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): November 1, 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 November 1, 2018, National Fuel Gas Company (the “Company”) issued a press release regarding its earnings for the quarter and fiscal year ended September 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 fiscal year ended September 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: November 2, 2018

Exhibit 99

	

 	 	6363 Main Street/Williamsville, NY 14221	
 	 	 	 	
Release Date:	Immediate November 1, 2018	Kenneth E. Webster
Investor Relations
716-857-7067	David P. Bauer
Treasurer
716-857-7318	

NATIONAL FUEL REPORTS FOURTH QUARTER
AND FULL YEAR FISCAL 2018 EARNINGS

WILLIAMSVILLE, N.Y.: National Fuel Gas Company (“National Fuel” or the “Company”) (NYSE:NFG) today announced consolidated results for the three months and fiscal year ended September 30, 2018.

FISCAL 2018 FOURTH QUARTER SUMMARY
		
•	GAAP earnings of $38.0 million, or $0.44 per share, compared to $45.6 million, or $0.53 per share, in the prior year	
		
•	Adjusted operating results of $42.2 million, or $0.49 per share (see reconciliation below)	
		
•	Consolidated Adjusted EBITDA of $143.8 million compared to $142.8 million in the prior year (non-GAAP reconciliation on page 25)	
		
•	Net production of 47.3 Bcfe, an increase of 17% from the prior year	
		
•	Average natural gas prices, after the impact of hedging, of $2.45 per Mcf, down $0.46 per Mcf from the prior year	
		
•	Average oil prices, after the impact of hedging, of $57.71 per Bbl, up $2.94 per Bbl from the prior year	
		
•	Gathering segment operating income of $19.2 million, up 12% on higher system throughput	

FISCAL 2018 HIGHLIGHTS
		
•	GAAP earnings of $391.5 million, or $4.53 per share, compared to $283.5 million, or $3.30 per share, in the prior year	
		
•	Adjusted operating results of $288.8 million, or $3.34 per share (see reconciliation below)	
		
•	Net cash provided by operating activities exceeded net cash used in investing activities by $84.7 million	
		
•	Net production of 178.1 Bcfe, an increase of 3% over fiscal 2017 and the highest output in Company history	
		
•	Proved reserves at September 30, 2018, of 2.5 Tcfe, an increase of 17% from September 30, 2017	
		
•	Increased shareholder dividend for the 48th consecutive year to an annualized distribution of $1.70 per share	

																	
 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Fiscal Year Ended	
 	 	September 30,	 	September 30,	
(in thousands except per share amounts)	 	2018	 	2017	 	2018	 	2017	
Reported GAAP Earnings	 	$	37,994		 	$	45,577		 	$	391,521		 	$	283,482		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	3,516		 	—		 	(103,484	)	 	—		
Premium paid on early redemption of debt (E&P)	 	962		 	—		 	962		 	—		
Tax impact on premium paid on early redemption of debt	 	(235	)	 	—		 	(235	)	 	—		
Adjusted Operating Results	 	$	42,237		 	$	45,577		 	$	288,764		 	$	283,482		
 	 	 	 	 	 	 	 	 	
Reported GAAP Earnings per share	 	$	0.44		 	$	0.53		 	$	4.53		 	$	3.30		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	0.04		 	—		 	(1.20	)	 	—		
Premium paid on early redemption of debt, net of tax	 	0.01		 	—		 	0.01		 	—		
Adjusted Operating Results per share	 	$	0.49		 	$	0.53		 	$	3.34		 	$	3.30		

Page 2.

MANAGEMENT COMMENTS

Ronald J. Tanski, President and Chief Executive Officer of National Fuel Gas Company, stated: “National Fuel concluded another successful fiscal year with strong results. Over the course of the year, we were busy setting Company records for Seneca’s Appalachian proved natural gas reserves and production, along with a record high level of throughput in our Gathering segment. We continued our investments dedicated to the modernization and safety of our interstate and utility pipeline systems, and maintained our strong record of customer service and reliability. Lower taxes from tax legislation enacted late last year helped to offset the decline in realized pricing on Seneca’s production, and the benefits of lower taxes in our Utility segment are being passed along to our utility customers. In what appears to be a ‘new normal’ period of lower natural gas prices, we nonetheless generated positive free cash flow for the third consecutive year - a testament to the quality of our assets and our focus on cost control and achieving operational efficiencies.

“Already a month into our 2019 fiscal year, we are well positioned to build on our success. Recently commissioned capacity on the Atlantic Sunrise project provides us with an avenue to further develop our acreage in Lycoming County, Pa., one of the most prolific positions in Appalachia. We will continue to transition to development of the Utica shale in the Western Development Area to enhance consolidated upstream and midstream returns and take advantage of improving pricing in the basin, all the while minimizing the environmental footprint of our operations as we utilize existing infrastructure. Combined with the stability of the rate-regulated businesses, we expect to responsibly grow the Company in a manner that strengthens our financial position and maximizes the value of our assets for our shareholders for years to come.”

FISCAL 2019 GUIDANCE

National Fuel is revising the preliminary guidance for fiscal 2019 that was announced in conjunction with the Company’s third quarter earnings release. The Company is now projecting that earnings will be within the range of $3.35 to $3.65 per share, or $3.50 per share at the midpoint of the range, which represents a $0.16 per share increase from fiscal 2018’s adjusted operating results. The $0.05 per share increase from the preliminary guidance is primarily due to higher expected price realizations on Seneca’s production and lower projected operating expenses at the Utility and Pipeline and Storage segments.

Seneca’s net production is expected to be in the range of 210 to 230 Bcfe, unchanged from the preliminary guidance, and a 24 percent increase over fiscal 2018 at the midpoint of the range. 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 guidance range, Gathering segment revenues are forecasted to increase by approximately $27 million, or 25 percent, to $135 million for fiscal 2019. Under current development plans in Appalachia, the Company expects to grow its production and gathering throughput at a 15 to 20 percent compound annual growth rate through fiscal 2022.

In addition to higher earnings expectations, the Company’s consolidated capital expenditures in fiscal 2019 are expected to be lower than disclosed in last quarter’s preliminary guidance due to reductions at the Exploration and Production and Pipeline and Storage segments. The new range is expected to be $725 million to $810 million, at the midpoint a $167 million increase from the Company’s fiscal 2018 capital expenditures. The primary driver of the year over year increase is Seneca’s development activity in Appalachia, where the Company plans to operate three drilling rigs for the entirety of the fiscal year. Despite the increase in Seneca’s spending, the capital budget for the Gathering segment is expected to be relatively flat year over year as Seneca shifts its Utica development into areas in the WDA where gathering infrastructure already exists and is currently being utilized to move Marcellus production.

Seneca currently has physical firm sales contracts in place with third parties that provide fixed pricing basis protection on 177 Bcf, or more than 85 percent, of its projected fiscal 2019 natural gas production. A majority of these sales, nearly 150 Bcf, are also matched with a financial hedge that locks in revenues on that production at a weighted average realized price of $2.43 per Mcf, net of firm transportation costs. With price certainty on a majority of its natural gas production, strong margins on California oil production, growing Gathering segment revenues, and stable earnings from the Company’s rate-regulated Pipeline and Storage and Utility segments, the Company expects that substantially all of its fiscal 2019 capital expenditures will 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 on page 8.

-more-
2

Page 3.

DISCUSSION OF RESULTS BY SEGMENT

The following discussion of the earnings of each operating segment is summarized in a tabular form on pages 9 through 12 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	 	Fiscal Year Ended	
 	September 30,	 	September 30,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	19,580		 	$	30,354		 	$	(10,774	)	 	$	180,632		 	$	129,326		 	$	51,306		
Net Income Per Share (Diluted)	$	0.23		 	$	0.35		 	$	(0.12	)	 	$	2.09		 	$	1.50		 	$	0.59		
Adjusted EBITDA	$	80,555		 	$	75,303		 	$	5,252		 	$	315,753		 	$	360,979		 	$	(45,226	)	

The Exploration and Production segment’s fourth quarter earnings declined $10.8 million, as the positive impacts of higher natural gas production, better realized crude oil prices, and lower lease operating and transportation (“LOE”) and other operating expenses were more than offset by the negative impacts of lower realized natural gas prices, higher depreciation, depletion and amortization (“DD&A”) expense and a higher effective income tax rate.

Seneca’s fourth quarter net production was 47.3 billion cubic feet equivalent (“Bcfe”), an increase of 7.0 Bcfe from the prior year. Natural gas production increased 7.4 billion cubic feet (“Bcf”), or 20 percent, due primarily to production from new Marcellus and Utica wells completed and connected to sales in the EDA-Lycoming and WDA-Clermont development areas as a result of increased drilling activity. Seneca's average realized natural gas price, after the impact of hedging and transportation costs, was $2.45 per thousand cubic feet ("Mcf"), a decrease of $0.46 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 for the fourth quarter decreased 77 thousand barrels ("Mbbl") in the fourth quarter due largely to the impact of the sale of Seneca’s Sespe properties in California in the third quarter of fiscal 2018. Sespe generated 67 Mbbl of production for the Company in the prior year’s fourth quarter. Seneca's average realized oil price, after the impact of hedging, was $57.71 per barrel ("Bbl"), an increase of $2.94 per Bbl over the prior year. 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.

LOE expense for the fourth quarter decreased $1.5 million due mostly to lower operating costs in California following the sale of Seneca’s Sespe properties combined with lower workover and steam fuel costs across its other California properties. 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 $0.88 per thousand cubic feet equivalent (“Mcfe”), a decrease of $0.19 per Mcfe from the prior year. Other operating expenses decreased $2.4 million due mainly to a one-time payment made in the prior year to reimburse a third-party pipeline operator for development costs.

DD&A expense for the fourth quarter increased $6.4 million due to the increase in production and a higher per unit depletion rate. The depletion rate for the quarter increased by $0.04 per Mcfe to $0.71 per Mcfe due mainly to a higher depletable fixed asset balance at September 30, 2018, as Seneca has increased development activity in Appalachia over the past year.

Income tax expense increased $9.0 million versus the prior year due largely to the combined impact of deferred state income tax adjustments recorded in the current and the prior year. The anticipated increase in Seneca’s development activity under a three-rig program in Appalachia resulted in a reapportionment of projected Pennsylvania state income taxes and increased the effective tax rate used to calculate the segment’s deferred state income tax liability at September 30, 2018. Coupled with a $7.9 million positive adjustment recorded in the prior year, which was related to the expected state income tax benefits of Seneca’s

-more-
3

Page 4.

capacity on the Atlantic Sunrise project, the current year $2.3 million adjustment negatively impacted income tax expense by $10.2 million versus the prior year. Additionally, the Company recorded an adjustment in the current quarter relating to the remeasurement of Seneca’s deferred income taxes due to the enactment of the 2017 Tax Reform Act. This $2.8 million adjustment reduced the initial estimated benefit recorded in the first quarter of fiscal 2018 and increased income tax expense for the quarter. These negative impacts to the segment’s effective tax rate were partially offset by a decrease in the federal statutory rate as a result of the 2017 Tax Reform Act.

Year End Proved Reserves

Seneca’s total proved natural gas and crude oil reserves at September 30, 2018 increased 369 Bcfe, or 17 percent, to 2,523 Bcfe from 2,154 Bcfe at September 30, 2017. In fiscal 2018, Seneca recorded 536 Bcfe of proved reserve extensions and discoveries, primarily from Utica and Marcellus locations in Appalachia, and 108 Bcfe of net positive revisions due largely to improvements in well performance. Seneca sold 57 Bcfe of Marcellus proved reserves in connection with the conveyance of the last joint development pad in the WDA, and another 39 Bcfe of proved reserves (73 percent oil) with the sale of the Sespe properties in California. Seneca’s total proved undeveloped reserves (“PUDs”) at the end of fiscal 2018 were 757 Bcfe, only 30 percent of total proved reserves.

Adjusting for sales, Seneca replaced 361 percent of its production in fiscal 2018, up from the 225 percent reserve replacement achieved in fiscal 2017. The year over year improvement was due mainly to the success of Seneca’s Utica Shale appraisal program in the WDA and increased development activity in the EDA-Lycoming area. Seneca’s three-year average finding and development cost at the end of fiscal 2018 was $0.74 per Mcfe, down $0.24 per Mcfe from the three-year average of $0.98 per Mcfe at the end of fiscal 2017.

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	 	Fiscal Year Ended	
 	September 30,	 	September 30,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	15,337		 	$	13,791		 	$	1,546		 	$	97,246		 	$	68,446		 	$	28,800		
Net Income Per Share (Diluted)	$	0.18		 	$	0.16		 	$	0.02		 	$	1.13		 	$	0.80		 	$	0.33		
Adjusted EBITDA	$	38,052		 	$	39,049		 	$	(997	)	 	$	185,393		 	$	180,328		 	$	5,065		

The Pipeline and Storage segment’s fourth quarter earnings increased $1.5 million due primarily to higher operating revenues, and a lower effective income tax rate, offset partially by higher operating expenses. Operating revenues increased $2.6 million, or 4 percent, versus the prior year due to new demand charges for transportation service on 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.

Operation and Maintenance (“O&M”) expense increased $2.8 million over the prior year due primarily to an increase in compressor and facility maintenance activity during the quarter, offset partially by lower pension and other post-retirement benefit expenses. The combined $1.1 million increase in DD&A expense and property, franchise and other taxes was due to projects and new facilities placed in-service over the past year. Income tax expense decreased $2.3 million due primarily to the 2017 Tax Reform Act, which reduced the Company’s federal statutory corporate tax rate.

-more-
4

Page 5.

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 currently delivers Seneca’s gross Appalachian production to the interstate pipeline system.

																								
 	Three Months Ended	 	Fiscal Year Ended	
 	September 30,	 	September 30,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income	$	14,783		 	$	9,003		 	$	5,780		 	$	83,519		 	$	40,377		 	$	43,142		
Net Income Per Share (Diluted)	$	0.17		 	$	0.10		 	$	0.07		 	$	0.97		 	$	0.47		 	$	0.50		
Adjusted EBITDA	$	23,732		 	$	21,206		 	$	2,526		 	$	91,609		 	$	94,380		 	$	(2,771	)	

The $5.8 million increase in the Gathering segment’s fourth quarter earnings was due mainly to higher revenues and a lower effective income tax rate, offset partially by an increase in operating expenses. Operating revenues increased $3.5 million, or 14 percent, due primarily to a 7.5 Bcf increase in throughput from Seneca’s Appalachian natural gas production. The Trout Run gathering system saw a 5.0 Bcf increase in throughput after Seneca resumed development activities in Lycoming County, Pa., in late fiscal 2017 and avoided price-related curtailments for much of fiscal 2018. Throughput on the Covington and Clermont gathering systems increased 2.2 Bcf and 1.1 Bcf, respectively.

O&M expense increased $0.8 million due largely to the operation of new compression facilities along the Covington gathering system, which were acquired from affiliate Seneca in March 2018, and an increase in facilities and maintenance activity at the Trout Run gathering system. 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 lower state income taxes resulting from tax planning and restructuring activities that were implemented during the quarter.

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	 	Fiscal Year Ended	
 	September 30,	 	September 30,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income / (Loss)	$	(7,067	)	 	$	(4,168	)	 	$	(2,899	)	 	$	51,217		 	$	46,935		 	$	4,282		
Net Income / (Loss) Per Share (Diluted)	$	(0.08	)	 	$	(0.05	)	 	$	(0.03	)	 	$	0.59		 	$	0.55		 	$	0.04		
Adjusted EBITDA	$	6,792		 	$	11,846		 	$	(5,054	)	 	$	144,155		 	$	151,078		 	$	(6,923	)	

The $2.9 million increase in the Utility segment’s fourth quarter net loss was due primarily to lower margin (operating revenues less purchased gas costs) and higher O&M expense, offset partially by lower property taxes and interest expense. The decrease in the Utility’s fourth quarter margin was largely due to a change in the allocation of a cost tracking mechanism for the low income customer program in the Company’s New York service territory. O&M expense increased $2.1 million due primarily to higher payroll costs and bad debt expense, offset partially by lower pension and other post-retirement benefit expenses.

-more-
5

Page 6.

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	 	Fiscal Year Ended	
 	September 30,	 	September 30,	
(in thousands except per share amounts)	2018	 	2017	 	Variance	 	2018	 	2017	 	Variance	
Net Income / (Loss)	$	(1,061	)	 	$	(614	)	 	$	(447	)	 	$	373		 	$	1,509		 	$	(1,136	)	
Net Income / (Loss) Per Share (Diluted)	$	(0.01	)	 	$	(0.01	)	 	$	—		 	$	—		 	$	0.02		 	$	(0.02	)	
Adjusted EBITDA	$	(1,652	)	 	$	(1,134	)	 	$	(518	)	 	$	536		 	$	2,080		 	$	(1,544	)	

The Energy Marketing segment’s fourth quarter net loss of $1.1 million increased $0.4 million over the prior year due largely to lower margins (operating revenues less purchased gas costs). NFR’s customer margins were negatively impacted by stronger natural gas prices at local purchase points relative to NYMEX-based customer sales contracts.

Corporate and All Other

For the fourth quarter of fiscal 2018, the Corporate and All Other category had a net loss of $3.6 million, a $0.8 million increase over the $2.8 million net loss in the prior year.

EARNINGS TELECONFERENCE

The Company will host a conference call on Friday, November 2, 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 “5899309.” 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 “5899309.” Both the webcast and a telephonic replay will be available until the close of business on Friday, November 9, 2018.

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

-more-
6

Page 7.

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
AND SUBSIDIARIES

GUIDANCE SUMMARY

As discussed on page 2, the Company is revising its earnings, capital expenditure and operational guidance for fiscal 2019. Additional details on the Company's forecast assumptions and business segment guidance for fiscal 2019 are outlined in the table below.

The revised fiscal 2019 earnings guidance does not include any impact to the remeasurement of deferred income taxes resulting from the 2017 Tax Reform Act. While it is possible that the Company will record additional adjustments to its deferred income taxes as a result of the 2017 Tax Reform Act during the first three months of fiscal 2019, 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 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.

	
				
 	Updated FY 2019 Guidance	 	Previous FY 2019 Guidance	
Consolidated Earnings per Share	$3.35 to $3.65	 	$3.30 to $3.60	
Consolidated Effective Tax Rate	~25%	 	~25%	
 	 	 	 	
Capital Expenditures  (Millions)	 	 	 	
    Exploration and Production	$460 - $495	 	$460 - $500	
    Pipeline and Storage	$120 - $150	 	$140 - $180	
    Gathering	$55 - $65	 	$55 - $65	
    Utility	$90 - $100	 	$90 - $100	
    Consolidated Capital Expenditures	$725 - $810	 	$745 - $845	
 	 	 	 	
Exploration & Production Segment Guidance	 	 	 	
 	 	 	 	
    Commodity Price Assumptions	 	 	 	
    NYMEX natural gas price (winter | summer)	$3.00 /MMBtu | $2.65 /MMBtu	 	$2.75 /MMBtu	
    Appalachian basin spot price (winter | summer)	$2.50 /MMBtu | $2.00 /MMBtu	 	$2.40 /MMBtu | $2.00 /MMBtu	
    NYMEX (WTI) crude oil price	$70.00 /Bbl	 	$65.00 /Bbl	
    California oil price (% of WTI)	100%	 	100%	
 	 	 	 	
    Production (Bcfe)	 	 	 	
    East Division - Appalachia	194 to 214	 	193 to 213	
    West Division - California	~ 16	 	~ 17	
    Total Production	210 to 230	 	210 to 230	
 	 	 	 	
    E&P Operating Costs ($/Mcfe)	 	 	 	
    LOE	$0.85 - $0.90	 	$0.85 - $0.90	
    G&A	$0.25 - $0.35	 	$0.25 - $0.35	
    DD&A	$0.70 - $0.75	 	$0.70 - $0.75	
 	 	 	 	
Other Business Segment Guidance (Millions)	 	 	 	
    Gathering Segment Revenues	$130 - $140	 	$130 - $140	
    Pipeline and Storage Segment Revenues	~$285	 	~$285	

Page 9.

	

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

 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
(Thousands of Dollars)	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fourth quarter 2017 GAAP earnings	$	30,354		 	$	13,791		 	$	9,003		 	$	(4,168	)	 	$	(614	)	 	$	(2,789	)	 	$	45,577		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers**	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	1,143		 	 	 	 	 	 	 	 	 	 	 	1,143		
Higher (lower) natural gas prices	(13,299	)	 	 	 	 	 	 	 	 	 	 	 	(13,299	)	
Higher (lower) natural gas production	14,058		 	 	 	 	 	 	 	 	 	 	 	14,058		
Higher (lower) crude oil production	(2,752	)	 	 	 	 	 	 	 	 	 	 	 	(2,752	)	
Derivative mark to market adjustments	451		 	 	 	 	 	 	 	 	 	 	 	451		
Lower (higher) lease operating and transportation expenses	954		 	 	 	 	 	 	 	 	 	 	 	954		
Lower (higher) depreciation / depletion	(4,130	)	 	(387	)	 	(260	)	 	 	 	 	 	 	 	(4,777	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation and storage revenues	 	 	1,487		 	 	 	 	 	 	 	 	 	1,487		
Higher (lower) gathering and processing revenues	 	 	 	 	2,267		 	 	 	 	 	 	 	2,267		
Lower (higher) other operating expenses	1,980		 	(1,841	)	 	(528	)	 	(1,334	)	 	 	 	 	 	(1,723	)	
Lower (higher) property, franchise and other taxes	340		 	(328	)	 	 	 	 	 	 	 	 	 	12		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Regulatory true-up adjustments	 	 	 	 	 	 	(1,746	)	 	 	 	 	 	(1,746	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) margins	 	 	 	 	 	 	 	 	(379	)	 	 	 	(379	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) interest expense	70		 	374		 	 	 	358		 	 	 	 	 	802		
Loss on reacquired debt	(626	)	 	 	 	 	 	 	 	 	 	 	 	(626	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	112		 	(966	)	 	610		 	(92	)	 	(38	)	 	1,842		 	1,468		
Deferred state income tax adjustment	(10,193	)	 	 	 	 	 	 	 	 	 	 	 	(10,193	)	
Impact of tax restructuring	 	 	 	 	2,346		 	 	 	 	 	 	 	2,346		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate change on current period earnings	3,297		 	2,998		 	1,474		 	320		 	(105	)	 	(1,344	)	 	6,640		
Refund provision on tax rate change	 	 	 	 	 	 	(559	)	 	 	 	 	 	(559	)	
Remeasurement of deferred income taxes under
2017 Tax Reform	(2,804	)	 	 	 	(12	)	 	 	 	(39	)	 	(661	)	 	(3,516	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	625		 	209		 	(117	)	 	154		 	114		 	(626	)	 	359		
Fourth quarter 2018 GAAP earnings	$	19,580		 	$	15,337		 	$	14,783		 	$	(7,067	)	 	$	(1,061	)	 	$	(3,578	)	 	$	37,994		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	
** 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 PER SHARE	
QUARTER ENDED SEPTEMBER 30, 2018	
(Unaudited)	

 	 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
 	 	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fourth quarter 2017 GAAP earnings	 	$	0.35		 	$	0.16		 	$	0.10		 	$	(0.05	)	 	$	(0.01	)	 	$	(0.02	)	 	$	0.53		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers**	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	 	0.01		 	 	 	 	 	 	 	 	 	 	 	0.01		
Higher (lower) natural gas prices	 	(0.15	)	 	 	 	 	 	 	 	 	 	 	 	(0.15	)	
Higher (lower) natural gas production	 	0.16		 	 	 	 	 	 	 	 	 	 	 	0.16		
Higher (lower) crude oil production	 	(0.03	)	 	 	 	 	 	 	 	 	 	 	 	(0.03	)	
Derivative mark to market adjustments	 	0.01		 	 	 	 	 	 	 	 	 	 	 	0.01		
Lower (higher) lease operating and transportation expenses	 	0.01		 	 	 	 	 	 	 	 	 	 	 	0.01		
Lower (higher) depreciation / depletion	 	(0.05	)	 	—		 	—		 	 	 	 	 	 	 	(0.05	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation and storage revenues	 	 	 	0.02		 	 	 	 	 	 	 	 	 	0.02		
Higher (lower) gathering and processing revenues	 	 	 	 	 	0.03		 	 	 	 	 	 	 	0.03		
Lower (higher) other operating expenses	 	0.02		 	(0.02	)	 	(0.01	)	 	(0.02	)	 	 	 	 	 	(0.03	)	
Lower (higher) property, franchise and other taxes	 	—		 	—		 	 	 	 	 	 	 	 	 	—		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Regulatory true-up adjustments	 	 	 	 	 	 	 	(0.02	)	 	 	 	 	 	(0.02	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) margins	 	 	 	 	 	 	 	 	 	—		 	 	 	—		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) interest expense	 	—		 	—		 	 	 	—		 	 	 	 	 	—		
Loss on reacquired debt	 	(0.01	)	 	 	 	 	 	 	 	 	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	 	—			(0.01	)		0.01			—			—			0.02			0.02		
Deferred state income tax adjustment	 	(0.12	)	 	 	 	 	 	 	 	 	 	 	 	(0.12	)	
Impact of tax restructuring	 	 	 	 	 	0.03		 	 	 	 	 	 	 	0.03		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate change on current period earnings	 	0.04		 	0.03		 	0.02		 	—		 	—		 	(0.02	)	 	0.07		
Refund provision on tax rate change	 	 	 	 	 	 	 	(0.01	)	 	 	 	 	 	(0.01	)	
Remeasurement of deferred income taxes under
2017 Tax Reform	 	(0.03	)	 	 	 	—		 	 	 	—		 	(0.01	)	 	(0.04	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	 	0.02		 	—		 	(0.01	)	 	0.02		 	—		 	(0.02	)	 	0.01		
Fourth quarter 2018 GAAP earnings	 	$	0.23		 	$	0.18		 	$	0.17		 	$	(0.08	)	 	$	(0.01	)	 	$	(0.05	)	 	$	0.44		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
** 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	
TWELVE MONTHS ENDED SEPTEMBER 30, 2018	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
(Thousands of Dollars)	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fiscal 2017 GAAP earnings	$	129,326		 	$	68,446		 	$	40,377		 	$	46,935		 	$	1,509		 	$	(3,111	)	 	$	283,482		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers**	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	7,892		 	 	 	 	 	 	 	 	 	 	 	7,892		
Higher (lower) natural gas prices	(45,115	)	 	 	 	 	 	 	 	 	 	 	 	(45,115	)	
Higher (lower) natural gas production	11,146		 	 	 	 	 	 	 	 	 	 	 	11,146		
Higher (lower) crude oil production	(7,181	)	 	 	 	 	 	 	 	 	 	 	 	(7,181	)	
Lower (higher) lease operating and transportation expenses	2,126		 	 	 	 	 	 	 	 	 	 	 	2,126		
Lower (higher) depreciation / depletion	(7,610	)	 	(1,474	)	 	(748	)	 	 	 	 	 	(631	)	 	(10,463	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation and storage revenues	 	 	3,612		 	 	 	 	 	 	 	 	 	3,612		
Lower (higher) other operating expenses	345		 	442		 	(1,827	)	 	(1,839	)	 	275		 	 	 	(2,604	)	
Lower (higher) property, franchise and other taxes	667		 	(765	)	 	 	 	729		 	 	 	 	 	631		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of new rates	 	 	 	 	 	 	2,789		 	 	 	 	 	2,789		
Colder weather	 	 	 	 	 	 	5,199		 	 	 	 	 	5,199		
Regulatory true-up adjustments	 	 	 	 	 	 	(3,903	)	 	 	 	 	 	(3,903	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) margins	 	 	 	 	 	 	 	 	(1,281	)	 	1,578		 	297		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Lower (higher) interest expense	244		 	1,518		 	 	 	1,130		 	 	 	 	 	2,892		
Loss on reacquired debt	(626	)	 	 	 	 	 	 	 	 	 	 	 	(626	)	
 	 	 	 	 	 	 	 	 	 	 	 	 		
Lower (higher) income tax expense / effective tax rate	2,434		 	(703	)	 	1,015		 	(34	)	 	41		 	(502	)	 	2,251		
Deferred state income tax adjustment	(8,065	)	 	 	 	 	 	 	 	 	 	 	 	(8,065	)	
Impact of tax restructuring	 	 	 	 	2,346		 	 	 	 	 	 	 	2,346		
 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 	
Impact of tax rate change on current period earnings	20,117		 	11,724		 	8,042		 	7,752		 	128		 	(703	)	 	47,060		
Refund provision on tax rate change	 	 	 	 	 	 	(8,240	)	 	 	 	 	 	(8,240	)	
Remeasurement of deferred income taxes under
2017 Tax Reform	73,706		 	14,100		 	34,488		 	 	 	(398	)	 	(18,412	)	 	103,484		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	1,226		 	346		 	(174	)	 	699		 	99		 	315		 	2,511		
Fiscal 2018 GAAP earnings	$	180,632			$	97,246			$	83,519			$	51,217			$	373			$	(21,466	)	 	$	391,521		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	
** 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	
RECONCILIATION OF CURRENT AND PRIOR YEAR GAAP EARNINGS PER SHARE	
TWELVE MONTHS ENDED SEPTEMBER 30, 2018	
(Unaudited)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Upstream	 	Midstream Businesses	 	Downstream Businesses	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Exploration &	 	Pipeline &	 	 	 	 	 	Energy	 	Corporate /	 	 	
 	 	Production	 	Storage	 	Gathering	 	Utility	 	Marketing	 	All Other	 	Consolidated*	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fiscal 2017 GAAP earnings	 	$	1.50		 	$	0.80		 	$	0.47		 	$	0.55		 	$	0.02		 	$	(0.04	)	 	$	3.30		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings drivers**	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Higher (lower) crude oil prices	 	0.09		 	 	 	 	 	 	 	 	 	 	 	0.09		
Higher (lower) natural gas prices	 	(0.52	)	 	 	 	 	 	 	 	 	 	 	 	(0.52	)	
Higher (lower) natural gas production	 	0.13		 	 	 	 	 	 	 	 	 	 	 	0.13		
Higher (lower) crude oil production	 	(0.08	)	 	 	 	 	 	 	 	 	 	 	 	(0.08	)	
Lower (higher) lease operating and transportation expenses	 	0.02		 	 	 	 	 	 	 	 	 	 	 	0.02		
Lower (higher) depreciation / depletion	 	(0.09	)	 	(0.02	)	 	(0.01	)	 	 	 	 	 	(0.01	)	 	(0.13	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) transportation and storage revenues	 	 	 	0.04		 	 	 	 	 	 	 	 	 	0.04		
Lower (higher) other operating expenses	 	—		 	0.01		 	(0.02	)	 	(0.02	)	 	—		 	 	 	(0.03	)	
Lower (higher) property, franchise and other taxes	 	0.01		 	(0.01	)	 	 	 	0.01		 	 	 	 	 	0.01		
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of new rates	 	 	 	 	 	 	 	0.03		 	 	 	 	 	0.03		
Colder weather	 	 	 	 	 	 	 	0.06		 	 	 	 	 	0.06		
Regulatory true-up adjustments	 	 	 	 	 	 	 	(0.05	)	 	 	 	 	 	(0.05	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		
Higher (lower) margins	 	 	 	 	 	 	 	 	 	(0.01	)	 	0.02		 	0.01		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) interest expense	 	—		 	0.02		 	 	 	0.01		 	 	 	 	 	0.03		
Loss on reacquired debt	 	(0.01	)	 	 	 	 	 	 	 	 	 	 	 	(0.01	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lower (higher) income tax expense / effective tax rate	 	0.03		 	(0.01	)	 	0.01		 	—		 	—		 	(0.01	)	 	0.02		
Deferred state income tax adjustment	 	(0.09	)	 	 	 	 	 	 	 	 	 	 	 	(0.09	)	
Impact of tax restructuring	 	 	 	 	 	0.03		 	 	 	 	 	 	 	0.03		
 	 		 		 		 		 		 		 		
Impact of 2017 Tax Reform Act	 	 	 	 	 	 	 	 	 	 	 	 	 		
Impact of tax rate change on current period earnings	 	0.23		 	0.14		 	0.09		 	0.09		 	—		 	(0.01	)	 	0.54		
Refund provision on tax rate change	 	 	 	 	 	 	 	(0.10	)	 	 	 	 	 	(0.10	)	
Remeasurement of deferred income taxes under
2017 Tax Reform	 	0.85		 	0.16		 	0.40		 	 	 	—		 	(0.21	)	 	1.20		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
All other / rounding	 	0.02		 	—		 	—		 	0.01		 	(0.01	)	 	0.01		 	0.03		
Fiscal 2018 GAAP earnings	 	$	2.09		 	$	1.13		 	$	0.97		 	$	0.59		 	$	—		 	$	(0.25	)	 	$	4.53		
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
* Amounts do not reflect intercompany eliminations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
** 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 13.

	

 	 	 	 	 				 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 				 	
(Thousands of Dollars, except per share amounts)	 	 	 	 				 	
 	Three Months Ended	 	Twelve Months Ended	 	
 	September 30,	 	September 30,	 	
 	(Unaudited)	 	(Unaudited)	 	
SUMMARY OF OPERATIONS	2018	 	2017	 	2018		2017	 	
Operating Revenues:		 	 	 	 		 	 	
Utility and Energy Marketing Revenues	$	93,240		 	$	92,456		 	$	812,474		 	$	755,485		 	
Exploration and Production and Other Revenues	143,998		 	144,049		 	569,808		 	617,666		 	
Pipeline and Storage and Gathering Revenues	51,958		 	50,432		 	210,386		 	206,730		 	
 	289,196			286,937		 	1,592,668			1,579,881		 	
Operating Expenses:	 	 	 	 						 	
Purchased Gas	14,968		 	10,905		 	337,822			275,254		 	
Operation and Maintenance:			 			 						 	
      Utility and Energy Marketing	42,383		 	40,497		 	200,780		 	199,293		 	
      Exploration and Production and Other	35,114		 	42,946		 	141,381		 	145,099		 	
      Pipeline and Storage and Gathering	32,796		 	29,184		 	100,245		 	98,200		 	
Property, Franchise and Other Taxes	20,148		 	20,627		 	84,393			84,995		 	
Depreciation, Depletion and Amortization	63,159		 	55,383		 	240,961			224,195		 	
 	208,568		 	199,542		 	1,105,582			1,027,036		 	
 	 	 	 	 						 	
Operating Income	80,628		 	87,395		 	487,086			552,845		 	
 	 	 	 	 						 	
Other Income (Expense):	 	 	 	 						 	
Interest Income	1,859		 	1,269		 	6,766			4,113		 	
Other Income	1,206		 	2,316		 	4,697			7,043		 	
Interest Expense on Long-Term Debt	(28,534	)	 	(29,230	)	 	(110,946	)		(116,471	)	 	
Other Interest Expense	(834	)	 	(686	)	 	(3,576	)		(3,366	)	 	
 	 	 	 	 						 	
Income Before Income Taxes	54,325		 	61,064		 	384,027			444,164		 	
 	 	 	 	 						 	
Income Tax Expense (Benefit)	16,331		 	15,487		 	(7,494	)		160,682		 	
 	 	 	 	 						 	
Net Income Available for Common Stock	$	37,994		 	$	45,577		 	$	391,521			$	283,482		 	
 	 	 	 	 				 	
Earnings Per Common Share	 	 	 	 				 	
Basic	$	0.44		 	$	0.53		 	$	4.56			$	3.32		 	
Diluted	$	0.44		 	$	0.53		 	$	4.53			$	3.30		 	
 	 	 	 	 				 	
Weighted Average Common Shares:	 	 	 	 				 	
Used in Basic Calculation	85,953,204		 	85,512,637		 	85,830,597			85,364,929		 	
Used in Diluted Calculation	86,650,677		 	86,238,287		 	86,439,698			86,021,386		 	

Page 14.

	
								
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
CONSOLIDATED BALANCE SHEETS	
(Unaudited)	
 	 	
 	September 30,	 	September 30,	
(Thousands of Dollars)	2018	 	2017	
 	 	 	 	
ASSETS	 	 	 	
Property, Plant and Equipment		$10,439,839		 		$9,945,560		
Less - Accumulated Depreciation, Depletion and Amortization	5,462,696		 	5,271,486		
Net Property, Plant and Equipment	4,977,143		 	4,674,074		
 	 	 	 	
Current Assets:	 	 	 	
Cash and Temporary Cash Investments	229,606		 	555,530		
Hedging Collateral Deposits	3,441		 	1,741		
Receivables - Net	141,498		 	112,383		
Unbilled Revenue	24,182		 	22,883		
Gas Stored Underground	37,813		 	35,689		
Materials and Supplies - at average cost	35,823		 	33,926		
Unrecovered Purchased Gas Costs	4,204		 	4,623		
Other Current Assets	68,024		 	51,505		
Total Current Assets	544,591		 	818,280		
 	 	 	 	
Other Assets:	 	 	 	
Recoverable Future Taxes	115,460		 	181,363		
Unamortized Debt Expense	15,975		 	1,159		
Other Regulatory Assets	112,918		 	174,433		
Deferred Charges	40,025		 	30,047		
Other Investments	132,545		 	125,265		
Goodwill	5,476		 	5,476		
Prepaid Post-Retirement Benefit Costs	82,733		 	56,370		
Fair Value of Derivative Financial Instruments	9,518		 	36,111		
Other	102		 	742		
Total Other Assets	514,752		 	610,966		
Total Assets		$6,036,486		 		$6,103,320		
 	 	 	 	
CAPITALIZATION AND LIABILITIES	 	 	 	
Capitalization:	 	 	 	
Comprehensive Shareholders' Equity	 	 	 	
Common Stock, $1 Par Value Authorized - 200,000,000 Shares; Issued and	 	 	 	
Outstanding - 85,956,814 Shares and 85,543,125 Shares, Respectively		$85,957		 		$85,543		
Paid in Capital	820,223		 	796,646		
Earnings Reinvested in the Business	1,098,900		 	851,669		
Accumulated Other Comprehensive Loss	(67,750	)	 	(30,123	)	
Total Comprehensive Shareholders' Equity	1,937,330		 	1,703,735		
Long-Term Debt, Net of Current Portion and Unamortized Discount and Debt Issuance Costs	2,131,365		 	2,083,681		
Total Capitalization	4,068,695		 	3,787,416		
 	 	 	 	
Current and Accrued Liabilities:	 	 	 	
Notes Payable to Banks and Commercial Paper	—		 	—		
Current Portion of Long-Term Debt	—		 	300,000		
Accounts Payable	160,031		 	126,443		
Amounts Payable to Customers	3,394		 	—		
Dividends Payable	36,532		 	35,500		
Interest Payable on Long-Term Debt	19,062		 	35,031		
Customer Advances	13,609		 	15,701		
Customer Security Deposits	25,703		 	20,372		
Other Accruals and Current Liabilities	132,693		 	111,889		
Fair Value of Derivative Financial Instruments	49,036		 	1,103		
Total Current and Accrued Liabilities	440,060		 	646,039		
 	 	 	 	
Deferred Credits:	 	 	 	
Deferred Income Taxes	512,686		 	891,287		
Taxes Refundable to Customers	370,628		 	95,739		
Cost of Removal Regulatory Liability	212,311		 	204,630		
Other Regulatory Liabilities	146,743		 	113,716		
Pension and Other Post-Retirement Liabilities	66,103		 	149,079		
Asset Retirement Obligations	108,235		 	106,395		
Other Deferred Credits	111,025		 	109,019		
Total Deferred Credits	1,527,731		 	1,669,865		
Commitments and Contingencies	—		 	—		
Total Capitalization and Liabilities		$6,036,486		 		$6,103,320		

Page 15.

	

 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
CONSOLIDATED STATEMENTS OF CASH FLOWS	
(Unaudited)	
 	 	Twelve Months Ended	
 	 	September 30,	
(Thousands of Dollars)	 	2018	 	2017	
 	 	 	 	 	
Operating Activities:	 	 	 	 	
Net Income Available for Common Stock	 	$	391,521		 	$	283,482		
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:	 	 	 	 	
Depreciation, Depletion and Amortization	 	240,961		 	224,195		
Deferred Income Taxes	 	(18,153	)	 	117,975		
Stock-Based Compensation	 	15,762		 	12,262		
Other	 	16,133		 	16,476		
Change in:	 	 	 	 	
Hedging Collateral Deposits	 	(1,700	)	 	(257	)	
Receivables and Unbilled Revenue	 	(30,882	)	 	(3,380	)	
Gas Stored Underground and Materials and Supplies	 	(4,021	)	 	(1,417	)	
Unrecovered Purchased Gas Costs	 	419		 	(2,183	)	
Other Current Assets	 	(16,519	)	 	7,849		
Accounts Payable	 	17,962		 	17,192		
Amounts Payable to Customers	 	3,394		 	(19,537	)	
Customer Advances	 	(2,092	)	 	939		
Customer Security Deposits	 	5,331		 	4,353		
Other Accruals and Current Liabilities	 	3,865		 	27,004		
Other Assets	 	(9,556	)	 	(2,885	)	
Other Liabilities	 	1,178		 	2,183		
Net Cash Provided by Operating Activities	 	$	613,603		 	$	684,251		
 	 	 	 	 	
Investing Activities:	 	 	 	 	
Capital Expenditures	 	$	(584,004	)	 	$	(450,335	)	
Net Proceeds from Sale of Oil and Gas Producing Properties	 	55,506		 	26,554		
Other	 	(389	)	 	1,216		
Net Cash Used in Investing Activities	 	$	(528,887	)	 	$	(422,565	)	
 	 	 	 	 	
Financing Activities:	 	 	 	 	
Reduction of Long-Term Debt	 	$	(566,512	)	 	$	—		
Dividends Paid on Common Stock	 	(143,258	)	 	(139,063	)	
Net Proceeds From Issuance of Long-Term Debt	 	295,020		 	295,151		
Net Proceeds From Issuance of Common Stock	 	4,110		 	7,784		
Net Cash (Used in) Provided by Financing Activities	 	$	(410,640	)	 	$	163,872		
 	 	 	 	 	
Net Increase (Decrease) in Cash and Temporary Cash Investments	 	(325,924	)	 	425,558		
Cash and Temporary Cash Investments at Beginning of Period	 	555,530		 	129,972		
Cash and Temporary Cash Investments at September 30	 	$	229,606		 	$	555,530		

Page 16.

	

 	 	 	 	 	 	 				
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 				
SEGMENT OPERATING RESULTS AND STATISTICS	
(UNAUDITED)	
 	 	 	 	 	 	 				
UPSTREAM BUSINESS	

 	Three Months Ended	 	Twelve Months Ended	
(Thousands of Dollars, except per share amounts)	September 30,	 	September 30,	
EXPLORATION AND PRODUCTION SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Total Operating Revenues	$	143,167		 	$	142,952		 	$	215		 	$	564,547		$	614,599		$	(50,052	)	
 	 	 	 	 	 	 							
Operating Expenses:	 	 	 	 	 	 							
Operation and Maintenance:	 	 	 	 	 	 							
General and Administrative Expense	14,420		 	15,060		 	(640	)	 	60,596		58,734		1,862		
Lease Operating and Transportation Expense	41,642		 	43,110		 	(1,468	)	 	162,721		165,991		(3,270	)	
All Other Operation and Maintenance Expense	2,895		 	5,301		 	(2,406	)	 	11,077		13,469		(2,392	)	
Property, Franchise and Other Taxes	3,655		 	4,178		 	(523	)	 	14,400		15,426		(1,026	)	
Depreciation, Depletion and Amortization	33,567		 	27,212		 	6,355		 	124,274		112,565		11,709		
 	96,179		 	94,861		 	1,318		 	373,068		366,185		6,883		
 	 	 	 	 	 	 							
Operating Income	46,988		 	48,091		 	(1,103	)	 	191,479		248,414		(56,935	)	
 	 	 	 	 	 	 							
Other Income (Expense):	 	 	 	 	 	 							
Interest Income	392		 	257		 	135		 	1,479		707		772		
Interest Expense on Long-Term Debt	(962	)	 	—		 	(962	)	 	(962	)	—		(962	)	
Other Interest Expense	(13,326	)	 	(13,432	)	 	106		 	(53,326	)	(53,702	)	376		
 	 	 	 	 	 	 							
Income Before Income Taxes	33,092		 	34,916		 	(1,824	)	 	138,670		195,419		(56,749	)	
Income Tax Expense (Benefit)	13,512		 	4,562		 	8,950		 	(41,962	)	66,093		(108,055	)	
Net Income	$	19,580		 	$	30,354		 	$	(10,774	)	 	$	180,632		$	129,326		$	51,306		
 	 	 	 	 	 	 							
Net Income Per Share (Diluted)	$	0.23		 	$	0.35		 	$	(0.12	)	 	$	2.09		$	1.50		$	0.59		

Page 17.

	

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

 	Three Months Ended	 	Twelve Months Ended	
(Thousands of Dollars, except per share amounts)	September 30,	 	September 30,	
PIPELINE AND STORAGE SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	51,958		 	$	50,403		 	$	1,555		 	$	210,345		$	206,615		$	3,730		
Intersegment Revenues	22,457		 	21,421		 	1,036		 	89,981		87,810		2,171		
Total Operating Revenues	74,415		 	71,824		 	2,591		 	300,326		294,425		5,901		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	341		 	90		 	251		 	607		271		336		
Operation and Maintenance	28,452		 	25,618		 	2,834		 	85,456		86,135		(679	)	
Property, Franchise and Other Taxes	7,570		 	7,067		 	503		 	28,870		27,691		1,179		
Depreciation, Depletion and Amortization	11,141		 	10,545		 	596		 	43,463		41,196		2,267		
 	47,504		 	43,320		 	4,184		 	158,396		155,293		3,103		
 	 	 	 	 	 	 	 	 	 	
Operating Income	26,911		 	28,504		 	(1,593	)	 	141,930		139,132		2,798		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	897		 	483		 	414		 	2,748		1,467		1,281		
Other Income	423		 	568		 	(145	)	 	1,757		2,511		(754	)	
Interest Expense	(7,965	)	 	(8,540	)	 	575		 	(31,383	)	(33,717	)	2,334		
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	20,266		 	21,015		 	(749	)	 	115,052		109,393		5,659		
Income Tax Expense	4,929		 	7,224		 	(2,295	)	 	17,806		40,947		(23,141	)	
Net Income	$	15,337		 	$	13,791		 	$	1,546		 	$	97,246		$	68,446		$	28,800		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.18		 	$	0.16		 	$	0.02		 	$	1.13		$	0.80		$	0.33		

 	Three Months Ended	 	Twelve Months Ended	
 	September 30,	 	September 30,	
GATHERING SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	—		 	$	29		 	$	(29	)	 	$	41		$	115		$	(74	)	
Intersegment Revenues	28,452		 	24,937		 	3,515		 	107,856		107,566		290		
Total Operating Revenues	28,452		 	24,966		 	3,486		 	107,897		107,681		216		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	4,697		 	3,884		 	813		 	16,190		13,380		2,810		
Property, Franchise and Other Taxes	23		 	(124	)	 	147		 	98		(79	)	177		
Depreciation, Depletion and Amortization	4,554		 	4,154		 	400		 	17,313		16,162		1,151		
 	9,274		 	7,914		 	1,360		 	33,601		29,463		4,138		
 	 	 	 	 	 	 	 	 	 	
Operating Income	19,178		 	17,052		 	2,126		 	74,296		78,218		(3,922	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 		 	 	 		
Interest Income	130		 	353		 	(223	)	 	1,106		994		112		
Other Income	—		 	—		 	—		 	—		1		(1	)	
Interest Expense	(2,211	)	 	(2,403	)	 	192		 	(9,560	)	(9,142	)	(418	)	
 	 	 	 	 	 	 	 	 	 	
Income Before Income Taxes	17,097		 	15,002		 	2,095		 	65,842		70,071		(4,229	)	
Income Tax Expense (Benefit)	2,314		 	5,999		 	(3,685	)	 	(17,677	)	29,694		(47,371	)	
Net Income	$	14,783		 	$	9,003		 	$	5,780		 	$	83,519		$	40,377		$	43,142		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	0.17		 	$	0.10		 	$	0.07		 	$	0.97		$	0.47		$	0.50		

Page 18.

	

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

 	Three Months Ended	 	Twelve Months Ended	
(Thousands of Dollars, except per share amounts)	September 30,	 	September 30,	
UTILITY SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	75,231		 	$	76,080		 	$	(849	)	 	$	674,726		$	626,899		$	47,827		
Intersegment Revenues	1,399		 	1,758		 	(359	)	 	12,800		13,072		(272	)	
Total Operating Revenues	76,630		 	77,838		 	(1,208	)	 	687,526		639,971		47,555		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	19,683		 	17,321		 	2,362		 	306,130		252,802		53,328		
Operation and Maintenance	41,520		 	39,448		 	2,072		 	197,257		195,231		2,026		
Property, Franchise and Other Taxes	8,635		 	9,223		 	(588	)	 	39,984		40,860		(876	)	
Depreciation, Depletion and Amortization	13,272		 	13,080		 	192		 	53,253		52,582		671		
 	83,110		 	79,072		 	4,038		 	596,624		541,475		55,149		
 	 	 	 	 	 	 	 	 	 	
Operating Income (Loss)	(6,480	)	 	(1,234	)	 	(5,246	)	 	90,902		98,496		(7,594	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	468		 	633		 	(165	)	 	1,591		1,051		540		
Other Income	237		 	197		 	40		 	735		774		(39	)	
Interest Expense	(6,487	)	 	(7,037	)	 	550		 	(26,753	)	(28,492	)	1,739		
 	 	 	 	 	 	 	 	 	 	
Income (Loss) Before Income Taxes	(12,262	)	 	(7,441	)	 	(4,821	)	 	66,475		71,829		(5,354	)	
Income Tax Expense (Benefit)	(5,195	)	 	(3,273	)	 	(1,922	)	 	15,258		24,894		(9,636	)	
Net Income (Loss)	$	(7,067	)	 	$	(4,168	)	 	$	(2,899	)	 	$	51,217		$	46,935		$	4,282		
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	(0.08	)	 	$	(0.05	)	 	$	(0.03	)	 	$	0.59		$	0.55		$	0.04		

 	Three Months Ended	 	Twelve Months Ended	
 	September 30,	 	September 30,	
ENERGY MARKETING SEGMENT	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	18,009		 	$	16,376		 	$	1,633		 	$	137,748		$	128,586		$	9,162		
Intersegment Revenues	237		 	194		 	43		 	826		794		32		
Total Operating Revenues	18,246		 	16,570		 	1,676		 	138,574		129,380		9,194		
 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	18,242		 	15,982		 	2,260		 	131,481		120,317		11,164		
Operation and Maintenance	1,653		 	1,717		 	(64	)	 	6,554		6,978		(424	)	
Property, Franchise and Other Taxes	3		 	5		 	(2	)	 	3		5		(2	)	
Depreciation, Depletion and Amortization	69		 	69		 	—		 	275		279		(4	)	
 	19,967		 	17,773		 	2,194		 	138,313		127,579		10,734		
 	 	 	 	 	 	 	 	 	 	
Operating Income (Loss)	(1,721	)	 	(1,203	)	 	(518	)	 	261		1,801		(1,540	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	189		 	153		 	36		 	685		571		114		
Other Income	29		 	19		 	10		 	81		75		6		
Interest Expense	(5	)	 	(10	)	 	5		 	(22	)	(47	)	25		
 	 	 	 	 	 	 	 	 	 	
Income (Loss) Before Income Taxes	(1,508	)	 	(1,041	)	 	(467	)	 	1,005		2,400		(1,395	)	
Income Tax Expense (Benefit)	(447	)	 	(427	)	 	(20	)	 	632		891		(259	)	
Net Income (Loss)	$	(1,061	)	 	$	(614	)	 	$	(447	)	 	$	373		$	1,509		$	(1,136	)	
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	(0.01	)	 	$	(0.01	)	 	$	—		 	$	—		$	0.02		$	(0.02	)	

Page 19.

	
																						
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	
SEGMENT OPERATING RESULTS AND STATISTICS	
(UNAUDITED)	
 	 	 	 	 	 	 	 	 	 	
 	Three Months Ended	 	Twelve Months Ended	
(Thousands of Dollars, except per share amounts)	September 30,	 	September 30,	
ALL OTHER	2018	 	2017	 	Variance	 	2018	2017	Variance	
Total Operating Revenues	$	776		 	$	862		 	$	(86	)	 	$	4,601		$	2,173		$	2,428		
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	313		 	374		 	(61	)	 	1,419		1,718		(299	)	
Property, Franchise and Other Taxes	137		 	151		 	(14	)	 	562		596		(34	)	
Depreciation, Depletion and Amortization	367		 	136		 	231		 	1,627		661		966		
 	817		 	661		 	156		 	3,608		2,975		633		
 	 	 	 	 	 	 	 	 	 	
Operating Income (Loss)	(41	)	 	201		 	(242	)	 	993		(802	)	1,795		
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	117		 	66		 	51		 	388		213		175		
 	 	 	 	 	 	 	 	 	 	
Income (Loss) Before Income Taxes	76		 	267		 	(191	)	 	1,381		(589	)	1,970		
Income Tax Expense (Benefit)	(27	)	 	111		 	(138	)	 	1,493		(247	)	1,740		
Net Income (Loss)	$	103		 	$	156		 	$	(53	)	 	$	(112	)	$	(342	)	$	230		
 	 	 	 	 	 	 	 	 	 	
Net Income (Loss) Per Share (Diluted)	$	—		 	$	0.01		 	$	(0.01	)	 	$	—		$	(0.01	)	$	0.01		

 	Three Months Ended	 	Twelve Months Ended	
 	September 30,	 	September 30,	
CORPORATE	2018	 	2017	 	Variance	 	2018	2017	Variance	
Revenues from External Customers	$	55		 	$	235		 	$	(180	)	 	$	660		$	894		$	(234	)	
Intersegment Revenues	1,047		 	895		 	152		 	4,045		3,825		220		
Total Operating Revenues	1,102		 	1,130		 	(28	)	 	4,705		4,719		(14	)	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Operation and Maintenance	4,995		 	4,832		 	163		 	16,248		15,887		361		
Property, Franchise and Other Taxes	125		 	127		 	(2	)	 	476		496		(20	)	
Depreciation, Depletion and Amortization	189		 	187		 	2		 	756		750		6		
 	5,309		 	5,146		 	163		 	17,480		17,133		347		
 	 	 	 	 	 	 	 	 	 	
Operating Loss	(4,207	)	 	(4,016	)	 	(191	)	 	(12,775	)	(12,414	)	(361	)	
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	30,035		 	31,318		 	(1,283	)	 	121,878		125,003		(3,125	)	
Other Income	517		 	1,532		 	(1,015	)	 	2,124		3,682		(1,558	)	
Interest Expense on Long-Term Debt	(27,572	)	 	(29,230	)	 	1,658		 	(109,984	)	(116,471	)	6,487		
Other Interest Expense	(1,209	)	 	(1,258	)	 	49		 	(5,641	)	(4,159	)	(1,482	)	
 	 	 	 	 	 	 	 	 	 	
Loss Before Income Taxes	(2,436	)	 	(1,654	)	 	(782	)	 	(4,398	)	(4,359	)	(39	)	
Income Tax Expense (Benefit)	1,245		 	1,291		 	(46	)	 	16,956		(1,590	)	18,546		
Net Loss	$	(3,681	)	 	$	(2,945	)	 	$	(736	)	 	$	(21,354	)	$	(2,769	)	$	(18,585	)	
 	 	 	 	 	 	 	 	 	 	
Net Loss Per Share (Diluted)	$	(0.05	)	 	$	(0.03	)	 	$	(0.02	)	 	$	(0.25	)	$	(0.03	)	$	(0.22	)	

 	Three Months Ended	 	Twelve Months Ended	
 	September 30,	 	September 30,	
INTERSEGMENT ELIMINATIONS	2018	 	2017	 	Variance	 	2018	2017	Variance	
Intersegment Revenues	$	(53,592	)	 	$	(49,205	)	 	$	(4,387	)	 	$	(215,508	)	$	(213,067	)	$	(2,441	)	
Operating Expenses:	 	 	 	 	 	 	 	 	 	
Purchased Gas	(23,298	)	 	(22,488	)	 	(810	)	 	(100,396	)	(98,136	)	(2,260	)	
Operation and Maintenance	(30,294	)	 	(26,717	)	 	(3,577	)	 	(115,112	)	(114,931	)	(181	)	
 	(53,592	)	 	(49,205	)	 	(4,387	)	 	(215,508	)	(213,067	)	(2,441	)	
 	 	 	 	 	 	 	 	 	 	
Operating Income	—		 	—		 	—		 	—		—		—		
 	 	 	 	 	 	 	 	 	 	
Other Income (Expense):	 	 	 	 	 	 	 	 	 	
Interest Income	(30,369	)	 	(31,994	)	 	1,625		 	(123,109	)	(125,893	)	2,784		
Interest Expense	30,369		 	31,994		 	(1,625	)	 	123,109		125,893		(2,784	)	
Net Income	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		
 	 	 	 	 	 	 	 	 	 	
Net Income Per Share (Diluted)	$	—		 	$	—		 	$	—		 	$	—		$	—		$	—		

Page 20.

	

 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	 	 	
SEGMENT INFORMATION (Continued)	
(Thousands of Dollars)	

 	Three Months Ended	 	Twelve Months Ended	
 	September 30,	 	September 30,	
 	(Unaudited)	 	(Unaudited)	
 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
 	 	 	 	 	 	 	 	 	 	 	 	
Capital Expenditures:	 	 	 	 	 	 	 	 	 	 	 	
Exploration and Production	$	110,801		(1)  	$	84,512		(2)  	$	26,289		 	$	380,677		(1)(2)  	$	253,057		(2)(3)  	$	127,620		
Pipeline and Storage	39,476		(1)  	41,808		(2)  	(2,332	)	 	92,832		(1)(2)  	95,336		(2)(3)  	(2,504	)	
Gathering	13,961		(1)  	8,940		(2)  	5,021		 	61,728		(1)(2)  	32,645		(2)(3)  	29,083		
Utility	33,621		(1)  	24,456		(2)  	9,165		 	85,648		(1)(2)  	80,867		(2)(3)  	4,781		
Energy Marketing	7		 	22		 	(15	)	 	40		 	36		 	4		
Total Reportable Segments	197,866			159,738			38,128			620,925			461,941			158,984		
All Other	—		 	—		 	—		 	1		 	39		 	(38	)	
Corporate	131		 	49		 	82		 	181		 	137		 	44		
Eliminations	(583	)	 	482		 	(1,065	)	 	(20,505	)	 	—		 	(20,505	)	
Total Capital Expenditures	$	197,414		 	$	160,269		 	$	37,145		 	$	600,602		 	$	462,117		 	$	138,485		

		
(1)  	Capital expenditures for the quarter and year ended September 30, 2018, include accounts payable and accrued liabilities related to capital expenditures of $51.3 million, $21.9 million, $6.1 million, and $9.5 million in the Exploration and Production segment, Pipeline and Storage segment, Gathering segment and Utility segment, respectively. These amounts have been excluded from the Consolidated Statement of Cash Flows at September 30, 2018, since they represent non-cash investing activities at that date.	

(2)  	Capital expenditures for the year ended September 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 year ended September 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 September 30, 2018.	

(3)  	Capital expenditures for the year ended September 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 year ended September 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 September 30, 2017.	

	

DEGREE DAYS	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	Percent Colder	
 	 	 	 	 	 	 	(Warmer) Than:	
Three Months Ended September 30	Normal	 	2018	 	2017	 	  Normal (1)	 	Last Year (1)	
 	 	 	 	 	 	 	 	 	 	
Buffalo, NY	162	 	83	 	109	 	(48.8)	 	(23.9)		
Erie, PA	124	 	47	 	97	 	(62.1)	 	(51.5)		
 	 	 	 	 	 	 	 	 	 	
Twelve Months Ended September 30	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Buffalo, NY	6,617	 	6,391	 	5,708	 	(3.4)	 	12.0		
Erie, PA	6,147	 	5,976	 	5,179	 	(2.8)	 	15.4		

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

Page 21.

	

 	 	 	 	 	 	 	 	 	 	 	 	 	
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	 	 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	

 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gas Production/Prices:	 	 	 	 	 	 	 	 	 	 	 	 	
Production (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	43,238		 	35,576		 	7,662		 	160,499		 	154,093		 	6,406		
West Coast	 	511		 	749		 	(238	)	 	2,407		 	2,995		 	(588	)	
Total Production	 	43,749		 	36,325		 	7,424		 	162,906		 	157,088		 	5,818		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Prices (Per Mcf)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	$	2.34		 	$	2.42		 	$	(0.08	)	 	$	2.36		 	$	2.52		 	$	(0.16	)	
West Coast	 	5.73		 	3.77		 	1.96		 	4.86		 	4.00		 	0.86		
Weighted Average	 	2.38		 	2.44		 	(0.06	)	 	2.40		 	2.55		 	(0.15	)	
Weighted Average after Hedging	 	2.45		 	2.91		 	(0.46	)	 	2.52		 	2.95		 	(0.43	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Oil Production/Prices:	 	 	 	 	 	 	 	 	 	 	 	 	
Production (Thousands of Barrels)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	1		 	1		 	—		 	4		 	4		 	—		
West Coast	 	597		 	674		 	(77	)	 	2,531		 	2,736		 	(205	)	
Total Production	 	598		 	675		 	(77	)	 	2,535		 	2,740		 	(205	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Prices (Per Barrel)	 	 	 	 	 	 	 	 	 	 	 	 	
Appalachia	 	$	66.97		 	$	45.71		 	$	21.26		 	$	57.76		 	$	48.27		 	$	9.49		
West Coast	 	71.91		 	47.44		 	24.47		 	66.39		 	46.14		 	20.25		
Weighted Average	 	71.90		 	47.44		 	24.46		 	66.38		 	46.18		 	20.20		
Weighted Average after Hedging	 	57.71		 	54.77		 	2.94		 	58.66		 	53.87		 	4.79		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Production (Mmcfe)	 	47,337		 	40,375		 	6,962		 	178,116		 	173,528		 	4,588		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Selected Operating Performance Statistics:	 	 	 	 	 	 	 	 	 	 	 	 	
General & Administrative Expense per Mcfe (1)	 	$	0.30		 	$	0.37		 	$	(0.07	)	 	$	0.34		 	$	0.34		 	$	—		
Lease Operating and Transportation Expense per Mcfe (1)(2)	 	$	0.88		 	$	1.07		 	$	(0.19	)	 	$	0.91		 	$	0.96		 	$	(0.05	)	
Depreciation, Depletion & Amortization per Mcfe (1)	 	$	0.71		 	$	0.67		 	$	0.04		 	$	0.70		 	$	0.65		 	$	0.05		

		
(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 $0.53 per Mcfe and $0.54 per Mcfe for the three months ended September 30, 2018 and September 30, 2017, respectively. Amounts include transportation expense of $0.54 per Mcfe for both the twelve months ended September 30, 2018 and September 30, 2017.	

Page 22.

	
								
NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	
 	
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	 	65,483,453		MMBTU	 	$	2.68 / MMBTU	
Total	 	153,663,453		MMBTU	 	$	2.83 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2020	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	864,000		BBL	 	$	63.51 / BBL	
NYMEX	 	324,000		BBL	 	$	50.52 / BBL	
Total	 	1,188,000		BBL	 	$	59.96 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	18,640,000		MMBTU	 	$	3.04 / MMBTU	
DAWN	 	7,200,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	43,024,639		MMBTU	 	$	2.31 / MMBTU	
Total	 	68,864,639		MMBTU	 	$	2.58 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2021	 	Volume	 	 	Average Hedge Price	
Oil Swaps	 	 	 	 	 	 	
Brent	 	576,000		BBL	 	$	64.48 / BBL	
NYMEX	 	156,000		BBL	 	$	51.00 / BBL	
Total	 	732,000		BBL	 	$	61.61 / BBL	
 	 	 	 	 	 	 	
Gas Swaps	 	 	 	 	 	 	
NYMEX	 	4,840,000		MMBTU	 	$	3.01 / MMBTU	
   DAWN	 	600,000		MMBTU	 	$	3.00 / MMBTU	
Fixed Price Physical Sales	 	41,804,668		MMBTU	 	$	2.22 / MMBTU	
Total	 	47,244,668		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	 	40,783,095		MMBTU	 	$	2.23 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2023	 	Volume	 	 	Average Hedge Price	
 	 	 	 	 	 	 	
Fixed Price Physical Sales	 	37,237,873		MMBTU	 	$	2.26 / MMBTU	
 	 	 	 	 	 	 	
Hedging Summary for Fiscal 2024	 	Volume	 	 	Average Hedge Price	
 	 	 	 	 	 	 	
Fixed Price Physical Sales	 	20,948,498		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 23.

	

NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	
 	 	 	 	 	
EXPLORATION AND PRODUCTION INFORMATION	
 	 	 	 	 	
Reserve Quantity Information	
(Unaudited)	

 	 	Gas MMcf	
 	 	U.S.	
 	 	Appalachian	West Coast	Total	
 	 	Region	Region	Company	
Proved Developed and Undeveloped Reserves:	 	 	 	 	
September 30, 2017	 	1,926,614		46,506		1,973,120		
Extensions and Discoveries	 	521,694		—		521,694		
Revisions of Previous Estimates	 	90,113		3,322		93,435		
Production	 	(160,499	)	(2,407	)	(162,906	)	
Sales of Minerals in Place	 	(57,420	)	(10,581	)	(68,001	)	
September 30, 2018	 	2,320,502		36,840		2,357,342		
 	 	 	 	 	
Proved Developed Reserves:	 	 	 	 	
 	 	 	 	 	
September 30, 2017	 	1,316,596		46,506		1,363,102		
September 30, 2018	 	1,569,692		36,840		1,606,532		

 	 	Oil Mbbl	
 	 	U.S.	
 	 	Appalachian	West Coast	Total	
 	 	Region	Region	Company	
Proved Developed and Undeveloped Reserves:	 	 	 	 	
September 30, 2017	 	28		30,179		30,207		
Extensions and Discoveries	 	—		2,301		2,301		
Revisions of Previous Estimates	 	(10	)	2,487		2,477		
Production	 	(4	)	(2,531	)	(2,535	)	
Sales of Minerals in Place	 	—		(4,787	)	(4,787	)	
September 30, 2018	 	14		27,649		27,663		
 	 	 	 	 	
Proved Developed Reserves:	 	 	 	 	
 	 	 	 	 	
September 30, 2017	 	28		29,771		29,799		
September 30, 2018	 	14		26,689		26,703		

Page 24.

	

NATIONAL FUEL GAS COMPANY	
AND SUBSIDIARIES	

 	 	 	 	 	 	 	 	 	 	 	 	 	
Pipeline & Storage Throughput - (millions of cubic feet - MMcf)	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Firm Transportation - Affiliated	 	15,058		 	15,404		 	(346	)	 	119,164		 	107,987		 	11,177		
Firm Transportation - Non-Affiliated	 	165,809		 	176,380		 	(10,571	)	 	645,156		 	671,395		 	(26,239	)	
Interruptible Transportation	 	393		 	727		 	(334	)	 	3,546		 	5,805		 	(2,259	)	
 	 	181,260		 	192,511		 	(11,251	)	 	767,866		 	785,187		 	(17,321	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Gathering Volume - (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Gathered Volume - Affiliated	 	52,427		 	44,915		 	7,512		 	198,355		 	194,921		 	3,434		

Utility Throughput - (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Retail Sales:	 	 	 	 	 	 	 	 	 	 	 	 	
Residential Sales	 	3,707		 	3,576		 	131		 	60,174		 	52,394		 	7,780		
Commercial Sales	 	567		 	555		 	12		 	9,187		 	7,927		 	1,260		
Industrial Sales	 	63		 	50		 	13		 	623		 	333		 	290		
 	 	4,337		 	4,181		 	156		 	69,984		 	60,654		 	9,330		
Off-System Sales	 	—		 	7		 	(7	)	 	141		 	1,301		 	(1,160	)	
Transportation	 	10,430		 	10,587		 	(157	)	 	76,828		 	71,040		 	5,788		
 	 	14,767		 	14,775		 	(8	)	 	146,953		 	132,995		 	13,958		
 	 	 	 	 	 	 	 	 	 	 	 	 	
Energy Marketing Volume	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	 	 	 	 	Increase	 	 	 	 	 	Increase	
 	 	2018	 	2017	 	(Decrease)	 	2018	 	2017	 	(Decrease)	
Natural Gas (MMcf)	 	5,849		 	5,932		 	(83	)	 	42,262		 	38,901		 	3,361		

	

	

	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	

Page 25.

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 twelve months ended September 30, 2018 and 2017:

																	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
(in thousands except per share amounts)	 	2018	 	2017	 	2018	 	2017	
Reported GAAP Earnings	 	$	37,994		 	$	45,577		 	$	391,521		 	$	283,482		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	3,516		 	—		 	(103,484	)	 	—		
Premium paid on early redemption of debt (E&P)	 	962		 	—		 	962		 	—		
Tax impact of premium paid on early redemption of debt	 	(235	)	 	—		 	(235	)	 	—		
Adjusted Operating Results	 	$	42,237		 	$	45,577		 	$	288,764		 	$	283,482		
 	 	 	 	 	 	 	 	 	
Reported GAAP Earnings per share	 	$	0.44		 	$	0.53		 	$	4.53		 	$	3.30		
Items impacting comparability	 	 	 	 	 	 	 	 	
Remeasurement of deferred income taxes
under 2017 Tax Reform	 	0.04		 	—		 	(1.20	)	 	—		
Premium paid on early redemption of debt, net of tax	 	0.01		 	—		 	$	0.01		 	—		
Adjusted Operating Results per share	 	$	0.49		 	$	0.53		 	$	3.34		 	$	3.30		

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 twelve months ended September 30, 2018 and 2017:

																	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
 	 	2018	 	2017	 	2018	 	2017	
(in thousands)	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	37,994		 	$	45,577		 	$	391,521		 	$	283,482		
Depreciation, Depletion and Amortization	 	63,159		 	55,383		 	240,961		 	224,195		
Interest and Other Income	 	(3,065	)	 	(3,585	)	 	(11,463	)	 	(11,156	)	
Interest Expense	 	29,368		 	29,916		 	114,522		 	119,837		
Income Taxes	 	16,331		 	15,487		 	(7,494	)	 	160,682		
Adjusted EBITDA	 	$	143,787		 	$	142,778		 	$	728,047		 	$	777,040		
 	 	 	 	 	 	 	 	 	
Adjusted EBITDA by Segment	 	 	 	 	 	 	 	 	
Pipeline and Storage Adjusted EBITDA	 	$	38,052		 	$	39,049		 	$	185,393		 	$	180,328		
Gathering Adjusted EBITDA	 	23,732		 	21,206		 	91,609		 	94,380		
Total Midstream Businesses Adjusted EBITDA	 	61,784		 	60,255			277,002			274,708		
Exploration and Production Adjusted EBITDA	 	80,555		 	75,303		 	315,753		 	360,979		
Utility Adjusted EBITDA	 	6,792		 	11,846		 	144,155		 	151,078		
Energy Marketing Adjusted EBITDA	 	(1,652	)	 	(1,134	)	 	536		 	2,080		
Corporate and All Other Adjusted EBITDA	 	(3,692	)	 	(3,492	)	 	(9,399	)	 	(11,805	)	
Total Adjusted EBITDA	 	$	143,787		 	$	142,778			$	728,047			$	777,040		

Page 26.

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

																	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	September 30,	 	September 30,	
(in thousands)	 	2018	 	2017	 	2018	 	2017	
Exploration and Production Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	19,580		 	$	30,354		 	$	180,632		 	$	129,326		
Depreciation, Depletion and Amortization	 	33,567		 	27,212		 	124,274		 	112,565		
Interest and Other Income	 	(392	)	 	(257	)	 	(1,479	)	 	(707	)	
Interest Expense	 	14,288		 	13,432		 	54,288		 	53,702		
Income Taxes	 	13,512		 	4,562		 	(41,962	)	 	66,093		
Adjusted EBITDA	 	$	80,555		 	$	75,303		 	$	315,753		 	$	360,979		
 	 	 	 	 	 	 	 	 	
Pipeline and Storage Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	15,337		 	$	13,791		 	$	97,246		 	$	68,446		
Depreciation, Depletion and Amortization	 	11,141		 	10,545		 	43,463		 	41,196		
Interest and Other Income	 	(1,320	)	 	(1,051	)	 	(4,505	)	 	(3,978	)	
Interest Expense	 	7,965		 	8,540		 	31,383		 	33,717		
Income Taxes	 	4,929		 	7,224		 	17,806		 	40,947		
Adjusted EBITDA	 	$	38,052		 	$	39,049		 	$	185,393		 	$	180,328		
 	 	 	 	 	 	 	 	 	
Gathering Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	14,783		 	$	9,003		 	$	83,519		 	$	40,377		
Depreciation, Depletion and Amortization	 	4,554		 	4,154		 	17,313		 	16,162		
Interest and Other Income	 	(130	)	 	(353	)	 	(1,106	)	 	(995	)	
Interest Expense	 	2,211		 	2,403		 	9,560		 	9,142		
Income Taxes	 	2,314		 	5,999		 	(17,677	)	 	29,694		
Adjusted EBITDA	 	$	23,732		 	$	21,206		 	$	91,609		 	$	94,380		
 	 	 	 	 	 	 	 	 	
Utility Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	(7,067	)	 	$	(4,168	)	 	$	51,217		 	$	46,935		
Depreciation, Depletion and Amortization	 	13,272		 	13,080		 	53,253		 	52,582		
Interest and Other Income	 	(705	)	 	(830	)	 	(2,326	)	 	(1,825	)	
Interest Expense	 	6,487		 	7,037		 	26,753		 	28,492		
Income Taxes	 	(5,195	)	 	(3,273	)	 	15,258		 	24,894		
Adjusted EBITDA	 	$	6,792		 	$	11,846		 	$	144,155		 	$	151,078		
 	 	 	 	 	 	 	 	 	
Energy Marketing Segment	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	(1,061	)	 	$	(614	)	 	$	373		 	$	1,509		
Depreciation, Depletion and Amortization	 	69		 	69		 	275		 	279		
Interest and Other Income	 	(218	)	 	(172	)	 	(766	)	 	(646	)	
Interest Expense	 	5		 	10		 	22		 	47		
Income Taxes	 	(447	)	 	(427	)	 	632		 	891		
Adjusted EBITDA	 	$	(1,652	)	 	$	(1,134	)	 	$	536		 	$	2,080		
 	 	 	 	 	 	 	 	 	
Corporate and All Other	 	 	 	 	 	 	 	 	
Reported GAAP Earnings	 	$	(3,578	)	 	$	(2,789	)	 	$	(21,466	)	 	$	(3,111	)	
Depreciation, Depletion and Amortization	 	556		 	323		 	2,383		 	1,411		
Interest and Other Income	 	(300	)	 	(922	)	 	(1,281	)	 	(3,005	)	
Interest Expense	 	(1,588	)	 	(1,506	)	 	(7,484	)	 	(5,263	)	
Income Taxes	 	1,218		 	1,402		 	18,449		 	(1,837	)	
Adjusted EBITDA	 	$	(3,692	)	 	$	(3,492	)	 	$	(9,399	)	 	$	(11,805	)