reduced demand.
Corporate and All Other
Other direct, wholly owned subsidiaries of the Company include: Horizon LFG, Inc., a corporation engaged through subsidiaries in the purchase, processing, transportation and sale of landfill gas; and Horizon Power, Inc., a corporation that owns independent electric generation facilities which are fueled with natural gas or landfill gas.
The Corporate and All Other category experienced a loss for the quarter ended September 30, 2008, of $4.1 million compared to earnings of $2.2 million for the prior year’s fourth quarter. Higher operating expenses, higher interest expense, lower interest income and higher income taxes were the primary reasons for the increased loss in this category. The increase in income taxes is due to the allocation of the benefit of the Parent Company’s tax loss to the operating subsidiaries in accordance with an intercompany tax sharing agreement. The operating segments reflect their allocated portion of this tax benefit in the respective segment results.
Earnings in the Corporate and All Other category for the fiscal year ended September 30, 2008 were $0.5 million, a decrease of $7.6 million when compared to the prior year’s earnings. The comparability of the fiscal year results is impacted by a $0.6 million gain in 2008 on the sale of a gas-powered turbine Horizon Power, Inc. had previously planned to use in the development of a co-generation plant. Excluding this item, Operating Results decreased $8.2 million. Higher operating expenses, mainly related to the proxy contest initiated by a shareholder, lower interest income and a higher effective tax rate due to the allocation in the fourth quarter of the tax benefit described above, more than offset an increase in margins from the landfill gas operations and higher income from unconsolidated subsidiaries.
Discontinued Operations
On August 31, 2007, Seneca completed the sale of its Canadian subsidiary. As a result of that sale, the Company has presented the Canadian operations as discontinued operations. Earnings in the fourth quarter of fiscal 2007 include earnings from discontinued operations of $123.4 million. Earnings for the fiscal year ended September 30, 2007, include earnings from discontinued operations of $135.8 million. There were no earnings from discontinued operations for the quarter or fiscal year ended September 30, 2008.
LIQUIDITY/CASH FLOW OUTLOOK
National Fuel has designed its capital expenditure budget to allow it to live within cash flow in fiscal 2009. During the Company’s third quarter earnings teleconference, management had announced fiscal 2009 forecasted capital expenditures in the range of $328 to $403 million. Since that time, Seneca was the high bidder for approximately 24,000 mineral acres in Pennsylvania at a cost of approximately $74 million. Seneca is in the process of negotiating the lease terms for that acreage. The Company also continues to pursue the sale of certain landfill gas related assets. National Fuel anticipates that cash from operations and the proceeds from those asset sales should be sufficient to fund its 2009 capital investments, the lease payments discussed above, operating expenses, and dividend payments. In the event conditions in the credit markets improve, the Company may accelerate spending for some capital projects and modestly exceed its projected 2009 cash flow.
National Fuel’s cash from operations is somewhat dependent on the crude oil and natural gas commodity prices received by Seneca for the sale of its production. As previously disclosed, using the middle of its range of production guidance, Seneca has approximately 44 percent of its fiscal 2009 gas production hedged at an average price of $9.49 per Mcf and 40 percent of its fiscal 2009 oil production hedged at a Midway-Sunset price of $83.12 per barrel (which equates to a NYMEX price of approximately $94.30). The operating cash flows of National Fuel’s Utility and Pipeline and Storage segments are considerably less sensitive to changes in commodity prices.
From time-to-time, the Company uses short-term borrowings to finance its working capital needs. National Fuel maintains $420 million of uncommitted lines of credit with various banks and a $300 million commercial paper program. The commercial paper program is backed by a $300 million syndicated committed credit facility that extends through September 30, 2010.
EARNINGS GUIDANCE
The Company is revising its earnings guidance for fiscal 2009 to reflect a change in pricing assumptions for natural gas and crude oil. The revised earnings range is $2.60 to $2.80 per share. This includes oil and gas production for the Exploration and Production segment in the range of 38 to 44 Bcfe and is based on hedges currently in place and flat commodity pricing on non-hedged volumes, exclusive of basis differential, of $7.00 per MMBtu for natural gas and $70 per Bbl for crude oil. The Company is currently exploring a possible sale of certain landfill gas related assets. The guidance for fiscal 2009 does not take into account any earnings impacts resulting from such possible sale or sales. If a sale were to occur, certain earnings that have historically been included in Operating Results would be changed to a non-operating classification, as would any gain or loss on the sale.
EARNINGS TELECONFERENCE
The Company will host a conference call on Friday, November 7, 2008, 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 Web site at investor.nationalfuelgas.com. For those without Internet access, access is also provided by dialing (toll-free) 1-800-659-2032, and using the passcode "80054431.” For those unable to listen to the live conference call, a replay will be available approximately one hour after the conclusion of the call at the same Web site link and by phone at (toll free) 1-888-286-8010 using passcode "13507417.” Both the webcast and telephonic replay will be available until the close of business on Friday, November 14, 2008.
National Fuel is an integrated energy company with $4.1 billion in assets comprised of the following five operating segments: Exploration and Production, Pipeline and Storage, Utility, Energy Marketing, and Timber. Additional information about National Fuel is available on its Internet Web site: http://www.nationalfuelgas.com or through its investor information service at 1-800-334-2188.
Certain statements contained herein, including those regarding estimated future earnings, and statements that are identified by the use of the words "anticipates,” "estimates,” "expects,” "forecasts,” "intends,” "plans,” "predicts,” "projects,” "believes,” "seeks,” "will,” "may” and similar expressions, are "forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: financial and economic conditions, including the availability of credit, and their effect on the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments; occurrences affecting the Company’s ability to obtain financing under credit lines or other credit facilities or through the issuance of commercial paper, other short-term notes or debt or equity securities, 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; economic disruptions caused by terrorist activities, acts of war or major accidents; changes in actuarial assumptions, the interest rate environment and the return on assets for the Company’s retirement plan and post-retirement benefit plans, which can affect future funding obligations and costs and plan liabilities; changes in demographic patterns and weather conditions, including the occurrence of severe weather such as hurricanes; changes in the availability and/or price of natural gas or oil and the effect of such changes on the accounting treatment of derivative financial instruments or the valuation of the Company’s natural gas and oil reserves; uncertainty of oil and natural gas reserve estimates; ability to successfully identify, drill for and produce economically viable natural gas and oil reserves, including shortages, delays or unavailability of equipment and services required in drilling operations; significant changes from expectations in the Company’s actual production levels for natural gas or oil; changes in the availability and/or price of derivative financial instruments; changes in the price differentials between various types of oil; inability to obtain new customers or retain existing ones; significant changes in competitive factors affecting the Company; changes in laws and regulations to which the Company is subject, including tax, environmental, safety and employment laws and regulations; governmental/regulatory actions, initiatives and proceedings, including those involving acquisitions, financings, rate cases (which address, among other things, allowed rates of return, rate design and retained natural gas), affiliate relationships, industry structure, franchise renewal, and environmental/safety requirements; unanticipated impacts of restructuring initiatives in the natural gas and electric industries; significant changes from expectations in actual capital expenditures and operating expenses and unanticipated project delays or changes in project costs or plans; the nature and projected profitability of pending and potential projects and other investments, and the ability to obtain necessary governmental approvals and permits; ability to successfully identify and finance acquisitions or other investments and ability to operate and integrate existing and any subsequently acquired business or properties; impairments under the Securities and Exchange Commission’s full cost ceiling test for natural gas and oil reserves; changes in the market price of timber and the impact such changes might have on the types and quantity of timber harvested by the Company; significant changes in tax rates or policies or in rates of inflation or interest; significant changes in the Company’s relationship with its employees or contractors and the potential adverse effects if labor disputes, grievances or shortages were to occur; changes in accounting principles or the application of such principles to the Company; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide 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 hereof.
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS | ||||||||||||||||||||||||||||
| QUARTER ENDED SEPTEMBER 30, 2008 | ||||||||||||||||||||||||||||
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Exploration & | Pipeline & | Energy | Corporate / | ||||||||||||||||||||||||
| (Thousands of Dollars) | Production * | Storage | Utility | Marketing | Timber | All Other | Consolidated | |||||||||||||||||||||
| Fourth quarter 2007 GAAP earnings | $ | 145,711 | $ | 13,311 | $ | (3,436 | ) | $ | (768 | ) | $ | 675 | $ | 2,197 | $ | 157,690 | ||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Gain on disposal of discontinued operations *** | (120,301 | ) | (120,301 | ) | ||||||||||||||||||||||||
| Earnings from discontinued operations | (3,094 | ) | (3,094 | ) | ||||||||||||||||||||||||
| Fourth quarter 2007 Operating Results | 22,316 | 13,311 | (3,436 | ) | (768 | ) | 675 | 2,197 | 34,295 | |||||||||||||||||||
| Drivers of Operating Results | ||||||||||||||||||||||||||||
| Higher (lower) crude oil prices | 12,616 | 12,616 | ||||||||||||||||||||||||||
| Higher (lower) natural gas prices | 7,317 | 7,317 | ||||||||||||||||||||||||||
| Higher (lower) natural gas production | (460 | ) | (460 | ) | ||||||||||||||||||||||||
| Higher (lower) crude oil production | (3,014 | ) | (3,014 | ) | ||||||||||||||||||||||||
| Derivative mark to market adjustment | 1,079 | 1,079 | ||||||||||||||||||||||||||
| Lower (higher) lease operating expenses | (2,844 | ) | (2,844 | ) | ||||||||||||||||||||||||
| Lower (higher) depreciation / depletion | 473 | 477 | 950 | |||||||||||||||||||||||||
| Higher (lower) transportation and storage revenues | (176 | ) | (176 | ) | ||||||||||||||||||||||||
| Higher (lower) efficiency gas revenues | (1,549 | ) | (1,549 | ) | ||||||||||||||||||||||||
| Lower (higher) operating expenses | (2,428 | ) | (371 | ) | (907 | ) | 261 | (1,630 | ) | (5,075 | ) | |||||||||||||||||
| Lower (higher) property, franchise and other taxes | 289 | 289 | ||||||||||||||||||||||||||
| Base rate increase in New York | 1,895 | 1,895 | ||||||||||||||||||||||||||
| Higher (lower) usage | 649 | 649 | ||||||||||||||||||||||||||
| Regulatory true-up adjustments | (3,011 | ) | (3,011 | ) | ||||||||||||||||||||||||
| Higher (lower) income from unconsolidated subsidiaries | (288 | ) | (288 | ) | ||||||||||||||||||||||||
| Higher (lower) margins | (677 | ) | (4,094 | ) | (110 | ) | (4,881 | ) | ||||||||||||||||||||
| Higher AFUDC** | 1,949 | 1,949 | ||||||||||||||||||||||||||
| Higher (lower) interest income | (970 | ) | 2,608 | (100 | ) | (746 | ) | 792 | ||||||||||||||||||||
| (Higher) lower interest expense | 2,066 | (341 | ) | 607 | (713 | ) | 1,619 | |||||||||||||||||||||
| Lower (higher) income tax expense | 2,339 | 466 | 524 | 558 | (2,518 | ) | 1,369 | |||||||||||||||||||||
| All other / rounding | 210 | 395 | (389 | ) | (170 | ) | 16 | (317 | ) | (255 | ) | |||||||||||||||||
| Fourth quarter 2008 GAAP earnings | $ | 38,227 | $ | 13,218 | $ | (756 | ) | $ | (1,191 | ) | $ | (2,107 | ) | $ | (4,125 | ) | $ | 43,266 | ||||||||||
| * Includes discontinued operations |
| ** AFUDC = Allowance for Funds Used During Construction |
| *** Includes positive effective tax rate impact of $16,384. |
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE | ||||||||||||||||||||||||||||
| QUARTER ENDED SEPTEMBER 30, 2008 | ||||||||||||||||||||||||||||
| Exploration & | Pipeline & | Energy | Corporate / | |||||||||||||||||||||||||
| Production * | Storage | Utility | Marketing | Timber | All Other | Consolidated | ||||||||||||||||||||||
| Fourth quarter 2007 GAAP earnings | $ | 1.70 | $ | 0.16 | $ | (0.04 | ) | $ | (0.01 | ) | $ | 0.01 | $ | 0.02 | $ | 1.84 | ||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Gain on disposal of discontinued operations | (1.41 | ) | (1.41 | ) | ||||||||||||||||||||||||
| Earnings from discontinued operations | (0.03 | ) | (0.03 | ) | ||||||||||||||||||||||||
| Fourth quarter 2007 Operating Results | 0.26 | 0.16 | (0.04 | ) | (0.01 | ) | 0.01 | 0.02 | 0.40 | |||||||||||||||||||
| Drivers of Operating Results | ||||||||||||||||||||||||||||
| Higher (lower) crude oil prices | 0.15 | 0.15 | ||||||||||||||||||||||||||
| Higher (lower) natural gas prices | 0.09 | 0.09 | ||||||||||||||||||||||||||
| Higher (lower) natural gas production | - | - | ||||||||||||||||||||||||||
| Higher (lower) crude oil production | (0.04 | ) | (0.04 | ) | ||||||||||||||||||||||||
| Derivative mark to market adjustment | 0.01 | 0.01 | ||||||||||||||||||||||||||
| Lower (higher) lease operating expenses | (0.03 | ) | (0.03 | ) | ||||||||||||||||||||||||
| Lower (higher) depreciation / depletion | 0.01 | - | 0.01 | |||||||||||||||||||||||||
| Higher (lower) transportation and storage revenues | - | - | ||||||||||||||||||||||||||
| Higher (lower) efficiency gas revenues | (0.02 | ) | (0.02 | ) | ||||||||||||||||||||||||
| Lower (higher) operating expenses | (0.03 | ) | - | (0.01 | ) | - | (0.02 | ) | (0.06 | ) | ||||||||||||||||||
| Lower (higher) property, franchise and other taxes | - | |||||||||||||||||||||||||||
| Base rate increase in New York | 0.02 | 0.02 | ||||||||||||||||||||||||||
| Higher (lower) usage | 0.01 | 0.01 | ||||||||||||||||||||||||||
| Regulatory true-up adjustments | (0.04 | ) | (0.04 | ) | ||||||||||||||||||||||||
| Higher (lower) income from unconsolidated subsidiaries | - | - | ||||||||||||||||||||||||||
| Higher (lower) margins | (0.01 | ) | (0.05 | ) | - | (0.06 | ) | |||||||||||||||||||||
| Higher AFUDC** | 0.02 | 0.02 | ||||||||||||||||||||||||||
| Higher (lower) interest income | (0.01 | ) | 0.03 | - | (0.01 | ) | 0.01 | |||||||||||||||||||||
| (Higher) lower interest expense | 0.02 | - | 0.01 | (0.01 | ) | 0.02 | ||||||||||||||||||||||
| Lower (higher) income tax expense | 0.03 | - | 0.01 | 0.01 | (0.03 | ) | 0.02 | |||||||||||||||||||||
| All other / rounding | 0.01 | - | - | - | 0.01 | |||||||||||||||||||||||
| Fourth quarter 2008 GAAP earnings | $ | 0.46 | $ | 0.16 | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.05 | ) | $ | 0.52 | ||||||||||
| * Includes discontinued operations |
| ** AFUDC = Allowance for Funds Used During Construction |
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS | ||||||||||||||||||||||||||||
| YEAR ENDED SEPTEMBER 30, 2008 | ||||||||||||||||||||||||||||
| Exploration & | Pipeline & | Energy | Corporate / | |||||||||||||||||||||||||
| (Thousands of Dollars) | Production * | Storage | Utility | Marketing | Timber | All Other | Consolidated | |||||||||||||||||||||
| Fiscal 2007 GAAP earnings | $ | 210,669 | $ | 56,386 | $ | 50,886 | $ | 7,663 | $ | 3,728 | $ | 8,123 | $ | 337,455 | ||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Gain on disposal of discontinued operations *** | (120,301 | ) | (120,301 | ) | ||||||||||||||||||||||||
| Earnings from discontinued operations | (15,479 | ) | (15,479 | ) | ||||||||||||||||||||||||
| Reversal of reserve for preliminary project costs | (4,787 | ) | (4,787 | ) | ||||||||||||||||||||||||
| Resolution of a purchased gas contingency | (2,344 | ) | (2,344 | ) | ||||||||||||||||||||||||
| Discontinuance of hedge accounting | (1,888 | ) | (1,888 | ) | ||||||||||||||||||||||||
| Fiscal 2007 Operating Results | 74,889 | 49,711 | 50,886 | 5,319 | 3,728 | 8,123 | 192,656 | |||||||||||||||||||||
| Drivers of Operating Results | ||||||||||||||||||||||||||||
| Higher (lower) crude oil prices | 60,008 | 60,008 | ||||||||||||||||||||||||||
| Higher (lower) natural gas prices | 26,157 | 26,157 | ||||||||||||||||||||||||||
| Higher (lower) natural gas production | 11,782 | 11,782 | ||||||||||||||||||||||||||
| Higher (lower) crude oil production | (5,839 | ) | (5,839 | ) | ||||||||||||||||||||||||
| Lower (higher) lease operating expenses | (11,879 | ) | (11,879 | ) | ||||||||||||||||||||||||
| Lower (higher) depreciation / depletion | (9,130 | ) | 929 | (8,201 | ) | |||||||||||||||||||||||
| Higher (lower) transportation and storage revenues | 2,350 | 2,350 | ||||||||||||||||||||||||||
| Higher (lower) efficiency gas revenues | 500 | 500 | ||||||||||||||||||||||||||
| Lower (higher) operating expenses | (6,192 | ) | (1,283 | ) | 4,670 | (1,126 | ) | (6,129 | ) | (10,060 | ) | |||||||||||||||||
| Lower (higher) property, franchise and other taxes | 1,185 | 1,185 | ||||||||||||||||||||||||||
| Base rate decrease in New York | (934 | ) | (934 | ) | ||||||||||||||||||||||||
| Base rate increase in Pennsylvania | 2,572 | 2,572 | ||||||||||||||||||||||||||
| Higher (lower) usage | 1,722 | 1,722 | ||||||||||||||||||||||||||
| Warmer weather in Pennsylvania | (1,637 | ) | (1,637 | ) | ||||||||||||||||||||||||
| Regulatory true-up adjustments | (1,763 | ) | (1,763 | ) | ||||||||||||||||||||||||
| Higher (lower) income from unconsolidated subsidiaries | 861 | 861 | ||||||||||||||||||||||||||
| Higher (lower) margins | 1,202 | (4,222 | ) | 220 | (2,800 | ) | ||||||||||||||||||||||
| Higher AFUDC** | 4,201 | 4,201 | ||||||||||||||||||||||||||
| Higher (lower) interest income | 660 | 2,608 | (233 | ) | (1,332 | ) | 1,703 | |||||||||||||||||||||
| (Higher) lower interest expense | 6,564 | (1,476 | ) | 330 | 5,418 | |||||||||||||||||||||||
| Lower (higher) income tax expense | (1,068 | ) | 675 | 987 | 809 | (1,748 | ) | (345 | ) | |||||||||||||||||||
| All other / rounding | 660 | 145 | 229 | (260 | ) | (208 | ) | (81 | ) | 485 | ||||||||||||||||||
| Fiscal 2008 Operating Results | 146,612 | 54,148 | 61,472 | 5,889 | 107 | (86 | ) | 268,142 | ||||||||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Gain on sale of turbine | 586 | 586 | ||||||||||||||||||||||||||
| Fiscal 2008 GAAP earnings | $ | 146,612 | $ | 54,148 | $ | 61,472 | $ | 5,889 | $ | 107 | $ | 500 | $ | 268,728 | ||||||||||||||
| * Includes discontinued operations |
| ** AFUDC = Allowance for Funds Used During Construction |
| *** Includes positive effective tax rate impact of $16,384. |
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||||||
| RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE | ||||||||||||||||||||||||||||
| YEAR ENDED SEPTEMBER 30, 2008 | ||||||||||||||||||||||||||||
| Exploration & | Pipeline & | Energy | Corporate / | |||||||||||||||||||||||||
| Production * | Storage | Utility | Marketing | Timber | All Other | Consolidated | ||||||||||||||||||||||
| Fiscal 2007 GAAP earnings | $ | 2.47 | $ | 0.66 | $ | 0.60 | $ | 0.09 | $ | 0.04 | $ | 0.10 | $ | 3.96 | ||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Gain on disposal of discontinued operations | (1.41 | ) | (1.41 | ) | ||||||||||||||||||||||||
| Earnings from discontinued operations | (0.18 | ) | (0.18 | ) | ||||||||||||||||||||||||
| Reversal of reserve for preliminary project costs | (0.06 | ) | (0.06 | ) | ||||||||||||||||||||||||
| Resolution of a purchased gas contingency | (0.03 | ) | (0.03 | ) | ||||||||||||||||||||||||
| Discontinuance of hedge accounting | (0.02 | ) | (0.02 | ) | ||||||||||||||||||||||||
| Fiscal 2007 Operating Results | 0.88 | 0.58 | 0.60 | 0.06 | 0.04 | 0.10 | 2.26 | |||||||||||||||||||||
| Drivers of Operating Results | ||||||||||||||||||||||||||||
| Higher (lower) crude oil prices | 0.71 | 0.71 | ||||||||||||||||||||||||||
| Higher (lower) natural gas prices | 0.31 | 0.31 | ||||||||||||||||||||||||||
| Higher (lower) natural gas production | 0.14 | 0.14 | ||||||||||||||||||||||||||
| Higher (lower) crude oil production | (0.07 | ) | (0.07 | ) | ||||||||||||||||||||||||
| Lower (higher) lease operating expenses | (0.14 | ) | (0.14 | ) | ||||||||||||||||||||||||
| Lower (higher) depreciation / depletion | (0.11 | ) | 0.01 | (0.10 | ) | |||||||||||||||||||||||
| Higher (lower) transportation and storage revenues | 0.03 | 0.03 | ||||||||||||||||||||||||||
| Higher (lower) efficiency gas revenues | 0.01 | 0.01 | ||||||||||||||||||||||||||
| Lower (higher) operating expenses | (0.07 | ) | (0.01 | ) | 0.06 | (0.01 | ) | (0.07 | ) | (0.10 | ) | |||||||||||||||||
| Lower (higher) property, franchise and other taxes | 0.01 | 0.01 | ||||||||||||||||||||||||||
| Base rate decrease in New York | (0.01 | ) | (0.01 | ) | ||||||||||||||||||||||||
| Base rate increase in Pennsylvania | 0.03 | 0.03 | ||||||||||||||||||||||||||
| Higher (lower) usage | 0.02 | 0.02 | ||||||||||||||||||||||||||
| Warmer weather in Pennsylvania | (0.02 | ) | (0.02 | ) | ||||||||||||||||||||||||
| Regulatory true-up adjustments | (0.02 | ) | (0.02 | ) | ||||||||||||||||||||||||
| Higher (lower) income from unconsolidated subsidiaries | 0.01 | 0.01 | ||||||||||||||||||||||||||
| Higher (lower) margins | 0.01 | (0.05 | ) | - | (0.04 | ) | ||||||||||||||||||||||
| Higher AFUDC** | 0.05 | 0.05 | ||||||||||||||||||||||||||
| Higher (lower) interest income | 0.01 | 0.03 | - | (0.02 | ) | 0.02 | ||||||||||||||||||||||
| (Higher) lower interest expense | 0.08 | (0.02 | ) | - | 0.06 | |||||||||||||||||||||||
| Lower (higher) income tax expense | (0.01 | ) | 0.01 | 0.01 | 0.01 | (0.02 | ) | - | ||||||||||||||||||||
| All other / rounding | - | - | 0.01 | - | - | - | 0.01 | |||||||||||||||||||||
| Fiscal 2008 Operating Results | 1.73 | 0.64 | 0.73 | 0.07 | (0.00 | ) | - | 3.17 | ||||||||||||||||||||
| Items impacting comparability: | ||||||||||||||||||||||||||||
| Gain on sale of turbine | 0.01 | 0.01 | ||||||||||||||||||||||||||
| Fiscal 2008 GAAP earnings | $ | 1.73 | $ | 0.64 | $ | 0.73 | $ | 0.07 | $ | (0.00 | ) | $ | 0.01 | $ | 3.18 | |||||||||||||
* Includes discontinued operations
| NATIONAL FUEL GAS COMPANY | ||||||||||||
| AND SUBSIDIARIES | ||||||||||||
| (Thousands of Dollars, except per share amounts) | ||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
|
SUMMARY OF OPERATIONS |
2008 | 2007 | 2008 | 2007 | ||||||||
| Operating Revenues | $ | 397,858 | $ | 302,030 | $ | 2,400,361 | $ | 2,039,566 | ||||
| Operating Expenses: | ||||||||||||
| Purchased Gas | 152,816 | 79,164 | 1,235,157 | 1,018,081 | ||||||||
| Operation and Maintenance | 107,228 | 90,905 | 432,871 | 396,408 | ||||||||
| Property, Franchise and Other Taxes | 17,379 | 16,098 | 75,585 | 70,660 | ||||||||
| Depreciation, Depletion and Amortization | 41,286 | 42,359 | 170,623 | 157,919 | ||||||||
| 318,709 | 228,526 | 1,914,236 | 1,643,068 | |||||||||
| Operating Income | 79,149 | 73,504 | 486,125 | 396,498 | ||||||||
| Other Income (Expense): | ||||||||||||
| Income from Unconsolidated Subsidiaries | 1,437 | 1,880 | 6,303 | 4,979 | ||||||||
| Other Income | 2,394 | 908 | 7,376 | 4,936 | ||||||||
| Interest Income | 2,459 | (1,548) | 10,815 | 1,550 | ||||||||
| Interest Expense on Long-Term Debt | (18,055) | (16,289) | (70,099) | (68,446) | ||||||||
| Other Interest Expense | 339 | (1,151) | (3,870) | (6,029) | ||||||||
| Income from Continuing Operations Before Income Taxes | 67,723 | 57,304 | 436,650 | 333,488 | ||||||||
| Income Tax Expense | 24,457 | 23,009 | 167,922 | 131,813 | ||||||||
| Income from Continuing Operations | 43,266 | 34,295 | 268,728 | 201,675 | ||||||||
| Discontinued Operations: | ||||||||||||
| Income from Operations, Net of Tax | - | 3,094 | - | 15,479 | ||||||||
| Gain on Disposal, Net of Tax | - | 120,301 | - | 120,301 | ||||||||
| Income from Discontinued Operations, Net of Tax | - | 123,395 | - | 135,780 | ||||||||
| Net Income Available for Common Stock | $ | 43,266 | $ | 157,690 | $ | 268,728 | $ | 337,455 | ||||
| Earnings Per Common Share: | ||||||||||||
| Basic: | ||||||||||||
| Income from Continuing Operations | $ | 0.54 | $ | 0.41 | $ | 3.27 | $ | 2.43 | ||||
| Income from Discontinued Operations | - | 1.48 | - | 1.63 | ||||||||
| Net Income Available for Common Stock | $ | 0.54 | $ | 1.89 | $ | 3.27 | $ | 4.06 | ||||
| Diluted: | ||||||||||||
| Income from Continuing Operations | $ | 0.52 | $ | 0.40 | $ | 3.18 | $ | 2.37 | ||||
| Income from Discontinued Operations | - | 1.44 | - | 1.59 | ||||||||
| Net Income Available for Common Stock | $ | 0.52 | $ | 1.84 | $ | 3.18 | $ | 3.96 | ||||
| Weighted Average Common Shares: | ||||||||||||
| Used in Basic Calculation | 80,858,668 | 83,506,748 | 82,304,335 | 83,141,640 | ||||||||
| Used in Diluted Calculation | 82,896,107 | 85,577,898 | 84,474,839 | 85,301,361 | ||||||||
| NATIONAL FUEL GAS COMPANY | ||||||
| AND SUBSIDIARIES | ||||||
| CONSOLIDATED BALANCE SHEETS | ||||||
| (Unaudited) | ||||||
| September 30, | September 30, | |||||
| (Thousands of Dollars) | 2008 | 2007 | ||||
| ASSETS | ||||||
| Property, Plant and Equipment | $ | 4,873,969 | $ | 4,461,586 | ||
| Less - Accumulated Depreciation, Depletion and Amortization | 1,719,869 | 1,583,181 | ||||
| Net Property, Plant and Equipment | 3,154,100 | 2,878,405 | ||||
| Current Assets: | ||||||
| Cash and Temporary Cash Investments | 68,239 | 124,806 | ||||
| Cash Held in Escrow | - | 61,964 | ||||
| Hedging Collateral Deposits | 1 | 4,066 | ||||
| Receivables - Net | 185,397 | 172,380 | ||||
| Unbilled Utility Revenue | 24,364 | 20,682 | ||||
| Gas Stored Underground | 87,294 | 66,195 | ||||
| Materials and Supplies - at average cost | 31,317 | 35,669 | ||||
| Unrecovered Purchased Gas Costs | 37,708 | 14,769 | ||||
| Other Current Assets | 65,158 | 45,057 | ||||
| Deferred Income Taxes | - | 8,550 | ||||
| Total Current Assets | 499,478 | 554,138 | ||||
| Other Assets: | ||||||
| Recoverable Future Taxes | 82,506 | 83,954 | ||||
| Unamortized Debt Expense | 13,978 | 12,070 | ||||
| Other Regulatory Assets | 189,587 | 137,577 | ||||
| Deferred Charges | 4,417 | 5,545 | ||||
| Other Investments | 80,640 | 85,902 | ||||
| Investments in Unconsolidated Subsidiaries | 16,279 | 18,256 | ||||
| Goodwill | 5,476 | 5,476 | ||||
| Intangible Assets | 26,174 | 28,836 | ||||
| Prepaid Pension and Post-Retirement Benefit Costs | 21,034 | 61,006 | ||||
| Fair Value of Derivative Financial Instruments | 28,786 | 9,188 | ||||
| Other | 7,732 | 8,059 | ||||
| Total Other Assets | 476,609 | 455,869 | ||||
| Total Assets | $ | 4,130,187 | $ | 3,888,412 | ||
| CAPITALIZATION AND LIABILITIES | ||||||
| Capitalization: | ||||||
| Comprehensive Shareholders' Equity |
|
|||||
| Common Stock, $1 Par Value Authorized - 200,000,000 | ||||||
|
Shares; Issued and Outstanding - 79,120,544 Shares |
||||||
| and 83,461,308 Shares, Respectively | $ | 79,121 | $ | 83,461 | ||
| Paid in Capital | 567,716 | 569,085 | ||||
| Earnings Reinvested in the Business | 953,799 | 983,776 | ||||
| Total Common Shareholders' Equity Before | ||||||
| Items of Other Comprehensive Loss | 1,600,636 | 1,636,322 | ||||
| Accumulated Other Comprehensive Income / (Loss) | 2,963 | (6,203) | ||||
| Total Comprehensive Shareholders' Equity | 1,603,599 | 1,630,119 | ||||
| Long-Term Debt, Net of Current Portion | 999,000 | 799,000 | ||||
| Total Capitalization | 2,602,599 | 2,429,119 | ||||
| Current and Accrued Liabilities: | ||||||
| Notes Payable to Banks and Commercial Paper | - | - | ||||
| Current Portion of Long-Term Debt | 100,000 | 200,024 | ||||
| Accounts Payable | 142,520 | 109,757 | ||||
| Amounts Payable to Customers | 2,753 | 10,409 | ||||
| Dividends Payable | 25,714 | 25,873 | ||||
| Interest Payable on Long-Term Debt | 22,114 | 18,158 | ||||
| Customer Advances | 33,017 | 22,863 | ||||
| Other Accruals and Current Liabilities | 45,220 | 36,062 | ||||
| Deferred Income Taxes | 1,871 | - | ||||
| Fair Value of Derivative Financial Instruments | 1,362 | 16,200 | ||||
| Total Current and Accrued Liabilities | 374,571 | 439,346 | ||||
| Deferred Credits: | ||||||
| Deferred Income Taxes | 634,372 | 575,356 | ||||
| Taxes Refundable to Customers | 18,449 | 14,026 | ||||
| Unamortized Investment Tax Credit | 4,691 | 5,392 | ||||
| Cost of Removal Regulatory Liability | 103,100 | 91,226 | ||||
| Other Regulatory Liabilities | 91,933 | 76,659 | ||||
| Post-Retirement Liabilities | 78,909 | 70,555 | ||||
| Asset Retirement Obligations | 93,247 | 75,939 | ||||
| Other Deferred Credits | 128,316 | 110,794 | ||||
| Total Deferred Credits | 1,153,017 | 1,019,947 | ||||
| Commitments and Contingencies | - | - | ||||
| Total Capitalization and Liabilities | $ | 4,130,187 | $ | 3,888,412 | ||
| NATIONAL FUEL GAS COMPANY | ||||||||
| AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| Twelve Months Ended | ||||||||
| September 30, | ||||||||
| (Thousands of Dollars) | 2008 | 2007 | ||||||
| Operating Activities: | ||||||||
| Net Income Available for Common Stock | $ | 268,728 | $ | 337,455 | ||||
| Adjustments to Reconcile Net Income to Net Cash | ||||||||
| Provided by Operating Activities: | ||||||||
| Gain on Sale of Discontinued Operations | - | (159,873 | ) | |||||
| Depreciation, Depletion and Amortization | 170,623 | 170,803 | ||||||
| Deferred Income Taxes | 72,496 | 52,847 | ||||||
| Income from Unconsolidated Subsidiaries, Net of Cash Distributions | 1,977 | (3,366 | ) | |||||
| Excess Tax Benefits Associated with Stock-Based Compensation Awards | (16,275 | ) | (13,689 | ) | ||||
| Other | 4,858 | 16,399 | ||||||
| Change in: | ||||||||
| Hedging Collateral Deposits | 4,065 | 15,610 | ||||||
| Receivables and Unbilled Utility Revenue | (16,815 | ) | 5,669 | |||||
|
Gas Stored Underground and Materials and Supplies |
(22,116 | ) | (5,714 | ) | ||||
| Unrecovered Purchased Gas Costs | (22,939 | ) | (1,799 | ) | ||||
| Prepayments and Other Current Assets | (36,376 | ) | 18,800 | |||||
| Accounts Payable | 32,763 | (26,002 | ) | |||||
| Amounts Payable to Customers | (7,656 | ) | (13,526 | ) | ||||
| Customer Advances | 10,154 | (6,554 | ) | |||||
| Other Accruals and Current Liabilities | (3,641 | ) | 8,950 | |||||
| Other Assets | (11,887 | ) | 4,109 | |||||
| Other Liabilities | 54,817 | (5,922 | ) | |||||
| Net Cash Provided by Operating Activities | $ | 482,776 | $ | 394,197 | ||||
| Investing Activities: | ||||||||
| Capital Expenditures | ($397,734 | ) | ($276,728 | ) | ||||
| Investment in Partnership | - | (3,300 | ) | |||||
| Net Proceeds from Sale of Foreign Subsidiary | - | 232,092 | ||||||
| Cash Held in Escrow | 58,397 | (58,248 | ) | |||||
| Net Proceeds from Sale of Oil and Gas Producing Properties | 5,969 | 5,137 | ||||||
| Other | 4,376 | (725 | ) | |||||
| Net Cash Used in Investing Activities | ($328,992 | ) | ($101,772 | ) | ||||
| Financing Activities: | ||||||||
| Excess Tax Benefits Associated with Stock-Based Compensation Awards | $ | 16,275 | $ | 13,689 | ||||
| Shares Repurchased under Repurchase Plan | (237,006 | ) | (48,070 | ) | ||||
| Net Proceeds from Issuance of Long-Term Debt | 296,655 | - | ||||||
| Reduction of Long-Term Debt | (200,024 | ) | (119,576 | ) | ||||
| Dividends Paid on Common Stock | (103,683 | ) | (100,632 | ) | ||||
| Proceeds From Issuance of Common Stock | 17,432 | 17,498 | ||||||
| Net Cash Used In Financing Activities | ($210,351 | ) | ($237,091 | ) | ||||
| Effect of Exchange Rates on Cash | - | (139 | ) | |||||
|
Net Increase / (Decrease) in Cash and Temporary Cash Investments |
(56,567 | ) | 55,195 | |||||
|
Cash and Temporary Cash Investments at Beginning of Period |
124,806 | 69,611 | ||||||
|
Cash and Temporary Cash Investments at September 30 |
$ | 68,239 | $ | 124,806 | ||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | ||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
|
(Thousands of Dollars, except per share amounts) |
September 30, |
September 30, |
||||||||||||||||||||||
|
EXPLORATION AND PRODUCTION SEGMENT |
2008 | 2007 | Variance | 2008 | 2007 | Variance | ||||||||||||||||||
| Operating Revenues | $ | 117,931 | $ | 90,329 | $ | 27,602 | $ | 466,760 | $ | 324,037 | $ | 142,723 | ||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Operation and Maintenance: | ||||||||||||||||||||||||
| General and Administrative Expense | 5,925 | 6,243 | (318 | ) | 24,600 | 19,946 | 4,654 | |||||||||||||||||
| Lease Operating Expense | 14,223 | 11,585 | 2,638 | 55,335 | 43,916 | 11,419 | ||||||||||||||||||
| All Other Operation and Maintenance Expense | 5,523 | 1,468 | 4,055 | 13,250 | 8,378 | 4,872 | ||||||||||||||||||
| Property, Franchise and Other Taxes (Lease Operating Expense) | 2,956 | 1,220 | 1,736 | 11,350 | 4,493 | 6,857 | ||||||||||||||||||
| Depreciation, Depletion and Amortization | 22,122 | 21,844 | 278 | 92,221 | 78,174 | 14,047 | ||||||||||||||||||
| 50,749 | 42,360 | 8,389 | 196,756 | 154,907 | 41,849 | |||||||||||||||||||
| Operating Income | 67,182 | 47,969 | 19,213 | 270,004 | 169,130 | 100,874 | ||||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 1,642 | 3,134 | (1,492 | ) | 10,921 | 9,905 | 1,016 | |||||||||||||||||
| Other Income | - | 18 | (18 | ) | 18 | 18 | - | |||||||||||||||||
| Interest Expense on Long-Term Debt | - | - | - | - | (1,188 | ) | 1,188 | |||||||||||||||||
| Other Interest Expense | (8,970 | ) | (12,149 | ) | 3,179 | (41,645 | ) | (50,555 | ) | 8,910 | ||||||||||||||
| Income from Continuing Operations Before Income Taxes | 59,854 | 38,972 | 20,882 | 239,298 | 127,310 | 111,988 | ||||||||||||||||||
| Income Tax Expense | 21,627 | 16,656 | 4,971 | 92,686 | 52,421 | 40,265 | ||||||||||||||||||
| Income from Continuing Operations | 38,227 | 22,316 | 15,911 | 146,612 | 74,889 | 71,723 | ||||||||||||||||||
| Discontinued Operations: | ||||||||||||||||||||||||
| Income from Operations, Net of Tax | - | 3,094 | (3,094 | ) | - | 15,479 | (15,479 | ) | ||||||||||||||||
| Gain on Disposal, Net of Tax | - | 120,301 | (120,301 | ) | - | 120,301 | (120,301 | ) | ||||||||||||||||
| Income from Discontinued Operations, Net of Tax | - | 123,395 | (123,395 | ) | - | 135,780 | (135,780 | ) | ||||||||||||||||
| Net Income | $ | 38,227 | $ | 145,711 | $ | (107,484 | ) | $ | 146,612 | $ | 210,669 | $ | (64,057 | ) | ||||||||||
| Income from Continuing Operations Per Share (Diluted) | $ | 0.46 | $ | 0.26 | $ | 0.20 | $ | 1.73 | $ | 0.88 | $ | 0.85 | ||||||||||||
|
Income from Discontinued Operations, Net of Tax, Per Share (Diluted) |
- | 1.44 | (1.44 | ) | - | 1.59 | (1.59 | ) | ||||||||||||||||
| Net Income Per Share (Diluted) | $ | 0.46 | $ | 1.70 | $ | (1.24 | ) | $ | 1.73 | $ | 2.47 | $ | (0.74 | ) | ||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
|
PIPELINE AND STORAGE SEGMENT |
2008 | 2007 | Variance | 2008 | 2007 | Variance | ||||||||||||||||||
| Revenues from External Customers | $ | 33,181 | $ | 35,521 | $ | (2,340 | ) | $ | 135,052 | $ | 130,410 | $ | 4,642 | |||||||||||
| Intersegment Revenues | 20,164 | 19,972 | 192 | 81,504 | 81,556 | (52 | ) | |||||||||||||||||
| Total Operating Revenues | 53,345 | 55,493 | (2,148 | ) | 216,556 | 211,966 | 4,590 | |||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Purchased Gas | 2 | 7 | (5 | ) | (10 | ) | (5 | ) | (5 | ) | ||||||||||||||
| Operation and Maintenance | 19,755 | 19,111 | 644 | 70,632 | 61,230 | 9,402 | ||||||||||||||||||
| Property, Franchise and Other Taxes | 4,224 | 4,317 | (93 | ) | 16,763 | 17,112 | (349 | ) | ||||||||||||||||
| Depreciation, Depletion and Amortization | 8,242 | 8,135 | 107 | 32,871 | 32,985 | (114 | ) | |||||||||||||||||
| 32,223 | 31,570 | 653 | 120,256 | 111,322 | 8,934 | |||||||||||||||||||
| Operating Income | 21,122 | 23,923 | (2,801 | ) | 96,300 | 100,644 | (4,344 | ) | ||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 116 | 134 | (18 | ) | 843 | 357 | 486 | |||||||||||||||||
| Other Income | 2,251 | 330 | 1,921 | 4,796 | 748 | 4,048 | ||||||||||||||||||
| Interest Expense on Long-Term Debt | - | (16 | ) | 16 | (31 | ) | 1,792 | (1,823 | ) | |||||||||||||||
| Other Interest Expense | (3,813 | ) | (3,274 | ) | (539 | ) | (13,752 | ) | (11,415 | ) | (2,337 | ) | ||||||||||||
| Income Before Income Taxes | 19,676 | 21,097 | (1,421 | ) | 88,156 | 92,126 | (3,970 | ) | ||||||||||||||||
| Income Tax Expense | 6,458 | 7,786 | (1,328 | ) | 34,008 | 35,740 | (1,732 | ) | ||||||||||||||||
| Net Income | $ | 13,218 | $ | 13,311 | $ | (93 | ) | $ | 54,148 | $ | 56,386 | $ | (2,238 | ) | ||||||||||
| Net Income Per Share (Diluted) | $ | 0.16 | $ | 0.16 | $ | - | $ | 0.64 | $ | 0.66 | $ | (0.02 | ) | |||||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | ||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| (Thousands of Dollars, except per share amounts) | September 30, | September 30, | ||||||||||||||||||||||
|
UTILITY SEGMENT |
2008 | 2007 | Variance | 2008 | 2007 | Variance | ||||||||||||||||||
| Revenues from External Customers | $ | 127,464 | $ | 105,594 | $ | 21,870 | $ | 1,194,657 | $ | 1,106,453 | $ | 88,204 | ||||||||||||
| Intersegment Revenues | 2,044 | 1,715 | 329 | 15,612 | 14,271 | 1,341 | ||||||||||||||||||
| Total Operating Revenues | 129,508 | 107,309 | 22,199 | 1,210,269 | 1,120,724 | 89,545 | ||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Purchased Gas | 65,215 | 47,682 | 17,533 | 800,474 | 718,376 | 82,098 | ||||||||||||||||||
| Operation and Maintenance | 44,765 | 37,519 | 7,246 | 202,745 | 202,965 | (220 | ) | |||||||||||||||||
| Property, Franchise and Other Taxes | 9,726 | 10,037 | (311 | ) | 45,476 | 47,023 | (1,547 | ) | ||||||||||||||||
| Depreciation, Depletion and Amortization | 9,661 | 10,389 | (728 | ) | 39,113 | 40,541 | (1,428 | ) | ||||||||||||||||
| 129,367 | 105,627 | 23,740 | 1,087,808 | 1,008,905 | 78,903 | |||||||||||||||||||
| Operating Income | 141 | 1,682 | (1,541 | ) | 122,461 | 111,819 | 10,642 | |||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 1,148 | (2,907 | ) | 4,055 | 1,836 | (2,345 | ) | 4,181 | ||||||||||||||||
| Other Income | 278 | 318 | (40 | ) | 1,161 | 1,244 | (83 | ) | ||||||||||||||||
| Other Interest Expense | (5,913 | ) | (6,847 | ) | 934 | (27,683 | ) | (28,190 | ) | 507 | ||||||||||||||
| Income (Loss) Before Income Taxes | (4,346 | ) | (7,754 | ) | 3,408 | 97,775 | 82,528 | 15,247 | ||||||||||||||||
| Income Tax Expense (Benefit) | (3,590 | ) | (4,318 | ) | 728 | 36,303 | 31,642 | 4,661 | ||||||||||||||||
| Net Income (Loss) | $ | (756 | ) | $ | (3,436 | ) | $ | 2,680 | $ | 61,472 | $ | 50,886 | $ | 10,586 | ||||||||||
| Net Income (Loss) Per Share (Diluted) | $ | (0.01 | ) | $ | (0.04 | ) | $ | 0.03 | $ | 0.73 | $ | 0.60 | $ | 0.13 | ||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
|
ENERGY MARKETING SEGMENT |
2008 | 2007 | Variance | 2008 | 2007 | Variance | ||||||||||||||||||
| Revenues from External Customers | $ | 109,821 | $ | 53,576 | $ | 56,245 | $ | 549,932 | $ | 413,612 | $ | 136,320 | ||||||||||||
| Intersegment Revenues | 1,300 | - | 1,300 | 1,300 | - | 1,300 | ||||||||||||||||||
| Total Operating Revenues | 111,121 | 53,576 | 57,545 | 551,232 | 413,612 | 137,620 | ||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Purchased Gas | 111,926 | 53,275 | 58,651 | 535,917 | 396,322 | 139,595 | ||||||||||||||||||
| Operation and Maintenance | 1,396 | 1,287 | 109 | 6,566 | 4,998 | 1,568 | ||||||||||||||||||
| Property, Franchise and Other Taxes | 18 | 27 | (9 | ) | 50 | 73 | (23 | ) | ||||||||||||||||
| Depreciation, Depletion and Amortization | 11 | 10 | 1 | 42 | 33 | 9 | ||||||||||||||||||
| 113,351 | 54,599 | 58,752 | 542,575 | 401,426 | 141,149 | |||||||||||||||||||
| Operating Income (Loss) | (2,230 | ) | (1,023 | ) | (1,207 | ) | 8,657 | 12,186 | (3,529 | ) | ||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 30 | 183 | (153 | ) | 323 | 682 | (359 | ) | ||||||||||||||||
| Other Income | 58 | 122 | (64 | ) | 264 | 712 | (448 | ) | ||||||||||||||||
| Other Interest Expense | (42 | ) | (9 | ) | (33 | ) | (175 | ) | (263 | ) | 88 | |||||||||||||
| Income (Loss) Before Income Taxes | (2,184 | ) | (727 | ) | (1,457 | ) | 9,069 | 13,317 | (4,248 | ) | ||||||||||||||
| Income Tax Expense | (993 | ) | 41 | (1,034 | ) | 3,180 | 5,654 | (2,474 | ) | |||||||||||||||
| Net Income (Loss) | $ | (1,191 | ) | $ | (768 | ) | $ | (423 | ) | $ | 5,889 | $ | 7,663 | $ | (1,774 | ) | ||||||||
| Net Income (Loss) Per Share (Diluted) | $ | (0.01 | ) | $ | (0.01 | ) | $ | - | $ | 0.07 | $ | 0.09 | $ | (0.02 | ) | |||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | ||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| (Thousands of Dollars, except per share amounts) | September 30, | September 30, | ||||||||||||||||||||||
|
TIMBER SEGMENT |
2008 | 2007 | Variance | 2008 | 2007 | Variance | ||||||||||||||||||
| Operating Revenues | $ | 9,078 | $ | 15,819 | $ | (6,741 | ) | $ | 49,516 | $ | 58,897 | $ | (9,381 | ) | ||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Operation and Maintenance | 11,230 | 12,029 | (799 | ) | 41,321 | 44,059 | (2,738 | ) | ||||||||||||||||
| Property, Franchise and Other Taxes | 364 | 406 | (42 | ) | 1,584 | 1,589 | (5 | ) | ||||||||||||||||
| Depreciation, Depletion and Amortization | 883 | 1,616 | (733 | ) | 4,904 | 4,709 | 195 | |||||||||||||||||
| 12,477 | 14,051 | (1,574 | ) | 47,809 | 50,357 | (2,548 | ) | |||||||||||||||||
| Operating Income (Loss) | (3,399 | ) | 1,768 | (5,167 | ) | 1,707 | 8,540 | (6,833 | ) | |||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 241 | 327 | (86 | ) | 1,053 | 1,249 | (196 | ) | ||||||||||||||||
| Other Income | - | - | - | 111 | 22 | 89 | ||||||||||||||||||
| Other Interest Expense | (750 | ) | (863 | ) | 113 | (3,142 | ) | (3,265 | ) | 123 | ||||||||||||||
| Income (Loss) Before Income Taxes | (3,908 | ) | 1,232 | (5,140 | ) | (271 | ) | 6,546 | (6,817 | ) | ||||||||||||||
| Income Tax Expense (Benefit) | (1,801 | ) | 557 | (2,358 | ) | (378 | ) | 2,818 | (3,196 | ) | ||||||||||||||
| Net Income (Loss) | $ | (2,107 | ) | $ | 675 | $ | (2,782 | ) | $ | 107 | $ | 3,728 | $ | (3,621 | ) | |||||||||
| Net Income (Loss) Per Share (Diluted) | $ | (0.03 | ) | $ | 0.01 | $ | (0.04 | ) | $ | - | $ | 0.04 | $ | (0.04 | ) | |||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
|
ALL OTHER |
2008 | 2007 | Variance | 2008 | 2007 | Variance | ||||||||||||||||||
| Revenues from External Customers | $ | 184 | $ | 997 | $ | (813 | ) | $ | 3,749 | $ | 5,385 | $ | (1,636 | ) | ||||||||||
| Intersegment Revenues | 3,864 | 2,186 | 1,678 | 14,115 | 8,726 | 5,389 | ||||||||||||||||||
| Total Operating Revenues | 4,048 | 3,183 | 865 | 17,864 | 14,111 | 3,753 | ||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Purchased Gas | 2,942 | 1,969 | 973 | 10,883 | 7,529 | 3,354 | ||||||||||||||||||
| Operation and Maintenance | 1,379 | 1,091 | 288 | 4,677 | 3,854 | 823 | ||||||||||||||||||
| Property, Franchise and Other Taxes | 20 | 22 | (2 | ) | 78 | 92 | (14 | ) | ||||||||||||||||
| Depreciation, Depletion and Amortization | 195 | 196 | (1 | ) | 783 | 785 | (2 | ) | ||||||||||||||||
| 4,536 | 3,278 | 1,258 | 16,421 | 12,260 | 4,161 | |||||||||||||||||||
| Operating Income (Loss) | (488 | ) | (95 | ) | (393 | ) | 1,443 | 1,851 | (408 | ) | ||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Income from Unconsolidated Subsidiaries | 1,437 | 1,880 | (443 | ) | 6,303 | 4,979 | 1,324 | |||||||||||||||||
| Interest Income | 70 | 4 | 66 | 179 | 16 | 163 | ||||||||||||||||||
| Other Income | 10 | 15 | (5 | ) | 951 | 52 | 899 | |||||||||||||||||
| Other Interest Expense | (105 | ) | (688 | ) | 583 | (640 | ) | (2,687 | ) | 2,047 | ||||||||||||||
| Income (Loss) Before Income Taxes | 924 | 1,116 | (192 | ) | 8,236 | 4,211 | 4,025 | |||||||||||||||||
| Income Tax Expense (Benefit) | 388 | 463 | (75 | ) | 2,564 | 1,647 | 917 | |||||||||||||||||
| Net Income (Loss) | $ | 536 | $ | 653 | $ | (117 | ) | $ | 5,672 | $ | 2,564 | $ | 3,108 | |||||||||||
| Net Income (Loss) Per Share (Diluted) | $ | 0.01 | $ | 0.01 | $ | - | $ | 0.07 | $ | 0.03 | $ | 0.04 | ||||||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||||
| SEGMENT OPERATING RESULTS AND STATISTICS | ||||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| (Thousands of Dollars, except per share amounts) | September 30, | September 30, | ||||||||||||||||||||||
|
CORPORATE |
2008 | 2007 | Variance | 2008 | 2007 | Variance | ||||||||||||||||||
| Revenues from External Customers | $ | 199 | $ | 194 | $ | 5 | $ | 695 | $ | 772 | $ | (77 | ) | |||||||||||
| Intersegment Revenues | 962 | 1,202 | (240 | ) | 3,844 | 3,819 | 25 | |||||||||||||||||
| Total Operating Revenues | 1,161 | 1,396 | (235 | ) | 4,539 | 4,591 | (52 | ) | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Operation and Maintenance | 4,097 | 1,878 | 2,219 | 18,013 | 11,293 | 6,720 | ||||||||||||||||||
| Property, Franchise and Other Taxes | 71 | 69 | 2 | 284 | 278 | 6 | ||||||||||||||||||
| Depreciation, Depletion and Amortization | 172 | 169 | 3 | 689 | 692 | (3 | ) | |||||||||||||||||
| 4,340 | 2,116 | 2,224 | 18,986 | 12,263 | 6,723 | |||||||||||||||||||
| Operating Income (Loss) | (3,179 | ) | (720 | ) | (2,459 | ) | (14,447 | ) | (7,672 | ) | (6,775 | ) | ||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | 20,304 | 21,518 | (1,214 | ) | 85,084 | 87,296 | (2,212 | ) | ||||||||||||||||
| Other Income | (203 | ) | 105 | (308 | ) | 75 | 2,140 | (2,065 | ) | |||||||||||||||
| Interest Expense on Long-Term Debt | (18,055 | ) | (16,273 | ) | (1,782 | ) | (70,068 | ) | (69,050 | ) | (1,018 | ) | ||||||||||||
| Other Interest Expense | (1,160 | ) | (1,262 | ) | 102 | (6,257 | ) | (5,264 | ) | (993 | ) | |||||||||||||
| Income (Loss) Before Income Taxes | (2,293 | ) | 3,368 | (5,661 | ) | (5,613 | ) | 7,450 | (13,063 | ) | ||||||||||||||
| Income Tax Expense (Benefit) | 2,368 | 1,824 | 544 | (441 | ) | 1,891 | (2,332 | ) | ||||||||||||||||
| Net Income (Loss) | $ | (4,661 | ) | $ | 1,544 | $ | (6,205 | ) | $ | (5,172 | ) | $ | 5,559 | $ | (10,731 | ) | ||||||||
| Net Income (Loss) Per Share (Diluted) | $ | (0.06 | ) | $ | 0.01 | $ | (0.07 | ) | $ | (0.06 | ) | $ | 0.07 | $ | (0.13 | ) | ||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
|
INTERSEGMENT ELIMINATIONS |
2008 | 2007 | Variance | 2008 | 2007 | Variance | ||||||||||||||||||
| Intersegment Revenues | $ | (28,334 | ) | $ | (25,075 | ) | $ | (3,259 | ) | $ | (116,375 | ) | $ | (108,372 | ) | $ | (8,003 | ) | ||||||
| Operating Expenses: | ||||||||||||||||||||||||
| Purchased Gas | (27,269 | ) | (23,769 | ) | (3,500 | ) | (112,107 | ) | (104,141 | ) | (7,966 | ) | ||||||||||||
| Operation and Maintenance | (1,065 | ) | (1,306 | ) | 241 | (4,268 | ) | (4,231 | ) | (37 | ) | |||||||||||||
| (28,334 | ) | (25,075 | ) | (3,259 | ) | (116,375 | ) | (108,372 | ) | (8,003 | ) | |||||||||||||
| Operating Income | - | - | - | - | - | - | ||||||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Interest Income | (21,092 | ) | (23,941 | ) | 2,849 | (89,424 | ) | (95,610 | ) | 6,186 | ||||||||||||||
| Other Interest Expense | 21,092 | 23,941 | (2,849 | ) | 89,424 | 95,610 | (6,186 | ) | ||||||||||||||||
| Net Income | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
| Net Income Per Share (Diluted) | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||||
| SEGMENT INFORMATION (Continued) | ||||||||||||||||||||||
| (Thousands of Dollars) | ||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||||
| Increase | Increase | |||||||||||||||||||||
| 2008 | 2007 | (Decrease) | 2008 | 2007 | (Decrease) | |||||||||||||||||
|
Capital Expenditures: |
||||||||||||||||||||||
| Exploration and Production | $ | 51,644 | $ | 33,899 | $ | 17,745 | $ | 192,187 | $ | 146,687 | $ | 45,500 | ||||||||||
| Pipeline and Storage (1) | 59,316 | 16,818 | 42,498 | 165,520 | 43,226 | 122,294 | ||||||||||||||||
| Utility | 18,621 | 14,240 | 4,381 | 57,457 | 54,185 | 3,272 | ||||||||||||||||
| Energy Marketing | 18 | 18 | - | 39 | 76 | (37 | ) | |||||||||||||||
| Timber | 180 | 1,394 | (1,214 | ) | 1,354 | 3,657 | (2,303 | ) | ||||||||||||||
| Total Reportable Segments | 129,779 | 66,369 | 63,410 | 416,557 | 247,831 | 168,726 | ||||||||||||||||
| All Other | 2 | - | 2 | 131 | 87 | 44 | ||||||||||||||||
| Corporate | 138 | 219 | (81 | ) | 221 | (319 | ) | 540 | ||||||||||||||
| Eliminations | - | - | - | (2,407 | ) | - | (2,407 | ) | ||||||||||||||
|
Total Expenditures from Continuing Operations |
129,919 | 66,588 | 63,331 | 414,502 | 247,599 | 166,903 | ||||||||||||||||
| Discontinued Operations | - | 3,631 | (3,631 | ) | - | 29,129 | (29,129 | ) | ||||||||||||||
| Total Capital Expenditures | $ | 129,919 | $ | 70,219 | $ | 59,700 | $ | 414,502 | $ | 276,728 | $ | 137,774 | ||||||||||
(1) Amount for the quarter and year ended September 30, 2008 includes $16.8 million of accrued capital expenditures related to the Empire Connector project. This amount has been excluded from the Consolidated Statement of Cash Flows at September 30, 2008 since it represents a non-cash investing activity at that date.
|
DEGREE DAYS |
||||||||||||
| Percent Colder | ||||||||||||
| (Warmer) Than: | ||||||||||||
|
Three Months Ended September 30 |
Normal | 2008 | 2007 | Normal | Last Year | |||||||
| Buffalo, NY | 178 | 102 | 76 | (42.7 | ) | 34.2 | ||||||
| Erie, PA | 135 | 42 | 77 | (68.9 | ) | (45.5 | ) | |||||
|
Twelve Months Ended September 30 |
||||||||||||
| Buffalo, NY | 6,729 | 6,277 | 6,271 | (6.7 | ) | 0.1 | ||||||
| Erie, PA | 6,277 | 5,779 | 6,007 | (7.9 | ) | (3.8 | ) | |||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||||||||
|
EXPLORATION AND PRODUCTION INFORMATION |
||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| Increase | Increase | |||||||||||||||||||
| 2008 | 2007 | (Decrease) | 2008 | 2007 | (Decrease) | |||||||||||||||
|
Gas Production/Prices: |
||||||||||||||||||||
| Production (MMcf) | ||||||||||||||||||||
| Gulf Coast | 2,165 | 2,422 | (257 | ) | 11,033 | 10,356 | 677 | |||||||||||||
| West Coast | 1,029 | 1,046 | (17 | ) | 4,039 | 3,929 | 110 | |||||||||||||
| Appalachia | 1,732 | 1,557 | 175 | 7,269 | 5,555 | 1,714 | ||||||||||||||
| Total Production from Continuing Operations | 4,926 | 5,025 | (99 | ) | 22,341 | 19,840 | 2,501 | |||||||||||||
| Canada - Discontinued Operations | - | 1,210 | (1,210 | ) | - | 6,426 | (6,426 | ) | ||||||||||||
| Total Production | 4,926 | 6,235 | (1,309 | ) | 22,341 | 26,266 | (3,925 | ) | ||||||||||||
| Average Prices (Per Mcf) | ||||||||||||||||||||
| Gulf Coast | $ | 11.57 | $ | 6.05 | $ | 5.52 | $ | 10.03 | $ | 6.58 | $ | 3.45 | ||||||||
| West Coast | 9.54 | 5.93 | 3.61 | 8.71 | 6.54 | 2.17 | ||||||||||||||
| Appalachia | 11.27 | 6.89 | 4.38 | 9.73 | 7.48 | 2.25 | ||||||||||||||
| Weighted Average for Continuing Operations | 11.04 | 6.28 | 4.76 | 9.70 | 6.82 | 2.88 | ||||||||||||||
| Weighted Average after Hedging for Continuing | ||||||||||||||||||||
| Operations | 9.41 | 7.13 | 2.28 | 9.05 | 7.25 | 1.80 | ||||||||||||||
| Canada - Discontinued Operations | N/M | 4.98 | N/M | N/M | 6.09 | N/M | ||||||||||||||
|
Oil Production/Prices: |
||||||||||||||||||||
| Production (Thousands of Barrels) | ||||||||||||||||||||
| Gulf Coast | 96 | 177 | (81 | ) | 505 | 717 | (212 | ) | ||||||||||||
| West Coast | 635 | 614 | 21 | 2,460 | 2,403 | 57 | ||||||||||||||
| Appalachia | 17 | 33 | (16 | ) | 105 | 124 | (19 | ) | ||||||||||||
| Total Production from Continuing Operations | 748 | 824 | (76 | ) | 3,070 | 3,244 | (174 | ) | ||||||||||||
| Canada - Discontinued Operations | - | 31 | (31 | ) | - | 206 | (206 | ) | ||||||||||||
| Total Production | 748 | 855 | (107 | ) | 3,070 | 3,450 | (380 | ) | ||||||||||||
| Average Prices (Per Barrel) | ||||||||||||||||||||
| Gulf Coast | $ | 123.54 | $ | 74.26 | $ | 49.28 | $ | 107.27 | $ | 63.04 | $ | 44.23 | ||||||||
| West Coast | 108.32 | 68.22 | 40.10 | 98.17 | 56.86 | 41.31 | ||||||||||||||
| Appalachia | 114.20 | 70.18 | 44.02 | 97.40 | 62.26 | 35.14 | ||||||||||||||
| Weighted Average for Continuing Operations | 110.40 | 69.59 | 40.81 | 99.64 | 58.43 | 41.21 | ||||||||||||||
| Weighted Average after Hedging for Continuing | ||||||||||||||||||||
| Operations | 87.29 | 61.35 | 25.94 | 81.75 | 51.68 | 30.07 | ||||||||||||||
| Canada - Discontinued Operations | N/M | 60.72 | N/M | N/M | 50.06 | N/M | ||||||||||||||
| Total Production from Continuing Operations (MMcfe) | 9,414 | 9,969 | (555 | ) | 40,761 | 39,304 | 1,457 | |||||||||||||
| Total Canadian Production (MMcfe) | - | 1,396 | (1,396 | ) | - | 7,662 | (7,662 | ) | ||||||||||||
| Total Production (MMcfe) | 9,414 | 11,365 | (1,951 | ) | 40,761 | 46,966 | (6,205 | ) | ||||||||||||
|
Selected Operating Performance Statistics: |
||||||||||||||||||||
| General & Administrative Expense per Mcfe (1) | $ | 0.63 | $ | 0.63 | $ | - | $ | 0.60 | $ | 0.51 | $ | 0.09 | ||||||||
| Lease Operating Expense per Mcfe (1) | $ | 1.82 | $ | 1.28 | $ | 0.54 | $ | 1.64 | $ | 1.23 | $ | 0.41 | ||||||||
| Depreciation, Depletion & Amortization per Mcfe (1) | $ | 2.35 | $ | 2.19 | $ | 0.16 | $ | 2.26 | $ | 1.99 | $ | 0.27 | ||||||||
(1) Refer to page 18 for the General and Administrative Expense, Lease Operating Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. Amounts exclude discontinued operations of Canada.
N/M = Not meaningful
| NATIONAL FUEL GAS COMPANY | ||||
| AND SUBSIDIARIES | ||||
|
EXPLORATION AND PRODUCTION INFORMATION |
||||
| Hedging Summary for Fiscal 2009 | ||||
|
SWAPS |
Volume | Average Hedge Price | ||
| Oil | 1.3 MMBBL | $83.12 / BBL | ||
| Gas | 10.2 BCF | $9.49 / MCF | ||
| Hedging Summary for Fiscal 2010 | ||||
|
SWAPS |
Volume | Average Hedge Price | ||
| Oil | 0.6 MMBBL | $102.52 / BBL | ||
| Gas | 3.6 BCF | $10.64 / MCF | ||
| Hedging Summary for Fiscal 2011 | ||||
|
SWAPS |
Volume | Average Hedge Price | ||
| Oil | 0.1 MMBBL | $125.25 / BBL | ||
| Gas | 1.1 BCF | $8.30 / MCF | ||
|
Gross Wells in Process of Drilling |
||||||||
|
Twelve Months Ended September 30, 2008 |
||||||||
| Total | ||||||||
| Gulf | West | East | Company | |||||
| Wells in Process - Beginning of Period | ||||||||
| Exploratory | 2.00 | 0.00 | 21.00 | 23.00 | ||||
| Developmental | 0.00 | 4.00 | 69.00 | 73.00 | ||||
| Wells Commenced | ||||||||
| Exploratory | 5.00 | 1.00 | 13.00 | 19.00 | ||||
| Developmental | 1.00 | 60.00 | 241.00 | 302.00 | ||||
| Wells Completed | ||||||||
| Exploratory | 3.00 | 1.00 | 8.00 | 12.00 | ||||
| Developmental | 0.00 | 62.00 | 187.00 | 249.00 | ||||
| Wells Plugged & Abandoned | ||||||||
| Exploratory | 1.00 | 0.00 | 1.00 | 2.00 | ||||
| Developmental | 0.00 | 1.00 | 0.00 | 1.00 | ||||
| Wells Sold | ||||||||
| Exploratory | 2.00 | 0.00 | 0.00 | 2.00 | ||||
| Developmental | 0.00 | 0.00 | 0.00 | 0.00 | ||||
| Wells in Process - End of Period | ||||||||
| Exploratory | 1.00 | 0.00 | 25.00 | 26.00 | ||||
| Developmental | 1.00 | 1.00 | 123.00 | 125.00 | ||||
|
Net Wells in Process of Drilling |
||||||||
|
Twelve Months Ended September 30, 2008 |
||||||||
| Total | ||||||||
| Gulf | West | East | Company | |||||
| Wells in Process - Beginning of Period | ||||||||
| Exploratory | 1.30 | 0.00 | 20.00 | 21.30 | ||||
| Developmental | 0.00 | 4.00 | 68.00 | 72.00 | ||||
| Wells Commenced | ||||||||
| Exploratory | 1.80 | 1.00 | 13.00 | 15.80 | ||||
| Developmental | 0.30 | 60.00 | 240.00 | 300.30 | ||||
| Wells Completed | ||||||||
| Exploratory | 1.14 | 1.00 | 8.00 | 10.14 | ||||
| Developmental | 0.00 | 62.00 | 186.00 | 248.00 | ||||
| Wells Plugged & Abandoned | ||||||||
| Exploratory | 0.37 | 0.00 | 1.00 | 1.37 | ||||
| Developmental | 0.00 | 1.00 | 0.00 | 1.00 | ||||
| Wells Sold | ||||||||
| Exploratory | 1.30 | 0.00 | 0.00 | 1.30 | ||||
| Developmental | 0.00 | 0.00 | 0.00 | 0.00 | ||||
| Wells in Process - End of Period | ||||||||
| Exploratory | 0.29 | 0.00 | 24.00 | 24.29 | ||||
| Developmental | 0.30 | 1.00 | 122.00 | 123.30 | ||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||
| AND SUBSIDIARIES | ||||||||||||
|
EXPLORATION AND PRODUCTION INFORMATION |
||||||||||||
| Reserve Quantity Information | ||||||||||||
| Gas MMcf | ||||||||||||
| U.S. | ||||||||||||
| Gulf Coast | West Coast | Appalachian | Total | |||||||||
| Region | Region | Region | Company | |||||||||
|
Proved Developed and Undeveloped Reserves: |
||||||||||||
| September 30, 2007 | 25,136 | 73,175 | 107,078 | 205,389 | ||||||||
| Extensions and Discoveries | 8,759 | - | 31,322 | 40,081 | ||||||||
| Revisions of Previous Estimates | 2,156 | 566 | (3,460 | ) | (738 | ) | ||||||
| Production | (11,033 | ) | (4,039 | ) | (7,269 | ) | (22,341 | ) | ||||
| Purchases of Minerals in Place | - | 4,539 | 727 | 5,266 | ||||||||
| Sales of Minerals in Place | (377 | ) | (1,381 | ) | - | (1,758 | ) | |||||
| September 30, 2008 | 24,641 | 72,860 | 128,398 | 225,899 | ||||||||
| Proved Developed Reserves: | ||||||||||||
| September 30, 2007 | 25,136 | 66,017 | 96,674 | 187,827 | ||||||||
| September 30, 2008 | 18,242 | 68,453 | 115,824 | 202,519 | ||||||||
| Oil Mbbl | ||||||||||||
| U.S. | ||||||||||||
| Gulf Coast | West Coast | Appalachian | Total | |||||||||
| Region | Region | Region | Company | |||||||||
|
Proved Developed and Undeveloped Reserves: |
||||||||||||
| September 30, 2007 | 1,435 | 45,644 | 507 | 47,586 | ||||||||
| Extensions and Discoveries | 298 | 471 | 58 | 827 | ||||||||
| Revisions of Previous Estimates | 203 | (34 | ) | (64 | ) | 105 | ||||||
| Production | (505 | ) | (2,460 | ) | (105 | ) | (3,070 | ) | ||||
| Purchases of Minerals in Place | - | 2,084 | - | 2,084 | ||||||||
| Sales of Minerals in Place | (73 | ) | (1,261 | ) | - | (1,334 | ) | |||||
| September 30, 2008 | 1,358 | 44,444 | 396 | 46,198 | ||||||||
| Proved Developed Reserves: | ||||||||||||
| September 30, 2007 | 1,435 | 36,509 | 483 | 38,427 | ||||||||
| September 30, 2008 | 1,313 | 37,224 | 357 | 38,894 | ||||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||
| Pipeline & Storage Throughput- (millions of cubic feet - MMcf) | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| Increase | Increase | |||||||||||||
| 2008 | 2007 | (Decrease) | 2008 | 2007 | (Decrease) | |||||||||
| Firm Transportation - Affiliated | 10,997 | 10,680 | 317 | 107,846 | 111,243 | (3,397 | ) | |||||||
| Firm Transportation - Non-Affiliated | 59,071 | 66,920 | (7,849 | ) | 245,327 | 239,870 | 5,457 | |||||||
| Interruptible Transportation | 1,354 | 1,378 | (24 | ) | 5,197 | 4,975 | 222 | |||||||
| 71,422 | 78,978 | (7,556 | ) | 358,370 | 356,088 | 2,282 | ||||||||
| Utility Throughput - (MMcf) | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| Increase | Increase | |||||||||||||
| 2008 | 2007 | (Decrease) | 2008 | 2007 | (Decrease) | |||||||||
| Retail Sales: | ||||||||||||||
| Residential Sales | 3,583 | 3,507 | 76 | 57,463 | 60,236 | (2,773 | ) | |||||||
| Commercial Sales | 571 | 580 | (9 | ) | 9,769 | 10,713 | (944 | ) | ||||||
| Industrial Sales | 29 | 100 | (71 | ) | 552 | 727 | (175 | ) | ||||||
| 4,183 | 4,187 | (4 | ) | 67,784 | 71,676 | (3,892 | ) | |||||||
| Off-System Sales | 895 | 888 | 7 | 5,686 | 1,355 | 4,331 | ||||||||
| Transportation | 8,301 | 8,684 | (383 | ) | 64,267 | 62,240 | 2,027 | |||||||
| 13,379 | 13,759 | (380 | ) | 137,737 | 135,271 | 2,466 | ||||||||
| Energy Marketing Volumes | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| Increase | Increase | |||||||||||||
| 2008 | 2007 | (Decrease) | 2008 | 2007 | (Decrease) | |||||||||
| Natural Gas (MMcf) | 8,931 | 6,712 | 2,219 | 56,120 | 50,775 | 5,345 | ||||||||
| Timber Board Feet (Thousands) | ||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| Increase | Increase | |||||||||||||
| 2008 | 2007 | (Decrease) | 2008 | 2007 | (Decrease) | |||||||||
| Log Sales | 2,132 | 2,202 | (70 | ) | 9,272 | 8,660 | 612 | |||||||
| Green Lumber Sales | 2,251 | 2,738 | (487 | ) | 9,747 | 9,358 | 389 | |||||||
| Kiln-Dried Lumber Sales | 2,889 | 3,826 | (937 | ) | 13,425 | 14,778 | (1,353 | ) | ||||||
| 7,272 | 8,766 | (1,494 | ) | 32,444 | 32,796 | (352 | ) | |||||||
| NATIONAL FUEL GAS COMPANY | ||||||||||||||
| AND SUBSIDIARIES | ||||||||||||||
| FISCAL 2009 EARNINGS GUIDANCE AND SENSITIVITY | ||||||||||||||
| Earnings per share sensitivity to changes | ||||||||||||||
| Fiscal 2009 (Diluted earnings per share guidance*) | from prices used in guidance* ^ | |||||||||||||
| $1 change per MMBtu gas | $5 change per Bbl oil | |||||||||||||
| Earnings Range | Increase | Decrease | Increase | Decrease | ||||||||||
| Consolidated Earnings | $2.60 | - | $2.80 | + $0.08 | - $0.08 | + $0.07 | - $0.07 | |||||||
* Please refer to forward looking statement footnote at page 9 of this document.
^ This sensitivity table is current as of November 6, 2008 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 2009 earnings forecast, the Company is utilizing flat commodity pricing, exclusive of basis differential, of $7.00 per MMBtu for natural gas and $70 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 | ||||||
|
Quarter Ended September 30 (unaudited) |
2008 | 2007 | ||||
| Operating Revenues | $ | 397,858,000 | $ | 302,030,000 | ||
| Income from Continuing Operations | $ | 43,266,000 | $ | 34,295,000 | ||
| Income from Discontinued Operations, Net of Tax | - | 123,395,000 | ||||
| Net Income Available for Common Stock | $ | 43,266,000 | $ | 157,690,000 | ||
| Earnings Per Common Share: | ||||||
| Basic: | ||||||
| Income from Continuing Operations | $ | 0.54 | $ | 0.41 | ||
| Income from Discontinued Operations | - | 1.48 | ||||
| Net Income Available for Common Stock | $ | 0.54 | $ | 1.89 | ||
| Diluted: | ||||||
| Income from Continuing Operations | $ | 0.52 | $ | 0.40 | ||
| Income from Discontinued Operations | - | 1.44 | ||||
| Net Income Available for Common Stock | $ | 0.52 | $ | 1.84 | ||
| Weighted Average Common Shares: | ||||||
| Used in Basic Calculation | 80,858,668 | 83,506,748 | ||||
| Used in Diluted Calculation | 82,896,107 | 85,577,898 | ||||
|
Twelve Months Ended September 30 (unaudited) |
||||||
| Operating Revenues | $ | 2,400,361,000 | $ | 2,039,566,000 | ||
| Income from Continuing Operations | $ | 268,728,000 | $ | 201,675,000 | ||
| Income from Discontinued Operations, Net of Tax | - | 135,780,000 | ||||
| Net Income Available for Common Stock | $ | 268,728,000 | $ | 337,455,000 | ||
| Earnings Per Common Share: | ||||||
| Basic: | ||||||
| Income from Continuing Operations | $ | 3.27 | $ | 2.43 | ||
| Income from Discontinued Operations | - | 1.63 | ||||
| Net Income Available for Common Stock | $ | 3.27 | $ | 4.06 | ||
| Diluted: | ||||||
| Income from Continuing Operations | $ | 3.18 | $ | 2.37 | ||
| Income from Discontinued Operations | - | 1.59 | ||||
| Net Income Available for Common Stock | $ | 3.18 | $ | 3.96 | ||
| Weighted Average Common Shares: | ||||||
| Used in Basic Calculation | 82,304,335 | 83,141,640 | ||||
| Used in Diluted Calculation | 84,474,839 | 85,301,361 | ||||
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