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Published: 2022-02-04 00:00:00 ET
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Exhibit 99
exhibit998kimagea15.jpg
6363 Main Street/Williamsville, NY 14221
Release Date:Immediate February 3, 2022Brandon J. Haspett
Investor Relations
716-857-7697		Karen M. Camiolo
Treasurer
716-857-7344

NATIONAL FUEL REPORTS FIRST QUARTER EARNINGS

WILLIAMSVILLE, N.Y.: National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the first quarter of its 2022 fiscal year.

FISCAL 2022 FIRST QUARTER SUMMARY
•GAAP net income of $132.4 million, or $1.44 per share, compared to GAAP net income of $77.8 million, or $0.85 per share, in the prior year.
•Adjusted operating results of $135.9 million, or $1.48 per share, an increase of 40%, compared to $1.06 per share, in the prior year (see non-GAAP reconciliation on page 2).
•Adjusted EBITDA of $298.2 million, an increase of 18%, compared to $251.7 million in the prior year (see non-GAAP reconciliation on page 21).
•E&P segment Adjusted EBITDA of $147.0 million, an increase of 46%, compared to $100.7 million in the prior year.
•E&P segment net production of 85.1 Bcfe, an increase of 5.6 Bcfe, or 7%, higher than both the prior year and Fiscal 2021 fourth quarter.
•Average realized natural gas prices of $2.52 per Mcf, up $0.38 per Mcf from the prior year.
•Average realized oil prices of $64.29 per Bbl, up $14.38 per Bbl from the prior year.
•Gathering segment Adjusted EBITDA of $44.0 million, an increase of 11%, compared to $39.8 million in the prior year.
•Company is revising its fiscal 2022 earnings guidance to a range of $5.20 to $5.50 per share, an increase of $0.10 at the midpoint.


MANAGEMENT COMMENTS

David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “National Fuel had an outstanding start to fiscal 2022, with adjusted operating results increasing 40% from the prior year, primarily driven by strong performance from our Exploration & Production business. We continued to execute on our growth plans by placing the FM100 expansion and modernization project into service in December. This project, which was completed on-time and under budget, provides significant new capacity on our FERC-regulated pipeline system which, along with Transco’s companion Leidy South project, is an important, long-term valuable outlet for the Company’s Appalachian production. Further, the project incorporated best-in-class emissions controls, including the installation of vent gas recovery systems and compressed air pneumatics, maintaining our focus on reducing the methane intensity of our operations.

“Additionally, throughout the quarter, National Fuel continued to make significant progress on its sustainability initiatives, achieving certification of 100% of our Appalachian production under Equitable Origin’s EO100TM Standard for Responsible Energy Development. This accreditation along with our ongoing investments to achieve our emission reduction targets, positions National Fuel to differentiate its responsibly sourced production in the marketplace, including all of our volumes transported on the Leidy South project.

“As we look forward, National Fuel’s integrated businesses are well-positioned for the future. Our unique mix of assets and the strength of our balance sheet enable us to deliver growth, while enhancing our ability to generate long-term free cash flow.”



Page 2.

RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS
Three Months Ended
 December 31,
(in thousands except per share amounts)20212020
Reported GAAP Earnings$132,392 $77,774 
Items impacting comparability:
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 
Unrealized (gain) loss on other investments (Corporate / All Other)
4,490 1,298 
Tax impact of unrealized (gain) loss on other investments
(943)(272)
Adjusted Operating Results$135,939 $96,975 
Reported GAAP Earnings Per Share$1.44 $0.85 
Items impacting comparability:
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)
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)
0.04 0.01 
Adjusted Operating Results Per Share$1.48 $1.06 


FISCAL 2022 GUIDANCE UPDATE

National Fuel is revising its fiscal 2022 earnings guidance range to reflect the results of the first quarter, along with updated assumptions for the balance of the year. The Company is now projecting that earnings, excluding items impacting comparability, will be within the range of $5.20 to $5.50 per share, an increase of $0.10 per share from the midpoint of the Company’s prior guidance range. The increase reflects changes in the Exploration and Production segment, including higher expected oil price realizations and lower expected cash unit costs, partially offset by higher operation and maintenance expense at the Company’s regulated businesses.

The Company is now assuming that NYMEX natural gas prices will average $4.50 per MMBtu for the remainder of fiscal 2022, an average increase of $0.17 per MMBtu from the $4.33 per MMBtu average assumed in the previous guidance over the remaining nine months of the fiscal year. Additionally, the Company is now projecting that WTI oil prices will average $80.00 per Bbl in fiscal 2022, a $5.00 increase from the $75.00 per Bbl assumed in the previous guidance. For guidance purposes, the Company’s updated projections approximate the current NYMEX forward markets for natural gas and oil and consider the impact of local sales point differentials and new physical firm sales, transportation, and financial hedge contracts.

The Exploration and Production segment’s fiscal 2022 net production is now expected to be in the range of 340 to 365 Bcfe, an increase of 2.5 Bcfe at the midpoint of the Company’s prior guidance. Seneca currently has firm sales contracts in place for approximately 92% of its projected remaining fiscal 2022 Appalachian production, limiting its exposure to in-basin markets. Approximately 79% of Seneca’s expected remaining Appalachian production is either matched by a financial hedge or were entered into at a fixed price.

The Company’s consolidated capital expenditures are now expected to be in the range of $665 to $810 million, a $37.5 million increase from the midpoint of previous guidance. This increase is relatively balanced between two items related to the Exploration and Production segment. First, the new guidance range incorporates moderately higher costs per well due to inflationary pressures. Second, additional growth capital is being incorporated, including highly economic enhanced completion designs expected to increase well productivity and more frequent use of a top-hole rig. This activity is expected to accelerate production and increase free cash flow generation beginning in fiscal 2023. The Company has added incremental long-term firm sales contracts to bolster its already strong marketing portfolio, mitigating price-related risk of this incremental production.

The Company's other guidance assumptions remain largely unchanged from the previous guidance. Additional details on the Company's updated forecast assumptions and business segment guidance for fiscal 2022 are outlined in the table on page 7.
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DISCUSSION OF FIRST QUARTER RESULTS BY SEGMENT

The following earnings discussion of each operating segment for the quarter ended December 31, 2021 is summarized in a tabular form on pages 8 and 9 of this report. 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 natural gas and oil reserves, primarily in Pennsylvania and California.
Three Months Ended
December 31,
(in thousands)20212020Variance
GAAP Earnings$62,369 $(29,623)$91,992 
Impairment of oil and gas properties, net of tax
— 55,172 (55,172)
Adjusted Operating Results$62,369 $25,549 $36,820 
Adjusted EBITDA$146,999 $100,744 $46,255 

Seneca’s first quarter GAAP earnings increased $92.0 million versus the prior year, primarily due to the prior-year first quarter impact of a non-cash ceiling test impairment charge of $55.2 million (after-tax). Excluding this item, Seneca’s first quarter earnings increased $36.8 million primarily due to higher natural gas production and higher realized natural gas and crude oil prices, as well as lower interest expense, partially offset by higher operating expenses.

Seneca produced 85.1 Bcfe during the first quarter, an increase of 5.6 Bcfe, or 7%, from the prior year. The improvement was due to a 5.7 Bcf increase in natural gas production, primarily due to production growth from Seneca's two-rig development program on its core acreage positions in Appalachia. Approximately 4.9 Bcf of the natural gas production increase came from the Western Development Area ("WDA") with the remainder attributable to Seneca’s Eastern Development Area ("EDA"). Seneca's crude oil production in California decreased 15 MBbls, or 3%, versus the prior year due to natural production declines.

Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.52 per Mcf, an increase of $0.38 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. Seneca's average realized oil price, after the impact of hedging, was $64.29 per Bbl, an increase of $14.38 per Bbl compared to the prior year.

Lease operating and transportation (“LOE”) expense increased $3.6 million primarily due to higher transportation costs in Appalachia related to Seneca's increased production, as well as higher steam fuel costs in California that were a result of higher natural gas prices. LOE expense includes $48.2 million in intercompany expense for gathering and compression services used to connect Seneca’s Appalachian production to sales points along interstate pipelines, which is an increase of $1.5 million from the prior-year first quarter. Depreciation, depletion and amortization ("DD&A") expense increased $4.2 million due largely to higher natural gas production. Other taxes increased $1.3 million primarily due to a higher Impact Fee in Pennsylvania, resulting from increased per well fees caused by higher NYMEX natural gas prices for calendar 2021. Impact Fees are variable fees that move based on calendar year NYMEX prices.

Interest expense decreased $3.4 million due primarily to a decrease in outstanding principal balances associated with Seneca's long-term intercompany borrowings coupled with lower weighted average interest rates as a result of the Company's issuance of a 2.95% coupon 10-year note in February 2021, which replaced a 4.9% coupon 10-year note that was retired in March 2021.
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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
December 31,
(in thousands)20212020Variance
GAAP Earnings$25,168 $24,183 $985 
Adjusted EBITDA$57,150 $58,134 $(984)

The Pipeline and Storage segment’s first quarter GAAP earnings increased $1.0 million versus the prior year primarily due to higher operating revenues and an increase in other income, partially offset by higher operation and maintenance ("O&M") expense. The increase in operating revenues of $0.6 million was primarily due to new demand charges for transportation service from Supply Corporation's FM100 Project, which was placed in service in December 2021, partially offset by a decrease in transportation revenue from miscellaneous contract revisions. The increase in other income of $1.2 million was primarily due to an increase in allowance for funds used during construction (AFUDC) related to the construction of the FM100 Project. O&M expense increased $1.0 million primarily due to power costs related to Empire's electric motor drive compressor station, as well as higher personnel costs. Power costs related to the electric motor drive compressor station are offset by an equal amount of revenue through a surcharge mechanism.

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
December 31,
(in thousands)20212020Variance
GAAP Earnings$23,137 $20,550 $2,587 
Adjusted EBITDA$44,032 $39,793 $4,239 

The Gathering segment’s first quarter GAAP earnings increased $2.6 million versus the prior year. The earnings increase was primarily driven by higher operating revenues, which was partially offset by higher O&M expense and a modest increase in DD&A expense. Operating revenues increased $5.2 million, or 11%, primarily driven by a 12.7 Bcf increase in gathered volume due to an increase in non-affiliated natural gas production in Appalachia and, to a lesser extent, an increase in Seneca's gross natural gas production in Appalachia. The increase in O&M expense of $1.0 million was primarily due to higher personnel costs, higher fuel costs, as well as higher compressor station operating and preventative maintenance activity during the quarter. The increase in DD&A expense of $0.5 million was primarily attributable to higher average depreciable plant in service compared to the prior year.


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Page 5.

Downstream Businesses

Utility Segment

The Utility segment operations are carried out by National Fuel Gas Distribution Corporation (“Distribution”), which sells or transports natural gas to customers located in western New York and northwestern Pennsylvania.
Three Months Ended
December 31,
(in thousands)20212020Variance
GAAP Earnings$22,130 $23,037 $(907)
Adjusted EBITDA$52,028 $56,968 $(4,940)

The Utility segment’s first quarter GAAP earnings decreased $0.9 million versus the prior year primarily due to lower customer margin (operating revenues less purchased gas sold), higher O&M expense and higher DD&A expense, partially offset by a decrease in other deductions and a lower effective income tax rate. The decrease in customer margin was due primarily to a decrease in base rates that reflects the elimination of other post-employment benefit (“OPEB”) expenses from customer rates in Distribution’s Pennsylvania service territory in accordance with a regulatory proceeding that became effective October 1, 2021, combined with the impact of adjustments related to certain regulatory rate and cost recovery mechanisms subject to annual reconciliation. These items were partially offset by higher revenues from the Company's system modernization tracking mechanism in its New York service territory.

O&M expense increased $2.2 million primarily due to higher personnel costs and an increase in vehicle fuel costs, partially offset by lower accruals for the allowance for uncollectible accounts, which were higher in the prior-year first quarter as a result of the economic backdrop brought on by COVID-19. The $0.8 million increase in DD&A expense was primarily attributable to higher average depreciable plant in service compared to the prior year. The decrease in other deductions of $2.1 million reflects the aforementioned elimination of OPEB expenses from customer rates in Distribution's Pennsylvania service territory that became effective October 1, 2021. The reduction in the Utility segment's effective income tax rate was due primarily to differences in permanent book and tax deductions related to stock compensation activity and a reduction in current state income taxes related to OPEB activity.

Corporate and All Other

The Company’s operations that are included in Corporate and All Other generated a combined net loss of $0.4 million in the current year first quarter, which was a $40.0 million decrease over combined earnings of $39.6 million generated in the prior-year first quarter. The decrease was primarily driven by the prior-year first quarter impact of a gain recognized on the sale of the Company's timber properties of $37.0 million (after-tax).


EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, February 4, 2022, at 11 a.m. Eastern Time to discuss this announcement. Pre-registration is required to access the teleconference by phone in a listen-only mode by following this link: http://www.directeventreg.com/registration/event/8375065. To access the webcast, visit the Events Calendar under the News & Events page on the NFG Investor Relations website at investor.nationalfuelgas.com. A replay of the conference call will be available approximately two hours following the teleconference at the same website link and by phone at 855-859-2056 or 800-585-8367 using conference ID number “8375065”. Both the webcast and conference call replay will be available until the close of business on Friday, February 11, 2022.

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
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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; the length and severity of the ongoing COVID-19 pandemic, including its impacts across our businesses on demand, operations, global supply chains and liquidity; changes in economic conditions, including inflationary pressures 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 or oil; 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 and oil reserves; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, including disruptions due to the COVID-19 pandemic, 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 or oil sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; 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 and oil reserves, including among others geology, lease availability, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; 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 or oil 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; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; changes in demographic patterns and weather conditions; changes in the availability, price or accounting treatment of derivative financial instruments; 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; 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.
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yes
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

GUIDANCE SUMMARY

As discussed on page 2, the Company is revising its earnings guidance for fiscal 2022. Additional details on the Company's forecast assumptions and business segment guidance are outlined in the table below.

The revised earnings guidance range does not include the impact of an after-tax unrealized loss on other investments, which reduced earnings by $0.04 per share, and impacted the comparability of earnings during the quarter ended December 31, 2021. While the Company expects to record certain adjustments to unrealized gain or loss on investments during the nine months ending September 30, 2022, 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.
Updated FY 2022 GuidancePrevious FY 2022 Guidance
Consolidated Earnings per Share, excluding items impacting comparability
$5.20 to $5.50$5.05 to $5.45
Consolidated Effective Tax Rate~ 25-26%~ 25-26%
Capital Expenditures (Millions)
    Exploration and Production$425 - $500$400 - $450
    Pipeline and Storage$100 - $150$100 - $150
    Gathering$50 - $60$50 - $60
    Utility$90 - $100$90 - $100
    Consolidated Capital Expenditures$665 - $810$640 - $760
Exploration & Production Segment Guidance*
    Commodity Price Assumptions
    NYMEX natural gas price (Oct - Mar | Apr - Sep)
$4.50 /MMBtu
$5.50 /MMBtu | $3.75 /MMBtu
    Appalachian basin spot price (Oct - Mar | Apr - Sep)
$3.65 /MMBtu
$4.80 /MMBtu | $2.75 /MMBtu
    NYMEX (WTI) crude oil price$80.00 /Bbl$75.00 /Bbl
    California oil price premium (% of WTI)97%97%
    Production (Bcfe)340 to 365335 to 365
    E&P Operating Costs ($/Mcfe)
    LOE$0.81 - $0.84$0.83 - $0.86
    G&A $0.19 - $0.21$0.19 - $0.21
    DD&A$0.59 - $0.62$0.59 - $0.62
Other Business Segment Guidance (Millions)
    Gathering Segment Revenues$200 - $225$200 - $225
    Pipeline and Storage Segment Revenues $360 - $380$360 - $380

* Commodity price assumptions are for the remaining 9 months of the fiscal year. Previous guidance included separate pricing assumptions for October - March and April - September.











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NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED DECEMBER 31, 2021
(Unaudited)
UpstreamMidstreamDownstream
Exploration &Pipeline &Corporate /
(Thousands of Dollars)ProductionStorageGatheringUtilityAll OtherConsolidated*
First quarter 2021 GAAP earnings$(29,623)$24,183 $20,550 $23,037 $39,627 $77,774 
Items impacting comparability:
Impairment of oil and gas properties76,152 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 properties14,069 14,069 
Unrealized (gain) loss on other investments1,298 1,298 
Tax impact of unrealized (gain) loss on other investments
(272)(272)
First quarter 2021 adjusted operating results25,549 24,183 20,550 23,037 3,656 96,975 
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production9,594 9,594 
Higher (lower) crude oil production(615)(615)
Higher (lower) realized natural gas prices, after hedging24,610 24,610 
Higher (lower) realized crude oil prices, after hedging6,223 6,223 
Higher (lower) other operating revenues1,904 1,904 
Midstream and All Other Revenues
Higher (lower) operating revenues463 4,121 4,584 
Downstream Margins***
Impact of new rates(1,785)(1,785)
System modernization tracker revenues781 781 
Regulatory revenue adjustments(903)(903)
Higher (lower) energy marketing margins1,345 1,345 
Operating Expenses
Lower (higher) lease operating and transportation expenses(2,808)(2,808)
Lower (higher) operating expenses(1,347)(789)(778)(1,432)(4,346)
Lower (higher) property, franchise and other taxes(1,018)(1,018)
Lower (higher) depreciation / depletion(3,297)(263)(385)(661)(4,606)
Other Income (Expense)
(Higher) lower other deductions1,160 1,695 873 3,728 
(Higher) lower interest expense2,653 473 (777)2,349 
Income Taxes
Lower (higher) income tax expense / effective tax rate
873 393 (195)2,019 (2,426)664 
All other / rounding48 (452)(176)(621)464 (737)
First quarter 2022 adjusted operating results62,369 25,168 23,137 22,130 3,135 135,939 
Items impacting comparability:
Unrealized gain (loss) on other investments
(4,490)(4,490)
Tax impact of unrealized gain (loss) on other investments
943 943 
First quarter 2022 GAAP earnings$62,369 $25,168 $23,137 $22,130 $(412)$132,392 
* 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.



Page 9.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED DECEMBER 31, 2021
(Unaudited)
UpstreamMidstreamDownstream
Exploration &Pipeline &Corporate /
ProductionStorageGatheringUtilityAll OtherConsolidated*
First quarter 2021 GAAP earnings per share$(0.32)$0.26 $0.22 $0.25 $0.44 $0.85 
Items impacting comparability:
Impairment of oil and gas properties, net of tax0.60 0.60 
Gain on sale of timber properties, net of tax(0.40)(0.40)
Unrealized (gain) loss on other investments, net of tax0.01 0.01 
First quarter 2021 adjusted operating results per share0.28 0.26 0.22 0.25 0.05 1.06 
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production0.10 0.10 
Higher (lower) crude oil production(0.01)(0.01)
Higher (lower) realized natural gas prices, after hedging
0.27 0.27 
Higher (lower) realized crude oil prices, after hedging0.07 0.07 
Higher (lower) other operating revenues0.02 0.02 
Midstream and All Other Revenues
Higher (lower) operating revenues
0.01 0.04 0.05 
Downstream Margins***
Impact of new rates(0.02)(0.02)
System modernization tracker revenues0.01 0.01 
Regulatory revenue adjustments(0.01)(0.01)
Higher (lower) energy marketing margins0.01 0.01 
Operating Expenses
Lower (higher) lease operating and transportation expenses
(0.03)(0.03)
Lower (higher) operating expenses(0.01)(0.01)(0.01)(0.02)(0.05)
Lower (higher) property, franchise and other taxes(0.01)(0.01)
Lower (higher) depreciation / depletion(0.04)— — (0.01)(0.05)
Other Income (Expense)
(Higher) lower other deductions0.01 0.02 0.01 0.04 
(Higher) lower interest expense0.03 0.01 (0.01)0.03 
Income Taxes
Lower (higher) income tax expense / effective tax rate
0.01 — — 0.02 (0.03)— 
All other / rounding— (0.01)— — 0.01 — 
First quarter 2022 adjusted operating results per share0.68 0.27 0.25 0.24 0.04 1.48 
Items impacting comparability:
Unrealized gain (loss) on other investments, net of tax
(0.04)(0.04)
First quarter 2022 GAAP earnings per share$0.68 $0.27 $0.25 $0.24 $— $1.44 
* 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.











Page 10.


NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
(Thousands of Dollars, except per share amounts)
Three Months Ended
December 31,
(Unaudited)
SUMMARY OF OPERATIONS20212020
Operating Revenues:
Utility and Energy Marketing Revenues$236,684 $189,466 
Exploration and Production and Other Revenues244,281 192,035 
Pipeline and Storage and Gathering Revenues65,592 59,659 
546,557 441,160 
Operating Expenses:
Purchased Gas101,628 51,620 
Operation and Maintenance:
      Utility and Energy Marketing46,644 44,886 
      Exploration and Production and Other45,619 42,027 
      Pipeline and Storage and Gathering29,928 28,098 
Property, Franchise and Other Taxes24,501 22,781 
Depreciation, Depletion and Amortization88,578 83,120 
Impairment of Oil and Gas Producing Properties— 76,152 
336,898 348,684 
Gain on Sale of Timber Properties— 51,066 
Operating Income209,659 143,542 
Other Income (Expense):
Other Income (Deductions)(1,079)(2,176)
Interest Expense on Long-Term Debt(30,130)(32,256)
Other Interest Expense(1,161)(1,919)
Income Before Income Taxes177,289 107,191 
Income Tax Expense44,897 29,417 
Net Income Available for Common Stock$132,392 $77,774 
Earnings Per Common Share
Basic$1.45 $0.85 
Diluted$1.44 $0.85 
Weighted Average Common Shares:
Used in Basic Calculation91,266,30091,007,657
Used in Diluted Calculation92,032,77591,508,259









Page 11.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31,September 30,
(Thousands of Dollars)20212021
ASSETS
Property, Plant and Equipment$13,293,191 $13,103,639 
Less - Accumulated Depreciation, Depletion and Amortization6,802,436 6,719,356 
Net Property, Plant and Equipment
6,490,755 6,384,283 
Current Assets:
Cash and Temporary Cash Investments79,065 31,528 
Hedging Collateral Deposits— 88,610 
Receivables - Net264,255 205,294 
Unbilled Revenue56,836 17,000 
Gas Stored Underground22,767 33,669 
Materials, Supplies and Emission Allowances47,351 53,560 
Unrecovered Purchased Gas Costs32,602 33,128 
Other Current Assets64,314 59,660 
Total Current Assets
567,190 522,449 
Other Assets:
Recoverable Future Taxes124,439 121,992 
Unamortized Debt Expense10,162 10,589 
Other Regulatory Assets57,178 60,145 
Deferred Charges69,981 59,939 
Other Investments106,483 149,632 
Goodwill5,476 5,476 
Prepaid Pension and Post-Retirement Benefit Costs158,009 149,151 
Other— 1,169 
Total Other Assets
531,728 558,093 
Total Assets$7,589,673 $7,464,825 
CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and
Outstanding - 91,436,837 Shares and 91,181,549 Shares, Respectively
$91,437 $91,182 
Paid in Capital1,013,821 1,017,446 
Earnings Reinvested in the Business1,281,963 1,191,175 
Accumulated Other Comprehensive Loss(277,026)(513,597)
Total Comprehensive Shareholders' Equity2,110,195 1,786,206 
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs2,629,602 2,628,687 
Total Capitalization
4,739,797 4,414,893 
Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper166,000 158,500 
Accounts Payable129,934 171,655 
Amounts Payable to Customers36 21 
Dividends Payable41,604 41,487 
Interest Payable on Long-Term Debt45,017 17,376 
Customer Advances14,620 17,223 
Customer Security Deposits20,273 19,292 
Other Accruals and Current Liabilities187,965 194,169 
Fair Value of Derivative Financial Instruments290,690 616,410 
Total Current and Accrued Liabilities
896,139 1,236,133 
Other Liabilities:
Deferred Income Taxes799,599 660,420 
Taxes Refundable to Customers350,628 354,089 
Cost of Removal Regulatory Liability249,208 245,636 
Other Regulatory Liabilities204,476 200,643 
Pension and Other Post-Retirement Liabilities4,775 7,526 
Asset Retirement Obligations208,128 209,639 
Other Liabilities136,923 135,846 
Total Other Liabilities1,953,737 1,813,799 
Commitments and Contingencies— — 
Total Capitalization and Liabilities$7,589,673 $7,464,825 



Page 12.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
December 31,
(Thousands of Dollars)20212020
Operating Activities:
Net Income Available for Common Stock$132,392 $77,774 
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
  
Gain on Sale of Timber Properties— (51,066)
Impairment of Oil and Gas Producing Properties— 76,152 
Depreciation, Depletion and Amortization88,578 83,120 
Deferred Income Taxes44,122 26,591 
Stock-Based Compensation5,487 3,933 
Other4,675 2,887 
Change in:  
Receivables and Unbilled Revenue(98,688)(63,606)
Gas Stored Underground and Materials, Supplies and Emission Allowances17,111 13,873 
Unrecovered Purchased Gas Costs526 (367)
Other Current Assets(4,654)(251)
Accounts Payable(10,888)(541)
Amounts Payable to Customers15 (4,965)
Customer Advances(2,603)713 
Customer Security Deposits981 424 
Other Accruals and Current Liabilities5,044 27,615 
Other Assets(6,838)10,066 
Other Liabilities(3,777)2,391 
Net Cash Provided by Operating Activities$171,483 $204,743 
Investing Activities:
Capital Expenditures$(213,491)$(183,301)
Net Proceeds from Sale of Timber Properties— 104,582 
Sale of Fixed Income Mutual Fund Shares in Grantor Trust30,000 — 
Other13,781 11,849 
Net Cash Used in Investing Activities$(169,710)$(66,870)
Financing Activities:
Changes in Notes Payable to Banks and Commercial Paper$7,500 $(5,000)
Dividends Paid on Common Stock(41,487)(40,475)
Net Repurchases of Common Stock(8,859)(3,526)
Net Cash Used in Financing Activities$(42,846)$(49,001)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash(41,073)88,872 
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period120,138 20,541 
Cash, Cash Equivalents, and Restricted Cash at December 31$79,065 $109,413 












Page 13.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
UPSTREAM BUSINESS
Three Months Ended
(Thousands of Dollars, except per share amounts)December 31,
EXPLORATION AND PRODUCTION SEGMENT20212020Variance
Total Operating Revenues$244,198 $191,395 $52,803 
Operating Expenses:
Operation and Maintenance:
General and Administrative Expense17,756 16,953 803 
Lease Operating and Transportation Expense69,136 65,581 3,555 
All Other Operation and Maintenance Expense4,573 3,671 902 
Property, Franchise and Other Taxes5,734 4,446 1,288 
Depreciation, Depletion and Amortization49,506 45,332 4,174 
Impairment of Oil and Gas Producing Properties— 76,152 (76,152)
146,705 212,135 (65,430)
Operating Income (Loss)97,493 (20,740)118,233 
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs(186)(285)99 
Interest and Other Income56 91 (35)
Interest Expense(12,132)(15,490)3,358 
Income (Loss) Before Income Taxes85,231 (36,424)121,655 
Income Tax Expense (Benefit)22,862 (6,801)29,663 
Net Income (Loss)$62,369 $(29,623)$91,992 
Net Income (Loss) Per Share (Diluted)$0.68 $(0.32)$1.00 












Page 14.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
MIDSTREAM BUSINESSES
Three Months Ended
(Thousands of Dollars, except per share amounts)December 31,
PIPELINE AND STORAGE SEGMENT20212020Variance
Revenues from External Customers$61,547 $59,308 $2,239 
Intersegment Revenues26,803 28,456 (1,653)
Total Operating Revenues88,350 87,764 586 
Operating Expenses:
Purchased Gas448 13 435 
Operation and Maintenance22,172 21,173 999 
Property, Franchise and Other Taxes8,580 8,444 136 
Depreciation, Depletion and Amortization15,801 15,468 333 
47,001 45,098 1,903 
Operating Income41,349 42,666 (1,317)
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Credit767 125 642 
Interest and Other Income1,402 856 546 
Interest Expense(10,132)(10,731)599 
Income Before Income Taxes33,386 32,916 470 
Income Tax Expense8,218 8,733 (515)
Net Income$25,168 $24,183 $985 
Net Income Per Share (Diluted)$0.27 $0.26 $0.01 
Three Months Ended
December 31,
GATHERING SEGMENT20212020Variance
Revenues from External Customers$4,045 $351 $3,694 
Intersegment Revenues48,180 46,658 1,522 
Total Operating Revenues52,225 47,009 5,216 
Operating Expenses:
Operation and Maintenance8,188 7,203 985 
Property, Franchise and Other Taxes5 13 (8)
Depreciation, Depletion and Amortization8,391 7,904 487 
16,584 15,120 1,464 
Operating Income35,641 31,889 3,752 
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs(56)(68)12 
Interest and Other Income9 234 (225)
Interest Expense(4,148)(4,131)(17)
Income Before Income Taxes31,446 27,924 3,522 
Income Tax Expense8,309 7,374 935 
Net Income$23,137 $20,550 $2,587 
Net Income Per Share (Diluted)$0.25 $0.22 $0.03 


Page 15.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
DOWNSTREAM BUSINESS
Three Months Ended
(Thousands of Dollars, except per share amounts)December 31,
UTILITY SEGMENT20212020Variance
Revenues from External Customers$236,684 $188,901 $47,783 
Intersegment Revenues75 100 (25)
Total Operating Revenues236,759 189,001 47,758 
Operating Expenses:
Purchased Gas127,212 77,032 50,180 
Operation and Maintenance47,461 45,252 2,209 
Property, Franchise and Other Taxes10,058 9,749 309 
Depreciation, Depletion and Amortization14,831 13,994 837 
199,562 146,027 53,535 
Operating Income37,197 42,974 (5,777)
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs(4,326)(6,684)2,358 
Interest and Other Income525 738 (213)
Interest Expense(5,524)(5,452)(72)
Income Before Income Taxes27,872 31,576 (3,704)
Income Tax Expense5,742 8,539 (2,797)
Net Income$22,130 $23,037 $(907)
Net Income Per Share (Diluted)$0.24 $0.25 $(0.01)




























Page 16.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
Three Months Ended
(Thousands of Dollars, except per share amounts)December 31,
ALL OTHER20212020Variance
Revenues from External Customers$— $1,110 $(1,110)
Intersegment Revenues6 20 (14)
Total Operating Revenues6 1,130 (1,124)
Operating Expenses:
Purchased Gas6 2,287 (2,281)
Operation and Maintenance5 764 (759)
Property, Franchise and Other Taxes— 8 (8)
Depreciation, Depletion and Amortization— 386 (386)
11 3,445 (3,434)
Gain on Sale of Timber Properties— 51,066 (51,066)
Operating Income (Loss)(5)48,751 (48,756)
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs— (4)4 
Interest and Other Income2 185 (183)
Income (Loss) before Income Taxes(3)48,932 (48,935)
Income Tax Expense4 11,372 (11,368)
Net Income (Loss)$(7)$37,560 $(37,567)
Net Income (Loss) Per Share (Diluted)$— $0.41 $(0.41)
Three Months Ended
December 31,
CORPORATE20212020Variance
Revenues from External Customers$83 $95 $(12)
Intersegment Revenues1,082 663 419 
Total Operating Revenues1,165 758 407 
Operating Expenses:
Operation and Maintenance3,008 2,599 409 
Property, Franchise and Other Taxes124 121 3 
Depreciation, Depletion and Amortization49 36 13 
3,181 2,756 425 
Operating Loss(2,016)(1,998)(18)
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs(1,017)(923)(94)
Interest and Other Income33,177 38,979 (5,802)
Interest Expense on Long-Term Debt(30,130)(32,256)2,126 
Other Interest Expense(657)(1,535)878 
Income (Loss) before Income Taxes(643)2,267 (2,910)
Income Tax Expense (Benefit)(238)200 (438)
Net Income (Loss)$(405)$2,067 $(2,472)
Net Income (Loss) Per Share (Diluted)$— $0.03 $(0.03)
Three Months Ended
December 31,
INTERSEGMENT ELIMINATIONS20212020Variance
Intersegment Revenues$(76,146)$(75,897)$(249)
Operating Expenses:
Purchased Gas(26,038)(27,712)1,674 
Operation and Maintenance(50,108)(48,185)(1,923)
(76,146)(75,897)(249)
Operating Income— — — 
Other Income (Expense):
Interest and Other Deductions(31,432)(35,420)3,988 
Interest Expense31,432 35,420 (3,988)
Net Income$— $— $— 
Net Income Per Share (Diluted)$— $— $— 



Page 17.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
Three Months Ended
December 31,
(Unaudited)
Increase
20212020(Decrease)
Capital Expenditures:
Exploration and Production$139,212 
(1)(2)
$81,339 
(3)(4)
$57,873 
Pipeline and Storage24,061 
(1)(2)
43,723 
(3)(4)
(19,662)
Gathering8,920 
(1)(2)
8,320 
(3)(4)
600 
Utility19,383 
(1)(2)
17,345 
(3)(4)
2,038 
Total Reportable Segments191,576 150,727 40,849 
All Other— — — 
Corporate225 39 186 
Eliminations— 154 (154)
Total Capital Expenditures$191,801 $150,920 $40,881 


(1)Capital expenditures for the quarter ended December 31, 2021, include accounts payable and accrued liabilities related to capital expenditures of $69.9 million, $5.4 million, $2.6 million, and $3.1 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at December 31, 2021, since they represent non-cash investing activities at that date.

(2)Capital expenditures for the quarter ended December 31, 2021, 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 quarter ended December 31, 2021. 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 December 31, 2021.

(3)Capital expenditures for the quarter ended December 31, 2020, include accounts payable and accrued liabilities related to capital expenditures of $35.1 million, $11.2 million, $2.3 million, and $3.5 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at December 31, 2020, since they represent non-cash investing activities at that date.

(4)Capital expenditures for the quarter ended December 31, 2020, 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 quarter ended December 31, 2020. 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 December 31, 2020.

DEGREE DAYS
Percent Colder
(Warmer) Than:
Three Months Ended December 31,Normal20212020
  Normal (1)
Last Year (1)
Buffalo, NY2,2531,7041,921(24.4)(11.3)
Erie, PA2,0441,5601,697(23.7)(8.1)
(1)Percents compare actual 2021 degree days to normal degree days and actual 2021 degree days to actual 2020 degree days.



Page 18.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Three Months Ended
December 31,
Increase
20212020(Decrease)
Gas Production/Prices:
Production (MMcf)
Appalachia81,389 75,669 5,720 
West Coast408 441 (33)
Total Production81,797 76,110 5,687 
Average Prices (Per Mcf)
Appalachia$4.39 $2.17 $2.22 
West Coast9.79 5.03 4.76 
Weighted Average4.42 2.19 2.23 
Weighted Average after Hedging2.52 2.14 0.38 
Oil Production/Prices:
Production (Thousands of Barrels)
Appalachia— — — 
West Coast548 563 (15)
Total Production548 563 (15)
Average Prices (Per Barrel)
Appalachia$70.86 $38.53 $32.33 
West Coast77.34 43.48 33.86 
Weighted Average77.34 43.48 33.86 
Weighted Average after Hedging64.29 49.91 14.38 
Total Production (MMcfe)85,085 79,488 5,597 
Selected Operating Performance Statistics:
General & Administrative Expense per Mcfe (1)
$0.21 $0.21 $— 
Lease Operating and Transportation Expense per Mcfe (1)(2)
$0.81 $0.83 $(0.02)
Depreciation, Depletion & Amortization per Mcfe (1)
$0.58 $0.57 $0.01 

(1)Refer to page 13 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment.
(2)Amounts include transportation expense of $0.56 and $0.57 per Mcfe for the three months ended December 31, 2021 and December 31, 2020, respectively.







Page 19.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Hedging Summary for Remaining Nine Months of Fiscal 2022VolumeAverage Hedge Price
Oil Swaps
Brent855,000 BBL$58.28 / BBL
NYMEX117,000 BBL$51.00 / BBL
Total972,000 BBL$57.40 / BBL
Gas Swaps
NYMEX160,740,000 MMBTU$2.76 / MMBTU
Fixed Price Physical Sales46,554,848 MMBTU$2.47 / MMBTU
Total207,294,848 MMBTU
Hedging Summary for Fiscal 2023VolumeAverage Hedge Price
Oil Swaps
Brent480,000 BBL$58.48 / BBL
Total480,000 BBL$58.48 / BBL
Gas Swaps
NYMEX116,200,000 MMBTU$2.79 / MMBTU
No Cost Collars52,800,000 MMBTU$3.06 / MMBTU (Floor) / $3.65 / MMBTU (Ceiling)
Fixed Price Physical Sales64,673,984 MMBTU$2.33 / MMBTU
Total233,673,984 MMBTU
Hedging Summary for Fiscal 2024VolumeAverage Hedge Price
Oil Swaps
Brent120,000 BBL$50.30 / BBL
Total120,000 BBL$50.30 / BBL
Gas Swaps
NYMEX61,080,000 MMBTU$2.72 / MMBTU
No Cost Collars40,000,000 MMBTU$3.18 / MMBTU (Floor) / $3.86 / MMBTU (Ceiling)
Fixed Price Physical Sales59,398,923 MMBTU$2.21 / MMBTU
Total160,478,923 MMBTU
Hedging Summary for Fiscal 2025VolumeAverage Hedge Price
Oil Swaps
Brent120,000 BBL$50.32 / BBL
Total120,000 BBL$50.32 / BBL
Gas Swaps
NYMEX23,660,000 MMBTU$2.74 / MMBTU
No Cost Collars3,200,000 MMBTU$3.20 / MMBTU (Floor) / $3.88 / MMBTU (Ceiling)
Fixed Price Physical Sales56,479,649 MMBTU$2.21 / MMBTU
Total83,339,649 MMBTU
Hedging Summary for Fiscal 2026VolumeAverage Hedge Price
Gas Swaps
NYMEX1,720,000 MMBTU$2.75 / MMBTU
Fixed Price Physical Sales48,105,111 MMBTU$2.22 / MMBTU
Total49,825,111 MMBTU
Hedging Summary for Fiscal 2027VolumeAverage Hedge Price
Fixed Price Physical Sales31,447,783 MMBTU$2.25 / MMBTU
Hedging Summary for Fiscal 2028VolumeAverage Hedge Price
Fixed Price Physical Sales5,317,246 MMBTU$2.26 / MMBTU
Hedging Summary for Fiscal 2029VolumeAverage Hedge Price
Fixed Price Physical Sales255,558 MMBTU$2.26 / MMBTU


Page 20.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)
Three Months Ended
December 31,
Increase
20212020(Decrease)
Firm Transportation - Affiliated28,197 29,964 (1,767)
Firm Transportation - Non-Affiliated165,397 173,064 (7,667)
Interruptible Transportation767 590 177 
194,361 203,618 (9,257)
Gathering Volume - (MMcf)
Three Months Ended
December 31,
Increase
20212020(Decrease)
Gathered Volume101,094 88,345 12,749 
Utility Throughput - (MMcf)
Three Months Ended
December 31,
Increase
20212020(Decrease)
Retail Sales:
Residential Sales17,496 18,412 (916)
Commercial Sales2,543 2,528 15 
Industrial Sales123 153 (30)
20,162 21,093 (931)
Transportation17,593 17,935 (342)
37,755 39,028 (1,273)























Page 21.

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 months ended December 31, 2021 and 2020:
Three Months Ended
December 31,
(in thousands except per share amounts)20212020
Reported GAAP Earnings$132,392 $77,774 
Items impacting comparability:
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 
Unrealized (gain) loss on other investments (Corporate/All Other)4,490 1,298 
Tax impact of unrealized (gain) loss on other investments(943)(272)
Adjusted Operating Results$135,939 $96,975 
Reported GAAP Earnings Per Share$1.44 $0.85 
Items impacting comparability:
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)
Unrealized (gain) loss on other investments, net of tax (Corporate/All Other)0.04 0.01 
Adjusted Operating Results Per Share$1.48 $1.06 

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 months ended December 31, 2021 and 2020:
Three Months Ended
December 31,
(in thousands)20212020
Reported GAAP Earnings$132,392 $77,774 
Depreciation, Depletion and Amortization88,578 83,120 
Other (Income) Deductions1,079 2,176 
Interest Expense31,291 34,175 
Income Taxes44,897 29,417 
Impairment of Oil and Gas Producing Properties— 76,152 
Gain on Sale of Timber Properties— (51,066)
Adjusted EBITDA$298,237 $251,748 
Adjusted EBITDA by Segment
Pipeline and Storage Adjusted EBITDA$57,150 $58,134 
Gathering Adjusted EBITDA44,032 39,793 
Total Midstream Businesses Adjusted EBITDA101,182 97,927 
Exploration and Production Adjusted EBITDA146,999 100,744 
Utility Adjusted EBITDA52,028 56,968 
Corporate and All Other Adjusted EBITDA(1,972)(3,891)
Total Adjusted EBITDA$298,237 $251,748 






Page 22.




NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
SEGMENT ADJUSTED EBITDA
Three Months Ended
December 31,
(in thousands)20212020
Exploration and Production Segment
Reported GAAP Earnings$62,369 $(29,623)
Depreciation, Depletion and Amortization49,506 45,332 
Other (Income) Deductions130 194 
Interest Expense12,132 15,490 
Income Taxes22,862 (6,801)
Impairment of Oil and Gas Producing Properties— 76,152 
Adjusted EBITDA$146,999 $100,744 
Pipeline and Storage Segment
Reported GAAP Earnings$25,168 $24,183 
Depreciation, Depletion and Amortization15,801 15,468 
Other (Income) Deductions(2,169)(981)
Interest Expense10,132 10,731 
Income Taxes8,218 8,733 
Adjusted EBITDA$57,150 $58,134 
Gathering Segment
Reported GAAP Earnings$23,137 $20,550 
Depreciation, Depletion and Amortization8,391 7,904 
Other (Income) Deductions47 (166)
Interest Expense4,148 4,131 
Income Taxes8,309 7,374 
Adjusted EBITDA$44,032 $39,793 
Utility Segment
Reported GAAP Earnings$22,130 $23,037 
Depreciation, Depletion and Amortization14,831 13,994 
Other (Income) Deductions3,801 5,946 
Interest Expense5,524 5,452 
Income Taxes5,742 8,539 
Adjusted EBITDA$52,028 $56,968 
Corporate and All Other
Reported GAAP Earnings$(412)$39,627 
Depreciation, Depletion and Amortization49 422 
Gain on Sale of Timber Properties— (51,066)
Other (Income) Deductions(730)(2,817)
Interest Expense(645)(1,629)
Income Taxes(234)11,572 
Adjusted EBITDA$(1,972)$(3,891)

Management defines free cash flow as funds from operations less capital expenditures. The Company is unable to provide a reconciliation of projected free cash flow as described in this release to its comparable financial measure calculated in accordance with GAAP without unreasonable efforts. This is due to our inability to calculate the comparable GAAP projected metrics, including operating income and total production costs, given the unknown effect, timing, and potential significance of certain income statement items.