EX-99 3 nfg-20140206xex99.htm EX-99 20131231 8K Earnings Rel Exhibit 99

Exhibit 99

C:\Users\raymond.ong\Desktop\g431908g53j45.jpg

 

 

 

 

 

6363 Main Street/Williamsville, NY 14221

 

 

 

Release Date:

Immediate February 6, 2014

Timothy Silverstein
Investor Relations
716-857-6987

 

 

 

 

 

David P. Bauer

Treasurer
716-857-7318

 

NATIONAL FUEL REPORTS FIRST QUARTER EARNINGS

 

WILLIAMSVILLE, N.Y.:  National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated earnings for the first quarter of its 2014 fiscal year (the quarter ended December 31, 2013).

 

HIGHLIGHTS

 

·

Earnings for the first quarter of fiscal 2014 of $82.3 million, or $0.97 per share, increased $14.4 million, or $0.16 per share, compared to $67.9 million, or $0.81 per share, for the prior year’s first quarter.  The increase is due to higher earnings across all segments.

 

·

Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) for the first quarter of fiscal 2014 were $253.7 million compared to $203.5 million for the prior year’s first quarter, an increase of 25%.

 

·

Seneca Resources Corporation’s (“Seneca”) first quarter production of natural gas and crude oil was 37.1 billion cubic feet equivalent (“Bcfe”), or 404 million cubic feet equivalent (“MMcfe”) per day, an increase of 12.6 Bcfe or approximately 51%, over the prior year’s first quarter.

 

·

The Company is reiterating its previous fiscal 2014 production guidance range of 145 to 165 Bcfe.  This represents a 20% to 37% increase over fiscal 2013 production.

 

·

The Company is revising its GAAP earnings guidance range for fiscal 2014 to a range of $3.20 to $3.40 per share. The previous earnings guidance had been a range of $3.10 to $3.40 per share. This guidance assumes a flat NYMEX price of $4.00 per MMBtu for natural gas and $90 per Bbl for crude oil for unhedged production for the remainder of the fiscal year.

 

·

A conference call is scheduled for Friday, February 7, 2014, at 11 a.m. Eastern Time.

 

 

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Page 2.

 

MANAGEMENT COMMENTS

 

Ronald J. Tanski, President and Chief Executive Officer of National Fuel Gas Company, stated:  “National Fuel’s financial and operating results for the first quarter reflect the quality of our assets and the focused work of our employees.  Growth across all of our business segments contributed to a 21 percent increase in consolidated earnings over the prior year’s first quarter.

 

“Seneca Resources delivered significant growth, increasing production 51 percent compared to the prior year’s first quarter and 12 percent compared to the fourth quarter of last year.  Notwithstanding Seneca’s tremendous operating performance, ongoing volatility in natural gas prices in the Appalachian region dampened Seneca’s financial results.  Since these regional pricing issues are expected to persist for the next few years, Seneca and our midstream subsidiaries continue to evaluate long-term solutions to help deliver natural gas to markets with more stable pricing that correlates more closely with long-term NYMEX pricing.  To that end, during the quarter, Seneca acquired long-term firm transportation capacity on Tennessee Gas Pipeline’s Niagara Expansion project, which is designed to export Marcellus Shale production to Canada, in part by using new capacity that our Supply Corporation will build and lease to Tennessee.

 

“Our Utility employees remained focused on safe and reliable service during a winter that has been much colder than recent years, and our midstream subsidiaries have easily handled the increased throughput resulting from our ongoing pipeline capacity expansion.  Combined with Seneca’s substantial production growth, fiscal 2014 is off to a strong start.”

 

EXPLORATION AND PRODUCTION SEGMENT OPERATIONS UPDATE

 

Seneca’s activities during the first quarter were primarily focused on multi-well pads in DCNR Tract 100 in Lycoming County, Pa., in the Eastern Development Area (“EDA”) and its Greater Clermont Area in Elk and Cameron counties, located in its Western Development Area (“WDA”).

 

Recently, Seneca brought 6 new wells on line in Tract 100 with 24-hour peak production rates that averaged 15.6 million cubic feet (“MMcf”) per day per well.  These wells, which were spud in early fiscal 2013, had an average lateral length of 4,872 feet.  Each well was completed using a reduced cluster spacing (“RCS”) design, averaging 32 stages per well with an average of 10 stages completed per day.  The estimated capital cost to drill and complete each of these wells averaged $6.9 million.

 

In its Greater Clermont Area, Seneca drilled all 9 wells on its first multi-well development pad in the WDA.  These wells had an average lateral length of approximately 5,600 feet, and will be completed prior to the Clermont Gathering System going in service, which is targeted to occur in the fourth quarter of fiscal 2014.

 

Today, Seneca has two horizontal drilling rigs operating in the WDA, with one currently located on a 6-well development pad in the Greater Clermont Area, and the other drilling the first of 5 delineation wells scheduled for fiscal 2014.  A third rig, located in the EDA, remains focused on development drilling in Lycoming County.

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Page 3.

 

SUMMARY OF RESULTS

 

National Fuel had consolidated earnings for the quarter ended December 31, 2013, of $82.3 million, or $0.97 per share, compared to the prior year’s first quarter of $67.9 million, or $0.81 per share, an increase of $14.4 million or $0.16 per share. Higher earnings across all segments contributed to the increase.  (Note:  All references to earnings per share are to diluted earnings per share and all amounts used in the discussion of earnings are after tax unless otherwise noted.)

 

DISCUSSION OF RESULTS BY SEGMENT  

 

The following discussion of the earnings of each segment is summarized in a tabular form at pages 8 and 9 of this report.  It may be helpful to refer to those tables while reviewing this discussion.

 

Upstream Business

 

Exploration and Production Segment

 

The Exploration and Production segment operations are carried out by Seneca Resources Corporation (“Seneca”).  Seneca explores for, develops and produces natural gas and oil reserves in Pennsylvania, California and Kansas. 

 

The Exploration and Production segment’s earnings in the first quarter of fiscal 2014 of $31.1 million, or $0.37 per share, increased $4.4 million, or $0.05 per share, when compared with the prior year’s first quarter. 

 

Overall production of natural gas and crude oil for the current quarter of 37.1 Bcfe increased approximately 12.6 Bcfe, or 51.4 percent, compared to the prior year’s first quarter.  Production from Seneca’s Appalachia properties increased approximately 64.4 percent and accounted for the entire 12.6 Bcfe increase, largely because of Seneca’s strong well results in Lycoming County.  California production of 5.0 Bcfe was consistent with the prior year’s first quarter.

 

Lower commodity prices realized after hedging also impacted earnings.  The weighted average natural gas price received by Seneca (after hedging) for the quarter ended December 31, 2013, was $3.70 per thousand cubic feet (“Mcf”), a decrease of $0.49 per Mcf compared to the prior year’s first quarter.  The weighted average crude oil price realized after hedging for the quarter ended December 31, 2013, was $94.00 per Bbl, a decrease of $2.69 per Bbl compared to the prior year’s first quarter. 

 

On a per unit basis, depletion decreased $0.20 per thousand cubic feet equivalent (“Mcfe”) due to higher natural gas reserve balances at December 31, 2013, compared to the prior year’s first quarter.  On a per unit basis, lease operating and transportation expenses (“LOE”) at $0.95 per Mcfe decreased $0.10 per Mcfe compared to the prior year’s first quarter due to higher production.  General and administrative expenses (“G&A”) decreased $0.18 per Mcfe compared to the prior year’s first quarter also due to higher production.  Earnings were also impacted by higher interest expense due to a higher outstanding debt balance.

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Page 4.

 

 

Midstream Businesses

 

Pipeline and Storage Segment

 

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

 

The Pipeline and Storage segment’s earnings of $19.1 million, or $0.23 per share, for the quarter ended December 31, 2013, increased $2.2 million, or $0.03 per share, when compared with the same period in the prior fiscal year.  The increase in earnings is mainly due to higher non-affiliated transportation revenues from the Northern Access and Line N 2012 Expansion projects, which were placed in service in the prior year’s first quarter, and lower operating expenses due to lower pension and other post retirement benefit costs.  Earnings were reduced by a lower allowance for funds used during construction due to the completion of the expansion projects mentioned above.

 

Gathering Segment

 

The Gathering segment’s operations are carried out by National Fuel Gas Midstream Corporation’s (“Midstream”) subsidiary limited liability companies.  The Gathering segment constructs, owns and operates natural gas pipeline gathering and processing facilities in the Appalachian region and currently provides the critical gathering infrastructure for transporting Seneca’s Marcellus Shale production to the interstate pipeline system.

 

The Gathering segment’s earnings of $6.1 million, or $0.07 per share, for the quarter ended December 31, 2013, increased $4.2 million, or $0.05 per share, when compared with the same period in the prior fiscal year.  The increase in earnings is mainly due to higher gathering revenues from Midstream’s Trout Run gathering system in Lycoming County, Pa. 

 

Downstream Businesses

 

Utility Segment

 

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

 

The Utility segment’s earnings of $24.2 million, or $0.28 per share, for the quarter ended December 31, 2013, increased $1.3 million, or $0.01 per share, when compared with the same period in the prior fiscal year.  Colder weather in Pennsylvania was a major reason for the increase in earnings in the current year’s first quarter.  Temperatures in Pennsylvania were 11.2 percent colder in the quarter ended December 31, 2013, than in the prior year’s first quarter.  In New York, the impact of weather variations on

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Page 5.

 

earnings is mitigated by that jurisdiction’s weather normalization clause.  Lower interest expense (mainly due to a lower outstanding debt balance) and regulatory true-up adjustments also contributed to higher earnings in the Utility segment.  Higher operating expenses, consisting mostly of higher pension related costs, which were the result of the settlement of the rate proceeding in New York, reduced earnings in the current year’s first quarter.

 

Energy Marketing Segment

 

National Fuel Resources, Inc. (“NFR”) comprises the Company’s Energy Marketing segment.  NFR markets natural gas to industrial, wholesale, commercial, public authority and residential customers primarily in western and central New York and northwestern Pennsylvania, offering competitively priced natural gas to its customers.

 

The Energy Marketing segment’s earnings for the quarter ended December 31, 2013, of $1.6 million increased $1.1 million compared to the prior year’s first quarter earnings of $0.5 million.  The increase in earnings is due to the impact of recording unbilled revenues and related margins as of December 31, 2013.  In prior periods, revenues and related purchased gas costs for the Energy Marketing segment were recorded when billed, resulting in a one month lag.

 

Corporate and All Other

 

The Corporate and All Other category primarily includes corporate operations.  The category also includes the remaining operations of Seneca’s Northeast division that markets high quality hardwoods from Appalachian land holdings.

 

The Corporate and All Other category earnings of $0.1 million, for the quarter ended December 31, 2013, compares to a loss of $1.0 million for the prior year’s first quarter.  The increase in the earnings is largely due to the receipt of insurance proceeds and higher proceeds from the sale of certain timber stumpage tracts by Seneca’s land and timber division in the current year’s first quarter.

 

 

EARNINGS GUIDANCE

 

The Company is revising its GAAP earnings guidance range for fiscal 2014 to a range of $3.20 to $3.40 per share.  The previous earnings guidance had been a range of $3.10 to $3.40 per share.  This guidance includes forecast oil and gas production for fiscal 2014 in the range between 145 to 165 Bcfe, hedges currently in place and a flat NYMEX price of $4.00 per MMBtu for natural gas and $90 per Bbl for crude oil for unhedged production for the remainder of the fiscal year. 

 

 

 

 

 

 

 

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Page 6.

 

EARNINGS TELECONFERENCE

 

The Company will host a conference call on Friday, February 7, 2014, at 11 a.m. Eastern Time to discuss this announcement.  There are two ways to access this call.  For those with Internet access, visit the investor relations page at National Fuel’s website at investor.nationalfuelgas.com.  For those without Internet access, access is also provided by dialing (toll-free) 1-866-383-8009, using passcode “80323087.”  For those unable to listen to the live conference call, a replay will be available at approximately 3 p.m. Eastern Time at the same website link and by phone at (toll-free) 1-888-286-8010, using passcode “73413175.”  Both the webcast and telephonic replay will be available until the close of business on Friday, February 14, 2014.

 

National Fuel is an integrated energy company with $6.3 billion in assets comprised of the following five operating segments: Exploration and Production, Pipeline and Storage, Gathering, Utility, and Energy Marketing.  Additional information about National Fuel is available at www.nationalfuelgas.com.  

 

 

 

 

 

 

 

 

Analyst Contact:

Timothy J. Silverstein

716-857-6987

Media Contact:

Karen L.  Merkel

716-857-7654

 

Certain statements contained herein, including statements identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions, and statements which are other than statements of historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas and oil reserves, including among others geology, lease availability, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; changes in laws, regulations or judicial interpretations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, real property, and exploration and production activities such as hydraulic fracturing; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, allowed rates of return, rate design and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; changes in the price of natural gas or oil; changes in price differential between similar quantities of natural gas or oil sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; other changes in price differentials between similar quantities of natural gas and oil having different quality, heating value, hydrocarbon mix or delivery date; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; changes in demographic patterns and weather conditions; changes in the availability, price or accounting

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Page 7.

 

treatment of derivative financial instruments; delays or changes in costs or plans with respect to Company projects or related projects of other companies, including difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; changes in economic conditions, including global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities, acts of war, cyber attacks or pest infestation; significant differences between the Company’s projected and actual capital expenditures and operating expenses; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; or increasing costs of insurance, changes in coverage and the ability to obtain insurance.  The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.

 

 

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Page 8.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS

QUARTER ENDED DECEMBER 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Upstream

 

 

Midstream Businesses

 

 

Downstream Businesses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration &

 

 

Pipeline &

 

 

 

 

 

 

 

 

Energy

 

 

Corporate /

 

 

 

(Thousands of Dollars)

 

 

Production

 

 

Storage

 

 

Gathering

 

 

Utility

 

 

Marketing

 

 

All Other

 

 

Consolidated*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First quarter 2013 GAAP earnings

 

$
26,680 

 

$
16,933 

 

$
1,942 

 

$
22,878 

 

$
495 

 

$
(984)

 

$
67,944 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Drivers of operating results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Higher (lower) crude oil prices

 

 
(1,248)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(1,248)

Higher (lower) natural gas prices

 

 
(10,413)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(10,413)

Higher (lower) natural gas production

 

 
34,319 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
34,319 

Higher (lower) crude oil production

 

 
91 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
91 

Derivative mark to market adjustments

 

 
1,204 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
1,204 

Lower (higher) lease operating and transportation expenses

 

 
(6,159)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(6,159)

Lower (higher) depreciation / depletion

 

 
(12,472)

 

 

 

 

 
(799)

 

 

 

 

 

 

 

 

 

 

 
(13,271)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Higher (lower) transportation and storage revenues

 

 

 

 

 
3,682 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
3,682 

Higher (lower) gathering and processing revenues

 

 

 

 

 

 

 

 
5,786 

 

 

 

 

 

 

 

 

 

 

 
5,786 

Lower (higher) operating expenses

 

 
1,310 

 

 
1,660 

 

 

 

 

 
(2,416)

 

 

 

 

 
(393)

 

 
161 

Lower (higher) property, franchise and other taxes

 

 
(653)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(653)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory true-up adjustments

 

 

 

 

 

 

 

 

 

 

 
1,093 

 

 

 

 

 

 

 

 
1,093 

Colder weather

 

 

 

 

 

 

 

 

 

 

 
1,907 

 

 

 

 

 

 

 

 
1,907 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Higher (lower) margins

 

 

 

 

 

 

 

 

 

 

 

 

 

 
1,153 

 

 
505 

 

 
1,658 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Higher (lower) AFUDC**

 

 

 

 

 
(1,534)

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(1,534)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Higher) lower interest expense

 

 
(1,319)

 

 

 

 

 

 

 

 
922 

 

 

 

 

 

 

 

 
(397)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lower (higher) income tax expense / effective tax rate

 

 
(778)

 

 
(899)

 

 
(660)

 

 

 

 

 

 

 

 

 

 

 
(2,337)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All other / rounding

 

 
535 

 

 
(704)

 

 
(122)

 

 
(169)

 

 
(44)

 

 
923 

 

 
419 

First quarter 2014 GAAP earnings

 

$
31,097 

 

$
19,138 

 

$
6,147 

 

$
24,215 

 

$
1,604 

 

$
51 

 

$
82,252 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Amounts do not reflect intercompany eliminations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

** AFUDC = Allowance for Funds Used During Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 9.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE

QUARTER ENDED December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Upstream

 

 

Midstream Businesses

 

 

Downstream Businesses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration &

 

 

Pipeline &

 

 

 

 

 

 

 

 

Energy

 

 

Corporate /

 

 

 

 

 

 

Production

 

 

Storage

 

 

Gathering

 

 

Utility

 

 

Marketing

 

 

All Other

 

 

Consolidated*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

First quarter 2013 GAAP earnings

 

$
0.32 

 

$
0.20 

 

$
0.02 

 

$
0.27 

 

$
0.01 

 

$
(0.01)

 

$
0.81 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Drivers of operating results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Higher (lower) crude oil prices

 

 
(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(0.01)

Higher (lower) natural gas prices

 

 
(0.12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(0.12)

Higher (lower) natural gas production

 

 
0.41 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
0.41 

Higher (lower) crude oil production

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

Derivative mark to market adjustments

 

 
0.01 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
0.01 

Lower (higher) lease operating and transportation expenses

 

 
(0.07)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(0.07)

Lower (higher) depreciation / depletion

 

 
(0.15)

 

 

 

 

 
(0.01)

 

 

 

 

 

 

 

 

 

 

 
(0.16)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Higher (lower) transportation and storage revenues

 

 

 

 

 
0.04 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
0.04 

Higher (lower) gathering and processing revenues

 

 

 

 

 

 

 

 
0.07 

 

 

 

 

 

 

 

 

 

 

 
0.07 

Lower (higher) operating expenses

 

 
0.02 

 

 
0.02 

 

 

 

 

 
(0.03)

 

 

 

 

 

 -

 

 
0.01 

Lower (higher) property, franchise and other taxes

 

 
(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory true-up adjustments

 

 

 

 

 

 

 

 

 

 

 
0.01 

 

 

 

 

 

 

 

 
0.01 

Colder weather

 

 

 

 

 

 

 

 

 

 

 
0.02 

 

 

 

 

 

 

 

 
0.02 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Higher (lower) margins

 

 

 

 

 

 

 

 

 

 

 

 

 

 
0.01 

 

 
0.01 

 

 
0.02 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Higher (lower) AFUDC**

 

 

 

 

 
(0.02)

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(0.02)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Higher) lower interest expense

 

 
(0.02)

 

 

 

 

 

 

 

 
0.01 

 

 

 

 

 

 

 

 
(0.01)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lower (higher) income tax expense / effective tax rate

 

 
(0.01)

 

 
(0.01)

 

 
(0.01)

 

 

 

 

 

 

 

 

 

 

 
(0.03)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All other / rounding

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

 

 

 -

First quarter 2014 GAAP earnings

 

$
0.37 

 

$
0.23 

 

$
0.07 

 

$
0.28 

 

$
0.02 

 

$

 -

 

$
0.97 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Amounts do not reflect intercompany eliminations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

** AFUDC = Allowance for Funds Used During Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 10.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

(Thousands of Dollars, except per share amounts)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

December 31,

 

 

 

(Unaudited)

 

SUMMARY OF OPERATIONS

 

2013

 

2012

 

Operating Revenues

 

$
550,072 

 

$
452,854 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

Purchased Gas

 

 
167,605 

 

 
121,919 

 

Operation and Maintenance

 

 
107,846 

 

 
107,732 

 

Property, Franchise and Other Taxes

 

 
20,926 

 

 
19,664 

 

Depreciation, Depletion and Amortization

 

 
93,114 

 

 
72,331 

 

 

 

 
389,491 

 

 
321,646 

 

 

 

 

 

 

 

 

 

Operating Income

 

 
160,581 

 

 
131,208 

 

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

Interest Income

 

 
702 

 

 
1,386 

 

Other Income

 

 
228 

 

 
1,415 

 

Interest Expense on Long-Term Debt

 

 
(22,885)

 

 
(21,448)

 

Other Interest Expense

 

 
(949)

 

 
(1,068)

 

 

 

 

 

 

 

 

 

Income Before Income Taxes

 

 
137,677 

 

 
111,493 

 

 

 

 

 

 

 

 

 

Income Tax Expense

 

 
55,425 

 

 
43,549 

 

 

 

 

 

 

 

 

 

Net Income Available for Common Stock

 

$
82,252 

 

$
67,944 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share:

 

 

 

 

 

 

 

Basic

 

$
0.98 

 

$
0.81 

 

Diluted

 

$
0.97 

 

$
0.81 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares:

 

 

 

 

 

 

 

Used in Basic Calculation

 

 
83,707,687 

 

 
83,390,278 

 

Used in Diluted Calculation

 

 
84,659,001 

 

 
84,006,050 

 

 

 

 

 

Page 11.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

 

 

 

 

 

December 31,

 

 

September 30,

(Thousands of Dollars)

 

 

2013

 

 

2013

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Property, Plant and Equipment

 

 

$
7,468,200 

 

 

$
7,313,203 

Less - Accumulated Depreciation, Depletion and Amortization

 

 

 
2,242,521 

 

 

 
2,161,477 

Net Property, Plant and Equipment

 

 

 
5,225,679 

 

 

 
5,151,726 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and Temporary Cash Investments

 

 

 
23,880 

 

 

 
64,858 

Hedging Collateral Deposits

 

 

 

 -

 

 

 
1,094 

Receivables - Net

 

 

 
164,074 

 

 

 
133,182 

Unbilled Revenue

 

 

 
80,828 

 

 

 
19,483 

Gas Stored Underground

 

 

 
36,047 

 

 

 
51,484 

Materials and Supplies - at average cost

 

 

 
27,364 

 

 

 
29,904 

Unrecovered Purchased Gas Costs

 

 

 
9,001 

 

 

 
12,408 

Other Current Assets

 

 

 
45,197 

 

 

 
56,905 

Deferred Income Taxes

 

 

 
23,127 

 

 

 
79,359 

Total Current Assets

 

 

 
409,518 

 

 

 
448,677 

 

 

 

 

 

 

 

 

 

Other Assets:

 

 

 

 

 

 

 

 

Recoverable Future Taxes

 

 

 
162,296 

 

 

 
163,355 

Unamortized Debt Expense

 

 

 
16,065 

 

 

 
16,645 

Other Regulatory Assets

 

 

 
257,697 

 

 

 
252,568 

Deferred Charges

 

 

 
9,818 

 

 

 
9,382 

Other Investments

 

 

 
99,433 

 

 

 
96,308 

Goodwill

 

 

 
5,476 

 

 

 
5,476 

Prepaid Post-Retirement Benefit Costs

 

 

 
24,865 

 

 

 
22,774 

Fair Value of Derivative Financial Instruments

 

 

 
53,678 

 

 

 
48,989 

Other

 

 

 
459 

 

 

 
2,447 

Total Other Assets

 

 

 
629,787 

 

 

 
617,944 

Total Assets

 

 

$
6,264,984 

 

 

$
6,218,347 

 

 

 

 

 

 

 

 

 

CAPITALIZATION AND LIABILITIES

 

 

 

 

 

 

 

 

Capitalization:

 

 

 

 

 

 

 

 

Comprehensive Shareholders' Equity

 

 

 

 

 

 

 

 

Common Stock, $1 Par Value Authorized - 200,000,000

 

 

 

 

 

 

 

 

Shares; Issued and Outstanding - 83,741,402 Shares

 

 

 

 

 

 

 

 

and 83,661,969 Shares, Respectively

 

 

$
83,741 

 

 

$
83,662 

Paid in Capital

 

 

 
695,571 

 

 

 
687,684 

Earnings Reinvested in the Business

 

 

 
1,493,466 

 

 

 
1,442,617 

Accumulated Other Comprehensive Loss

 

 

 
(22,038)

 

 

 
(19,234)

Total Comprehensive Shareholders' Equity

 

 

 
2,250,740 

 

 

 
2,194,729 

Long-Term Debt, Net of Current Portion

 

 

 
1,649,000 

 

 

 
1,649,000 

Total Capitalization

 

 

 
3,899,740 

 

 

 
3,843,729 

 

 

 

 

 

 

 

 

 

Current and Accrued Liabilities:

 

 

 

 

 

 

 

 

Notes Payable to Banks and Commercial Paper

 

 

 

 -

 

 

 

 -

Current Portion of Long-Term Debt

 

 

 

 -

 

 

 

 -

Accounts Payable

 

 

 
121,615 

 

 

 
105,283 

Amounts Payable to Customers

 

 

 
8,884 

 

 

 
12,828 

Dividends Payable

 

 

 
31,403 

 

 

 
31,373 

Interest Payable on Long-Term Debt

 

 

 
18,195 

 

 

 
29,960 

Customer Advances

 

 

 
18,678 

 

 

 
21,959 

Customer Security Deposits

 

 

 
15,690 

 

 

 
16,183 

Other Accruals and Current Liabilities

 

 

 
102,709 

 

 

 
83,946 

Fair Value of Derivative Financial Instruments

 

 

 
7,161 

 

 

 
639 

Total Current and Accrued Liabilities

 

 

 
324,335 

 

 

 
302,171 

 

 

 

 

 

 

 

 

 

Deferred Credits:

 

 

 

 

 

 

 

 

Deferred Income Taxes

 

 

 
1,318,577 

 

 

 
1,347,007 

Taxes Refundable to Customers

 

 

 
84,781 

 

 

 
85,655 

Unamortized Investment Tax Credit

 

 

 
1,470 

 

 

 
1,579 

Cost of Removal Regulatory Liability

 

 

 
163,238 

 

 

 
157,622 

Other Regulatory Liabilities

 

 

 
69,897 

 

 

 
61,549 

Pension and Other Post-Retirement Liabilities

 

 

 
139,664 

 

 

 
158,014 

Asset Retirement Obligations

 

 

 
120,122 

 

 

 
119,511 

Other Deferred Credits

 

 

 
143,160 

 

 

 
141,510 

Total Deferred Credits

 

 

 
2,040,909 

 

 

 
2,072,447 

Commitments and Contingencies

 

 

 

 -

 

 

 

 -

Total Capitalization and Liabilities

 

 

$
6,264,984 

 

 

$
6,218,347 

 

 

Page 12.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Three Months Ended

 

 

December 31,

(Thousands of Dollars)

 

2013

 

2012

 

 

 

 

 

 

 

Operating Activities:

 

 

 

 

 

 

Net Income Available for Common Stock

 

$
82,252 

 

$
67,944 

Adjustments to Reconcile Net Income to Net Cash

 

 

 

 

 

 

Provided by Operating Activities:

 

 

 

 

 

 

Depreciation, Depletion and Amortization

 

 
93,114 

 

 
72,331 

Deferred Income Taxes

 

 
30,093 

 

 
41,000 

Excess Tax Benefits Associated with Stock-Based Compensation Awards

 

 
(3,149)

 

 

 -

Stock-Based Compensation

 

 
2,960 

 

 
3,302 

Other

 

 
(2,095)

 

 
4,621 

Change in:

 

 

 

 

 

 

Hedging Collateral Deposits

 

 
1,094 

 

 
364 

Receivables and Unbilled Revenue

 

 
(92,261)

 

 
(55,261)

Gas Stored Underground and Materials and Supplies

 

 
17,977 

 

 
3,941 

Unrecovered Purchased Gas Costs

 

 
3,407 

 

 

 -

Other Current Assets

 

 
12,764 

 

 
7,013 

Accounts Payable

 

 
39,382 

 

 
6,163 

Amounts Payable to Customers

 

 
(3,944)

 

 
(4,686)

Customer Advances

 

 
(3,281)

 

 
(1,987)

Customer Security Deposits

 

 
(493)

 

 
984 

Other Accruals and Current Liabilities

 

 
12,347 

 

 
(5,667)

Other Assets

 

 
(6,268)

 

 
(597)

Other Liabilities

 

 
(7,205)

 

 
6,495 

Net Cash Provided by Operating Activities

 

$
176,694 

 

$
145,960 

 

 

 

 

 

 

 

Investing Activities:

 

 

 

 

 

 

Capital Expenditures

 

$
(194,920)

 

$
(162,981)

Other

 

 
3,615 

 

 
(3,533)

Net Cash Used in Investing Activities

 

$
(191,305)

 

$
(166,514)

 

 

 

 

 

 

 

Financing Activities:

 

 

 

 

 

 

Changes in Notes Payable to Banks and Commercial Paper

 

$

 -

 

$
67,000 

Excess Tax Benefits Associated with Stock-Based Compensation Awards

 

 
3,149 

 

 

 -

Dividends Paid on Common Stock

 

 
(31,373)

 

 
(60,879)

Net Proceeds From Issuance of Common Stock

 

 
1,857 

 

 
956 

Net Cash Provided By (Used in) Financing Activities

 

$
(26,367)

 

$
7,077 

Net Decrease in Cash and Temporary

 

 

 

 

 

 

Cash Investments

 

 
(40,978)

 

 
(13,477)

Cash and Temporary Cash Investments

 

 

 

 

 

 

at Beginning of Period

 

 
64,858 

 

 
74,494 

Cash and Temporary Cash Investments

 

 

 

 

 

 

at December 31

 

$
23,880 

 

$
61,017 

 

 

 

 

Page 13.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING RESULTS AND STATISTICS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

UPSTREAM BUSINESS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

(Thousands of Dollars, except per share amounts)

 

December 31,

EXPLORATION AND PRODUCTION SEGMENT

 

 

2013

 

 

2012

 

 

Variance

Total Operating Revenues

 

$
193,046 

 

$
155,450 

 

$
37,596 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

Operation and Maintenance:

 

 

 

 

 

 

 

 

 

General and Administrative Expense

 

 
15,134 

 

 
14,433 

 

 
701 

Lease Operating and Transportation Expense

 

 
35,171 

 

 
25,696 

 

 
9,475 

All Other Operation and Maintenance Expense

 

 
2,782 

 

 
5,498 

 

 
(2,716)

Property, Franchise and Other Taxes

 

 
4,263 

 

 
3,257 

 

 
1,006 

Depreciation, Depletion and Amortization

 

 
71,110 

 

 
51,922 

 

 
19,188 

 

 

 
128,460 

 

 
100,806 

 

 
27,654 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 
64,586 

 

 
54,644 

 

 
9,942 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

Interest Income

 

 
551 

 

 
470 

 

 
81 

Other Interest Expense

 

 
(10,726)

 

 
(8,696)

 

 
(2,030)

 

 

 

 

 

 

 

 

 

 

Income Before Income Taxes

 

 
54,411 

 

 
46,418 

 

 
7,993 

Income Tax Expense

 

 
23,314 

 

 
19,738 

 

 
3,576 

Net Income

 

$
31,097 

 

$
26,680 

 

$
4,417 

 

 

 

 

 

 

 

 

 

 

Net Income Per Share (Diluted)

 

$
0.37 

 

$
0.32 

 

$
0.05 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 14.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING RESULTS AND STATISTICS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

MIDSTREAM BUSINESSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

(Thousands of Dollars, except per share amounts)

 

December 31,

PIPELINE AND STORAGE SEGMENT

 

 

2013

 

 

2012

 

 

Variance

Revenues from External Customers

 

$
51,212 

 

$
43,459 

 

$
7,753 

Intersegment Revenues

 

 
20,739 

 

 
22,797 

 

 
(2,058)

Total Operating Revenues

 

 
71,951 

 

 
66,256 

 

 
5,695 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

Purchased Gas

 

 
1,262 

 

 
786 

 

 
476 

Operation and Maintenance

 

 
16,885 

 

 
19,439 

 

 
(2,554)

Property, Franchise and Other Taxes

 

 
5,688 

 

 
5,433 

 

 
255 

Depreciation, Depletion and Amortization

 

 
9,121 

 

 
8,525 

 

 
596 

 

 

 
32,956 

 

 
34,183 

 

 
(1,227)

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 
38,995 

 

 
32,073 

 

 
6,922 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

Interest Income

 

 
75 

 

 
64 

 

 
11 

Other Income

 

 
(193)

 

 
1,343 

 

 
(1,536)

Other Interest Expense

 

 
(6,800)

 

 
(6,177)

 

 
(623)

 

 

 

 

 

 

 

 

 

 

Income Before Income Taxes

 

 
32,077 

 

 
27,303 

 

 
4,774 

Income Tax Expense

 

 
12,939 

 

 
10,370 

 

 
2,569 

Net Income

 

$
19,138 

 

$
16,933 

 

$
2,205 

 

 

 

 

 

 

 

 

 

 

Net Income Per Share (Diluted)

 

$
0.23 

 

$
0.20 

 

$
0.03 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31,

GATHERING SEGMENT

 

 

2013

 

 

2012

 

 

Variance

Revenues from External Customers

 

$
235 

 

$
202 

 

$
33 

Intersegment Revenues

 

 
14,350 

 

 
5,480 

 

 
8,870 

Total Operating Revenues

 

 
14,585 

 

 
5,682 

 

 
8,903 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

Operation and Maintenance

 

 
1,167 

 

 
943 

 

 
224 

Property, Franchise and Other Taxes

 

 
32 

 

 
141 

 

 
(109)

Depreciation, Depletion and Amortization

 

 
1,909 

 

 
680 

 

 
1,229 

 

 

 
3,108 

 

 
1,764 

 

 
1,344 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 
11,477 

 

 
3,918 

 

 
7,559 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

Interest Income

 

 
38 

 

 

 -

 

 
38 

Other Income

 

 
1 

 

 

 -

 

 
1 

Other Interest Expense

 

 
(583)

 

 
(468)

 

 
(115)

 

 

 

 

 

 

 

 

 

 

Income Before Income Taxes

 

 
10,933 

 

 
3,450 

 

 
7,483 

Income Tax Expense

 

 
4,786 

 

 
1,508 

 

 
3,278 

Net Income

 

$
6,147 

 

$
1,942 

 

$
4,205 

 

 

 

 

 

 

 

 

 

 

Net Income Per Share (Diluted)

 

$
0.07 

 

$
0.02 

 

$
0.05 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 15.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING RESULTS AND STATISTICS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

DOWNSTREAM BUSINESSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

(Thousands of Dollars, except per share amounts)

 

December 31,

UTILITY SEGMENT

 

 

2013

 

 

2012

 

 

Variance

Revenues from External Customers

 

$
230,453 

 

$
208,563 

 

$
21,890 

Intersegment Revenues

 

 
4,706 

 

 
4,311 

 

 
395 

Total Operating Revenues

 

 
235,159 

 

 
212,874 

 

 
22,285 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

Purchased Gas

 

 
121,926 

 

 
105,942 

 

 
15,984 

Operation and Maintenance

 

 
47,271 

 

 
43,261 

 

 
4,010 

Property, Franchise and Other Taxes

 

 
10,667 

 

 
10,355 

 

 
312 

Depreciation, Depletion and Amortization

 

 
10,711 

 

 
10,508 

 

 
203 

 

 

 
190,575 

 

 
170,066 

 

 
20,509 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 
44,584 

 

 
42,808 

 

 
1,776 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

Interest Income

 

 
77 

 

 
886 

 

 
(809)

Other Income

 

 
370 

 

 
219 

 

 
151 

Other Interest Expense

 

 
(6,814)

 

 
(8,233)

 

 
1,419 

 

 

 

 

 

 

 

 

 

 

Income Before Income Taxes

 

 
38,217 

 

 
35,680 

 

 
2,537 

Income Tax Expense

 

 
14,002 

 

 
12,802 

 

 
1,200 

Net Income

 

$
24,215 

 

$
22,878 

 

$
1,337 

 

 

 

 

 

 

 

 

 

 

Net Income Per Share (Diluted)

 

$
0.28 

 

$
0.27 

 

$
0.01 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31,

ENERGY MARKETING SEGMENT

 

 

2013

 

 

2012

 

 

Variance

Revenues from External Customers

 

$
73,159 

 

$
44,166 

 

$
28,993 

Intersegment Revenues

 

 
255 

 

 
426 

 

 
(171)

Total Operating Revenues

 

 
73,414 

 

 
44,592 

 

 
28,822 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

Purchased Gas

 

 
69,204 

 

 
42,156 

 

 
27,048 

Operation and Maintenance

 

 
1,593 

 

 
1,594 

 

 
(1)

Property, Franchise and Other Taxes

 

 

 -

 

 
58 

 

 
(58)

Depreciation, Depletion and Amortization

 

 
48 

 

 
23 

 

 
25 

 

 

 
70,845 

 

 
43,831 

 

 
27,014 

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 
2,569 

 

 
761 

 

 
1,808 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

Interest Income

 

 
45 

 

 
53 

 

 
(8)

Other Income

 

 
15 

 

 
12 

 

 
3 

Other Interest Expense

 

 
(8)

 

 
(10)

 

 
2 

 

 

 

 

 

 

 

 

 

 

Income Before Income Taxes

 

 
2,621 

 

 
816 

 

 
1,805 

Income Tax Expense

 

 
1,017 

 

 
321 

 

 
696 

Net Income

 

$
1,604 

 

$
495 

 

$
1,109 

 

 

 

 

 

 

 

 

 

 

Net Income Per Share (Diluted)

 

$
0.02 

 

$
0.01 

 

$
0.01 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 16.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

SEGMENT OPERATING RESULTS AND STATISTICS

(UNAUDITED)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

(Thousands of Dollars, except per share amounts)

 

December 31,

ALL OTHER

 

 

2013

 

 

2012

 

 

Variance

Total Operating Revenues

 

$
1,700 

 

$
813 

 

$
887 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

Operation and Maintenance

 

 
353 

 

 
283 

 

 
70 

Property, Franchise and Other Taxes

 

 
157 

 

 
157 

 

 

 -

Depreciation, Depletion and Amortization

 

 
58 

 

 
473 

 

 
(415)

 

 

 
568 

 

 
913 

 

 
(345)

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

 
1,132 

 

 
(100)

 

 
1,232 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

Interest Income

 

 
34 

 

 
39 

 

 
(5)

Other Income

 

 
21 

 

 
(34)

 

 
55 

Other Interest Expense

 

 
(1)

 

 
(1)

 

 

 -

 

 

 

 

 

 

 

 

 

 

Income (Loss) Before Income Taxes

 

 
1,186 

 

 
(96)

 

 
1,282 

Income Tax Expense (Benefit)

 

 
511 

 

 
(39)

 

 
550 

Net Income (Loss)

 

$
675 

 

$
(57)

 

$
732 

 

 

 

 

 

 

 

 

 

 

Net Income (Loss) Per Share (Diluted)

 

$
0.01 

 

$

 -

 

$
0.01 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31,

CORPORATE

 

 

2013

 

 

2012

 

 

Variance

Revenues from External Customers

 

$
267 

 

$
201 

 

$
66 

Intersegment Revenues

 

 
963 

 

 
547 

 

 
416 

Total Operating Revenues

 

 
1,230 

 

 
748 

 

 
482 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

Operation and Maintenance

 

 
3,716 

 

 
3,181 

 

 
535 

Property, Franchise and Other Taxes

 

 
119 

 

 
263 

 

 
(144)

Depreciation, Depletion and Amortization

 

 
157 

 

 
200 

 

 
(43)

 

 

 
3,992 

 

 
3,644 

 

 
348 

 

 

 

 

 

 

 

 

 

 

Operating Loss

 

 
(2,762)

 

 
(2,896)

 

 
134 

 

 

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

Interest Income

 

 
24,607 

 

 
23,304 

 

 
1,303 

Other Income

 

 
14 

 

 
(125)

 

 
139 

Interest Expense on Long-Term Debt

 

 
(22,885)

 

 
(21,448)

 

 
(1,437)

Other Interest Expense

 

 
(742)

 

 
(913)

 

 
171 

 

 

 

 

 

 

 

 

 

 

Loss Before Income Taxes

 

 
(1,768)

 

 
(2,078)

 

 
310 

Income Tax Benefit

 

 
(1,144)

 

 
(1,151)

 

 
7 

Net Loss

 

$
(624)

 

$
(927)

 

$
303 

 

 

 

 

 

 

 

 

 

 

Net Loss Per Share (Diluted)

 

$
(0.01)

 

$
(0.01)

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31,

INTERSEGMENT ELIMINATIONS

 

 

2013

 

 

2012

 

 

Variance

Intersegment Revenues

 

$
(41,013)

 

$
(33,561)

 

$
(7,452)

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

Purchased Gas

 

 
(24,787)

 

 
(26,965)

 

 
2,178 

Operation and Maintenance

 

 
(16,226)

 

 
(6,596)

 

 
(9,630)

 

 

 
(41,013)

 

 
(33,561)

 

 
(7,452)

 

 

 

 

 

 

 

 

 

 

Operating Income

 

 

 -

 

 

 -

 

 

 -

 

 

 

 

 

 

 

 

 

 

Other Income (Expense):

 

 

 

 

 

 

 

 

 

Interest Income

 

 
(24,725)

 

 
(23,430)

 

 
(1,295)

Other Interest Expense

 

 
24,725 

 

 
23,430 

 

 
1,295 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

 -

 

$

 -

 

$

 -

 

 

 

 

 

 

 

 

 

 

Net Income Per Share (Diluted)

 

$

 -

 

$

 -

 

$

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 17.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

 

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

SEGMENT INFORMATION (Continued)

 

(Thousands of Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

December 31,

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase

 

 

 

2013

 

2012

 

(Decrease)

 

 

 

 

 

 

 

 

 

 

 

 

Capital Expenditures:

 

 

 

 

 

 

 

 

 

 

Exploration and Production 

 

$
111,341 

(1)(2)

$
127,652 

(3)(4)

$
(16,311)

 

Pipeline and Storage

 

 
9,939 

(1)(2)

 
25,751 

(3)(4)

 
(15,812)

 

Gathering

 

 
23,463 

(1)(2)

 
13,559 

(3)(4)

 
9,904 

 

Utility

 

 
21,660 

(1)(2)

 
14,363 

(3)(4)

 
7,297 

 

Energy Marketing

 

 
43 

 

 
183 

 

 
(140)

 

  Total Reportable Segments

 

 
166,446 

 

 
181,508 

 

 
(15,062)

 

All Other

 

 
59 

 

 
106 

 

 
(47)

 

Corporate

 

 
15 

 

 
8 

 

 
7 

 

Total Capital Expenditures

 

$
166,520 

 

$
181,622 

 

$
(15,102)

 

 

 

 

 

 

 

 

 

(1)

Capital expenditures for the three months ended December 31, 2013 include accounts payable and accrued liabilities related to capital expenditures of $38.4 million, $0.6 million, $8.8 million, and $4.9 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively.  These amounts have been excluded from the Consolidated Statement of Cash Flows at December 31, 2013 since they represent non-cash investing activities at that date.

 

(2)

Capital expenditures for the three months ended December 31, 2013 exclude capital expenditures of $58.5 million, $5.6 million, $6.7 million and $10.3 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively.  These amounts were in accounts payable and accrued liabilities at September 30, 2013 and paid during the three months ended December 31, 2013.    These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2013 since they represented non-cash investing activities at that date.  These amounts have been included in the Consolidated Statement of Cash Flows at December 31, 2013.

 

(3)

Capital expenditures for the three months ended December 31, 2012  include accounts payable and accrued liabilities related to capital expenditures of $73.4 million, $10.5 million, $2.1 million, and $0.1 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively.    These amounts have been excluded from the Consolidated Statement of Cash Flows at December 31, 2012 since they represent non-cash investing activities at that date.

 

(4)

Capital expenditures for the three months ended December 31, 2012 exclude capital expenditures of $38.9 million, $12.7 million, $12.7 million and $3.2 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively.  These amounts were in accounts payable and accrued liabilities at September 30, 2012 and paid during the three months ended December 31, 2012.  These amounts were excluded from the Consolidated Statements of Cash Flows at September 30, 2012 since they represented non-cash investing activities at that date.  These amounts have been included in the Consolidated Statement of Cash Flows at December 31, 2012.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DEGREE DAYS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent Colder

 

 

 

 

 

 

 

 

 

 

 

 

(Warmer) Than:

Three Months Ended December 31

 

 

Normal

 

 

2013

 

 

2012

 

 

 Normal (1)

 

 

Last Year (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Buffalo, NY

 

 
2,253 

 

 
2,290 

 

 
2,036 

 

 
1.6 

 

 
12.5 

Erie, PA

 

 
2,044 

 

 
2,110 

 

 
1,898 

 

 
3.2 

 

 
11.2 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Percents compare actual 2013 degree days to normal degree days and actual 2013 degree days to actual 2012 degree days.

 

 

Page 18.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

EXPLORATION AND PRODUCTION INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

December 31,

 

 

 

 

 

 

 

 

 

Increase

 

 

 

2013

 

 

2012

 

 

(Decrease)

 

 

 

 

 

 

 

 

 

 

Gas Production/Prices:

 

 

 

 

 

 

 

 

 

Production (MMcf)

 

 

 

 

 

 

 

 

 

Appalachia

 

 
32,052 

 

 
19,496 

 

 
12,556 

West Coast

 

 
786 

 

 
745 

 

 
41 

Total Production

 

 
32,838 

 

 
20,241 

 

 
12,597 

 

 

 

 

 

 

 

 

 

 

Average Prices (Per Mcf)

 

 

 

 

 

 

 

 

 

Appalachia

 

$
3.28 

 

$
3.35 

 

$
(0.07)

West Coast (3)

 

 
5.93 

 

 
6.53 

 

 
(0.60)

Weighted Average

 

 
3.35 

 

 
3.47 

 

 
(0.12)

Weighted Average after Hedging

 

 
3.70 

 

 
4.19 

 

 
(0.49)

 

 

 

 

 

 

 

 

 

 

Oil Production/Prices:

 

 

 

 

 

 

 

 

 

Production (Thousands of Barrels)

 

 

 

 

 

 

 

 

 

 Appalachia

 

 
9 

 

 
6 

 

 
3 

 West Coast

 

 
706 

 

 
708 

 

 
(2)

Total Production

 

 
715 

 

 
714 

 

 
1 

 

 

 

 

 

 

 

 

 

 

Average Prices (Per Barrel)

 

 

 

 

 

 

 

 

 

Appalachia

 

$
96.03 

 

$
87.83 

 

$
8.20 

West Coast

 

 
97.45 

 

 
100.10 

 

 
(2.65)

Weighted Average

 

 
97.43 

 

 
100.01 

 

 
(2.58)

Weighted Average after Hedging

 

 
94.00 

 

 
96.69 

 

 
(2.69)

 

 

 

 

 

 

 

 

 

 

Total Production (Mmcfe)

 

 
37,128 

 

 
24,525 

 

 
12,603 

 

 

 

 

 

 

 

 

 

 

Selected Operating Performance Statistics:

 

 

 

 

 

 

 

 

 

General & Administrative Expense per Mcfe (1)

 

$
0.41 

 

$
0.59 

 

$
(0.18)

Lease Operating and Transportation Expense per Mcfe (1)(2)

 

$
0.95 

 

$
1.05 

 

$
(0.10)

Depreciation, Depletion & Amortization per Mcfe (1)

 

$
1.92 

 

$
2.12 

 

$
(0.20)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Refer to page 13 for the General and Administrative Expense, Lease Operating Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. 

(2)

Amounts include transportation expense of $0.41 and $0.32 per Mcfe for the three months ended December 31, 2013 and December 31, 2012, respectively. 

(3)

Prices reflect revenues from gas produced on the West Coast, including natural gas liquids. 

 

 

Page 19.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

EXPLORATION AND PRODUCTION INFORMATION

 

 

 

 

 

 

 

 

Hedging Summary for the Remaining Nine Months of Fiscal 2014

 

 

 

 

 

 

 

 

SWAPS

 

 

Volume

 

 

Average Hedge Price

Oil

 

 

 

 

 

 

 

Midway Sunset (MWSS)

 

 
0.47 

MMBBL

 

$

95.68 / BBL

Brent

 

 
1.01 

MMBBL

 

$

102.32 / BBL

Total

 

 
1.48 

MMBBL

 

$

100.22 / BBL

 

 

 

 

 

 

 

 

Gas

 

 

 

 

 

 

 

NYMEX

 

 
61.51 

BCF

 

$

4.27 / MCF

Dominion Transmission Appalachian (DOM)

 

 
20.57 

BCF

 

$

4.26 / MCF

Southern California City Gate (SoCal)

 

 
0.86 

BCF

 

$

4.57 / MCF

Total

 

 
82.94 

BCF

 

$

4.27 / MCF

 

 

 

 

 

 

 

 

Hedging Summary for Fiscal 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SWAPS

 

 

Volume

 

 

Average Hedge Price

Oil

 

 

 

 

 

 

 

Brent

 

 
0.90 

MMBBL

 

$

98.42 / BBL

NYMEX

 

 
0.40 

MMBBL

 

$

90.14 / BBL

Total

 

 
1.30 

MMBBL

 

$

95.90 / BBL

 

 

 

 

 

 

 

 

Gas

 

 

 

 

 

 

 

NYMEX

 

 
58.94 

BCF

 

$

4.32 / MCF

DOM

 

 
17.83 

BCF

 

$

4.07 / MCF

SoCal

 

 
1.14 

BCF

 

$

4.57 / MCF

Total

 

 
77.91 

BCF

 

$

4.27 / MCF

 

 

 

 

 

 

 

 

Hedging Summary for Fiscal 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SWAPS

 

 

Volume

 

 

Average Hedge Price

Oil

 

 

 

 

 

 

 

Brent

 

 
0.93 

MMBBL

 

$

95.18 / BBL

NYMEX

 

 
0.30 

MMBBL

 

$

86.09 / BBL

Total

 

 
1.23 

MMBBL

 

$

92.97 / BBL

 

 

 

 

 

 

 

 

Gas

 

 

 

 

 

 

 

NYMEX

 

 
35.66 

BCF

 

$

4.46 / MCF

DOM

 

 
17.94 

BCF

 

$

4.07 / MCF

Total

 

 
53.60 

BCF

 

$

4.33 / MCF

 

 

 

 

 

 

 

 

Hedging Summary for Fiscal 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SWAPS

 

 

Volume

 

 

Average Hedge Price

Oil

 

 

 

 

 

 

 

Brent

 

 
0.38 

MMBBL

 

$

92.30 / BBL

 

 

 

 

 

 

 

 

Gas

 

 

 

 

 

 

 

NYMEX

 

 
23.77 

BCF

 

$

4.71 / MCF

DOM

 

 
17.94 

BCF

 

$

4.07 / MCF

Total

 

 
41.71 

BCF

 

$

4.44 / MCF

 

 

 

 

 

 

 

 

Hedging Summary for Fiscal 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SWAPS

 

 

Volume

 

 

Average Hedge Price

Oil

 

 

 

 

 

 

 

Brent

 

 
0.08 

MMBBL

 

$

91.00 / BBL

 

 

 

 

 

 

 

 

Gas

 

 

 

 

 

 

 

NYMEX

 

 
5.29 

BCF

 

$

4.81 / MCF

 

 

 

Page 20.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

 

 

 

 

 

 

 

EXPLORATION AND PRODUCTION INFORMATION

 

 

 

 

 

 

 

Gross Wells in Process of Drilling

 

 

 

 

 

 

Quarter Ended December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

East

 

West

 

 

Company

Wells in Process - Beginning of Period

 

 

 

 

 

 

Exploratory
0.000 

 
0.000 

 

 
0.000 

Developmental
76.000 

 
0.000 

 

 
76.000 

Wells Commenced

 

 

 

 

 

 

Exploratory
0.000 

 
1.000 

 

 
1.000 

Developmental
14.000 

 
18.000 

 

 
32.000 

Wells Completed

 

 

 

 

 

 

Exploratory
0.000 

 
0.000 

 

 
0.000 

Developmental
14.000 

 
17.000 

 

 
31.000 

Wells Plugged & Abandoned

 

 

 

 

 

 

Exploratory
0.000 

 
0.000 

 

 
0.000 

Developmental
1.000 

 
0.000 

 

 
1.000 

Wells in Process - End of Period

 

 

 

 

 

 

Exploratory
0.000 

 
1.000 

 

 
1.000 

Developmental
75.000 

 
1.000 

 

 
76.000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Wells in Process of Drilling

 

 

 

 

 

 

Quarter Ended December 31, 2013

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

East

 

West

 

 

Company

Wells in Process - Beginning of Period

 

 

 

 

 

 

Exploratory
0.000 

 
0.000 

 

 
0.000 

Developmental
61.000 

 
0.000 

 

 
61.000 

Wells Commenced

 

 

 

 

 

 

Exploratory
0.000 

 
0.766 

 

 
0.766 

Developmental
14.000 

 
18.000 

 

 
32.000 

Wells Completed

 

 

 

 

 

 

Exploratory
0.000 

 
0.000 

 

 
0.000 

Developmental
14.000 

 
17.000 

 

 
31.000 

Wells Plugged & Abandoned

 

 

 

 

 

 

Exploratory
0.000 

 
0.000 

 

 
0.000 

Developmental
1.000 

 
0.000 

 

 
1.000 

Wells in Process - End of Period

 

 

 

 

 

 

Exploratory
0.000 

 
0.766 

 

 
0.766 

Developmental
60.000 

 
1.000 

 

 
61.000 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 21.

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pipeline & Storage Throughput - (millions of cubic feet - MMcf)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31,

 

 

 

 

 

 

Increase

 

 

2013

 

2012

 

(Decrease)

Firm Transportation - Affiliated

 
29,686 

 
28,234 

 
1,452 

Firm Transportation - Non-Affiliated

 
161,970 

 
95,179 

 
66,791 

Interruptible Transportation

 
1,322 

 
1,252 

 
70 

 

 
192,978 

 
124,665 

 
68,313 

 

 

 

 

 

 

 

Gathering Volume - (MMcf)

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31,

 

 

 

 

 

 

Increase

 

 

2013

 

2012

 

(Decrease)

Gathered Volume - Affiliated

 
31,014 

 
16,811 

 
14,203 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Utility Throughput - (MMcf)

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31,

 

 

 

 

 

 

Increase

 

 

2013

 

2012

 

(Decrease)

Retail Sales:

 

 

 

 

 

 

Residential Sales

 
17,008 

 
15,153 

 
1,855 

Commercial Sales

 
2,360 

 
1,967 

 
393 

Industrial Sales

 
91 

 
301 

 
(210)

 

 
19,459 

 
17,421 

 
2,038 

Off-System Sales

 
1,978 

 
2,429 

 
(451)

Transportation

 
21,190 

 
18,637 

 
2,553 

 

 
42,627 

 
38,487 

 
4,140 

 

 

 

 

 

 

 

Energy Marketing Volume

 

 

 

 

 

 

 

 

Three Months Ended

 

 

December 31,

 

 

 

 

 

 

Increase

 

 

2013

 

2012

 

(Decrease)

Natural Gas (MMcf)

 
16,008 

 
10,365 

 
5,643 

 

 

 

 

 

 

 

 

 

 

Page 22.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

FISCAL 2014 EARNINGS GUIDANCE AND SENSITIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share sensitivity to changes

Fiscal 2014 (Diluted earnings per share guidance*)

 

 

from prices used in guidance*  ^

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$0.50 change per MMBtu gas

 

$5 change per Bbl oil

 

 

Range

 

 

Increase

 

Decrease

 

Increase

 

Decrease

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Earnings

 

$
3.20 

-

$
3.40 

 

 

+$
0.07 

 

-$
0.07 

 

+$
0.03 

 

-$
0.03 

 

 

 

 

* Please refer to forward looking statement footnote beginning at page 6 of document.

 

^ This sensitivity table is current as of February 6, 2014 and only considers revenue from the Exploration and Production segment's crude oil and natural gas sales.  This revenue is based upon pricing used in the Company's earnings forecast.  For its fiscal 2014 earnings forecast, the Company is utilizing flat NYMEX equivalent commodity pricing, exclusive of basis differential, of $4.00 per MMBtu for natural gas and $90 per Bbl for crude oil.  The sensitivities will become obsolete with the passage of time, changes in Seneca's production forecast, changes in basis differential, as additional hedging contracts are entered into, and with the settling of hedge contracts at their maturity.    

 

 

Page 23.

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

 

NON-GAAP FINANCIAL MEASURES

 

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

 

Management defines Adjusted EBITDA as reported GAAP earnings before the following items:  interest expense, depreciation, depletion and amortization, interest and other income, impairments, items impacting comparability and income taxes. 

 

The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three months ended December 31, 2013:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

 

Ended December 31,

 

 

2013

 

2012

(in thousands)

 

 

 

 

 

 

Reported GAAP Earnings

 

$
82,252 

 

$
67,944 

Depreciation, Depletion and Amortization

 

 
93,114 

 

 
72,331 

Interest and Other Income

 

 
(930)

 

 
(2,801)

Interest Expense

 

 
23,834 

 

 
22,516 

Income Taxes

 

 
55,425 

 

 
43,549 

Adjusted EBITDA

 

$
253,695 

 

$
203,539 

 

 

 

Page 24.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NATIONAL FUEL GAS COMPANY

AND SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended December 31 (unaudited)

 

2013

 

2012

 

 

 

 

 

 

 

Operating Revenues

 

$
550,072,000 

 

$
452,854,000 

 

 

 

 

 

 

 

Net Income Available for Common Stock

 

$
82,252,000 

 

$
67,944,000 

 

 

 

 

 

 

 

Earnings Per Common Share:

 

 

 

 

 

 

Basic

 

$
0.98 

 

$
0.81 

Diluted

 

$
0.97 

 

$
0.81 

 

 

 

 

 

 

 

Weighted Average Common Shares:

 

 

 

 

 

 

Used in Basic Calculation

 

 
83,707,687 

 

 
83,390,278 

Used in Diluted Calculation

 

 
84,659,001 

 

 
84,006,050 

 

 

 

 

 

 

 

Twelve Months Ended December 31 (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Revenues

 

$
1,926,768,000 

 

$
1,647,284,000 

 

 

 

 

 

 

 

Net Income Available for Common Stock

 

$
274,309,000 

 

$
227,322,000 

 

 

 

 

 

 

 

Earnings Per Common Share:

 

 

 

 

 

 

Basic

 

$
3.28 

 

$
2.73 

Diluted

 

$
3.25 

 

$
2.71 

 

 

 

 

 

 

 

Weighted Average Common Shares:

 

 

 

 

 

 

Used in Basic Calculation

 

 
83,598,868 

 

 
83,258,386 

Used in Diluted Calculation

 

 
84,411,007 

 

 
83,800,341