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National Fuel Reports Fourth Quarter and Full Year Fiscal 2022 Earnings

NFG

WILLIAMSVILLE, N.Y., Nov. 03, 2022 (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, 2022.

FISCAL 2022 FOURTH QUARTER SUMMARY

  • GAAP net income of $158.1 million, or $1.71 per share, compared to GAAP net income of $87.0 million, or $0.95 per share, in the prior year, an increase of 80% per share.
  • Adjusted operating results of $109.3 million, or $1.19 per share, an increase of 25%, compared to $0.95 per share, in the prior year (see non-GAAP reconciliation on page 2).
  • Adjusted EBITDA of $271.9 million, an increase of 26%, compared to $215.9 million in the prior year (see non-GAAP reconciliation on page 26).

FISCAL 2022 HIGHLIGHTS

  • GAAP net income of $566.0 million, or $6.15 per share, an increase of 55% per share from the prior year.
  • Adjusted operating results of $541.6 million, or $5.88 per share, an increase of 37% per share from the prior year (see non-GAAP reconciliation on page 2).
  • Adjusted EBITDA of $1.2 billion, an increase of 23% from the prior year (see non-GAAP reconciliation on page 26).
  • E&P segment net production increased by 8% from the prior year, which includes the impact of the divestiture of our California operations.
  • Gathering segment revenues increased by 11% from the prior year.
  • Pipeline & Storage segment revenues increased by 10% from the prior year, primarily driven by the completion of the Company's FM100 project.
  • Utility segment invested $82.6 million in system modernization and reliability, replacing over 150 miles of older vintage mains and services, and bringing 5-year total to over $377 million.
  • Increased shareholder dividend for the 52nd consecutive year to an annual rate of $1.90 per share, an increase of 4.4%, continuing our long history of consecutive dividend increases and our 120th year of uninterrupted dividend payments.
  • Achieved an "A" certification grade under the MiQ Standard for Methane Emissions Performance, the highest available certification level, for 100% of the Company's natural gas production.
  • Continued to enhance sustainability disclosures with the publication of the inaugural Climate Report and the third annual Corporate Responsibility Report.

MANAGEMENT COMMENTS

David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “The fourth quarter was a terrific ending to a very strong fiscal year for National Fuel. Adjusted operating results for the quarter were up more than 25% compared to last year as a result of higher production at Seneca and the tailwind of improved natural gas prices.

“As we enter fiscal 2023, the outlook for National Fuel is excellent. Continued production growth at Seneca, combined with a strong outlook for natural gas prices, should translate to significant free cash flow, which will be used to deleverage the balance sheet, pursue future growth opportunities, and return capital to 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) 2022 2021 2022 2021
Reported GAAP Earnings $ 158,143 $ 86,962 $ 566,021 $ 363,647
Items impacting comparability:
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 )
Unrealized (gain) loss on derivative asset (E&P) 4,395 4,395
Tax impact of unrealized (gain) loss on derivative asset (1,203 ) (1,203 )
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
Unrealized (gain) loss on other investments (Corporate / All Other) 1,532 395 11,625 (181 )
Tax impact of unrealized (gain) loss on other investments (322 ) (83 ) (2,441 ) 38
Impairment of oil and gas properties (E&P) 76,152
Tax impact of impairment of oil and gas properties (20,980 )
Gain on sale of timber properties (Corporate / All Other) (51,066 )
Tax impact of gain on sale of timber properties 14,069
Premium paid on early redemption of debt 15,715
Tax impact of premium paid on early redemption of debt (4,321 )
Adjusted Operating Results $ 109,289 $ 87,274 $ 541,556 $ 393,073
Reported GAAP Earnings Per Share $ 1.71 $ 0.95 $ 6.15 $ 3.97
Items impacting comparability:
Items impacting comparability from West Coast asset sale, net of tax (E&P) (1) 0.34
Unrealized (gain) loss on derivative asset, net of tax (E&P) 0.03 0.03
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 )
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other) 0.01 0.10
Impairment of oil and gas properties, net of tax (E&P) 0.60
Gain on sale of timber properties, net of tax (Corporate / All Other) (0.40 )
Premium paid on early redemption of debt, net of tax 0.12
Rounding 0.02
Adjusted Operating Results Per Share $ 1.19 $ 0.95 $ 5.88 $ 4.29


(1) Refer to non-GAAP reconciliation on page 25 for a separate breakout of items impacting comparability from the West Coast asset sale.

FISCAL 2023 GUIDANCE UPDATE

National Fuel is revising its fiscal 2023 earnings guidance to reflect updated forecast assumptions and projections, including the impact of revised natural gas price expectations since the Company’s preliminary guidance was announced in August 2022. The Company is now projecting that earnings will be within the range of $6.40 to $6.90 per share, an increase of 13% from the Company’s 2022 adjusted operating results at the midpoint of the updated guidance range.

The Company is now assuming that NYMEX natural gas prices will average $6.00 per MMBtu for the first six months of fiscal 2023 (October-March) and $4.75 per MMBtu for the second half of fiscal 2023 (April-September). 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.

Consistent with preliminary guidance, the Exploration and Production segment’s fiscal 2023 net production guidance range of 370 to 390 Bcfe remains unchanged. Seneca currently has firm sales contracts in place for approximately 88% of its projected fiscal 2023 Appalachian production, limiting its exposure to in-basin markets. Approximately 67% of Seneca’s expected Appalachian production is either matched by a financial hedge, including a combination of swaps and no-cost collars, or were entered into at a fixed price.

The Company’s consolidated and individual segment capital expenditures guidance also 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 8.

DISCUSSION OF FOURTH QUARTER RESULTS BY SEGMENT

The following earnings discussion of each operating segment for the quarter ended September 30, 2022 is summarized in a tabular form on pages 9 and 10 of this report (earnings drivers for the fiscal year ended September 30, 2022 are summarized on pages 11 and 12). 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) 2022 2021 Variance
GAAP Earnings $ 116,077 $ 55,703 $ 60,374
Unrealized (gain) loss on derivative asset, net of tax 3,192 3,192
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 $ 74,528 $ 55,703 $ 18,825
Adjusted EBITDA $ 166,238 $ 120,588 $ 45,650

Seneca’s fourth quarter GAAP earnings, which increased $60.4 million versus the prior year, include the impact of several items noted in the table above. In particular, Seneca reversed a valuation allowance of $28.6 million on deferred tax assets related to certain state net operating loss and credit carryforwards as these deferred tax assets are now expected to be realized in the future. Seneca also recorded an income tax benefit of $16.2 million from the remeasurement of deferred state income taxes related to a prospective series of reductions in the Pennsylvania state corporate income tax rate that was signed into law in July 2022. In addition, during the fourth quarter, Seneca recognized an unrealized loss of $4.4 million ($3.2 million after-tax) due to a reduction in the implied fair value of an asset related to contingent consideration in connection with the June 2022 sale of Seneca's California assets.

Excluding these items noted above, Seneca’s earnings increased $18.8 million primarily due to higher realized natural gas prices and higher natural gas production, which were partially offset by the loss of earnings from Seneca's California assets that were sold in June, as well as higher Appalachian operating expenses, higher interest expense and a higher effective income tax rate.

Seneca produced 87.9 Bcfe during the fourth quarter, an increase of 8.3 Bcfe, or 10%, from the prior year. This is a result of an 11.6 Bcf increase in natural gas production primarily due to growth from Seneca's development program in Appalachia. Seneca's crude oil production decreased 545 MBbls versus the prior year due to Seneca's aforementioned sale of its California assets in June 2022.

Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.84 per Mcf, an increase of $0.47 per Mcf from the prior year. This increase was primarily due to higher NYMEX prices and higher spot prices at local sales points in Pennsylvania.

Lease operating and transportation ("LOE") expense was $0.71 per Mcfe, a decrease of $0.14 per Mcfe from the prior year. General and administrative expense was $0.18 per Mcfe, a decrease of $0.03 per Mcfe from the prior year. Depreciation, depletion and amortization ("DD&A") expense was $0.60 per Mcfe, an increase of $0.03 per Mcfe from the prior year.

On an absolute basis, LOE expense decreased $5.3 million primarily due to the impact of the third quarter sale of Seneca's California assets, partly offset by increases in LOE expense from higher transportation and gathering costs in Appalachia as a result of increased production, as well as higher workover and rental expenses in Appalachia. LOE expense includes $52.1 million in intercompany expense for gathering and compression services used to connect Seneca's Appalachian production to sales points along interstate pipelines. The decrease in Seneca's other operating expenses of $3.1 million was also primarily due to the impact of the third quarter sale of Seneca's California assets. DD&A expense increased $7.8 million due to higher natural gas production and a higher per unit DD&A rate, which was driven by an increase in capitalized costs in Seneca's full cost pool.

Interest expense increased $2.5 million due primarily to a higher weighted average interest rate on intercompany short-term borrowings. Excluding the impact of the elimination of the valuation allowance and remeasurement of deferred income taxes from the reduction in the state income tax rate in Pennsylvania, both of which are discussed above, Seneca's effective income tax rate increased. This increase was primarily driven by a reduction to the valuation allowance recorded in the fiscal 2021 fourth quarter.

Proved Reserves Year-End Update

Seneca’s total proved reserves at September 30, 2022 were 4,172 Bcfe, an increase of 319 Bcfe, or 8%, from September 30, 2021. Seneca sold 154 Bcfe of proved reserves (81% of which were oil reserves) with the sale of its California assets, which represented substantially all of Seneca's oil reserves. As a result of the sale, the proved reserves base is now comprised of approximately 100% natural gas. Seneca also sold another 21 Bcfe of proved reserves during fiscal 2022 related to the sale of certain gas assets in Tioga County, Pennsylvania. Seneca’s proved developed reserves at the end of fiscal 2022 were 3,314 Bcfe, representing 79% of total proved reserves, compared to 84% a year ago. In fiscal 2022, Seneca recorded 839 Bcfe of proved reserve extensions and discoveries, and 8 Bcfe of net positive revisions due primarily to certain price-related revisions, improvements in well performance and changes in development plans. Adjusting for sales, Seneca replaced 240% of its fiscal 2022 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) 2022 2021 Variance
GAAP Earnings $ 25,320 $ 21,482 $ 3,838
Adjusted EBITDA $ 59,819 $ 49,131 $ 10,688

The Pipeline and Storage segment’s fourth quarter GAAP earnings increased $3.8 million versus the prior year primarily due to an increase in operating revenues, partially offset by higher operation and maintenance ("O&M") expense, higher DD&A expense and a higher effective income tax rate. The increase in operating revenues of $12.7 million was primarily attributable to higher transportation revenues from Supply Corporation's FM100 Project, which was placed in service in December 2021. O&M expense increased $2.1 million primarily due to an increase in personnel costs and compressor station maintenance costs. The increase in DD&A expense of $1.7 million was primarily attributable to incremental depreciation expense from the FM100 Project. The increase in the Pipeline and Storage segment's effective income tax rate was primarily driven by a reduction in benefits associated with the tax sharing agreement with affiliated companies combined with higher state income taxes due to higher pre-tax earnings.

Gathering Segment

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

Three Months Ended
September 30,
(in thousands) 2022 2021 Variance
GAAP Earnings $ 31,224 $ 18,597 $ 12,627
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 $ 23,107 $ 18,597 $ 4,510
Adjusted EBITDA $ 43,335 $ 37,858 $ 5,477

The Gathering segment’s fourth quarter GAAP earnings increased $12.6 million versus the prior year. Earnings were positively impacted by an $11.9 million income tax benefit recorded due to the remeasurement of deferred income taxes related to the aforementioned reduction in the Pennsylvania corporate income tax rate. Earnings were also impacted by the Gathering segment's recognition of a $3.7 million increase in income tax expense that was recorded as an offset to the reversal of a valuation allowance described above in the Exploration and Production segment due to the Gathering and Exploration and Production segments' subsidiaries filing a combined state tax return. Excluding these items, the Gathering segment's earnings increased $4.5 million. The increase was primarily driven by higher operating revenues, which were partially offset by higher O&M expense. Operating revenues increased $6.7 million, or 14%, primarily driven by a 14.0 Bcf increase in gathered volumes due to an increase in natural gas production from both Seneca and non-affiliated parties. The increase in O&M expense of $1.3 million was primarily due to higher costs for materials and higher compression leasing expenses, which are both primarily attributable to higher throughput, as well as an increase in personnel costs.

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) 2022 2021 Variance
GAAP Earnings $ (10,852 ) $ (5,587 ) $ (5,265 )
Adjusted EBITDA $ 6,270 $ 11,093 $ (4,823 )

The Utility segment’s fourth quarter net loss was $5.3 million higher than the net loss in the prior-year fourth quarter primarily due to higher O&M and interest expense, partially offset by higher customer margin (operating revenues less purchased gas sold) and a decrease in non-service post-retirement benefit costs recorded in other income (deductions). The increase in O&M expense of $6.5 million was primarily attributable to higher personnel costs and higher pipeline integrity expenses. Interest expense increased $1.7 million due primarily to a higher weighted average interest rate on intercompany short-term borrowings. The increase in customer margin was due primarily to the positive impact of adjustments related to certain regulatory rate and cost recovery mechanisms subject to annual reconciliation, partially offset by a reduction in base rates in Pennsylvania as a result of a rate proceeding that concluded in the second quarter whereby the Utility agreed to lower the amount of other post-employment benefit (“OPEB”) expense it recovers in rates. With the elimination of OPEB expenses in rates, there was also a decrease in non-service post-retirement benefit costs recorded in other income (deductions).

Corporate and All Other

The Company’s operations that are included in Corporate and All Other generated a combined net loss of $3.6 million in the current year fourth quarter, which was $0.4 million higher than the combined net loss of $3.2 million in the prior-year fourth quarter. The increase in net loss was primarily driven by a higher 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 Friday, November 4, 2022, at 11 a.m. Eastern Time to discuss this announcement. To pre-register for this call (recommended), please visit https://www.netroadshow.com/events/login?show=d40ff074&confId=42546. After registering, you will receive your access details via email. To join by telephone on the day of the call, dial U.S. toll free 1-844–200–6205 and provide Access Code 879958. The teleconference will be simultaneously webcast online and can be accessed on the NFG Investor Relations website at investor.nationalfuelgas.com. An audio replay of the teleconference call will be available until Friday November 11, 2022. To access the telephone replay, dial U.S. toll free 866-813-9403 and provide Access Code 533110.

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.

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; the Company's ability to successfully integrate acquired assets and achieve expected cost synergies; 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 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 2023. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below.

While the Company expects to record certain adjustments to unrealized gain or loss on a derivative asset and unrealized gain or loss on investments during the fiscal year ending September 30, 2023, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.

Preliminary FY 2023 Guidance Updated FY 2023 Guidance
Consolidated Earnings per Share, excluding items impacting comparability $7.25 to $7.75 $6.40 to $6.90
Consolidated Effective Tax Rate ~ 25.5 - 26% ~ 25.5 - 26%
Capital Expenditures (Millions)
Exploration and Production $525 - $575 $525 - $575
Pipeline and Storage $110 - $130 $110 - $130
Gathering $85 - $105 $85 - $105
Utility $110 - $130 $110 - $130
Consolidated Capital Expenditures $830 - $940 $830 - $940
Exploration & Production Segment Guidance
Commodity Price Assumptions
NYMEX natural gas price (Oct - Mar | Apr - Sep) $7.50 /MMBtu l $5.00 /MMBtu $6.00 /MMBtu l $4.75 /MMBtu
Appalachian basin spot price (Oct - Mar | Apr - Sep) $6.50 /MMBtu l $3.90 /MMBtu $4.95 /MMBtu l $3.55 /MMBtu
Production (Bcfe) 370 to 390 370 to 390
E&P Operating Costs ($/Mcfe)
LOE $0.67 - $0.69 $0.67 - $0.69
G&A $0.17 - $0.19 $0.17 - $0.19
DD&A $0.60 - $0.64 $0.60 - $0.64
Other Business Segment Guidance (Millions)
Gathering Segment Revenues $235 - $250 $230 - $245
Pipeline and Storage Segment Revenues $360 - $380 $360 - $380


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED SEPTEMBER 30, 2022
(Unaudited)
Upstream Midstream Downstream
Exploration & Pipeline & Corporate /
(Thousands of Dollars) Production Storage Gathering Utility All Other Consolidated*
Fourth quarter 2021 GAAP earnings $ 55,703 $ 21,482 $ 18,597 $ (5,587 ) $ (3,233 ) $ 86,962
Items impacting comparability:
Unrealized (gain) loss on other investments 395 395
Tax impact of unrealized (gain) loss on other investments (83 ) (83 )
Fourth quarter 2021 adjusted operating results 55,703 21,482 18,597 (5,587 ) (2,921 ) 87,274
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production 21,670 21,670
Higher (lower) crude oil production (25,805 ) (25,805 )
Higher (lower) realized natural gas prices, after hedging 32,485 32,485
Midstream Revenues
Higher (lower) operating revenues 10,052 5,330 15,382
Downstream Margins***
Impact of usage and weather 507 507
Impact of new rates (465 ) (465 )
Regulatory revenue adjustments 1,108 1,108
Operating Expenses
Lower (higher) lease operating and transportation expenses 4,201 4,201
Lower (higher) operating expenses 2,410 (1,694 ) (1,003 ) (4,960 ) (762 ) (6,009 )
Lower (higher) property, franchise and other taxes 653 653
Lower (higher) depreciation / depletion (6,180 ) (1,309 ) (7,489 )
Other Income (Expense)
(Higher) lower other deductions 1,093 939 (1,386 ) 646
(Higher) lower interest expense (2,000 ) (1,032 ) (1,314 ) 1,934 (2,412 )
Income Taxes
Lower (higher) income tax expense / effective tax rate (10,151 ) (1,844 ) 441 (669 ) 374 (11,849 )
All other / rounding 449 (335 ) (258 ) (411 ) (53 ) (608 )
Fourth quarter 2022 adjusted operating results 74,528 25,320 23,107 (10,852 ) (2,814 ) 109,289
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 GAAP earnings $ 116,077 $ 25,320 $ 31,224 $ (10,852 ) $ (3,626 ) $ 158,143
* 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.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED SEPTEMBER 30, 2022
(Unaudited)
Upstream Midstream Downstream
Exploration & Pipeline & Corporate /
Production Storage Gathering Utility All Other Consolidated*
Fourth quarter 2021 GAAP earnings per share $ 0.61 $ 0.23 $ 0.20 $ (0.06 ) $ (0.03 ) $ 0.95
Items impacting comparability:
Unrealized (gain) loss on other investments, net of tax
Fourth quarter 2021 adjusted operating results per share 0.61 0.23 0.20 (0.06 ) (0.03 ) 0.95
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production 0.24 0.24
Higher (lower) crude oil production (0.28 ) (0.28 )
Higher (lower) realized natural gas prices, after hedging 0.35 0.35
Midstream Revenues
Higher (lower) operating revenues 0.11 0.06 0.17
Downstream Margins***
Impact of usage and weather 0.01 0.01
Impact of new rates (0.01 ) (0.01 )
Regulatory revenue adjustments 0.01 0.01
Operating Expenses
Lower (higher) lease operating and transportation expenses 0.05 0.05
Lower (higher) operating expenses 0.03 (0.02 ) (0.01 ) (0.05 ) (0.01 ) (0.06 )
Lower (higher) property, franchise and other taxes 0.01 0.01
Lower (higher) depreciation / depletion (0.07 ) (0.01 ) (0.08 )
Other Income (Expense)
(Higher) lower other deductions 0.01 0.01 (0.02 )
(Higher) lower interest expense (0.02 ) (0.01 ) (0.01 ) 0.02 (0.02 )
Income Taxes
Lower (higher) income tax expense / effective tax rate (0.11 ) (0.02 ) (0.01 ) (0.14 )
All other / rounding (0.01 ) (0.01 ) (0.01 ) 0.02 (0.01 )
Fourth quarter 2022 adjusted operating results per share 0.81 0.27 0.25 (0.12 ) (0.02 ) 1.19
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 GAAP earnings per share $ 1.26 $ 0.27 $ 0.34 $ (0.12 ) $ (0.04 ) $ 1.71
* 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.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
TWELVE MONTHS ENDED SEPTEMBER 30, 2022
(Unaudited)
Upstream Midstream Downstream
Exploration & Pipeline & Corporate /
(Thousands of Dollars) Production Storage Gathering Utility All Other Consolidated*
Fiscal 2021 GAAP earnings $ 101,916 $ 92,542 $ 80,274 $ 54,335 $ 34,580 $ 363,647
Items impacting comparability:
Impairment of oil and gas properties 76,152 76,152
Tax impact of impairment of oil and gas properties (20,980 ) (20,980 )
Gain on sale of timber properties (51,066 ) (51,066 )
Tax impact of gain on sale of timber properties 14,069 14,069
Premium paid on early redemption of debt 14,772 943 15,715
Tax impact of premium paid on early redemption of debt (4,062 ) (259 ) (4,321 )
Unrealized (gain) loss on other investments (181 ) (181 )
Tax impact of unrealized (gain) loss on other investments 38 38
Fiscal 2021 adjusted operating results 167,798 92,542 80,958 54,335 (2,560 ) 393,073
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production 51,264 51,264
Higher (lower) crude oil production (28,169 ) (28,169 )
Higher (lower) realized natural gas prices, after hedging 126,330 126,330
Higher (lower) realized crude oil prices, after hedging 18,071 18,071
Higher (lower) other operating revenues 5,037 5,037
Midstream Revenues
Higher (lower) operating revenues 25,738 17,047 42,785
Downstream Margins***
Impact of usage and weather 2,887 2,887
Impact of new rates (5,596 ) (5,596 )
System modernization tracker revenues 3,585 3,585
Higher (lower) energy marketing margins 1,287 1,287
Operating Expenses
Lower (higher) lease operating and transportation expenses (13,112 ) (13,112 )
Lower (higher) operating expenses (5,432 ) (7,571 ) (3,181 ) (9,502 ) 995 (24,691 )
Lower (higher) property, franchise and other taxes (2,484 ) (800 ) (3,284 )
Lower (higher) depreciation / depletion (20,268 ) (4,163 ) (1,302 ) (25,733 )
Other Income (Expense)
(Higher) lower other deductions 1,676 9,767 (3,262 ) 8,181
(Higher) lower interest expense 1,176 (1,198 ) (1,992 ) 2,030 16
Income Taxes
Lower (higher) income tax expense / effective tax rate (6,318 ) (2,279 ) (578 ) 574 (2,569 ) (11,170 )
All other / rounding 2 288 50 249 206 795
Fiscal 2022 adjusted operating results 295,571 102,557 92,994 54,307 (3,873 ) 541,556
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 )
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 Cost asset sale 2,455 2,455
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 (11,625 ) (11,625 )
Tax impact of unrealized gain (loss) on other investments 2,441 2,441
Fiscal 2022 GAAP earnings $ 306,064 $ 102,557 $ 101,111 $ 68,948 $ (12,659 ) $ 566,021
* 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.


NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
TWELVE MONTHS ENDED SEPTEMBER 30, 2022
(Unaudited)
Upstream Midstream Downstream
Exploration & Pipeline & Corporate /
Production Storage Gathering Utility All Other Consolidated*
Fiscal 2021 GAAP earnings per share $ 1.11 $ 1.01 $ 0.88 $ 0.59 $ 0.38 $ 3.97
Items impacting comparability:
Impairment of oil and gas properties, net of tax 0.60 0.60
Gain on sale of timber properties, net of tax (0.40 ) (0.40 )
Premium paid on early redemption of debt, net of tax 0.12 0.12
Unrealized (gain) loss on other investments, net of tax
Fiscal 2021 adjusted operating results per share 1.83 1.01 0.88 0.59 (0.02 ) 4.29
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production 0.56 0.56
Higher (lower) crude oil production (0.31 ) (0.31 )
Higher (lower) realized natural gas prices, after hedging 1.37 1.37
Higher (lower) realized crude oil prices, after hedging 0.20 0.20
Higher (lower) other operating revenues 0.05 0.05
Midstream Revenues
Higher (lower) operating revenues 0.28 0.19 0.47
Downstream Margins***
Impact of usage and weather 0.03 0.03
Impact of new rates (0.06 ) (0.06 )
System modernization tracker revenues 0.04 0.04
Higher (lower) energy marketing margins 0.01 0.01
Operating Expenses
Lower (higher) lease operating and transportation expenses (0.14 ) (0.14 )
Lower (higher) operating expenses (0.06 ) (0.08 ) (0.03 ) (0.10 ) 0.01 (0.26 )
Lower (higher) property, franchise and other taxes (0.03 ) (0.01 ) (0.04 )
Lower (higher) depreciation / depletion (0.22 ) (0.05 ) (0.01 ) (0.28 )
Other Income (Expense)
(Higher) lower other deductions 0.02 0.11 (0.04 ) 0.09
(Higher) lower interest expense 0.01 (0.01 ) (0.02 ) 0.02
Income Taxes
Lower (higher) income tax expense / effective tax rate (0.07 ) (0.02 ) (0.01 ) 0.01 (0.03 ) (0.12 )
All other / rounding (0.01 ) (0.01 ) (0.01 ) 0.01 (0.02 )
Fiscal 2022 adjusted operating results per share 3.21 1.11 1.01 0.59 (0.04 ) 5.88
Items impacting comparability:
Reduction of other post-retirement regulatory liability, net of tax 0.16 0.16
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 )
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 (0.10 ) (0.10 )
Rounding (0.01 ) 0.01
Fiscal 2022 GAAP earnings per share $ 3.32 $ 1.11 $ 1.10 $ 0.75 $ (0.13 ) $ 6.15
* 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.


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 2022 2021 2022 2021
Operating Revenues:
Utility and Energy Marketing Revenues $ 112,252 $ 80,302 $ 897,916 $ 667,549
Exploration and Production and Other Revenues 252,035 215,664 1,010,629 837,597
Pipeline and Storage and Gathering Revenues 70,859 60,022 277,501 237,513
435,146 355,988 2,186,046 1,742,659
Operating Expenses:
Purchased Gas 22,925 (5,190 ) 392,093 171,827
Operation and Maintenance:
Utility and Energy Marketing 46,535 40,026 193,058 179,547
Exploration and Production and Other 31,554 46,007 191,572 173,041
Pipeline and Storage and Gathering 39,138 35,747 136,571 123,218
Property, Franchise and Other Taxes 23,089 23,454 101,182 94,713
Depreciation, Depletion and Amortization 94,109 83,671 369,790 335,303
Impairment of Oil and Gas Producing Properties 76,152
257,350 223,715 1,384,266 1,153,801
Gain on Sale of Assets 12,736 51,066
Operating Income 177,796 132,273 814,516 639,924
Other Expense:
Other Income (Deductions) (4,800 ) (160 ) (1,509 ) (15,238 )
Interest Expense on Long-Term Debt (30,207 ) (30,161 ) (120,507 ) (141,457 )
Other Interest Expense (3,289 ) (270 ) (9,850 ) (4,900 )
Income Before Income Taxes 139,500 101,682 682,650 478,329
Income Tax Expense (Benefit) (18,643 ) 14,720 116,629 114,682
Net Income Available for Common Stock $ 158,143 $ 86,962 $ 566,021 $ 363,647
Earnings Per Common Share
Basic $ 1.73 $ 0.95 $ 6.19 $ 3.99
Diluted $ 1.71 $ 0.95 $ 6.15 $ 3.97
Weighted Average Common Shares:
Used in Basic Calculation 91,476,535 91,181,292 91,410,625 91,130,941
Used in Diluted Calculation 92,218,581 91,851,443 92,107,066 91,684,583


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, September 30,
(Thousands of Dollars) 2022 2021
ASSETS
Property, Plant and Equipment $ 12,551,909 $ 13,103,639
Less - Accumulated Depreciation, Depletion and Amortization 5,985,432 6,719,356
Net Property, Plant and Equipment 6,566,477 6,384,283
Current Assets:
Cash and Temporary Cash Investments 46,048 31,528
Hedging Collateral Deposits 91,670 88,610
Receivables - Net 361,626 205,294
Unbilled Revenue 30,075 17,000
Gas Stored Underground 32,364 33,669
Materials, Supplies and Emission Allowances 40,637 53,560
Unrecovered Purchased Gas Costs 99,342 33,128
Other Current Assets 59,369 59,660
Total Current Assets 761,131 522,449
Other Assets:
Recoverable Future Taxes 106,247 121,992
Unamortized Debt Expense 8,884 10,589
Other Regulatory Assets 67,101 60,145
Deferred Charges 77,472 59,939
Other Investments 95,025 149,632
Goodwill 5,476 5,476
Prepaid Pension and Post-Retirement Benefit Costs 196,597 149,151
Fair Value of Derivative Financial Instruments 9,175
Other 2,677 1,169
Total Other Assets 568,654 558,093
Total Assets $ 7,896,262 $ 7,464,825
CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and
Outstanding - 91,478,064 Shares and 91,181,549 Shares, Respectively $ 91,478 $ 91,182
Paid in Capital 1,027,066 1,017,446
Earnings Reinvested in the Business 1,587,085 1,191,175
Accumulated Other Comprehensive Loss (625,733 ) (513,597 )
Total Comprehensive Shareholders' Equity 2,079,896 1,786,206
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs 2,083,409 2,628,687
Total Capitalization 4,163,305 4,414,893
Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper 60,000 158,500
Current Portion of Long-Term Debt 549,000
Accounts Payable 178,945 171,655
Amounts Payable to Customers 419 21
Dividends Payable 43,452 41,487
Interest Payable on Long-Term Debt 17,376 17,376
Customer Advances 26,108 17,223
Customer Security Deposits 24,283 19,292
Other Accruals and Current Liabilities 257,327 194,169
Fair Value of Derivative Financial Instruments 785,659 616,410
Total Current and Accrued Liabilities 1,942,569 1,236,133
Other Liabilities:
Deferred Income Taxes 698,229 660,420
Taxes Refundable to Customers 362,098 354,089
Cost of Removal Regulatory Liability 259,947 245,636
Other Regulatory Liabilities 188,803 200,643
Pension and Other Post-Retirement Liabilities 3,065 7,526
Asset Retirement Obligations 161,545 209,639
Other Liabilities 116,701 135,846
Total Other Liabilities 1,790,388 1,813,799
Commitments and Contingencies
Total Capitalization and Liabilities $ 7,896,262 $ 7,464,825


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Twelve Months Ended
September 30,
(Thousands of Dollars) 2022 2021
Operating Activities:
Net Income Available for Common Stock $ 566,021 $ 363,647
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Gain on Sale of Assets (12,736 ) (51,066 )
Impairment of Oil and Gas Producing Properties 76,152
Depreciation, Depletion and Amortization 369,790 335,303
Deferred Income Taxes 104,415 105,993
Premium Paid on Early Redemption of Debt 15,715
Stock-Based Compensation 19,506 17,065
Reduction of Other Post-Retirement Regulatory Liability (18,533 )
Other 31,983 10,896
Change in:
Receivables and Unbilled Revenue (168,769 ) (61,413 )
Gas Stored Underground and Materials, Supplies and Emission Allowances 3,109 (2,014 )
Unrecovered Purchased Gas Costs (66,214 ) (33,128 )
Other Current Assets 291 (11,972 )
Accounts Payable 11,907 31,352
Amounts Payable to Customers 398 (10,767 )
Customer Advances 8,885 1,904
Customer Security Deposits 4,991 2,093
Other Accruals and Current Liabilities 34,260 34,314
Other Assets (58,924 ) 1,250
Other Liabilities (17,859 ) (33,771 )
Net Cash Provided by Operating Activities $ 812,521 $ 791,553
Investing Activities:
Capital Expenditures $ (811,826 ) $ (751,734 )
Net Proceeds from Sale of Oil and Gas Producing Properties 254,439
Net Proceeds from Sale of Timber Properties 104,582
Sale of Fixed Income Mutual Fund Shares in Grantor Trust 30,000
Other 8,683 13,935
Net Cash Used in Investing Activities $ (518,704 ) $ (633,217 )
Financing Activities:
Changes in Notes Payable to Banks and Commercial Paper $ (98,500 ) $ 128,500
Reduction of Long-Term Debt (515,715 )
Dividends Paid on Common Stock (168,147 ) (163,089 )
Net Proceeds From Issuance of Long-Term Debt 495,267
Net Repurchases of Common Stock (9,590 ) (3,702 )
Net Cash Used in Financing Activities $ (276,237 ) $ (58,739 )
Net Increase in Cash, Cash Equivalents, and Restricted Cash 17,580 99,597
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 120,138 20,541
Cash, Cash Equivalents, and Restricted Cash at September 30 $ 137,718 $ 120,138


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 2022 2021 Variance 2022 2021 Variance
Total Operating Revenues $ 252,035 $ 215,581 $ 36,454 $ 1,010,464 $ 836,697 $ 173,767
Operating Expenses:
Operation and Maintenance:
General and Administrative Expense 15,664 16,957 (1,293 ) 79,061 67,973 11,088
Lease Operating and Transportation Expense 62,701 68,019 (5,318 ) 283,914 267,316 16,598
All Other Operation and Maintenance Expense 1,957 3,715 (1,758 ) 20,140 14,659 5,481
Property, Franchise and Other Taxes 5,475 6,302 (827 ) 25,364 22,220 3,144
Depreciation, Depletion and Amortization 52,958 45,135 7,823 208,148 182,492 25,656
Impairment of Oil and Gas Producing Properties 76,152 (76,152 )
138,755 140,128 (1,373 ) 616,627 630,812 (14,185 )
Gain on Sale of Assets 12,736 12,736
Operating Income 113,280 75,453 37,827 406,573 205,885 200,688
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs (186 ) (289 ) 103 (744 ) (1,148 ) 404
Interest and Other Income (3,080 ) 35 (3,115 ) (2,466 ) 211 (2,677 )
Interest Expense on Long-Term Debt (15,119 ) 15,119
Interest Expense (14,474 ) (11,942 ) (2,532 ) (53,401 ) (54,543 ) 1,142
Income Before Income Taxes 95,540 63,257 32,283 349,962 135,286 214,676
Income Tax Expense (Benefit) (20,537 ) 7,554 (28,091 ) 43,898 33,370 10,528
Net Income $ 116,077 $ 55,703 $ 60,374 $ 306,064 $ 101,916 $ 204,148
Net Income Per Share (Diluted) $ 1.26 $ 0.61 $ 0.65 $ 3.32 $ 1.11 $ 2.21


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 2022 2021 Variance 2022 2021 Variance
Revenues from External Customers $ 68,836 $ 58,515 $ 10,321 $ 265,415 $ 234,397 $ 31,018
Intersegment Revenues 28,913 26,510 2,403 111,629 109,160 2,469
Total Operating Revenues 97,749 85,025 12,724 377,044 343,557 33,487
Operating Expenses:
Purchased Gas 592 764 (172 ) 1,890 983 907
Operation and Maintenance 28,868 26,724 2,144 100,117 90,533 9,584
Property, Franchise and Other Taxes 8,470 8,406 64 34,133 33,120 1,013
Depreciation, Depletion and Amortization 17,283 15,626 1,657 67,701 62,431 5,270
55,213 51,520 3,693 203,841 187,067 16,774
Operating Income 42,536 33,505 9,031 173,203 156,490 16,713
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Credit 767 125 642 3,069 501 2,568
Interest and Other Income 1,490 2,180 (690 ) 3,820 5,339 (1,519 )
Interest Expense (10,929 ) (9,623 ) (1,306 ) (42,492 ) (40,976 ) (1,516 )
Income Before Income Taxes 33,864 26,187 7,677 137,600 121,354 16,246
Income Tax Expense 8,544 4,705 3,839 35,043 28,812 6,231
Net Income $ 25,320 $ 21,482 $ 3,838 $ 102,557 $ 92,542 $ 10,015
Net Income Per Share (Diluted) $ 0.27 $ 0.23 $ 0.04 $ 1.11 $ 1.01 $ 0.10
Three Months Ended Twelve Months Ended
September 30, September 30,
GATHERING SEGMENT 2022 2021 Variance 2022 2021 Variance
Revenues from External Customers $ 2,023 $ 1,507 $ 516 $ 12,086 $ 3,116 $ 8,970
Intersegment Revenues 52,061 45,830 6,231 202,757 190,148 12,609
Total Operating Revenues 54,084 47,337 6,747 214,843 193,264 21,579
Operating Expenses:
Operation and Maintenance 10,725 9,456 1,269 38,234 34,207 4,027
Property, Franchise and Other Taxes 24 23 1 37 52 (15 )
Depreciation, Depletion and Amortization 8,656 8,219 437 33,998 32,350 1,648
19,405 17,698 1,707 72,269 66,609 5,660
Operating Income 34,679 29,639 5,040 142,574 126,655 15,919
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs (56 ) (68 ) 12 (224 ) (271 ) 47
Interest and Other Income 117 6 111 198 259 (61 )
Interest Expense on Long-Term Debt (965 ) 965
Interest Expense (4,105 ) (4,093 ) (12 ) (16,488 ) (16,528 ) 40
Income Before Income Taxes 30,635 25,484 5,151 126,060 109,150 16,910
Income Tax Expense (Benefit) (589 ) 6,887 (7,476 ) 24,949 28,876 (3,927 )
Net Income $ 31,224 $ 18,597 $ 12,627 $ 101,111 $ 80,274 $ 20,837
Net Income Per Share (Diluted) $ 0.34 $ 0.20 $ 0.14 $ 1.10 $ 0.88 $ 0.22


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 2022 2021 Variance 2022 2021 Variance
Revenues from External Customers $ 112,252 $ 80,302 $ 31,950 $ 897,916 $ 666,920 $ 230,996
Intersegment Revenues 60 60 305 331 (26 )
Total Operating Revenues 112,312 80,362 31,950 898,221 667,251 230,970
Operating Expenses:
Purchased Gas 49,692 19,826 29,866 497,959 274,837 223,122
Operation and Maintenance 47,369 40,855 6,514 196,254 182,266 13,988
Property, Franchise and Other Taxes 8,981 8,588 393 41,137 38,769 2,368
Depreciation, Depletion and Amortization 15,167 14,646 521 59,760 57,457 2,303
121,209 83,915 37,294 795,110 553,329 241,781
Operating Income (Loss) (8,897 ) (3,553 ) (5,344 ) 103,111 113,922 (10,811 )
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit (Costs) Credit (492 ) (1,985 ) 1,493 5,526 (26,659 ) 32,185
Interest and Other Income 429 733 (304 ) 1,591 2,874 (1,283 )
Interest Expense (7,000 ) (5,337 ) (1,663 ) (24,115 ) (21,795 ) (2,320 )
Income (Loss) Before Income Taxes (15,960 ) (10,142 ) (5,818 ) 86,113 68,342 17,771
Income Tax Expense (Benefit) (5,108 ) (4,555 ) (553 ) 17,165 14,007 3,158
Net Income (Loss) $ (10,852 ) $ (5,587 ) $ (5,265 ) $ 68,948 $ 54,335 $ 14,613
Net Income (Loss) Per Share (Diluted) $ (0.12 ) $ (0.06 ) $ (0.06 ) $ 0.75 $ 0.59 $ 0.16


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 2022 2021 Variance 2022 2021 Variance
Revenues from External Customers $ $ $ $ $ 1,173 $ (1,173 )
Intersegment Revenues 26 (26 ) 6 49 (43 )
Total Operating Revenues 26 (26 ) 6 1,222 (1,216 )
Operating Expenses:
Purchased Gas 9 (9 ) 6 2,306 (2,300 )
Operation and Maintenance (20 ) 20 5 682 (677 )
Property, Franchise and Other Taxes 47 (47 )
Depreciation, Depletion and Amortization 394 (394 )
(11 ) 11 11 3,429 (3,418 )
Gain on Sale of Assets 51,066 (51,066 )
Operating Income (Loss) 37 (37 ) (5 ) 48,859 (48,864 )
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs (7 ) 7
Interest and Other Income 1 2 (1 ) 3 231 (228 )
Interest Expense (4 ) (4 ) (4 ) (4 )
Income (Loss) before Income Taxes (3 ) 39 (42 ) (6 ) 49,083 (49,089 )
Income Tax Expense (Benefit) (1 ) 10 (11 ) 3 11,438 (11,435 )
Net Income (Loss) $ (2 ) $ 29 $ (31 ) $ (9 ) $ 37,645 $ (37,654 )
Net Income (Loss) Per Share (Diluted) $ $ $ $ $ 0.41 $ (0.41 )
Three Months Ended Twelve Months Ended
September 30, September 30,
CORPORATE 2022 2021 Variance 2022 2021 Variance
Revenues from External Customers $ $ 83 $ (83 ) $ 165 $ 356 $ (191 )
Intersegment Revenues 1,183 1,146 37 4,430 3,864 566
Total Operating Revenues 1,183 1,229 (46 ) 4,595 4,220 375
Operating Expenses:
Operation and Maintenance 4,801 3,857 944 14,841 15,423 (582 )
Property, Franchise and Other Taxes 139 135 4 511 505 6
Depreciation, Depletion and Amortization 45 45 183 179 4
4,985 4,037 948 15,535 16,107 (572 )
Operating Loss (3,802 ) (2,808 ) (994 ) (10,940 ) (11,887 ) 947
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs (1,017 ) (923 ) (94 ) (4,069 ) (3,692 ) (377 )
Interest and Other Income 33,712 31,154 2,558 126,648 138,882 (12,234 )
Interest Expense on Long-Term Debt (30,207 ) (30,161 ) (46 ) (120,507 ) (125,373 ) 4,866
Other Interest Expense (3,262 ) (405 ) (2,857 ) (8,211 ) (2,816 ) (5,395 )
Loss before Income Taxes (4,576 ) (3,143 ) (1,433 ) (17,079 ) (4,886 ) (12,193 )
Income Tax Expense (Benefit) (952 ) 119 (1,071 ) (4,429 ) (1,821 ) (2,608 )
Net Loss $ (3,624 ) $ (3,262 ) $ (362 ) $ (12,650 ) $ (3,065 ) $ (9,585 )
Net Loss Per Share (Diluted) $ (0.04 ) $ (0.03 ) $ (0.01 ) $ (0.13 ) $ (0.03 ) $ (0.10 )
Three Months Ended Twelve Months Ended
September 30, September 30,
INTERSEGMENT ELIMINATIONS 2022 2021 Variance 2022 2021 Variance
Intersegment Revenues $ (82,217 ) $ (73,572 ) $ (8,645 ) $ (319,127 ) $ (303,552 ) $ (15,575 )
Operating Expenses:
Purchased Gas (27,359 ) (25,789 ) (1,570 ) (107,762 ) (106,299 ) (1,463 )
Operation and Maintenance (54,858 ) (47,783 ) (7,075 ) (211,365 ) (197,253 ) (14,112 )
(82,217 ) (73,572 ) (8,645 ) (319,127 ) (303,552 ) (15,575 )
Operating Income
Other Income (Expense):
Interest and Other Deductions (36,485 ) (31,130 ) (5,355 ) (134,861 ) (131,758 ) (3,103 )
Interest Expense 36,485 31,130 5,355 134,861 131,758 3,103
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
2022 2021 (Decrease) 2022 2021 (Decrease)
Capital Expenditures:
Exploration and Production $ 160,056 (1) $ 117,646 (2) $ 42,410 $ 565,791 (1)(2) $ 381,408 (2)(3) $ 184,383
Pipeline and Storage 37,563 (1) 96,760 (2) (59,197 ) 95,806 (1)(2) 252,316 (2)(3) (156,510 )
Gathering 26,957 (1) 9,041 (2) 17,916 55,546 (1)(2) 34,669 (2)(3) 20,877
Utility 40,061 (1) 34,154 (2) 5,907 111,033 (1)(2) 100,845 (2)(3) 10,188
Total Reportable Segments 264,637 257,601 7,036 828,176 769,238 58,938
All Other
Corporate 549 231 318 1,212 450 762
Eliminations 2,341 (2,341 ) 223 (223 )
Total Capital Expenditures $ 265,186 $ 260,173 $ 5,013 $ 829,388 $ 769,911 $ 59,477


(1) Capital expenditures for the quarter and year ended September 30, 2022, include accounts payable and accrued liabilities related to 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 have been excluded from the Consolidated Statement of Cash Flows at September 30, 2022, since they represent non-cash investing activities at that date.
(2) 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.
(3) Capital expenditures for the year ended September 30, 2021, exclude capital expenditures of $45.8 million, $17.3 million, $13.5 million and $10.7 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, 2020 and paid during the year ended September 30, 2021. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2020, 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, 2021.


DEGREE DAYS
Percent Colder
(Warmer) Than:
Three Months Ended September 30, Normal 2022 2021 Normal (1) Last Year (1)
Buffalo, NY 162 107 38 (34.0 ) 181.6
Erie, PA 124 94 33 (24.2 ) 184.8
Twelve Months Ended September 30,
Buffalo, NY 6,617 5,769 5,731 (12.8 ) 0.7
Erie, PA 6,147 5,368 5,221 (12.7 ) 2.8


(1) Percents compare actual 2022 degree days to normal degree days and actual 2022 degree days to actual 2021 degree days.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Three Months Ended Twelve Months Ended
September 30, September 30,
Increase Increase
2022 2021 (Decrease) 2022 2021 (Decrease)
Gas Production/Prices: