WILLIAMSVILLE, N.Y., November 9 /CNW/ - National Fuel Gas Company
("National Fuel" or the "Company") (NYSE:NFG) today announced results for its
fourth quarter and fiscal year ended September 30, 2006.
HIGHLIGHTS
-- Reported GAAP earnings for the quarter and fiscal year of $0.02 and
$1.61 per share, respectively, were down $0.55 per share from the prior year's
fourth quarter and $0.62 from the prior year mostly due to the previously
announced full cost ceiling test impairments.
-- Quarterly operating results before items impacting comparability were
$0.36 per share, a 125 percent increase over the prior year, mostly due to
higher average commodity prices realized in the Exploration and Production
segment.
-- Fiscal year operating results before items impacting comparability
were $2.25 per share, a 30 percent increase, also due to higher average
commodity prices.
-- Production of crude oil and natural gas volumes for the quarter and
fiscal year were 12.1 billion cubic feet equivalent ("Bcfe") and 47.4 Bcfe,
respectively, and were in line with the Company's guidance.
-- The Company's expected fiscal 2007 production remains at the
previously announced level of 47 to 52 Bcfe.(x) Based on recent reductions in
crude oil and natural gas pricing strips, the Company is revising its earnings
guidance for fiscal 2007 to a range of $2.10 to $2.30 per share. Earnings
guidance had previously been $2.60 to $2.80 per share.(x)
-- A conference call is scheduled for Friday, November 10, 2006 at 11:00
am Eastern Standard Time.
MANAGEMENT COMMENTS
Philip C. Ackerman, Chairman and Chief Executive Officer of National Fuel
Gas Company stated: "This year, the continued volatility of commodity prices
caused us to experience non-cash write downs of our Canadian exploration and
production properties in the third and fourth quarters. Absent these write
downs, consolidated earnings improved dramatically. Similarly, cash provided
by operating activities improved substantially, reaching $471 million, and was
sufficient to fund an increase in capital spending, an increase in our
dividend, and the repurchase of more than 2,000,000 shares of stock. Our
balance sheet remains solid, with an equity component growing to more than 56
percent of our capital structure, and strong operational results in all of our
business segments reflect the continued dedication of the Company's
employees."
SUMMARY OF RESULTS
National Fuel had consolidated earnings for the quarter ended September
30, 2006 of $2.0 million, or $0.02 per share, a decrease of $47.2 million, or
$0.55 per share, from the prior year's fourth quarter of $49.2 million or
$0.57 per share. (note: all references to earnings per share are to diluted
earnings per share and all amounts are stated in U.S. dollars).
Consolidated earnings for the fiscal year ended September 30, 2006 were
$138.1 million, or $1.61 per share, a decrease of $51.4 million, or $0.62 per
share, from the prior year's earnings of $189.5 million or $2.23 per share.
Please refer to the table below to view the effect of items impacting
comparability for both the quarterly and twelve-month periods.
<<
Three Months Twelve Months
Ended September 30, Ended September 30,
2006 2005 2006 2005
---------- -------- --------- ---------
(in thousands except per
share amounts)
Reported GAAP earnings $1,968 $49,211 $138,091 $189,488
Items impacting
comparability:
Income from
discontinued
operations1 (30,900) (35,973)
Impairment of Canadian
oil and gas producing
properties2 29,144 68,646
Income tax adjustments2 (11,202)
Out-of-period
symmetrical sharing
adjustment2 (2,551)
Gain associated with
insurance proceeds2 (3,885) (3,885)
Gain on sale of base
gas2 (2,636)
---------- -------- --------- ---------
Operating results $31,112 $14,426 $192,984 $146,994
---------- -------- --------- ---------
Reported GAAP earnings per
share $0.02 $0.57 $1.61 $2.23
Items impacting
comparability:
Income from
discontinued
operations1 (0.36) (0.42)
Impairment of Canadian
oil and gas producing
properties2 0.34 0.80
Income tax adjustments2 (0.13)
Out-of-period
symmetrical sharing
adjustment2 (0.03)
Gain associated with
insurance proceeds2 (0.05) (0.05)
Gain on sale of base
gas2 (0.03)
---------- -------- --------- ---------
Operating results $0.36 $0.16 $2.25 $1.73
---------- -------- --------- ---------
>>
1 National Fuel presents the earnings of United Energy, a.s. ("United
Energy"), its former operations in the Czech Republic, as "Income from
Discontinued Operations."
2 See discussion of these items below.
As outlined in the table above, certain items included in GAAP earnings
impacted the comparability of the Company's operating results when comparing
the fourth quarter of 2006 to the fourth quarter of 2005 and the annual
results for fiscal 2006 to those for fiscal 2005. Excluding these items,
operating results for the current fourth quarter were $31.1 million, or $0.36
per share, an increase of $16.7 million, or $0.20 per share, over the prior
year's quarter. Operating results for fiscal 2006 of $193.0 million, or $2.25
per share, increased $46.0 million, or $0.52 per share, compared to the prior
year. Items impacting comparability will be discussed in more detail within
the discussion of segment earnings below.
DISCUSSION OF RESULTS BY SEGMENT
(The following discussion of the earnings of each segment is summarized
in a tabular form in this report. It may be helpful to refer to those tables
while reviewing this discussion.)
Utility Segment
The Utility segment operations are carried out by National Fuel Gas
Distribution Corporation ("Distribution"), which sells or transports natural
gas to customers located in western New York and northwestern Pennsylvania.
The Utility segment's loss of approximately $1.4 million, or $0.02 per share,
for the quarter ended September 30, 2006 improved from a loss of $6.1 million,
or $0.07 per share, in the prior year's fourth quarter. Annual earnings of
$49.8 million, or $0.58 per share, for the Utility segment were up $10.6
million, or $0.12 per share, compared to $39.2 million, or $0.46 per share, in
fiscal 2005.
In the fourth quarter, Distribution's New York Division recorded a loss
of $0.6 million which represents an improvement from a loss of $2.9 million
for the fourth quarter of 2005. In Distribution's Pennsylvania Division, the
loss for the quarter of approximately $0.8 million improved from a loss of
$3.2 million in the prior year's fourth quarter. The improvement in earnings
in both Divisions was due primarily to lower bad debt expense. In the fourth
quarter of 2005, Distribution increased the allowance for uncollectible
accounts in its New York and Pennsylvania divisions to reflect the increase in
final billed account balances and the increased age of outstanding active
receivables heading into the heating season. A similar adjustment to the
allowance balance was not required in 2006. In addition, in the New York
Division, higher usage per account during the quarter and the impact of the
last rate case also contributed to the improvement. These positive impacts
were partially offset by a higher effective tax rate due to positive tax
adjustments recorded in 2005 that did not recur in 2006.
For the year ended September 30, 2006, earnings in Distribution's New
York Division of $40.0 million increased $9.2 million compared to the prior
year. The comparability of the fiscal year results is impacted by a $2.6
million positive out-of-period adjustment recorded in the first quarter of
fiscal 2006 to correct Distribution's calculation of the symmetrical sharing
component of New York's gas adjustment rate. The increase in operating results
is due to the impact of the last rate settlement and the absence of two
negative adjustments recorded in 2005 to true-up regulatory liabilities that
did not recur in 2006. Partially offsetting these increases to operating
results were lower average usage per account overall for the year, higher bad
debt (on an annual basis), pension, and interest expense, and a higher
effective tax rate.
For the fiscal year ended September 30, 2006, earnings in Distribution's
Pennsylvania Division of $9.8 million, increased $1.4 million, or $0.02 per
share, compared to the prior year. Earnings increased mainly due to the
positive impact of the last rate settlement combined with lower bad debt
expense. Partially offsetting this increase was warmer weather and lower usage
per account. In addition, a higher effective tax rate partially offset the
increase in earnings.
Pipeline and Storage Segment
The Pipeline and Storage segment operations are carried out by National
Fuel Gas Supply Corporation ("Supply Corporation") and Empire State Pipeline
("Empire"). These companies provide natural gas transportation and storage
services to affiliated and non-affiliated companies through an integrated
system of pipelines and underground natural gas storage fields in western New
York and western Pennsylvania.
The Pipeline and Storage segment's earnings of $10.2 million, or $0.12
per share, for the quarter ended September 30, 2006, decreased $8.6 million,
or $0.10 per share, when compared with the same period in the prior fiscal
year. The comparability of the results for the quarter is impacted by a $3.9
million gain associated with insurance proceeds received in a prior year for
which a contingency (related to possible migration of storage gas) was
resolved during last year's fourth quarter. Excluding that gain, operating
results decreased $4.7 million mainly due to lower efficiency gas revenue
resulting from a lower of cost or market adjustment of $4.7 million (after
tax) to the value of efficiency gas held in inventory at the end of the
quarter. The value of the efficiency gas inventory was adjusted to current
market prices at September 30, 2006. In addition, higher pension and other
operating expenses, partially offset by lower expenses for preliminary project
costs associated with the Empire Connector project, contributed to the
decrease in earnings.
Earnings of $55.6 million, or $0.65 per share, for the fiscal year ended
September 30, 2006, decreased $4.8 million, or $0.06 per share, when compared
with the fiscal year ended September 30, 2005. The comparability of the fiscal
year results is impacted by the $3.9 million gain in 2005 associated with
insurance proceeds described above and a $2.6 million gain in 2005 on the sale
of base gas from Supply Corporation's jointly-owned Ellisburg Storage Field.
The increase in operating results of $1.7 million, or $0.02 per share, is due
to higher transportation and storage revenues and a lower effective tax rate
that more than offset lower efficiency gas revenues (including the impact of
the lower of cost or market adjustment).
Exploration and Production Segment
The Exploration and Production segment operations are carried out by
Seneca Resources Corporation ("Seneca"). Seneca explores for, develops and
purchases natural gas and oil reserves in California, in the Appalachian
region, in the Gulf Coast region of Texas, Louisiana and Alabama, and in the
western provinces of Canada.
The Exploration and Production segment's loss in the fourth quarter of
fiscal 2006 of $7.2 million, or $0.08 per share, is a decrease of $18.9
million, or $0.21 per share, when compared with the prior year's fourth
quarter. The decrease was mainly due to the previously announced non-cash
charge of $29.1 million (after tax) to write down the value of Seneca's
Canadian oil and natural gas producing properties.
Seneca uses the full cost method of accounting for determining the book
value of its oil and natural gas properties. This method requires that Seneca
perform a quarterly "ceiling test" to compare, on a country-by-country basis,
the present value of future revenues from its oil and natural gas reserves
based on period-end spot prices ("the ceiling") with the book value of those
reserves at the balance sheet date. If the book value of the reserves in any
country exceeds the ceiling, a non-cash charge must be recorded to reduce the
book value of the reserves to the calculated ceiling. For purposes of
calculating the ceiling, Seneca values its Canadian reserves (of which more
than 80 percent are natural gas) at commodity prices on the last day of the
quarter. Seneca determines this quarter-end price by reference to a Canadian
current cash index price, a price quoted by Alberta Energy Company or "AECO."
That price had declined from approximately CDN $7.30/MMBtu at the end of March
2006 to CDN $5.50/MMBtu at the end of June 2006 and to CDN $3.70/MMBtu at
September 30, 2006 (MMBtu is the designation for one million British Thermal
Units, a measure of heating value. One MMBtu is approximately equivalent to
one thousand cubic feet, or one Mcf, of natural gas). At November 8, 2006, the
AECO cash index price had rebounded to approximately CDN $7.50/MMBtu. If
Seneca's Canadian reserves had been valued at that price, no impairment would
have been recorded. In the United States, Seneca had a ceiling test cushion
(i.e. the present value of future net revenue exceeded the book value) of
approximately $200.0 million at September 30, 2006.
Excluding the impact of the ceiling test this quarter, Seneca's earnings
were $22.0 million, or $0.26 per share, an increase of $10.3 million, or $0.13
per share, compared to the fourth quarter of the prior year. The increase was
primarily due to higher weighted average crude oil prices after hedging, as
well as the impact of a mark-to-market adjustment recorded in the fourth
quarter of 2005 that did not recur in 2006. That adjustment related to losses
on certain derivatives contracts that no longer qualified as effective hedges
due to anticipated delays in oil and gas production volumes caused by
Hurricane Rita. This increase was partially offset by slightly lower natural
gas prices and a 0.6 Bcfe decline in production. For the quarter ended
September 30, 2006, the weighted average oil price (after hedging) was
$45.73/barrel ("Bbl"), an increase of $15.03/Bbl from the prior year's quarter
and the weighted average natural gas price (after hedging) was $6.36/Mcf, a
decrease of $0.41/Mcf from the prior year's quarter.
Earnings of $21.0 million, or $0.24 per share, for the fiscal year ended
September 30, 2006 decreased $29.7 million, or $0.36 per share, when compared
with the year ended September 30, 2005. The comparability of the fiscal year
results is impacted by the two non-cash charges totaling $68.6 million (after
tax) to write down the value of Seneca's Canadian oil and natural gas
producing properties described above and in the Company's third quarter
earnings release, and certain positive tax adjustments recorded in the second
and third quarters of fiscal 2006. In the second quarter, Seneca recognized a
$5.1 million benefit to earnings that resulted from an adjustment to a
deferred income tax balance. Under generally accepted accounting principles, a
company may recognize the benefit of certain expected future income tax
deductions as a deferred tax asset only if it anticipates sufficient future
taxable income to utilize those deductions. As a result of changing
circumstances, Seneca increased its forecast of future taxable income in the
Canadian division and, consequently, recorded a deferred tax asset for certain
costs related to capital expenditures that it now expects to deduct on future
income tax returns. In the third quarter, Seneca recognized a $6.1 million
benefit to earnings related to income taxes. The Company reversed a valuation
allowance associated with the capital loss carryforward that resulted from the
2003 sale of certain Seneca oil properties and also recognized a tax benefit
related to the favorable resolution of certain open tax issues.
Excluding the items that impacted comparability, annual operating results
in the Exploration and Production segment increased $27.8 million, or $0.31
per share, from the prior year. This increase is mainly due to higher weighted
average natural gas and oil prices after hedging that were partially offset by
lower production volumes. For the year ended September 30, 2006, the weighted
average oil price (after hedging) was $41.10/Bbl, an increase of $13.24/Bbl,
or 47.5 percent, from the prior year and the weighted average natural gas
price (after hedging) was $7.15/Mcf, an increase of $0.92/Mcf, or 14.8
percent, from the prior year. These price increases more than offset a 5.0
Bcfe decline in production. More than 4.0 Bcfe of the decline was due to
production shut-ins resulting from Hurricane Rita.
The increase in annual operating results also reflects the positive
impact of a mark-to-market adjustment recorded in the fourth quarter of 2005
for losses on certain derivatives contracts that no longer qualified as
effective hedges that did not recur in 2006 as described above.
Energy Marketing
National Fuel Resources, Inc. ("NFR") comprises the Company's Energy
Marketing segment. NFR markets natural gas to industrial, commercial, public
authority and residential customers in western and central New York and
northwestern Pennsylvania, offering competitively priced energy and energy
management services to its customers.
The Energy Marketing segment's net loss for the quarter of $0.1 million
compares to earnings of $0.2 million in the fourth quarter last year. This
decrease is mainly due to a slight decrease in margin.
Earnings for the year ended September 30, 2006 in the Energy Marketing
segment of $5.8 million, or $0.07 per share, increased $0.7 million, or $0.01
per share, from the prior year due to higher margins offset partially by
higher operating expenses.
Timber Segment
The Timber segment operations are carried out by Highland Forest
Resources, Inc. ("Highland") and Seneca's Northeast Division. This segment
markets high quality hardwoods from its New York and Pennsylvania land
holdings and owns two sawmill/dry kiln operations in northwestern
Pennsylvania.
The Timber segment's fourth quarter earnings of $0.5 million compared to
$0.8 million in the prior year's fourth quarter. The decrease is due to lower
margins during the quarter.
Earnings for the year ended September 30, 2006 of $5.7 million, or $0.07
per share, increased $0.7 million, or $0.01 per share, from the prior year's
earnings. The increase is due to higher margins overall for the fiscal year.
Corporate and All Other
Other direct, wholly-owned subsidiaries of the Company include Horizon
Energy Development, Inc., a corporation formerly engaged in the development of
international power projects, Horizon LFG, Inc., a corporation engaged,
through subsidiaries, in the purchase, processing, transportation and sale of
landfill gas, and Horizon Power, Inc. ("Horizon Power"), a corporation that
develops and owns independent electric generation facilities which are fueled
by natural gas or landfill gas.
Break-even earnings in the quarter for this category decreased $23.8
million or $0.29 per share when compared to the prior year's fourth quarter.
Excluding earnings from discontinued operations of $30.9 million, operating
results improved from a loss of $7.2 million in the fourth quarter of 2005 to
breakeven results for the fourth quarter of 2006. Annual earnings of $0.2
million decreased $28.9 million, or $0.34 per share, when compared to the
prior year. Excluding earnings from discontinued operations of $36.0 million,
operating results improved from a loss of $6.9 million in fiscal year 2005 to
income of $0.2 million in fiscal year 2006. The loss during last year's fourth
quarter and fiscal year included an impairment in the value of the Horizon
Power's 50 percent investment in Energy Systems North East, LLC, a partnership
that owns an 80-megawatt natural gas-fired combined cycle power plant, and an
impairment of a gas-fired turbine Horizon Power had previously planned to use
in the development of an independent power plant.
SHARE REPURCHASES
During the quarter, the Company repurchased in the open market 242,200
shares of its common stock pursuant to the authorization of the Company's
Board of Directors to repurchase up to 8,000,000 shares of its common stock.
Through September 30, 2006, the Company has repurchased 2,526,550 shares
pursuant to this authorization. Depending upon other investment opportunities,
and subject to market conditions, such purchases may continue from time to
time.(x) The Company estimates that the share repurchases had no meaningful
impact upon the calculated diluted earnings per share for the quarter. For the
year ended September 30, 2006, the Company estimates that the calculated
diluted earnings per share were increased by $0.017 per share as a result of
the share repurchases.
With respect to the earnings guidance discussed below, the Company has
not incorporated any additional share repurchases into its earnings per share
guidance. The Company continues to view share repurchases as a good use of its
cash, and will continue to consider repurchasing shares up to the full
8,000,000 repurchase authorization of its Board of Directors.(x) The Company
cannot predict with any certainty the timing of those repurchases or the
impact of those repurchases on the calculation of earnings per share.
EARNINGS GUIDANCE
The Company's consolidated earnings guidance for fiscal 2007 is in the
range of $2.10 to $2.30 per share.(x) This guidance includes a revision in New
York Mercantile Exchange ("NYMEX") futures pricing for the unhedged portion of
Seneca's projected production. The NYMEX futures closing prices on September
21, 2006 are incorporated into this current guidance on a consolidated basis,
and are shown in this release. An earnings sensitivity is also shown in this
release. Changes in actual prices from the NYMEX prices shown in the table,
will affect earnings accordingly.
Following a growing trend by other public companies, National Fuel will
provide earnings guidance only on its consolidated earnings and will no longer
provide earnings guidance by segment or by future quarterly periods. Based on
certain corporate events, National Fuel will update its annual guidance as
necessary.
For its 2007 fiscal year, the $2.10 to $2.30 earnings guidance range
includes:
Exploration and Production segment
-- Production between 47 and 52 Bcfe.(x)
-- Pricing based on September 21, 2006 NYMEX futures pricing strip.
-- No new 2007 production from the venture with EOG Resources, Inc.
announced in the Company's press release dated November 1, 2006.
Pipeline and Storage segment
-- Settlement of complaint proceeding brought by Joint State Agencies
with new tariff rates in effect during fiscal 2007.(x)
Utility segment
-- Pennsylvania rate settlement in effect as of January 1, 2007.(x)
EARNINGS TELECONFERENCE
The Company will host a conference call on Friday, November 10, 2006, at
11 a.m. (Eastern Standard Time) to discuss this announcement. There are two
ways to access this call. For those with Internet access, visit National
Fuel's Web site at http://www.nationalfuelgas.com and click on the "For
Investors" link at the top of the homepage. For those without Internet access,
access is also provided by dialing (toll-free) 1-866-578-5771, and using the
passcode "93603463." For those unable to listen to the live conference call, a
replay will be available approximately one hour after the conclusion of the
call at the same Web site link and by phone at (toll free) 888-286-8010 using
passcode "91885312." Both the webcast and telephonic replay will be available
until the close of business on Friday, November 17, 2006.
National Fuel is an integrated energy company with $3.7 billion in assets
comprised of the following five operating segments: Utility, Pipeline and
Storage, Exploration and Production, Energy Marketing, and Timber. Additional
information about National Fuel is available on its Internet Web site:
http://www.nationalfuelgas.com or through its investor information service at
1-800-334-2188.
(x) - Certain statements contained herein, including those which are
designated with an asterisk ("(x)") and those which use words such as
"anticipates," "estimates," "expects," "intends," "plans," "predicts,"
"projects," and similar expressions, are "forward-looking statements" as
defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve risks and uncertainties, which could cause
actual results or outcomes to differ materially from those expressed in the
forward-looking statements. The Company's expectations, beliefs and
projections contained herein are expressed in good faith and are believed to
have a reasonable basis, but there can be no assurance that such expectations,
beliefs or projections will result or be achieved or accomplished. In addition
to other factors, the following are important factors that could cause actual
results to differ materially from those discussed in the forward-looking
statements: changes in laws and regulations to which the Company is subject,
including changes in tax, environmental, safety and employment laws and
regulations; changes in economic conditions, including economic disruptions
caused by terrorist activities, acts of war or major accidents; changes in
demographic patterns and weather conditions, including the occurrence of
severe weather, such as hurricanes; changes in the availability and/or price
of natural gas or oil and the effect of such changes on the accounting
treatment or valuation of derivative financial instruments or the Company's
natural gas and oil reserves; impairments under the Securities and Exchange
Commission's full cost ceiling test for natural gas and oil reserves; changes
in the availability and/or price of derivative financial instruments; changes
in the price differentials between various types of oil; failure of the price
differential between heavy sour crude oil and light sweet crude oil to return
to its historical norm; inability to obtain new customers or retain existing
ones; significant changes in competitive factors affecting the Company;
governmental/regulatory actions, initiatives and proceedings, including those
involving acquisitions, financings, rate cases (which address, among other
things, allowed rates of return, rate design and retained gas), affiliate
relationships, industry structure, franchise renewal, and environmental/safety
requirements; unanticipated impacts of restructuring initiatives in the
natural gas and electric industries; significant changes from expectations in
actual capital expenditures and operating expenses and unanticipated project
delays or changes in project costs or plans, including changes in the plans of
the sponsors of the proposed Millennium Pipeline with respect to that project;
the nature and projected profitability of pending and potential projects and
other investments; occurrences affecting the Company's ability to obtain funds
from operations, debt or equity to finance needed capital expenditures and
other investments, including any downgrades in the Company's credit ratings;
uncertainty of oil and gas reserve estimates; ability to successfully identify
and finance acquisitions or other investments and ability to operate and
integrate existing and any subsequently acquired business or properties;
ability to successfully identify, drill for and produce economically viable
natural gas and oil reserves; significant changes from expectations in the
Company's actual production levels for natural gas or oil; regarding foreign
operations, changes in trade and monetary policies, inflation and exchange
rates, taxes, operating conditions, laws and regulations related to foreign
operations, and political and governmental changes; significant changes in tax
rates or policies or in rates of inflation or interest; significant changes in
the Company's relationship with its employees or contractors and the potential
adverse effects if labor disputes, grievances or shortages were to occur;
changes in accounting principles or the application of such principles to the
Company; the cost and effects of legal and administrative claims against the
Company; changes in actuarial assumptions and the return on assets with
respect to the Company's retirement plan and post retirement benefit plans;
increasing health care costs and the resulting effect on health insurance
premiums and on the obligation to provide post retirement benefits; or
increasing costs of insurance, changes in coverage and the ability to obtain
insurance. The Company disclaims any obligation to update any forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
<<
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED SEPTEMBER 30, 2006
Pipeline Corporate
& Energy / All Consol-
Utility Storage E&P Marketing Timber Other(x) idated
---------------------------------- -----------------------
Fourth
quarter
2005 GAAP
earnings $(6,073)$18,877 $11,676 $168 $830 $23,733 $49,211
Items
impacting
compar-
ability:
Earnings
from dis-
continued
operations (30,900)(30,900)
Gain
associated
with
insurance
proceeds (3,885) (3,885)
---------------------------------- -----------------------
Fourth
quarter
2005
operating
results (6,073) 14,992 11,676 168 830 (7,167) 14,426
Drivers of
operating
results
Impact of NY
rate
settlement 967 967
Higher
normalized
usage per
account 1,755 1,755
True-up of
regulatory
liabilities (1,724) (1,724)
Routine
regulatory
adjustments 1,541 1,541
Higher
transportation
and storage
revenues 638 638
Lower
efficiency
gas
revenues (4,598) (4,598)
Lower
(higher)
operating
expenses 6,137 (1,101) 1,054 6,090
Higher crude
oil and
natural gas
prices 7,045 7,045
Lower crude
oil and
natural gas
production (2,431) (2,431)
Derivatives
mark-to-
market
adjustment 3,343 3,343
Lower per
unit
margins (110) (110)
Lower
margins (203) (203)
Asset
impairment
write-downs
in 2005 4,499 4,499
Higher
interest
expense (1,081) (391) (1,472)
Higher
interest
income 706 1,350 2,056
Higher
effective
tax rate (3,754) (3,754)
All other /
rounding 813 317 1,624 (168) (158) 616 3,044
---------------------------------- -----------------------
Fourth
quarter
2006
operating
results (1,419) 10,248 21,963 (110) 469 (39) 31,112
Items
impacting
comparability:
Impairment
of oil and
gas
properties (29,144) (29,144)
---------------------------------- -----------------------
Fourth
quarter
2006 GAAP
earnings $(1,419)$10,248 $(7,181) $(110) $469 $(39) $1,968
---------------------------------- -----------------------
(x) Includes discontinued operations
>>
<<
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED SEPTEMBER 30, 2006
Pipeline Corporate
& Energy / All Consol
Utility Storage E&P Marketing Timber Other(x) -idated
-------------------------------- ----------------------
Fourth quarter
2005 GAAP
earnings $(0.07) $0.22 $0.13 $- $0.01 $0.28 $0.57
Items impacting
comparability:
Earnings from
discontinued
operations (0.36) (0.36)
Gain associated
with insurance
proceeds (0.05) - (0.05)
-------------------------------- ----------------------
Fourth quarter
2005 operating
results (0.07) 0.17 0.13 - 0.01 (0.08) 0.16
Drivers of
operating
results
Impact of NY
rate
settlement 0.01 0.01
Higher
normalized
usage per
account 0.02 0.02
True-up of
regulatory
liabilities (0.02) (0.02)
Routine
regulatory
adjustments 0.02 0.02
Higher
transportation
and storage
revenues 0.01 0.01
Lower
efficiency gas
revenues (0.05) (0.05)
Lower (higher)
operating
expenses 0.07 (0.01) 0.01 0.07
Higher crude
oil and
natural gas
prices 0.08 0.08
Lower crude oil
and natural
gas production (0.03) (0.03)
Derivatives
mark-to-market
adjustment 0.04 0.04
Lower per unit
margins - -
Lower margins - -
Asset
impairment
write-downs in
2005 0.05 0.05
-
Higher interest
expense (0.01) (0.01)
Higher interest
income 0.01 0.02 0.03
-
Higher
effective tax
rate (0.04) (0.04)
-
All other /
rounding - - 0.03 - - (0.01) 0.02
-------------------------------- ----------------------
Fourth quarter
2006 operating
results (0.02) 0.12 0.26 - 0.01 (0.01) 0.36
Items impacting
comparability:
Impairment of
oil and gas
properties (0.34) (0.34)
-------------------------------- ----------------------
Fourth quarter
2006 GAAP
earnings $(0.02) $0.12 $(0.08) $- $0.01 $(0.01) $0.02
-------------------------------- ----------------------
(x) Includes discontinued operations
>>
<<
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
YEAR ENDED SEPTEMBER 30, 2006
Corporate
Pipeline /
& Energy All Consoli-
Utility Storage E&P Marketing Timber Other(x) dated
----------------------------------------------------------
Fiscal 2005
GAAP
earnings $39,197 $60,454 $50,659 $5,077 $5,032 $29,069 $189,488
Items
impacting
comparability:
Earnings
from
discontinued
operations (35,973) (35,973)
Gain
associated
with
insurance
proceeds (3,885) (3,885)
Gain on sale
of base gas (2,636) (2,636)
----------------------------------------------------------
Fiscal 2005
operating
results 39,197 53,933 50,659 5,077 5,032 (6,904) 146,994
Drivers of
operating
results
Impact of NY
& PA rate
settle-
ments 18,640 18,640
Warmer
weather in
PA (3,033) (3,033)
Lower
normalized
usage per
account (2,930) (2,930)
True-up of
regulatory
liabilities 2,603 2,603
Routine
regulatory
adjustments 1,433 1,433
Higher
transportation
and storage
revenues 1,963 1,963
Lower
efficiency
gas
revenues (1,661) (1,661)
Higher
operating
expenses (712) (613) (1,969) (815) (1,290) (5,399)
Higher crude
oil and
natural gas
prices 46,459 46,459
Lower crude
oil and
natural gas
production (18,529) (18,529)
Derivatives
mark-to-
market
adjustment 3,343 3,343
Higher
lifting
costs (3,157) (3,157)
Higher DD&A (2,487) (2,487)
Higher per
unit
margins 1,679 1,679
Higher
margins 989 989
Lower
margins on
landfill
gas
pipeline
sales (530) (530)
Asset
impairment
write-downs
in 2005 943 4,499 5,442
Higher
interest
expense (3,490) (3,490)
Higher
interest
income 2,614 4,755 7,369
(Higher)
lower
effective
tax rate (4,467) 1,674 (2,793)
All other /
rounding 23 (606) 1,482 (143) (317) (360) 79
----------------------------------------------------------
Fiscal 2006
operating
results 47,264 55,633 78,415 5,798 5,704 170 192,984
Items
impacting
comparability:
Out-of-
period
adjustment
to
symmetrical
sharing 2,551 2,551
Income tax
adjustments 11,202 11,202
Impairment
of oil and
gas
properties (68,646) (68,646)
----------------------------------------------------------
Fiscal 2006
GAAP
earnings $49,815 $55,633 $20,971 $5,798 $5,704 $170 $138,091
----------------------------------------------------------
(x) Includes discontinued operations
>>
<<
NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
YEAR ENDED SEPTEMBER 30, 2006
Corporate
Pipeline /
& Energy All Consoli-
Utility Storage E&P Marketing Timber Other(x) dated
-------------------------------------------------------
Fiscal 2005
GAAP earnings $0.46 $0.71 $0.60 $0.06 $0.06 $0.34 $2.23
Items
impacting
comparability:
Earnings from
discontinued
operations (0.42) (0.42)
Gain associated
with insurance
proceeds (0.05) (0.05)
Gain on sale of
base gas (0.03) (0.03)
-------------------------------------------------------
Fiscal 2005
operating
results 0.46 0.63 0.60 0.06 0.06 (0.08) 1.73
Drivers of
operating
results
Impact of NY &
PA rate
settlements 0.21 0.21
Warmer weather
in PA (0.04) (0.04)
Lower
normalized
usage per
account (0.03) (0.03)
True-up of
regulatory
liabilities 0.03 0.03
Routine
regulatory
adjustments 0.02 0.02
Higher
transportation
and storage
revenues 0.02 0.02
Lower
efficiency gas
revenues (0.02) (0.02)
Higher
operating
expenses (0.01) (0.01)(0.02) (0.01) (0.02) (0.07)
Higher crude
oil and
natural gas
prices 0.54 0.54
Lower crude oil
and natural
gas production (0.22) (0.22)
Derivatives
mark-to-market
adjustments 0.04 0.04
Higher lifting
costs (0.03) (0.03)
Higher DD&A (0.04) (0.04)
Higher per unit
margins 0.02 0.02
Higher margins 0.01 0.01
Lower margins
on landfill
gas pipeline
sales (0.01) (0.01)
Asset
impairment
write-downs in
2005 0.01 0.05 0.06
Higher interest
expense (0.04) - (0.04)
Higher interest
income 0.03 0.06 0.09
(Higher) lower
effective tax
rate (0.05) 0.02 (0.03)
All other /
rounding - - 0.01 - - - 0.01
-------------------------------------------------------
Fiscal 2006
operating
results 0.55 0.65 0.91 0.07 0.07 0.00 2.25
Items impacting
comparability:
Out-of-period
adjustment to
symmetrical
sharing 0.03 0.03
Income tax
adjustments 0.13 0.13
Impairment of
oil and gas
properties (0.80) (0.80)
-------------------------------------------------------
Fiscal 2006
GAAP earnings $0.58 $0.65 $0.24 $0.07 $0.07 $0.00 $1.61
-------------------------------------------------------
(x) Includes discontinued operations
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
(Thousands of Dollars, except per share amounts)
Three Months Ended Twelve Months Ended
September 30, September 30,
(Unaudited) (Unaudited)
----------------------- -----------------------
SUMMARY OF OPERATIONS 2006 2005 2006 2005
---------------------- ----------- ----------- ----------- -----------
Operating Revenues $294,469 $287,064 $2,311,659 $1,923,549
----------- ----------- ----------- -----------
Operating Expenses:
Purchased Gas 79,609 82,316 1,267,562 959,827
Operation and
Maintenance 92,905 106,968 413,726 404,517
Property, Franchise
and Other Taxes 15,795 15,525 69,942 69,076
Depreciation,
Depletion and
Amortization 45,348 47,329 179,615 179,767
Impairment of Oil
and Gas Producing
Properties 42,368 - 104,739 -
----------- ----------- ----------- -----------
276,025 252,138 2,035,584 1,613,187
Operating Income 18,444 34,926 276,075 310,362
Other Income
(Expense):
Income from
Unconsolidated
Subsidiaries 1,384 1,447 3,583 3,362
Impairment of
Investment in
Partnership - (4,158) - (4,158)
Other Income 1,291 6,764 2,825 12,744
Interest Income 5,973 4,714 10,275 6,496
Interest Expense on
Long-Term Debt (18,127) (18,255) (72,629) (73,244)
Other Interest
Expense (1,686) (158) (5,952) (9,069)
----------- ----------- ----------- -----------
Income from Continuing
Operations Before
Income Taxes 7,279 25,280 214,177 246,493
Income Tax Expense 5,311 6,969 76,086 92,978
----------- ----------- ----------- -----------
Income from Continuing
Operations 1,968 18,311 138,091 153,515
Discontinued
Operations:
Income from
Operations, Net of
Tax - 5,126 - 10,199
Gain on Disposal,
Net of Tax - 25,774 - 25,774
----------- ----------- ----------- -----------
Income from
Discontinued
Operations, Net of
Tax - 30,900 - 35,973
----------- ----------- ----------- -----------
Net Income Available
for Common Stock $1,968 $49,211 $138,091 $189,488
----------- ----------- ----------- -----------
Earnings Per Common
Share:
Basic:
Income from
Continuing
Operations $0.02 $0.22 $1.64 $1.84
Income from Dis-
continued
Operations - 0.36 - 0.43
----------- ----------- ----------- -----------
Net Income
Available for
Common Stock $0.02 $0.58 $1.64 $2.27
----------- ----------- ----------- -----------
Diluted:
Income from
Continuing
Operations $0.02 $0.21 $1.61 $1.81
Income from
Discontinued
Operations - 0.36 - 0.42
----------- ----------- ----------- -----------
Net Income
Available for
Common Stock $0.02 $0.57 $1.61 $2.23
----------- ----------- ----------- -----------
Weighted Average
Common Shares:
Used in Basic
Calculation 83,432,553 84,128,929 84,030,118 83,541,627
----------- ----------- ----------- -----------
Used in Diluted
Calculation 85,523,042 85,784,654 86,028,466 85,029,131
----------- ----------- ----------- -----------
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September September
30, 30,
(Thousands of Dollars) 2006 2005
----------------------------------------------------------------------
ASSETS
Property, Plant and Equipment $4,703,040 $4,423,255
Less - Accumulated Depreciation, Depletion and
Amortization 1,825,314 1,583,955
----------------------------------------------------------------------
Net Property, Plant and Equipment 2,877,726 2,839,300
---------------------------------------------- -----------------------
Current Assets:
Cash and Temporary Cash Investments 69,611 57,607
Hedging Collateral Deposits 19,676 77,784
Receivables - Net 144,254 141,408
Unbilled Utility Revenue 25,538 20,465
Gas Stored Underground 59,461 64,529
Materials and Supplies - at average cost 36,693 33,267
Unrecovered Purchased Gas Costs 12,970 14,817
Prepaid Pension and Post-Retirement Benefit
Costs 64,125 14,404
Other Current Assets 56,320 64,721
Deferred Income Taxes 23,402 83,774
---------------------------------------------- -----------------------
Total Current Assets 512,050 572,776
---------------------------------------------- -----------------------
Other Assets:
Recoverable Future Taxes 79,511 85,000
Unamortized Debt Expense 15,492 17,567
Other Regulatory Assets 76,917 47,028
Deferred Charges 3,558 4,474
Other Investments 88,414 80,394
Investments in Unconsolidated Subsidiaries 11,590 12,658
Goodwill 5,476 5,476
Intangible Assets 31,498 42,302
Fair Value of Derivative Financial Instruments 11,305 -
Deferred Income Taxes 9,003 -
Other 4,388 15,677
---------------------------------------------- -----------------------
Total Other Assets 337,152 310,576
---------------------------------------------- -----------------------
Total Assets $3,726,928 $3,722,652
---------------------------------------------- -----------------------
CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized -
200,000,000
Shares; Issued and Outstanding - 83,402,670
Shares
and 84,356,748 Shares, Respectively $83,403 $84,357
Paid in Capital 563,746 529,834
Earnings Reinvested in the Business 765,997 813,020
---------------------------------------------- -----------------------
Total Common Shareholders' Equity Before
Items of Other Comprehensive Income (Loss) 1,413,146 1,427,211
Accumulated Other Comprehensive Income (Loss) 30,416 (197,628)
---------------------------------------------- -----------------------
Total Comprehensive Shareholders' Equity 1,443,562 1,229,583
Long-Term Debt, Net of Current Portion 1,109,109 1,119,012
---------------------------------------------- -----------------------
Total Capitalization 2,552,671 2,348,595
---------------------------------------------- -----------------------
Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper - -
Current Portion of Long-Term Debt 9,491 9,393
Accounts Payable 133,034 155,485
Amounts Payable to Customers 23,935 1,158
Dividends Payable 25,008 24,445
Other Accruals and Current Liabilities 38,057 60,404
Fair Value of Derivative Financial Instruments 39,983 209,072
---------------------------------------------- -----------------------
Total Current and Accrued
Liabilities 269,508 459,957
---------------------------------------------- -----------------------
Deferred Credits:
Deferred Income Taxes 544,502 489,720
Taxes Refundable to Customers 10,426 11,009
Unamortized Investment Tax Credit 6,094 6,796
Cost of Removal Regulatory Liability 85,076 90,396
Other Regulatory Liabilities 75,456 66,339
Pension and Post-Retirement Liabilities 32,918 143,687
Asset Retirement Obligation 77,392 41,411
Other Deferred Credits 72,885 64,742
---------------------------------------------- -----------------------
Total Deferred Credits 904,749 914,100
---------------------------------------------- -----------------------
Commitments and Contingencies - -
---------------------------------------------- -----------------------
Total Capitalization and Liabilities $3,726,928 $3,722,652
---------------------------------------------- -----------------------
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Twelve Months Ended
September 30,
(Thousands of Dollars) 2006 2005
----------------------------------------------------------------------
Operating Activities:
Net Income Available for Common Stock $138,091 $189,488
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Gain on Sale of Discontinued
Operations - (27,386)
Impairment of Oil and Gas Producing
Properties 104,739 -
Depreciation, Depletion and
Amortization 179,615 193,144
Deferred Income Taxes (5,231) 40,388
(Income) Loss from Unconsolidated
Subsidiaries, Net of Cash
Distributions 1,068 (1,372)
Impairment of Investment in
Partnership - 4,158
Minority Interest in Foreign
Subsidiaries - 2,645
Excess Tax Benefits Associated with
Stock-Based Compensation Awards (6,515) -
Other 4,829 7,390
Change in:
Hedging Collateral Deposits 58,108 (69,172)
Receivables and Unbilled Utility
Revenue (7,397) (21,857)
Gas Stored Underground and Materials
and
Supplies 1,679 1,934
Unrecovered Purchased Gas Costs 1,847 (7,285)
Prepayments and Other Current Assets (34,799) (39,779)
Accounts Payable (23,144) 48,089
Amounts Payable to Customers 22,777 (1,996)
Other Accruals and Current Liabilities (22,527) 16,085
Other Assets (22,700) (13,461)
Other Liabilities 80,960 (3,667)
----------------------------------------------------------------------
Net Cash Provided by Operating
Activities $471,400 $317,346
----------------------------------------------------------------------
Investing Activities:
Capital Expenditures ($294,159) ($219,530)
Net Proceeds from Sale of Foreign Subsidiary - 111,619
Net Proceeds from Sale of Oil and Gas Producing
Properties 13 1,349
Other (3,230) 3,238
----------------------------------------------------------------------
Net Cash Used in Investing
Activities ($297,376) ($103,324)
----------------------------------------------------------------------
Financing Activities:
Change in Notes Payable to Banks and
Commercial Paper $- ($115,359)
Excess Tax Benefits Associated with Stock-Based
Compensation Awards 6,515 -
Shares Repurchased under Repurchase Plan (85,168) -
Reduction of Long-Term Debt (9,805) (13,317)
Dividends Paid on Common Stock (98,266) (94,159)
Dividends Paid to Minority Interest - (12,676)
Proceeds From Issuance of Common Stock 23,339 20,279
----------------------------------------------------------------------
Net Cash Used In Financing
Activities ($163,385) ($215,232)
----------------------------------------------------------------------
Effect of Exchange Rates on Cash 1,365 1,276
----------------------------------------------------------------------
Net Increase in Cash and Temporary
Cash Investments 12,004 66
Cash and Temporary Cash Investments
at Beginning of Period 57,607 57,541
----------------------------------------------------------------------
Cash and Temporary Cash Investments
at September 30 $69,611 $57,607
----------------------------------------------------------------------
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
(Thousands of Dollars, except per share Three Months Ended
amounts) September 30,
----------------------------
UTILITY SEGMENT 2006 2005 Variance
--------------------------------------------------------------------
Revenues from External Customers $111,320 $109,921 $1,399
Intersegment Revenues 2,751 2,763 (12)
----------------------------
Total Operating Revenues 114,071 112,684 1,387
----------------------------
Operating Expenses:
Purchased Gas 52,440 52,060 380
Operation and Maintenance 41,233 55,674 (14,441)
Property, Franchise and Other Taxes 10,151 9,791 360
Depreciation, Depletion and
Amortization 10,113 10,079 34
----------------------------
113,937 127,604 (13,667)
----------------------------
Operating Income (Loss) 134 (14,920) 15,054
Other Income (Expense):
Interest Income 4,347 3,836 511
Other Income 221 213 8
Other Interest Expense (6,782) (4,145) (2,637)
----------------------------
Income (Loss) Before Income Taxes (2,080) (15,016) 12,936
Income Tax Expense (Benefit) (661) (8,943) 8,282
----------------------------
Net Income (Loss) $(1,419) $(6,073) $4,654
----------------------------
Net Income (Loss) Per Share (Diluted) $(0.02) $(0.07) $0.05
----------------------------
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
(Thousands of Dollars, except per Twelve Months Ended
share amounts) September 30,
----------------------------------
UTILITY SEGMENT 2006 2005 Variance
----------------------------------------------------------------------
Revenues from External Customers $1,265,695 $1,101,572 $164,123
Intersegment Revenues 15,068 15,495 (427)
----------------------------------
Total Operating Revenues 1,280,763 1,117,067 163,696
----------------------------------
Operating Expenses:
Purchased Gas 883,263 739,286 143,977
Operation and Maintenance 204,330 211,019 (6,689)
Property, Franchise and Other
Taxes 47,029 46,214 815
Depreciation, Depletion and
Amortization 40,172 40,159 13
----------------------------------
1,174,794 1,036,678 138,116
----------------------------------
Operating Income (Loss) 105,969 80,389 25,580
Other Income (Expense):
Interest Income 4,889 4,111 778
Other Income 830 699 131
Other Interest Expense (26,174) (22,900) (3,274)
----------------------------------
Income (Loss) Before Income Taxes 85,514 62,299 23,215
Income Tax Expense (Benefit) 35,699 23,102 12,597
----------------------------------
Net Income (Loss) $49,815 $39,197 $10,618
----------------------------------
Net Income (Loss) Per Share
(Diluted) $0.58 $0.46 $0.12
----------------------------------
>>
<<
Three Months Ended
September 30,
-----------------------------
PIPELINE AND STORAGE SEGMENT 2006 2005 Variance
--------------------------------------------------- -------- --------
Revenues from External Customers $28,086 $34,689 $(6,603)
Intersegment Revenues 20,126 19,982 144
----------- -------- --------
Total Operating Revenues 48,212 54,671 (6,459)
----------- -------- --------
Operating Expenses:
Purchased Gas (48) 5 (53)
Operation and Maintenance 18,462 16,766 1,696
Property, Franchise and Other Taxes 4,109 3,936 173
Depreciation, Depletion and
Amortization 9,227 9,134 93
----------- -------- --------
31,750 29,841 1,909
----------- -------- --------
Operating Income 16,462 24,830 (8,368)
Other Income (Expense):
Interest Income 137 29 108
Other Income 197 6,128 (5,931)
Interest Expense on Long-Term Debt (241) (363) 122
Other Interest Expense (1,813) (1,383) (430)
----------- -------- --------
Income Before Income Taxes 14,742 29,241 (14,499)
Income Tax Expense 4,494 10,364 (5,870)
----------- -------- --------
Net Income $10,248 $18,877 $(8,629)
----------- -------- --------
Net Income Per Share (Diluted) $0.12 $0.22 $(0.10)
----------- -------- --------
Twelve Months Ended
September 30,
------------------------------
PIPELINE AND STORAGE SEGMENT 2006 2005 Variance
--------------------------------------------------- --------- --------
Revenues from External Customers $132,921 $132,805 $116
Intersegment Revenues 81,431 83,054 (1,623)
----------- --------- --------
Total Operating Revenues 214,352 215,859 (1,507)
----------- --------- --------
Operating Expenses:
Purchased Gas (65) 636 (701)
Operation and Maintenance 66,340 65,397 943
Property, Franchise and Other Taxes 16,088 15,598 490
Depreciation, Depletion and
Amortization 36,876 38,050 (1,174)
----------- --------- --------
119,239 119,681 (442)
----------- --------- --------
Operating Income 95,113 96,178 (1,065)
Other Income (Expense):
Interest Income 454 76 378
Other Income 582 10,396 (9,814)
Interest Expense on Long-Term Debt (1,078) (1,675) 597
Other Interest Expense (5,542) (5,453) (89)
----------- --------- --------
Income Before Income Taxes 89,529 99,522 (9,993)
Income Tax Expense 33,896 39,068 (5,172)
----------- --------- --------
Net Income $55,633 $60,454 $(4,821)
----------- --------- --------
Net Income Per Share (Diluted) $0.65 $0.71 $(0.06)
----------- --------- --------
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
(Thousands of Dollars, except per share Three Months Ended
amounts) September 30,
---------------------------
EXPLORATION AND PRODUCTION SEGMENT 2006 2005 Variance
------------------------------------------------- -------- ---------
Operating Revenues $89,474 $73,898 $15,576
-------- -------- ---------
Operating Expenses:
Purchased Gas - 106 (106)
Operation and Maintenance:
General and Administrative Expense 4,888 4,623 265
Lease Operating Expense 12,765 12,677 88
All Other Operation and Maintenance
Expense 2,065 1,813 252
Property, Franchise and Other Taxes
(Lease Operating Expense) 1,065 1,193 (128)
Depreciation, Depletion and
Amortization 24,083 23,368 715
Impairment of Oil and Gas Producing
Properties 42,368 - 42,368
-------- -------- ---------
87,234 43,780 43,454
-------- -------- ---------
Operating Income 2,240 30,118 (27,878)
Other Income (Expense):
Interest Income 2,568 1,482 1,086
Other Interest Expense (12,835) (12,472) (363)
-------- -------- ---------
Income (Loss) Before Income Taxes (8,027) 19,128 (27,155)
Income Tax Expense (Benefit) (846) 7,452 (8,298)
-------- -------- ---------
Net Income (Loss) $(7,181) $11,676 $(18,857)
-------- -------- ---------
Net Income (Loss) Per Share (Diluted) $(0.08) $0.13 $(0.21)
-------- -------- ---------
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
(Thousands of Dollars, except per share Twelve Months Ended
amounts) September 30,
------------------------------
EXPLORATION AND PRODUCTION SEGMENT 2006 2005 Variance
-------------------------------------------------- --------- ---------
Operating Revenues $346,880 $293,425 $53,455
---------- --------- ---------
Operating Expenses:
Purchased Gas 98 (176) 274
Operation and Maintenance:
General and Administrative Expense 23,352 21,512 1,840
Lease Operating Expense 50,944 46,030 4,914
All Other Operation and
Maintenance Expense 8,033 6,844 1,189
Property, Franchise and Other Taxes
(Lease Operating Expense) 5,038 5,095 (57)
Depreciation, Depletion and
Amortization 94,738 90,912 3,826
Impairment of Oil and Gas Producing
Properties 104,739 - 104,739
---------- --------- ---------
286,942 170,217 116,725
---------- --------- ---------
Operating Income 59,938 123,208 (63,270)
Other Income (Expense):
Interest Income 8,682 4,661 4,021
Other Interest Expense (50,457) (48,856) (1,601)
---------- --------- ---------
Income (Loss) Before Income Taxes 18,163 79,013 (60,850)
Income Tax Expense (Benefit) (2,808) 28,354 (31,162)
---------- --------- ---------
Net Income (Loss) $20,971 $50,659 $(29,688)
---------- --------- ---------
Net Income (Loss) Per Share (Diluted) $0.24 $0.60 $(0.36)
---------- --------- ---------
>>
<<
Three Months Ended
September 30,
--------------------------
ENERGY MARKETING SEGMENT 2006 2005 Variance
--------------------------------------------------- -------- --------
Operating Revenues $50,702 $53,608 $(2,906)
-------- -------- --------
Operating Expenses:
Purchased Gas 49,939 52,628 (2,689)
Operation and Maintenance 1,185 1,170 15
Property, Franchise and Other Taxes 10 4 6
Depreciation, Depletion and Amortization 7 (24) 31
-------- -------- --------
51,141 53,778 (2,637)
-------- -------- --------
Operating Income (Loss) (439) (170) (269)
Other Income (Expense):
Interest Income 144 200 (56)
Other Income 57 47 10
Other Interest Expense (20) (4) (16)
-------- -------- --------
Income (Loss) Before Income Taxes (258) 73 (331)
Income Tax Expense (Benefit) (148) (95) (53)
-------- -------- --------
Net Income (Loss) $(110) $168 $(278)
-------- -------- --------
Net Income Per Share (Diluted) $- $- $-
-------- -------- --------
Twelve Months Ended
September 30,
-----------------------------
ENERGY MARKETING SEGMENT 2006 2005 Variance
-------------------------------------------------- --------- ---------
Operating Revenues $497,069 $329,714 $167,355
--------- --------- ---------
Operating Expenses:
Purchased Gas 483,250 318,571 164,679
Operation and Maintenance 5,079 3,731 1,348
Property, Franchise and Other Taxes (222) 83 (305)
Depreciation, Depletion and
Amortization 53 41 12
--------- --------- ---------
488,160 322,426 165,734
--------- --------- ---------
Operating Income (Loss) 8,909 7,288 1,621
Other Income (Expense):
Interest Income 445 783 (338)
Other Income 419 227 192
Other Interest Expense (227) (11) (216)
--------- --------- ---------
Income (Loss) Before Income Taxes 9,546 8,287 1,259
Income Tax Expense (Benefit) 3,748 3,210 538
--------- --------- ---------
Net Income (Loss) $5,798 $5,077 $721
--------- --------- ---------
Net Income Per Share (Diluted) $0.07 $0.06 $0.01
--------- --------- ---------
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
(Thousands of Dollars, except per share Three Months Ended
amounts) September 30,
----------------------------
TIMBER SEGMENT 2006 2005 Variance
--------------------------------------------------------------------
Revenues from External Customers $13,647 $14,291 $(644)
Intersegment Revenues 1 - 1
----------------------------
Total Operating Revenues 13,648 14,291 (643)
----------------------------
Operating Expenses:
Operation and Maintenance 10,383 10,818 (435)
Property, Franchise and Other Taxes 370 418 (48)
Depreciation, Depletion and
Amortization 1,582 1,697 (115)
----------------------------
12,335 12,933 (598)
----------------------------
Operating Income 1,313 1,358 (45)
Other Income (Expense):
Interest Income 229 131 98
Other Income 66 3 63
Other Interest Expense (796) (757) (39)
----------------------------
Income Before Income Taxes 812 735 77
Income Tax Expense (Benefit) 343 (95) 438
----------------------------
Net Income $469 $830 $(361)
----------------------------
Net Income Per Share (Diluted) $0.01 $0.01 $-
----------------------------
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
(Thousands of Dollars, except per share Twelve Months Ended
amounts) September 30,
------------------------------
TIMBER SEGMENT 2006 2005 Variance
----------------------------------------------------------------------
Revenues from External Customers $65,024 $61,285 $3,739
Intersegment Revenues 5 1 4
------------------------------
Total Operating Revenues 65,029 61,286 3,743
------------------------------
Operating Expenses:
Operation and Maintenance 45,712 43,641 2,071
Property, Franchise and Other Taxes 1,611 1,488 123
Depreciation, Depletion and
Amortization 6,495 6,601 (106)
------------------------------
53,818 51,730 2,088
------------------------------
Operating Income 11,211 9,556 1,655
Other Income (Expense):
Interest Income 747 438 309
Other Income 118 73 45
Other Interest Expense (3,095) (2,764) (331)
------------------------------
Income Before Income Taxes 8,981 7,303 1,678
Income Tax Expense (Benefit) 3,277 2,271 1,006
------------------------------
Net Income $5,704 $5,032 $672
------------------------------
Net Income Per Share (Diluted) $0.07 $0.06 $0.01
------------------------------
>>
<<
Three Months Ended
September 30,
-----------------------------
ALL OTHER 2006 2005 Variance
--------------------------------------------------- -------- --------
Revenues from External Customers $1,053 $658 $395
Intersegment Revenues 1,506 2,482 (976)
----------- -------- --------
Total Operating Revenues 2,559 3,140 (581)
----------- -------- --------
Operating Expenses:
Purchased Gas 1,541 2,580 (1,039)
Operation and Maintenance 1,132 1,187 (55)
Property, Franchise and Other Taxes 21 20 1
Depreciation, Depletion and
Amortization 196 2,957 (2,761)
----------- -------- --------
2,890 6,744 (3,854)
----------- -------- --------
Operating Income (Loss) (331) (3,604) 3,273
Other Income (Expense):
Income from Unconsolidated
Subsidiaries 1,384 1,447 (63)
Impairment of Investment in
Partnership - (4,158) 4,158
Interest Income 3 6 (3)
Other Income 11 172 (161)
Other Interest Expense (681) (523) (158)
----------- -------- --------
Income (Loss) Before Income Taxes 386 (6,660) 7,046
Income Tax Expense (Benefit) 430 (2,523) 2,953
----------- -------- --------
Net Income (Loss) $(44) $(4,137) $4,093
----------- -------- --------
Net Income (Loss) Per Share (Diluted) $(0.01) $(0.05) $0.04
----------- -------- --------
Twelve Months Ended
September 30,
------------------------------
ALL OTHER 2006 2005 Variance
---------------------------------------------------- -------- --------
Revenues from External Customers $3,304 $4,748 $(1,444)
Intersegment Revenues 9,444 8,606 838
------------ -------- --------
Total Operating Revenues 12,748 13,354 (606)
------------ -------- --------
Operating Expenses:
Purchased Gas 7,908 7,876 32
Operation and Maintenance 3,731 3,850 (119)
Property, Franchise and Other Taxes 95 87 8
Depreciation, Depletion and
Amortization 789 3,537 (2,748)
------------ -------- --------
12,523 15,350 (2,827)
------------ -------- --------
Operating Income (Loss) 225 (1,996) 2,221
Other Income (Expense):
Income from Unconsolidated
Subsidiaries 3,583 3,362 221
Impairment of Investment in
Partnership - (4,158) 4,158
Interest Income 22 19 3
Other Income 53 458 (405)
Other Interest Expense (2,555) (1,726) (829)
------------ -------- --------
Income (Loss) Before Income Taxes 1,328 (4,041) 5,369
Income Tax Expense (Benefit) 969 (1,425) 2,394
------------ -------- --------
Net Income (Loss) $359 $(2,616) $2,975
------------ -------- --------
Net Income (Loss) Per Share (Diluted) $- $(0.03) $0.03
------------ -------- --------
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
(Thousands of Dollars, except per share Three Months Ended
amounts) September 30,
----------------------------
CORPORATE 2006 2005 Variance
-------------------------------------------------- -------- --------
Revenues from External Customers $187 $- $187
Intersegment Revenues 737 811 (74)
---------- -------- --------
Total Operating Revenues 924 811 113
---------- -------- --------
Operating Expenses:
Operation and Maintenance 1,650 3,216 (1,566)
Property, Franchise and Other Taxes 69 163 (94)
Depreciation, Depletion and
Amortization 140 118 22
---------- -------- --------
1,859 3,497 (1,638)
---------- -------- --------
Operating Loss (935) (2,686) 1,751
Other Income (Expense):
Interest Income 22,360 20,280 2,080
Other Income 739 201 538
Interest Expense on Long-Term Debt (17,886) (17,892) 6
Other Interest Expense (2,574) (2,124) (450)
---------- -------- --------
Income (Loss) Before Income Taxes 1,704 (2,221) 3,925
Income Tax Expense (Benefit) 1,699 809 890
---------- -------- --------
Net Income (Loss) $5 $(3,030) $3,035
---------- -------- --------
Net Income (Loss) Per Share (Diluted) $- $(0.03) $0.03
---------- -------- --------
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
(Thousands of Dollars, except per share Twelve Months Ended
amounts) September 30,
------------------------------
CORPORATE 2006 2005 Variance
---------------------------------------------------- -------- --------
Revenues from External Customers $766 $- $766
Intersegment Revenues 2,949 2,824 125
------------ -------- --------
Total Operating Revenues 3,715 2,824 891
------------ -------- --------
Operating Expenses:
Operation and Maintenance 8,210 6,107 2,103
Property, Franchise and Other Taxes 303 511 (208)
Depreciation, Depletion and
Amortization 492 467 25
------------ -------- --------
9,005 7,085 1,920
------------ -------- --------
Operating Loss (5,290) (4,261) (1,029)
Other Income (Expense):
Interest Income 86,820 79,508 7,312
Other Income 823 891 (68)
Interest Expense on Long-Term Debt (71,551) (71,569) 18
Other Interest Expense (9,686) (10,459) 773
------------ -------- --------
Income (Loss) Before Income Taxes 1,116 (5,890) 7,006
Income Tax Expense (Benefit) 1,305 (1,602) 2,907
------------ -------- --------
Net Income (Loss) $(189) $(4,288) $4,099
------------ -------- --------
Net Income (Loss) Per Share (Diluted) $- $(0.05) $0.05
------------ -------- --------
>>
<<
Three Months Ended
September 30,
-----------------------------
INTERSEGMENT ELIMINATIONS 2006 2005 Variance
-------------------------------------------------- --------- --------
Intersegment Revenues $(25,121) $(26,039) $918
---------- --------- --------
Operating Expenses:
Purchased Gas (24,263) (25,063) 800
Operation and Maintenance (858) (976) 118
---------- --------- --------
(25,121) (26,039) 918
---------- --------- --------
Operating Income - - -
Other Income (Expense):
Interest Income (23,815) (21,250) (2,565)
Other Interest Expense 23,815 21,250 2,565
---------- --------- --------
Net Income $- $- $-
---------- --------- --------
Net Income Per Share (Diluted) $- $- $-
---------- --------- --------
Twelve Months Ended
September 30,
------------------------------
INTERSEGMENT ELIMINATIONS 2006 2005 Variance
-------------------------------------------------- ---------- --------
Intersegment Revenues $(108,897) $(109,980) $1,083
---------- ---------- --------
Operating Expenses:
Purchased Gas (106,892) (106,366) (526)
Operation and Maintenance (2,005) (3,614) 1,609
---------- ---------- --------
(108,897) (109,980) 1,083
---------- ---------- --------
Operating Income - - -
Other Income (Expense):
Interest Income (91,784) (83,100) (8,684)
Other Interest Expense 91,784 83,100 8,684
---------- ---------- --------
Net Income $- $- $-
---------- ---------- --------
Net Income Per Share (Diluted) $- $- $-
---------- ---------- --------
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
Three Months Ended
September 30,
(Unaudited)
----------------------------------------------
Increase
2006 2005 (Decrease)
------------------ ----------- ---------------
Capital Expenditures:
----------------------
Utility $15,042 $15,078 $(36)
Pipeline and Storage 10,662 7,977 2,685
Exploration and
Production 47,980 36,402 11,578
Energy Marketing 10 12 (2)
Timber 1,193 193 1,000
------------------ ----------- ---------------
Total Reportable
Segments 74,887 59,662 15,225
All Other 7 293 (286)
Corporate 607 512 95
------------------ ----------- ---------------
Total Expenditures
from
Continuing
Operations $75,501 $60,467 $15,034
------------------ ----------- ---------------
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
Twelve Months Ended
September 30,
(Unaudited)
------------------------------------------------
Increase
2006 2005 (Decrease)
----------------------- ----------- ------------
Capital Expenditures:
----------------------
Utility $54,414 $50,071 $4,343
Pipeline and Storage 26,023 21,099 4,924
Exploration and
Production 208,303 122,450 85,853
Energy Marketing 16 58 (42)
Timber 2,323 18,894 (16,571)
----------------------- ----------- ------------
Total Reportable
Segments 291,079 212,572 78,507
All Other 85 463 (378)
Corporate 2,995 618 2,377
----------------------- ----------- ------------
Total Expenditures
from
Continuing
Operations $294,159 $213,653 $80,506
----------------------- ----------- ------------
>>
<<
DEGREE DAYS
--------------------------------
Percent Colder
(Warmer) Than:
Last
Three Months Ended September 30 Normal 2006 2005 Normal Year
-------------------------------- ------- ------ ------ ------- ------
Buffalo, NY 178 152 36 (14.6) 322.2
Erie, PA 135 123 32 (8.9) 284.4
Twelve Months Ended September 30
---------------------------------
Buffalo, NY 6,692 5,968 6,587 (10.8) (9.4)
Erie, PA 6,243 5,688 6,247 (8.9) (8.9)
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
----------------------------------------------------------------------
Three Months Ended
September 30,
Increase
2006 2005 (Decrease)
------- ------- ----------
Gas Production/Prices:
-----------------------------------------
Production (MMcf)
Gulf Coast 2,582 3,035 (453)
West Coast 947 1,052 (105)
Appalachia 1,342 1,150 192
Canada 1,842 2,050 (208)
------- ------- ----------
6,713 7,287 (574)
------- ------- ----------
Average Prices (Per Mcf)
Gulf Coast $6.62 $8.07 $(1.45)
West Coast 6.40 7.73 (1.33)
Appalachia 7.38 8.93 (1.55)
Canada 5.22 7.47 (2.25)
Weighted Average 6.36 7.99 (1.63)
Weighted Average after Hedging 6.36 6.77 (0.41)
Oil Production/Prices:
-----------------------------------------
Production (Thousands of Barrels)
Gulf Coast 206 188 18
West Coast 620 628 (8)
Appalachia 27 13 14
Canada 51 71 (20)
------- ------- ----------
904 900 4
------- ------- ----------
Average Prices (Per Barrel)
Gulf Coast $68.92 $58.53 $10.39
West Coast 61.23 54.52 6.71
Appalachia 70.37 51.06 19.31
Canada 60.69 51.29 9.40
Weighted Average 63.23 55.06 8.17
Weighted Average after Hedging 45.73 30.70 15.03
Total Production (Mmcfe) 12,137 12,687 (550)
----------------------------------------- ------- ------- ----------
Selected Operating Performance
Statistics:
-----------------------------------------
General & Administrative Expense per Mcfe
(1) $0.40 $0.36 $0.04
Lease Operating Expense per Mcfe (1) $1.14 $1.09 $0.05
Depreciation, Depletion & Amortization
per Mcfe (1) $1.98 $1.84 $0.14
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
----------------------------------------------------------------------
Twelve Months Ended
September 30,
Increase
2006 2005 (Decrease)
---------- ------- ----------
Gas Production/Prices:
-----------------------------------------
Production (MMcf)
Gulf Coast 9,110 12,468 (3,358)
West Coast 3,880 4,052 (172)
Appalachia 5,108 4,650 458
Canada 7,673 8,009 (336)
---------- ------- ----------
25,771 29,179 (3,408)
---------- ------- ----------
Average Prices (Per Mcf)
Gulf Coast $8.01 $7.05 $0.96
West Coast 7.93 6.85 1.08
Appalachia 9.53 7.60 1.93
Canada 7.14 6.15 0.99
Weighted Average 8.04 6.86 1.18
Weighted Average after Hedging 7.15 6.23 0.92
Oil Production/Prices:
-----------------------------------------
Production (Thousands of Barrels)
Gulf Coast 685 989 (304)
West Coast 2,582 2,544 38
Appalachia 69 36 33
Canada 272 300 (28)
---------- ------- ----------
3,608 3,869 (261)
---------- ------- ----------
Average Prices (Per Barrel)
Gulf Coast $64.10 $49.78 $14.32
West Coast 56.80 42.91 13.89
Appalachia 65.28 48.28 17.00
Canada 51.40 42.97 8.43
Weighted Average 57.94 44.72 13.22
Weighted Average after Hedging 41.10 27.86 13.24
Total Production (Mmcfe) 47,419 52,393 (4,974)
--------------------------------------------------- ------- ----------
Selected Operating Performance
Statistics:
-----------------------------------------
General & Administrative Expense per Mcfe
(1) $0.49 $0.41 $0.08
Lease Operating Expense per Mcfe (1) $1.18 $0.98 $0.20
Depreciation, Depletion & Amortization
per Mcfe (1) $2.00 $1.74 $0.26
>>
<<
(1) Refer to page 18 for the General and Administrative Expense, Lease
Operating Expense and Depreciation, Depletion, and Amortization
Expense for the Exploration and Production segment.
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
----------------------------------------------------------------------
Hedging Summary for Fiscal 2007
SWAPS Volume Average Hedge Price
-------------------------------------- ----------- -------------------
Oil 0.9 MMBBL $37.03 /
BBL
Gas 0.7 BCF $5.84 /
MCF
Average Average
Floor Ceiling
No-cost Collars Volume Price Price
-------------------------------------- ----------- ---------- --------
Oil 0.2 MMBBL $70.00 / $77.00 /
BBL BBL
Gas 5.7 BCF $8.12 / $17.45 /
MCF MCF
Hedging Summary for Fiscal 2008
Average Average
Floor Ceiling
No-cost Collars Volume Price Price
-------------------------------------- ----------- ---------- --------
Gas 1.4 BCF $8.83 / $16.45 /
MCF MCF
>>
<<
Drilling Program
----------------------------------
Twelve Months Ended September 30,
2006:
----------------------------------
Gross Wells Drilled
----------------------------------
Gulf West East Canada Total
------- ------- ----- ------- -----
Exploratory
Successful 3 1 7 19 30
Unsuccessful 2 0 2 2 6
Developmental
Successful 0 93 143 3 239
Unsuccessful 0 1 0 1 2
Total
Successful 3 94 150 22 269
Unsuccessful 2 1 2 3 8
Success Ratio 60% 99% 99% 88% 97%
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
----------------------------------------------------------------------
Reserve Quantity Information
Gas MMcf
-------------------------------------------------
U.S.
---------------------------------
Gulf West
Coast Coast Appalachian Total Total
Region Region Region U.S. Canada Company
-------------------------------------------------
Proved Developed and
Undeveloped
Reserves:
September 30, 2005 38,470 70,459 83,125 192,054 46,086 238,140
Extensions and
Discoveries 11,763 1,815 11,132 24,710 6,229 30,939
Revisions of
Previous Estimates 679 5,757 (7,776) (1,340)(11,096)(12,436)
Production (9,110)(3,880) (5,108)(18,098) (7,673)(25,771)
Purchases of
Minerals in Place - 1,715 - 1,715 - 1,715
Sales of Minerals in
Place - - - - (12) (12)
-------------------------------------------------
September 30, 2006 41,802 75,866 81,373 199,041 33,534 232,575
Proved Developed
Reserves:
September 30, 2005 23,108 58,692 83,125 164,925 43,980 208,905
September 30, 2006 32,345 64,196 81,373 177,914 33,534 211,448
Oil Mbbl
-------------------------------------------------
U.S.
---------------------------------
Gulf West
Coast Coast Appalachian Total Total
Region Region Region U.S. Canada Company
-------------------------------------------------
Proved Developed and
Undeveloped
Reserves:
September 30, 2005 1,295 57,085 177 58,557 1,700 60,257
Extensions and
Discoveries 39 172 108 319 128 447
Revisions of
Previous Estimates 595 (80) 57 572 101 673
Production (685)(2,582) (69) (3,336) (272) (3,608)
Purchases of
Minerals in Place - 274 - 274 - 274
Sales of Minerals in
Place - - - - (25) (25)
-------------------------------------------------
September 30, 2006 1,244 54,869 273 56,386 1,632 58,018
Proved Developed
Reserves:
September 30, 2005 1,229 41,701 177 43,107 1,700 44,807
September 30, 2006 1,217 42,522 273 44,012 1,632 45,644
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Utility Throughput - (millions of cubic feet - MMcf)
Three Months Ended
September 30,
------------------------------
Increase
2006 2005 (Decrease)
---------- -------- ----------
Retail Sales:
Residential Sales 4,372 3,778 594
Commercial Sales 741 643 98
Industrial Sales 85 666 (581)
---------- -------- ----------
5,198 5,087 111
Transportation 9,701 9,426 275
---------- -------- ----------
14,899 14,513 386
---------- -------- ----------
Pipeline & Storage Throughput- (MMcf)
Three Months Ended
September 30,
------------------------------
Increase
2006 2005 (Decrease)
---------- -------- ----------
Firm Transportation - Affiliated 10,608 10,442 166
Firm Transportation - Non-
Affiliated 64,501 62,606 1,895
Interruptible Transportation 3,835 4,790 (955)
---------- -------- ----------
78,944 77,838 1,106
---------- -------- ----------
Energy Marketing Volumes
Three Months Ended
September 30,
Increase
2006 2005 (Decrease)
---------- -------- ----------
Natural Gas (MMcf) 6,774 6,567 207
---------- -------- ----------
Timber Board Feet (Thousands)
Three Months Ended
September 30,
Increase
2006 2005 (Decrease)
---------- -------- ----------
Log
Sales 1,986 1,668 318
Green Lumber Sales 2,372 2,310 62
Kiln Dry Lumber Sales 3,624 4,118 (494)
---------- -------- ----------
7,982 8,096 (114)
---------- -------- ----------
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Utility Throughput - (millions
of cubic feet - MMcf)
Twelve Months Ended
September 30,
--------------------------------------
Increase
2006 2005 (Decrease)
--------------- ---------- -----------
Retail Sales:
Residential Sales 59,443 66,903 (7,460)
Commercial Sales 10,681 11,984 (1,303)
Industrial Sales 985 1,387 (402)
--------------- ---------- -----------
71,109 80,274 (9,165)
Transportation 57,950 59,770 (1,820)
--------------- ---------- -----------
129,059 140,044 (10,985)
--------------- ---------- -----------
Pipeline & Storage Throughput-
(MMcf)
Twelve Months Ended
September 30,
--------------------------------------
Increase
2006 2005 (Decrease)
--------------- ---------- -----------
Firm Transportation -
Affiliated 103,223 113,242 (10,019)
Firm Transportation - Non-
Affiliated 260,156 244,343 15,813
Interruptible Transportation 11,609 14,794 (3,185)
--------------- ---------- -----------
374,988 372,379 2,609
--------------- ---------- -----------
Energy Marketing Volumes
Twelve Months Ended
September 30,
Increase
2006 2005 (Decrease)
--------------- ---------- -----------
Natural Gas (MMcf) 45,270 40,683 4,587
--------------- ---------- -----------
Timber Board Feet (Thousands)
Twelve Months Ended
September 30,
Increase
2006 2005 (Decrease)
--------------- ---------- -----------
Log
Sales 9,527 7,601 1,926
Green Lumber Sales 10,454 10,489 (35)
Kiln Dry Lumber Sales 16,862 15,491 1,371
--------------- ---------- -----------
36,843 33,581 3,262
--------------- ---------- -----------
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
FISCAL 2007 EARNINGS GUIDANCE AND SENSITIVITIES
Earnings per share sensitivity to
Fiscal 2007 (Diluted earnings per changes from NYMEX prices used in
share guidance(x)) guidance(x) (caret)
---------------------------------- -----------------------------------
$1 change per $5 change per Bbl
MMBtu gas oil
-----------------------------------
Range Increase Decrease Increase Decrease
-------------- -------- -------- -------- --------
Consolidated
Earnings $2.10 - $2.30 + $0.19 - $0.19 + $0.09 - $0.09
>>
<<
NYMEX Settlement Prices at September 21, 2006
-----------------------------------------------
Natural Gas
($ per Oil
MMBtu) ($ per Bbl)
----------- ------------
Oct-06 $4.781 $61.59
Nov-06 $6.011 $61.59
Dec-06 $7.391 $62.53
Jan-07 $7.881 $63.32
Feb-07 $7.921 $64.03
Mar-07 $7.746 $64.65
Apr-07 $7.166 $65.18
May-07 $7.126 $65.61
Jun-07 $7.221 $65.96
Jul-07 $7.311 $66.25
Aug-07 $7.391 $66.49
Sep-07 $7.476 $66.67
Average $7.119 $64.49
>>
<<
(x) Please refer to forward looking statement footnote at page 9 of this
document.
(caret) This sensitivity table is current as of November 6, 2006, but
will become obsolete with the passage of time, changes in Seneca's
production forecast, change in basis differentials, changes in
customer use per account, as additional hedging contracts are entered
into, and the settling of NYMEX hedge contracts at their maturity.
>>
<<
NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Quarter Ended September 30 (unaudited) 2006 2005
-------------------------------------- --------------- ---------------
Operating Revenues $294,469,000 $287,064,000
--------------- ---------------
Income from Continuing Operations $1,968,000 $18,311,000
Income (Loss) from Discontinued
Operations, Net of Tax - 30,900,000
--------------- ---------------
Net Income Available for Common
Stock $1,968,000 $49,211,000
--------------- ---------------
Earnings Per Common Share:
Basic:
Income from Continuing
Operations $0.02 $0.22
Income (Loss) from
Discontinued Operations - 0.36
--------------- ---------------
Net Income Available for
Common Stock $0.02 $0.58
--------------- ---------------
Diluted:
Income from Continuing
Operations $0.02 $0.21
Income (Loss) from
Discontinued Operations - 0.36
--------------- ---------------
Net Income Available for
Common Stock $0.02 $0.57
--------------- ---------------
Weighted Average Common Shares:
Used in Basic Calculation 83,432,553 84,128,929
--------------- ---------------
Used in Diluted Calculation 85,523,042 85,784,654
--------------- ---------------
Twelve Months Ended September 30
(unaudited)
--------------------------------------
Operating Revenues $2,311,659,000 $1,923,549,000
--------------- ---------------
Income from Continuing Operations $138,091,000 $153,515,000
Income from Discontinued Operations,
Net of Tax - 35,973,000
--------------- ---------------
Net Income Available for Common
Stock $138,091,000 $189,488,000
--------------- ---------------
Earnings Per Common Share:
Basic:
Income from Continuing
Operations $1.64 $1.84
Income from Discontinued
Operations - 0.43
--------------- ---------------
Net Income Available for
Common Stock $1.64 $2.27
--------------- ---------------
Diluted:
Income from Continuing
Operations $1.61 $1.81
Income from Discontinued
Operations - 0.42
--------------- ---------------
Net Income Available for
Common Stock $1.61 $2.23
--------------- ---------------
Weighted Average Common Shares:
Used in Basic Calculation 84,030,118 83,541,627
--------------- ---------------
Used in Diluted Calculation 86,028,466 85,029,131
--------------- ---------------
>>
