National Fuel Reports Third Quarter Earnings and Announces Preliminary Guidance for Fiscal 2022

WILLIAMSVILLE, N.Y., Aug. 05, 2021 (GLOBE NEWSWIRE) -- National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the third quarter of its 2021 fiscal year and for the nine months ended June 30, 2021.

FISCAL 2021 THIRD QUARTER SUMMARY

• GAAP net income of $86.5 million, or $0.94 per share, compared to $41.3 million, or $0.47 per share, in the prior year.
• Adjusted operating results of $85.7 million, or $0.93 per share, compared to $50.0 million, or $0.57 per share, in the prior year (see non-GAAP reconciliation on page 2).
• Adjusted EBITDA of $234.2 million, an increase of 36%, compared to $171.9 million in the prior year (see non-GAAP reconciliation on page 24).
• Pipeline & Storage segment Adjusted EBITDA of $53.1 million, an increase of 5% from the prior year.
• Gathering segment Adjusted EBITDA of $39.9 million, an increase of 43% from the prior year.
• E&P segment Adjusted EBITDA of $116.1 million, an increase of 79% from the prior year.
• E&P segment net production of 83.1 Bcfe, an increase of 27.1 Bcfe, or 48%, from the prior year.
• E&P segment cash operating costs (combined G&A expenses, LOE expense, other operation and maintenance expense, and property, franchise, and other taxes), of $1.13 per Mcfe, a 5% decrease from the prior year.
• Average realized natural gas prices of $2.20 per Mcf, an increase $0.28 per Mcf from the prior year.
• Average realized oil prices of $59.22 per Bbl, an increase of $8.52 per Bbl from the prior year.
• Company is increasing its fiscal 2021 earnings guidance to a range of $4.05 to $4.15 per share, an increase of $0.15 at the midpoint, excluding items impacting comparability (see Guidance Summary on page 8).
• Company is initiating its fiscal 2022 earnings guidance with a range of $4.40 to $4.80 per share, an increase of 12% from the midpoint of the Company's updated fiscal 2021 guidance (see Guidance Summary on page 8).

MANAGEMENT COMMENTS

David P. Bauer, President and Chief Executive Officer of National Fuel Gas Company, stated: “National Fuel had a strong third quarter, with adjusted operating results per share increasing more than 60% from the prior year. As we look to fiscal 2022, the Company is poised for continued earnings growth, as evidenced by our greater than 10% projected increase in earnings per share, driven by the significantly improved outlook for natural gas prices and the expected completion of our FM100 expansion and modernization project in late calendar 2021. Once complete, this project, in addition to providing long-term system integrity and reliability benefits for our existing pipeline transportation customers, puts National Fuel on a pathway to generating significant annual free cash flow across each of our major businesses, allowing the Company to maintain the strength of its balance sheet while continuing to return cash to shareholders in the years ahead.”

RECONCILIATION OF GAAP EARNINGS TO ADJUSTED OPERATING RESULTS

	Three Months Ended								Nine Months Ended
	June 30,								June 30,
(in thousands except per share amounts)	2021				2020				2021				2020
Reported GAAP Earnings	$	86,475			$	41,250			$	276,685			$	21,773
Items impacting comparability:
Impairment of oil and gas properties (E&P)	—				18,236				76,152				195,997
Tax impact of impairment of oil and gas properties	—				(4,986		)		(20,980		)		(53,489		)
Gain on sale of timber properties (Corporate / All Other)	—				—				(51,066		)		—
Tax impact of gain on sale of timber properties	—				—				14,069				—
Premium paid on early redemption of debt	—				—				15,715				—
Tax impact of premium paid on early redemption of debt	—				—				(4,321		)		—
Deferred tax valuation allowance	—				—				—				56,770
Unrealized (gain) loss on other investments (Corporate / All Other)	(1,025		)		(5,639		)		(575		)		794
Tax impact of unrealized (gain) loss on other investments	215				1,184				120				(167		)
Adjusted Operating Results	$	85,665			$	50,045			$	305,799			$	221,678
Reported GAAP Earnings Per Share	$	0.94			$	0.47			$	3.02			$	0.25
Items impacting comparability:
Impairment of oil and gas properties, net of tax (E&P)	—				0.15				0.60				1.63
Gain on sale of timber properties, net of tax (Corporate / All Other)	—				—				(0.40		)		—
Premium paid on early redemption of debt, net of tax	—				—				0.12				—
Deferred tax valuation allowance	—				—				—				0.65
Unrealized (gain) loss on other investments, net of tax (Corporate / All Other)	(0.01		)		(0.05		)		—				0.01
Adjusted Operating Results Per Share	$	0.93			$	0.57			$	3.34			$	2.54

DISCUSSION OF GUIDANCE UPDATE

National Fuel is revising its fiscal 2021 earnings guidance to reflect the results of the third quarter, along with updated assumptions for the balance of the year, as detailed on page 8. The Company is now projecting that earnings, excluding items impacting comparability, will be within the range of $4.05 to $4.15 per share, an increase of $0.15 per share from the midpoint of the Company’s prior guidance range.

For the balance of fiscal 2021, Seneca currently has price certainty on approximately 79% of its expected remaining Appalachian production, utilizing a combination of physical firm sales contracts and financial hedges, including swaps, and floor protection on an additional approximately 9% of its expected remaining Appalachian production via no-cost collars. Additionally, Seneca has financial hedges in place for approximately 72% of its expected remaining oil production in fiscal 2021.

The Company is also initiating preliminary guidance for fiscal 2022 with earnings projected to be within a range of $4.40 to $4.80 per share, or $4.60 per share at the midpoint of the range, an increase of 12% from the midpoint of the fiscal 2021 guidance range. The anticipated increase in earnings is being driven largely by higher anticipated commodity price realizations and expected late calendar 2021 completion of the Company's FERC-regulated FM100 expansion and modernization project. This project is expected to generate approximately $50 million of annualized revenue and 330,000 Dekatherms per day of new firm transportation capacity. This incremental pipeline capacity provides a key outlet for Seneca’s natural gas production and is the primary driver behind the forecasted growth in natural gas production and the associated impact on Gathering revenues.

With this incremental transportation capacity, Seneca’s fiscal 2022 net production is increasing to an expected range of 335 to 365 Bcfe, an increase of 25 Bcfe versus fiscal 2021 at the midpoint of the respective guidance ranges. In addition, the Company anticipates its natural gas price realizations after hedging to increase by approximately $0.10 per Mcf from its estimated fiscal 2021 realizations, driven in large part by higher expected NYMEX and regional spot prices for natural gas. Overall, Seneca has firm sales contracts in place for approximately 93% of its expected fiscal 2022 Appalachian production at the midpoint of the Company's production guidance range. The Company is also well positioned with respect to potential swings in natural gas prices in fiscal 2022, with financial hedges on approximately 76% of Seneca’s projected fiscal 2022 Appalachian natural gas production.

The Company’s consolidated capital expenditures in fiscal 2022 are expected to be in a range of $640 million to $760 million, a decrease of $90 million versus the midpoint of its fiscal 2021 guidance. The primary drivers are a significant decrease in Pipeline and Storage segment capital as a result of the expected completion of its FM100 project, partially offset by a higher average activity level in the Exploration and Production segment. The Company added a second drilling rig in the second quarter of fiscal 2021 and expects to maintain its current two-rig program for the entirety of fiscal 2022 along with elevated levels of completion activity designed to efficiently utilize the entirety of Seneca’s new transportation capacity over the course of the fiscal year.

Additional details on the Company's updated forecast assumptions and business segment guidance for fiscal 2021 and fiscal 2022 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, 2021 is summarized in a tabular form on pages 9 and 10 of this report (earnings drivers for the nine months ended June 30, 2021 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 natural gas and oil reserves, primarily in Pennsylvania and California.

	Three Months Ended
	June 30,
(in thousands)	2021				2020				Variance
GAAP Earnings	$	39,015			$	(6,434	)		$	45,449
Impairment of oil and gas properties, net of tax	—				13,250				(13,250		)
Adjusted Operating Results	$	39,015			$	6,816			$	32,199
Adjusted EBITDA	$	116,052			$	64,780			$	51,272

Seneca’s third quarter GAAP earnings increased $45.4 million versus the prior year, which includes the impact of a non-cash ceiling test impairment charge of $13.2 million (after-tax) recorded in the prior year's third quarter. Excluding this item, Seneca’s third quarter earnings increased $32.2 million primarily due to the positive impacts of higher natural gas production, higher realized natural gas and crude oil prices as well as lower per unit operating costs, partially offset by lower crude oil production and a higher effective income tax rate.

Seneca produced 83.1 Bcfe during the third quarter, an increase of 27.1 Bcfe, or 48%, from the prior year. The improvement was primarily from a 27.3 Bcf increase in natural gas production, largely related to the Company's fourth quarter fiscal 2020 acquisition of Appalachian upstream assets, as well as production growth from Seneca's other core development areas, partially offset by a 4% decrease, or 26 MBbls, of crude oil production in California largely due to natural declines. Approximately 21.6 Bcf of the natural gas production increase came from the Eastern Development Area ("EDA"), with the remainder attributable to Seneca’s Western Development Area ("WDA").

Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.20 per Mcf, an increase of $0.28 per Mcf from the prior year. This increase was primarily due to higher NYMEX prices and higher spot prices at local sales points in Pennsylvania. Seneca's average realized oil price, after the impact of hedging, was $59.22 per Bbl, an increase of $8.52 per Bbl compared to the prior year. The improvement in oil price realizations was primarily due to stronger commodity pricing.

Lease operating and transportation (“LOE”) expense increased $20.6 million primarily due to higher transportation costs in Appalachia from increased production, as well as higher well repairs, workover activity and steam fuel costs in California. LOE expense includes $48.1 million in intercompany expense for gathering and compression services used to connect Seneca’s Marcellus and Utica production to sales points along interstate pipelines. DD&A expense increased $6.5 million due largely to higher natural gas production, partially offset by the impact of ceiling test impairments recorded during fiscal 2020. Seneca's general and administrative ("G&A") expense increased $2.2 million due primarily to higher personnel costs and technology-related expenses. Other taxes increased $3.5 million primarily due to higher impact fee accruals in Pennsylvania, driven by higher expected NYMEX natural gas prices for calendar 2021. The increase in Seneca's effective income tax rate was primarily driven by a higher effective state income tax rate as a result of the Company's Appalachian acquisition that caused a change in the mix of earnings between state jurisdictions.

On a unit of production basis, Seneca's combined general and administrative ("G&A"), LOE, other operation and maintenance ("O&M") expense, and Property, Franchise, and Other Taxes decreased $0.06 per Mcfe, or 5%, during the quarter.

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)	2021				2020				Variance
GAAP Earnings	$	21,948			$	22,623			$	(675	)
Adjusted EBITDA	$	53,086			$	50,511			$	2,575

The Pipeline and Storage segment’s third quarter GAAP earnings decreased $0.7 million versus the prior year as higher operating revenues were more than offset by the negative impacts of higher O&M expense, higher DD&A expense and higher interest expense. The increase in operating revenues of $6.3 million, or 8%, was largely due to new demand charges for transportation service from the Company's Empire North expansion project, which was placed in service near the end of the fourth quarter of fiscal 2020, combined with an increase in revenues from a surcharge for pipeline safety and greenhouse gas regulatory costs, which went into effect in November 2020 in accordance with Supply Corporation's fiscal 2020 rate case settlement. Additionally, the Company recognized increased revenue from a surcharge mechanism for power costs related to electric motor drive compression on the Empire North project, for which offsetting O&M expense was recognized during the quarter. These positive items were partially offset by a modest decrease in transportation revenue from miscellaneous contract revisions. O&M expense increased $3.7 million primarily due to higher pipeline integrity costs, higher compressor and facility maintenance costs, and higher personnel costs, as well as the aforementioned Empire power costs. The increase in DD&A expense of $1.3 million was primarily attributable to incremental depreciation from the Empire North expansion project. The increase in interest expense of $2.3 million was primarily driven by additional long-term borrowings from the Company's long-term debt issuance in June 2020.

Gathering Segment

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

	Three Months Ended
	June 30,
(in thousands)	2021				2020				Variance
GAAP Earnings	$	20,427			$	15,239			$	5,188
Adjusted EBITDA	$	39,929			$	27,844			$	12,085

The Gathering segment’s third quarter GAAP earnings increased $5.2 million versus the prior year. The earnings increase was primarily driven by higher operating revenues, which was partially offset by higher DD&A expense, higher O&M expense, higher interest expense and a higher effective income tax rate. Operating revenues increased $15.4 million, or 46%, primarily due to increased gathering throughput resulting from the Company's Appalachian acquisition in the fourth quarter of fiscal 2020 and from new Marcellus and Utica wells that were brought on-line. The increase in DD&A expense of $2.9 million was primarily attributable to incremental depreciation expense related to the Company's Appalachian acquisition, as well as higher average depreciable plant in service compared to the prior year. Compression leasing expenses, as well as higher facility, personnel and contractor costs, all associated with the Appalachian acquisition, were primarily responsible for the $3.3 million increase in O&M expense. Interest expense increased by $1.7 million from the prior year, primarily driven by additional long-term borrowings from the Company's long-term debt issuances in June 2020 and February 2021. The increase in the Gathering segment's effective income tax rate was primarily driven by a higher effective state income tax rate as a result of the Company's Appalachian acquisition that caused a change in the mix of earnings between state jurisdictions.

Downstream Businesses

Utility Segment

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

	Three Months Ended
	June 30,
(in thousands)	2021				2020				Variance
GAAP Earnings	$	4,841			$	6,254			$	(1,413	)
Adjusted EBITDA	$	29,431			$	30,214			$	(783	)

The Utility segment’s third quarter GAAP earnings decreased $1.4 million versus the prior year primarily due to lower customer margins (operating revenues less purchased gas sold) and higher DD&A expense. The decline in customer margin was due primarily to warmer weather in Distribution's Pennsylvania service territory that resulted in a decrease in customer usage, partially offset by higher revenues earned through the Company's system modernization tracking mechanism in its New York service territory. Weather in Distribution's Pennsylvania service territory was 20% warmer on average than last year. The impact of weather variations on earnings for the quarter in Distribution's New York service territory is largely mitigated by that jurisdiction's weather normalization clause. The $0.6 million increase in DD&A expense was primarily attributable to higher average depreciable plant in service compared to the prior year.

Corporate and All Other

The Company’s operations that are included in Corporate and All Other generated combined earnings of $0.2 million in the current year third quarter, which was $3.4 million lower than the combined earnings of $3.6 million in the prior-year third quarter. The decrease in earnings was primarily driven by lower unrealized gains on investment securities quarter over quarter.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, August 6, 2021, at 11 a.m. Eastern Time to discuss this announcement. Pre-registration is required to access the teleconference by phone in a listen-only mode by following this link: http://www.directeventreg.com/registration/event/1368175. To access the webcast, visit the Events Calendar under the News & Events page on the NFG Investor Relations website at investor.nationalfuelgas.com. A replay of the conference call will be available approximately two hours following the teleconference at the same website link and by phone (toll-free) at 800-585-8367 using conference ID number “1368175”. Both the webcast and conference call replay will be available until the close of business on Friday, August 13, 2021.

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:	Kenneth E. Webster	716-857-7067
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 and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; the length and severity of the ongoing COVID-19 pandemic, including its impacts across our businesses on demand, operations, global supply chains and liquidity; changes in economic conditions, including global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; changes in the price of natural gas or oil; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; 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; delays or changes in costs or plans with respect to Company projects or related projects of other companies, including disruptions due to the COVID-19 pandemic, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; the Company's ability to complete planned strategic transactions; the Company's ability to successfully integrate acquired assets and achieve expected cost synergies; changes in price differentials between similar quantities of natural gas or oil sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; the impact of information technology disruptions, cybersecurity or data security breaches; factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas and oil reserves, including among others geology, lease availability, title disputes, weather conditions, shortages, delays or unavailability of equipment and services required in drilling operations, insufficient gathering, processing and transportation capacity, the need to obtain governmental approvals and permits, and compliance with environmental laws and regulations; increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; other changes in price differentials between similar quantities of natural gas or oil having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; changes in demographic patterns and weather conditions; changes in the availability, price or accounting treatment of derivative financial instruments; changes in laws, actuarial assumptions, the interest rate environment and the return on plan/trust assets related to the Company’s pension and other post-retirement benefits, which can affect future funding obligations and costs and plan liabilities; economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war; significant differences between the Company’s projected and actual capital expenditures and operating expenses; or increasing costs of insurance, changes in coverage and the ability to obtain insurance. The Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date thereof.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES

GUIDANCE SUMMARY

As discussed on page 2, the Company is revising its earnings guidance for fiscal 2021 and initiating preliminary guidance for fiscal 2022. Additional details on the Company's forecast assumptions and business segment guidance for fiscal 2021 and fiscal 2022 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, 2021, including: (1) the after-tax impairment of oil and gas properties, which reduced earnings by $0.60 per share; (2) the after-tax gain on sale of timber properties, which increased earnings by $0.40 per share; and (3) the after-tax premium paid on early redemption of debt, which reduced earnings by $0.12 per share. While the Company expects to record certain adjustments to unrealized gain or loss on investments during the three months ending September 30, 2021, 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 2021 Guidance		Preliminary FY 2022 Guidance
Consolidated Earnings per Share, excluding items impacting comparability	$4.05 to $4.15		$4.40 to $4.80
Consolidated Effective Tax Rate	~ 26%		~ 25-26%
Capital Expenditures (Millions)
Exploration and Production	$370 - $390		$400 - $450
Pipeline and Storage	$250 - $300		$100 - $150
Gathering	$35 - $45		$50 - $60
Utility	$90 - $100		$90 - $100
Consolidated Capital Expenditures	$745 - $835		$640 - $760
Exploration & Production Segment Guidance*
Commodity Price Assumptions
NYMEX natural gas price	$3.75 /MMBtu		$3.50 /MMBtu
Appalachian basin spot price (winter | summer)	$2.75 /MMBtu		$2.85 /MMBtu | $2.25 /MMBtu
NYMEX (WTI) crude oil price	$70.00 /Bbl		$65.00 /Bbl
California oil price premium (% of WTI)	96%		96%
Production (Bcfe)	320 to 330		335 to 365
E&P Operating Costs ($/Mcfe)
LOE	$0.81 - $0.83		$0.82 - $0.85
G&A	$0.20 - $0.22		$0.19 - $0.21
DD&A	$0.55 - $0.57		$0.59 - $0.62
Other Business Segment Guidance (Millions)
Gathering Segment Revenues	$190 - $195		$200 - $225
Pipeline and Storage Segment Revenues	$340 - $345		$360 - $380

* Fiscal 2021 commodity price assumptions are for the remaining 3 months of the fiscal year.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
QUARTER ENDED JUNE 30, 2021
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
(Thousands of Dollars)	Production				Storage				Gathering				Utility				All Other				Consolidated*
Third quarter 2020 GAAP earnings	$	(6,434	)		$	22,623			$	15,239			$	6,254			$	3,568			$	41,250
Items impacting comparability:
Impairment of oil and gas properties	18,236																				18,236
Tax impact of impairment of oil and gas properties	(4,986		)																		(4,986		)
Unrealized (gain) loss on other investments																	(5,639		)		(5,639		)
Tax impact of unrealized (gain) loss on other investments																	1,184				1,184
Third quarter 2020 adjusted operating results	6,816				22,623				15,239				6,254				(887		)		50,045
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production	41,361																				41,361
Higher (lower) crude oil production	(1,042		)																		(1,042		)
Higher (lower) realized natural gas prices, after hedging	17,437																				17,437
Higher (lower) realized crude oil prices, after hedging	3,760																				3,760
Midstream and All Other Revenues
Higher (lower) operating revenues					4,938				12,132								(801		)		16,269
Downstream Margins***
Impact of usage and weather													(796		)						(796		)
System modernization tracker revenues													369								369
Regulatory revenue adjustments													(149		)						(149		)
Higher (lower) energy marketing margins																	(1,246		)		(1,246		)
Operating Expenses
Lower (higher) lease operating and transportation expenses	(16,235		)																		(16,235		)
Lower (higher) operating expenses	(2,372		)		(2,888		)		(2,585		)										(7,845		)
Lower (higher) property, franchise and other taxes	(2,751		)																		(2,751		)
Lower (higher) depreciation / depletion	(5,146		)		(993		)		(2,286		)		(510		)						(8,935		)
Other Income (Expense)
(Higher) lower other deductions													(573		)		719				146
(Higher) lower interest expense	1,829				(1,815		)		(1,358		)						(554		)		(1,898		)
Income Taxes
Lower (higher) income tax expense / effective tax rate	(4,975		)		177				(693		)		501				2,054				(2,936		)
All other / rounding	333				(94		)		(22		)		(255		)		149				111
Third quarter 2021 adjusted operating results	39,015				21,948				20,427				4,841				(566		)		85,665
Items impacting comparability:
Unrealized gain (loss) on other investments																	1,025				1,025
Tax impact of unrealized gain (loss) on other investments																	(215		)		(215		)
Third quarter 2021 GAAP earnings	$	39,015			$	21,948			$	20,427			$	4,841			$	244			$	86,475
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
QUARTER ENDED JUNE 30, 2021
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
	Production				Storage				Gathering				Utility				All Other				Consolidated*
Third quarter 2020 GAAP earnings per share	$	(0.07	)		$	0.26			$	0.17			$	0.07			$	0.04			$	0.47
Items impacting comparability:
Impairment of oil and gas properties, net of tax	0.15																				0.15
Unrealized (gain) loss on other investments, net of tax																	(0.05		)		(0.05		)
Third quarter 2020 adjusted operating results per share	0.08				0.26				0.17				0.07				(0.01		)		0.57
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production	0.45																				0.45
Higher (lower) crude oil production	(0.01		)																		(0.01		)
Higher (lower) realized natural gas prices, after hedging	0.19																				0.19
Higher (lower) realized crude oil prices, after hedging	0.04																				0.04
Midstream and All Other Revenues
Higher (lower) operating revenues					0.05				0.13								(0.01		)		0.17
Downstream Margins***
Impact of usage and weather													(0.01		)						(0.01		)
System modernization tracker revenues													—								—
Regulatory revenue adjustments													—								—
Higher (lower) energy marketing margins																	(0.01		)		(0.01		)
Operating Expenses
Lower (higher) lease operating and transportation expenses	(0.18		)																		(0.18		)
Lower (higher) operating expenses	(0.03		)		(0.03		)		(0.03		)										(0.09		)
Lower (higher) property, franchise and other taxes	(0.03		)																		(0.03		)
Lower (higher) depreciation / depletion	(0.06		)		(0.01		)		(0.02		)		(0.01		)						(0.10		)
Other Income (Expense)
(Higher) lower other deductions													(0.01		)		0.01				—
(Higher) lower interest expense	0.02				(0.02		)		(0.01		)						(0.01		)		(0.02		)
Income Taxes
Lower (higher) income tax expense / effective tax rate	(0.05		)		—				(0.01		)		0.01				0.02				(0.03		)
Impact of additional shares	—				(0.01		)		(0.01		)		—				—				(0.02		)
All other / rounding	0.01				—				—				—				—				0.01
Third quarter 2021 adjusted operating results per share	0.43				0.24				0.22				0.05				(0.01		)		0.93
Items impacting comparability:
Unrealized gain (loss) on other investments, net of tax																	0.01				0.01
Third quarter 2021 GAAP earnings per share	$	0.43			$	0.24			$	0.22			$	0.05			$	—			$	0.94
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS
NINE MONTHS ENDED JUNE 30, 2021
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
(Thousands of Dollars)	Production				Storage				Gathering				Utility				All Other				Consolidated*
Nine months ended June 30, 2020 GAAP earnings	$	(157,733	)		$	62,815			$	51,081			$	64,335			$	1,275			$	21,773
Items impacting comparability:
Impairment of oil and gas properties	195,997																				195,997
Tax impact of impairment of oil and gas properties	(53,489		)																		(53,489		)
Deferred tax valuation allowance	60,463								(3,769		)						76				56,770
Unrealized (gain) loss on other investments																	794				794
Tax impact of unrealized (gain) loss on other investments																	(167		)		(167		)
Nine months ended June 30, 2020 adjusted operating results	45,238				62,815				47,312				64,335				1,978				221,678
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production	124,819																				124,819
Higher (lower) crude oil production	(4,923		)																		(4,923		)
Higher (lower) realized natural gas prices, after hedging	15,081																				15,081
Higher (lower) realized crude oil prices, after hedging	(2,590		)																		(2,590		)
Midstream and All Other Revenues
Higher (lower) operating revenues					23,111				33,632								(1,925		)		54,818
Downstream Margins***
Impact of usage and weather													(476		)						(476		)
System modernization tracker revenues													2,851								2,851
Regulatory revenue adjustments													(1,167		)						(1,167		)
Higher (lower) energy marketing margins																	(5,914		)		(5,914		)
Operating Expenses
Lower (higher) lease operating and transportation expenses	(39,981		)																		(39,981		)
Lower (higher) operating expenses	(4,891		)		(1,266		)		(6,528		)		(3,201		)		1,902				(13,984		)
Lower (higher) property, franchise and other taxes	(3,456		)																		(3,456		)
Lower (higher) depreciation / depletion	(6,873		)		(5,919		)		(6,697		)		(1,240		)		529				(20,200		)
Other Income (Expense)
(Higher) lower other deductions					(1,038		)						(446		)		2,289				805
(Higher) lower interest expense					(7,360		)		(4,482		)						(1,621		)		(13,463		)
Income Taxes
Lower (higher) income tax expense / effective tax rate	(10,584		)		634				(927		)		(665		)		3,287				(8,255		)
All other / rounding	255				83				51				(69		)		(164		)		156
Nine months ended June 30, 2021 adjusted operating results	112,095				71,060				62,361				59,922				361				305,799
Items impacting comparability:
Impairment of oil and gas properties	(76,152		)																		(76,152		)
Tax impact of impairment of oil and gas properties	20,980																				20,980
Gain on sale of timber properties																	51,066				51,066
Tax impact of gain on sale of timber properties																	(14,069		)		(14,069		)
Premium paid on early redemption of debt	(14,772		)						(943		)										(15,715		)
Tax impact of premium paid on early redemption of debt	4,062								259												4,321
Unrealized gain (loss) on other investments																	575				575
Tax impact of unrealized gain (loss) on other investments																	(120		)		(120		)
Nine months ended June 30, 2021 GAAP earnings	$	46,213			$	71,060			$	61,677			$	59,922			$	37,813			$	276,685
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.

NATIONAL FUEL GAS COMPANY
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE
NINE MONTHS ENDED JUNE 30, 2021
(Unaudited)
	Upstream				Midstream								Downstream
	Exploration &				Pipeline &												Corporate /
	Production				Storage				Gathering				Utility				All Other				Consolidated*
Nine months ended June 30, 2020 GAAP earnings per share	$	(1.81	)		$	0.72			$	0.58			$	0.74			$	0.02			$	0.25
Items impacting comparability:
Impairment of oil and gas properties, net of tax	1.63																				1.63
Deferred tax valuation allowance	0.69								(0.04		)						—				0.65
Unrealized (gain) loss on other investments, net of tax																	0.01				0.01
Rounding	0.01																(0.01		)		—
Nine months ended June 30, 2020 adjusted operating results per share	0.52				0.72				0.54				0.74				0.02				2.54
Drivers of adjusted operating results**
Upstream Revenues
Higher (lower) natural gas production	1.36																				1.36
Higher (lower) crude oil production	(0.05		)																		(0.05		)
Higher (lower) realized natural gas prices, after hedging	0.16																				0.16
Higher (lower) realized crude oil prices, after hedging	(0.03		)																		(0.03		)
Midstream and All Other Revenues
Higher (lower) operating revenues					0.25				0.37								(0.02		)		0.60
Downstream Margins***
Impact of usage and weather													(0.01		)						(0.01		)
System modernization tracker revenues													0.03								0.03
Regulatory revenue adjustments													(0.01		)						(0.01		)
Higher (lower) energy marketing margins																	(0.06		)		(0.06		)
Operating Expenses
Lower (higher) lease operating and transportation expenses	(0.44		)																		(0.44		)
Lower (higher) operating expenses	(0.05		)		(0.01		)		(0.07		)		(0.03		)		0.02				(0.14		)
Lower (higher) property, franchise and other taxes	(0.04		)																		(0.04		)
Lower (higher) depreciation / depletion	(0.07		)		(0.06		)		(0.07		)		(0.01		)		0.01				(0.20		)
Other Income (Expense)
(Higher) lower other deductions					(0.01		)						—				0.02				0.01
(Higher) lower interest expense					(0.08		)		(0.05		)						(0.02		)		(0.15		)
Income Taxes
Lower (higher) income tax expense / effective tax rate	(0.12		)		0.01				(0.01		)		(0.01		)		0.04				(0.09		)
Impact of additional shares	(0.02		)		(0.03		)		(0.03		)		(0.04		)		—				(0.12		)
All other / rounding	—				(0.01		)		—				(0.01		)		—				(0.02		)
Nine months ended June 30, 2021 adjusted operating results per share	1.22				0.78				0.68				0.65				0.01				3.34
Items impacting comparability:
Impairment of oil and gas properties, net of tax	(0.60		)																		(0.60		)
Gain on sale of timber properties, net of tax																	0.40				0.40
Premium paid on early redemption of debt, net of tax	(0.12		)						—												(0.12		)
Unrealized gain (loss) on other investments, net of tax																	—				—
Rounding									(0.01		)						0.01				—
Nine months ended June 30, 2021 GAAP earnings per share	$	0.50			$	0.78			$	0.67			$	0.65			$	0.42			$	3.02
* Amounts do not reflect intercompany eliminations.
** Drivers of adjusted operating results have been calculated using the 21% federal statutory rate.
*** Downstream margin defined as operating revenues less purchased gas expense.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
(Thousands of Dollars, except per share amounts)
	Three Months Ended								Nine Months Ended
	June 30,								June 30,
	(Unaudited)								(Unaudited)
SUMMARY OF OPERATIONS	2021				2020				2021				2020
Operating Revenues:
Utility and Energy Marketing Revenues	$	126,933			$	139,661			$	587,247			$	650,320
Exploration and Production and Other Revenues	209,618				132,338				621,933				456,073
Pipeline and Storage and Gathering Revenues	57,846				51,020				177,491				151,908
	394,397				323,019				1,386,671				1,258,301
Operating Expenses:
Purchased Gas	18,737				29,121				177,018				239,663
Operation and Maintenance:
Utility and Energy Marketing	42,577				43,950				139,521				138,931
Exploration and Production and Other	43,112				32,404				127,033				109,056
Pipeline and Storage and Gathering	31,239				24,298				87,471				77,488
Property, Franchise and Other Taxes	24,492				21,381				71,259				67,268
Depreciation, Depletion and Amortization	84,170				73,232				251,632				226,062
Impairment of Oil and Gas Producing Properties	—				18,236				76,152				195,997
	244,327				242,622				930,086				1,054,465
Gain on Sale of Timber Properties	—				—				51,066				—
Operating Income	150,070				80,397				507,651				203,836
Other Income (Expense):
Other Income (Deductions)	(2,028		)		2,547				(15,078		)		(17,971		)
Interest Expense on Long-Term Debt	(30,220		)		(27,140		)		(111,296		)		(77,853		)
Other Interest Expense	(1,012		)		(1,420		)		(4,630		)		(4,863		)
Income Before Income Taxes	116,810				54,384				376,647				103,149
Income Tax Expense	30,335				13,134				99,962				81,376
Net Income Available for Common Stock	$	86,475			$	41,250			$	276,685			$	21,773
Earnings Per Common Share
Basic	$	0.95			$	0.47			$	3.04			$	0.25
Diluted	$	0.94			$	0.47			$	3.02			$	0.25
Weighted Average Common Shares:
Used in Basic Calculation	91,172,683				87,966,289				91,113,973				86,966,448
Used in Diluted Calculation	91,762,898				88,323,699				91,642,849				87,346,362

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
	June 30,				September 30,
(Thousands of Dollars)	2021				2020
ASSETS
Property, Plant and Equipment	$	12,834,695			$	12,351,852
Less - Accumulated Depreciation, Depletion and Amortization		6,649,038				6,353,785
Net Property, Plant and Equipment		6,185,657				5,998,067
Assets Held for Sale, Net		—				53,424
Current Assets:
Cash and Temporary Cash Investments		118,012				20,541
Hedging Collateral Deposits		1,710				—
Receivables - Net		188,863				143,583
Unbilled Revenue		12,812				17,302
Gas Stored Underground		12,451				33,338
Materials, Supplies and Emission Allowances		53,740				51,877
Other Current Assets		51,969				47,557
Total Current Assets		439,557				314,198
Other Assets:
Recoverable Future Taxes		118,883				118,310
Unamortized Debt Expense		11,016				12,297
Other Regulatory Assets		145,632				156,106
Deferred Charges		58,807				67,131
Other Investments		149,250				154,502
Goodwill		5,476				5,476
Prepaid Post-Retirement Benefit Costs		93,627				76,035
Fair Value of Derivative Financial Instruments		770				9,308
Other		—				81
Total Other Assets		583,461				599,246
Total Assets	$	7,208,675			$	6,964,935
CAPITALIZATION AND LIABILITIES
Capitalization:
Comprehensive Shareholders' Equity
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and
Outstanding - 91,172,701 Shares and 90,954,696 Shares, Respectively	$	91,173			$	90,955
Paid in Capital		1,012,703				1,004,158
Earnings Reinvested in the Business		1,145,700				991,630
Accumulated Other Comprehensive Loss		(238,462	)			(114,757	)
Total Comprehensive Shareholders' Equity		2,011,114				1,971,986
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs		2,627,860				2,629,576
Total Capitalization		4,638,974				4,601,562
Current and Accrued Liabilities:
Notes Payable to Banks and Commercial Paper		—				30,000
Accounts Payable		113,470				134,126
Amounts Payable to Customers		7,193				10,788
Dividends Payable		41,484				40,475
Interest Payable on Long-Term Debt		45,304				27,521
Customer Advances		—				15,319
Customer Security Deposits		19,272				17,199
Other Accruals and Current Liabilities		168,378				140,176
Fair Value of Derivative Financial Instruments		205,501				43,969
Total Current and Accrued Liabilities		600,602				459,573
Deferred Credits:
Deferred Income Taxes		742,638				696,054
Taxes Refundable to Customers		353,736				357,508
Cost of Removal Regulatory Liability		241,377				230,079
Other Regulatory Liabilities		182,430				161,573
Pension and Other Post-Retirement Liabilities		117,291				127,181
Asset Retirement Obligations		191,853				192,228
Other Deferred Credits		139,774				139,177
Total Deferred Credits		1,969,099				1,903,800
Commitments and Contingencies		—				—
Total Capitalization and Liabilities	$	7,208,675			$	6,964,935

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Nine Months Ended
	June 30,
(Thousands of Dollars)	2021				2020
Operating Activities:
Net Income Available for Common Stock	$	276,685			$	21,773
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Gain on Sale of Timber Properties	(51,066		)		—
Impairment of Oil and Gas Producing Properties	76,152				195,997
Depreciation, Depletion and Amortization	251,632				226,062
Deferred Income Taxes	89,277				116,332
Premium Paid on Early Redemption of Debt	15,715				—
Stock-Based Compensation	12,296				9,716
Other	7,795				5,645
Change in:
Receivables and Unbilled Revenue	(40,733		)		4,045
Gas Stored Underground and Materials, Supplies and Emission Allowances	19,024				11,597
Unrecovered Purchased Gas Costs	—				2,246
Other Current Assets	(4,282		)		49,312
Accounts Payable	7,474				(13,166		)
Amounts Payable to Customers	(3,595		)		14,755
Customer Advances	(15,319		)		(12,483		)
Customer Security Deposits	2,073				(984		)
Other Accruals and Current Liabilities	23,154				6,774
Other Assets	5,839				(18,215		)
Other Liabilities	(311		)		4,464
Net Cash Provided by Operating Activities	$	671,810			$	623,870
Investing Activities:
Capital Expenditures	$	(512,775	)		$	(551,004	)
Net Proceeds from Sale of Timber Properties	104,582				—
Acquisition of Upstream Assets and Midstream Gathering Assets	—				(27,050		)
Other	11,223				4,126
Net Cash Used in Investing Activities	$	(396,970	)		$	(573,928	)
Financing Activities:
Changes in Notes Payable to Banks and Commercial Paper	$	(30,000	)		$	(55,200	)
Reduction of Long-Term Debt	(515,715		)		—
Dividends Paid on Common Stock	(121,606		)		(112,851		)
Net Proceeds From Issuance of Long-Term Debt	495,267				493,108
Net Proceeds from Issuance (Repurchase) of Common Stock	(3,605		)		161,704
Net Cash Provided by (Used in) Financing Activities	$	(175,659	)		$	486,761
Net Increase in Cash, Cash Equivalents, and Restricted Cash	99,181				536,703
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	20,541				27,260
Cash, Cash Equivalents, and Restricted Cash at June 30	$	119,722			$	563,963

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	2021				2020				Variance				2021				2020				Variance
Total Operating Revenues	$	209,535			$	131,228			$	78,307			$	621,116			$	452,728			$	168,388
Operating Expenses:
Operation and Maintenance:
General and Administrative Expense	16,165				13,968				2,197				51,017				46,777				4,240
Lease Operating and Transportation Expense	66,708				46,157				20,551				199,296				148,687				50,609
All Other Operation and Maintenance Expense	3,757				2,952				805				10,944				8,994				1,950
Property, Franchise and Other Taxes	6,853				3,371				3,482				15,918				11,543				4,375
Depreciation, Depletion and Amortization	45,886				39,372				6,514				137,356				128,656				8,700
Impairment of Oil and Gas Producing Properties	—				18,236				(18,236		)		76,152				195,997				(119,845		)
	139,369				124,056				15,313				490,683				540,654				(49,971		)
Operating Income (Loss)	70,166				7,172				62,994				130,433				(87,926		)		218,359
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs	(289		)		(395		)		106				(860		)		(1,185		)		325
Interest and Other Income	18				142				(124		)		176				583				(407		)
Interest Expense on Long-Term Debt	—				—				—				(15,119		)		—				(15,119		)
Interest Expense	(12,008		)		(14,323		)		2,315				(42,601		)		(42,543		)		(58		)
Income (Loss) Before Income Taxes	57,887				(7,404		)		65,291				72,029				(131,071		)		203,100
Income Tax Expense (Benefit)	18,872				(970		)		19,842				25,816				26,662				(846		)
Net Income (Loss)	$	39,015			$	(6,434	)		$	45,449			$	46,213			$	(157,733	)		$	203,946
Net Income (Loss) Per Share (Diluted)	$	0.43			$	(0.07	)		$	0.50			$	0.50			$	(1.81	)		$	2.31

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	2021				2020				Variance				2021				2020				Variance
Revenues from External Customers	$	57,258			$	51,020			$	6,238			$	175,881			$	151,908			$	23,973
Intersegment Revenues	26,805				26,793				12				82,651				77,370				5,281
Total Operating Revenues	84,063				77,813				6,250				258,532				229,278				29,254
Operating Expenses:
Purchased Gas	(11		)		11				(22		)		219				1				218
Operation and Maintenance	22,918				19,262				3,656				63,809				62,207				1,602
Property, Franchise and Other Taxes	8,070				8,029				41				24,713				24,515				198
Depreciation, Depletion and Amortization	15,609				14,352				1,257				46,806				39,313				7,493
	46,586				41,654				4,932				135,547				126,036				9,511
Operating Income	37,477				36,159				1,318				122,985				103,242				19,743
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit (Costs) Credit	125				(174		)		299				376				(523		)		899
Interest and Other Income	1,364				1,763				(399		)		3,159				4,851				(1,692		)
Interest Expense	(10,070		)		(7,773		)		(2,297		)		(31,353		)		(22,037		)		(9,316		)
Income Before Income Taxes	28,896				29,975				(1,079		)		95,167				85,533				9,634
Income Tax Expense	6,948				7,352				(404		)		24,107				22,718				1,389
Net Income	$	21,948			$	22,623			$	(675	)		$	71,060			$	62,815			$	8,245
Net Income Per Share (Diluted)	$	0.24			$	0.26			$	(0.02	)		$	0.78			$	0.72			$	0.06
	Three Months Ended												Nine Months Ended
	June 30,												June 30,
GATHERING SEGMENT	2021				2020				Variance				2021				2020				Variance
Revenues from External Customers	$	588			$	—			$	588			$	1,610			$	—			$	1,610
Intersegment Revenues	48,068				33,299				14,769				144,317				103,355				40,962
Total Operating Revenues	48,656				33,299				15,357				145,927				103,355				42,572
Operating Expenses:
Operation and Maintenance	8,715				5,443				3,272				24,750				16,487				8,263
Property, Franchise and Other Taxes	12				12				—				30				50				(20		)
Depreciation, Depletion and Amortization	8,131				5,237				2,894				24,132				15,655				8,477
	16,858				10,692				6,166				48,912				32,192				16,720
Operating Income	31,798				22,607				9,191				97,015				71,163				25,852
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs	(68		)		(71		)		3				(203		)		(214		)		11
Interest and Other Income	10				41				(31		)		253				198				55
Interest Expense on Long-Term Debt	—				—				—				(965		)		—				(965		)
Interest Expense	(4,102		)		(2,383		)		(1,719		)		(12,435		)		(6,762		)		(5,673		)
Income Before Income Taxes	27,638				20,194				7,444				83,665				64,385				19,280
Income Tax Expense	7,211				4,955				2,256				21,988				13,304				8,684
Net Income	$	20,427			$	15,239			$	5,188			$	61,677			$	51,081			$	10,596
Net Income Per Share (Diluted)	$	0.22			$	0.17			$	0.05			$	0.67			$	0.58			$	0.09

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	2021				2020				Variance				2021				2020				Variance
Revenues from External Customers	$	126,934			$	124,390			$	2,544			$	586,618			$	569,856			$	16,762
Intersegment Revenues	74				2,647				(2,573		)		271				8,499				(8,228		)
Total Operating Revenues	127,008				127,037				(29		)		586,889				578,355				8,534
Operating Expenses:
Purchased Gas	44,848				43,752				1,096				255,011				247,869				7,142
Operation and Maintenance	43,296				43,410				(114		)		141,412				137,323				4,089
Property, Franchise and Other Taxes	9,433				9,661				(228		)		30,181				30,295				(114		)
Depreciation, Depletion and Amortization	14,505				13,860				645				42,811				41,241				1,570
	112,082				110,683				1,399				469,415				456,728				12,687
Operating Income	14,926				16,354				(1,428		)		117,474				121,627				(4,153		)
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs	(5,747		)		(5,811		)		64				(24,674		)		(24,962		)		288
Interest and Other Income	960				1,749				(789		)		2,142				2,994				(852		)
Interest Expense	(5,510		)		(5,240		)		(270		)		(16,457		)		(16,430		)		(27		)
Income Before Income Taxes	4,629				7,052				(2,423		)		78,485				83,229				(4,744		)
Income Tax Expense (Benefit)	(212		)		798				(1,010		)		18,563				18,894				(331		)
Net Income	$	4,841			$	6,254			$	(1,413	)		$	59,922			$	64,335			$	(4,413	)
Net Income Per Share (Diluted)	$	0.05			$	0.07			$	(0.02	)		$	0.65			$	0.74			$	(0.09	)

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	2021				2020				Variance				2021				2020				Variance
Revenues from External Customers	$	(1	)		$	16,286			$	(16,287	)		$	1,174			$	83,445			$	(82,271	)
Intersegment Revenues	2				341				(339		)		22				598				(576		)
Total Operating Revenues	1				16,627				(16,626		)		1,196				84,043				(82,847		)
Operating Expenses:
Purchased Gas	4				14,038				(14,034		)		2,297				75,222				(72,925		)
Operation and Maintenance	17				2,176				(2,159		)		701				5,754				(5,053		)
Property, Franchise and Other Taxes	—				202				(202		)		47				522				(475		)
Depreciation, Depletion and Amortization	—				245				(245		)		394				653				(259		)
	21				16,661				(16,640		)		3,439				82,151				(78,712		)
Gain on Sale of Timber Properties	—				—				—				51,066				—				51,066
Operating Income (Loss)	(20		)		(34		)		14				48,823				1,892				46,931
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs	—				(69		)		69				(7		)		(207		)		200
Interest and Other Income	3				202				(199		)		229				674				(445		)
Interest Expense	—				(10		)		10				—				(52		)		52
Income (Loss) before Income Taxes	(17		)		89				(106		)		49,045				2,307				46,738
Income Tax Expense (Benefit)	(1,056		)		98				(1,154		)		11,428				775				10,653
Net Income (Loss)	$	1,039			$	(9	)		$	1,048			$	37,617			$	1,532			$	36,085
Net Income (Loss) Per Share (Diluted)	$	0.01			$	—			$	0.01			$	0.41			$	0.02			$	0.39
	Three Months Ended												Nine Months Ended
	June 30,												June 30,
CORPORATE	2021				2020				Variance				2021				2020				Variance
Revenues from External Customers	$	83			$	95			$	(12	)		$	272			$	364			$	(92	)
Intersegment Revenues	1,027				1,094				(67		)		2,718				3,281				(563		)
Total Operating Revenues	1,110				1,189				(79		)		2,990				3,645				(655		)
Operating Expenses:
Operation and Maintenance	5,224				2,778				2,446				11,566				8,920				2,646
Property, Franchise and Other Taxes	124				106				18				370				343				27
Depreciation, Depletion and Amortization	39				166				(127		)		133				544				(411		)
	5,387				3,050				2,337				12,069				9,807				2,262
Operating Loss	(4,277		)		(1,861		)		(2,416		)		(9,079		)		(6,162		)		(2,917		)
Other Income (Expense):
Non-Service Pension and Post-Retirement Benefit Costs	(923		)		(775		)		(148		)		(2,769		)		(2,326		)		(443		)
Interest and Other Income	33,433				35,919				(2,486		)		107,728				89,795				17,933
Interest Expense on Long-Term Debt	(30,220		)		(27,140		)		(3,080		)		(95,212		)		(77,853		)		(17,359		)
Other Interest Expense	(236		)		(1,665		)		1,429				(2,412		)		(4,688		)		2,276
Income (Loss) before Income Taxes	(2,223		)		4,478				(6,701		)		(1,744		)		(1,234		)		(510		)
Income Tax Expense (Benefit)	(1,428		)		901				(2,329		)		(1,940		)		(977		)		(963		)
Net Income (Loss)	$	(795	)		$	3,577			$	(4,372	)		$	196			$	(257	)		$	453
Net Income (Loss) Per Share (Diluted)	$	(0.01	)		$	0.04			$	(0.05	)		$	0.01			$	—			$	0.01
	Three Months Ended												Nine Months Ended
	June 30,												June 30,
INTERSEGMENT ELIMINATIONS	2021				2020				Variance				2021				2020				Variance
Intersegment Revenues	$	(75,976	)		$	(64,174	)		$	(11,802	)		$	(229,979	)		$	(193,103	)		$	(36,876	)
Operating Expenses:
Purchased Gas	(26,104		)		(28,680		)		2,576				(80,509		)		(83,429		)		2,920
Operation and Maintenance	(49,872		)		(35,494		)		(14,378		)		(149,470		)		(109,674		)		(39,796		)
	(75,976		)		(64,174		)		(11,802		)		(229,979		)		(193,103		)		(36,876		)
Operating Income	—				—				—				—				—				—
Other Income (Expense):
Interest and Other Deductions	(30,914		)		(29,974		)		(940		)		(100,628		)		(87,649		)		(12,979		)
Interest Expense	30,914				29,974				940				100,628				87,649				12,979
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
	2021					2020				(Decrease)				2021				2020			(Decrease)
Capital Expenditures:
Exploration and Production	$	94,152		(1)		$	65,647	(3)		$	28,505			$	263,763		(1)(2)	$	294,990	(3)(4)	$	(31,227	)
Pipeline and Storage	63,863			(1)		41,494		(3)		22,369				155,556			(1)(2)	124,131		(3)(4)	31,425
Gathering	6,209			(1)		21,289		(3)		(15,080		)		25,628			(1)(2)	46,200		(3)(4)	(20,572		)
Utility	24,866			(1)		25,616		(3)		(750		)		66,691			(1)(2)	62,238		(3)(4)	4,453
Total Reportable Segments	189,090					154,046				35,044				511,638				527,559			(15,921		)
All Other	—					16				(16		)		—				38			(38		)
Corporate	129					100				29				218				420			(202		)
Eliminations	(1,898		)			—				(1,898		)		(2,118		)		—			(2,118		)
Total Capital Expenditures	$	187,321				$	154,162			$	33,159			$	509,738			$	528,017		$	(18,279	)

(1)	Capital expenditures for the quarter and nine months ended June 30, 2021, include accounts payable and accrued liabilities related to capital expenditures of $49.7 million, $25.8 million, $0.9 million, and $5.1 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at June 30, 2021, since they represent non-cash investing activities at that date.
(2)	Capital expenditures for the nine months ended June 30, 2021, exclude capital expenditures of $45.8 million, $17.3 million, $13.5 million and $10.7 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2020 and paid during the nine months ended June 30, 2021. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2020, since they represented non-cash investing activities at that date. These amounts have been included in the Consolidated Statement of Cash Flows at June 30, 2021.
(3)	Capital expenditures for the quarter and nine months ended June 30, 2020, include accounts payable and accrued liabilities related to capital expenditures of $26.5 million, $16.4 million, $6.5 million, and $8.7 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, 2020, since they represent non-cash investing activities at that date.
(4)	Capital expenditures for the nine months ended June 30, 2020, exclude capital expenditures of $38.0 million, $23.8 million, $6.6 million and $12.7 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts were in accounts payable and accrued liabilities at September 30, 2019 and paid during the nine months ended June 30, 2020. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2019, 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, 2020.

DEGREE DAYS
							Percent Colder
							(Warmer) Than:
Three Months Ended June 30,	Normal		2021		2020		Normal (1)			Last Year (1)
Buffalo, NY	912		794		1,032		(12.9	)		(23.1	)
Erie, PA	871		741		920		(14.9	)		(19.5	)
Nine Months Ended June 30,
Buffalo, NY	6,455		5,693		6,002		(11.8	)		(5.1	)
Erie, PA	6,023		5,188		5,381		(13.9	)		(3.6	)

(1)   Percents compare actual 2021 degree days to normal degree days and actual 2021 degree days to actual 2020 degree days.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
	Three Months Ended										Nine Months Ended
	June 30,										June 30,
							Increase										Increase
	2021			2020			(Decrease)				2021			2020			(Decrease)
Gas Production/Prices:
Production (MMcf)
Appalachia	79,314			52,043			27,271				236,429			161,965			74,464
West Coast	431			468			(37		)		1,300			1,434			(134		)
Total Production	79,745			52,511			27,234				237,729			163,399			74,330
Average Prices (Per Mcf)
Appalachia	$	2.29		$	1.45		$	0.84			$	2.25		$	1.80		$	0.45
West Coast	5.36			2.58			2.78				5.83			3.98			1.85
Weighted Average	2.31			1.46			0.85				2.27			1.82			0.45
Weighted Average after Hedging	2.20			1.92			0.28				2.21			2.13			0.08
Oil Production/Prices:
Production (Thousands of Barrels)
Appalachia	1			—			1				2			2			—
West Coast	557			584			(27		)		1,681			1,790			(109		)
Total Production	558			584			(26		)		1,683			1,792			(109		)
Average Prices (Per Barrel)
Appalachia	$	42.09		$	27.50		$	14.59			$	43.13		$	50.28		$	(7.15	)
West Coast	67.55			29.13			38.42				56.92			47.40			9.52
Weighted Average	67.52			29.12			38.40				56.90			47.41			9.49
Weighted Average after Hedging	59.22			50.70			8.52				55.40			57.35			(1.95		)
Total Production (MMcfe)	83,093			56,015			27,078				247,827			174,151			73,676
Selected Operating Performance Statistics:
General & Administrative Expense per Mcfe (1)	$	0.19		$	0.25		$	(0.06	)		$	0.21		$	0.27		$	(0.06	)
Lease Operating and Transportation Expense per Mcfe (1)(2)	$	0.80		$	0.82		$	(0.02	)		$	0.80		$	0.85		$	(0.05	)
Depreciation, Depletion & Amortization per Mcfe (1)	$	0.55		$	0.70		$	(0.15	)		$	0.55		$	0.74		$	(0.19	)

(1)	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.
(2)	Amounts include transportation expense of $0.57 and $0.57 per Mcfe for the three months ended June 30, 2021 and June 30, 2020, respectively. Amounts include transportation expense of $0.57 and $0.57 per Mcfe for the nine months ended June 30, 2021 and June 30, 2020, respectively.

NATIONAL FUEL GAS COMPANY
AND SUBSIDIARIES
EXPLORATION AND PRODUCTION INFORMATION
Hedging Summary for Remaining Three Months of Fiscal 2021		Volume					Average Hedge Price
Oil Swaps
Brent		354,000		BBL		$	57.57 / BBL
NYMEX		39,000		BBL		$	51.00 / BBL
Total		393,000		BBL		$	56.91 / BBL
Gas Swaps
NYMEX		37,170,000		MMBTU		$	2.62 / MMBTU
No Cost Collars		7,050,000		MMBTU		$	2.28 / MMBTU (Floor) / $2.77 / MMBTU (Ceiling)
Fixed Price Physical Sales		25,768,709		MMBTU		$	2.27 / MMBTU
Total		69,988,709		MMBTU
Hedging Summary for Fiscal 2022		Volume					Average Hedge Price
Oil Swaps
Brent		1,140,000		BBL		$	58.28 / BBL
NYMEX		156,000		BBL		$	51.00 / BBL
Total		1,296,000		BBL		$	57.40 / BBL
Gas Swaps
NYMEX		208,500,000		MMBTU		$	2.75 / MMBTU
No Cost Collars		2,350,000		MMBTU		$	2.28 / MMBTU (Floor) / $2.77 / MMBTU (Ceiling)
Fixed Price Physical Sales		51,121,738		MMBTU		$	2.27 / MMBTU
Total		261,971,738		MMBTU
Hedging Summary for Fiscal 2023		Volume					Average Hedge Price
Oil Swaps
Brent		480,000		BBL		$	58.48 / BBL
Total		480,000		BBL		$	58.48 / BBL
Gas Swaps
NYMEX		98,710,000		MMBTU		$	2.69 / MMBTU
No Cost Collars		7,700,000		MMBTU		$	2.76 / MMBTU (Floor) / $3.16 / MMBTU (Ceiling)
Fixed Price Physical Sales		48,121,254		MMBTU		$	2.23 / MMBTU
Total		154,531,254		MMBTU
Hedging Summary for Fiscal 2024		Volume					Average Hedge Price
Oil Swaps
Brent		120,000		BBL		$	50.30 / BBL
Total		120,000		BBL		$	50.30 / BBL
Gas Swaps
NYMEX		59,490,000		MMBTU		$	2.71 / MMBTU
No Cost Collars		700,000		MMBTU		$	2.76 / MMBTU (Floor) / $3.16 / MMBTU (Ceiling)
Fixed Price Physical Sales		27,530,402		MMBTU		$	2.18 / MMBTU
Total		87,720,402		MMBTU
Hedging Summary for Fiscal 2025		Volume					Average Hedge Price
Oil Swaps
Brent		120,000		BBL		$	50.32 / BBL
Total		120,000		BBL		$	50.32 / BBL
Gas Swaps
NYMEX		4,740,000		MMBTU		$	2.71 / MMBTU
Fixed Price Physical Sales		8,835,284		MMBTU		$	2.06 / MMBTU
Total		13,575,284		MMBTU
Hedging Summary for Fiscal 2026		Volume					Average Hedge Price
Fixed Price Physical Sales		4,923,270		MMBTU		$	2.02 / MMBTU
Hedging Summary for Fiscal 2027		Volume					Average Hedge Price
Fixed Price Physical Sales		286,249		MMBTU		$	2.02 / 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
	2021			2020			(Decrease)			2021			2020			(Decrease)
Firm Transportation - Affiliated	19,202			20,877			(1,675	)		92,290			98,145			(5,855	)
Firm Transportation - Non-Affiliated	155,022			151,702			3,320			494,458			478,880			15,578
Interruptible Transportation	181			757			(576	)		1,205			2,002			(797	)
	174,405			173,336			1,069			587,953			579,027			8,926
Gathering Volume - (MMcf)
	Three Months Ended									Nine Months Ended
	June 30,									June 30,
							Increase									Increase
	2021			2020			(Decrease)			2021			2020			(Decrease)
Gathered Volume	91,817			61,338			30,479			275,283			190,864			84,419
Utility Throughput - (MMcf)
	Three Months Ended									Nine Months Ended
	June 30,									June 30,
							Increase									Increase
	2021			2020			(Decrease)			2021			2020			(Decrease)
Retail Sales:
Residential Sales	9,776			11,312			(1,536	)		57,241			56,943			298
Commercial Sales	1,369			1,450			(81	)		8,206			8,295			(89	)
Industrial Sales	65			106			(41	)		441			506			(65	)
	11,210			12,868			(1,658	)		65,888			65,744			144
Transportation	13,298			13,520			(222	)		55,815			59,233			(3,418	)
	24,508			26,388			(1,880	)		121,703			124,977			(3,274	)

  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, 2021 and 2020:

	Three Months Ended								Nine Months Ended
	June 30,								June 30,
(in thousands except per share amounts)	2021				2020				2021				2020
Reported GAAP Earnings	$	86,475			$	41,250			$	276,685			$	21,773
Items impacting comparability:
Impairment of oil and gas properties (E&P)	—				18,236				76,152				195,997
Tax impact of impairment of oil and gas properties	—				(4,986		)		(20,980		)		(53,489		)
Gain on sale of timber properties (Corporate/All Other)	—				—				(51,066		)		—
Tax impact of gain on sale of timber properties	—				—				14,069				—
Premium paid on early redemption of debt	—				—				15,715				—
Tax impact of premium paid on early redemption of debt	—				—				(4,321		)		—
Deferred tax valuation allowance	—				—				—				56,770
Unrealized (gain) loss on other investments (Corporate/All Other)	(1,025		)		(5,639		)		(575		)		794
Tax impact of unrealized (gain) loss on other investments	215				1,184				120				(167		)
Adjusted Operating Results	$	85,665			$	50,045			$	305,799			$	221,678
Reported GAAP Earnings Per Share	$	0.94			$	0.47			$	3.02			$	0.25
Items impacting comparability:
Impairment of oil and gas properties, net of tax (E&P)	—				0.15				0.60				1.63
Gain on sale of timber properties, net of tax (Corporate/All Other)	—				—				(0.40		)		—
Premium paid on early redemption of debt, net of tax	—				—				0.12				—
Deferred tax valuation allowance	—				—				—				0.65
Unrealized (gain) loss on other investments, net of tax (Corporate/All Other)	(0.01		)		(0.05		)		—				0.01
Adjusted Operating Results Per Share	$	0.93			$	0.57			$	3.34			$	2.54

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, 2021 and 2020:

	Three Months Ended								Nine Months Ended
	June 30,								June 30,
(in thousands)	2021				2020				2021				2020
Reported GAAP Earnings	$	86,475			$	41,250			$	276,685			$	21,773
Depreciation, Depletion and Amortization	84,170				73,232				251,632				226,062
Other (Income) Deductions	2,028				(2,547		)		15,078				17,971
Interest Expense	31,232				28,560				115,926				82,716
Income Taxes	30,335				13,134				99,962				81,376
Impairment of Oil and Gas Producing Properties	—				18,236				76,152				195,997
Gain on Sale of Timber Properties	—				—				(51,066		)		—
Adjusted EBITDA	$	234,240			$	171,865			$	784,369			$	625,895
Adjusted EBITDA by Segment
Pipeline and Storage Adjusted EBITDA	$	53,086			$	50,511			$	169,791			$	142,555
Gathering Adjusted EBITDA	39,929				27,844				121,147				86,818
Total Midstream Businesses Adjusted EBITDA	93,015				78,355				290,938				229,373
Exploration and Production Adjusted EBITDA	116,052				64,780				343,941				236,727
Utility Adjusted EBITDA	29,431				30,214				160,285				162,868
Corporate and All Other Adjusted EBITDA	(4,258		)		(1,484		)		(10,795		)		(3,073		)
Total Adjusted EBITDA	$	234,240			$	171,865			$	784,369			$	625,895

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)	2021				2020				2021				2020
Exploration and Production Segment
Reported GAAP Earnings	$	39,015			$	(6,434	)		$	46,213			$	(157,733	)
Depreciation, Depletion and Amortization	45,886				39,372				137,356				128,656
Other (Income) Deductions	271				253				684				602
Interest Expense	12,008				14,323				57,720				42,543
Income Taxes	18,872				(970		)		25,816				26,662
Impairment of Oil and Gas Producing Properties	—				18,236				76,152				195,997
Adjusted EBITDA	$	116,052			$	64,780			$	343,941			$	236,727
Pipeline and Storage Segment
Reported GAAP Earnings	$	21,948			$	22,623			$	71,060			$	62,815
Depreciation, Depletion and Amortization	15,609				14,352				46,806				39,313
Other (Income) Deductions	(1,489		)		(1,589		)		(3,535		)		(4,328		)
Interest Expense	10,070				7,773				31,353				22,037
Income Taxes	6,948				7,352				24,107				22,718
Adjusted EBITDA	$	53,086			$	50,511			$	169,791			$	142,555
Gathering Segment
Reported GAAP Earnings	$	20,427			$	15,239			$	61,677			$	51,081
Depreciation, Depletion and Amortization	8,131				5,237				24,132				15,655
Other (Income) Deductions	58				30				(50		)		16
Interest Expense	4,102				2,383				13,400				6,762
Income Taxes	7,211				4,955				21,988				13,304
Adjusted EBITDA	$	39,929			$	27,844			$	121,147			$	86,818
Utility Segment
Reported GAAP Earnings	$	4,841			$	6,254			$	59,922			$	64,335
Depreciation, Depletion and Amortization	14,505				13,860				42,811				41,241
Other (Income) Deductions	4,787				4,062				22,532				21,968
Interest Expense	5,510				5,240				16,457				16,430
Income Taxes	(212		)		798				18,563				18,894
Adjusted EBITDA	$	29,431			$	30,214			$	160,285			$	162,868
Corporate and All Other
Reported GAAP Earnings	$	244			$	3,568			$	37,813			$	1,275
Depreciation, Depletion and Amortization	39				411				527				1,197
Gain on Sale of Timber Properties	—				—				(51,066		)		—
Other (Income) Deductions	(1,599		)		(5,303		)		(4,553		)		(287		)
Interest Expense	(458		)		(1,159		)		(3,004		)		(5,056		)
Income Taxes	(2,484		)		999				9,488				(202		)
Adjusted EBITDA	$	(4,258	)		$	(1,484	)		$	(10,795	)		$	(3,073	)

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

Kenneth E. Webster Investor Relations 716-857-7067

Karen M. Camiolo Treasurer 716-857-7344