• National Fuel Reports Fourth Quarter and Full Year Fiscal 2023 Earnings

    ソース: Nasdaq GlobeNewswire / 01 11 2023 16:45:49   America/New_York

    WILLIAMSVILLE, N.Y., Nov. 01, 2023 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the three months and fiscal year ended September 30, 2023.

    FISCAL 2023 FOURTH QUARTER SUMMARY

    • GAAP net income of $73.7 million, or $0.80 per share, compared to GAAP net income of $158.1 million, or $1.71 per share, in the prior year.
    • Adjusted operating results of $72.2 million, or $0.78 per share, compared to $109.3 million, or $1.19 per share, in the prior year (see non-GAAP reconciliation on page 2 for fourth quarter and fiscal 2023).
    • Both E&P segment net production and Gathering segment revenue increased by 7% versus the prior year, driven by continued strong operational execution in Appalachia.
    • Supply Corporation entered into a precedent agreement with Seneca for its Tioga Pathway Project, which is an estimated $90 million modernization and expansion project that will add 190,000 Dth per day of firm transportation takeaway capacity from northwest Tioga County, Pennsylvania.

    FISCAL 2023 HIGHLIGHTS

    • Generated consolidated net cash provided by operating activities of $1.24 billion for fiscal 2023, with free cash flow of $275 million (see non-GAAP reconciliation on page 27 for fiscal 2023).
    • Increased the shareholder dividend for the 53rd consecutive year to an annual rate of $1.98 per share, an increase of 4.2%, continuing the Company’s long history of consistently returning capital to shareholders.
    • Distribution Corporation settled a rate proceeding in Pennsylvania, which will increase annual base rate delivery revenues by $23 million.
    • Seneca Resources bolstered its deep inventory of highly economic development locations in its Eastern Development Area with the acquisition of approximately 39,000 net acres in Tioga and Lycoming counties.
    • NFG Midstream achieved certification of 100% of its assets under Equitable Origin’s EO100TM Standard for Responsible Energy Development, becoming the first gathering or midstream company to receive this ESG-focused certification.

    MANAGEMENT COMMENTS

    David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “Despite the headwinds of lower natural gas prices in fiscal 2023, National Fuel delivered strong results, both financially and operationally. As we move into fiscal 2024, the combination of a strong outlook for long-term growth in our regulated businesses, increasing capital efficiency in our non-regulated operations, and expectations of improving natural gas price realizations position us well to deliver long-term value to our shareholders.”

    RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

     Three Months Ended Fiscal Year Ended
     September 30, September 30,
    (in thousands except per share amounts) 2023   2022   2023   2022 
    Reported GAAP Earnings$        73,677  $        158,143  $        476,866  $        566,021 
    Items impacting comparability:       
    Unrealized (gain) loss on derivative asset (E&P)         (2,803)          4,395           899           4,395 
    Tax impact of unrealized (gain) loss on derivative asset         775           (1,203)          (240)          (1,203)
    Unrealized (gain) loss on other investments (Corporate / All Other)         719           1,532           (913)          11,625 
    Tax impact of unrealized (gain) loss on other investments         (151)          (322)          192           (2,441)
    Reversal of deferred tax valuation allowance         —           (24,850)          —           (24,850)
    Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction         —           (28,406)          —           (28,406)
    Items impacting comparability from West Coast asset sale (E&P) (1)         —           —           —           41,589 
    Tax impact of items impacting comparability from West Coast asset sale (1)         —           —           —           (10,533)
    Reduction of other post-retirement regulatory liability (Utility)         —           —           —           (18,533)
    Tax impact of reduction of other post-retirement regulatory liability         —           —           —           3,892 
    Adjusted Operating Results$        72,217  $        109,289  $        476,804  $        541,556 
            
    Reported GAAP Earnings Per Share$        0.80  $        1.71  $        5.17  $        6.15 
    Items impacting comparability:       
    Unrealized (gain) loss on derivative asset, net of tax (E&P)         (0.02)          0.03           0.01           0.03 
    Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)         0.01           0.01           (0.01)          0.10 
    Reversal of deferred tax valuation allowance         —           (0.27)          —           (0.27)
    Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction         —           (0.31)          —           (0.31)
    Items impacting comparability from West Coast asset sale, net of tax (E&P) (1)         —           —           —           0.34 
    Reduction of other post-retirement regulatory liability, net of tax (Utility)         —           —           —           (0.16)
    Rounding         (0.01)          0.02           —           — 
    Adjusted Operating Results Per Share$        0.78  $        1.19  $        5.17  $        5.88 


    (1)Refer to non-GAAP reconciliation on page 24 for a separate breakout of items impacting comparability from the West Coast asset sale.
      

    FISCAL 2024 GUIDANCE UPDATE

    National Fuel is revising its fiscal 2024 earnings guidance to reflect updated forecast assumptions and projections since the Company’s preliminary guidance range was announced in August 2023. The Company is now projecting that earnings will be within the range of $5.40 to $5.90 per share, an increase of 9% from the Company’s 2023 adjusted operating results at the midpoint of the updated 2024 guidance range.

    Consistent with preliminary guidance, the Company is assuming that NYMEX natural gas prices will average $3.25 per MMBtu for the fiscal year. For guidance purposes, the Company’s updated natural gas price projections approximate the current NYMEX forward curve and consider the impact of local sales point differentials and new physical firm sales, transportation, and financial hedge contracts.

    Seneca currently has firm sales contracts in place for approximately 89% of its projected fiscal 2024 Appalachian production, limiting its exposure to in-basin markets. Approximately 69% of Seneca’s expected Appalachian production is either matched by a financial hedge, including a combination of swaps and no-cost collars, or was entered into at a fixed price. Seneca’s depreciation, depletion and amortization guidance range was also revised to reflect current expectations for the fiscal year.

    The Company’s consolidated and individual segment capital expenditures guidance remain unchanged from the preliminary guidance. Other guidance assumptions remain largely unchanged from the previous guidance. The details are outlined in the table on page 7.

    DISCUSSION OF FOURTH QUARTER RESULTS BY SEGMENT

    The following earnings discussion of each operating segment for the quarter ended September 30, 2023 is summarized in a tabular form on pages 8 and 9 of this report (earnings drivers for the fiscal years ended September 30, 2023 are summarized on pages 10 and 11). It may be helpful to refer to those tables while reviewing this discussion.

    Note that management defines Adjusted Operating Results as reported GAAP earnings adjusted for items impacting comparability, and Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability.

    Upstream Business

    Exploration and Production Segment

    The Exploration and Production segment operations are carried out by Seneca Resources Company, LLC (“Seneca”). Seneca explores for, develops and produces primarily natural gas reserves in Pennsylvania.

     Three Months Ended
     September 30
    (in thousands) 2023   2022  Variance
    GAAP Earnings$        36,772  $        116,077  $        (79,305)
    Unrealized (gain) loss on derivative asset, net of tax         (2,028)          3,192           (5,220)
    Reversal of deferred tax valuation allowance         —           (28,589)          28,589 
    Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction         —           (16,152)          16,152 
    Adjusted Operating Results$        34,744  $        74,528  $        (39,784)
          
    Adjusted EBITDA$        132,641  $        166,238  $        (33,597)


    Seneca’s fourth quarter GAAP earnings decreased $79.3 million versus the prior year. Excluding several items impacting comparability as described below, Seneca's earnings decreased $39.8 million, with higher natural gas production more than offset by lower realized natural gas prices, higher operating expenses and higher income tax expense.

    Last year’s fourth quarter earnings included two one-time items related to state deferred income taxes that impacted comparability as shown in the table above. These items consisted of a reversal of a $28.6 million valuation allowance on deferred tax assets related to certain state net operating loss and credit carryforwards, along with a $16.2 million benefit from the remeasurement of state deferred income taxes related to a series of reductions in the Pennsylvania state corporate income tax rate that was signed into law in July 2022. Earnings were also impacted by an unrealized gain of $2.8 million ($2.0 million after-tax) recognized during the current-year fourth quarter related to an increase in the fair value of the contingent consideration Seneca received in connection with the June 2022 divestiture of its California assets. In the prior-year's fourth quarter, Seneca recorded an unrealized loss of $4.4 million ($3.2 million after-tax) on that contingent consideration.

    During this year's fourth quarter, Seneca produced 93.8 Bcfe, an increase of 5.9 Bcfe, or 7%, from the prior year, despite the impact of approximately 2 Bcfe of price-related curtailments due to low in-basin pricing.

    Seneca’s average realized natural gas price, after the impact of hedging and transportation costs, was $2.33 per Mcf, a decrease of $0.51 per Mcf from the prior year. Lower natural gas prices, before the impact of hedging, were partially offset by an increase in the weighted average hedge price compared to the prior-year fourth quarter.

    On a per unit basis, lease operating and transportation expense (“LOE”) was $0.69 per Mcfe, a decrease of $0.02 per Mcfe from the prior year. On an absolute basis, LOE increased $1.7 million primarily due to higher water management costs, partially offset by lower rental and workover expenses. An increase in transportation and gathering costs as a result of increased production also contributed to the increase in absolute LOE. LOE includes $51.2 million for gathering and compression services from NFG Midstream to connect Seneca’s production to sales points along interstate pipelines.

    General and administrative (“G&A”) expense remained flat at $0.18 per Mcfe compared to the prior year. On an absolute basis, Seneca’s G&A expense increased $1.5 million primarily due to an increase in labor-related costs.

    Depreciation, depletion and amortization (“DD&A”) expense was $0.71 per Mcfe, an increase of $0.11 per Mcfe from the prior year.  Absolute DD&A expense increased $13.4 million due to higher natural gas production and a higher per unit DD&A rate. The higher rate was driven by an increase in Seneca's full cost pool due to a combination of higher capitalized costs and an increase in estimated future development costs related to proved undeveloped wells.

    Other taxes decreased $1.7 million largely attributable to lower Impact Fees in Pennsylvania due to the decline in NYMEX natural gas prices.

    Excluding the impact of last year’s fourth quarter one-time items impacting comparability shown in the table above, the increase in Seneca’s effective tax rate was primarily driven by higher state income tax expense.

    Proved Reserves Year-End Update

    Seneca’s total proved reserves at September 30, 2023 were 4,536 Bcfe, an increase of 364 Bcfe, or 9%, from September 30, 2022. Seneca’s proved developed reserves at the end of fiscal 2023 were 3,551 Bcfe, representing 78% of total proved reserves, compared to 79% a year ago. In fiscal 2023, Seneca added 670 Bcfe of proved reserve extensions and discoveries, 34 Bcfe of proved developed reserves as a result of two separate upstream asset purchases during fiscal 2023, and 32 Bcfe of net positive revisions due primarily to improvements in well performance and changes in development plans. Seneca replaced 198% of its fiscal 2023 production.

    Midstream Businesses

    Pipeline and Storage Segment

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

     Three Months Ended
     September 30
    (in thousands) 2023   2022  Variance
    GAAP Earnings$        23,354  $        25,320  $        (1,966)
          
    Adjusted EBITDA$        56,236  $        59,819  $        (3,583)


    The Pipeline and Storage segment’s fourth quarter GAAP earnings decreased $2.0 million versus the prior year primarily due to lower operating revenues, partially offset by an increase in other income. The decrease in operating revenues of $3.7 million was primarily attributable to contract expirations that occurred earlier in the fiscal year, partially offset by an increase in new short-term contracts. The increase in other income of $1.1 million was primarily attributable to a higher weighted average interest rate on intercompany short-term notes receivable.

    Gathering Segment

    The Gathering segment’s operations are carried out by National Fuel Gas Midstream Company, LLC’s limited liability companies. The Gathering segment constructs, owns and operates natural gas gathering pipelines and compression facilities in the Appalachian region, which delivers Seneca and other non-affiliated Appalachian production to the interstate pipeline system.

     Three Months Ended
     September 30
    (in thousands) 2023   2022  Variance
    GAAP Earnings$        26,517  $        31,224  $        (4,707)
    Reversal of deferred tax valuation allowance         —           3,739           (3,739)
    Remeasurement of deferred income tax from Pennsylvania state income tax rate reduction         —           (11,856)          11,856 
    Adjusted Operating Results$        26,517  $        23,107  $        3,410 
          
    Adjusted EBITDA$        46,874  $        43,335  $        3,539 


    The Gathering segment’s fourth quarter GAAP earnings decreased $4.7 million versus the prior year. Similar to our Exploration and Production segment, last year’s fourth quarter earnings included two one-time items impacting comparability shown in the table above related to state deferred income taxes that did not recur this year. Excluding these items, the Gathering segment’s earnings increased $3.4 million primarily due to higher operating revenues. Operating revenues increased $3.9 million, or 7%, which was the result of a 12.6 Bcf increase in gathered volumes due to an increase in natural gas throughput from both non-affiliated parties and Seneca.

    Downstream Business

    Utility Segment

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

     Three Months Ended
     September 30
    (in thousands) 2023   2022  Variance
    GAAP Earnings$        (7,179) $        (10,852) $        3,673 
          
    Adjusted EBITDA$        6,693  $        6,270  $        423 


    The Utility segment’s fourth quarter GAAP net loss was $3.7 million lower than the net loss in the prior year’s fourth quarter due to higher customer margins (operating revenues less purchased gas sold), a decrease in non-service pension and OPEB costs, higher other income and lower income tax expense, partially offset by increases in operation and maintenance (“O&M”) expense and interest expense.

    The increase in customer margin of $1.6 million was due primarily to the implementation of the recent Pennsylvania rate case settlement, which increased base rates by $23 million annually, effective August 1, 2023. Also contributing to the increase were adjustments related to certain regulatory rate and cost recovery mechanisms subject to annual reconciliation and higher revenues from the Company’s system modernization tracking mechanisms in its New York service territory. These increases were partially offset by a $1.1 million reduction in base rates in New York, which, consistent with prior quarters, was the result of a rate proceeding that temporarily reduced the Utility’s recovery of pension and other post-employment benefit (“OPEB”) expenses to zero effective October 1, 2022. In addition to lowering rates, the proceeding mandated a corresponding decrease in pension and OPEB expenses, most of which had been previously recorded in “below the line” non-service pension and OPEB costs.

    The increase in other income of $1.0 million was primarily attributable to interest earned on deferred gas costs. O&M expense increased by $1.7 million, primarily driven by higher labor-related costs. Interest expense increased $1.0 million due to the Company’s long-term debt issuance in May 2023.

    Corporate and All Other

    The Company’s operations that are included in Corporate and All Other generated a combined net loss of $5.8 million in the current year fourth quarter, which was $2.2 million higher than the combined net loss of $3.6 million in the prior-year fourth quarter. The increase in net loss was primarily driven by higher O&M expense as a result of an increase in professional services, which was partially offset by a lower amount of unrealized losses on investment securities recognized in the current quarter as compared to the prior-year fourth quarter.

    EARNINGS TELECONFERENCE

    The Company will host a conference call on Thursday, November 2, 2023, at 10 a.m. Eastern Time to discuss this announcement. To pre-register for the call (recommended), please visit https://www.netroadshow.com/events/login?show=2be14adf&confId=56623. After registering, you will receive your access details via email. To join by telephone on the day of the call, dial U.S. toll free 1-833–470–1428 and provide Participant Access Code 568657. The teleconference will also be simultaneously webcast online and can be accessed on the NFG Investor Relations website at investor.nationalfuelgas.com. A telephone replay of the teleconference call will be available through the end of the day on Thursday, November 9, 2023. To access the replay, dial U.S. toll free 1-866-813-9403 and provide Replay Access Code 693074.

    National Fuel is an integrated energy company reporting financial results for four operating segments: Exploration and Production, Pipeline and Storage, Gathering, and Utility. Additional information about National Fuel is available at www.nationalfuelgas.com.

       
    Analyst Contact:Brandon J. Haspett716-857-7697
    Media Contact:Karen L. Merkel716-857-7654
       
       

    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: changes in laws, regulations or judicial interpretations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, real property, and exploration and production activities such as hydraulic fracturing; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design, retained natural gas and system modernization), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; the Company’s ability to estimate accurately the time and resources necessary to meet emissions targets; governmental/regulatory actions and/or market pressures to reduce or eliminate reliance on natural gas; changes in economic conditions, including inflationary pressures, supply chain issues, liquidity challenges, and global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; changes in the price of natural gas; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; impairments under the SEC’s full cost ceiling test for natural gas reserves; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; the Company’s ability to complete planned strategic transactions; changes in price differentials between similar quantities of natural gas sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; the impact of information technology disruptions, cybersecurity or data security breaches; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; other changes in price differentials between similar quantities of natural gas having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; negotiations with the collective bargaining units representing the Company's workforce, including potential work stoppages during negotiations; uncertainty of natural gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas; changes in demographic patterns and weather conditions (including those related to climate change); changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.

    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
     
    GUIDANCE SUMMARY


    As discussed on page 2, the Company is revising its earnings guidance for fiscal 2024. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below.

    While the Company expects to record certain adjustments to unrealized gain or loss on a derivative asset and unrealized gain or loss on investments during the fiscal year ending September 30, 2024, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.

     Previous FY 2024 Guidance Updated FY 2024 Guidance
    Adjusted Consolidated Earnings per Share, excluding items impacting comparability$5.50 to $6.00 $5.40 to $5.90
    Consolidated Effective Tax Rate~ 25.5 - 26% ~ 25 - 25.5%
        
    Capital Expenditures (Millions)   
    Exploration and Production$525 - $575 $525 - $575
    Pipeline and Storage$120 - $140 $120 - $140
    Gathering$90 - $110 $90 - $110
    Utility$130 - $150 $130 - $150
    Consolidated Capital Expenditures$865 - $975 $865 - $975
        
    Exploration & Production Segment Guidance   
        
    Commodity Price Assumptions   
    NYMEX natural gas price$3.25 /MMBtu $3.25 /MMBtu
    Appalachian basin spot price$2.45 /MMBtu $2.40 - $2.45 /MMBtu
        
    Production (Bcfe)390 to 410 390 to 410
        
    E&P Operating Costs ($/Mcfe)   
    LOE$0.69 - $0.71 $0.69 - $0.71
    G&A$0.17 - $0.19 $0.17 - $0.19
    DD&A$0.66 - $0.70 $0.69 - $0.74
        
    Other Business Segment Guidance (Millions)   
    Gathering Segment Revenues$240 - $260 $240 - $260
    Pipeline and Storage Segment Revenues$380 - $420 $380 - $420


     
    NATIONAL FUEL GAS COMPANY
    RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
    QUARTER ENDED SEPTEMBER 30, 2023
    (Unaudited)
                
     Upstream Midstream Downstream    
                
     Exploration & Pipeline &     Corporate /  
    (Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated*
                
    Fourth quarter 2022 GAAP earnings$        116,077  $        25,320  $        31,224  $        (10,852) $        (3,626) $        158,143 
    Items impacting comparability:           
    Unrealized gain (loss) on derivative asset         4,395                   4,395 
    Tax impact of unrealized gain (loss) on derivative asset         (1,203)                  (1,203)
    Reversal of deferred tax valuation allowance         (28,589)    3,739               (24,850)
    Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction         (16,152)            (11,856)            (398)          (28,406)
    Unrealized (gain) loss on other investments                 1,532           1,532 
    Tax impact of unrealized (gain) loss on other investments                 (322)          (322)
    Fourth quarter 2022 adjusted operating results         74,528           25,320           23,107           (10,852)          (2,814)          109,289 
    Drivers of adjusted operating results**           
    Upstream Revenues           
    Higher (lower) natural gas production         13,121                   13,121 
    Higher (lower) realized natural gas prices, after hedging         (37,374)                  (37,374)
    Higher (lower) other operating revenues         (734)                  (734)
    Midstream Revenues           
    Higher (lower) operating revenues           (2,932)          3,108               176 
    Downstream Margins***           
    Impact of usage and weather               (386)            (386)
    Impact of new rates in Pennsylvania               754             754 
    Impact of new rates in New York****               (893)            (893)
    System modernization and improvement tracker revenues               366             366 
    Regulatory revenue adjustments               1,951             1,951 
    Operating Expenses           
    Lower (higher) lease operating and transportation expenses         (1,352)                  (1,352)
    Lower (higher) operating expenses         (1,500)            (314)          (1,586)          (2,800)          (6,200)
    Lower (higher) property, franchise and other taxes         1,343                   1,343 
    Lower (higher) depreciation / depletion         (10,614)          (529)          (359)          (679)            (12,181)
    Other Income (Expense)           
    (Higher) lower other deductions           815             1,192           (276)          1,731 
    (Higher) lower interest expense         (627)            531           (998)          1,283           189 
    Income Taxes           
    Lower (higher) income tax expense / effective tax rate         (1,900)          474           402           3,648           (367)          2,257 
    All other / rounding         (147)          206           42           304           (245)          160 
    Fourth quarter 2023 adjusted operating results         34,744           23,354           26,517           (7,179)          (5,219)          72,217 
    Items impacting comparability:           
    Unrealized gain (loss) on derivative asset         2,803                   2,803 
    Tax impact of unrealized gain (loss) on derivative asset         (775)                  (775)
    Unrealized gain (loss) on other investments                 (719)          (719)
    Tax impact of unrealized gain (loss) on other investments                 151           151 
    Fourth quarter 2023 GAAP earnings$        36,772  $        23,354  $        26,517  $        (7,179) $        (5,787) $        73,677 
                
    * Amounts do not reflect intercompany eliminations.
    ** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
    *** Downstream margin defined as operating revenues less purchased gas expense.
    **** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023.


     
    NATIONAL FUEL GAS COMPANY
    RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
    QUARTER ENDED SEPTEMBER 30, 2023
    (Unaudited)
                
     Upstream Midstream Downstream     
                
     Exploration & Pipeline &     Corporate /  
     Production Storage Gathering Utility All Other Consolidated*
                
    Fourth quarter 2022 GAAP earnings per share$        1.26  $        0.27  $        0.34  $        (0.12) $        (0.04) $        1.71 
    Items impacting comparability:           
    Unrealized gain (loss) on derivative asset, net of tax         0.03                   0.03 
    Reversal of deferred tax valuation allowance         (0.31)            0.04               (0.27)
    Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction         (0.18)            (0.13)            —           (0.31)
    Unrealized (gain) loss on other investments, net of tax                 0.01           0.01 
    Rounding         0.01                 0.01           0.02 
    Fourth quarter 2022 adjusted operating results per share         0.81           0.27           0.25           (0.12)          (0.02)          1.19 
    Drivers of adjusted operating results**           
    Upstream Revenues           
    Higher (lower) natural gas production         0.14                   0.14 
    Higher (lower) realized natural gas prices, after hedging         (0.40)                  (0.40)
    Higher (lower) other operating revenues         (0.01)                  (0.01)
    Midstream Revenues           
    Higher (lower) operating revenues           (0.03)          0.03               — 
    Downstream Margins***           
    Impact of usage and weather               —             — 
    Impact of new rates in Pennsylvania               0.01             0.01 
    Impact of new rates in New York****               (0.01)            (0.01)
    System modernization and improvement tracker revenues               —             — 
    Regulatory revenue adjustments               0.02             0.02 
    Operating Expenses           
    Lower (higher) lease operating and transportation expenses         (0.01)                  (0.01)
    Lower (higher) operating expenses         (0.02)            —           (0.02)          (0.03)          (0.07)
    Lower (higher) property, franchise and other taxes         0.01                   0.01 
    Lower (higher) depreciation / depletion         (0.11)          (0.01)          —           (0.01)            (0.13)
    Other Income (Expense)           
    (Higher) lower other deductions           0.01             0.01           —           0.02 
    (Higher) lower interest expense         (0.01)            0.01           (0.01)          0.01           — 
    Income Taxes           
    Lower (higher) income tax expense / effective tax rate         (0.02)          0.01           —           0.04           —           0.03 
    All other / rounding         —           —           —           0.01           (0.02)          (0.01)
    Fourth quarter 2023 adjusted operating results per share         0.38           0.25           0.29           (0.08)          (0.06)          0.78 
    Items impacting comparability:           
    Unrealized gain (loss) on derivative asset, net of tax         0.02                   0.02 
    Unrealized gain (loss) on other investments, net of tax                 (0.01)          (0.01)
    Rounding                 0.01           0.01 
    Fourth quarter 2023 GAAP earnings per share$        0.40  $        0.25  $        0.29  $        (0.08) $        (0.06) $        0.80 
                
    * Amounts do not reflect intercompany eliminations.
    ** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
    *** Downstream margin defined as operating revenues less purchased gas expense.
    **** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023.


     
    NATIONAL FUEL GAS COMPANY
    RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
    TWELVE MONTHS ENDED SEPTEMBER 30, 2023
    (Unaudited)
                
     Upstream Midstream Downstream    
                
     Exploration & Pipeline &     Corporate /  
    (Thousands of Dollars)Production Storage Gathering Utility All Other Consolidated*
                
    Fiscal 2022 GAAP earnings$        306,064  $        102,557  $        101,111  $        68,948  $        (12,659) $        566,021 
    Items impacting comparability:           
    Reduction of other post-retirement regulatory liability               (18,533)            (18,533)
    Tax impact of reduction of other post-retirement regulatory liability               3,892             3,892 
    Unrealized gain (loss) on derivative asset         4,395                   4,395 
    Tax impact of unrealized gain (loss) on derivative asset         (1,203)                  (1,203)
    Gain on sale of West Coast assets         (12,736)                  (12,736)
    Tax impact of gain on sale of West Coast assets         3,225                   3,225 
    Loss from discontinuance of crude oil cash flow hedges         44,632                   44,632 
    Tax impact of loss from discontinuance of crude oil cash flow hedges         (11,303)                  (11,303)
    Transaction and severance costs related to West Coast asset sale         9,693                   9,693 
    Tax impact of transaction and severance costs related to West Coast asset sale         (2,455)                  (2,455)
    Reversal of deferred tax valuation allowance         (28,589)            3,739               (24,850)
    Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction         (16,152)            (11,856)            (398)          (28,406)
    Unrealized (gain) loss on other investments                 11,625           11,625 
    Tax impact of unrealized (gain) loss on other investments                 (2,441)          (2,441)
    Fiscal 2022 adjusted operating results         295,571           102,557           92,994           54,307           (3,873)          541,556 
    Drivers of adjusted operating results**           
    Upstream Revenues           
    Higher (lower) natural gas production         62,913                   62,913 
    Higher (lower) crude oil production         (88,063)                  (88,063)
    Higher (lower) realized natural gas prices, after hedging         (48,413)                  (48,413)
    Higher (lower) other operating revenues         (2,898)                  (2,898)
    Midstream Revenues           
    Higher (lower) operating revenues           1,696           12,224               13,920 
    Downstream Margins***           
    Impact of usage and weather               (1,104)            (1,104)
    Impact of new rates in Pennsylvania               754             754 
    Impact of new rates in New York****               (12,019)            (12,019)
    System modernization and improvement tracker revenues               3,829             3,829 
    Regulatory revenue adjustments               1,504             1,504 
    Higher (lower) other operating revenues               1,734             1,734 
    Operating Expenses           
    Lower (higher) lease operating and transportation expenses         23,984                   23,984 
    Lower (higher) operating expenses         11,145           (5,164)          (4,851)          (8,798)          (3,389)          (11,057)
    Lower (higher) property, franchise and other taxes         6,041               597             6,638 
    Lower (higher) depreciation / depletion         (26,065)          (2,470)          (1,364)          (1,335)            (31,234)
    Other Income (Expense)           
    (Higher) lower other deductions         2,735           3,624           561           14,030           (3,859)          17,091 
    (Higher) lower interest expense         (724)          (796)          1,184           (8,575)          7,120           (1,791)
    Income Taxes           
    Lower (higher) income tax expense / effective tax rate         (3,406)          411           (1,006)          3,503           (380)          (878)
    All other / rounding         114           643           (18)          (32)          (369)          338 
    Fiscal 2023 adjusted operating results         232,934           100,501           99,724           48,395           (4,750)          476,804 
    Items impacting comparability:           
    Unrealized gain (loss) on derivative asset         (899)                  (899)
    Tax impact of unrealized gain (loss) on derivative asset         240                   240 
    Unrealized gain (loss) on other investments                 913           913 
    Tax impact of unrealized gain (loss) on other investments                 (192)          (192)
    Fiscal 2023 GAAP earnings$        232,275  $        100,501  $        99,724  $        48,395  $        (4,029) $        476,866 
                
    * Amounts do not reflect intercompany eliminations.
    ** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
    *** Downstream margin defined as operating revenues less purchased gas expense.
    **** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023.


     
    NATIONAL FUEL GAS COMPANY
    RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
    TWELVE MONTHS ENDED SEPTEMBER 30, 2023
    (Unaudited)
                
     Upstream Midstream Downstream    
                
     Exploration & Pipeline &     Corporate /  
     Production Storage Gathering Utility All Other Consolidated*
    Fiscal 2022 GAAP earnings per share$        3.32  $        1.11  $        1.10  $        0.75  $        (0.13) $        6.15 
    Items impacting comparability:           
    Reduction of other post-retirement regulatory liability, net of tax               (0.16)            (0.16)
    Unrealized gain (loss) on derivative asset, net of tax         0.03                   0.03 
    Gain on sale of West Coast assets, net of tax         (0.10)                  (0.10)
    Loss from discontinuance of crude oil cash flow hedges, net of tax         0.36                   0.36 
    Transaction and severance costs related to West Coast asset sale, net of tax         0.08                   0.08 
    Reversal of deferred tax valuation allowance         (0.31)            0.04               (0.27)
    Remeasurement of deferred income taxes from Pennsylvania state income tax rate deduction         (0.18)            (0.13)            —           (0.31)
    Unrealized (gain) loss on other investments, net of tax                 0.10           0.10 
    Rounding         0.01                 (0.01)          — 
    Fiscal 2022 adjusted operating results per share         3.21           1.11           1.01           0.59           (0.04)          5.88 
    Drivers of adjusted operating results**           
    Upstream Revenues           
    Higher (lower) natural gas production         0.68                   0.68 
    Higher (lower) crude oil production         (0.95)                  (0.95)
    Higher (lower) realized natural gas prices, after hedging         (0.52)                  (0.52)
    Higher (lower) other operating revenues         (0.03)                  (0.03)
    Midstream Revenues           
    Higher (lower) operating revenues           0.02           0.13               0.15 
    Downstream Margins***           
    Impact of usage and weather               (0.01)            (0.01)
    Impact of new rates in Pennsylvania               0.01             0.01 
    Impact of new rates in New York****               (0.13)            (0.13)
    System modernization and improvement tracker revenues               0.04             0.04 
    Regulatory revenue adjustments               0.02             0.02 
    Higher (lower) other operating revenues               0.02             0.02 
    Operating Expenses           
    Lower (higher) lease operating and transportation expenses         0.26                   0.26 
    Lower (higher) operating expenses         0.12           (0.06)          (0.05)          (0.10)          (0.04)          (0.13)
    Lower (higher) property, franchise and other taxes         0.07       0.01             0.08 
    Lower (higher) depreciation / depletion         (0.28)          (0.03)          (0.01)          (0.01)            (0.33)
    Other Income (Expense)           
    (Higher) lower other deductions         0.03           0.04           0.01           0.15           (0.04)          0.19 
    (Higher) lower interest expense         (0.01)          (0.01)          0.01           (0.09)          0.08           (0.02)
    Income Taxes           
    Lower (higher) income tax expense / effective tax rate         (0.04)          —           (0.01)          0.04           —           (0.01)
    All other / rounding         (0.02)          0.02           (0.01)          (0.02)          —           (0.03)
    Fiscal 2023 adjusted operating results per share         2.52           1.09           1.08           0.52           (0.04)          5.17 
    Items impacting comparability:           
    Unrealized gain (loss) on derivative asset, net of tax         (0.01)                  (0.01)
    Unrealized gain (loss) on other investments, net of tax                 0.01           0.01 
    Rounding         0.01                 (0.01)          — 
    Fiscal 2023 GAAP earnings per share$        2.52  $        1.09  $        1.08  $        0.52  $        (0.04) $        5.17 
                
    * Amounts do not reflect intercompany eliminations.
    ** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
    *** Downstream margin defined as operating revenues less purchased gas expense.
    **** Amount is offset by corresponding decrease in other deductions and has no earnings impact for the year ended September 30, 2023.


            
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
            
    (Thousands of Dollars, except per share amounts)       
     Three Months Ended Twelve Months Ended
     September 30, September 30,
     (Unaudited) (Unaudited)
    SUMMARY OF OPERATIONS 2023   2022   2023   2022 
    Operating Revenues:       
    Utility Revenues$        78,865  $        112,252  $        941,779  $        897,916 
    Exploration and Production and Other Revenues         220,348           252,035           958,455           1,010,629 
    Pipeline and Storage and Gathering Revenues         69,735           70,859           273,537           277,501 
              368,948           435,146           2,173,771           2,186,046 
    Operating Expenses:       
    Purchased Gas         (12,865)          22,925           437,595           392,093 
    Operation and Maintenance:       
    Utility         48,354           46,535           205,239           193,058 
    Exploration and Production and Other         37,955           31,554           124,270           191,572 
    Pipeline and Storage and Gathering         39,901           39,138           149,247           136,571 
    Property, Franchise and Other Taxes         20,701           23,089           92,700           101,182 
    Depreciation, Depletion and Amortization         109,599           94,109           409,573           369,790 
              243,645           257,350           1,418,624           1,384,266 
    Gain on Sale of Assets         —           —           —           12,736 
    Operating Income         125,303           177,796           755,147           814,516 
            
    Other Income (Expense):       
    Other Income (Deductions)         5,384           (4,800)          18,138           (1,509)
    Interest Expense on Long-Term Debt         (28,449)          (30,207)          (111,948)          (120,507)
    Other Interest Expense         (4,453)          (3,289)          (19,938)          (9,850)
            
    Income Before Income Taxes         97,785           139,500           641,399           682,650 
            
    Income Tax Expense (Benefit)         24,108           (18,643)          164,533           116,629 
            
    Net Income Available for Common Stock$        73,677  $        158,143  $        476,866  $        566,021 
            
    Earnings Per Common Share       
    Basic$        0.80  $        1.73  $        5.20  $        6.19 
    Diluted$        0.80  $        1.71  $        5.17  $        6.15 
            
    Weighted Average Common Shares:       
    Used in Basic Calculation 91,818,933   91,476,535   91,748,890   91,410,625 
    Used in Diluted Calculation 92,378,675   92,218,581   92,285,918   92,107,066 


     
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)
      
     September 30, September 30,
    (Thousands of Dollars) 2023   2022 
    ASSETS   
    Property, Plant and Equipment$        13,635,303  $        12,551,909 
    Less - Accumulated Depreciation, Depletion and Amortization         6,335,441           5,985,432 
    Net Property, Plant and Equipment         7,299,862           6,566,477 
    Current Assets:   
    Cash and Temporary Cash Investments         55,447           46,048 
    Hedging Collateral Deposits         —           91,670 
    Receivables - Net         160,601           361,626 
    Unbilled Revenue         16,622           30,075 
    Gas Stored Underground         32,509           32,364 
    Materials and Supplies - at average cost         48,989           40,637 
    Unrecovered Purchased Gas Costs         —           99,342 
    Other Current Assets         100,260           59,369 
    Total Current Assets         414,428           761,131 
    Other Assets:   
    Recoverable Future Taxes         69,045           106,247 
    Unamortized Debt Expense         7,240           8,884 
    Other Regulatory Assets         72,138           67,101 
    Deferred Charges         82,416           77,472 
    Other Investments         73,976           95,025 
    Goodwill         5,476           5,476 
    Prepaid Pension and Post-Retirement Benefit Costs         200,301           196,597 
    Fair Value of Derivative Financial Instruments         50,487           9,175 
    Other         4,891           2,677 
    Total Other Assets         565,970           568,654 
    Total Assets$        8,280,260  $        7,896,262 
    CAPITALIZATION AND LIABILITIES   
    Capitalization:   
    Comprehensive Shareholders' Equity   
    Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and   
    Outstanding - 91,819,405 Shares and 91,478,064 Shares, Respectively$        91,819  $        91,478 
    Paid in Capital         1,040,761           1,027,066 
    Earnings Reinvested in the Business         1,885,856           1,587,085 
    Accumulated Other Comprehensive Loss         (55,060)          (625,733)
    Total Comprehensive Shareholders' Equity         2,963,376           2,079,896 
    Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs         2,384,485           2,083,409 
    Total Capitalization         5,347,861           4,163,305 
    Current and Accrued Liabilities:   
    Notes Payable to Banks and Commercial Paper         287,500           60,000 
    Current Portion of Long-Term Debt         —           549,000 
    Accounts Payable         152,193           178,945 
    Amounts Payable to Customers         59,019           419 
    Dividends Payable         45,451           43,452 
    Interest Payable on Long-Term Debt         20,399           17,376 
    Customer Advances         21,003           26,108 
    Customer Security Deposits         28,764           24,283 
    Other Accruals and Current Liabilities         160,974           257,327 
    Fair Value of Derivative Financial Instruments         31,009           785,659 
    Total Current and Accrued Liabilities         806,312           1,942,569 
    Other Liabilities:   
    Deferred Income Taxes         1,124,170           698,229 
    Taxes Refundable to Customers         268,562           362,098 
    Cost of Removal Regulatory Liability         277,694           259,947 
    Other Regulatory Liabilities         165,441           188,803 
    Other Post-Retirement Liabilities         2,915           3,065 
    Asset Retirement Obligations         165,492           161,545 
    Other Liabilities         121,813           116,701 
    Total Other Liabilities         2,126,087           1,790,388 
    Commitments and Contingencies         —           — 
    Total Capitalization and Liabilities$        8,280,260  $        7,896,262 


        
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
     Twelve Months Ended
     September 30,
    (Thousands of Dollars) 2023   2022 
        
    Operating Activities:   
    Net Income Available for Common Stock$        476,866  $        566,021 
    Adjustments to Reconcile Net Income to Net Cash
    Provided by Operating Activities:    		   
    Gain on Sale of Assets         —           (12,736)
    Depreciation, Depletion and Amortization         409,573           369,790 
    Deferred Income Taxes         151,403           104,415 
    Stock-Based Compensation         20,630           19,506 
    Reduction of Other Post-Retirement Regulatory Liability         —           (18,533)
    Other         19,647           31,983 
    Change in:   
    Receivables and Unbilled Revenue         213,579           (168,769)
    Gas Stored Underground and Materials, Supplies and Emission Allowances         (8,406)          3,109 
    Unrecovered Purchased Gas Costs         99,342           (66,214)
    Other Current Assets         (41,077)          291 
    Accounts Payable         (37,095)          11,907 
    Amounts Payable to Customers         58,600           398 
    Customer Advances         (5,105)          8,885 
    Customer Security Deposits         4,481           4,991 
    Other Accruals and Current Liabilities         (67,664)          34,260 
    Other Assets         (26,564)          (58,924)
    Other Liabilities         (31,135)          (17,859)
    Net Cash Provided by Operating Activities$        1,237,075  $        812,521 
        
    Investing Activities:   
    Capital Expenditures$        (1,009,868) $        (811,826)
    Net Proceeds from Sale of Oil and Gas Producing Properties         —           254,439 
    Acquisition of Upstream Assets         (124,758)          — 
    Sale of Fixed Income Mutual Fund Shares in Grantor Trust         10,000           30,000 
    Other         12,279           8,683 
    Net Cash Used in Investing Activities$        (1,112,347) $        (518,704)
        
    Financing Activities:   
    Proceeds from Issuance of Short-Term Note Payable to Bank$        250,000  $        — 
    Repayment of Short-Term Note Payable to Bank         (250,000)          — 
    Net Change in Other Short-Term Notes Payable to Banks and Commercial Paper         227,500           (98,500)
    Reduction of Long-Term Debt         (549,000)          — 
    Net Proceeds From Issuance of Long-Term Debt         297,306           — 
    Dividends Paid on Common Stock         (176,096)          (168,147)
    Net Repurchases of Common Stock         (6,709)          (9,590)
    Net Cash Used in Financing Activities$        (206,999) $        (276,237)
        
    Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash         (82,271)          17,580 
    Cash, Cash Equivalents, and Restricted Cash at Beginning of Period         137,718           120,138 
    Cash, Cash Equivalents, and Restricted Cash at September 30$        55,447  $        137,718 


              
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
              
    SEGMENT OPERATING RESULTS AND STATISTICS
    (UNAUDITED)
              
    UPSTREAM BUSINESS
              
              
     Three Months Ended Twelve Months Ended
    (Thousands of Dollars, except per share amounts)September 30, September 30,
    EXPLORATION AND PRODUCTION SEGMENT 2023   2022  Variance  2023   2022  Variance
    Total Operating Revenues$        220,348  $        252,035  $        (31,687) $        958,455  $        1,010,464  $        (52,009)
    Operating Expenses:         
    Operation and Maintenance:         
    General and Administrative Expense         17,163           15,664           1,499           66,074           79,061           (12,987)
    Lease Operating and Transportation Expense         64,412           62,701           1,711           253,555           283,914           (30,359)
    All Other Operation and Maintenance Expense         2,357           1,957           400           9,327           20,140           (10,813)
    Property, Franchise and Other Taxes         3,775           5,475           (1,700)          17,717           25,364           (7,647)
    Depreciation, Depletion and Amortization         66,394           52,958           13,436           241,142           208,148           32,994 
              154,101           138,755           15,346           587,815           616,627           (28,812)
    Gain on Sale of Assets         —           —           —           —           12,736           (12,736)
    Operating Income         66,247   113,280           (47,033)          370,640   406,573           (35,933)
              
    Other Income (Expense):         
    Non-Service Pension and Post-Retirement Benefit (Costs) Credit         347           (186)          533           1,389           (744)          2,133 
    Interest and Other Income (Deductions)         3,457           (3,080)          6,537           2,359           (2,466)          4,825 
    Interest Expense         (15,268)          (14,474)          (794)          (54,317)          (53,401)          (916)
    Income Before Income Taxes         54,783           95,540           (40,757)          320,071           349,962           (29,891)
    Income Tax Expense (Benefit)         18,011           (20,537)          38,548           87,796           43,898           43,898 
    Net Income$        36,772  $        116,077  $        (79,305) $        232,275  $        306,064  $        (73,789)
    Net Income Per Share (Diluted)$        0.40  $        1.26  $        (0.86) $        2.52  $        3.32  $        (0.80)


              
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
              
    SEGMENT OPERATING RESULTS AND STATISTICS
    (UNAUDITED)
              
    MIDSTREAM BUSINESSES
              
     Three Months Ended Twelve Months Ended
    (Thousands of Dollars, except per share amounts)September 30, September 30,
    PIPELINE AND STORAGE SEGMENT 2023   2022  Variance  2023   2022  Variance
    Revenues from External Customers$        64,846  $        68,836  $        (3,990) $        259,646  $        265,415  $        (5,769)
    Intersegment Revenues         29,192           28,913           279           119,545           111,629           7,916 
    Total Operating Revenues         94,038           97,749           (3,711)          379,191           377,044           2,147 
    Operating Expenses:         
    Purchased Gas         326           592           (266)          1,436           1,890           (454)
    Operation and Maintenance         29,154           28,868           286           106,654           100,117           6,537 
    Property, Franchise and Other Taxes         8,322           8,470           (148)          33,774           34,133           (359)
    Depreciation, Depletion and Amortization         17,953           17,283           670           70,827           67,701           3,126 
              55,755           55,213           542           212,691           203,841           8,850 
              
    Operating Income         38,283           42,536           (4,253)          166,500           173,203           (6,703)
              
    Other Income (Expense):         
    Non-Service Pension and Post-Retirement Benefit Credit         1,330           767           563           5,319           3,069           2,250 
    Interest and Other Income         2,017           1,490           527           6,670           3,820           2,850 
    Interest Expense         (10,796)          (10,929)          133           (43,499)          (42,492)          (1,007)
    Income Before Income Taxes         30,834           33,864           (3,030)          134,990           137,600           (2,610)
    Income Tax Expense         7,480           8,544           (1,064)          34,489           35,043           (554)
    Net Income$        23,354  $        25,320  $        (1,966) $        100,501  $        102,557  $        (2,056)
    Net Income Per Share (Diluted)$        0.25  $        0.27  $        (0.02) $        1.09  $        1.11  $        (0.02)
              
              
     Three Months Ended Twelve Months Ended
     September 30, September 30,
    GATHERING SEGMENT 2023   2022  Variance  2023   2022  Variance
    Revenues from External Customers$        4,889  $        2,023  $        2,866  $        13,891  $        12,086  $        1,805 
    Intersegment Revenues         53,129           52,061           1,068           216,426           202,757           13,669 
    Total Operating Revenues         58,018           54,084           3,934           230,317           214,843           15,474 
    Operating Expenses:         
    Operation and Maintenance         11,123           10,725           398           44,375           38,234           6,141 
    Property, Franchise and Other Taxes         21           24           (3)          60           37           23 
    Depreciation, Depletion and Amortization         9,111           8,656           455           35,725           33,998           1,727 
              20,255           19,405           850           80,160           72,269           7,891 
              
    Operating Income         37,763           34,679           3,084           150,157           142,574           7,583 
              
    Other Income (Expense):         
    Non-Service Pension and Post-Retirement Benefit (Costs) Credit         37           (56)          93           150           (224)          374 
    Interest and Other Income         75           117           (42)          534           198           336 
    Interest Expense         (3,433)          (4,105)          672           (14,989)          (16,488)          1,499 
    Income Before Income Taxes         34,442           30,635           3,807           135,852           126,060           9,792 
    Income Tax Expense (Benefit)         7,925           (589)          8,514           36,128           24,949           11,179 
    Net Income$        26,517  $        31,224  $        (4,707) $        99,724  $        101,111  $        (1,387)
    Net Income Per Share (Diluted)$        0.29  $        0.34  $        (0.05) $        1.08  $        1.10  $        (0.02)


              
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
              
    SEGMENT OPERATING RESULTS AND STATISTICS
    (UNAUDITED)
              
    DOWNSTREAM BUSINESS
              
              
     Three Months Ended Twelve Months Ended
    (Thousands of Dollars, except per share amounts)September 30, September 30,
    UTILITY SEGMENT 2023   2022  Variance  2023   2022  Variance
    Revenues from External Customers$        78,865  $        112,252  $        (33,387) $        941,779  $        897,916  $        43,863 
    Intersegment Revenues         81           60           21           581           305           276 
    Total Operating Revenues         78,946           112,312           (33,366)          942,360           898,221           44,139 
    Operating Expenses:         
    Purchased Gas         14,743           49,692           (34,949)          548,195           497,959           50,236 
    Operation and Maintenance         49,056           47,369           1,687           208,539           196,254           12,285 
    Property, Franchise and Other Taxes         8,454           8,981           (527)          40,624           41,137           (513)
    Depreciation, Depletion and Amortization         16,026           15,167           859           61,450           59,760           1,690 
              88,279           121,209           (32,930)          858,808           795,110           63,698 
              
    Operating Income (Loss)         (9,333)          (8,897)          (436)          83,552           103,111           (19,559)
              
    Other Income (Expense):         
    Non-Service Pension and Post-Retirement Benefit (Costs) Credit         9           (492)          501           4           5,526           (5,522)
    Interest and Other Income         1,437           429           1,008           6,339           1,591           4,748 
    Interest Expense         (8,041)          (7,000)          (1,041)          (34,233)          (24,115)          (10,118)
    Income (Loss) Before Income Taxes         (15,928)          (15,960)          32           55,662           86,113           (30,451)
    Income Tax Expense (Benefit)         (8,749)          (5,108)          (3,641)          7,267           17,165           (9,898)
    Net Income (Loss)$        (7,179) $        (10,852) $        3,673  $        48,395  $        68,948  $        (20,553)
    Net Income (Loss) Per Share (Diluted)$        (0.08) $        (0.12) $        0.04  $        0.52  $        0.75  $        (0.23)


     
    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,
    ALL OTHER 2023   2022  Variance  2023   2022  Variance
    Revenues from External Customers$        —  $        —  $        —  $        —  $        —  $        — 
    Intersegment Revenues         —           —           —           —           6           (6)
    Total Operating Revenues         —           —           —           —           6           (6)
    Operating Expenses:         
    Purchased Gas         —           —           —           —           6           (6)
    Operation and Maintenance         —           —           —           21           5           16 
              —           —           —           21           11           10 
              
    Operating Loss         —           —           —           (21)          (5)          (16)
    Other Income (Expense):         
    Interest and Other Income (Deductions)         (66)          1           (67)          (517)          3           (520)
    Interest Expense         (68)          (4)          (64)          (157)          (4)          (153)
    Loss before Income Taxes         (134)          (3)          (131)          (695)          (6)          (689)
    Income Tax Expense (Benefit)         (33)          (1)          (32)          (164)          3           (167)
    Net Loss$        (101) $        (2) $        (99) $        (531) $        (9) $        (522)
    Net Loss Per Share (Diluted)$        —  $        —  $        —  $        —  $        —  $        — 
          
     Three Months Ended Twelve Months Ended
     September 30, September 30,
    CORPORATE 2023   2022  Variance  2023   2022  Variance
    Revenues from External Customers$        —  $        —  $        —  $        —  $        165  $        (165)
    Intersegment Revenues         932           1,183           (251)          4,388           4,430           (42)
    Total Operating Revenues         932           1,183           (251)          4,388           4,595           (207)
    Operating Expenses:         
    Operation and Maintenance         8,345           4,801           3,544           19,115           14,841           4,274 
    Property, Franchise and Other Taxes         129           139           (10)          525           511           14 
    Depreciation, Depletion and Amortization         115           45           70           429           183           246 
              8,589           4,985           3,604           20,069           15,535           4,534 
              
    Operating Loss         (7,657)          (3,802)          (3,855)          (15,681)          (10,940)          (4,741)
    Other Income (Expense):         
    Non-Service Pension and Post-Retirement Benefit Costs         (354)          (1,017)          663           (1,417)          (4,069)          2,652 
    Interest and Other Income         36,337           33,712           2,625           147,935           126,648           21,287 
    Interest Expense on Long-Term Debt         (28,449)          (30,207)          1,758           (111,948)          (120,507)          8,559 
    Other Interest Expense         (6,089)          (3,262)          (2,827)          (23,370)          (8,211)          (15,159)
    Loss before Income Taxes         (6,212)          (4,576)          (1,636)          (4,481)          (17,079)          12,598 
    Income Tax Benefit         (526)          (952)          426           (983)          (4,429)          3,446 
    Net Loss$        (5,686) $        (3,624) $        (2,062) $        (3,498) $        (12,650) $        9,152 
    Net Loss Per Share (Diluted)$        (0.06) $        (0.04) $        (0.02) $        (0.04) $        (0.13) $        0.09 
              
              
     Three Months Ended Twelve Months Ended
     September 30, September 30,
    INTERSEGMENT ELIMINATIONS 2023   2022  Variance  2023   2022  Variance
    Intersegment Revenues$        (83,334) $        (82,217) $        (1,117) $        (340,940) $        (319,127) $        (21,813)
    Operating Expenses:         
    Purchased Gas         (27,934)          (27,359)          (575)          (112,036)          (107,762)          (4,274)
    Operation and Maintenance         (55,400)          (54,858)          (542)          (228,904)          (211,365)          (17,539)
              (83,334)          (82,217)          (1,117)          (340,940)          (319,127)          (21,813)
    Operating Income         —           —           —           —           —           — 
    Other Income (Expense):         
    Interest and Other Deductions         (39,242)          (36,485)          (2,757)          (150,627)          (134,861)          (15,766)
    Interest Expense         39,242           36,485           2,757           150,627           134,861           15,766 
    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
      2023   2022  (Decrease)  2023   2022  (Decrease)
                
    Capital Expenditures:           
    Exploration and Production(1)$        144,938 (2)$        160,056 (3)$        (15,118) $        737,725 (2)(3)$        565,791 (3)(4)$        171,934 
    Pipeline and Storage         75,109 (2)         37,563 (3)         37,546           141,877 (2)(3)         95,806 (3)(4)         46,071 
    Gathering         47,917 (2)         26,957 (3)         20,960           103,295 (2)(3)         55,546 (3)(4)         47,749 
    Utility         51,246 (2)         40,061 (3)         11,185           139,922 (2)(3)        111,033 (3)(4)         28,889 
    Total Reportable Segments         319,210           264,637           54,573           1,122,819           828,176           294,643 
    All Other         —           —           —           —           —           — 
    Corporate         305           549           (244)          754           1,212           (458)
    Total Capital Expenditures$        319,515  $        265,186  $        54,329  $        1,123,573  $        829,388  $        294,185 

     

    (1)The year ended September 30, 2023 includes $124.8 million related to the acquisition of upstream assets acquired from SWN, as well as $25.0 million related to the acquisition of assets from EXCO and UGI. The acquisition cost for the assets acquired from SWN is reported as a component of Acquisition of Upstream Assets on the Consolidated Statement of Cash Flows.
    (2)Capital expenditures for the quarter and year ended September 30, 2023, include accounts payable and accrued liabilities related to capital expenditures of $43.2 million, $31.8 million, $20.6 million, and $13.6 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 September 30, 2023, since they represent non-cash investing activities at that date.
    (3)Capital expenditures for the year ended September 30, 2023, exclude capital expenditures of $83.0 million, $15.2 million, $10.7 million and $11.4 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2022 and paid during the year ended September 30, 2023. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2022, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2023.
    (4)Capital expenditures for the year ended September 30, 2022, exclude capital expenditures of $47.9 million, $39.4 million, $4.8 million and $10.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2021 and paid during the year ended September 30, 2022. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2021, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at September 30, 2022.
      


    DEGREE DAYS            
              Percent Colder
              (Warmer) Than:
    Three Months Ended September 30,Normal 2023 2022 Normal (1) Last Year (1)
    Buffalo, NY162  61  107          (62.3)         (43.0)
    Erie, PA81  59  94          (27.2)         (37.2)
                 
    Twelve Months Ended September 30,            
    Buffalo, NY6,617  5,717  5,769          (13.6)         (0.9)
    Erie, PA6,104  5,493  5,368          (10.0)         2.3 


    (1)Percents compare actual 2023 degree days to normal degree days and actual 2023 degree days to actual 2022 degree days.
      


    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
                
    EXPLORATION AND PRODUCTION INFORMATION
                
                
     Three Months Ended Twelve Months Ended
     September 30, September 30,
         Increase     Increase
      2023   2022  (Decrease)  2023   2022  (Decrease)
                
    Gas Production/Prices:           
    Production (MMcf)           
    Appalachia         93,709           87,858           5,851           372,271           341,700           30,571 
    West Coast         —           1           (1)          —           1,211           (1,211)
    Total Production         93,709           87,859           5,850           372,271           342,911           29,360 
                
    Average Prices (Per Mcf)           
    Appalachia$        1.99  $        6.16  $        (4.17) $        2.78  $        5.03  $        (2.25)
    West CoastN/M N/M N/M N/M          10.03  N/M
    Weighted Average         1.99           6.16           (4.17)          2.78           5.05           (2.27)
    Weighted Average after Hedging         2.33           2.84           (0.51)          2.55           2.71           (0.16)
                
    Oil Production/Prices:           
    Production (Thousands of Barrels)           
    Appalachia         8           7           1           30           16           14 
    West Coast         —           —           —           —           1,588           (1,588)
    Total Production         8           7           1           30           1,604           (1,574)
                
    Average Prices (Per Barrel)           
    Appalachia$        76.02  $        90.22  $        (14.20) $        75.64  $        97.82  $        (22.18)
    West CoastN/M N/M N/M N/M          94.06  N/M
    Weighted Average         76.02           90.93           (14.91)          75.64           94.10           (18.46)
    Weighted Average after Hedging (1)         76.02           90.86           (14.84)          75.64           70.80           4.84 
                
    Total Production (MMcfe)         93,757           87,901           5,856           372,451           352,535           19,916 
                
    Selected Operating Performance Statistics:           
    General & Administrative Expense per Mcfe (2)$        0.18  $        0.18  $        —  $        0.18  $        0.20  $        (0.02)
    Lease Operating and Transportation Expense per Mcfe (2)(3)$        0.69  $        0.71  $        (0.02) $        0.68  $        0.81  $        (0.13)
    Depreciation, Depletion & Amortization per Mcfe (2)$        0.71  $        0.60  $        0.11  $        0.65  $        0.59  $        0.06 


    N/M Not Meaningful (as a result of the sale of Seneca's West Coast assets in June 2022)
      
    (1)Weighted average oil price after hedging for the twelve months ended September 30, 2022 excludes a loss on discontinuance of crude oil cash flow hedges of $44.6 million.
      
    (2)Refer to page 15 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. General and Administrative Expense per Mcfe for the twelve months ended September 30, 2022 excludes transaction and severance costs related to the California asset sale.
      
    (3)Amounts include transportation expense of $0.55 and $0.58 per Mcfe for the three months ended September 30, 2023 and September 30, 2022, respectively. Amounts include transportation expense of $0.57 and $0.57 per Mcfe for the twelve months ended September 30, 2023 and September 30, 2022, respectively.
      


    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
             
    EXPLORATION AND PRODUCTION INFORMATION
     
    Hedging Summary for Fiscal 2024 Volume   Average Hedge Price
    Gas Swaps        
    NYMEX         134,930,000 MMBTU $ 3.34 / MMBTU
    No Cost Collars         65,280,000 MMBTU $ 3.33 / MMBTU (Floor) / $4.17 / MMBTU (Ceiling)
    Fixed Price Physical Sales         83,196,787 MMBTU $ 2.44 / MMBTU
    Total         283,406,787 MMBTU    
             
    Hedging Summary for Fiscal 2025 Volume   Average Hedge Price
    Gas Swaps        
    NYMEX         88,810,000 MMBTU $ 3.53 / MMBTU
    No Cost Collars         43,960,000 MMBTU $ 3.49 / MMBTU (Floor) / $4.65 / MMBTU (Ceiling)
    Fixed Price Physical Sales         75,047,438 MMBTU $ 2.49 / MMBTU
    Total         207,817,438 MMBTU    
             
    Hedging Summary for Fiscal 2026 Volume   Average Hedge Price
    Gas Swaps        
    NYMEX         38,020,000 MMBTU $ 3.98 / MMBTU
    No Cost Collars         42,720,000 MMBTU $ 3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)
    Fixed Price Physical Sales         66,821,415 MMBTU $ 2.39 / MMBTU
    Total         147,561,415 MMBTU    
             
    Hedging Summary for Fiscal 2027 Volume   Average Hedge Price
    Gas Swaps        
    NYMEX         13,500,000 MMBTU $ 4.25 / MMBTU
    No Cost Collars         3,560,000 MMBTU $ 3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)
    Fixed Price Physical Sales         46,128,777 MMBTU $ 2.39 / MMBTU
    Total         63,188,777 MMBTU    
             
    Hedging Summary for Fiscal 2028 Volume   Average Hedge Price
    Gas Swaps        
    NYMEX         1,000,000 MMBTU $ 4.29 / MMBTU
    Fixed Price Physical Sales         12,208,068 MMBTU $ 2.48 / MMBTU
    Total         13,208,068 MMBTU    
             
    Hedging Summary for Fiscal 2029 Volume   Average Hedge Price
    Fixed Price Physical Sales         788,352 MMBTU $ 2.54 / MMBTU


      
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
      
    EXPLORATION AND PRODUCTION INFORMATION
      
    Reserve Quantity Information
    (Unaudited)
      
      
     Gas MMcf
     U.S.
     Appalachian
     Region
    Proved Developed and Undeveloped Reserves: 
    September 30, 2022        4,170,662 
    Extensions and Discoveries        670,438 
    Revisions of Previous Estimates        32,379 
    Production        (372,271)
    Purchases of Minerals in Place        33,876 
    September 30, 2023        4,535,084 
      
    Proved Developed Reserves: 
    September 30, 2022        3,312,568 
    September 30, 2023        3,550,034 
      
      
     Oil Mbbl
     U.S.
     Appalachian
     Region
    Proved Developed and Undeveloped Reserves: 
    September 30, 2022        250 
    Extensions and Discoveries        — 
    Revisions of Previous Estimates        (4)
    Production        (30)
    September 30, 2023        216 
      
    Proved Developed Reserves: 
    September 30, 2022        250 
    September 30, 2023        216 
      


    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
     2023 2022 (Decrease) 2023 2022 (Decrease)
    Firm Transportation - Affiliated        17,589          16,943          646          126,500          111,157          15,343 
    Firm Transportation - Non-Affiliated        161,750          171,983          (10,233)         689,984          679,260          10,724 
    Interruptible Transportation        168          3,886          (3,718)         2,192          5,612          (3,420)
             179,507          192,812          (13,305)         818,676          796,029          22,647 
                    
    Gathering Volume - (MMcf)               
     Three Months Ended Twelve Months Ended
     September 30, September 30,
           Increase       Increase
     2023 2022 (Decrease) 2023 2022 (Decrease)
    Gathered Volume        117,260          104,707          12,553          453,338          419,332          34,006 
                    
                    
    Utility Throughput - (MMcf)               
     Three Months Ended Twelve Months Ended
     September 30, September 30,
           Increase       Increase
     2023  2022  (Decrease) 2023  2022  (Decrease)
    Retail Sales:               
    Residential Sales        3,765          4,146          (381)         61,401          64,011          (2,610)
    Commercial Sales        530          644          (114)         9,342          9,621          (279)
    Industrial Sales        42          75          (33)         548          541          7 
             4,337          4,865          (528)         71,291          74,173          (2,882)
    Transportation        9,419          9,720          (301)         62,986          65,993          (3,007)
             13,756          14,585          (829)         134,277          140,166          (5,889)
                    


    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 Operating Results, Adjusted EBITDA and free cash flow, which are non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company's ongoing operating results or liquidity and for comparing the Company’s financial performance to other companies. The Company's management uses these non-GAAP financial measures for the same purpose, and for planning and forecasting purposes. The presentation of non-GAAP financial measures is not meant to be a substitute for financial measures in accordance with GAAP.

    Management defines Adjusted Operating Results as reported GAAP earnings before items impacting comparability. The following table reconciles National Fuel's reported GAAP earnings to Adjusted Operating Results for the three and twelve months ended September 30, 2023 and 2022:

     Three Months Ended Twelve Months Ended
     September 30, September 30,
    (in thousands except per share amounts) 2023   2022   2023   2022 
    Reported GAAP Earnings$        73,677  $        158,143  $        476,866  $        566,021 
    Items impacting comparability:       
    Items related to West Coast asset sale:       
    Gain on sale of West Coast assets (E&P)         —           —           —           (12,736)
    Tax impact of gain on sale of West Coast assets         —           —           —           3,225 
    Loss from discontinuance of crude oil cash flow hedges (E&P)         —           —           —           44,632 
    Tax impact of loss from discontinuance of crude oil cash flow hedges         —           —           —           (11,303)
    Transaction and severance costs (E&P)         —           —           —           9,693 
    Tax impact of transaction and severance costs         —           —           —           (2,455)
    Total items impacting comparability related to West Coast asset sale         —           —           —           31,056 
            
    Unrealized (gain) loss on derivative asset (E&P)         (2,803)          4,395           899           4,395 
    Tax impact of unrealized (gain) loss on derivative asset         775           (1,203)          (240)          (1,203)
    Unrealized (gain) loss on other investments (Corporate / All Other)         719           1,532           (913)          11,625 
    Tax impact of unrealized (gain) loss on other investments         (151)          (322)          192           (2,441)
    Reversal of deferred tax valuation allowance         —           (24,850)          —           (24,850)
    Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction         —           (28,406)          —           (28,406)
    Reduction of other post-retirement regulatory liability (Utility)         —           —           —           (18,533)
    Tax impact of reduction of other post-retirement regulatory liability         —           —           —           3,892 
    Adjusted Operating Results$        72,217  $        109,289  $        476,804  $        541,556 
            
    Reported GAAP Earnings Per Share$        0.80  $        1.71  $        5.17  $        6.15 
    Items impacting comparability:       
    Items related to West Coast asset sale:       
    Gain on sale of West Coast assets, net of tax (E&P)         —           —           —           (0.10)
    Loss from discontinuance of crude oil cash flow hedges, net of tax (E&P)         —           —           —           0.36 
    Transaction and severance costs, net of tax (E&P)         —           —           —           0.08 
    Total items impacting comparability related to West Coast asset sale         —           —           —           0.34 
            
    Unrealized (gain) loss on derivative asset, net of tax (E&P)         (0.02)          0.03           0.01           0.03 
    Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)         0.01           0.01           (0.01)          0.10 
    Reversal of deferred tax valuation allowance         —           (0.27)          —           (0.27)
    Remeasurement of deferred income taxes from Pennsylvania state income tax rate reduction         —           (0.31)          —           (0.31)
    Reduction of other post-retirement regulatory liability, net of tax (Utility)         —           —           —           (0.16)
    Rounding         (0.01)          0.02           —           — 
    Adjusted Operating Results Per Share$        0.78  $        1.19  $        5.17  $        5.88 

     

     
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
     
    NON-GAAP FINANCIAL MEASURES (Continued)


    Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, other income and deductions, impairments, and other items reflected in operating income that impact comparability. The following tables reconcile National Fuel's reported GAAP earnings to Adjusted EBITDA for the three and twelve months ended September 30, 2023 and 2022:

     Three Months Ended Twelve Months Ended
     September 30, September 30,
    (in thousands) 2023   2022   2023   2022 
    Reported GAAP Earnings$        73,677  $        158,143  $        476,866  $        566,021 
    Depreciation, Depletion and Amortization         109,599           94,109           409,573           369,790 
    Other (Income) Deductions         (5,384)          4,800           (18,138)          1,509 
    Interest Expense         32,902           33,496           131,886           130,357 
    Income Taxes         24,108           (18,643)          164,533           116,629 
    Gain on Sale of Assets         —           —           —           (12,736)
    Loss from discontinuance of crude oil cash flow hedges (E&P)         —           —           —           44,632 
    Transaction and severance costs related to West Coast asset sale (E&P)         —           —           —           9,693 
    Adjusted EBITDA$        234,902  $        271,905  $        1,164,720  $        1,225,895 
            
    Adjusted EBITDA by Segment       
    Pipeline and Storage Adjusted EBITDA$        56,236  $        59,819  $        237,327  $        240,904 
    Gathering Adjusted EBITDA         46,874           43,335           185,882           176,572 
    Total Midstream Businesses Adjusted EBITDA         103,110           103,154           423,209           417,476 
    Exploration and Production Adjusted EBITDA         132,641           166,238           611,782           656,310 
    Utility Adjusted EBITDA         6,693           6,270           145,002           162,871 
    Corporate and All Other Adjusted EBITDA         (7,542)          (3,757)          (15,273)          (10,762)
    Total Adjusted EBITDA$        234,902  $        271,905  $        1,164,720  $        1,225,895 


     
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    NON-GAAP FINANCIAL MEASURES
    SEGMENT ADJUSTED EBITDA
     
     Three Months Ended Twelve Months Ended
     September 30, September 30,
    (in thousands) 2023   2022   2023   2022 
    Exploration and Production Segment       
    Reported GAAP Earnings$        36,772  $        116,077  $        232,275  $        306,064 
    Depreciation, Depletion and Amortization         66,394           52,958           241,142           208,148 
    Other (Income) Deductions         (3,804)          3,266           (3,748)          3,210 
    Interest Expense         15,268           14,474           54,317           53,401 
    Income Taxes         18,011           (20,537)          87,796           43,898 
    Gain on Sale of West Coast Assets         —           —           —           (12,736)
    Loss from Discontinuance of Crude Oil Cash Flow Hedges         —           —           —           44,632 
    Transaction and Severance Costs related to West Coast Asset Sale         —           —           —           9,693 
    Adjusted EBITDA$        132,641  $        166,238  $        611,782  $        656,310 
            
    Pipeline and Storage Segment       
    Reported GAAP Earnings$        23,354  $        25,320  $        100,501  $        102,557 
    Depreciation, Depletion and Amortization         17,953           17,283           70,827           67,701 
    Other (Income) Deductions         (3,347)          (2,257)          (11,989)          (6,889)
    Interest Expense         10,796           10,929           43,499           42,492 
    Income Taxes         7,480           8,544           34,489           35,043 
    Adjusted EBITDA$        56,236  $        59,819  $        237,327  $        240,904 
            
    Gathering Segment       
    Reported GAAP Earnings$        26,517  $        31,224  $        99,724  $        101,111 
    Depreciation, Depletion and Amortization         9,111           8,656           35,725           33,998 
    Other (Income) Deductions         (112)          (61)          (684)          26 
    Interest Expense         3,433           4,105           14,989           16,488 
    Income Taxes         7,925           (589)          36,128           24,949 
    Adjusted EBITDA$        46,874  $        43,335  $        185,882  $        176,572 
            
    Utility Segment       
    Reported GAAP Earnings$        (7,179) $        (10,852) $        48,395  $        68,948 
    Depreciation, Depletion and Amortization         16,026           15,167           61,450           59,760 
    Other (Income) Deductions         (1,446)          63           (6,343)          (7,117)
    Interest Expense         8,041           7,000           34,233           24,115 
    Income Taxes         (8,749)          (5,108)          7,267           17,165 
    Adjusted EBITDA$        6,693  $        6,270  $        145,002  $        162,871 
            
    Corporate and All Other       
    Reported GAAP Earnings$        (5,787) $        (3,626) $        (4,029) $        (12,659)
    Depreciation, Depletion and Amortization         115           45           429           183 
    Other (Income) Deductions         3,325           3,789           4,626           12,279 
    Interest Expense         (4,636)          (3,012)          (15,152)          (6,139)
    Income Taxes         (559)          (953)          (1,147)          (4,426)
    Adjusted EBITDA$        (7,542) $        (3,757) $        (15,273) $        (10,762)


     
    NATIONAL FUEL GAS COMPANY
    AND SUBSIDIARIES
    NON-GAAP FINANCIAL MEASURES
    FREE CASH FLOW


    Management defines free cash flow as net cash provided by operating activities, less net cash used in investing activities, adjusted for acquisitions and divestitures. The following table reconciles National Fuel's free cash flow to Net Cash Provided by Operating Activities on the Consolidated Statement of Cash Flows for the twelve months ended September 30, 2023 and 2022:

     Twelve Months Ended
     September 30,
    (in thousands) 2023   2022 
        
    Net Cash Provided by Operating Activities$        1,237,075  $        812,521 
        
    Less:   
    Net Cash Used in Investing Activities         1,112,347           518,704 
    Proceeds from Divestitures         —           254,439 
              124,728           39,378 
    Plus:   
    Acquisitions         124,758           — 
    Upstream Acquisitions Included in Capital Expenditures(1)         25,057           — 
        
    Free Cash Flow$        274,543  $        39,378 

     

    (1)$25.0 million related to the acquisition of assets from EXCO and UGI included in Capital Expenditures on the Consolidated Statement of Cash Flows.
      

    Brandon J. Haspett
Investor Relations
716-857-7697

Timothy J. Silverstein
Treasurer
716-857-6987

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