National Fuel Reports First Quarter Earnings and Provides Appalachian Operations Update
National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG)
today announced consolidated results for the first quarter of its 2016
fiscal year (the quarter ended December 31, 2015) and provided an update
on the Company's upstream and midstream operations in Appalachia.
FISCAL 2016 FIRST QUARTER EARNINGS SUMMARY
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Consolidated net loss of $189.1 million, or $2.23 per share
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Operating results, excluding items impacting comparability, of $66.5
million, or $0.78 per share
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$252.6 million, or $2.97 per share, after-tax impairment of oil and
gas properties
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$204.8 million consolidated adjusted EBITDA (see non-GAAP
reconciliation on page 23)
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Production of 38.1 Bcfe, a 21% decrease from prior year and 1%
increase from the last quarter
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Price-related natural gas production curtailments of 14.6 Bcf in
Appalachia
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Average natural gas and crude oil prices after hedging of $3.16 per
Mcf and $59.76 per Bbl, respectively
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Pipeline and Storage operating revenues of $75.5 million, a 3.2%
increase over prior year's first quarter
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Weather 27.4% warmer than normal and 25.5% warmer than the prior year
in Utility's Pa. service territory
APPALACHIAN OPERATIONS UPDATE SUMMARY
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Currently operating two rigs in Appalachia, with plans to go to one
rig by March 2016
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Northern Access 2016 pipeline expansion project timeline revised to
target November 1, 2017, in service
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Fiscal 2016 capital expenditure budget reduced by a total of $470
million
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Company does not anticipate a need to access the long-term debt or
equity capital markets through 2016
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OPERATING RESULTS
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Three Months Ended
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December 31,
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(in thousands except per share amounts)
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2015
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2014
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Reported GAAP earnings (loss)
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$
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(189,109
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$
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84,740
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Items impacting comparability:
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Impairment of oil and gas properties (E&P)
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252,562
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Joint development agreement professional fees (E&P)
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3,043
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Operating Results
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$
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66,496
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$
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84,740
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Reported GAAP earnings (loss) per share
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$
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(2.23
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$
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1.00
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Items impacting comparability:
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Impairment of oil and gas properties (E&P)
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2.97
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Joint development agreement professional fees (E&P)
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0.04
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Earnings per share impact of dilutive shares (All segments)
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0.01
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Rounding
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(0.01
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Operating Results per share
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$
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0.78
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$
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1.00
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APPALACHIAN OPERATIONS UPDATE
Due to ongoing low prices in the natural gas market, National Fuel is
revising its near-term upstream and midstream development plans in
Appalachia, while its long-term strategic plans remain intact.
Seneca Resources Corporation (“Seneca”), the Company's wholly owned
exploration and production subsidiary, has elected to further reduce the
pace of its drilling program in the Marcellus Shale. Having already
dropped one of its three rigs in January, Seneca plans to lay down an
additional rig in March and operate a single rig in Appalachia for the
remainder of fiscal 2016 and fiscal 2017. While Seneca's operational
success in the Marcellus has significantly improved the economics of its
development program, near-term natural gas prices have fallen to levels
such that a reduction in activity is warranted. Seneca's program will
utilize a single completions crew to complete its drilled well inventory
and manage water logistics, thereby allowing it to maintain operational
efficiencies and meet current firm transportation and firm sales
commitments while significantly reducing the Company's upstream capital
commitments over the near term. Seneca's projected fiscal 2016
production is largely unaffected by the planned decrease in drilling
activity. Further, the reduction in activity is also not expected to
have any impact on the Marcellus joint development agreement announced
on December 2, 2015.
As a result of Seneca's slowed drilling activity and other
considerations, the Company is revising the target in-service date for
the Northern Access 2016 expansion project to November 1, 2017, and
slowing the build-out of the Clermont Gathering System. The Northern
Access project, originally scheduled for late calendar 2016 in-service,
is a $455 million pipeline expansion of the Company's National Fuel Gas
Supply Corporation and Empire Pipeline systems designed to transport and
deliver 490,000 Dth per day of natural gas production from
Seneca-operated wells to multiple markets in the northeast U.S.,
including Western New York and the Dawn market center that serves the
Midwest and Ontario, Canada. The revised project timeline allows the
Company additional time to complete all development activities and
prepare for efficient construction of the project facilities. National
Fuel will continue to pursue timely authorization from the Federal
Energy Regulatory Commission ("FERC") to construct the project to meet
the schedule and will preserve the option to accelerate construction as
market and regulatory conditions and resource availability might allow.
As the owner and controlling operator of both the upstream acreage and
midstream infrastructure subsidiaries, National Fuel has the ability to
modify the timing and level of its coordinated Appalachian development
activities to quickly and appropriately respond to changing market
conditions. Seneca, as the fee owner of predominately all of the natural
gas rights in the Western Development Area in Pennsylvania, is largely
unencumbered by lease expirations that would commit it to drill the
acreage in any set period of time. Additionally, the Northern Access
project capacity is subscribed completely by Seneca, allowing for the
coordination of production volumes and build-out of necessary pipeline
capacity. With the stability provided by the Company's rate-regulated
downstream and midstream businesses, the Company enjoys significant
operational and financial flexibility to ensure that capital is deployed
in an efficient and cost-effective fashion and financed in a manner that
positions the Company and its shareholders for long-term value creation.
Based on the modified activity levels, National Fuel is updating its
capital spending guidance for fiscal 2016. Business segment and
consolidated guidance for the Company's fiscal 2016 capital expenditures
is summarized in the table below. The Exploration and Production
segment's capital expenditure guidance range would be reduced by an
additional $90 to $110 million if Seneca's Marcellus joint development
partner exercises their right to participate in the remaining 38 wells
as outlined in the joint development agreement.
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Updated FY 2016 Guidance
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Previous
FY 2016 Guidance
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Capital Expenditures (Millions)
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Exploration & Production
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$150 - $200
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$200 - $250
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Pipeline & Storage
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$125 - $175
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$500 - $550
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Gathering
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$85 - $95
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$125 - $150
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Utility
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$95 - $105
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$90 - $110
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Consolidated Capital Expenditures
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$455 - $575
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$915 - $1,060
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Due to the anticipated decrease in projected upstream and midstream
capital expenditures and a strong hedge position that will provide
attractive and certain realizations on a majority of Seneca's production
in fiscal 2016, National Fuel is projecting a modest outspend through
the end of fiscal 2016 that should be met with cash on the balance sheet.
MANAGEMENT COMMENTS
Ronald J. Tanski, President and Chief Executive Officer of National Fuel
Gas Company, stated: “Operationally, the first quarter was a good start
to our 2016 fiscal year, particularly for the Company's Pipeline and
Storage segment. During the first quarter, we completed construction and
placed in service three expansion projects for affiliated and
non-affiliated customers. We continue to see opportunities to capitalize
on our valuable midstream footprint in Appalachia and meet the
increasing demand for pipeline infrastructure to move natural gas
production from the Marcellus and Utica shales.
"However, persistently low commodity prices continued to weigh on our
quarterly financial results, leading to a significant write-down of our
natural gas and oil properties and lower price realizations on our
natural gas and crude oil production. Magnified by warmer weather this
winter in the Northeast, which also reduced earnings in our Utility
segment, national and regional commodity prices have continued to trend
lower, creating volatility in the energy markets and clouding the
near-term outlook for the sector. While we remain committed to growing
our uniquely integrated upstream and midstream asset base in a
coordinated fashion over the long term, current market conditions
compelled us to take precautionary and financially prudent steps to
preserve the strength of our balance sheet and ensure that our long-term
plans remain viable.
"Our decision to slow our pace of drilling in the Marcellus and revise
the in-service date of the Northern Access expansion project
demonstrates the ability of our integrated model to react quickly to
changing market conditions. Our integrated structure and the coordinated
nature of our upstream and midstream activities provides us significant
stability and flexibility to efficiently deploy capital. Our
rate-regulated midstream and downstream operations provide balance and a
solid base of earnings and cash flows that allow us to maintain the
safety and reliability of our pipeline systems, meet our fixed financial
obligations, and fund our dividend.
"We have prudently managed and structured our business over the years to
endure periods of extreme volatility in commodity prices. I am confident
that National Fuel will stand ready and on strong footing to execute our
long-term Appalachian growth strategy as we continue to work through
this current business cycle.”
DISCUSSION OF RESULTS BY SEGMENT
The following discussion of the earnings of each segment is summarized
in a tabular form on pages 9 and 10 of this report. It may be helpful to
refer to those tables while reviewing this discussion.
Upstream Business
Exploration and Production Segment
The Exploration and Production segment operations are carried out by
Seneca Resources Corporation. Seneca explores for, develops and produces
natural gas and oil reserves, primarily in Pennsylvania and California.
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(in thousands except per share amounts)
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Quarter Ended
December 31, 2015
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Quarter Ended
December 31, 2014
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Variance
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Net Income / (Loss)
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$
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(237,086
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$
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26,720
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$
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(263,806
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Net Income / (Loss) Per Share (Diluted)
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$
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(2.80
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$
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0.32
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$
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(3.12
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Adjusted EBITDA
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$
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91,140
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$
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135,431
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$
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(44,291
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The quarter over quarter variance is mainly due to a non-cash, after-tax
charge of $252.6 million to write down the value of Seneca’s oil and
natural gas reserves under the full cost method of accounting. This
accounting method requires that Seneca perform a quarterly “ceiling
test” to compare the present value of future revenues from its oil and
natural gas reserves based on an unweighted arithmetic average of the
first day of the month oil and gas prices for each month within the
12-month period prior to the end of the reporting period (“the ceiling”)
with the book value of those reserves at the balance sheet date. If the
book value of the reserves exceeds the ceiling, a non-cash impairment
charge must be recorded in order to reduce the book value of the
reserves to the calculated ceiling. Unless oil and gas prices improve
significantly, Seneca expects to incur additional impairment charges
during the remainder of the fiscal year ending September 30, 2016.
Seneca also incurred $4.7 million ($3.0 million after-tax, or $0.04 per
share) of professional and legal expenses relating to the joint
development agreement that Seneca entered into during the first quarter.
These transaction costs were recorded to General and Administrative
("G&A") expense.
Excluding these items, Operating Results in the Exploration and
Production segment in the current year’s first quarter were $18.5
million, or $0.22 per share, compared to $26.7 million, or $0.32 per
share, in the prior year’s first quarter, a decrease of $8.2 million or
$0.10 per share. The decrease in Operating Results is mainly due to
lower natural gas production and lower realized natural gas and crude
oil prices after hedging, offset partially by a lower per unit
depreciation, depletion and amortization expense ("DD&A") rate.
Seneca's total first quarter fiscal 2016 production was 38.1 billion
cubic feet equivalent ("Bcfe"), a decrease of 10.1 Bcfe, or 21.0
percent, from the prior fiscal year's first quarter, and an increase of
0.4 Bcfe, or 1.1 percent, versus the fourth quarter of fiscal 2015.
Natural gas and crude oil production for the quarter was 33.6 billion
cubic feet (“Bcf”) and 748 thousand barrels ("Mbbl"), respectively. As a
result of persistently low local spot prices in the Appalachian basin,
Seneca voluntarily curtailed approximately 14.6 Bcf of natural gas
production during the quarter. Absent price-related curtailments,
Seneca's first quarter fiscal 2016 natural gas production would have
been approximately 48.2 Bcf, or nearly 524 million cubic feet ("MMcf")
per day.
Seneca's average realized natural gas price, after the impact of
hedging, for the first quarter was $3.16 per thousand cubic feet
("Mcf"), reflecting $1.14 per Mcf of uplift from financial hedges
settled during the quarter. Seneca's average realized oil price, after
the impact of hedging, for the first quarter was $59.76 per barrel
("Bbl"), reflecting a $23.68 per Bbl uplift from financial hedges
settled during the quarter. Seneca's remaining fiscal 2016 natural gas
production is now 78 percent hedged at the midpoint of production
guidance, with nearly 92 million Million British thermal units ("MMBtu")
(88.7 Bcf) of production hedged at an average price of $3.53 per MMBtu.
In California, Seneca's remaining fiscal 2016 oil production is now 46
percent hedged at an average hedge price of $87.70 per Bbl. For fiscal
2017, Seneca has over 97 million MMBtu (93 Bcf) of production hedged at
an average hedge price of $3.66 per MMBtu and nearly 700,000 Bbls of oil
production hedged at $75.19 per Bbl.
First quarter DD&A expense decreased $36.0 million versus the prior year
first quarter. On a per unit basis, DD&A decreased $0.50 per Mcf
equivalent ("Mcfe") to $1.16 per Mcfe due primarily to the ceiling test
impairment charges recorded during the prior fiscal year and higher
natural gas reserve balances at September 30, 2015.
First quarter lease operating expense (“LOE”) decreased by $7.8 million
mostly due to lower production. On a per unit basis, LOE increased by
$0.06 per Mcfe largely due to the pricing related curtailments discussed
above, which increased the relative proportion of higher cost California
oil production to the total.
The increase in Interest Expense is the result of a new long-term debt
issuance that occurred during the quarter ended June 30, 2015.
Midstream Businesses
Pipeline and Storage Segment
The Pipeline and Storage segment’s operations are carried out by
National Fuel Gas Supply Corporation (“Supply Corporation”) and Empire
Pipeline, Inc. (“Empire”). The Pipeline and Storage segment provides
natural gas transportation and storage services to affiliated and
non-affiliated companies through an integrated system of pipelines and
underground natural gas storage fields in western New York and
Pennsylvania.
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(in thousands except per share amounts)
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Quarter Ended
December 31, 2015
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Quarter Ended
December 31, 2014
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Variance
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Net Income / (Loss)
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$
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21,276
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$
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20,778
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$
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498
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Net Income / (Loss) Per Share (Diluted)
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$
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0.25
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$
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0.25
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$
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—
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Adjusted EBITDA
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$
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50,741
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$
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48,893
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$
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1,848
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The increase in the Pipeline and Storage segment's earnings is due to
higher transportation revenues, offset partially by higher DD&A and
property tax expenses. Transportation revenues increased $2.5 million,
or 4.6 percent, as a result of higher non-affiliated revenues generated
from the Mercer Expansion project, which was placed in service in
November 2014, as well as revenues generated from three additional
expansion projects that were placed in service during the first quarter
of fiscal 2016. The Tuscarora Lateral, Westside Expansion and
Modernization and Northern Access 2015 projects added a combined 364,000
dekatherms (Dth) of new firm transportation capacity to the Supply
Corporation and Empire systems under long-dated contracts for affiliated
and non-affiliated customers. DD&A and property tax expenses increased
$1.2 million and $0.6 million, respectively, mostly due to a higher
gross plant in service, which was largely the result of the Company's
recent expansion projects.
Gathering Segment
The Gathering segment’s operations are carried out by National Fuel Gas
Midstream Corporation’s subsidiary limited liability companies. The
Gathering segment constructs, owns and operates natural gas pipeline
gathering facilities in the Appalachian region and currently provides
the gathering infrastructure for transporting Seneca’s Marcellus Shale
production to the interstate pipeline system.
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(in thousands except per share amounts)
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Quarter Ended
December 31, 2015
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Quarter Ended
December 31, 2014
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Variance
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Net Income / (Loss)
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$
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4,921
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$
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11,623
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$
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(6,702
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Net Income / (Loss) Per Share (Diluted)
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$
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0.06
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$
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0.14
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$
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(0.08
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Adjusted EBITDA
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$
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16,458
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$
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22,763
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$
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(6,305
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The decrease in the Gathering segment's earnings is due primarily to
lower gathering revenues, higher DD&A expense, and higher interest
expense. Gathering revenues decreased $5.8 million as a result of lower
Seneca production volumes in Appalachia compared to the prior year’s
first quarter. DD&A expense increased $2.1 million due to a higher
average gross plant in-service balance, resulting primarily from
Clermont Gathering system facilities that were placed in service over
the previous twelve months. The increase in Interest Expense is the
result of a new long-term debt issuance that occurred during the quarter
ended June 30, 2015, as well as lower capitalized interest expense on
plant construction in progress.
Downstream Businesses
Utility Segment
The Utility segment operations are carried out by National Fuel Gas
Distribution Corporation (“Distribution”), which sells or transports
natural gas to customers located in western New York and northwestern
Pennsylvania.
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(in thousands except per share amounts)
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Quarter Ended
December 31, 2015
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Quarter Ended
December 31, 2014
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Variance
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Net Income / (Loss)
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$
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18,606
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$
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22,594
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$
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(3,988
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Net Income / (Loss) Per Share (Diluted)
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$
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0.22
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$
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0.26
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$
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(0.04
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Adjusted EBITDA
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$
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45,918
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$
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53,431
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$
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(7,513
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The decrease in the Utility segment's earnings is largely attributable
to the impact of warmer weather in Distribution's Pennsylvania service
territory, partially offset by lower Operation and Maintenance ("O&M")
expense. Weather in Distribution's Pennsylvania service territory was
25.5% warmer than last year, resulting in lower retail residential and
transportation customer throughput and revenues, which decreased the
Utility segment's earnings by approximately $0.04 per share. The impact
of weather variations on earnings in Distribution's New York service
territory is largely mitigated by the New York rate jurisdiction's
weather normalization clause. The decrease in O&M expense is mainly due
to lower bad debt expense and a reduction in personnel costs.
Energy Marketing Segment
National Fuel Resources, Inc. (“NFR”) comprises the Company’s Energy
Marketing segment. NFR markets natural gas to industrial, wholesale,
commercial, public authority and residential customers primarily in
western and central New York and northwestern Pennsylvania, offering
competitively priced natural gas to its customers.
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(in thousands except per share amounts)
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Quarter Ended
December 31, 2015
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Quarter Ended
December 31, 2014
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Variance
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Net Income / (Loss)
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$
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1,223
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$
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2,826
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$
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(1,603
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)
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Net Income / (Loss) Per Share (Diluted)
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$
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0.01
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$
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0.03
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$
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(0.02
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Adjusted EBITDA
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$
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1,846
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$
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4,641
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$
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(2,795
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)
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The decrease in the Energy Marketing segment's earnings is due to lower
margins. Margins were negatively impacted by warmer weather, which
lowered retail customer usage, and lower per unit margins, which were
the result of stronger pricing basis in the Northeast.
Corporate and All Other
The Corporate and All Other category earnings of $2.0 million in the
quarter ended December 31, 2015, compares to earnings of $0.2 million in
the prior year’s first quarter. The increase is due to lower income tax
expense.
EARNINGS GUIDANCE
The Company is updating earnings guidance for fiscal 2016 to reflect
first quarter results and revised forecast assumptions. Updated
consolidated earnings guidance and Exploration and Production segment
operational guidance is summarized in the tables below:
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Consolidated Earnings Guidance
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Updated FY 2016 Guidance
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Previous FY 2016 Guidance
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Consolidated Earnings per Share*
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$2.75 to $3.00
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$2.70 to $3.00
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*Exclusive of ceiling test impairment charges
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Exploration & Production Segment Operational Guidance
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Updated FY 2016 Guidance
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Previous FY 2016 Guidance
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NYMEX Natural Gas Price Assumption
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$2.25
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$2.75
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NYMEX Crude Oil Price Assumption
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$40.00
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$50.00
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Production (Bcfe)
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150 to 180
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139 to 202
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Operating Costs ($/Mcfe)
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LOE
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$1.00 - $1.10
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$1.00 - $1.10
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G&A
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$0.40 - $0.45
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$0.40 - $0.45
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DD&A
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|
|
|
$0.90 - $1.00
|
|
$1.00 - $1.10
|
|
|
|
|
|
|
|
While the Company currently expects to incur additional ceiling test
impairment charges in the remaining quarters of fiscal 2016, the amount
of these charges is not reasonably determinable at this time. The amount
of any ceiling test charge is determined at the end of the applicable
quarter and will depend on many factors, including additions to or
subtractions from proved reserves, fluctuations in oil and gas prices,
and income tax effects related to the differences between the book and
tax basis of the Company’s oil and gas properties. Some or all of these
factors are likely to be significant. Because the amount of the expected
ceiling test impairment charges is not reasonably determinable at this
time, the Company is unable to provide earnings guidance other than on a
non-GAAP basis that excludes those charges.
EARNINGS TELECONFERENCE
The Company will host a conference call on Friday, February 5, 2016, at
11 a.m. Eastern Time to discuss this announcement. There are two ways to
access this call. For those with Internet access, visit the investor
relations page at National Fuel’s website at investor.nationalfuelgas.com.
For those without Internet access, access is also provided by dialing
(toll-free) 1-866-202-0886, using passcode “36905811.” For those unable
to listen to the live conference call, a replay will be available at
approximately 3 p.m. Eastern Time at the same website link and by phone
at (toll-free) 1-888-286-8010, using passcode “20223279.” Both the
webcast and telephonic replay will be available until the close of
business on Friday, February 12, 2016.
National Fuel is an integrated energy company reporting financial
results for five operating segments: Exploration and Production,
Pipeline and Storage, Gathering, Utility, and Energy Marketing.
Additional information about National Fuel is available at www.nationalfuelgas.com.
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:
impairments under the SEC’s full cost ceiling test for natural gas and
oil reserves; changes in the price of natural gas or oil; 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;
delays or changes in costs or plans with respect to Company projects or
related projects of other companies, including difficulties or delays in
obtaining necessary governmental approvals, permits or orders or in
obtaining the cooperation of interconnecting facility operators; factors
affecting the Company’s ability to successfully identify, drill for and
produce economically viable natural gas and oil reserves, including
among others geology, lease availability, title disputes, weather
conditions, shortages, delays or unavailability of equipment and
services required in drilling operations, insufficient gathering,
processing and transportation capacity, the need to obtain governmental
approvals and permits, and compliance with environmental laws and
regulations; changes in laws, regulations or judicial interpretations to
which the Company is subject, including those involving derivatives,
taxes, safety, employment, climate change, other environmental matters,
real property, and exploration and production activities such as
hydraulic fracturing; governmental/regulatory actions, initiatives and
proceedings, including those involving rate cases (which address, among
other things, target rates of return, rate design and retained natural
gas), environmental/safety requirements, affiliate relationships,
industry structure, and franchise renewal; 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; 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 economic conditions, including global,
national or regional recessions, and their effect on the demand for, and
customers’ ability to pay for, the Company’s products and services; the
creditworthiness or performance of the Company’s key suppliers,
customers and counterparties; economic disruptions or uninsured losses
resulting from major accidents, fires, severe weather, natural
disasters, terrorist activities, acts of war, cyber attacks or pest
infestation; significant differences between the Company’s projected and
actual capital expenditures and operating expenses; changes in laws,
actuarial assumptions, the interest rate environment and the return on
plan/trust assets related to the Company’s pension and other
post-retirement benefits, which can affect future funding obligations
and costs and plan liabilities; increasing health care costs and the
resulting effect on health insurance premiums and on the obligation to
provide other post-retirement benefits; or increasing costs of
insurance, changes in coverage and the ability to obtain insurance. The
Company disclaims any obligation to update any forward-looking
statements to reflect events or circumstances after the date thereof.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
|
QUARTER ENDED DECEMBER 31, 2015
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upstream
|
|
Midstream Businesses
|
|
Downstream Businesses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration &
|
|
Pipeline &
|
|
|
|
|
|
Energy
|
|
Corporate /
|
|
|
(Thousands of Dollars)
|
|
Production
|
|
Storage
|
|
Gathering
|
|
Utility
|
|
Marketing
|
|
All Other
|
|
Consolidated*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter 2015 GAAP earnings
|
|
$
|
26,720
|
|
|
$
|
20,778
|
|
|
$
|
11,623
|
|
|
$
|
22,594
|
|
|
$
|
2,826
|
|
|
$
|
199
|
|
|
$
|
84,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drivers of operating results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) crude oil prices
|
|
(8,914
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(8,914
|
)
|
Higher (lower) natural gas prices
|
|
(1,930
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(1,930
|
)
|
Higher (lower) natural gas production
|
|
(21,134
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(21,134
|
)
|
Higher (lower) crude oil production
|
|
(1,119
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(1,119
|
)
|
Derivative mark to market adjustments
|
|
(860
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(860
|
)
|
Lower (higher) lease operating and transportation expenses
|
|
5,060
|
|
|
|
|
|
|
|
|
|
|
|
|
5,060
|
|
Lower (higher) depreciation / depletion
|
|
23,422
|
|
|
(794
|
)
|
|
(1,397
|
)
|
|
|
|
|
|
|
|
21,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) transportation revenues
|
|
|
|
1,652
|
|
|
|
|
|
|
|
|
|
|
1,652
|
|
Higher (lower) gathering and processing revenues
|
|
|
|
|
|
(3,776
|
)
|
|
|
|
|
|
|
|
(3,776
|
)
|
Lower (higher) operating expenses
|
|
|
|
|
|
|
|
1,023
|
|
|
|
|
400
|
|
|
1,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warmer weather
|
|
|
|
|
|
|
|
(4,578
|
)
|
|
|
|
|
|
(4,578
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) margins
|
|
|
|
|
|
|
|
|
|
(1,671
|
)
|
|
|
|
(1,671
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) AFUDC**
|
|
|
|
1,027
|
|
|
|
|
|
|
|
|
|
|
1,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower (higher) interest expense
|
|
(2,778
|
)
|
|
(974
|
)
|
|
(1,802
|
)
|
|
|
|
|
|
|
|
(5,554
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower (higher) income tax expense / effective tax rate
|
|
|
|
|
|
|
|
|
|
|
|
1,020
|
|
|
1,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other / rounding
|
|
52
|
|
|
(413
|
)
|
|
273
|
|
|
(433
|
)
|
|
68
|
|
|
332
|
|
|
(121
|
)
|
First quarter 2016 operating results
|
|
18,519
|
|
|
21,276
|
|
|
4,921
|
|
|
18,606
|
|
|
1,223
|
|
|
1,951
|
|
|
66,496
|
|
Items impacting comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of oil and gas producing properties
|
|
(252,562
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(252,562
|
)
|
Joint development agreement professional fees
|
|
(3,043
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(3,043
|
)
|
First quarter 2016 GAAP earnings
|
|
$
|
(237,086
|
)
|
|
$
|
21,276
|
|
|
$
|
4,921
|
|
|
$
|
18,606
|
|
|
$
|
1,223
|
|
|
$
|
1,951
|
|
|
$
|
(189,109
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts do not reflect intercompany eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** AFUDC = Allowance for Funds Used During Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
|
QUARTER ENDED DECEMBER 31, 2015
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upstream
|
|
Midstream Businesses
|
|
Downstream Businesses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration &
|
|
Pipeline &
|
|
|
|
|
|
Energy
|
|
Corporate /
|
|
|
|
|
Production
|
|
Storage
|
|
Gathering
|
|
Utility
|
|
Marketing
|
|
All Other
|
|
Consolidated*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter 2015 GAAP earnings
|
|
$
|
0.32
|
|
|
$
|
0.25
|
|
|
$
|
0.14
|
|
|
$
|
0.26
|
|
|
$
|
0.03
|
|
|
$
|
—
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drivers of operating results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) crude oil prices
|
|
(0.10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(0.10
|
)
|
Higher (lower) natural gas prices
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(0.02
|
)
|
Higher (lower) natural gas production
|
|
(0.25
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(0.25
|
)
|
Higher (lower) crude oil production
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
Derivative mark to market adjustments
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
Lower (higher) lease operating and transportation expenses
|
|
0.06
|
|
|
|
|
|
|
|
|
|
|
|
|
0.06
|
|
Lower (higher) depreciation / depletion
|
|
0.28
|
|
|
(0.01
|
)
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) transportation revenues
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
0.02
|
|
Higher (lower) gathering and processing revenues
|
|
|
|
|
|
(0.04
|
)
|
|
|
|
|
|
|
|
(0.04
|
)
|
Lower (higher) operating expenses
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
—
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warmer weather
|
|
|
|
|
|
|
|
(0.05
|
)
|
|
|
|
|
|
(0.05
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) margins
|
|
|
|
|
|
|
|
|
|
(0.02
|
)
|
|
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higher (lower) AFUDC**
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower (higher) interest expense
|
|
(0.03
|
)
|
|
(0.01
|
)
|
|
(0.02
|
)
|
|
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lower (higher) income tax expense / effective tax rate
|
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All other / rounding
|
|
(0.02
|
)
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
(0.02
|
)
|
First quarter 2016 operating results
|
|
0.22
|
|
|
0.25
|
|
|
0.06
|
|
|
0.22
|
|
|
0.01
|
|
|
0.02
|
|
|
0.78
|
|
Items impacting comparability:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment of oil and gas producing properties
|
|
(2.97
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(2.97
|
)
|
Joint development agreement professional fees
|
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(0.04
|
)
|
Earnings per share impact of diluted shares
|
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(0.01
|
)
|
Rounding
|
|
|
|
|
|
|
|
|
|
|
|
0.01
|
|
|
0.01
|
|
First quarter 2016 GAAP earnings
|
|
$
|
(2.80
|
)
|
|
$
|
0.25
|
|
|
$
|
0.06
|
|
|
$
|
0.22
|
|
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
(2.23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amounts do not reflect intercompany eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** AFUDC = Allowance for Funds Used During Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
(Thousands of Dollars, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
December 31,
|
|
|
|
|
(Unaudited)
|
SUMMARY OF OPERATIONS
|
|
|
|
2015
|
|
2014
|
Operating Revenues
|
|
|
|
$
|
375,195
|
|
|
$
|
523,909
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
Purchased Gas
|
|
|
|
42,068
|
|
|
127,091
|
|
Operation and Maintenance
|
|
|
|
112,692
|
|
|
112,582
|
|
Property, Franchise and Other Taxes
|
|
|
|
20,357
|
|
|
20,929
|
|
Depreciation, Depletion and Amortization
|
|
|
|
70,551
|
|
|
102,747
|
|
Impairment of Oil and Gas Producing Properties
|
|
|
|
435,451
|
|
|
—
|
|
|
|
|
|
681,119
|
|
|
363,349
|
|
|
|
|
|
|
|
|
Operating Income (Loss)
|
|
|
|
(305,924
|
)
|
|
160,560
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
Interest Income
|
|
|
|
1,799
|
|
|
1,258
|
|
Other Income
|
|
|
|
2,418
|
|
|
1,183
|
|
Interest Expense on Long-Term Debt
|
|
|
|
(30,372
|
)
|
|
(22,311
|
)
|
Other Interest Expense
|
|
|
|
(1,380
|
)
|
|
(790
|
)
|
|
|
|
|
|
|
|
Income (Loss) Before Income Taxes
|
|
|
|
(333,459
|
)
|
|
139,900
|
|
|
|
|
|
|
|
|
Income Tax Expense (Benefit)
|
|
|
|
(144,350
|
)
|
|
55,160
|
|
|
|
|
|
|
|
|
Net Income (Loss) Available for Common Stock
|
|
|
|
$
|
(189,109
|
)
|
|
$
|
84,740
|
|
|
|
|
|
|
|
|
Earnings (Loss) Per Common Share:
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
(2.23
|
)
|
|
$
|
1.01
|
|
Diluted
|
|
|
|
$
|
(2.23
|
)
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares:
|
|
|
|
|
|
|
Used in Basic Calculation
|
|
|
|
84,651,233
|
|
84,208,645
|
Used in Diluted Calculation
|
|
|
|
84,651,233
|
|
85,118,516
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
September 30,
|
(Thousands of Dollars)
|
|
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Property, Plant and Equipment
|
|
|
|
$9,311,376
|
|
|
$9,261,323
|
Less - Accumulated Depreciation, Depletion and Amortization
|
|
|
|
4,428,593
|
|
|
3,929,428
|
Net Property, Plant and Equipment
|
|
|
|
4,882,783
|
|
|
5,331,895
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash and Temporary Cash Investments
|
|
|
|
36,329
|
|
|
113,596
|
Hedging Collateral Deposits
|
|
|
|
9,551
|
|
|
11,124
|
Receivables - Net
|
|
|
|
211,112
|
|
|
105,004
|
Unbilled Revenue
|
|
|
|
40,178
|
|
|
20,746
|
Gas Stored Underground
|
|
|
|
28,811
|
|
|
34,252
|
Materials and Supplies - at average cost
|
|
|
|
32,389
|
|
|
30,414
|
Other Current Assets
|
|
|
|
66,145
|
|
|
60,665
|
Total Current Assets
|
|
|
|
424,515
|
|
|
375,801
|
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
|
|
Recoverable Future Taxes
|
|
|
|
172,205
|
|
|
168,214
|
Unamortized Debt Expense
|
|
|
|
2,085
|
|
|
2,218
|
Other Regulatory Assets
|
|
|
|
275,721
|
|
|
278,227
|
Deferred Charges
|
|
|
|
16,410
|
|
|
15,129
|
Other Investments
|
|
|
|
108,209
|
|
|
92,990
|
Goodwill
|
|
|
|
5,476
|
|
|
5,476
|
Prepaid Post-Retirement Benefit Costs
|
|
|
|
25,357
|
|
|
24,459
|
Fair Value of Derivative Financial Instruments
|
|
|
|
277,409
|
|
|
270,363
|
Other
|
|
|
|
162
|
|
|
167
|
Total Other Assets
|
|
|
|
883,034
|
|
|
857,243
|
Total Assets
|
|
|
|
$6,190,332
|
|
|
$6,564,939
|
|
|
|
|
|
|
|
CAPITALIZATION AND LIABILITIES
|
|
|
|
|
|
|
Capitalization:
|
|
|
|
|
|
|
Comprehensive Shareholders' Equity
|
|
|
|
|
|
|
Common Stock, $1 Par Value Authorized - 200,000,000
|
|
|
|
|
|
|
Shares; Issued and Outstanding - 84,739,068 Shares
|
|
|
|
|
|
|
and 84,594,383 Shares, Respectively
|
|
|
|
$84,739
|
|
|
$84,594
|
Paid in Capital
|
|
|
|
748,867
|
|
|
744,274
|
Earnings Reinvested in the Business
|
|
|
|
880,619
|
|
|
1,103,200
|
Accumulated Other Comprehensive Income
|
|
|
|
98,456
|
|
|
93,372
|
Total Comprehensive Shareholders' Equity
|
|
|
|
1,812,681
|
|
|
2,025,440
|
Long-Term Debt, Net of Unamortized Discount and Debt Issuance Costs
|
|
|
|
2,084,562
|
|
|
2,084,009
|
Total Capitalization
|
|
|
|
3,897,243
|
|
|
4,109,449
|
|
|
|
|
|
|
|
Current and Accrued Liabilities:
|
|
|
|
|
|
|
Notes Payable to Banks and Commercial Paper
|
|
|
|
31,400
|
|
|
—
|
Current Portion of Long-Term Debt
|
|
|
|
—
|
|
|
—
|
Accounts Payable
|
|
|
|
126,917
|
|
|
180,388
|
Amounts Payable to Customers
|
|
|
|
45,076
|
|
|
56,778
|
Dividends Payable
|
|
|
|
33,472
|
|
|
33,415
|
Interest Payable on Long-Term Debt
|
|
|
|
30,285
|
|
|
36,200
|
Customer Advances
|
|
|
|
23,425
|
|
|
16,236
|
Customer Security Deposits
|
|
|
|
16,757
|
|
|
16,490
|
Other Accruals and Current Liabilities
|
|
|
|
95,830
|
|
|
96,557
|
Fair Value of Derivative Financial Instruments
|
|
|
|
7,969
|
|
|
10,076
|
Total Current and Accrued Liabilities
|
|
|
|
411,131
|
|
|
446,140
|
|
|
|
|
|
|
|
Deferred Credits:
|
|
|
|
|
|
|
Deferred Income Taxes
|
|
|
|
999,399
|
|
|
1,137,962
|
Taxes Refundable to Customers
|
|
|
|
94,468
|
|
|
89,448
|
Unamortized Investment Tax Credit
|
|
|
|
644
|
|
|
731
|
Cost of Removal Regulatory Liability
|
|
|
|
184,784
|
|
|
184,907
|
Other Regulatory Liabilities
|
|
|
|
113,187
|
|
|
108,617
|
Pension and Other Post-Retirement Liabilities
|
|
|
|
205,431
|
|
|
202,807
|
Asset Retirement Obligations
|
|
|
|
158,108
|
|
|
156,805
|
Other Deferred Credits
|
|
|
|
125,937
|
|
|
128,073
|
Total Deferred Credits
|
|
|
|
1,881,958
|
|
|
2,009,350
|
Commitments and Contingencies
|
|
|
|
—
|
|
|
—
|
Total Capitalization and Liabilities
|
|
|
|
$6,190,332
|
|
|
$6,564,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
Three Months Ended
|
|
|
December 31,
|
(Thousands of Dollars)
|
|
2015
|
|
2014
|
|
|
|
|
|
Operating Activities:
|
|
|
|
|
Net Income (Loss) Available for Common Stock
|
|
$
|
(189,109
|
)
|
|
$
|
84,740
|
|
Adjustments to Reconcile Net Income (Loss) to Net Cash Provided by
Operating Activities:
|
|
|
|
|
Impairment of Oil and Gas Producing Properties
|
|
435,451
|
|
|
—
|
|
Depreciation, Depletion and Amortization
|
|
70,551
|
|
|
102,747
|
|
Deferred Income Taxes
|
|
(140,013
|
)
|
|
33,207
|
|
Excess Tax Benefits Associated with Stock-Based Compensation Awards
|
|
(226
|
)
|
|
(7,667
|
)
|
Stock-Based Compensation
|
|
960
|
|
|
3,078
|
|
Other
|
|
3,418
|
|
|
2,358
|
|
Change in:
|
|
|
|
|
Hedging Collateral Deposits
|
|
1,573
|
|
|
(10,734
|
)
|
Receivables and Unbilled Revenue
|
|
(31,150
|
)
|
|
(60,947
|
)
|
Gas Stored Underground and Materials and Supplies
|
|
3,466
|
|
|
9,386
|
|
Other Current Assets
|
|
(5,254
|
)
|
|
(5,635
|
)
|
Accounts Payable
|
|
(20,784
|
)
|
|
19,378
|
|
Amounts Payable to Customers
|
|
(11,702
|
)
|
|
2,249
|
|
Customer Advances
|
|
7,189
|
|
|
1,431
|
|
Customer Security Deposits
|
|
267
|
|
|
630
|
|
Other Accruals and Current Liabilities
|
|
(14,353
|
)
|
|
(6,416
|
)
|
Other Assets
|
|
885
|
|
|
2,142
|
|
Other Liabilities
|
|
2,904
|
|
|
19,132
|
|
Net Cash Provided by Operating Activities
|
|
$
|
114,073
|
|
|
$
|
189,079
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
Capital Expenditures
|
|
$
|
(186,437
|
)
|
|
$
|
(244,927
|
)
|
Net Proceeds from Sale of Oil and Gas Producing Properties
|
|
10,574
|
|
|
—
|
|
Other
|
|
(15,756
|
)
|
|
(1,229
|
)
|
Net Cash Used in Investing Activities
|
|
$
|
(191,619
|
)
|
|
$
|
(246,156
|
)
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
Changes in Notes Payable to Banks and Commercial Paper
|
|
$
|
31,400
|
|
|
$
|
87,300
|
|
Excess Tax Benefits Associated with Stock-Based Compensation Awards
|
|
226
|
|
|
7,667
|
|
Dividends Paid on Common Stock
|
|
(33,415
|
)
|
|
(32,400
|
)
|
Net Proceeds From Issuance of Common Stock
|
|
2,068
|
|
|
1,548
|
|
Net Cash Provided by Financing Activities
|
|
$
|
279
|
|
|
$
|
64,115
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and Temporary Cash Investments
|
|
(77,267
|
)
|
|
7,038
|
|
Cash and Temporary Cash Investments at Beginning of Period
|
|
113,596
|
|
|
36,886
|
|
Cash and Temporary Cash Investments at December 31
|
|
$
|
36,329
|
|
|
$
|
43,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
UPSTREAM BUSINESS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
(Thousands of Dollars, except per share amounts)
|
|
|
|
December 31,
|
EXPLORATION AND PRODUCTION SEGMENT
|
|
|
|
2015
|
|
2014
|
|
Variance
|
Total Operating Revenues
|
|
|
|
$
|
151,965
|
|
|
$
|
204,665
|
|
|
$
|
(52,700
|
)
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
Operation and Maintenance:
|
|
|
|
|
|
|
|
|
General and Administrative Expense
|
|
|
|
19,955
|
|
|
15,685
|
|
|
4,270
|
|
Lease Operating and Transportation Expense
|
|
|
|
39,022
|
|
|
46,807
|
|
|
(7,785
|
)
|
All Other Operation and Maintenance Expense
|
|
|
|
3,145
|
|
|
2,841
|
|
|
304
|
|
Property, Franchise and Other Taxes
|
|
|
|
3,385
|
|
|
3,901
|
|
|
(516
|
)
|
Depreciation, Depletion and Amortization
|
|
|
|
44,033
|
|
|
80,067
|
|
|
(36,034
|
)
|
Impairment of Oil and Gas Producing Properties
|
|
|
|
435,451
|
|
|
—
|
|
|
435,451
|
|
|
|
|
|
544,991
|
|
|
149,301
|
|
|
395,690
|
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss)
|
|
|
|
(393,026
|
)
|
|
55,364
|
|
(448,390
|
)
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
|
667
|
|
|
510
|
|
|
157
|
|
Interest Expense
|
|
|
|
(14,582
|
)
|
|
(10,308
|
)
|
|
(4,274)
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before Income Taxes
|
|
|
|
(406,941
|
)
|
|
45,566
|
|
|
(452,507
|
)
|
Income Tax Expense (Benefit)
|
|
|
|
(169,855
|
)
|
|
18,846
|
|
|
(188,701
|
)
|
Net Income (Loss)
|
|
|
|
$
|
(237,086
|
)
|
|
$
|
26,720
|
|
|
$
|
(263,806
|
)
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Per Share (Diluted)
|
|
|
|
$
|
(2.80
|
)
|
|
$
|
0.32
|
|
|
$
|
(3.12
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
MIDSTREAM BUSINESSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
(Thousands of Dollars, except per share amounts)
|
|
|
|
December 31,
|
PIPELINE AND STORAGE SEGMENT
|
|
|
|
2015
|
|
2014
|
|
Variance
|
Revenues from External Customers
|
|
|
|
$
|
53,354
|
|
|
$
|
51,745
|
|
|
$
|
1,609
|
|
Intersegment Revenues
|
|
|
|
22,183
|
|
|
21,461
|
|
|
722
|
|
Total Operating Revenues
|
|
|
|
75,537
|
|
|
73,206
|
|
|
2,331
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
Purchased Gas
|
|
|
|
458
|
|
|
266
|
|
|
192
|
|
Operation and Maintenance
|
|
|
|
17,593
|
|
|
17,884
|
|
|
(291
|
)
|
Property, Franchise and Other Taxes
|
|
|
|
6,745
|
|
|
6,163
|
|
|
582
|
|
Depreciation, Depletion and Amortization
|
|
|
|
10,256
|
|
|
9,035
|
|
|
1,221
|
|
|
|
|
|
35,052
|
|
|
33,348
|
|
|
1,704
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
40,485
|
|
|
39,858
|
|
|
627
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
|
111
|
|
|
85
|
|
|
26
|
|
Other Income
|
|
|
|
1,582
|
|
|
557
|
|
|
1,025
|
|
Interest Expense
|
|
|
|
(8,038
|
)
|
|
(6,539
|
)
|
|
(1,499
|
)
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
|
|
34,140
|
|
|
33,961
|
|
|
179
|
|
Income Tax Expense
|
|
|
|
12,864
|
|
|
13,183
|
|
|
(319
|
)
|
Net Income
|
|
|
|
$
|
21,276
|
|
|
$
|
20,778
|
|
|
$
|
498
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share (Diluted)
|
|
|
|
$
|
0.25
|
|
|
$
|
0.25
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
December 31,
|
GATHERING SEGMENT
|
|
|
|
2015
|
|
2014
|
|
Variance
|
Revenues from External Customers
|
|
|
|
$
|
125
|
|
|
$
|
146
|
|
|
$
|
(21
|
)
|
Intersegment Revenues
|
|
|
|
18,640
|
|
|
24,428
|
|
|
(5,788
|
)
|
Total Operating Revenues
|
|
|
|
18,765
|
|
|
24,574
|
|
|
(5,809
|
)
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
Operation and Maintenance
|
|
|
|
2,273
|
|
|
1,776
|
|
|
497
|
|
Property, Franchise and Other Taxes
|
|
|
|
34
|
|
|
35
|
|
|
(1
|
)
|
Depreciation, Depletion and Amortization
|
|
|
|
4,210
|
|
|
2,061
|
|
|
2,149
|
|
|
|
|
|
6,517
|
|
|
3,872
|
|
|
2,645
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
12,248
|
|
|
20,702
|
|
|
(8,454
|
)
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
|
34
|
|
|
27
|
|
|
7
|
|
Other Income
|
|
|
|
1
|
|
|
1
|
|
|
—
|
|
Interest Expense
|
|
|
|
(3,070
|
)
|
|
(298
|
)
|
|
(2,772
|
)
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
|
|
9,213
|
|
|
20,432
|
|
|
(11,219
|
)
|
Income Tax Expense
|
|
|
|
4,292
|
|
|
8,809
|
|
|
(4,517
|
)
|
Net Income
|
|
|
|
$
|
4,921
|
|
|
$
|
11,623
|
|
|
$
|
(6,702
|
)
|
|
|
|
|
|
|
|
|
|
Net Income Per Share (Diluted)
|
|
|
|
$
|
0.06
|
|
|
$
|
0.14
|
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
DOWNSTREAM BUSINESSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
(Thousands of Dollars, except per share amounts)
|
|
|
|
December 31,
|
UTILITY SEGMENT
|
|
|
|
2015
|
|
2014
|
|
Variance
|
Revenues from External Customers
|
|
|
|
$
|
143,848
|
|
|
$
|
210,073
|
|
|
$
|
(66,225
|
)
|
Intersegment Revenues
|
|
|
|
3,664
|
|
|
4,534
|
|
|
(870
|
)
|
Total Operating Revenues
|
|
|
|
147,512
|
|
|
214,607
|
|
|
(67,095
|
)
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
Purchased Gas
|
|
|
|
45,068
|
|
|
101,711
|
|
|
(56,643
|
)
|
Operation and Maintenance
|
|
|
|
46,599
|
|
|
48,907
|
|
|
(2,308
|
)
|
Property, Franchise and Other Taxes
|
|
|
|
9,927
|
|
|
10,558
|
|
|
(631
|
)
|
Depreciation, Depletion and Amortization
|
|
|
|
11,618
|
|
|
11,151
|
|
|
467
|
|
|
|
|
|
113,212
|
|
|
172,327
|
|
|
(59,115
|
)
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
34,300
|
|
|
42,280
|
|
|
(7,980
|
)
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
|
85
|
|
|
18
|
|
|
67
|
|
Other Income
|
|
|
|
697
|
|
|
498
|
|
|
199
|
|
Interest Expense
|
|
|
|
(7,334
|
)
|
|
(6,943
|
)
|
|
(391
|
)
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
|
|
27,748
|
|
|
35,853
|
|
|
(8,105
|
)
|
Income Tax Expense
|
|
|
|
9,142
|
|
|
13,259
|
|
|
(4,117
|
)
|
Net Income
|
|
|
|
$
|
18,606
|
|
|
$
|
22,594
|
|
|
$
|
(3,988
|
)
|
|
|
|
|
|
|
|
|
|
Net Income Per Share (Diluted)
|
|
|
|
$
|
0.22
|
|
|
$
|
0.26
|
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
December 31,
|
ENERGY MARKETING SEGMENT
|
|
|
|
2015
|
|
2014
|
|
Variance
|
Revenues from External Customers
|
|
|
|
$
|
24,984
|
|
|
$
|
56,166
|
|
|
$
|
(31,182
|
)
|
Intersegment Revenues
|
|
|
|
311
|
|
|
206
|
|
|
105
|
|
Total Operating Revenues
|
|
|
|
25,295
|
|
|
56,372
|
|
|
(31,077
|
)
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
Purchased Gas
|
|
|
|
21,723
|
|
|
50,230
|
|
|
(28,507
|
)
|
Operation and Maintenance
|
|
|
|
1,723
|
|
|
1,499
|
|
|
224
|
|
Property, Franchise and Other Taxes
|
|
|
|
3
|
|
|
2
|
|
|
1
|
|
Depreciation, Depletion and Amortization
|
|
|
|
70
|
|
|
51
|
|
|
19
|
|
|
|
|
|
23,519
|
|
|
51,782
|
|
|
(28,263
|
)
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
1,776
|
|
|
4,590
|
|
|
(2,814
|
)
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
|
50
|
|
|
39
|
|
|
11
|
|
Other Income
|
|
|
|
10
|
|
|
24
|
|
|
(14
|
)
|
Interest Expense
|
|
|
|
(19
|
)
|
|
(3
|
)
|
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
|
|
1,817
|
|
|
4,650
|
|
|
(2,833
|
)
|
Income Tax Expense
|
|
|
|
594
|
|
|
1,824
|
|
|
(1,230
|
)
|
Net Income
|
|
|
|
$
|
1,223
|
|
|
$
|
2,826
|
|
|
$
|
(1,603
|
)
|
|
|
|
|
|
|
|
|
|
Net Income Per Share (Diluted)
|
|
|
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
SEGMENT OPERATING RESULTS AND STATISTICS
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
(Thousands of Dollars, except per share amounts)
|
|
|
|
December 31,
|
ALL OTHER
|
|
|
|
2015
|
|
2014
|
|
Variance
|
Total Operating Revenues
|
|
|
|
$
|
706
|
|
|
$
|
884
|
|
|
$
|
(178
|
)
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
Operation and Maintenance
|
|
|
|
75
|
|
|
530
|
|
|
(455
|
)
|
Property, Franchise and Other Taxes
|
|
|
|
143
|
|
|
150
|
|
|
(7
|
)
|
Depreciation, Depletion and Amortization
|
|
|
|
182
|
|
|
215
|
|
|
(33
|
)
|
|
|
|
|
400
|
|
|
895
|
|
|
(495
|
)
|
|
|
|
|
|
|
|
|
|
Operating Income (Loss)
|
|
|
|
306
|
|
|
(11
|
)
|
|
317
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
|
19
|
|
|
12
|
|
|
7
|
|
Other Income
|
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
|
|
325
|
|
|
2
|
|
|
323
|
|
Income Tax Expense
|
|
|
|
136
|
|
|
8
|
|
|
128
|
|
Net Income (Loss)
|
|
|
|
$
|
189
|
|
|
$
|
(6
|
)
|
|
$
|
195
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Per Share (Diluted)
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
December 31,
|
CORPORATE
|
|
|
|
2015
|
|
2014
|
|
Variance
|
Revenues from External Customers
|
|
|
|
$
|
213
|
|
|
$
|
230
|
|
|
$
|
(17
|
)
|
Intersegment Revenues
|
|
|
|
967
|
|
|
886
|
|
|
81
|
|
Total Operating Revenues
|
|
|
|
1,180
|
|
|
1,116
|
|
|
64
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
Operation and Maintenance
|
|
|
|
2,891
|
|
|
3,052
|
|
|
(161
|
)
|
Property, Franchise and Other Taxes
|
|
|
|
120
|
|
|
120
|
|
|
—
|
|
Depreciation, Depletion and Amortization
|
|
|
|
182
|
|
|
167
|
|
|
15
|
|
|
|
|
|
3,193
|
|
|
3,339
|
|
|
(146
|
)
|
|
|
|
|
|
|
|
|
|
Operating Loss
|
|
|
|
(2,013
|
)
|
|
(2,223
|
)
|
|
210
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
|
31,743
|
|
|
25,300
|
|
|
6,443
|
|
Other Income
|
|
|
|
128
|
|
|
102
|
|
|
26
|
|
Interest Expense on Long-Term Debt
|
|
|
|
(30,372
|
)
|
|
(22,311
|
)
|
|
(8,061
|
)
|
Other Interest Expense
|
|
|
|
753
|
|
|
(1,432
|
)
|
|
2,185
|
|
|
|
|
|
|
|
|
|
|
Income (Loss) Before Income Taxes
|
|
|
|
239
|
|
|
(564
|
)
|
|
803
|
|
Income Tax Expense (Benefit)
|
|
|
|
(1,523
|
)
|
|
(769
|
)
|
|
(754
|
)
|
Net Income
|
|
|
|
$
|
1,762
|
|
|
$
|
205
|
|
|
$
|
1,557
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share (Diluted)
|
|
|
|
$
|
0.03
|
|
|
$
|
—
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
December 31,
|
INTERSEGMENT ELIMINATIONS
|
|
|
|
2015
|
|
2014
|
|
Variance
|
Intersegment Revenues
|
|
|
|
$
|
(45,765
|
)
|
|
$
|
(51,515
|
)
|
|
$
|
5,750
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
Purchased Gas
|
|
|
|
(25,181
|
)
|
|
(25,116
|
)
|
|
(65
|
)
|
Operation and Maintenance
|
|
|
|
(20,584
|
)
|
|
(26,399
|
)
|
|
5,815
|
|
|
|
|
|
(45,765
|
)
|
|
(51,515
|
)
|
|
5,750
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
Interest Income
|
|
|
|
(30,910
|
)
|
|
(24,733
|
)
|
|
(6,177
|
)
|
Interest Expense
|
|
|
|
30,910
|
|
|
24,733
|
|
|
6,177
|
|
Net Income
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share (Diluted)
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION (Continued)
|
(Thousands of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
December 31,
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
2015
|
|
|
2014
|
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
|
Exploration and Production
|
|
|
|
$
|
88,125
|
|
(1) (2)
|
|
$
|
157,711
|
|
(3) (4)
|
|
$
|
(69,586
|
)
|
Pipeline and Storage
|
|
|
|
31,621
|
|
(1) (2)
|
|
16,027
|
|
(3) (4)
|
|
15,594
|
|
Gathering
|
|
|
|
21,744
|
|
(1) (2)
|
|
14,948
|
|
(3) (4)
|
|
6,796
|
|
Utility
|
|
|
|
19,917
|
|
(1) (2)
|
|
21,175
|
|
(3) (4)
|
|
(1,258
|
)
|
Energy Marketing
|
|
|
|
7
|
|
|
|
75
|
|
|
|
(68
|
)
|
Total Reportable Segments
|
|
|
|
161,414
|
|
|
|
209,936
|
|
|
|
(48,522
|
)
|
All Other
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Corporate
|
|
|
|
48
|
|
|
|
26
|
|
|
|
22
|
|
Total Capital Expenditures
|
|
|
|
$
|
161,462
|
|
|
|
$
|
209,962
|
|
|
|
$
|
(48,500
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Capital expenditures for the three months ended December 31, 2015,
include accounts payable and accrued liabilities related to capital
expenditures of $43.7 million, $19.0 million, $18.8 million, and
$12.5 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, 2015, since they represent
non-cash investing activities at that date.
|
|
|
|
|
(2)
|
|
|
Capital expenditures for the three months ended December 31, 2015,
exclude capital expenditures of $46.2 million, $33.9 million, $22.4
million and $16.5 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, 2015 and paid during the three months
ended December 31, 2015. These amounts were excluded from the
Consolidated Statement of Cash Flows at September 30, 2015, 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, 2015.
|
|
|
|
|
(3)
|
|
|
Capital expenditures for the three months ended December 31, 2014,
include accounts payable and accrued liabilities related to capital
expenditures of $82.3 million, $3.0 million, $11.0 million, and $5.4
million in the Exploration and Production segment, Pipeline and
Storage segment, Gathering segment and Utility segment,
respectively. These amounts have been excluded from the Consolidated
Statement of Cash Flows at December 31, 2014, since they represent
non-cash investing activities at that date.
|
|
|
|
|
(4)
|
|
|
Capital expenditures for the year ended December 31, 2014, exclude
capital expenditures of $80.1 million, $28.1 million, $20.1 million
and $8.3 million in the Exploration and Production segment, Pipeline
and Storage segment, Gathering segment and Utility segment,
respectively. These amounts were in accounts payable and accrued
liabilities at September 30, 2014 and paid during the three months
ended December 31, 2014. These amounts were excluded from the
Consolidated Statements of Cash Flows at September 30, 2014, 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, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEGREE DAYS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent Colder
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Warmer) Than:
|
Three Months Ended December 31
|
|
|
|
Normal
|
|
|
2015
|
|
|
2014
|
|
|
Normal (1)
|
|
|
Last Year (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buffalo, NY
|
|
|
|
2,253
|
|
|
1,677
|
|
|
2,136
|
|
|
(25.6)
|
|
|
(21.5)
|
Erie, PA
|
|
|
|
2,044
|
|
|
1,484
|
|
|
1,991
|
|
|
(27.4)
|
|
|
(25.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Percents compare actual 2015 degree days to normal degree days and
actual 2015 degree days to actual 2014 degree days.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
EXPLORATION AND PRODUCTION INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
2015
|
|
2014
|
|
(Decrease)
|
|
|
|
|
|
|
|
|
|
Gas Production/Prices:
|
|
|
|
|
|
|
|
|
Production (MMcf)
|
|
|
|
|
|
|
|
|
Appalachia
|
|
|
|
32,788
|
|
|
42,798
|
|
|
(10,010
|
)
|
West Coast
|
|
|
|
783
|
|
|
773
|
|
|
10
|
|
Total Production
|
|
|
|
33,571
|
|
|
43,571
|
|
|
(10,000
|
)
|
|
|
|
|
|
|
|
|
|
Average Prices (Per Mcf)
|
|
|
|
|
|
|
|
|
Appalachia
|
|
|
|
$
|
1.98
|
|
|
$
|
2.95
|
|
|
$
|
(0.97
|
)
|
West Coast
|
|
|
|
3.65
|
|
|
5.61
|
|
|
(1.96
|
)
|
Weighted Average
|
|
|
|
2.02
|
|
|
3.00
|
|
|
(0.98
|
)
|
Weighted Average after Hedging
|
|
|
|
3.16
|
|
|
3.25
|
|
|
(0.09
|
)
|
|
|
|
|
|
|
|
|
|
Oil Production/Prices:
|
|
|
|
|
|
|
|
|
Production (Thousands of Barrels)
|
|
|
|
|
|
|
|
|
Appalachia
|
|
|
|
6
|
|
9
|
|
(3)
|
West Coast
|
|
|
|
742
|
|
762
|
|
(20)
|
Total Production
|
|
|
|
748
|
|
771
|
|
(23)
|
|
|
|
|
|
|
|
|
|
Average Prices (Per Barrel)
|
|
|
|
|
|
|
|
|
Appalachia
|
|
|
|
$
|
39.78
|
|
|
$
|
75.56
|
|
|
$
|
(35.78
|
)
|
West Coast
|
|
|
|
36.05
|
|
|
66.86
|
|
|
(30.81
|
)
|
Weighted Average
|
|
|
|
36.08
|
|
|
66.96
|
|
|
(30.88
|
)
|
Weighted Average after Hedging
|
|
|
|
59.76
|
|
|
78.09
|
|
|
(18.33
|
)
|
|
|
|
|
|
|
|
|
|
Total Production (Mmcfe)
|
|
|
|
38,059
|
|
48,197
|
|
(10,138)
|
|
|
|
|
|
|
|
|
|
Selected Operating Performance Statistics:
|
|
|
|
|
|
|
|
|
General & Administrative Expense per Mcfe (1)
|
|
|
|
$
|
0.52
|
|
|
$
|
0.33
|
|
|
$
|
0.19
|
|
Lease Operating and Transportation Expense per Mcfe (1)(2)
|
|
|
|
$
|
1.03
|
|
|
$
|
0.97
|
|
|
$
|
0.06
|
|
Depreciation, Depletion & Amortization per Mcfe (1)
|
|
|
|
$
|
1.16
|
|
|
$
|
1.66
|
|
|
$
|
(0.50
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Refer to page 14 for the General and Administrative Expense, Lease
Operating Expense and Depreciation, Depletion, and Amortization
Expense for the Exploration and Production segment.
|
(2)
|
|
|
Amounts include transportation expense of $0.51 and $0.53 per Mcfe
for the three months ended December 31, 2015 and December 31, 2014,
respectively.
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
EXPLORATION AND PRODUCTION INFORMATION
|
|
|
|
|
|
|
|
|
|
Hedging Summary for the Remaining Nine Months of Fiscal 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
|
|
|
|
|
|
Average Hedge Price
|
Oil Swaps
|
|
|
|
|
|
|
|
|
Brent
|
|
404,000
|
|
BBL
|
|
|
|
$
|
|
94.63 / BBL
|
NYMEX
|
|
640,000
|
|
BBL
|
|
|
|
$
|
|
83.33 / BBL
|
Total
|
|
1,044,000
|
|
BBL
|
|
|
|
$
|
|
87.70 / BBL
|
|
|
|
|
|
|
|
|
|
Gas Swaps
|
|
|
|
|
|
|
|
|
NYMEX
|
|
28,440,000
|
|
MMBTU
|
|
|
|
$
|
|
3.92 / MMBTU
|
Dominion Transmission Appalachian (DOM)
|
|
14,130,000
|
|
MMBTU
|
|
|
|
$
|
|
3.78 / MMBTU
|
Michigan Consolidated City Gate (Mich Con)
|
|
9,000,000
|
|
MMBTU
|
|
|
|
$
|
|
4.10 / MMBTU
|
Dawn Ontario (DAWN)
|
|
9,990,000
|
|
MMBTU
|
|
|
|
$
|
|
3.92 / MMBTU
|
Fixed Price Physical Sales
|
|
30,426,000
|
|
MMBTU
|
|
|
|
$
|
|
2.75 / MMBTU
|
Total
|
|
91,986,000
|
|
MMBTU
|
|
|
|
$
|
|
3.53 / MMBTU
|
|
|
|
|
|
|
|
|
|
Hedging Summary for Fiscal 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
|
|
|
|
|
|
Average Hedge Price
|
Oil Swaps
|
|
|
|
|
|
|
|
|
Brent
|
|
231,000
|
|
BBL
|
|
|
|
$
|
|
92.14 / BBL
|
NYMEX
|
|
465,000
|
|
BBL
|
|
|
|
$
|
|
66.77 / BBL
|
Total
|
|
696,000
|
|
BBL
|
|
|
|
$
|
|
75.19 / BBL
|
|
|
|
|
|
|
|
|
|
Gas Swaps
|
|
|
|
|
|
|
|
|
NYMEX
|
|
29,530,000
|
|
MMBTU
|
|
|
|
$
|
|
4.20 / MMBTU
|
DOM
|
|
12,720,000
|
|
MMBTU
|
|
|
|
$
|
|
3.87 / MMBTU
|
Mich Con
|
|
3,000,000
|
|
MMBTU
|
|
|
|
$
|
|
4.10 / MMBTU
|
DAWN
|
|
19,100,000
|
|
MMBTU
|
|
|
|
$
|
|
3.70 / MMBTU
|
Fixed Price Physical Sales
|
|
32,893,000
|
|
MMBTU
|
|
|
|
$
|
|
3.03 / MMBTU
|
Total
|
|
97,243,000
|
|
MMBTU
|
|
|
|
$
|
|
3.66 / MMBTU
|
|
|
|
|
|
|
|
|
|
Hedging Summary for Fiscal 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
|
|
|
|
|
|
Average Hedge Price
|
Oil Swaps
|
|
|
|
|
|
|
|
|
Brent
|
|
51,000
|
|
BBL
|
|
|
|
$
|
|
91.00 / BBL
|
NYMEX
|
|
24,000
|
|
BBL
|
|
|
|
$
|
|
90.52 / BBL
|
Total
|
|
75,000
|
|
BBL
|
|
|
|
$
|
|
90.85 / BBL
|
|
|
|
|
|
|
|
|
|
Gas Swaps
|
|
|
|
|
|
|
|
|
NYMEX
|
|
20,350,000
|
|
MMBTU
|
|
|
|
$
|
|
3.62 / MMBTU
|
DAWN
|
|
1,800,000
|
|
MMBTU
|
|
|
|
$
|
|
3.40 / MMBTU
|
Fixed Price Physical Sales
|
|
8,010,000
|
|
MMBTU
|
|
|
|
$
|
|
3.21 / MMBTU
|
Total
|
|
30,160,000
|
|
MMBTU
|
|
|
|
$
|
|
3.50 / MMBTU
|
|
|
|
|
|
|
|
|
|
Hedging Summary for Fiscal 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
|
|
|
|
|
|
Average Hedge Price
|
Gas Swaps
|
|
|
|
|
|
|
|
|
NYMEX
|
|
11,400,000
|
|
MMBTU
|
|
|
|
$
|
|
3.39 / MMBTU
|
Fixed Price Physical Sales
|
|
5,840,000
|
|
MMBTU
|
|
|
|
$
|
|
3.25 / MMBTU
|
Total
|
|
17,240,000
|
|
MMBTU
|
|
|
|
$
|
|
3.34 / MMBTU
|
|
|
|
|
|
|
|
|
|
Hedging Summary for Fiscal 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
|
|
|
|
|
|
Average Hedge Price
|
Gas Swaps
|
|
|
|
|
|
|
|
|
NYMEX
|
|
2,000,000
|
|
MMBTU
|
|
|
|
$
|
|
3.49 / MMBTU
|
Fixed Price Physical Sales
|
|
2,928,000
|
|
MMBTU
|
|
|
|
$
|
|
3.25 / MMBTU
|
Total
|
|
4,928,000
|
|
MMBTU
|
|
|
|
$
|
|
3.35 / MMBTU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPLORATION AND PRODUCTION INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Wells in Process of Drilling
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
East
|
|
|
|
West
|
|
|
|
Company
|
Wells in Process - Beginning of Period
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploratory
|
|
|
|
4.000
|
|
(1)
|
|
0.000
|
|
|
|
4.000
|
Developmental
|
|
|
|
96.000
|
|
(1)
|
|
0.000
|
|
|
|
96.000
|
Wells Commenced
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploratory
|
|
|
|
0.000
|
|
|
|
0.000
|
|
|
|
0.000
|
Developmental
|
|
|
|
31.000
|
|
|
|
13.000
|
|
|
|
44.000
|
Wells Completed
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploratory
|
|
|
|
0.000
|
|
|
|
0.000
|
|
|
|
0.000
|
Developmental
|
|
|
|
11.000
|
|
|
|
12.000
|
|
|
|
23.000
|
Wells Plugged & Abandoned
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploratory
|
|
|
|
0.000
|
|
|
|
0.000
|
|
|
|
0.000
|
Developmental
|
|
|
|
0.000
|
|
|
|
0.000
|
|
|
|
0.000
|
Wells in Process - End of Period
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploratory
|
|
|
|
4.000
|
|
|
|
0.000
|
|
|
|
4.000
|
Developmental
|
|
|
|
116.000
|
|
|
|
1.000
|
|
|
|
117.000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Gross exploratory wells were increased by 4 and developmental wells
were decreased by 4.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Wells in Process of Drilling
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
East
|
|
|
|
West
|
|
|
|
Company
|
Wells in Process - Beginning of Period
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploratory
|
|
|
|
4.000
|
|
(1)
|
|
0.000
|
|
|
|
4.000
|
Developmental
|
|
|
|
81.500
|
|
(1)
|
|
0.000
|
|
|
|
81.500
|
Wells Commenced
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploratory
|
|
|
|
0.000
|
|
|
|
0.000
|
|
|
|
0.000
|
Developmental
|
|
|
|
31.000
|
|
|
|
13.000
|
|
|
|
44.000
|
Wells Completed
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploratory
|
|
|
|
0.000
|
|
|
|
0.000
|
|
|
|
0.000
|
Developmental
|
|
|
|
11.000
|
|
|
|
12.000
|
|
|
|
23.000
|
Wells Plugged & Abandoned
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploratory
|
|
|
|
0.000
|
|
|
|
0.000
|
|
|
|
0.000
|
Developmental
|
|
|
|
0.000
|
|
|
|
0.000
|
|
|
|
0.000
|
Well Interest Sold (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploratory
|
|
|
|
0.000
|
|
|
|
0.000
|
|
|
|
0.000
|
Developmental
|
|
|
|
6.400
|
|
|
|
0.000
|
|
|
|
6.400
|
Wells in Process - End of Period
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploratory
|
|
|
|
4.000
|
|
|
|
0.000
|
|
|
|
4.000
|
Developmental
|
|
|
|
95.100
|
|
(2)
|
|
1.000
|
|
|
|
96.100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Net exploratory wells were increased by 4 and developmental wells
were decreased by 4.
|
(2)
|
|
|
Seneca's East Division sold an 80% working interest in 8 of the
existing developmental wells in process to IOG during the three
months ended December 31, 2015.
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
December 31,
|
|
|
|
|
|
|
Increase
|
|
|
2015
|
|
2014
|
|
(Decrease)
|
Firm Transportation - Affiliated
|
|
24,709
|
|
|
29,086
|
|
|
(4,377
|
)
|
Firm Transportation - Non-Affiliated
|
|
151,123
|
|
|
157,236
|
|
|
(6,113
|
)
|
Interruptible Transportation
|
|
5,631
|
|
|
2,102
|
|
|
3,529
|
|
|
|
181,463
|
|
|
188,424
|
|
|
(6,961
|
)
|
|
|
|
|
|
|
|
Gathering Volume - (MMcf)
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
December 31,
|
|
|
|
|
|
|
Increase
|
|
|
2015
|
|
2014
|
|
(Decrease)
|
Gathered Volume - Affiliated
|
|
33,800
|
|
|
44,872
|
|
|
(11,072
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility Throughput - (MMcf)
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
December 31,
|
|
|
|
|
|
|
Increase
|
|
|
2015
|
|
2014
|
|
(Decrease)
|
Retail Sales:
|
|
|
|
|
|
|
Residential Sales
|
|
13,133
|
|
|
16,467
|
|
|
(3,334
|
)
|
Commercial Sales
|
|
1,827
|
|
|
2,284
|
|
|
(457
|
)
|
Industrial Sales
|
|
66
|
|
|
89
|
|
|
(23
|
)
|
|
|
15,026
|
|
|
18,840
|
|
|
(3,814
|
)
|
Off-System Sales
|
|
—
|
|
|
1,669
|
|
|
(1,669
|
)
|
Transportation
|
|
17,615
|
|
|
20,949
|
|
|
(3,334
|
)
|
|
|
32,641
|
|
|
41,458
|
|
|
(8,817
|
)
|
|
|
|
|
|
|
|
Energy Marketing Volume
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
December 31,
|
|
|
|
|
|
|
Increase
|
|
|
2015
|
|
2014
|
|
(Decrease)
|
Natural Gas (MMcf)
|
|
10,098
|
|
|
12,589
|
|
|
(2,491
|
)
|
|
|
|
|
|
|
|
|
|
|
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 Operating Results and Adjusted EBITDA,
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, for measuring the Company’s cash flow and liquidity, and for
comparing the Company’s financial performance to other companies. The
Company's management uses 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 Operating Results as reported GAAP earnings before
items impacting comparability. The table at page 1 of this report
reconciles National Fuel's reported GAAP earnings to Operating Results
for the three months ended December 31, 2015 and 2014.
Management defines Adjusted EBITDA as reported GAAP earnings before the
following items: interest expense, depreciation, depletion and
amortization, interest and other income, impairments, items impacting
comparability and income taxes.
The following tables reconcile National Fuel's reported GAAP earnings to
Adjusted EBITDA for the three months ended December 31, 2015 and 2014:
|
|
|
|
|
|
|
Three Months Ended
|
|
|
December 31,
|
|
|
2015
|
|
2014
|
(in thousands)
|
|
|
|
|
Reported GAAP Earnings
|
|
$
|
(189,109
|
)
|
|
$
|
84,740
|
|
Depreciation, Depletion and Amortization
|
|
70,551
|
|
|
102,747
|
|
Interest and Other Income
|
|
(4,217
|
)
|
|
(2,441
|
)
|
Interest Expense
|
|
31,752
|
|
|
23,101
|
|
Income Taxes
|
|
(144,350
|
)
|
|
55,160
|
|
Impairment of Oil and Gas Producing
Properties
|
|
435,451
|
|
|
—
|
|
Joint Development Agreement Professional Fees
|
|
4,682
|
|
|
—
|
|
Adjusted EBITDA
|
|
$
|
204,760
|
|
|
$
|
263,307
|
|
|
|
|
|
|
Adjusted EBITDA by Segment
|
|
|
|
|
Pipeline and Storage Adjusted EBITDA
|
|
$
|
50,741
|
|
|
$
|
48,893
|
|
Gathering Adjusted EBITDA
|
|
16,458
|
|
|
22,763
|
|
Total Midstream Businesses Adjusted EBITDA
|
|
67,199
|
|
|
71,656
|
|
Exploration and Production Adjusted EBITDA
|
|
91,140
|
|
|
135,431
|
|
Utility Adjusted EBITDA
|
|
45,918
|
|
|
53,431
|
|
Energy Marketing Adjusted EBITDA
|
|
1,846
|
|
|
4,641
|
|
Corporate and All Other Adjusted EBITDA
|
|
(1,343
|
)
|
|
(1,852
|
)
|
Total Adjusted EBITDA
|
|
$
|
204,760
|
|
|
$
|
263,307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL FUEL GAS COMPANY
|
AND SUBSIDIARIES
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31 (unaudited)
|
|
2015
|
|
2014
|
|
|
|
|
|
Operating Revenues
|
|
$
|
375,195,000
|
|
|
$
|
523,909,000
|
|
|
|
|
|
Net Income (Loss) Available for Common Stock
|
|
$
|
(189,109,000
|
)
|
|
$
|
84,740,000
|
|
|
|
|
|
Earnings (Loss) Per Common Share:
|
|
|
|
|
Basic
|
|
$
|
(2.23
|
)
|
|
$
|
1.01
|
Diluted
|
|
$
|
(2.23
|
)
|
|
$
|
1.00
|
|
|
|
|
|
Weighted Average Common Shares:
|
|
|
|
|
Used in Basic Calculation
|
|
84,651,233
|
|
|
84,208,645
|
Used in Diluted Calculation
|
|
84,651,233
|
|
|
85,118,516
|
|
|
|
|
|
Twelve Months Ended December 31
(unaudited)
|
|
|
|
|
|
|
|
|
|
Operating Revenues
|
|
$
|
1,612,199,000
|
|
|
$
|
2,086,918,000
|
|
|
|
|
|
Net Income (Loss) Available for Common Stock
|
|
$
|
(653,276,000
|
)
|
|
$
|
301,901,000
|
|
|
|
|
|
Earnings (Loss) Per Common Share:
|
|
|
|
|
Basic
|
|
$
|
(7.73
|
)
|
|
$
|
3.59
|
Diluted
|
|
$
|
(7.73
|
)
|
|
$
|
3.55
|
|
|
|
|
|
Weighted Average Common Shares:
|
|
|
|
|
Used in Basic Calculation
|
|
84,499,299
|
|
|
84,056,263
|
Used in Diluted Calculation
|
|
84,499,299
|
|
|
85,013,301
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160204006579/en/ Copyright Business Wire 2016
Source: Business Wire
(February 4, 2016 - 5:05 PM EST)
News by QuoteMedia
www.quotemedia.com
|