UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 2, 2018

NATIONAL FUEL GAS COMPANY
(Exact name of registrant as specified in its charter)

	
			
New Jersey	1-3880	13-1086010	
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer
Identification No.)	

6363 Main Street, Williamsville, New York         14221
(Address of principal executive offices)        (Zip Code)

Registrant’s telephone number, including area code: (716) 857-7000

Former name or former address, if changed since last report: Not Applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

		
 	 	
□	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
□	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
□	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
□	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).

Emerging growth company      ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02    Results of Operations and Financial Condition.

On August 2, 2018, National Fuel Gas Company (the “Company”) issued a press release regarding its earnings for the quarter and nine months ended June 30, 2018. A copy of the press release is furnished as part of this Current Report as Exhibit 99.

Neither the furnishing of the press release as an exhibit to this Current Report nor the inclusion in such press release of any reference to the Company’s internet address shall, under any circumstances, be deemed to incorporate the information available at such internet address into this Current Report. The information available at the Company’s internet address is not part of this Current Report or any other report filed or furnished by the Company with the Securities and Exchange Commission.

In addition to financial measures calculated in accordance with generally accepted accounting principles (“GAAP”), the press release furnished as part of this Current Report as Exhibit 99 contains certain non-GAAP financial measures. The Company believes that such non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company’s operating results in a manner that is focused on the performance of the Company’s ongoing operations, for measuring the Company’s cash flow and liquidity, and for comparing the Company’s financial performance to other companies. The Company’s management uses these non-GAAP financial measures for the same purpose, and for planning and forecasting purposes. The presentation of non-GAAP financial measures is not meant to be a substitute for financial measures prepared in accordance with GAAP.

Certain statements contained herein or in the press release furnished as part of this Current Report, including statements regarding estimated future earnings and statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will” and “may” and similar expressions, are “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. There can be no assurance that the Company’s projections will in fact be achieved nor do these projections reflect any acquisitions or divestitures that may occur in the future. While the Company’s expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis, actual results may differ materially from those projected in forward-looking statements. Furthermore, each forward-looking statement speaks only as of the date on which it is made. 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: delays or changes in costs or plans with respect to Company projects or related projects of other companies, including difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; changes in 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; 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; changes in the price of natural gas or oil; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; 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; changes in price differentials between similar quantities of natural gas or oil sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; other changes in price differentials between similar quantities of natural gas or oil having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; changes in demographic patterns and weather conditions; changes in the availability, price or accounting treatment of derivative financial instruments; changes in 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; changes in economic conditions, including global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; the impact of potential information technology, cybersecurity or data security breaches; 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 hereof.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits

Exhibit 99      Press release furnished regarding earnings for the quarter and nine months ended June 30, 2018

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	
		
NATIONAL FUEL GAS COMPANY	

By:	/s/ Sarah J. Mugel	
 	Sarah J. Mugel	
 	Secretary	

Dated: August 3, 2018

Exhibit 99

	

 	 	6363 Main Street/Williamsville, NY 14221	
 	 	 	 	
Release Date:	Immediate August 2, 2018	Kenneth E. Webster
Investor Relations
716-857-7067	David P. Bauer
Treasurer
716-857-7318	

NATIONAL FUEL REPORTS THIRD QUARTER EARNINGS
AND PROVIDES INITIAL GUIDANCE FOR FISCAL 2019

WILLIAMSVILLE, N.Y.: National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the third quarter of its 2018 fiscal year and for the nine months ended June 30, 2018. The Company also provided preliminary earnings and operational guidance for fiscal 2019.

FISCAL 2018 THIRD QUARTER SUMMARY
		
•	GAAP earnings of $63.0 million, or $0.73 per share, compared to $59.7 million, or $0.69 per share, in the prior year	
		
•	Consolidated Adjusted EBITDA of $168.6 million (non-GAAP reconciliation on page 23)	
		
•	Pipeline & Storage segment operating income of $35.5 million, up 6% on higher operating revenues	
		
•	Net natural gas and oil production of 44.6 Bcfe, up 4% from the prior year	
		
•	Average natural gas prices, after the impact of hedging, of $2.43 per Mcf, down $0.51 per Mcf from the prior year	
		
•	Average oil prices, after the impact of hedging, of $58.74 per Bbl, up $5.72 per Bbl from the prior year	
		
•	Reduction in federal tax rate from the 2017 Tax Reform Act resulted in a net earnings benefit of $11.2 million, or $0.14 per share for the quarter, helping to offset the expected decline in realized natural gas prices	

GUIDANCE UPDATE
		
•	Raising and tightening FY18 earnings guidance to $3.30 to $3.40 per share (see non-GAAP discussion on page 5)	
		
•	Initiating FY19 earnings guidance at $3.30 to $3.60 per share, at the midpoint a $0.10 per share increase over FY18	
		
•	FY19 production of 210 to 230 Bcfe, a 24 percent increase over estimated FY18 production	
		
•	Firm contracts in place for more than 85% of FY19 Appalachian natural gas production at attractive pricing	
		
•	FY19 capital expenditures are expected to be in the range of $745 million to $845 million	
		
•	At midpoint of expected guidance ranges, substantially all of FY19 capital expenditures are expected to be funded by internally generated cash flows	

																	
 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
(in thousands except per share amounts)	 	2018	 	2017	 	2018	 	2017	
Reported GAAP Earnings	 	$	63,025		 	$	59,714		 	$	353,527		 	$	237,906		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	—		 	—		 	(107,000	)	 	—		
Adjusted Operating Results	 	$	63,025		 	$	59,714		 	$	246,527		 	$	237,906		
 	 	 	 	 	 	 	 	 	
Reported GAAP Earnings per share	 	$	0.73		 	$	0.69		 	$	4.09		 	$	2.77		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	—		 	—		 	(1.24	)	 	—		
Adjusted Operating Results per share	 	$	0.73		 	$	0.69		 	$	2.85		 	$	2.77		

Page 2.

MANAGEMENT COMMENTS

Ronald J. Tanski, President and Chief Executive Officer of National Fuel Gas Company, stated: “We had an excellent fiscal third quarter with each of our business segments achieving solid financial results. Typically a quarter where we expect lower earnings due to the impact of seasonality on our Utility segment, consolidated results surpassed our forecast on better than projected commodity pricing realized on Seneca’s production, higher Pipeline & Storage revenues, and lower operating expenses across the system.

“Operationally, we continue to execute on our long-term strategic plans to grow our upstream and midstream businesses in tandem and pull forward the value of our integrated asset position in Appalachia. Seneca added a third drilling rig in May to focus more development in the Utica shale where results continue to impress. As we look forward into fiscal 2019, our Gathering segment will benefit from Seneca’s increase in production, a majority of which is contracted to be sold at attractive pricing. Coupled with the stability of our utility and pipeline businesses, we expect to continue to generate a predictable and growing base of earnings and cash flows that will add value for our shareholders and position us to achieve our long-term plans for organic growth across our integrated businesses.”

DISCUSSION OF RESULTS BY SEGMENT

The following discussion of the earnings of each operating segment is summarized in a tabular form on pages 8 through 11 of this report. It may be helpful to refer to those tables while reviewing this discussion. Note that management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, interest and other income, 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	 	Nine Months Ended	
 	June 30,	 	June 30,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	27,817		 	$	30,123		 	$	(2,306	)	 	$	161,052		 	$	98,972		 	$	62,080		
Net Income Per Share (Diluted)	$	0.32		 	$	0.35		 	$	(0.03	)	 	$	1.86		 	$	1.15		 	$	0.71		
Adjusted EBITDA	$	76,935		 	$	89,229		 	$	(12,294	)	 	$	235,199		 	$	285,675		 	$	(50,476	)	

The Exploration and Production segment’s third quarter earnings declined $2.3 million, as the positive impacts of higher natural gas production, better realized crude oil prices, lower lease operating and transportation (“LOE”) expenses, and a lower effective income tax rate were negatively impacted by lower realized natural gas prices and higher depreciation, depletion and amortization (“DD&A”) expense.

Seneca’s third quarter net production was 44.6 billion cubic feet equivalent (“Bcfe”), an increase of 1.9 Bcfe from the prior year. Natural gas production increased 2.3 billion cubic feet (“Bcf”), or 6 percent, due primarily to production from new Marcellus and Utica wells completed and connected to sales in the WDA-Clermont and EDA-Lycoming development areas after adding a second drilling rig in Appalachia in the third quarter of 2017. Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.43 per thousand cubic feet ("Mcf"), a decrease of $0.51 per Mcf from the prior year. The decline in Seneca’s average realized natural gas price is primarily attributable to the expiration of physical firm sales and financial hedge contracts over the past 12 months that had favorable pricing relative to firm sales and hedges settled in the current quarter.

Seneca’s oil production decreased 69 thousand barrels ("Mbbl") versus the prior year due largely to the expected reduction in California production after the sale of Seneca’s Sespe properties, which closed on May 1, 2018. Seneca's average realized oil price, after the impact of hedging, was $58.74 per barrel ("Bbl"), an increase of $5.72 per Bbl. The improvement in oil price realizations was due primarily to higher market prices for West Texas Intermediate (WTI) crude oil during the quarter and stronger price differentials relative to WTI at local sales points in California.

-more-
2

Page 3.

LOE expense for the quarter decreased $3.0 million due to lower operating costs in California following the sale of Seneca’s Sespe properties and lower workover costs combined with a reduction in costs to operate compression facilities in Tioga County, Pennsylvania, which were acquired by the Gathering segment from Seneca in the second quarter of 2018. These decreases were partially offset by higher gathering expenses in Appalachia due to the increase in natural gas production. On a per unit of production basis, LOE expense was $0.84 per thousand cubic feet equivalent (“Mcfe”), a decrease of $0.11 per Mcfe from the prior year.

DD&A expense increased $3.8 million due to the increase in production and a higher per unit depletion rate. The depletion rate for the quarter increased by $0.06 per Mcfe to $0.70 per Mcfe due mainly to a higher depletable fixed asset balance at June 30, 2018, as Seneca has increased development activity in Appalachia over the past year.

The decrease in the segment’s effective tax rate was mostly due to the 2017 Tax Reform Act, which reduced the Company’s federal statutory corporate tax rate in fiscal 2018 and benefited Seneca’s third quarter earnings by $6.2 million, or $0.07 per share.

See page 20 for additional comparative information on the Exploration & Production segment’s production, realized pricing and per unit operating costs.

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	 	Nine Months Ended	
 	June 30,	 	June 30,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	20,723		 	$	16,031		 	$	4,692		 	$	81,909		 	$	54,656		 	$	27,253		
Net Income Per Share (Diluted)	$	0.24		 	$	0.19		 	$	0.05		 	$	0.95		 	$	0.64		 	$	0.31		
Adjusted EBITDA	$	46,428		 	$	44,163		 	$	2,265		 	$	147,342		 	$	141,279		 	$	6,063		

The Pipeline and Storage segment’s third quarter earnings increased $4.7 million due primarily to higher operating revenues, lower interest expense, and a lower effective income tax rate. Operating revenues increased $2.2 million, or 3 percent, versus the prior year due to new demand charges for transportation service from Supply Corporation’s Line D Expansion project, which was placed in service on November 1, 2017, an increase in storage revenues resulting from Supply Corporation’s acquisition of the remaining interest in a jointly owned storage field during the quarter, additional revenues from short-term transportation contracts, and surcharge revenues relating to Supply Corporation’s greenhouse gas and pipeline safety system enhancements that also went into effect in November 2017.

The $0.8 million decrease in interest expense was primarily due to a lower weighted average interest rate on long-term debt. The interest rate decreased following the Company’s issuance of 3.95 percent notes to repay 6.5 percent notes in October 2017. The decrease in the effective income tax rate was due primarily to the 2017 Tax Reform Act, which reduced the Company’s federal statutory corporate tax rate and benefited the segment’s earnings by $3.0 million, or $0.04 per share.

Gathering Segment

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

-more-
3

Page 4.

	
																								
 	Three Months Ended	 	Nine Months Ended	
 	June 30,	 	June 30,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	11,566		 	$	10,107		 	$	1,459		 	$	68,736		 	$	31,373		 	$	37,363		
Net Income Per Share (Diluted)	$	0.13		 	$	0.12		 	$	0.01		 	$	0.80		 	$	0.37		 	$	0.43		
Adjusted EBITDA	$	23,008		 	$	23,901		 	$	(893	)	 	$	67,877		 	$	73,174		 	$	(5,297	)	

The $1.5 million increase in the Gathering segment’s third quarter earnings was due mainly to higher revenues and a lower effective income tax rate, offset partially by an increase in operation and maintenance ("O&M") expense. Operating revenues increased $1.0 million, or 4 percent, versus the prior year due primarily to a 2.6 Bcf increase in throughput from Seneca’s Appalachian natural gas production.

The $1.9 million increase in O&M expense was due largely to the operation of new compression facilities along the Covington gathering system that were acquired from affiliate Seneca in March 2018, an increase in facilities and maintenance activity at the Clermont gathering system, and a non-recurring loss recognized on the sale of pipe materials. The decrease in the effective income tax rate was due primarily to the 2017 Tax Reform Act, which reduced the Company’s federal statutory corporate tax rate and benefited the segment’s earnings by $2.4 million, or $0.03 per share.

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	 	Nine Months Ended	
 	June 30,	 	June 30,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	3,930		 	$	4,348		 	$	(418	)	 	$	58,283		 	$	51,103		 	$	7,180		
Net Income Per Share (Diluted)	$	0.05		 	$	0.05		 	$	—		 	$	0.67		 	$	0.59		 	$	0.08		
Adjusted EBITDA	$	24,366		 	$	25,322		 	$	(956	)	 	$	137,364		 	$	139,232		 	$	(1,868	)	

The Utility segment’s third quarter earnings decreased $0.4 million as the positive impact of colder weather was more than offset by higher O&M expense and the impact of tax reform. Weather in Distribution’s Pennsylvania service territory was 17 percent colder than last year, resulting in higher residential and transportation customer throughput and revenues. The impact of weather variations on earnings in Distribution’s New York service territory is largely mitigated by that jurisdiction’s weather normalization clause. O&M expense increased $1.3 million due mainly to higher personnel costs, primarily pension costs. The net impact of the 2017 Tax Reform Act, including a $0.5 million customer refund provision ($0.4 million after-tax) that reduced the segment’s operating revenues, lowered third quarter earnings by $0.3 million.

Energy Marketing Segment

The Energy Marketing segment's operations are carried out by National Fuel Resources, Inc. (“NFR”). NFR markets natural gas to industrial, wholesale, commercial, public authority, and residential customers primarily in western and central New York and northwestern Pennsylvania, offering competitively priced natural gas to its customers.

																								
 	Three Months Ended	 	Nine Months Ended	
 	June 30,	 	June 30,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income / (Loss)	$	(190	)	 	$	(564	)	 	$	374		 	$	1,434		 	$	2,122		 	$	(688	)	
Net Income / (Loss) Per Share (Diluted)	$	—		 	$	(0.01	)	 	$	0.01		 	$	0.02		 	$	0.02		 	$	—		
Adjusted EBITDA	$	(419	)	 	$	(1,017	)	 	$	598		 	$	2,187		 	$	3,213		 	$	(1,026	)	

The Energy Marketing segment’s third quarter earnings increased $0.4 million due largely to higher margins (operating revenues less purchased gas expenses). NFR’s customer margins were positively impacted by weaker natural gas prices at local purchase points relative to NYMEX-based customer sales contracts and higher volumes due to colder weather.

-more-
4

Page 5.

Corporate and All Other

For the third quarter of fiscal 2018, the Corporate and All Other category had a net loss of $0.8 million compared to a net loss of $0.3 million in the prior year. The increase in the net loss was primarily attributable to higher income tax expense offset partially by an increase in sales generated by the Company’s timber operations.

GUIDANCE

The Company is raising and tightening its earnings guidance for fiscal 2018 to a range of $3.30 to $3.40 per share to reflect the impact of actual results for the nine months ended June 30, 2018, and updates to key forecast assumptions, including revisions to the expected consolidated effective tax rate and the Exploration and Production segment’s forecasted production, oil pricing, and operating expense assumptions, as outlined in the table below.

The revised fiscal 2018 earnings guidance does not include the impact of the remeasurement of deferred income taxes resulting from the 2017 Tax Reform Act, which reduced the Company’s consolidated income tax expense and benefited earnings for the nine months ended June 30, 2018, by $107.0 million, or $1.24 per share. While the Company expects to record additional adjustments to its deferred income taxes as a result of the 2017 Tax Reform Act during the last three months of fiscal 2018, the amounts of these and other potential adjustments are not reasonably determinable at this time. The final determination of the impact of the income tax effects of certain items will require additional analysis and further interpretation of the 2017 Tax Reform Act from yet to be issued U.S. Treasury regulations, state income tax guidance, federal and state regulatory guidance, and possible technical corrections. Some or all of these factors may be significant. Because the amounts of final adjustments are not reasonably determinable at this time, the Company is unable to provide earnings guidance other than on a non-GAAP basis that excludes the impact of the remeasurement of deferred income taxes and other potential adjustments.

The Company is also initiating preliminary guidance for fiscal 2019. National Fuel is projecting that its fiscal 2019 earnings will be within a range of $3.30 to $3.60 per share, or $3.45 per share at the midpoint of the range. The $0.10 per share increase from the fiscal 2018 earnings guidance midpoint is being driven primarily by an increase in Seneca’s forecasted natural gas production and the associated impact on Gathering segment revenues, offset partially by lower expected natural gas price realizations after hedging and lower Pipeline & Storage segment revenues.

Seneca’s fiscal 2019 net production is expected to be in the range of 210 to 230 Bcfe, an increase of 24 percent from fiscal 2018 at the midpoint of the respective ranges. Seneca added a third drilling rig in Appalachia this past May, which is the main driver of the expected 42.5 Bcf increase year over year. The midpoint of the production range does not assume any price related curtailments. The increase in Seneca’s production is also expected to generate higher throughput and revenues for the Company’s Gathering segment. At the midpoint of the range, Gathering revenues are forecasted to increase by approximately $25 million, or 23 percent, to $135 million for fiscal 2019.

Seneca has approximately 176 Bcf, or more than 85 percent of its fiscal 2019 projected Appalachian natural gas production sold under physical firm contracts with third parties, leaving a modest amount of production exposed to local spot prices for the year. Seneca's net-back pricing on approximately 140 Bcf of the 176 Bcf of production sold firm is currently locked-in using a combination of financial hedges and fixed-price contracts that achieve a certain weighted average realized price of $2.44 per Mcf for the year. Assuming NYMEX natural gas pricing of $2.75 per MMBtu and including the impact of local spot pricing and firm transportation costs, Seneca expects its fiscal 2019 net realized gas price after hedging to be approximately $2.35 per Mcf, which is a decrease of $0.15 per Mcf from Seneca’s expected realized pricing after hedging of $2.50 per Mcf for fiscal 2018.

Seneca’s oil operations in California are expected to produce approximately 17 Bcfe in fiscal 2019, relatively flat versus fiscal 2018 excluding production from the California Sespe properties sold in May 2018. Seneca is approximately 72 percent hedged on an expected 2.5 million Bbls of oil production in fiscal 2019 at an average hedge price of $57.57 per Bbl.

The Company expects Pipeline & Storage segment revenues to decrease from approximately $295 million in fiscal 2018 to $285 million in fiscal 2019. The $10 million reduction reflects the anticipated roll-off of a significant counter-flow, legacy contract on the Company’s Empire Pipeline system in December 2018 (as discussed on the Company’s first quarter 2018 earnings teleconference). In response, Empire Pipeline filed a rate case in June 2018 with the Federal Energy Regulatory Commission (“FERC”). The requested increase in transportation rates, which is expected to partially offset the loss of the contract revenues, is anticipated to be effective January 1, 2019, subject to refund.

-more-
5

Page 6.

Consolidated capital expenditures in fiscal 2019 are expected to be in a range of $745 million to $845 million, a $180 million increase from the midpoint of the Company’s fiscal 2018 capital expenditure guidance. The primary drivers of the increase are Seneca’s development activity in Appalachia, where the Company plans to operate three drilling rigs for the entirety of the fiscal year, coupled with the impact of the completion of the 75 well Marcellus shale joint development agreement (“JDA”) earlier in fiscal 2018. Seneca’s JDA partner contributed $17 million in initial conveyance proceeds and an additional $25 million for its 80 percent working interest to complete the final 12 JDA wells, which offset Seneca’s fiscal 2018 total capital expenditures and is reflected in the fiscal 2018 guidance range of $350 million to $370 million. Pipeline & Storage segment capital expenditures are expected to increase by $50 million at the midpoint of the range due to higher spending on expansion projects and system modernization. At the midpoint of the fiscal 2019 guidance ranges, substantially all of the Company's capital expenditures are expected to be funded by internally generated cash flows.

Additional details on the Company's forecast assumptions and business segment guidance for fiscal 2019 are outlined in the table below.

				
 	Updated FY 2018 Guidance	 	Preliminary FY 2019 Guidance	
Consolidated Earnings per Share (1)	$3.30 to $3.40	 	$3.30 to $3.60	
Consolidated Effective Tax Rate (1)	~25%	 	~25%	
 	 	 	 	
Capital Expenditures  (Millions)	 	 	 	
    Exploration and Production (2)	$350 - $370	 	$460 - $500	
    Pipeline and Storage	$100 - $120	 	$140 - $180	
    Gathering	$55 - $65	 	$55 - $65	
    Utility	$80 - $90	 	$90 - $100	
    Consolidated Capital Expenditures	$585 - $645	 	$745 - $845	

				
Exploration & Production Segment Guidance	 	 	 	
 	 	 	 	
    Commodity Price Assumptions	 	 	 	
    NYMEX natural gas price	$2.75 /MMBtu	 	$2.75 /MMBtu	
    Appalachian basin spot price (winter | summer)	$2.00 /MMBtu	 	$2.40 /MMBtu | $2.00 /MMBtu	
    NYMEX (WTI) crude oil price	$65.00 /Bbl	 	$65.00 /Bbl	
    California oil price (% of WTI)	100%	 	100%	
 	 	 	 	
    Production (Bcfe)	 	 	 	
    East Division - Appalachia	157 to 162	 	193 to 213	
    West Division - California	~ 18	 	~ 17	
    Total Production	175 to 180	 	210 to 230	
 	 	 	 	
    E&P Operating Costs ($/Mcfe)	 	 	 	
    LOE	$0.90 - $0.95	 	$0.85 - $0.90	
    G&A	$0.30 - $0.35	 	$0.25 - $0.35	
    DD&A	~ $0.70	 	$0.70 - $0.75	
 	 	 	 	
Other Business Segment Guidance (Millions)	 	 	 	
    Gathering Segment Revenues	~$110	 	$130 - $140	
    Pipeline and Storage Segment Revenues	~$295	 	~$285	

(1)    FY18 excludes earnings impact of the remeasurement of deferred income taxes resulting from the 2017 Tax Reform Act.
(2)    FY18 net of proceeds received from joint development partner for working interest in joint development wells.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, August 3, 2018, at 11 a.m. Eastern Time to discuss this announcement. There are two ways to access this call. For those with Internet access, visit the NFG Investor Relations News & Events page at National Fuel’s website at investor.nationalfuelgas.com. For those without Internet access, audio access is also provided by dialing (toll-free) 833-287-0795, using conference ID number “1984229.” For those unable to listen to the live conference call, an audio replay will be available approximately two hours following the teleconference at the same website link and by phone at (toll-free) 800-585-8367 using conference ID number “1984229.” Both the webcast and a telephonic replay will be available until the close of business on Friday, August 10, 2018.

-more-
6

Page 7.

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

	

 	 	 	
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: delays or changes in costs or plans with respect to Company projects or related projects of other companies, including difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design and retained natural gas), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; changes in 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; 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; changes in the price of natural gas or oil; impairments under the SEC’s full cost ceiling test for natural gas and oil reserves; 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; changes in price differentials between similar quantities of natural gas or oil sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; other changes in price differentials between similar quantities of natural gas or oil having different quality, heating value, hydrocarbon mix or delivery date; the cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; uncertainty of oil and gas reserve estimates; significant differences between the Company’s projected and actual production levels for natural gas or oil; changes in demographic patterns and weather conditions; changes in the availability, price or accounting treatment of derivative financial instruments; changes in 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; changes in economic conditions, including global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; the creditworthiness or performance of the Company’s key suppliers, customers and counterparties; the impact of potential information technology, cybersecurity or data security breaches; 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.

-more-
7

Page 8.

	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS	
QUARTER ENDED JUNE 30, 2018	
(Unaudited)	

 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
(Thousands of Dollars)	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Third quarter 2017 GAAP earnings	$	30,123		 	$	16,031		 	$	10,107		 	$	4,348		 	$	(564	)	 	$	(331	)	 	$	59,714		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers***	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	2,236		 	 	 	 	 	 	 	 	 	 	 	2,236		
Higher (lower) natural gas prices	(13,665	)	 	 	 	 	 	 	 	 	 	 	 	(13,665	)	
Higher (lower) natural gas production	4,464		 	 	 	 	 	 	 	 	 	 	 	4,464		
Higher (lower) crude oil production	(2,361	)	 	 	 	 	 	 	 	 	 	 	 	(2,361	)	
Lower (higher) lease operating and transportation expenses	1,954		 	 	 	 	 	 	 	 	 	 	 	1,954		
Lower (higher) depreciation / depletion	(2,501	)	 	 	 	(203	)	 	 	 	 	 	(283	)	 	(2,987	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation and storage revenues	 	 	1,342		 	 	 	 	 	 	 	 	 	1,342		
Higher (lower) gathering and processing revenues	 	 	 	 	644		 	 	 	 	 	 	 	644		
Lower (higher) other operating expenses	(625	)	 	 	 	(1,224	)	 	(980	)	 	 	 	 	 	(2,829	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Colder weather	 	 	 	 	 	 	659		 	 	 	 	 	659		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) margins	 	 	 	 	 	 	 	 	304		 	623		 	927		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) AFUDC**	 	 	(113	)	 	 	 	 	 	 	 	 	 	(113	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Lower (higher) interest expense	 	 	534		 	 	 	 	 	 	 	 	 	534		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	1,730		 	 	 	 	 	 	 	 	 	(956	)	 	774		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate change on current period earnings	6,154		 	3,046		 	2,422		 	77		 	 	 	(161	)	 	11,538		
Refund provision on tax rate change	 	 	 	 	 	 	(358	)	 	 	 	 	 	(358	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	308		 	(117	)	 	(180	)	 	184		 	70		 	287		 	552		
Third quarter 2018 GAAP earnings	$	27,817		 	$	20,723		 	$	11,566		 	$	3,930		 	$	(190	)	 	$	(821	)	 	$	63,025		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	
** AFUDC = Allowance for Funds Used During Construction	 	 	 	 	 	 	 	 	 	 	 	 	
*** Earnings drivers have been calculated using a 35% federal statutory rate. The impact of the change to a blended year 24.5% federal statutory rate is broken out separately under the caption "Impact of 2017 Tax Reform Act."	 	 	 	 	

Page 9.

	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE	
QUARTER ENDED JUNE 30, 2018	
(Unaudited)	

 	 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
 	 	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Third quarter 2017 GAAP earnings	 	$	0.35		 	$	0.19		 	$	0.12		 	$	0.05		 	$	(0.01	)	 	$	(0.01	)	 	$	0.69		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers***	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	 	0.03		 	 	 	 	 	 	 	 	 	 	 	0.03		
Higher (lower) natural gas prices	 	(0.16	)	 	 	 	 	 	 	 	 	 	 	 	(0.16	)	
Higher (lower) natural gas production	 	0.05		 	 	 	 	 	 	 	 	 	 	 	0.05		
Higher (lower) crude oil production	 	(0.03	)	 	 	 	 	 	 	 	 	 	 	 	(0.03	)	
Lower (higher) lease operating and transportation expenses	 	0.02		 	 	 	 	 	 	 	 	 	 	 	0.02		
Lower (higher) depreciation / depletion	 	(0.03	)	 	 	 	—		 	 	 	 	 	—		 	(0.03	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation and storage revenues	 	 	 	0.02		 	 	 	 	 	 	 	 	 	0.02		
Higher (lower) gathering and processing revenues	 	 	 	 	 	0.01		 	 	 	 	 	 	 	0.01		
Lower (higher) other operating expenses	 	(0.01	)	 	 	 	(0.01	)	 	(0.01	)	 	 	 	 	 	(0.03	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Colder weather	 	 	 	 	 	 	 	0.01		 	 	 	 	 	0.01		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) margins	 	 	 	 	 	 	 	 	 	—		 	0.01		 	0.01		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) AFUDC**	 	 	 	—		 	 	 	 	 	 	 	 	 	—		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) interest expense	 	 	 	0.01		 	 	 	 	 	 	 	 	 	0.01		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	 	0.02											(0.01	)		0.01		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate change on current period earnings	 	0.07		 	0.04		 	0.03		 	—		 	 	 	—		 	0.14		
Refund provision on tax rate change	 	 	 	 	 	 	 	—		 	 	 	 	 	—		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	 	0.01		 	(0.02	)	 	(0.02	)	 	—		 	0.01		 	—		 	(0.02	)	
Third quarter 2018 GAAP earnings	 	$	0.32		 	$	0.24		 	$	0.13		 	$	0.05		 	$	—		 	$	(0.01	)	 	$	0.73		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
** AFUDC = Allowance for Funds Used During Construction	 	 	 	 	 	 	 	 	 	 	 	 	
*** Earnings drivers have been calculated using a 35% federal statutory rate. The impact of the change to a blended year 24.5% federal statutory rate is broken out separately under the caption "Impact of 2017 Tax Reform Act."	 	 	 	 	

Page 10.

	

NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS	
NINE MONTHS ENDED JUNE 30, 2018	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
(Thousands of Dollars)	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nine months ended June 30, 2017 GAAP earnings	$	98,972		 	$	54,656		 	$	31,373		 	$	51,103		 	$	2,122		 	$	(320	)	 	$	237,906		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers***	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	6,770		 	 	 	 	 	 	 	 	 	 	 	6,770		
Higher (lower) natural gas prices	(31,640	)	 	 	 	 	 	 	 	 	 	 	 	(31,640	)	
Higher (lower) natural gas production	(3,088	)	 	 	 	 	 	 	 	 	 	 	 	(3,088	)	
Higher (lower) crude oil production	(4,449	)	 	 	 	 	 	 	 	 	 	 	 	(4,449	)	
Lower (higher) lease operating and transportation expenses	1,171		 	 	 	 	 	 	 	 	 	 	 	1,171		
Lower (higher) depreciation / depletion	(3,480	)	 	(1,086	)	 	(488	)	 	 	 	 	 	(479	)	 	(5,533	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation and storage revenues	 	 	2,126		 	 	 	 	 	 	 	 	 	2,126		
Higher (lower) gathering and processing revenues	 	 	 	 	(2,126	)	 	 	 	 	 	 	 	(2,126	)	
Lower (higher) other operating expenses	(1,635	)	 	2,283		 	(1,299	)	 	(505	)	 	234		 	 	 	(922	)	
Lower (higher) property, franchise and other taxes	 	 	(439	)	 	 	 	 	 	 	 	 	 	(439	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of new rates	 	 	 	 	 	 	2,789		 	 	 	 	 	2,789		
Colder weather	 	 	 	 	 	 	5,621		 	 	 	 	 	5,621		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) margins	 	 	 	 	 	 	 	 	(901	)	 	1,634		 	733		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) AFUDC**	 	 	(656	)	 	 	 	 	 	 	 	 	 	(656	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Lower (higher) interest expense	 	 	1,143		 	 	 	772		 	 	 	 	 	1,915		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Lower (higher) income tax expense / effective tax rate	3,871		 		 		 	(2,201	)	 		 	(1,381	)	 	289		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate change on current period earnings	17,401		 	9,967		 	7,091		 	10,726		 	263		 	(322	)	 	45,126		
Refund provision on tax rate change	 	 	 	 	 	 	(8,678	)	 	 	 	 	 	(8,678	)	
Remeasurement of deferred income taxes under
2017 Tax Reform	76,510		 	14,100		 	34,500		 	 	 	(359	)	 	(17,751	)	 	107,000		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	649		 	(185	)	 	(315	)	 	(1,344	)	 	75		 	732		 	(388	)	
Nine months ended June 30, 2018 GAAP earnings	$	161,052			$	81,909			$	68,736			$	58,283			$	1,434			$	(17,887	)	 	$	353,527		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	
** AFUDC = Allowance for Funds Used During Construction	 	 	 	 	 	 	 	 	 	 	 	 	
*** Earnings drivers have been calculated using a 35% federal statutory rate. The impact of the change to a blended year 24.5% federal statutory rate is broken out separately under the caption "Impact of 2017 Tax Reform Act."	 	 	 	

Page 11.

	

NATIONAL FUEL GAS COMPANY	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE	
NINE MONTHS ENDED JUNE 30, 2018	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
 	 	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Nine months ended June 30, 2017 GAAP earnings	 	$	1.15		 	$	0.64		 	$	0.37		 	$	0.59		 	$	0.02		 	$	—		 	$	2.77		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers***	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	 	0.08		 	 	 	 	 	 	 	 	 	 	 	0.08		
Higher (lower) natural gas prices	 	(0.37	)	 	 	 	 	 	 	 	 	 	 	 	(0.37	)	
Higher (lower) natural gas production	 	(0.04	)	 	 	 	 	 	 	 	 	 	 	 	(0.04	)	
Higher (lower) crude oil production	 	(0.05	)	 	 	 	 	 	 	 	 	 	 	 	(0.05	)	
Lower (higher) lease operating and transportation expenses	 	0.01		 	 	 	 	 	 	 	 	 	 	 	0.01		
Lower (higher) depreciation / depletion	 	(0.04	)	 	(0.01	)	 	(0.01	)	 	 	 	 	 	(0.01	)	 	(0.07	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation and storage revenues	 	 	 	0.02		 	 	 	 	 	 	 	 	 	0.02		
Higher (lower) gathering and processing revenues	 	 	 	 	 	(0.02	)	 	 	 	 	 	 	 	(0.02	)	
Lower (higher) other operating expenses	 	(0.02	)	 	0.03		 	(0.02	)	 	(0.01	)	 	—		 	 	 	(0.02	)	
Lower (higher) property, franchise and other taxes	 	 	 	(0.01	)	 	 	 	 	 	 	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of new rates	 	 	 	 	 	 	 	0.03		 	 	 	 	 	0.03		
Colder weather	 	 	 	 	 	 	 	0.07		 	 	 	 	 	0.07		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) margins	 	 	 	 	 	 	 	 	 	(0.01	)	 	0.02		 	0.01		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) AFUDC**	 	 	 	(0.01	)	 	 	 	 	 	 	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) interest expense	 	 	 	0.01		 	 	 	0.01		 	 	 	 	 	0.02		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	 	0.04		 	 	 	 	 	(0.03	)	 	 	 	(0.02	)	 	(0.01	)	
 	 		 		 		 		 		 		 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of tax rate change on current period earnings	 	0.20		 	0.12		 	0.08		 	0.12		 	—		 	—		 	0.52		
Refund provision on tax rate change	 	 	 	 	 	 	 	(0.10	)	 	 	 	 	 	(0.10	)	
Remeasurement of deferred income taxes under
2017 Tax Reform	 	0.89		 	0.16		 	0.40		 	 	 	—		 	(0.21	)	 	1.24		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	 	0.01		 	—		 	—		 	(0.01	)	 	0.01		 	0.01		 	0.02		
Nine months ended June 30, 2018 GAAP earnings	 	$	1.86		 	$	0.95		 	$	0.80		 	$	0.67		 	$	0.02		 	$	(0.21	)	 	$	4.09		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
** AFUDC = Allowance for Funds Used During Construction	 	 	 	 	 	 	 	 	 	 	 	 	
*** Earnings drivers have been calculated using a 35% federal statutory rate. The impact of the change to a blended year 24.5% federal statutory rate is broken out separately under the caption "Impact of 2017 Tax Reform Act."	 	 	 	 	

Page 12.

	

 	 	 	 	 				 	
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	2018	 	2017	 	2018		2017	 	
Operating Revenues:		 	 	 	 		 	 	
Utility and Energy Marketing Revenues	$	154,088		 	$	146,360		 	$	719,234		 	$	663,029		 	
Exploration and Production and Other Revenues	137,492		 	151,925		 	425,811		 	473,617		 	
Pipeline and Storage and Gathering Revenues	51,332		 	50,083		 	158,428		 	156,298		 	
 	342,912			348,368		 	1,303,473			1,292,944		 	
Operating Expenses:	 	 	 	 						 	
Purchased Gas	52,211		 	46,135		 	322,854			264,349		 	
Operation and Maintenance:			 			 						 	
      Utility and Energy Marketing	45,618		 	44,467		 	158,397		 	158,796		 	
      Exploration and Production and Other	31,141		 	34,098		 	106,268		 	102,153		 	
      Pipeline and Storage and Gathering	24,770		 	23,250		 	67,450		 	69,016		 	
Property, Franchise and Other Taxes	20,595		 	21,447		 	64,245			64,368		 	
Depreciation, Depletion and Amortization	60,817		 	55,617		 	177,802			168,812		 	
 	235,152		 	225,014		 	897,016			827,494		 	
 	 	 	 	 						 	
Operating Income	107,760		 	123,354		 	406,457			465,450		 	
 	 	 	 	 						 	
Other Income (Expense):	 	 	 	 						 	
Interest Income	1,632		 	853		 	4,907			2,844		 	
Other Income	999		 	1,370		 	3,492			4,728		 	
Interest Expense on Long-Term Debt	(27,177	)	 	(29,225	)	 	(82,412	)		(87,241	)	 	
Other Interest Expense	(1,006	)	 	(846	)	 	(2,742	)		(2,680	)	 	
 	 	 	 	 						 	
Income Before Income Taxes	82,208		 	95,506		 	329,702			383,101		 	
 	 	 	 	 						 	
Income Tax Expense (Benefit)	19,183		 	35,792		 	(23,825	)		145,195		 	
 	 	 	 	 						 	
Net Income Available for Common Stock	$	63,025		 	$	59,714		 	$	353,527			$	237,906		 	
 	 	 	 	 				 	
Earnings Per Common Share	 	 	 	 				 	
Basic	$	0.73		 	$	0.70		 	$	4.12			$	2.79		 	
Diluted	$	0.73		 	$	0.69		 	$	4.09			$	2.77		 	
 	 	 	 	 				 	
Weighted Average Common Shares:	 	 	 	 				 	
Used in Basic Calculation	85,930,289		 	85,422,313		 	85,789,279			85,315,154		 	
Used in Diluted Calculation	86,501,194		 	86,064,464		 	86,370,900			85,950,742		 	

Page 13.

	
								
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
CONSOLIDATED BALANCE SHEETS	
(Unaudited)	
 	 	
 	June 30,	 	September 30,	
(Thousands of Dollars)	2018	 	2017	
 	 	 	 	
ASSETS	 	 	 	
Property, Plant and Equipment		$10,254,976		 		$9,945,560		
Less - Accumulated Depreciation, Depletion and Amortization	5,411,746		 	5,271,486		
Net Property, Plant and Equipment	4,843,230		 	4,674,074		
 	 	 	 	
Current Assets:	 	 	 	
Cash and Temporary Cash Investments	313,307		 	555,530		
Hedging Collateral Deposits	2,283		 	1,741		
Receivables - Net	151,005		 	112,383		
Unbilled Revenue	18,930		 	22,883		
Gas Stored Underground	16,090		 	35,689		
Materials and Supplies - at average cost	34,693		 	33,926		
Unrecovered Purchased Gas Costs	—		 	4,623		
Other Current Assets	52,690		 	51,505		
Total Current Assets	588,998		 	818,280		
 	 	 	 	
Other Assets:	 	 	 	
Recoverable Future Taxes	115,688		 	181,363		
Unamortized Debt Expense	7,587		 	1,159		
Other Regulatory Assets	171,792		 	174,433		
Deferred Charges	37,349		 	30,047		
Other Investments	130,744		 	125,265		
Goodwill	5,476		 	5,476		
Prepaid Post-Retirement Benefit Costs	61,371		 	56,370		
Fair Value of Derivative Financial Instruments	11,760		 	36,111		
Other	108		 	742		
Total Other Assets	541,875		 	610,966		
Total Assets		$5,974,103		 		$6,103,320		
 	 	 	 	
CAPITALIZATION AND LIABILITIES	 	 	 	
Capitalization:	 	 	 	
Comprehensive Shareholders' Equity	 	 	 	
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and	 	 	 	
Outstanding - 85,943,875 Shares and 85,543,125 Shares, Respectively		$85,944		 		$85,543		
Paid in Capital	816,395		 	796,646		
Earnings Reinvested in the Business	1,097,438		 	851,669		
Accumulated Other Comprehensive Loss	(72,396	)	 	(30,123	)	
Total Comprehensive Shareholders' Equity	1,927,381		 	1,703,735		
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs	1,835,582		 	2,083,681		
Total Capitalization	3,762,963		 	3,787,416		
 	 	 	 	
Current and Accrued Liabilities:	 	 	 	
Notes Payable to Banks and Commercial Paper	—		 	—		
Current Portion of Long-Term Debt	250,000		 	300,000		
Accounts Payable	111,812		 	126,443		
Amounts Payable to Customers	16,833		 	—		
Dividends Payable	36,526		 	35,500		
Interest Payable on Long-Term Debt	28,357		 	35,031		
Customer Advances	197		 	15,701		
Customer Security Deposits	18,468		 	20,372		
Other Accruals and Current Liabilities	161,252		 	111,889		
Fair Value of Derivative Financial Instruments	38,012		 	1,103		
Total Current and Accrued Liabilities	661,457		 	646,039		
 	 	 	 	
Deferred Credits:	 	 	 	
Deferred Income Taxes	491,520		 	891,287		
Taxes Refundable to Customers	366,183		 	95,739		
Cost of Removal Regulatory Liability	213,560		 	204,630		
Other Regulatory Liabilities	128,184		 	113,716		
Pension and Other Post-Retirement Liabilities	138,275		 	149,079		
Asset Retirement Obligations	101,833		 	106,395		
Other Deferred Credits	110,128		 	109,019		
Total Deferred Credits	1,549,683		 	1,669,865		
Commitments and Contingencies	—		 	—		
Total Capitalization and Liabilities		$5,974,103		 		$6,103,320		

Page 14.

	

 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
CONSOLIDATED STATEMENTS OF CASH FLOWS	
(Unaudited)	
 	 	Nine Months Ended	
 	 	June 30,	
(Thousands of Dollars)	 	2018	 	2017	
 	 	 	 	 	
Operating Activities:	 	 	 	 	
Net Income Available for Common Stock	 	$	353,527		 	$	237,906		
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:	 	 	 	 	
Depreciation, Depletion and Amortization	 	177,802		 	168,812		
Deferred Income Taxes	 	(43,537	)	 	105,073		
Stock-Based Compensation	 	11,770		 	8,857		
Other	 	12,311		 	11,084		
Change in:	 	 	 	 	
Hedging Collateral Deposits	 	(542	)	 	(658	)	
Receivables and Unbilled Revenue	 	(35,021	)	 	(15,885	)	
Gas Stored Underground and Materials and Supplies	 	18,832		 	15,699		
Unrecovered Purchased Gas Costs	 	4,623		 	(1,317	)	
Other Current Assets	 	(1,185	)	 	8,502		
Accounts Payable	 	2,327		 	5,046		
Amounts Payable to Customers	 	16,833		 	(6,467	)	
Customer Advances	 	(15,504	)	 	(14,538	)	
Customer Security Deposits	 	(1,904	)	 	1,503		
Other Accruals and Current Liabilities	 	26,538		 	25,423		
Other Assets	 	(10,770	)	 	(3,548	)	
Other Liabilities	 	1,441		 	5,638		
Net Cash Provided by Operating Activities	 	$	517,541		 	$	551,130		
 	 	 	 	 	
Investing Activities:	 	 	 	 	
Capital Expenditures	 	$	(403,994	)	 	$	(314,774	)	
Net Proceeds from Sale of Oil and Gas Producing Properties	 	55,506		 	26,554		
Other	 	(1,759	)	 	(10,186	)	
Net Cash Used in Investing Activities	 	$	(350,247	)	 	$	(298,406	)	
 	 	 	 	 	
Financing Activities:	 	 	 	 	
Reduction of Long-Term Debt	 	$	(307,047	)	 	$	—		
Dividends Paid on Common Stock	 	(106,732	)	 	(103,594	)	
Net Proceeds From Issuance of Common Stock	 	4,262		 	6,223		
Net Cash Used in Financing Activities	 	$	(409,517	)	 	$	(97,371	)	
 	 	 	 	 	
Net Increase (Decrease) in Cash and Temporary Cash Investments	 	(242,223	)	 	155,353		
Cash and Temporary Cash Investments at Beginning of Period	 	555,530		 	129,972		
Cash and Temporary Cash Investments at June 30	 	$	313,307		 	$	285,325		

Page 15.

	

 	 	 	 	 	 	 				
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	2018	 	2017	 	Variance	 	2018	2017	Variance	
Total Operating Revenues	$	135,828		 	$	151,161		 	$	(15,333	)	 	$	421,381		$	471,646		$	(50,265	)	
 	 	 	 	 	 	 							
Operating Expenses:	 	 	 	 	 	 							
Operation and Maintenance:	 	 	 	 	 	 							
General and Administrative Expense	15,239		 	14,170		 	1,069		 	46,175		43,674		2,501		
Lease Operating and Transportation Expense	37,624		 	40,630		 	(3,006	)	 	121,079		122,881		(1,802	)	
All Other Operation and Maintenance Expense	2,728		 	2,835		 	(107	)	 	8,182		8,168		14		
Property, Franchise and Other Taxes	3,302		 	4,297		 	(995	)	 	10,746		11,248		(502	)	
Depreciation, Depletion and Amortization	31,296		 	27,448		 	3,848		 	90,707		85,353		5,354		
 	90,189		 	89,380		 	809		 	276,889		271,324		5,565		
 	 	 	 	 	 	 							
Operating Income	45,639		 	61,781		 	(16,142	)	 	144,492		200,322		(55,830	)	
 	 	 	 	 	 	 							
Other Income (Expense):	 	 	 	 	 	 							
Interest Income	486		 	217		 	269		 	1,087		451		636		
Interest Expense	(13,247	)	 	(13,444	)	 	197		 	(40,001	)	(40,270	)	269		
 	 	 	 	 	 	 							
Income Before Income Taxes	32,878		 	48,554		 	(15,676	)	 	105,578		160,503		(54,925	)	
Income Tax Expense (Benefit)	5,061		 	18,431		 	(13,370	)	 	(55,474	)	61,531		(117,005	)	
Net Income	$	27,817		 	$	30,123		 	$	(2,306	)	 	$	161,052		$	98,972		$	62,080		
 	 	 	 	 	 	 							
Net Income Per Share (Diluted)	$	0.32		 	$	0.35		 	$	(0.03	)	 	$	1.86		$	1.15		$	0.71		

Page 16.

	

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	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	51,363		 	$	50,049		 	$	1,314		 	$	158,387		$	156,212		$	2,175		
Intersegment Revenues	22,496		 	21,643		 	853		 	67,524		66,389		1,135		
Total Operating Revenues	73,859		 	71,692		 	2,167		 	225,911		222,601		3,310		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	105		 	(13	)	 	118		 	266		181		85		
Operation and Maintenance	20,262		 	20,607		 	(345	)	 	57,004		60,517		(3,513	)	
Property, Franchise and Other Taxes	7,064		 	6,935		 	129		 	21,299		20,624		675		
Depreciation, Depletion and Amortization	10,888		 	10,513		 	375		 	32,322		30,651		1,671		
 	38,319		 	38,042		 	277		 	110,891		111,973		(1,082	)	
 	 	 	 	 	 	 	 	 	 	
Operating Income	35,540		 	33,650		 	1,890		 	115,020		110,628		4,392		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	698		 	393		 	305		 	1,851		984		867		
Other Income	379		 	449		 	(70	)	 	1,333		1,944		(611	)	
Interest Expense	(7,667	)	 	(8,489	)	 	822		 	(23,418	)	(25,177	)	1,759		
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	28,950		 	26,003		 	2,947		 	94,786		88,379		6,407		
Income Tax Expense	8,227		 	9,972		 	(1,745	)	 	12,877		33,723		(20,846	)	
Net Income	$	20,723		 	$	16,031		 	$	4,692		 	$	81,909		$	54,656		$	27,253		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.24		 	$	0.19		 	$	0.05		 	$	0.95		$	0.64		$	0.31		

 	Three Months Ended	 	Nine Months Ended	
 	June 30,	 	June 30,	
GATHERING SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	(31	)	 	$	34		 	$	(65	)	 	$	41		$	86		$	(45	)	
Intersegment Revenues	27,908		 	26,853		 	1,055		 	79,404		82,629		(3,225	)	
Total Operating Revenues	27,877		 	26,887		 	990		 	79,445		82,715		(3,270	)	
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	4,855		 	2,973		 	1,882		 	11,494		9,496		1,998		
Property, Franchise and Other Taxes	14		 	13		 	1		 	74		45		29		
Depreciation, Depletion and Amortization	4,444		 	4,131		 	313		 	12,759		12,008		751		
 	9,313		 	7,117		 	2,196		 	24,327		21,549		2,778		
 	 	 	 	 	 	 	 	 	 	
Operating Income	18,564		 	19,770		 	(1,206	)	 	55,118		61,166		(6,048	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 		 	 	 		
Interest Income	160		 	288		 	(128	)	 	976		641		335		
Other Income	—		 	—		 	—		 	—		1		(1	)	
Interest Expense	(2,502	)	 	(2,411	)	 	(91	)	 	(7,349	)	(6,739	)	(610	)	
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	16,222		 	17,647		 	(1,425	)	 	48,745		55,069		(6,324	)	
Income Tax Expense (Benefit)	4,656		 	7,540		 	(2,884	)	 	(19,991	)	23,696		(43,687	)	
Net Income	$	11,566		 	$	10,107		 	$	1,459		 	$	68,736		$	31,373		$	37,363		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.13		 	$	0.12		 	$	0.01		 	$	0.80		$	0.37		$	0.43		

Page 17.

	

 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	
SEGMENT OPERATING RESULTS AND STATISTICS	
(UNAUDITED)	
 	 	 	 	 	 	 	 	 	 	
DOWNSTREAM BUSINESSES	

 	Three Months Ended	 	Nine Months Ended	
(Thousands of Dollars, except per share amounts)	June 30,	 	June 30,	
UTILITY SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	128,628		 	$	121,900		 	$	6,728		 	$	599,495		$	550,819		$	48,676		
Intersegment Revenues	3,519		 	3,391		 	128		 	11,401		11,314		87		
Total Operating Revenues	132,147		 	125,291		 	6,856		 	610,896		562,133		48,763		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	53,028		 	46,536		 	6,492		 	286,446		235,481		50,965		
Operation and Maintenance	44,792		 	43,506		 	1,286		 	155,737		155,783		(46	)	
Property, Franchise and Other Taxes	9,961		 	9,927		 	34		 	31,349		31,637		(288	)	
Depreciation, Depletion and Amortization	13,316		 	13,086		 	230		 	39,981		39,502		479		
 	121,097		 	113,055		 	8,042		 	513,513		462,403		51,110		
 	 	 	 	 	 	 	 	 	 	
Operating Income	11,050		 	12,236		 	(1,186	)	 	97,383		99,730		(2,347	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	306		 	141		 	165		 	1,121		418		703		
Other Income	192		 	438		 	(246	)	 	499		576		(77	)	
Interest Expense	(6,572	)	 	(7,062	)	 	490		 	(20,266	)	(21,454	)	1,188		
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	4,976		 	5,753		 	(777	)	 	78,737		79,270		(533	)	
Income Tax Expense	1,046		 	1,405		 	(359	)	 	20,454		28,167		(7,713	)	
Net Income	$	3,930		 	$	4,348		 	$	(418	)	 	$	58,283		$	51,103		$	7,180		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.05		 	$	0.05		 	$	—		 	$	0.67		$	0.59		$	0.08		

 	Three Months Ended	 	Nine Months Ended	
 	June 30,	 	June 30,	
ENERGY MARKETING SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	25,460		 	$	24,460		 	$	1,000		 	$	119,739		$	112,210		$	7,529		
Intersegment Revenues	512		 	565		 	(53	)	 	589		600		(11	)	
Total Operating Revenues	25,972		 	25,025		 	947		 	120,328		112,810		7,518		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	24,816		 	24,336		 	480		 	113,240		104,335		8,905		
Operation and Maintenance	1,575		 	1,706		 	(131	)	 	4,901		5,262		(361	)	
Depreciation, Depletion and Amortization	69		 	69		 	—		 	207		210		(3	)	
 	26,460		 	26,111		 	349		 	118,348		109,807		8,541		
 	 	 	 	 	 	 	 	 	 	
Operating Income (Loss)	(488	)	 	(1,086	)	 	598		 	1,980		3,003		(1,023	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	202		 	146		 	56		 	497		418		79		
Other Income	26		 	22		 	4		 	52		57		(5	)	
Interest Expense	(4	)	 	(13	)	 	9		 	(16	)	(38	)	22		
 	 	 	 	 	 	 	 	 	 	
Income (Loss) Before Income Taxes	(264	)	 	(931	)	 	667		 	2,513		3,440		(927	)	
Income Tax Expense (Benefit)	(74	)	 	(367	)	 	293		 	1,079		1,318		(239	)	
Net Income (Loss)	$	(190	)	 	$	(564	)	 	$	374		 	$	1,434		$	2,122		$	(688	)	
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	—		 	$	(0.01	)	 	$	0.01		 	$	0.02		$	0.02		$	—		

Page 18.

	
																						
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	2018	 	2017	 	Variance	 	2018	2017	Variance	
Total Operating Revenues	$	1,496		 	$	538		 	$	958		 	$	3,824		$	1,311		$	2,513		
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	414		 	435		 	(21	)	 	1,106		1,344		(238	)	
Property, Franchise and Other Taxes	138		 	151		 	(13	)	 	425		445		(20	)	
Depreciation, Depletion and Amortization	614		 	182		 	432		 	1,259		525		734		
 	1,166		 	768		 	398		 	2,790		2,314		476		
 	 	 	 	 	 	 	 	 	 	
Operating Income (Loss)	330		 	(230	)	 	560		 	1,034		(1,003	)	2,037		
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	108		 	59		 	49		 	271		147		124		
 	 	 	 	 	 	 	 	 	 	
Income (Loss) Before Income Taxes	438		 	(171	)	 	609		 	1,305		(856	)	2,161		
Income Tax Expense (Benefit)	141		 	(73	)	 	214		 	1,519		(358	)	1,877		
Net Income (Loss)	$	297		 	$	(98	)	 	$	395		 	$	(214	)	$	(498	)	$	284		
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		

 	Three Months Ended	 	Nine Months Ended	
 	June 30,	 	June 30,	
CORPORATE	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	168		 	$	226		 	$	(58	)	 	$	606		$	660		$	(54	)	
Intersegment Revenues	999		 	977		 	22		 	2,998		2,930		68		
Total Operating Revenues	1,167		 	1,203		 	(36	)	 	3,604		3,590		14		
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	3,736		 	3,658		 	78		 	11,255		11,054		201		
Property, Franchise and Other Taxes	116		 	124		 	(8	)	 	352		369		(17	)	
Depreciation, Depletion and Amortization	190		 	188		 	2		 	567		563		4		
 	4,042		 	3,970		 	72		 	12,174		11,986		188		
 	 	 	 	 	 	 	 	 	 	
Operating Loss	(2,875	)	 	(2,767	)	 	(108	)	 	(8,570	)	(8,396	)	(174	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	30,147		 	31,185		 	(1,038	)	 	91,844		93,684		(1,840	)	
Other Income	402		 	461		 	(59	)	 	1,608		2,150		(542	)	
Interest Expense on Long-Term Debt	(27,177	)	 	(29,225	)	 	2,048		 	(82,412	)	(87,241	)	4,829		
Other Interest Expense	(1,489	)	 	(1,003	)	 	(486	)	 	(4,432	)	(2,901	)	(1,531	)	
 	 	 	 	 	 	 	 	 	 	
Loss Before Income Taxes	(992	)	 	(1,349	)	 	357		 	(1,962	)	(2,704	)	742		
Income Tax Expense (Benefit)	126		 	(1,116	)	 	1,242		 	15,711		(2,882	)	18,593		
Net Income (Loss)	$	(1,118	)	 	$	(233	)	 	$	(885	)	 	$	(17,673	)	$	178		$	(17,851	)	
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	(0.01	)	 	$	(0.01	)	 	$	—		 	$	(0.21	)	$	—		$	(0.21	)	

 	Three Months Ended	 	Nine Months Ended	
 	June 30,	 	June 30,	
INTERSEGMENT ELIMINATIONS	2018	 	2017	 	Variance	 	2018	2017	Variance	
Intersegment Revenues	$	(55,434	)	 	$	(53,429	)	 	$	(2,005	)	 	$	(161,916	)	$	(163,862	)	$	1,946		
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	(25,738	)	 	(24,724	)	 	(1,014	)	 	(77,098	)	(75,648	)	(1,450	)	
Operation and Maintenance	(29,696	)	 	(28,705	)	 	(991	)	 	(84,818	)	(88,214	)	3,396		
 	(55,434	)	 	(53,429	)	 	(2,005	)	 	(161,916	)	(163,862	)	1,946		
 	 	 	 	 	 	 	 	 	 	
Operating Income	—		 	—		 	—		 	—		—		—		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	(30,475	)	 	(31,576	)	 	1,101		 	(92,740	)	(93,899	)	1,159		
Interest Expense	30,475		 	31,576		 	(1,101	)	 	92,740		93,899		(1,159	)	
Net Income	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		

Page 19.

	

 	 	 	 	 	 	 	 	 	 	 	 	
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	
 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
 	 	 	 	 	 	 	 	 	 	 	 	
Capital Expenditures:	 	 	 	 	 	 	 	 	 	 	 	
Exploration and Production	$	110,591		(1)  	$	70,719		(3)  	$	39,872		 	$	269,876		(1)(2)  	$	168,545		(3)(4)  	$	101,331		
Pipeline and Storage	15,916		(1)  	16,750		(3)  	(834	)	 	53,356		(1)(2)  	53,528		(3)(4)  	(172	)	
Gathering	15,484		(1)  	9,214		(3)  	6,270		 	47,767		(1)(2)  	23,705		(3)(4)  	24,062		
Utility	19,737		(1)  	20,116		(3)  	(379	)	 	52,026		(1)(2)  	56,411		(3)(4)  	(4,385	)	
Energy Marketing	10		 	3		 	7		 	33		 	14		 	19		
Total Reportable Segments	161,738			116,802			44,936			423,058			302,203			120,855		
All Other	—		 	—		 	—		 	1		 	40		 	(39	)	
Corporate	7		 	22		 	(15	)	 	51		 	86		 	(35	)	
Eliminations	—		 	295		 	(295	)	 	(19,922	)	 	(482	)	 	(19,440	)	
Total Capital Expenditures	$	161,745		 	$	117,119		 	$	44,626		 	$	403,188		 	$	301,847		 	$	101,341		

		
(1)  	Capital expenditures for the quarter and nine months ended June 30, 2018, include accounts payable and accrued liabilities related to capital expenditures of $49.0 million, $10.9 million, $8.2 million, and $3.3 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, 2018, since they represent non-cash investing activities at that date.	

(2)  	Capital expenditures for the nine months ended June 30, 2018, exclude capital expenditures of $36.5 million, $25.1 million, $3.9 million and $6.7 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, 2017 and paid during the nine months ended June 30, 2018. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2017, 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, 2018.	

(3)  	Capital expenditures for the quarter and nine months ended June 30, 2017, include accounts payable and accrued liabilities related to capital expenditures of $25.0 million, $10.3 million, $5.2 million, and $7.0 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, 2017, since they represent non-cash investing activities at that date.	

(4)  	Capital expenditures for the nine months ended June 30, 2017, exclude capital expenditures of $25.2 million, $18.7 million, $5.3 million and $11.2 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, 2016 and paid during the nine months ended June 30, 2017. These amounts were excluded from the Consolidated Statement of Cash Flows at September 30, 2016, 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, 2017.	

	

DEGREE DAYS	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	Percent Colder	
 	 	 	 	 	 	 	(Warmer) Than:	
Three Months Ended June 30	Normal	 	2018	 	2017	 	  Normal (1)	 	Last Year (1)	
 	 	 	 	 	 	 	 	 	 	
Buffalo, NY	912	 	873	 	767	 	(4.3)	 	13.8		
Erie, PA	871	 	825	 	705	 	(5.3)	 	17.0		
 	 	 	 	 	 	 	 	 	 	
Nine Months Ended June 30	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Buffalo, NY	6,455	 	6,308	 	5,599	 	(2.3)	 	12.7		
Erie, PA	6,023	 	5,929	 	5,082	 	(1.6)	 	16.7		

(1)  	Percents compare actual 2018 degree days to normal degree days and actual 2018 degree days to actual 2017 degree days.	

Page 20.

	

 	 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	

 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gas Production/Prices:	 	 	 	 	 	 	 	 	 	 	 	 	
Production (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	40,444		 	37,904		 	2,540		 	117,261		 	118,517		 	(1,256	)	
West Coast	 	526		 	733		 	(207	)	 	1,896		 	2,246		 	(350	)	
Total Production	 	40,970		 	38,637		 	2,333		 	119,157		 	120,763		 	(1,606	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Prices (Per Mcf)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	$	2.30		 	$	2.58		 	$	(0.28	)	 	$	2.37		 	$	2.55		 	$	(0.18	)	
West Coast	 	4.41		 	3.39		 	1.02		 	4.62		 	4.07		 	0.55		
Weighted Average	 	2.32		 	2.59		 	(0.27	)	 	2.40		 	2.58		 	(0.18	)	
Weighted Average after Hedging	 	2.43		 	2.94		 	(0.51	)	 	2.55		 	2.96		 	(0.41	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Oil Production/Prices:	 	 	 	 	 	 	 	 	 	 	 	 	
Production (Thousands of Barrels)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	1		 	1		 	—		 	3		 	3		 	—		
West Coast	 	600		 	669		 	(69	)	 	1,934		 	2,062		 	(128	)	
Total Production	 	601		 	670		 	(69	)	 	1,937		 	2,065		 	(128	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Prices (Per Barrel)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	$	64.37		 	$	48.34		 	$	16.03		 	$	55.06		 	$	48.85		 	$	6.21		
West Coast	 	71.53		 	45.63		 	25.90		 	64.69		 	45.71		 	18.98		
Weighted Average	 	71.52		 	45.64		 	25.88		 	64.68		 	45.76		 	18.92		
Weighted Average after Hedging	 	58.74		 	53.02		 	5.72		 	58.96		 	53.58		 	5.38		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Production (Mmcfe)	 	44,576		 	42,657		 	1,919		 	130,779		 	133,153		 	(2,374	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Selected Operating Performance Statistics:	 	 	 	 	 	 	 	 	 	 	 	 	
General & Administrative Expense per Mcfe (1)	 	$	0.34		 	$	0.33		 	$	0.01		 	$	0.35		 	$	0.33		 	$	0.02		
Lease Operating and Transportation Expense per Mcfe (1)(2)	 	$	0.84		 	$	0.95		 	$	(0.11	)	 	$	0.93		 	$	0.92		 	$	0.01		
Depreciation, Depletion & Amortization per Mcfe (1)	 	$	0.70		 	$	0.64		 	$	0.06		 	$	0.69		 	$	0.64		 	$	0.05		

		
(1)  	Refer to page 15 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 $0.53 and $0.54 per Mcfe for the three months ended June 30, 2018 and June 30, 2017, respectively. Amounts include transportation expense of $0.54 per Mcfe for both the nine months ended June 30, 2018 and June 30, 2017.	

Page 21.

	
								
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	
 	
Hedging Summary for the Remaining Three Months of Fiscal 2018	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	114,000		BBL	 	$	63.55 / BBL	
NYMEX	 	420,000		BBL	 	$	52.67 / BBL	
Total	 	534,000		BBL	 	$	54.99 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	12,260,000		MMBTU	 	$	3.11 / MMBTU	
DAWN	 	1,800,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	21,037,880		MMBTU	 	$	2.30 / MMBTU	
Total	 	35,097,880		MMBTU	 	$	2.62 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2019	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	744,000		BBL	 	$	63.52 / BBL	
NYMEX	 	1,068,000		BBL	 	$	53.42 / BBL	
Total	 	1,812,000		BBL	 	$	57.57 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	80,980,000		MMBTU	 	$	2.94 / MMBTU	
DAWN	 	7,200,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	56,149,146		MMBTU	 	$	2.64 / MMBTU	
Total	 	144,329,146		MMBTU	 	$	2.83 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2020	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	732,000		BBL	 	$	61.48 / BBL	
NYMEX	 	324,000		BBL	 	$	50.52 / BBL	
Total	 	1,056,000		BBL	 	$	58.12 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	18,640,000		MMBTU	 	$	3.04 / MMBTU	
DAWN	 	7,200,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	41,833,352		MMBTU	 	$	2.30 / MMBTU	
Total	 	67,673,352		MMBTU	 	$	2.58 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2021	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	444,000		BBL	 	$	62.59 / BBL	
NYMEX	 	156,000		BBL	 	$	51.00 / BBL	
Total	 	600,000		BBL	 	$	59.58 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	4,840,000		MMBTU	 	$	3.01 / MMBTU	
   DAWN	 	600,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	41,608,372		MMBTU	 	$	2.22 / MMBTU	
Total	 	47,048,372		MMBTU	 	$	2.31 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2022	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	300,000		BBL	 	$	60.07 / BBL	
NYMEX	 	156,000		BBL	 	$	51.00 / BBL	
Total	 	456,000		BBL	 	$	56.97 / BBL	
 	 	 	 	 	 	 	
Fixed Price Physical Sales	 	40,589,265		MMBTU	 	$	2.23 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2023	 	Volume	 	 	Average Hedge Price	
 	 	 	 	 	 	 	
Fixed Price Physical Sales	 	37,079,884		MMBTU	 	$	2.26 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2024	 	Volume	 	 	Average Hedge Price	
 	 	 	 	 	 	 	
Fixed Price Physical Sales	 	20,966,205		MMBTU	 	$	2.25 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2025	 	Volume	 	 	Average Hedge Price	
 	 	 	 	 	 	 	
Fixed Price Physical Sales	 	2,293,200		MMBTU	 	$	2.18 / MMBTU	

	

Page 22.

	

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	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Firm Transportation - Affiliated	 	21,714		 	17,734		 	3,980		 	104,106		 	92,583		 	11,523		
Firm Transportation - Non-Affiliated	 	155,357		 	165,717		 	(10,360	)	 	479,346		 	495,015		 	(15,669	)	
Interruptible Transportation	 	1,107		 	1,060		 	47		 	3,153		 	5,078		 	(1,925	)	
 	 	178,178		 	184,511		 	(6,333	)	 	586,605		 	592,676		 	(6,071	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gathering Volume - (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Gathered Volume - Affiliated	 	51,392		 	48,838		 	2,554		 	145,928		 	150,005		 	(4,077	)	

Utility Throughput - (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Retail Sales:	 	 	 	 	 	 	 	 	 	 	 	 	
Residential Sales	 	10,052		 	8,105		 	1,947		 	56,468		 	48,817		 	7,651		
Commercial Sales	 	1,525		 	1,170		 	355		 	8,621		 	7,373		 	1,248		
Industrial Sales	 	128		 	48		 	80		 	559		 	282		 	277		
 	 	11,705		 	9,323		 	2,382		 	65,648		 	56,472		 	9,176		
Off-System Sales	 	—		 	—		 	—		 	141		 	1,295		 	(1,154	)	
Transportation	 	15,348		 	13,799		 	1,549		 	66,398		 	60,453		 	5,945		
 	 	27,053		 	23,122		 	3,931		 	132,187		 	118,220		 	13,967		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Energy Marketing Volume	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Natural Gas (MMcf)	 	8,322		 	7,722		 	600		 	36,413		 	32,969		 	3,444		

	

	

	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

Page 23.

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 and Adjusted EBITDA, which are non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide an alternative method for assessing the Company's ongoing operating results 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, 2018 and 2017:

																	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
(in thousands except per share amounts)	 	2018	 	2017	 	2018	 	2017	
Reported GAAP Earnings	 	$	63,025		 	$	59,714		 	$	353,527		 	$	237,906		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	—		 	—		 	(107,000	)	 	—		
Adjusted Operating Results	 	$	63,025		 	$	59,714		 	$	246,527		 	$	237,906		
 	 	 	 	 	 	 	 	 	
Reported GAAP Earnings per share	 	$	0.73		 	$	0.69		 	$	4.09		 	$	2.77		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	—		 	—		 	(1.24	)	 	—		
Adjusted Operating Results per share	 	$	0.73		 	$	0.69		 	$	2.85		 	$	2.77		

Management defines Adjusted EBITDA as reported GAAP earnings before the following items: interest expense, income taxes, depreciation, depletion and amortization, interest and other income, 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, 2018 and 2017:

																	
 	 	Three Months Ended	 	Nine Months Ended	
 	 	June 30,	 	June 30,	
 	 	2018	 	2017	 	2018	 	2017	
(in thousands)	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	63,025		 	$	59,714		 	$	353,527		 	$	237,906		
Depreciation, Depletion and Amortization	 	60,817		 	55,617		 	177,802		 	168,812		
Interest and Other Income	 	(2,631	)	 	(2,223	)	 	(8,399	)	 	(7,572	)	
Interest Expense	 	28,183		 	30,071		 	85,154		 	89,921		
Income Taxes	 	19,183		 	35,792		 	(23,825	)	 	145,195		
Adjusted EBITDA	 	$	168,577		 	$	178,971		 	$	584,259		 	$	634,262		
 	 	 	 	 	 	 	 	 	
Adjusted EBITDA by Segment	 	 	 	 	 	 	 	 	
Pipeline and Storage Adjusted EBITDA	 	$	46,428		 	$	44,163		 	$	147,342		 	$	141,279		
Gathering Adjusted EBITDA	 	23,008		 	23,901		 	67,877		 	73,174		
Total Midstream Businesses Adjusted EBITDA	 	69,436		 	68,064			215,219			214,453		
Exploration and Production Adjusted EBITDA	 	76,935		 	89,229		 	235,199		 	285,675		
Utility Adjusted EBITDA	 	24,366		 	25,322		 	137,364		 	139,232		
Energy Marketing Adjusted EBITDA	 	(419	)	 	(1,017	)	 	2,187		 	3,213		
Corporate and All Other Adjusted EBITDA	 	(1,741	)	 	(2,627	)	 	(5,710	)	 	(8,311	)	
Total Adjusted EBITDA	 	$	168,577		 	$	178,971			$	584,259			$	634,262		

Page 24.

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)	 	2018	 	2017	 	2018	 	2017	
Exploration and Production Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	27,817		 	$	30,123		 	$	161,052		 	$	98,972		
Depreciation, Depletion and Amortization	 	31,296		 	27,448		 	90,707		 	85,353		
Interest and Other Income	 	(486	)	 	(217	)	 	(1,087	)	 	(451	)	
Interest Expense	 	13,247		 	13,444		 	40,001		 	40,270		
Income Taxes	 	5,061		 	18,431		 	(55,474	)	 	61,531		
Adjusted EBITDA	 	$	76,935		 	$	89,229		 	$	235,199		 	$	285,675		
 	 	 	 	 	 	 	 	 	
Pipeline and Storage Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	20,723		 	$	16,031		 	$	81,909		 	$	54,656		
Depreciation, Depletion and Amortization	 	10,888		 	10,513		 	32,322		 	30,651		
Interest and Other Income	 	(1,077	)	 	(842	)	 	(3,184	)	 	(2,928	)	
Interest Expense	 	7,667		 	8,489		 	23,418		 	25,177		
Income Taxes	 	8,227		 	9,972		 	12,877		 	33,723		
Adjusted EBITDA	 	$	46,428		 	$	44,163		 	$	147,342		 	$	141,279		
 	 	 	 	 	 	 	 	 	
Gathering Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	11,566		 	$	10,107		 	$	68,736		 	$	31,373		
Depreciation, Depletion and Amortization	 	4,444		 	4,131		 	12,759		 	12,008		
Interest and Other Income	 	(160	)	 	(288	)	 	(976	)	 	(642	)	
Interest Expense	 	2,502		 	2,411		 	7,349		 	6,739		
Income Taxes	 	4,656		 	7,540		 	(19,991	)	 	23,696		
Adjusted EBITDA	 	$	23,008		 	$	23,901		 	$	67,877		 	$	73,174		
 	 	 	 	 	 	 	 	 	
Utility Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	3,930		 	$	4,348		 	$	58,283		 	$	51,103		
Depreciation, Depletion and Amortization	 	13,316		 	13,086		 	39,981		 	39,502		
Interest and Other Income	 	(498	)	 	(579	)	 	(1,620	)	 	(994	)	
Interest Expense	 	6,572		 	7,062		 	20,266		 	21,454		
Income Taxes	 	1,046		 	1,405		 	20,454		 	28,167		
Adjusted EBITDA	 	$	24,366		 	$	25,322		 	$	137,364		 	$	139,232		
 	 	 	 	 	 	 	 	 	
Energy Marketing Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	(190	)	 	$	(564	)	 	$	1,434		 	$	2,122		
Depreciation, Depletion and Amortization	 	69		 	69		 	207		 	210		
Interest and Other Income	 	(228	)	 	(168	)	 	(549	)	 	(475	)	
Interest Expense	 	4		 	13		 	16		 	38		
Income Taxes	 	(74	)	 	(367	)	 	1,079		 	1,318		
Adjusted EBITDA	 	$	(419	)	 	$	(1,017	)	 	$	2,187		 	$	3,213		
 	 	 	 	 	 	 	 	 	
Corporate and All Other	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	(821	)	 	$	(331	)	 	$	(17,887	)	 	$	(320	)	
Depreciation, Depletion and Amortization	 	804		 	370		 	1,826		 	1,088		
Interest and Other Income	 	(182	)	 	(129	)	 	(983	)	 	(2,082	)	
Interest Expense	 	(1,809	)	 	(1,348	)	 	(5,896	)	 	(3,757	)	
Income Taxes	 	267		 	(1,189	)	 	17,230		 	(3,240	)	
Adjusted EBITDA	 	$	(1,741	)	 	$	(2,627	)	 	$	(5,710	)	 	$	(8,311	)	

Page 25.

	

NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	

Quarter Ended June 30 (unaudited)	 	2018	 	2017	
 	 	 	 	 	
Operating Revenues	 	$	342,912,000		 	$	348,368,000		
 	 	 	 	 	
Net Income Available for Common Stock	 	$	63,025,000		 	$	59,714,000		
 	 	 	 	 	
Earnings Per Common Share	 	 	 	 	
Basic	 	$	0.73		 	$	0.70		
Diluted	 	$	0.73		 	$	0.69		
 	 	 	 	 	
Weighted Average Common Shares:	 	 	 	 	
Used in Basic Calculation	 	85,930,289		 	85,422,313		
Used in Diluted Calculation	 	86,501,194		 	86,064,464		
 	 	 	 	 	
Nine Months Ended June 30 (unaudited)	 	 	 	 	
 	 	 	 	 	
Operating Revenues	 	$	1,303,473,000		 	$	1,292,944,000		
 	 	 	 	 	
Net Income Available for Common Stock	 	$	353,527,000		 	$	237,906,000		
 	 	 	 	 	
Earnings Per Common Share:	 	 	 	 	
Basic	 	$	4.12		 	$	2.79		
Diluted	 	$	4.09		 	$	2.77		
 	 	 	 	 	
Weighted Average Common Shares:	 	 	 	 	
Used in Basic Calculation	 	85,789,279		 	85,315,154		
Used in Diluted Calculation	 	86,370,900		 	85,950,742		
 	 	 	 	 	
Twelve Months Ended June 30 (unaudited)	 	 	 	 	
 	 	 	 	 	
Operating Revenues	 	$	1,590,410,000		 	$	1,585,416,000		
 	 	 	 	 	
Net Income Available for Common Stock	 	$	399,103,000		 	$	275,459,000		
 	 	 	 	 	
Earnings Per Common Share	 	 	 	 	
Basic	 	$	4.66		 	$	3.23		
Diluted	 	$	4.62		 	$	3.21		
 	 	 	 	 	
Weighted Average Common Shares:	 	 	 	 	
Used in Basic Calculation	 	85,719,552		 	85,239,850		
Used in Diluted Calculation	 	86,333,307		 	85,881,424