National Fuel Reports Third Quarter Earnings And Announces Preliminary Guidance For Fiscal 2024

National Fuel Gas Company

WILLIAMSVILLE, N.Y., Aug. 02, 2023 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the third quarter of its 2023 fiscal year and for the nine months ended June 30, 2023.

FISCAL 2023 THIRD QUARTER SUMMARY

• GAAP net income of $92.6 million, or $1.00 per share, compared to GAAP net income of $108.2 million, or $1.17 per share, in the prior year.

• Adjusted operating results of $93.4 million, or $1.01 per share, compared to $141.9 million, or $1.54 per share, in the prior year (see non-GAAP reconciliation on page 2).

• E&P segment net Appalachian natural gas production of 94.7 Bcfe, an increase of 5.9 Bcfe, or 7%, compared to the prior year, and a 2% increase when compared to fiscal 2023 second quarter.

• Successfully closed on the purchase of three separate upstream assets that total approximately 36,000 net acres with flowing net production of approximately 16 million cubic feet per day in the E&P segment’s Eastern Development Area, for total consideration of $138.9 million.

• The Pennsylvania Public Utility Commission approved a joint settlement in the Utility segment’s Pennsylvania rate case proceeding that, effective August 1, 2023, will increase annual base rate delivery revenues by $23 million and, among other stipulations, includes a newly implemented weather normalization adjustment mechanism.

• The Company is narrowing its fiscal 2023 earnings guidance to a range of $5.15 to $5.25 per share, excluding items impacting comparability, and initiating its fiscal 2024 earnings guidance with a range of $5.50 to $6.00 per share, an increase of 11% from fiscal 2023, at the midpoint (see Guidance Summary on page 8).

MANAGEMENT COMMENTS

David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “National Fuel achieved strong operational results in the third quarter, but lower natural gas price realizations at Seneca and higher operating expenses across our regulated operations weighed on our financial results. Looking ahead to fiscal 2024, we expect significant earnings growth, driven by our integrated development program coupled with improved earnings at our rate-regulated businesses as a result of rate case outcomes.

“Longer-term, our continued investment in the modernization of our rate-regulated infrastructure, along with a disciplined approach to Seneca’s development program and an improved long-term outlook for natural gas prices, positions the Company well to deliver shareholder value through future earnings growth and increasing free cash flow generation.”

RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
(in thousands except per share amounts)			2023				2022				2023				2022
Reported GAAP Earnings		$	92,620			$	108,158			$	403,189			$	407,879
Items impacting comparability:
Unrealized (gain) loss on derivative asset (E&P)			1,430				—				3,702				—
Tax impact of unrealized (gain) loss on derivative asset			(392	)			—				(1,015	)			—
Unrealized (gain) loss on other investments (Corporate / All Other)			(355	)			3,434				(1,632	)			10,093
Tax impact of unrealized (gain) loss on other investments			74				(721	)			343				(2,120	)
Items impacting comparability from West Coast asset sale (E&P)(1)			—				41,589				—				41,589
Tax impact of items impacting comparability from West Coast asset sale(1)			—				(10,533	)			—				(10,533	)
Reduction of other post-retirement regulatory liability (Utility)			—				—				—				(18,533	)
Tax impact of reduction of other post-retirement regulatory liability			—				—				—				3,892
Adjusted Operating Results		$	93,377			$	141,927			$	404,587			$	432,267
Reported GAAP Earnings Per Share		$	1.00			$	1.17			$	4.37			$	4.43
Items impacting comparability:
Unrealized (gain) loss on derivative asset, net of tax (E&P)			0.01				—				0.03				—
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)			—				0.03				(0.01	)			0.08
Items impacting comparability from West Coast asset sale, net of tax (E&P)(1)			—				0.34				—				0.34
Reduction of other post-retirement regulatory liability, net of tax (Utility)			—				—				—				(0.16	)
Rounding			—				—				(0.01	)			—
Adjusted Operating Results Per Share		$	1.01			$	1.54			$	4.38			$	4.69

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

DISCUSSION OF GUIDANCE UPDATE

National Fuel is revising its fiscal 2023 earnings guidance range and is now projecting that earnings, excluding items impacting comparability, will be within the range of $5.15 to $5.25 per share. This updated range reflects the results of the third quarter, along with updated assumptions for the balance of the year, as detailed on page 8.

The Exploration and Production segment’s fiscal 2023 net production is now expected to be in the range of 370 to 380 Bcfe, which reflects the impacts of over 5 Bcfe of price-related curtailments and volumes shut-in due to the operational impacts of low in-basin pricing and third-party pipeline system constraints during the third quarter. This guidance range does not incorporate any additional price-related curtailments over the remainder of the fiscal year. Seneca currently has firm sales contracts in place for approximately 95% of its projected remaining fiscal 2023 natural gas production, significantly limiting its exposure to in-basin markets. Approximately 80% of expected remaining production is either matched by a financial hedge or was entered into at a fixed price.

The Company is also initiating preliminary guidance for fiscal 2024 with earnings projected to be within a range of $5.50 to $6.00 per share, or $5.75 per share at the midpoint of the range, an increase of 11% from the midpoint of the revised fiscal 2023 guidance range. Drivers of the expected increase in earnings include anticipated higher natural gas price realizations, further growth in natural gas production and the associated impact on Gathering segment revenues, and substantial growth in earnings from the regulated segments expected as a result of anticipated base rate increases.

Seneca’s fiscal 2024 net production forecast is increasing to an expected range of 390 to 410 Bcfe, an increase of 7% versus fiscal 2023 at the midpoint of the guidance range. In addition, the Company is assuming NYMEX natural gas prices of $3.25 per MMBtu for the year, which will drive expected natural gas price realizations after hedging to increase by approximately $0.10 per Mcf from its estimated fiscal 2023 realizations. Overall, Seneca has firm sales contracts in place for approximately 88% of its expected fiscal 2024 natural gas production, significantly limiting its exposure to in-basin markets. Approximately 67% of expected production is supported by financial hedges or fixed price contracts, limiting exposure to potential swings in natural gas prices in fiscal 2024.

The Company’s consolidated capital expenditures in fiscal 2024 are expected to be in a range of $865 million to $975 million, which at the midpoint, is generally in line with its fiscal 2023 guidance.

Capital expenditures in the Company’s rate-regulated Pipeline and Storage and Utility segments are expected to be in the range of $250 million to $290 million for fiscal 2024, an increase of $25 million from fiscal 2023 at the midpoint. Most of this spending will be focused on ongoing infrastructure modernization programs that are geared toward enhancing the safety, reliability, and resiliency of the Company's critical infrastructure, as well as contributing to the ongoing reduction in the Company’s emissions profile. The ability to ramp up growth investments in these businesses provides for the ability to generate stable, predictable, value-accretive returns, and is an efficient means of deploying excess free cash flow generated across the Company to the long-term benefit of shareholders.

In the Exploration and Production segment, Seneca’s activity is expected to further moderate as it continues a planned transition that targets a maintenance-to-low single-digit, long-term production growth profile. Capital spending for fiscal 2024 is expected to be in the range of $525 million to $575 million, a decrease of 7% from fiscal 2023 at the midpoint. In addition to moderating long-term capital spending levels, Seneca is shifting the vast majority of its development activity to its highly prolific Eastern Development Area where, as a result of acquisitions over the past three years, it has a significant inventory of well locations that generate superior returns. As part of this transition, costs related to water management will lead to modestly higher capital spending on a per foot basis as the transition is fully executed. Further, Seneca plans to spend more than $35 million of one-time costs in fiscal 2024 related to this transition as it bolsters its seismic inventory, expands its produced water infrastructure, and increases its leasehold position in Lycoming County. In addition, the Gathering segment will continue its multi-year build out of key infrastructure in the Tioga County region and as a result, expects spending to be in the range of $90 million to $110 million, which is generally consistent with the current fiscal year.

Additional details on the Company’s updated forecast assumptions and business segment guidance for fiscal 2023 and fiscal 2024 are outlined in the table on page 8.

DISCUSSION OF THIRD QUARTER RESULTS BY SEGMENT

The following earnings discussion of each operating segment for the quarter ended June 30, 2023 is summarized in a tabular form on pages 9 and 10 of this report (earnings drivers for the nine months ended June 30, 2023 are summarized on pages 11 and 12). It may be helpful to refer to those tables while reviewing this discussion.

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

Upstream Business

Exploration and Production Segment

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

	Three Months Ended
	June 30
(in thousands)		2023			2022			Variance
GAAP Earnings	$	43,329		$	56,497			$	(13,168	)
Unrealized (gain) loss on derivative asset, net of tax		1,038			—				1,038
Gain on sale of West Coast assets, net of tax		—			(9,511	)			9,511
Loss from discontinuance of crude oil cash flow hedges, net of tax		—			33,329				(33,329	)
Transaction and severance costs related to West Coast asset sale, net of tax		—			7,238				(7,238	)
Adjusted Operating Results	$	44,367		$	87,553			$	(43,186	)
Adjusted EBITDA	$	134,236		$	184,622			$	(50,386	)

Seneca’s third quarter GAAP earnings decreased $13.2 million versus the prior year. Last year’s third quarter earnings included several one-time items impacting comparability shown in the table above related to the divestiture of Seneca’s California assets in June 2022 that did not recur this year. Earnings were also impacted by an unrealized loss of $1.4 million ($1.0 million after-tax) recognized during the current-year third quarter from a reduction in the implied fair value of an asset related to the contingent consideration in connection with this divestiture. Excluding these items, Seneca’s earnings decreased $43.2 million. Higher natural gas production was more than offset by lower Appalachian realized natural gas prices and the loss of earnings related to the divestiture of Seneca’s crude oil production in California.

Seneca produced 94.8 Bcfe during the third quarter, an increase of 2.3 Bcfe, or 3%, from the prior year. Despite the combined impact of approximately 5 Bcfe of price-related curtailments and other volumes shut-in due to the operational impacts of low in-basin pricing and third-party pipeline system constraints, production in Appalachia increased 5.9 Bcfe, or 7%. This increase was partially offset by a 3.5 Bcfe decrease in production related to the aforementioned California sale.

Seneca’s average realized natural gas price, after the impact of hedging and transportation costs, was $2.27 per Mcf, a decrease of $0.60 per Mcf from the prior year. Lower natural gas prices, before the impact of hedging, were partially offset by an increase in the weighted average hedge price compared to the prior-year third quarter.

On an absolute basis, lease operating and transportation expense (“LOE”) decreased $17.7 million primarily due to the California sale, slightly offset by increases in LOE from higher well repair costs in Appalachia. LOE expense includes $54.3 million in intercompany expense for gathering and compression services used to connect Seneca’s production to sales points along interstate pipelines. On a per unit basis, LOE was $0.65 per Mcfe, a decrease of $0.21 per Mcfe from the prior year.

The decrease in Seneca’s other operating expense of $6.5 million was primarily due to the prior-year third quarter, non-recurring accrual of plugging and abandonment expenses related to certain formerly owned offshore Gulf of Mexico wells that were sold in prior years, as well as the sale of Seneca’s California assets. Other taxes decreased $4.8 million largely attributable to both the impact of the sale of Seneca's California assets as well as lower Impact Fees in Pennsylvania due to the decrease in NYMEX natural gas prices.

Depreciation, depletion and amortization (“DD&A”) expense increased $5.4 million due to higher natural gas production and a higher per unit DD&A rate, which was driven by an increase in capitalized costs in Seneca’s full cost pool. DD&A expense was $0.64 per Mcfe, an increase of $0.04 per Mcfe from the prior year.

Midstream Businesses

Pipeline and Storage Segment

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

	Three Months Ended
	June 30
(in thousands)		2023			2022		Variance
GAAP Earnings	$	23,813		$	26,599		$	(2,786	)
Adjusted EBITDA	$	57,636		$	62,565		$	(4,929	)

The Pipeline and Storage segment’s third quarter GAAP earnings decreased $2.8 million versus the prior year primarily due to lower operating revenues and higher operation and maintenance (“O&M”) expense, partially offset by an increase in other income. The decrease in operating revenues of $3.2 million was primarily attributable to contract expirations, partially offset by an increase in new short-term contracts. O&M expense increased $1.6 million primarily due to higher pipeline integrity and personnel costs. The increase in other income of $1.7 million was primarily attributable to a higher weighted average interest rate on intercompany short-term notes receivables.

Gathering Segment

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

	Three Months Ended
	June 30
(in thousands)		2023			2022		Variance
GAAP Earnings	$	24,135		$	24,658		$	(523	)
Adjusted EBITDA	$	46,032		$	46,151		$	(119	)

The Gathering segment’s third quarter GAAP earnings decreased $0.5 million versus the prior year primarily due to higher O&M expense and higher income tax expense, both of which were almost entirely offset by higher operating revenues. Operating revenues increased $3.0 million, or 5%, which was the result of an 8.9 Bcf increase in gathered volumes due to an increase in natural gas production from both Seneca and non-affiliated parties. The increase in O&M expense of $3.1 million was due to an increase in compressor station preventative maintenance activity and higher compression leasing expenses, as well as increases in personnel expenses and costs for materials. The increase in material costs primarily reflects a higher amount of materials being purchased as a result of the increase in gathered volume, and to a lesser extent, rising costs from inflation. The increase in income tax expense was primarily driven by a higher effective state income tax rate.

Downstream Business

Utility Segment

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

	Three Months Ended
	June 30
(in thousands)		2023			2022		Variance
GAAP Earnings	$	37		$	4,622		$	(4,585	)
Adjusted EBITDA	$	20,912		$	27,042		$	(6,130	)

The Utility segment’s third quarter GAAP earnings decreased $4.6 million versus the prior year primarily due to lower customer margins (operating revenues less purchased gas sold), as well as increases in O&M and interest expense, partially offset by a decrease in non-service pension and OPEB costs and higher other income.

The decline in customer margin of $2.9 million was due primarily to a $2.6 million reduction in base rates in New York as a result of a rate proceeding that became effective October 1, 2022 which temporarily reduced the Utility’s recovery of pension and other post-employment benefit (“OPEB”) expenses to zero. In addition to lowering rates, the proceeding mandated a corresponding decrease in pension and OPEB expense, most of which had been previously recorded in “below the line” non-service pension and OPEB costs. This decrease was partially offset by higher revenues from the Company’s system modernization and improvement tracking mechanisms in its New York service territory.

O&M expense increased by $3.7 million due primarily to higher personnel costs and an increase in legal and consulting expenses. An increase in the cost of materials and transportation expenses, primarily as a result of rising costs from inflation, also contributed to higher O&M expense for the quarter. Interest expense increased $2.4 million due primarily to a higher weighted average interest rate on intercompany short-term borrowings. The increase in other income of $1.3 million was primarily attributable to interest earned on deferred gas costs.

Corporate and All Other

The Company’s operations that are included in Corporate and All Other generated combined earnings of $1.3 million in the current quarter, which was a $5.5 million increase over the combined net loss of $4.2 million in the prior-year third quarter. The increase in earnings was primarily driven by unrealized gains on investment securities recognized in the current quarter compared to unrealized losses on investment securities recognized in the prior-year third quarter. Also contributing to the increase were changes in cash surrender value of life insurance policies, which increased in value $1.1 million during the current quarter compared to a decrease in value of less than $0.1 million during the prior-year third quarter.

EARNINGS TELECONFERENCE

The Company will host a conference call on Thursday, August 3, 2023, at 10 a.m. Eastern Time to discuss this announcement. To pre-register for this call (recommended), please visit https://conferencingportals.com/event/ygNxHFJo. After registering, you will receive your access details via email. To join by telephone on the day of the call, dial U.S. toll free 1-888–330–2513 and provide Conference ID 47961. The teleconference will be simultaneously webcast online and can be accessed on the NFG Investor Relations website at investor.nationalfuelgas.com. An audio replay of the teleconference call will be available until Thursday, August 10, 2023. To access the telephone replay, dial U.S. toll free 1-800-770-2030 and provide Conference ID 47961.

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

Analyst Contact:	Brandon J. Haspett	716-857-7697
Media Contact:	Karen L. Merkel	716-857-7654

Certain statements contained herein, including statements identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may” and similar expressions, and statements which are other than statements of historical facts, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company’s expectations, beliefs and projections contained herein are expressed in good faith and are believed to have a reasonable basis, but there can be no assurance that such expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors, the following are important factors that could cause actual results to differ materially from those discussed in the forward-looking statements: changes in laws, regulations or judicial interpretations to which the Company is subject, including those involving derivatives, taxes, safety, employment, climate change, other environmental matters, real property, and exploration and production activities such as hydraulic fracturing; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design, retained natural gas and system modernization), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; the Company’s ability to estimate accurately the time and resources necessary to meet emissions targets; governmental/regulatory actions and/or market pressures to reduce or eliminate reliance on natural gas; changes in economic conditions, including inflationary pressures, supply chain issues, liquidity challenges, and global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; changes in the price of natural gas; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; financial and economic conditions, including the availability of credit, and occurrences affecting the Company’s ability to obtain financing on acceptable terms for working capital, capital expenditures and other investments, including any downgrades in the Company’s credit ratings and changes in interest rates and other capital market conditions; impairments under the SEC’s full cost ceiling test for natural gas reserves; increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; the Company’s ability to complete planned strategic transactions; changes in price differentials between similar quantities of natural gas sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; the impact of information technology disruptions, cybersecurity or data security breaches; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; other changes in price differentials between similar quantities of natural gas having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; negotiations with the collective bargaining units representing the Company's workforce, including potential work stoppages during negotiations; uncertainty of natural gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas; changes in demographic patterns and weather conditions (including those related to climate change); changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

GUIDANCE SUMMARY

As discussed on page 2, the Company is revising its earnings guidance for fiscal 2023 and initiating guidance for fiscal 2024. Additional details on the Company's forecast assumptions and business segment guidance for fiscal 2023 and fiscal 2024 are outlined in the table below.

The revised earnings guidance range does not include the impact of certain items that impacted the comparability of earnings during the nine months ended June 30, 2023, including: (1) after-tax unrealized losses on a derivative asset, which reduced earnings by $0.03 per share; and (2) after-tax unrealized gains on other investments, which increased earnings by $0.01 per share. While the Company expects to record certain adjustments to unrealized gain or loss on a derivative asset and unrealized gain or loss on investments during the three months ending September 30, 2023, the amounts of these and other potential adjustments are not reasonably determinable at this time. As such, the Company is unable to provide earnings guidance other than on a non-GAAP basis.

	Updated FY 2023 Guidance		Preliminary FY 2024 Guidance
Adjusted Consolidated Earnings per Share, excluding items impacting comparability	$5.15 to $5.25		$5.50 to $6.00
Consolidated Effective Tax Rate	~ 25.5%		~ 25.5 - 26%
Capital Expenditures (Millions)*
Exploration and Production	$575 - $600		$525 - $575
Pipeline and Storage	$110 - $130		$120 - $140
Gathering	$95 - $105		$90 - $110
Utility	$125 - $135		$130 - $150
Consolidated Capital Expenditures	$905 - $970		$865 - $975
Exploration & Production Segment Guidance**
Commodity Price Assumptions
NYMEX natural gas price	$2.60 /MMBtu		$3.25 /MMBtu
Appalachian basin spot price	$1.60 /MMBtu		$2.45 /MMBtu
Production (Bcfe)	370 to 380		390 to 410
E&P Operating Costs ($/Mcfe)
LOE	$0.67 - $0.68		$0.69 - $0.71
G&A	~$0.18		$0.17 - $0.19
DD&A	$0.62 - $0.64		$0.66 - $0.70
Other Business Segment Guidance (Millions)
Gathering Segment Revenues	$225 - $235		$240 - $260
Pipeline and Storage Segment Revenues	$370 - $380		$380 - $420

* Capital expenditures guidance for fiscal 2023 excludes capital related to acquisitions announced during the fiscal year.
** Fiscal 2023 commodity price assumptions are for the remaining three months of the fiscal year.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED JUNE 30, 2023
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
(Thousands of Dollars)	Production				Storage				Gathering				Utility				All Other				Consolidated*
Third quarter 2022 GAAP earnings	$	56,497			$	26,599			$	24,658			$	4,622			$	(4,218	)		$	108,158
Items impacting comparability:
Gain on sale of West Coast assets		(12,736	)																			(12,736	)
Tax impact of gain on sale of West Coast assets		3,225																				3,225
Loss from discontinuance of crude oil cash flow hedges		44,632																				44,632
Tax impact of loss from discontinuance of crude oil cash flow hedges		(11,303	)																			(11,303	)
Transaction and severance costs related to West Coast asset sale		9,693																				9,693
Tax impact of transaction and severance costs related to West Coast asset sale		(2,455	)																			(2,455	)
Unrealized (gain) loss on other investments																		3,434				3,434
Tax impact of unrealized (gain) loss on other investments																		(721	)			(721	)
Third quarter 2022 adjusted operating results		87,553				26,599				24,658				4,622				(1,505	)			141,927
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production		12,371																				12,371
Higher (lower) crude oil production		(31,860	)																			(31,860	)
Higher (lower) realized natural gas prices, after hedging		(44,649	)																			(44,649	)
Midstream Revenues
Higher (lower) operating revenues						(2,491	)			2,350												(141	)
Downstream Margins***
Impact of new rates****														(2,015	)							(2,015	)
System modernization and improvement tracker revenues														866								866
Operating Expenses
Lower (higher) lease operating and transportation expenses		13,994																				13,994
Lower (higher) operating expenses		6,138				(1,239	)			(2,432	)			(3,105	)							(638	)
Lower (higher) property, franchise and other taxes		3,807																				3,807
Lower (higher) depreciation / depletion		(4,304	)			(324	)			(314	)											(4,942	)
Other Income (Expense)
(Higher) lower other deductions		533				1,292								3,188								5,013
(Higher) lower interest expense		759								435				(2,154	)			2,199				1,239
Income Taxes
Lower (higher) income tax expense / effective tax rate		(370	)			187				(631	)			(884	)			146				(1,552	)
All other / rounding		395				(211	)			69				(481	)			185				(43	)
Third quarter 2023 adjusted operating results		44,367				23,813				24,135				37				1,025				93,377
Items impacting comparability:
Unrealized gain (loss) on derivative asset		(1,430	)																			(1,430	)
Tax impact of unrealized gain (loss) on derivative asset		392																				392
Unrealized gain (loss) on other investments																		355				355
Tax impact of unrealized gain (loss) on other investments																		(74	)			(74	)
Third quarter 2023 GAAP earnings	$	43,329			$	23,813			$	24,135			$	37			$	1,306			$	92,620
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.
**** Amount is offset by corresponding decrease in other deductions and will have no earnings impact for the year ended September 30, 2023.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED JUNE 30, 2023
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
	Production				Storage				Gathering				Utility				All Other				Consolidated*
Third quarter 2022 GAAP earnings per share	$	0.61			$	0.29			$	0.27			$	0.05			$	(0.05	)		$	1.17
Items impacting comparability:
Gain on sale of West Coast assets, net of tax		(0.10	)																			(0.10	)
Loss from discontinuance of crude oil cash flow hedges, net of tax		0.36																				0.36
Transaction and severance costs related to West Coast asset sale, net of tax		0.08																				0.08
Unrealized (gain) loss on other investments, net of tax																		0.03				0.03
Third quarter 2022 adjusted operating results per share		0.95				0.29				0.27				0.05				(0.02	)			1.54
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production		0.13																				0.13
Higher (lower) crude oil production		(0.35	)																			(0.35	)
Higher (lower) realized natural gas prices, after hedging		(0.48	)																			(0.48	)
Midstream Revenues
Higher (lower) operating revenues						(0.03	)			0.03												—
Downstream Margins***
Impact of new rates****														(0.02	)							(0.02	)
System modernization and improvement tracker revenues														0.01								0.01
Operating Expenses
Lower (higher) lease operating and transportation expenses		0.15																				0.15
Lower (higher) operating expenses		0.07				(0.01	)			(0.03	)			(0.03	)							—
Lower (higher) property, franchise and other taxes		0.04																				0.04
Lower (higher) depreciation / depletion		(0.05	)			—				—												(0.05	)
Other Income (Expense)
(Higher) lower other deductions		0.01				0.01								0.03								0.05
(Higher) lower interest expense		0.01								—				(0.02	)			0.02				0.01
Income Taxes
Lower (higher) income tax expense / effective tax rate		—				—				(0.01	)			(0.01	)			—				(0.02	)
All other / rounding		—				—				—				(0.01	)			0.01				—
Third quarter 2023 adjusted operating results per share		0.48				0.26				0.26				—				0.01				1.01
Items impacting comparability:
Unrealized gain (loss) on derivative asset, net of tax		(0.01	)																			(0.01	)
Unrealized gain (loss) on other investments, net of tax																		—				—
Third quarter 2023 GAAP earnings per share	$	0.47			$	0.26			$	0.26			$	—			$	0.01			$	1.00
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.
**** Amount is offset by corresponding decrease in other deductions and will have no earnings impact for the year ended September 30, 2023.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
NINE MONTHS ENDED JUNE 30, 2023
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
(Thousands of Dollars)	Production				Storage				Gathering				Utility				All Other				Consolidated*
Nine months ended June 30, 2022 GAAP earnings	$	189,987			$	77,236			$	69,887			$	79,800			$	(9,031	)		$	407,879
Items impacting comparability:
Reduction of other post-retirement regulatory liability														(18,533	)							(18,533	)
Tax impact of reduction of other post-retirement regulatory liability														3,892								3,892
Gain on sale of West Coast assets		(12,736	)																			(12,736	)
Tax impact of gain on sale of West Coast assets		3,225																				3,225
Loss from discontinuance of crude oil cash flow hedges		44,632																				44,632
Tax impact of loss from discontinuance of crude oil cash flow hedges		(11,303	)																			(11,303	)
Transaction and severance costs related to West Coast asset sale		9,693																				9,693
Tax impact of transaction and severance costs related to West Coast asset sale		(2,455	)																			(2,455	)
Unrealized (gain) loss on other investments																		10,093				10,093
Tax impact of unrealized (gain) loss on other investments																		(2,120	)			(2,120	)
Nine months ended June 30, 2022 adjusted operating results		221,043				77,236				69,887				65,159				(1,058	)			432,267
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production		49,567																				49,567
Higher (lower) crude oil production		(87,986	)																			(87,986	)
Higher (lower) realized natural gas prices, after hedging		(10,815	)																			(10,815	)
Higher (lower) other operating revenues		(2,161	)																			(2,161	)
Midstream Revenues
Higher (lower) operating revenues						4,629				9,117												13,746
Downstream Margins***
Impact of new rates****														(11,126	)							(11,126	)
System modernization and improvement tracker revenues														3,462								3,462
Operating Expenses
Lower (higher) lease operating and transportation expenses		25,335																				25,335
Lower (higher) operating expenses		12,644				(4,939	)			(4,537	)			(7,213	)			(590	)			(4,635	)
Lower (higher) property, franchise and other taxes		4,697																				4,697
Lower (higher) depreciation / depletion		(15,450	)			(1,941	)			(1,003	)											(18,394	)
Other Income (Expense)
(Higher) lower other deductions		2,837				2,810				519				12,840				(3,585	)			15,421
(Higher) lower interest expense						(899	)			653				(7,577	)			5,837				(1,986	)
Income Taxes
Lower (higher) income tax expense / effective tax rate		(1,807	)			(64	)			(1,408	)			(144	)			(13	)			(3,436	)
All other / rounding		286				315				(21	)			173				(122	)			631
Nine months ended June 30, 2023 adjusted operating results		198,190				77,147				73,207				55,574				469				404,587
Items impacting comparability:
Unrealized gain (loss) on derivative asset		(3,702	)																			(3,702	)
Tax impact of unrealized gain (loss) on derivative asset		1,015																				1,015
Unrealized gain (loss) on other investments																		1,632				1,632
Tax impact of unrealized gain (loss) on other investments																		(343	)			(343	)
Nine months ended June 30, 2023 GAAP earnings	$	195,503			$	77,147			$	73,207			$	55,574			$	1,758			$	403,189
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.
**** Amount is offset by corresponding decrease in other deductions and will have no earnings impact for the year ended September 30, 2023.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
NINE MONTHS ENDED JUNE 30, 2023
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
	Production				Storage				Gathering				Utility				All Other				Consolidated*
Nine months ended June 30, 2022 GAAP earnings per share	$	2.06			$	0.84			$	0.76			$	0.87			$	(0.10	)		$	4.43
Items impacting comparability:
Reduction of other post-retirement regulatory liability, net of tax														(0.16	)							(0.16	)
Gain on sale of West Coast assets, net of tax		(0.10	)																			(0.10	)
Loss from discontinuance of crude oil cash flow hedges, net of tax		0.36																				0.36
Transaction and severance costs related to West Coast asset sale, net of tax		0.08																				0.08
Unrealized (gain) loss on other investments, net of tax																		0.08				0.08
Nine months ended June 30, 2022 adjusted operating results per share		2.40				0.84				0.76				0.71				(0.02	)			4.69
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production		0.54																				0.54
Higher (lower) crude oil production		(0.95	)																			(0.95	)
Higher (lower) realized natural gas prices, after hedging		(0.12	)																			(0.12	)
Higher (lower) other operating revenues		(0.02	)																			(0.02	)
Midstream Revenues
Higher (lower) operating revenues						0.05				0.10												0.15
Downstream Margins***
Impact of new rates****														(0.12	)							(0.12	)
System modernization and improvement tracker revenues														0.04								0.04
Operating Expenses
Lower (higher) lease operating and transportation expenses		0.27																				0.27
Lower (higher) operating expenses		0.14				(0.05	)			(0.05	)			(0.08	)			(0.01	)			(0.05	)
Lower (higher) property, franchise and other taxes		0.05																				0.05
Lower (higher) depreciation / depletion		(0.17	)			(0.02	)			(0.01	)											(0.20	)
Other Income (Expense)
(Higher) lower other deductions		0.03				0.03				0.01				0.14				(0.04	)			0.17
(Higher) lower interest expense						(0.01	)			0.01				(0.08	)			0.06				(0.02	)
Income Taxes
Lower (higher) income tax expense / effective tax rate		(0.02	)			—				(0.02	)			—				—				(0.04	)
All other / rounding		—				—				(0.01	)			(0.01	)			0.01				(0.01	)
Nine months ended June 30, 2023 adjusted operating results per share		2.15				0.84				0.79				0.60				—				4.38
Items impacting comparability:
Unrealized gain (loss) on derivative asset, net of tax		(0.03	)																			(0.03	)
Unrealized gain (loss) on other investments, net of tax																		0.01				0.01
Rounding																		0.01				0.01
Nine months ended June 30, 2023 GAAP earnings per share	$	2.12			$	0.84			$	0.79			$	0.60			$	0.02			$	4.37
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.
**** Amount is offset by corresponding decrease in other deductions and will have no earnings impact for the year ended September 30, 2023.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
(Thousands of Dollars, except per share amounts)
	Three Months Ended								Nine Months Ended
	June 30,								June 30,
	(Unaudited)								(Unaudited)
SUMMARY OF OPERATIONS		2023				2022				2023				2022
Operating Revenues:
Utility Revenues	$	144,538			$	179,888			$	862,914			$	785,664
Exploration and Production and Other Revenues		216,581				252,638				738,107				758,594
Pipeline and Storage and Gathering Revenues		67,585				70,098				203,803				206,642
		428,704				502,624				1,804,824				1,750,900
Operating Expenses:
Purchased Gas		35,425				67,948				450,461				369,168
Operation and Maintenance:
Utility		50,080				46,403				156,885				146,523
Exploration and Production and Other		27,659				64,593				86,315				160,016
Pipeline and Storage and Gathering		38,607				33,988				109,347				97,434
Property, Franchise and Other Taxes		20,427				25,874				71,999				78,093
Depreciation, Depletion and Amortization		102,410				95,857				299,973				275,681
		274,608				334,663				1,174,980				1,126,915
Gain on Sale of Assets		—				12,736				—				12,736
Operating Income		154,096				180,697				629,844				636,721
Other Income (Expense):
Other Income (Deductions)		3,551				(5,649	)			12,754				3,291
Interest Expense on Long-Term Debt		(26,311	)			(30,091	)			(83,499	)			(90,300	)
Other Interest Expense		(5,781	)			(3,882	)			(15,485	)			(6,561	)
Income Before Income Taxes		125,555				141,075				543,614				543,151
Income Tax Expense		32,935				32,917				140,425				135,272
Net Income Available for Common Stock	$	92,620			$	108,158			$	403,189			$	407,879
Earnings Per Common Share
Basic	$	1.01			$	1.18			$	4.40			$	4.46
Diluted	$	1.00			$	1.17			$	4.37			$	4.43
Weighted Average Common Shares:
Used in Basic Calculation		91,803,638				91,456,265				91,725,286				91,388,417
Used in Diluted Calculation		92,294,666				92,168,518				92,268,904				92,083,560

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
	June 30,				September 30,
(Thousands of Dollars)		2023				2022
ASSETS
Property, Plant and Equipment	$	13,326,563			$	12,551,909
Less - Accumulated Depreciation, Depletion and Amortization		6,245,650				5,985,432
Net Property, Plant and Equipment		7,080,913				6,566,477
Current Assets:
Cash and Temporary Cash Investments		53,415				46,048
Hedging Collateral Deposits		—				91,670
Receivables - Net		183,377				361,626
Unbilled Revenue		13,476				30,075
Gas Stored Underground		13,047				32,364
Materials and Supplies - at average cost		48,288				40,637
Unrecovered Purchased Gas Costs		24,098				99,342
Other Current Assets		71,586				59,369
Total Current Assets		407,287				761,131
Other Assets:
Recoverable Future Taxes		104,794				106,247
Unamortized Debt Expense		7,651				8,884
Other Regulatory Assets		63,398				67,101
Deferred Charges		77,886				77,472
Other Investments		74,777				95,025
Goodwill		5,476				5,476
Prepaid Pension and Post-Retirement Benefit Costs		234,425				196,597
Fair Value of Derivative Financial Instruments		46,280				9,175
Other		3,745				2,677
Total Other Assets		618,432				568,654
Total Assets	$	8,106,632			$	7,896,262
CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and
Outstanding - 91,803,996 Shares and 91,478,064 Shares, Respectively	$	91,804			$	91,478
Paid in Capital		1,035,852				1,027,066
Earnings Reinvested in the Business		1,857,630				1,587,085
Accumulated Other Comprehensive Loss		(49,384	)			(625,733	)
Total Comprehensive Shareholders' Equity		2,935,902				2,079,896
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs		2,383,685				2,083,409
Total Capitalization		5,319,587				4,163,305
Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper		138,500				60,000
Current Portion of Long-Term Debt		—				549,000
Accounts Payable		91,808				178,945
Amounts Payable to Customers		22,391				419
Dividends Payable		45,444				43,452
Interest Payable on Long-Term Debt		40,134				17,376
Customer Advances		—				26,108
Customer Security Deposits		34,024				24,283
Other Accruals and Current Liabilities		260,897				257,327
Fair Value of Derivative Financial Instruments		32,502				785,659
Total Current and Accrued Liabilities		665,700				1,942,569
Other Liabilities:
Deferred Income Taxes		1,030,526				698,229
Taxes Refundable to Customers		347,066				362,098
Cost of Removal Regulatory Liability		272,740				259,947
Other Regulatory Liabilities		190,907				188,803
Other Post-Retirement Liabilities		2,921				3,065
Asset Retirement Obligations		160,415				161,545
Other Liabilities		116,770				116,701
Total Other Liabilities		2,121,345				1,790,388
Commitments and Contingencies		—				—
Total Capitalization and Liabilities	$	8,106,632			$	7,896,262

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Nine Months Ended
		June 30,
(Thousands of Dollars)			2023				2022
Operating Activities:
Net Income Available for Common Stock		$	403,189			$	407,879
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Gain on Sale of Assets			—				(12,736	)
Depreciation, Depletion and Amortization			299,973				275,681
Deferred Income Taxes			101,096				121,150
Stock-Based Compensation			15,807				15,178
Reduction of Other Post-Retirement Regulatory Liability			—				(18,533	)
Other			16,640				27,527
Change in:
Receivables and Unbilled Revenue			192,324				(194,832	)
Gas Stored Underground and Materials, Supplies and Emission Allowances			11,757				24,141
Unrecovered Purchased Gas Costs			75,244				716
Other Current Assets			(12,230	)			(1,699	)
Accounts Payable			(52,340	)			19,259
Amounts Payable to Customers			21,972				271
Customer Advances			(26,108	)			(17,223	)
Customer Security Deposits			9,741				5,908
Other Accruals and Current Liabilities			45,363				61,322
Other Assets			(39,367	)			(44,184	)
Other Liabilities			(7,949	)			(15,809	)
Net Cash Provided by Operating Activities		$	1,055,112			$	654,016
Investing Activities:
Capital Expenditures		$	(727,738	)		$	(592,487	)
Net Proceeds from Sale of Oil and Gas Producing Properties			—				254,439
Acquisition of Upstream Assets			(124,758	)			—
Sale of Fixed Income Mutual Fund Shares in Grantor Trust			10,000				30,000
Other			13,397				13,528
Net Cash Used in Investing Activities		$	(829,099	)		$	(294,520	)
Financing Activities:
Proceeds from Issuance of Short-Term Note Payable to Bank		$	250,000			$	—
Repayment of Short-Term Note Payable to Bank			(250,000	)			—
Net Change in Other Short-Term Notes Payable to Banks and Commercial Paper			78,500				241,500
Reduction of Long-Term Debt			(549,000	)			—
Dividends Paid on Common Stock			(130,653	)			(124,701	)
Net Proceeds From Issuance of Long-Term Debt			297,533				—
Net Repurchases of Common Stock			(6,696	)			(9,387	)
Net Cash Provided by (Used in) Financing Activities		$	(310,316	)		$	107,412
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash			(84,303	)			466,908
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			137,718				120,138
Cash, Cash Equivalents, and Restricted Cash at June 30		$	53,415			$	587,046

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
UPSTREAM BUSINESS
	Three Months Ended												Nine Months Ended
(Thousands of Dollars, except per share amounts)	June 30,												June 30,
EXPLORATION AND PRODUCTION SEGMENT		2023				2022			Variance					2023			2022		Variance
Total Operating Revenues	$	216,581			$	252,638			$	(36,057	)		$	738,107		$	758,428		$	(20,321	)
Operating Expenses:
Operation and Maintenance:
General and Administrative Expense		15,877				26,844				(10,967	)			48,910			63,396			(14,486	)
Lease Operating and Transportation Expense		61,815				79,529				(17,714	)			189,144			221,213			(32,069	)
All Other Operation and Maintenance Expense		2,358				8,854				(6,496	)			6,970			18,183			(11,213	)
Property, Franchise and Other Taxes		2,295				7,114				(4,819	)			13,943			19,888			(5,945	)
Depreciation, Depletion and Amortization		60,584				55,136				5,448				174,747			155,190			19,557
		142,929				177,477				(34,548	)			433,714			477,870			(44,156	)
Gain on Sale of Assets		—				12,736				(12,736	)			—			12,736			(12,736	)
Operating Income		73,652				87,897				(14,245	)			304,393			293,294			11,099
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit (Costs) Credit		347				(186	)			533				1,042			(558	)		1,600
Interest and Other Income (Deductions)		(806	)			482				(1,288	)			(1,098	)		613			(1,711	)
Interest Expense		(13,628	)			(14,589	)			961				(39,049	)		(38,927	)		(122	)
Income Before Income Taxes		59,565				73,604				(14,039	)			265,288			254,422			10,866
Income Tax Expense		16,236				17,107				(871	)			69,785			64,435			5,350
Net Income	$	43,329			$	56,497			$	(13,168	)		$	195,503		$	189,987		$	5,516
Net Income Per Share (Diluted)	$	0.47			$	0.61			$	(0.14	)		$	2.12		$	2.06		$	0.06

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
MIDSTREAM BUSINESSES
	Three Months Ended												Nine Months Ended
(Thousands of Dollars, except per share amounts)	June 30,												June 30,
PIPELINE AND STORAGE SEGMENT		2023				2022			Variance					2023			2022		Variance
Revenues from External Customers	$	62,956			$	67,236			$	(4,280	)		$	194,800		$	196,579		$	(1,779	)
Intersegment Revenues		29,439				28,312				1,127				90,354			82,716			7,638
Total Operating Revenues		92,395				95,548				(3,153	)			285,154			279,295			5,859
Operating Expenses:
Purchased Gas		223				(139	)			362				1,111			1,298			(187	)
Operation and Maintenance		26,207				24,639				1,568				77,501			71,249			6,252
Property, Franchise and Other Taxes		8,329				8,483				(154	)			25,452			25,664			(212	)
Depreciation, Depletion and Amortization		17,732				17,322				410				52,874			50,417			2,457
		52,491				50,305				2,186				156,938			148,628			8,310
Operating Income		39,904				45,243				(5,339	)			128,216			130,667			(2,451	)
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Credit		1,330				767				563				3,990			2,302			1,688
Interest and Other Income		1,831				735				1,096				4,653			2,330			2,323
Interest Expense		(10,873	)			(10,813	)			(60	)			(32,702	)		(31,564	)		(1,138	)
Income Before Income Taxes		32,192				35,932				(3,740	)			104,157			103,735			422
Income Tax Expense		8,379				9,333				(954	)			27,010			26,499			511
Net Income	$	23,813			$	26,599			$	(2,786	)		$	77,147		$	77,236		$	(89	)
Net Income Per Share (Diluted)	$	0.26			$	0.29			$	(0.03	)		$	0.84		$	0.84		$	—
	Three Months Ended												Nine Months Ended
	June 30,												June 30,
GATHERING SEGMENT		2023				2022			Variance					2023			2022		Variance
Revenues from External Customers	$	4,629			$	2,862			$	1,767			$	9,003		$	10,063		$	(1,060	)
Intersegment Revenues		54,277				53,069				1,208				163,297			150,696			12,601
Total Operating Revenues		58,906				55,931				2,975				172,300			160,759			11,541
Operating Expenses:
Operation and Maintenance		12,849				9,770				3,079				33,252			27,509			5,743
Property, Franchise and Other Taxes		25				10				15				39			12			27
Depreciation, Depletion and Amortization		8,987				8,589				398				26,613			25,343			1,270
		21,861				18,369				3,492				59,904			52,864			7,040
Operating Income		37,045				37,562				(517	)			112,396			107,895			4,501
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit (Costs) Credit		37				(56	)			93				112			(168	)		280
Interest and Other Income		63				53				10				458			81			377
Interest Expense		(3,613	)			(4,164	)			551				(11,556	)		(12,383	)		827
Income Before Income Taxes		33,532				33,395				137				101,410			95,425			5,985
Income Tax Expense		9,397				8,737				660				28,203			25,538			2,665
Net Income	$	24,135			$	24,658			$	(523	)		$	73,207		$	69,887		$	3,320
Net Income Per Share (Diluted)	$	0.26			$	0.27			$	(0.01	)		$	0.79		$	0.76		$	0.03

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
DOWNSTREAM BUSINESS
	Three Months Ended												Nine Months Ended
(Thousands of Dollars, except per share amounts)	June 30,												June 30,
UTILITY SEGMENT		2023				2022			Variance					2023			2022		Variance
Revenues from External Customers	$	144,538			$	179,888			$	(35,350	)		$	862,914		$	785,664		$	77,250
Intersegment Revenues		79				60				19				500			245			255
Total Operating Revenues		144,617				179,948				(35,331	)			863,414			785,909			77,505
Operating Expenses:
Purchased Gas		63,151				95,587				(32,436	)			533,452			448,268			85,184
Operation and Maintenance		50,915				47,176				3,739				159,483			148,885			10,598
Property, Franchise and Other Taxes		9,639				10,143				(504	)			32,169			32,156			13
Depreciation, Depletion and Amortization		14,997				14,765				232				45,425			44,592			833
		138,702				167,671				(28,969	)			770,529			673,901			96,628
Operating Income		5,915				12,277				(6,362	)			92,885			112,008			(19,123	)
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit (Costs) Credit		8				(2,678	)			2,686				(5	)		6,018			(6,023	)
Interest and Other Income		1,694				349				1,345				4,903			1,162			3,741
Interest Expense		(8,441	)			(6,087	)			(2,354	)			(26,193	)		(17,115	)		(9,078	)
Income (Loss) Before Income Taxes		(824	)			3,861				(4,685	)			71,590			102,073			(30,483	)
Income Tax Expense (Benefit)		(861	)			(761	)			(100	)			16,016			22,273			(6,257	)
Net Income	$	37			$	4,622			$	(4,585	)		$	55,574		$	79,800		$	(24,226	)
Net Income Per Share (Diluted)	$	—			$	0.05			$	(0.05	)		$	0.60		$	0.87		$	(0.27	)

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT OPERATING RESULTS AND STATISTICS
(UNAUDITED)
	Three Months Ended												Nine Months Ended
(Thousands of Dollars, except per share amounts)	June 30,												June 30,
ALL OTHER		2023				2022			Variance					2023			2022		Variance
Revenues from External Customers	$	—			$	—			$	—			$	—		$	—		$	—
Intersegment Revenues		—				—				—				—			6			(6	)
Total Operating Revenues		—				—				—				—			6			(6	)
Operating Expenses:
Purchased Gas		—				—				—				—			6			(6	)
Operation and Maintenance		—				—				—				21			5			16
		—				—				—				21			11			10
Operating Loss		—				—				—				(21	)		(5	)		(16	)
Other Income (Expense):
Interest and Other Income (Deductions)		(65	)			—				(65	)			(451	)		2			(453	)
Interest Expense		(41	)			—				(41	)			(89	)		—			(89	)
Loss before Income Taxes		(106	)			—				(106	)			(561	)		(3	)		(558	)
Income Tax Expense (Benefit)		(25	)			—				(25	)			(131	)		4			(135	)
Net Loss	$	(81	)		$	—			$	(81	)		$	(430	)	$	(7	)	$	(423	)
Net Loss Per Share (Diluted)	$	—			$	—			$	—			$	—		$	—		$	—
	Three Months Ended												Nine Months Ended
	June 30,												June 30,
CORPORATE		2023				2022			Variance					2023			2022		Variance
Revenues from External Customers	$	—			$	—			$	—			$	—		$	166		$	(166	)
Intersegment Revenues		1,152				1,082				70				3,455			3,247			208
Total Operating Revenues		1,152				1,082				70				3,455			3,413			42
Operating Expenses:
Operation and Maintenance		3,323				3,195				128				10,770			10,039			731
Property, Franchise and Other Taxes		139				124				15				396			373			23
Depreciation, Depletion and Amortization		110				45				65				314			139			175
		3,572				3,364				208				11,480			10,551			929
Operating Loss		(2,420	)			(2,282	)			(138	)			(8,025	)		(7,138	)		(887	)
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs		(354	)			(1,017	)			663				(1,063	)		(3,052	)		1,989
Interest and Other Income		36,312				31,019				5,293				111,598			92,937			18,661
Interest Expense on Long-Term Debt		(26,311	)			(30,091	)			3,780				(83,499	)		(90,300	)		6,801
Other Interest Expense		(6,031	)			(3,346	)			(2,685	)			(17,281	)		(4,948	)		(12,333	)
Income (Loss) before Income Taxes		1,196				(5,717	)			6,913				1,730			(12,501	)		14,231
Income Tax Benefit		(191	)			(1,499	)			1,308				(458	)		(3,477	)		3,019
Net Income (Loss)	$	1,387			$	(4,218	)		$	5,605			$	2,188		$	(9,024	)	$	11,212
Net Income (Loss) Per Share (Diluted)	$	0.01			$	(0.05	)		$	0.06			$	0.02		$	(0.10	)	$	0.12
	Three Months Ended												Nine Months Ended
	June 30,												June 30,
INTERSEGMENT ELIMINATIONS		2023				2022			Variance					2023			2022		Variance
Intersegment Revenues	$	(84,947	)		$	(82,523	)		$	(2,424	)		$	(257,606	)	$	(236,910	)	$	(20,696	)
Operating Expenses:
Purchased Gas		(27,949	)			(27,500	)			(449	)			(84,102	)		(80,404	)		(3,698	)
Operation and Maintenance		(56,998	)			(55,023	)			(1,975	)			(173,504	)		(156,506	)		(16,998	)
		(84,947	)			(82,523	)			(2,424	)			(257,606	)		(236,910	)		(20,696	)
Operating Income		—				—				—				—			—			—
Other Income (Expense):
Interest and Other Deductions		(36,846	)			(35,117	)			(1,729	)			(111,385	)		(98,376	)		(13,009	)
Interest Expense		36,846				35,117				1,729				111,385			98,376			13,009
Net Income	$	—			$	—			$	—			$	—		$	—		$	—
Net Income Per Share (Diluted)	$	—			$	—			$	—			$	—		$	—		$	—

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
SEGMENT INFORMATION (Continued)
(Thousands of Dollars)
	Three Months Ended										Nine Months Ended
	June 30,										June 30,
	(Unaudited)										(Unaudited)
							Increase										Increase
		2023			2022		(Decrease)					2023			2022		(Decrease)
Capital Expenditures:
Exploration and Production(1)	$	269,171	(2)	$	131,776	(4)	$	137,395			$	592,787	(2)(3)	$	405,736	(4)(5)	$	187,051
Pipeline and Storage		33,503	(2)		19,778	(4)		13,725				66,767	(2)(3)		58,243	(4)(5)		8,524
Gathering		21,297	(2)		8,614	(4)		12,683				55,379	(2)(3)		28,588	(4)(5)		26,791
Utility		39,446	(2)		27,664	(4)		11,782				88,676	(2)(3)		70,972	(4)(5)		17,704
Total Reportable Segments		363,417			187,832			175,585				803,609			563,539			240,070
All Other		—			—			—				—			—			—
Corporate		45			166			(121	)			449			663			(214	)
Total Capital Expenditures	$	363,462		$	187,998		$	175,464			$	804,058		$	564,202		$	239,856

⁽¹⁾   The quarter and nine months ended June 30, 2023 includes $124.8 million related to the acquisition of upstream assets acquired from SWN. The acquisition cost is reported as a component of Acquisition of Upstream Assets on the Consolidated Statement of Cash Flows.

⁽²⁾   Capital expenditures for the quarter and nine months ended June 30, 2023, include accounts payable and accrued liabilities related to capital expenditures of $52.8 million, $7.7 million, $2.8 million, and $8.5 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 June 30, 2023, since they represent non-cash investing activities at that date.

⁽³⁾   Capital expenditures for the nine months ended June 30, 2023, exclude capital expenditures of $83.0 million, $15.2 million, $10.7 million and $11.4 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2022 and paid during the nine months ended June 30, 2023. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2022, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at June 30, 2023.

⁽⁴⁾   Capital expenditures for the quarter and nine months ended June 30, 2022, include accounts payable and accrued liabilities related to capital expenditures of $62.0 million, $5.2 million, $2.5 million, and $4.7 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 June 30, 2022, since they represent non-cash investing activities at that date.

⁽⁵⁾   Capital expenditures for the nine months ended June 30, 2022, exclude capital expenditures of $47.9 million, $39.4 million, $4.8 million and $10.6 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2021 and paid during the nine months ended June 30, 2022. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2021, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at June 30, 2022.

DEGREE DAYS
							Percent Colder
							(Warmer) Than:
Three Months Ended June 30,	Normal		2023		2022		Normal(1)			Last Year(1)
Buffalo, NY	912		788		797		(13.6	)		(1.1	)
Erie, PA	871		802		741		(7.9	)		8.2
Nine Months Ended June 30,
Buffalo, NY	6,455		5,656		5,662		(12.4	)		(0.1	)
Erie, PA	6,023		5,434		5,274		(9.8	)		3.0

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

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
		Three Months Ended										Nine Months Ended
		June 30,										June 30,
								Increase										Increase
			2023			2022		(Decrease)					2023			2022		(Decrease)
Gas Production/Prices:
Production (MMcf)
Appalachia			94,747			88,888			5,859				278,562			253,842			24,720
West Coast			—			405			(405	)			—			1,210			(1,210	)
Total Production			94,747			89,293			5,454				278,562			255,052			23,510
Average Prices (Per Mcf)
Appalachia		$	1.66		$	5.50		$	(3.84	)		$	3.05		$	4.64		$	(1.59	)
West Coast		N/M				10.29		N/M				N/M				10.04		N/M
Weighted Average			1.66			5.52			(3.86	)			3.05			4.67			(1.62	)
Weighted Average after Hedging			2.27			2.87			(0.60	)			2.62			2.67			(0.05	)
Oil Production/Prices:
Production (Thousands of Barrels)
Appalachia			7			7			—				22			8			14
West Coast			—			519			(519	)			—			1,589			(1,589	)
Total Production			7			526			(519	)			22			1,597			(1,575	)
Average Prices (Per Barrel)
Appalachia		$	69.66		$	108.47		$	(38.81	)		$	75.50		$	104.83		$	(29.33	)
West Coast		N/M				110.79		N/M				N/M				94.06		N/M
Weighted Average			69.66			110.76			(41.10	)			75.50			94.11			(18.61	)
Weighted Average after Hedging(1)			69.66			77.65			(7.99	)			75.50			70.71			4.79
Total Production (MMcfe)			94,789			92,449			2,340				278,694			264,634			14,060
Selected Operating Performance Statistics:
General & Administrative Expense per Mcfe(2)		$	0.17		$	0.19		$	(0.02	)		$	0.18		$	0.20		$	(0.02	)
Lease Operating and Transportation Expense per Mcfe(2)(3)		$	0.65		$	0.86		$	(0.21	)		$	0.68		$	0.84		$	(0.16	)
Depreciation, Depletion & Amortization per Mcfe(2)		$	0.64		$	0.60		$	0.04			$	0.63		$	0.59		$	0.04

N/M Not Meaningful (as a result of the sale of Seneca's West Coast assets in June 2022)

⁽¹⁾   Weighted average oil price after hedging for the three and nine months ended June 30, 2022 excludes a loss on discontinuance of crude oil cash flow hedges of $44.6 million.

⁽²⁾   Refer to page 16 for the General and Administrative Expense, Lease Operating and Transportation Expense and Depreciation, Depletion, and Amortization Expense for the Exploration and Production segment. General and Administrative Expense per Mcfe for the three and nine months ended June 30, 2022 excludes transaction and severance costs related to the California asset sale.

⁽³⁾   Amounts include transportation expense of $0.55 and $0.57 per Mcfe for the three months ended June 30, 2023 and June 30, 2022, respectively. Amounts include transportation expense of $0.57 and $0.56 per Mcfe for the nine months ended June 30, 2023 and June 30, 2022, respectively.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Hedging Summary for Remaining Three Months of Fiscal 2023		Volume				Average Hedge Price
Gas Swaps
NYMEX		32,820,000	MMBTU		$	2.88 / MMBTU
No Cost Collars		23,940,000	MMBTU		$	3.43 / MMBTU (Floor) / $4.13 / MMBTU (Ceiling)
Fixed Price Physical Sales		23,006,166	MMBTU		$	2.20 / MMBTU
Total		79,766,166	MMBTU
Hedging Summary for Fiscal 2024		Volume				Average Hedge Price
Gas Swaps
NYMEX		134,930,000	MMBTU		$	3.34 / MMBTU
No Cost Collars		65,280,000	MMBTU		$	3.33 / MMBTU (Floor) / $4.17 / MMBTU (Ceiling)
Fixed Price Physical Sales		75,554,510	MMBTU		$	2.44 / MMBTU
Total		275,764,510	MMBTU
Hedging Summary for Fiscal 2025		Volume				Average Hedge Price
Gas Swaps
NYMEX		80,560,000	MMBTU		$	3.49 / MMBTU
No Cost Collars		43,960,000	MMBTU		$	3.49 / MMBTU (Floor) / $4.65 / MMBTU (Ceiling)
Fixed Price Physical Sales		73,371,069	MMBTU		$	2.49 / MMBTU
Total		197,891,069	MMBTU
Hedging Summary for Fiscal 2026		Volume				Average Hedge Price
Gas Swaps
NYMEX		29,020,000	MMBTU		$	3.98 / MMBTU
No Cost Collars		42,720,000	MMBTU		$	3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)
Fixed Price Physical Sales		65,847,497	MMBTU		$	2.39 / MMBTU
Total		137,587,497	MMBTU
Hedging Summary for Fiscal 2027		Volume				Average Hedge Price
Gas Swaps
NYMEX		12,750,000	MMBTU		$	4.27 / MMBTU
No Cost Collars		3,560,000	MMBTU		$	3.53 / MMBTU (Floor) / $4.76 / MMBTU (Ceiling)
Fixed Price Physical Sales		45,656,079	MMBTU		$	2.39 / MMBTU
Total		61,966,079	MMBTU
Hedging Summary for Fiscal 2028		Volume				Average Hedge Price
Gas Swaps
NYMEX		1,000,000	MMBTU		$	4.29 / MMBTU
Fixed Price Physical Sales		12,081,308	MMBTU		$	2.48 / MMBTU
Total		13,081,308	MMBTU
Hedging Summary for Fiscal 2029		Volume				Average Hedge Price
Fixed Price Physical Sales		782,637	MMBTU		$	2.54 / MMBTU

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)
		Three Months Ended							Nine Months Ended
		June 30,							June 30,
						Increase							Increase
		2023		2022		(Decrease)			2023		2022		(Decrease)
Firm Transportation - Affiliated		22,295		19,558		2,737			108,911		94,213		14,698
Firm Transportation - Non-Affiliated		159,145		156,310		2,835			528,234		507,278		20,956
Interruptible Transportation		97		206		(109	)		2,024		1,726		298
		181,537		176,074		5,463			639,169		603,217		35,952
Gathering Volume - (MMcf)
		Three Months Ended							Nine Months Ended
		June 30,							June 30,
						Increase							Increase
		2023		2022		(Decrease)			2023		2022		(Decrease)
Gathered Volume		118,707		109,797		8,910			336,078		314,625		21,453
Utility Throughput - (MMcf)
		Three Months Ended							Nine Months Ended
		June 30,							June 30,
						Increase							Increase
		2023		2022		(Decrease)			2023		2022		(Decrease)
Retail Sales:
Residential Sales		9,600		10,344		(744	)		57,636		59,865		(2,229	)
Commercial Sales		1,434		1,511		(77	)		8,812		8,977		(165	)
Industrial Sales		87		74		13			506		466		40
		11,121		11,929		(808	)		66,954		69,308		(2,354	)
Transportation		12,468		12,936		(468	)		53,567		56,274		(2,707	)
		23,589		24,865		(1,276	)		120,521		125,582		(5,061	)

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

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

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

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
(in thousands except per share amounts)			2023				2022				2023				2022
Reported GAAP Earnings		$	92,620			$	108,158			$	403,189			$	407,879
Items impacting comparability:
Items related to West Coast asset sale:
Gain on sale of West Coast assets (E&P)			—				(12,736	)			—				(12,736	)
Tax impact of gain on sale of West Coast assets			—				3,225				—				3,225
Loss from discontinuance of crude oil cash flow hedges (E&P)			—				44,632				—				44,632
Tax impact of loss from discontinuance of crude oil cash flow hedges			—				(11,303	)			—				(11,303	)
Transaction and severance costs (E&P)			—				9,693				—				9,693
Tax impact of transaction and severance costs			—				(2,455	)			—				(2,455	)
Total items impacting comparability related to West Coast asset sale			—				31,056				—				31,056
Unrealized (gain) loss on derivative asset (E&P)			1,430				—				3,702				—
Tax impact of unrealized (gain) loss on derivative asset			(392	)			—				(1,015	)			—
Unrealized (gain) loss on other investments (Corporate / All Other)			(355	)			3,434				(1,632	)			10,093
Tax impact of unrealized (gain) loss on other investments			74				(721	)			343				(2,120	)
Reduction of other post-retirement regulatory liability (Utility)			—				—				—				(18,533	)
Tax impact of reduction of other post-retirement regulatory liability			—				—				—				3,892
Adjusted Operating Results		$	93,377			$	141,927			$	404,587			$	432,267
Reported GAAP Earnings Per Share		$	1.00			$	1.17			$	4.37			$	4.43
Items impacting comparability:
Items related to West Coast asset sale:
Gain on sale of West Coast assets, net of tax (E&P)			—				(0.10	)			—				(0.10	)
Loss from discontinuance of crude oil cash flow hedges, net of tax (E&P)			—				0.36				—				0.36
Transaction and severance costs, net of tax (E&P)			—				0.08				—				0.08
Total items impacting comparability related to West Coast asset sale			—				0.34				—				0.34
Unrealized (gain) loss on derivative asset, net of tax (E&P)			0.01				—				0.03				—
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)			—				0.03				(0.01	)			0.08
Reduction of other post-retirement regulatory liability, net of tax (Utility)			—				—				—				(0.16	)
Rounding			—				—				(0.01	)			—
Adjusted Operating Results Per Share		$	1.01			$	1.54			$	4.38			$	4.69

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES (Continued)

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

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
(in thousands)			2023				2022				2023				2022
Reported GAAP Earnings		$	92,620			$	108,158			$	403,189			$	407,879
Depreciation, Depletion and Amortization			102,410				95,857				299,973				275,681
Other (Income) Deductions			(3,551	)			5,649				(12,754	)			(3,291	)
Interest Expense			32,092				33,973				98,984				96,861
Income Taxes			32,935				32,917				140,425				135,272
Gain on Sale of Assets			—				(12,736	)			—				(12,736	)
Loss from discontinuance of crude oil cash flow hedges (E&P)			—				44,632				—				44,632
Transaction and severance costs related to West Coast asset sale (E&P)			—				9,693				—				9,693
Adjusted EBITDA		$	256,506			$	318,143			$	929,817			$	953,991
Adjusted EBITDA by Segment
Pipeline and Storage Adjusted EBITDA		$	57,636			$	62,565			$	181,090			$	181,084
Gathering Adjusted EBITDA			46,032				46,151				139,009				133,238
Total Midstream Businesses Adjusted EBITDA			103,668				108,716				320,099				314,322
Exploration and Production Adjusted EBITDA			134,236				184,622				479,140				490,073
Utility Adjusted EBITDA			20,912				27,042				138,310				156,600
Corporate and All Other Adjusted EBITDA			(2,310	)			(2,237	)			(7,732	)			(7,004	)
Total Adjusted EBITDA		$	256,506			$	318,143			$	929,817			$	953,991

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
SEGMENT ADJUSTED EBITDA

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
(in thousands)			2023				2022				2023				2022
Exploration and Production Segment
Reported GAAP Earnings		$	43,329			$	56,497			$	195,503			$	189,987
Depreciation, Depletion and Amortization			60,584				55,136				174,747				155,190
Other (Income) Deductions			459				(296	)			56				(55	)
Interest Expense			13,628				14,589				39,049				38,927
Income Taxes			16,236				17,107				69,785				64,435
Gain on Sale of West Coast Assets			—				(12,736	)			—				(12,736	)
Loss from Discontinuance of Crude Oil Cash Flow Hedges			—				44,632				—				44,632
Transaction and Severance Costs related to West Coast Asset Sale			—				9,693				—				9,693
Adjusted EBITDA		$	134,236			$	184,622			$	479,140			$	490,073
Pipeline and Storage Segment
Reported GAAP Earnings		$	23,813			$	26,599			$	77,147			$	77,236
Depreciation, Depletion and Amortization			17,732				17,322				52,874				50,417
Other (Income) Deductions			(3,161	)			(1,502	)			(8,643	)			(4,632	)
Interest Expense			10,873				10,813				32,702				31,564
Income Taxes			8,379				9,333				27,010				26,499
Adjusted EBITDA		$	57,636			$	62,565			$	181,090			$	181,084
Gathering Segment
Reported GAAP Earnings		$	24,135			$	24,658			$	73,207			$	69,887
Depreciation, Depletion and Amortization			8,987				8,589				26,613				25,343
Other (Income) Deductions			(100	)			3				(570	)			87
Interest Expense			3,613				4,164				11,556				12,383
Income Taxes			9,397				8,737				28,203				25,538
Adjusted EBITDA		$	46,032			$	46,151			$	139,009			$	133,238
Utility Segment
Reported GAAP Earnings		$	37			$	4,622			$	55,574			$	79,800
Depreciation, Depletion and Amortization			14,997				14,765				45,425				44,592
Other (Income) Deductions			(1,702	)			2,329				(4,898	)			(7,180	)
Interest Expense			8,441				6,087				26,193				17,115
Income Taxes			(861	)			(761	)			16,016				22,273
Adjusted EBITDA		$	20,912			$	27,042			$	138,310			$	156,600
Corporate and All Other
Reported GAAP Earnings		$	1,306			$	(4,218	)		$	1,758			$	(9,031	)
Depreciation, Depletion and Amortization			110				45				314				139
Other (Income) Deductions			953				5,115				1,301				8,489
Interest Expense			(4,463	)			(1,680	)			(10,516	)			(3,128	)
Income Taxes			(216	)			(1,499	)			(589	)			(3,473	)
Adjusted EBITDA		$	(2,310	)		$	(2,237	)		$	(7,732	)		$	(7,004	)

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

CONTACT: Brandon J. Haspett Investor Relations 716-857-7697 Timothy J. Silverstein Treasurer 716-857-6987