NATIONAL FUEL GAS CO 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations OVERVIEW Please note that this overview is a high-level summary of items that are discussed in greater detail in subsequent sections of this report. The Company is a diversified energy company engaged principally in the production, gathering, transportation, storage and distribution of natural gas. The Company operates an integrated business, with assets centered in western New York and Pennsylvania, being utilized for, and benefiting from, the production and transportation of natural gas from the Appalachian Basin. The common geographic footprint of the Company’s subsidiaries enables them to share management, labor, facilities and support services across various businesses and pursue coordinated projects designed to produce and transport natural gas from the Appalachian Basin to markets in the eastern United States and Canada. The Company's efforts in this regard are not limited to affiliated projects. The Company has also been designing and building pipeline projects for the transportation of natural gas for non-affiliated natural gas customers in the Appalachian Basin. In addition to expansion projects, the Company continues to focus on the ongoing modernization of its regulated Pipeline and Storage and Utility assets. The Company reports financial results for four business segments. For a discussion of the Company's earnings, refer to the Results of Operations section below. The Company has continued to pursue development projects to expand its Pipeline and Storage segment. One project on Supply Corporation’s system, referred to as the Tioga Pathway Project, is an expansion and modernization project that would allow for the transportation of 190,000 Dth per day of shale gas supplies from a new interconnection in northwest Tioga County, Pennsylvania to an existing Supply Corporation interconnection with Tennessee Gas Pipeline Company, LLC at Ellisburg and a new virtual delivery point into an existing Transcontinental Gas Pipe Line Company, LLC (“Transco”) capacity 29 Table of Content lease, providing access to Mid-Atlantic markets. On May 5, 2025, FERC issued the Section 7(b)/7(c) certificate for the project. Construction on the Tioga Pathway Project is expected to commence in early calendar 2026. This project has a target in-service date in late calendar 2026 and a preliminary cost estimate of approximately $101 million. Supply Corporation has also announced that it expects to serve as the transporter for 205,000 Dth/day of natural gas supplies to the Shippingport Power Station, a natural gas power generation facility under development in Beaver County, Pennsylvania. In order to provide this new natural gas transportation capacity, Supply Corporation expects to construct an approximately 7.5 mile pipeline lateral from its existing Line N pipeline system to a direct interconnection with the facility (the “Shippingport Lateral Project”), with the incremental capacity expected to come online as early as Fall 2026 and a preliminary cost estimate of approximately $57 million. The Tioga Pathway Project and the Shippingport Lateral Project are both discussed in more detail in the Capital Resources and Liquidity section that follows. From a rate perspective, Distribution Corporation, in its New York jurisdiction, reached a settlement with the parties to its rate case proceeding. On December 19, 2024, the NYPSC issued an order approving the settlement. The settlement, effective January 1, 2025, established a three-year rate plan that reflects a return on equity of 9.7% and authorizes a revenue requirement increase of $57.3 million in fiscal 2025, an additional revenue requirement increase of $15.8 million in fiscal 2026, and an additional revenue requirement increase of $12.7 million in fiscal 2027. The settlement also included standard make-whole language allowing full recovery of revenues that would have been billed at the new rates between October 1, 2024 and December 31, 2024. In addition, on March 17, 2025, FERC approved an amendment to Empire's 2019 rate case settlement. This settlement amendment is estimated to decrease Empire's revenues on a yearly basis by approximately $0.5 million. For further discussion of these and other rate matters, refer to the Rate Matters section below. As discussed in the following Critical Accounting Estimates section, the Company uses the full cost method of accounting for determining the book value of its exploration and production properties and that book value is subject to a quarterly ceiling test. In addition to the non-cash impairment charges under the ceiling test that the Company recorded during fiscal 2024, the Company recorded a non-cash impairment charge under the ceiling test during the quarter ended December 31, 2024 of $108.3 million ($79.1 million after-tax). At both June 30, 2025 and March 31, 2025, the ceiling exceeded the book value of the exploration and production properties, and thus, did not result in an impairment charge in either the quarter ended June 30, 2025 or the quarter ended March 31, 2025. Please refer to the Critical Accounting Estimates section below for more details on this matter and a sensitivity analysis concerning commodity price changes. From a financing perspective, on February 19, 2025, the Company issued $500.0 million of 5.50% notes due March 15, 2030 and $500.0 million of 5.95% notes due March 15, 2035. The proceeds of these debt issuances were used for general corporate purposes, including the March 2025 redemptions of $450.0 million of the Company's 5.20% notes that were scheduled to mature in July 2025 and $500.0 million of the Company's 5.50% notes that were scheduled to mature in January 2026. The Company redeemed those notes for $450.8 million and $503.3 million, respectively, plus accrued interest. The remaining proceeds of the debt issuances were used to repay a portion of short-term borrowings the Company incurred to fund a trust for the benefit of holders of $50.0 million of 7.38% notes under the Company's 1974 indenture prior to the June 13, 2025 maturity date of these notes. Placing these funds in trust enabled the Company to cancel and discharge the 1974 indenture. This relieved the Company from its obligations to comply with the 1974 indenture’s covenants. The funds were paid out of the trust on June 13, 2025 for the redemption of the $50.0 million of 7.38% notes, leaving no notes outstanding under the 1974 indenture. For details of these matters, refer to the Capital Resources and Liquidity section below. The Company is a party to a syndicated Credit Agreement that provides a $1.0 billion unsecured committed revolving credit facility. In January 2025, the Company and the syndicate of banks under the Credit Agreement consented to a second one-year extension on the maturity date of the Credit Agreement, such that the Company has aggregate commitments available in the full amount of $1.0 billion through February 23, 2029. In May 2025, the total lenders under the Credit Agreement increased to twelve as a new lender joined the syndicate, assuming a portion of an existing lender's commitment. The Company began repurchasing outstanding shares of its common stock during the quarter ended March 31, 2024 under a share repurchase program authorized by the Company’s Board of Directors. The program authorizes the Company to repurchase up to an aggregate amount of $200 million of its outstanding common stock in the open market or through privately negotiated transactions. In April 2025, repurchases under the program were temporarily paused. As a result, the Company expects completion of the program will extend into calendar 2026. The timing and amount of future repurchases under this program will depend on a number of factors, including but not limited to stock price, market conditions, applicable securities laws (including SEC Rule 10b-18), corporate and regulatory requirements, and capital and liquidity needs. During the nine months ended June 30, 2025, the Company executed transactions to repurchase 828,720 shares at an average price of $64.37 per share, for a total cost of $53.8 million (including broker fees and excise taxes). As of June 30, 2025, the Company has 30 Table of Content repurchased 1,974,979 shares under the share repurchase program at an average price of $59.70, for a total cost of $119.0 million (including broker fees and excise taxes). The program has no fixed expiration date. These matters are discussed further in the Capital Resources and Liquidity section that follows. The Company expects to use cash on hand, cash from operations, and short-term and/or long-term borrowings, as needed, to meet its financing needs for the remainder of fiscal 2025. The Company continues to evaluate these financing needs and options to meet them. Given the current economic conditions, which include continued inflationary pressures, volatile interest rates and the ongoing impacts of federal policy changes, the cost and/or availability of capital may be impacted, but the Company continues to expect to meet its financing needs. CRITICAL ACCOUNTING ESTIMATES For a complete discussion of critical accounting estimates, refer to "Critical Accounting Estimates" in Item 7 of the Company's 2024 Form 10-K. There have been no material changes to that disclosure other than as set forth below. The information presented below updates and should be read in conjunction with the critical accounting estimates in that Form 10-K. Exploration and Development Costs. The Company, in its Exploration and Production segment, follows the full cost method of accounting for determining the book value of its exploration and production properties, with natural gas properties in the Appalachian Region being the primary component after the fiscal 2022 sale of the Company's California exploration and production properties. In accordance with the full cost methodology, the Company is required to perform a quarterly ceiling test. Under the ceiling test, the present value of future revenues from the Company's exploration and production reserves based on an unweighted arithmetic average of first day of the month commodity prices for each month within the twelve-month period prior to the end of the reporting period (the “ceiling”) is compared with the book value of the Company’s exploration and production properties at the balance sheet date. The present value of future revenues is calculated using a 10% discount factor. If the book value of the exploration and production properties exceeds the ceiling, a non-cash impairment charge must be recorded to reduce the book value of such properties to the calculated ceiling. At June 30, 2025, the ceiling exceeded the book value of the exploration and production properties by approximately $798.8 million (after-tax). The 12-month average of the first day of the month price for natural gas for each month during the twelve months ended June 30, 2025, based on the quoted Henry Hub spot price for natural gas, was $2.86 per MMBtu. (Note: Because actual pricing of the Company’s producing properties vary depending on their location and hedging, the prices used to calculate the ceiling may differ from the Henry Hub price, which is only indicative of 12-month average prices for the twelve months ended June 30, 2025. Actual realized pricing includes adjustments for regional market differentials, transportation fees and contractual arrangements.) In regard to the sensitivity of the ceiling test calculation to commodity price changes, if natural gas prices were $0.25 per MMBtu lower than the average prices in the twelve-month period used at June 30, 2025 in the ceiling test calculation, the ceiling would have exceeded the book value of the Company's exploration and production properties by approximately $440.1 million (after-tax), which would not have resulted in an impairment charge. This calculated amount is based solely on price changes and does not take into account any other changes to the ceiling test calculation, including, among others, changes in reserve quantities and future cost estimates. It is difficult to predict what factors could lead to future non-cash impairments under the SEC's full cost ceiling test. Fluctuations in or subtractions from proved reserves, increases in development costs for undeveloped reserves and significant fluctuations in natural gas prices have an impact on the amount of the ceiling at any point in time. For a more complete discussion of the full cost method of accounting, refer to "Exploration and Development Costs" under "Critical Accounting Estimates" in Item 7 of the Company's 2024 Form 10-K. RESULTS OF OPERATIONS Earnings The Company's earnings were $149.8 million for the quarter ended June 30, 2025 compared to a loss of $54.2 million for the quarter ended June 30, 2024. The increase in earnings of $204.0 million is primarily the result of higher earnings in the Exploration and Production segment, as well as the Gathering and Utility segments. Lower earnings in the Pipeline and Storage segment and losses in the Corporate and All Other categories partially offset these increases. The Company's earnings were $411.2 million for the nine months ended June 30, 2025 compared to earnings of $245.1 million for the nine months ended June 30, 2024. The increase in earnings of $166.1 million is primarily the result of higher earnings in all reportable segments, partially offset by losses in the Corporate and All Other categories. 31 Table of Content The Company's earnings for the nine months ended June 30, 2025 included non-cash impairment charges of $141.8 million ($103.6 million after-tax) in the Exploration and Production segment, consisting mostly of ceiling test impairment charges of $108.3 million ($79.1 million after-tax), as discussed above. The remaining charges are related to the impairment of certain water disposal assets. The Company's earnings for the quarter and nine months ended June 30, 2024 included a non-cash ceiling test impairment charge of $200.7 million ($145.0 million after-tax) recorded during the quarter ended June 30, 2024 in the Exploration and Production segment. Note that all amounts used in earnings discussions are after-tax amounts, unless otherwise noted. Earnings (Loss) by Segment Three Months Ended June 30, Nine Months Ended June 30, (Thousands) 2025 2024 Increase (Decrease) 2025 2024 Increase (Decrease) Exploration and Production $ 86,671 $ (112,028) $ 198,699 $ 137,722 $ 2,521 $ 135,201 Pipeline and Storage 28,857 30,690 (1,833) 93,019 85,482 7,537 Gathering 29,996 24,979 5,017 83,483 82,510 973 Utility 4,997 2,559 2,438 101,040 73,848 27,192 Total Reportable Segments 150,521 (53,800) 204,321 415,264 244,361 170,903 All Other (209) (124) (85) (674) (341) (333) Corporate (494) (234) (260) (3,428) 1,114 (4,542) Total Consolidated $ 149,818 $ (54,158) $ 203,976 $ 411,162 $ 245,134 $ 166,028 Exploration and Production Exploration and Production Operating Revenues Three Months Ended June 30, Nine Months Ended June 30, (Thousands) 2025 2024 Increase (Decrease) 2025 2024 Increase (Decrease) Gas Produced in Appalachia (after Hedging) $ 302,652 $ 219,836 $ 82,816 $ 860,409 $ 735,634 $ 124,775 Other 1,231 1,069 162 4,292 3,903 389 $ 303,883 $ 220,905 $ 82,978 $ 864,701 $ 739,537 $ 125,164 Production Volumes Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 Increase (Decrease) 2025 2024 Increase (Decrease) Gas Production per MMcf 111,588 96,504 15,084 314,819 300,144 14,675 Average Prices Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 Increase (Decrease) 2025 2024 Increase (Decrease) Average Gas Price/Mcf Weighted Average $ 2.69 $ 1.50 $ 1.19 $ 2.66 $ 1.93 $ 0.73 Weighted Average After Hedging $ 2.71 $ 2.28 $ 0.43 $ 2.73 $ 2.45 $ 0.28 32 Table of Content 2025 Compared with 2024 Operating revenues for the Exploration and Production segment increased $83.0 million for the quarter ended June 30, 2025 as compared with the quarter ended June 30, 2024. Gas production revenue after hedging increased $82.8 million due to the impact of a $0.43 per Mcf increase in the weighted average price of natural gas after hedging, combined with a 15.1 Bcf increase in natural gas production. The increase in natural gas production was largely due to pads recently turned in line. Operating revenues for the Exploration and Production segment increased $125.2 million for the nine months ended June 30, 2025 as compared with the nine months ended June 30, 2024. Gas production revenue after hedging increased $124.8 million due to the impact of a $0.28 per Mcf increase in the weighted average price of natural gas after hedging, combined with a 14.7 Bcf increase in natural gas production. The increase in natural gas production for the nine months ended June 30, 2025 as compared with the nine months ended June 30, 2024 was largely due to pads recently turned in line. The Exploration and Production segment's earnings for the quarter ended June 30, 2025 were $86.7 million, an increase of $198.7 million when compared with a loss of $112.0 million for the quarter ended June 30, 2024. The $198.7 million increase can be attributed to the following factors: (Millions) Non-cash ceiling test impairment $ 145.0 Higher natural gas prices after hedging 38.3 Higher natural gas production 27.1 Change in mark to market adjustment on contingent consideration received as part of the 2022 California asset sale 0.8 Lower interest expense 0.6 (1) Higher lease operating and transportation expenses (5.7) (2) Higher income tax expense (5.6) (3) Higher other tax expense (1.6) (4) Other items (0.2) $ 198.7 (1) Lower interest expense mainly attributed to lower short-term and long-term intercompany borrowings. (2) The increase in lease operating and transportation expenses was primarily the result of higher production combined with higher gathering and transportation costs. (3) The increase in income tax expense was primarily driven by an increase in state tax expense due to higher pre-tax income. (4) The increase in other tax expense was primarily attributable to higher Impact Fees in the Appalachian region as the Company moved into a higher rate tier due to higher NYMEX pricing. 33 Table of Content The Exploration and Production segment's earnings for the nine months ended June 30, 2025 were $137.7 million, an increase of $135.2 million when compared with earnings of $2.5 million for the nine months ended June 30, 2024. The $135.2 million increase can be attributed to the following factors: (Millions) Higher natural gas prices after hedging $ 70.2 Lower non-cash impairments of assets 41.4 (1) Higher natural gas production 28.4 Lower depletion expense 13.8 (2) Change in mark to market adjustment on contingent consideration received as part of the 2022 California asset sale 3.0 Higher income tax expense (7.9) (3) Higher lease operating and transportation expenses (5.8) (4) Lower other income (2.4) (5) Higher other tax expense (2.4) (6) Higher operating expenses (1.5) (7) Premiums paid on early redemption of debt (1.0) (8) Earnings reduction associated with remeasurement of state deferred income taxes due to ceiling test impairment (1.0) Other items 0.4 $ 135.2 (1) Includes a ceiling test impairment of $79.1 million and a $24.5 million impairment of certain water disposal assets recorded during the quarter ended December 31, 2024, offset by a ceiling test impairment of $145.0 million in the nine months ending June 30, 2024. (2) The decrease in depletion expense was primarily due to ceiling test impairments recorded in fiscal 2024 and 2025 that lowered Seneca’s full cost pool depletable base. (3) The increase in income tax expense was primarily driven by an increase in state income tax expense due to higher pre-tax income before impairments. (4) The increase in lease operating and transportation expenses was primarily the result of higher production combined with higher gathering and transportation costs. (5) The decrease in other income is mainly attributable to non-recurrence of business interruption insurance proceeds received during the quarter ended December 31, 2023 related to a pipeline outage impacting Seneca’s ability to market gas. (6) The increase in other tax expense was primarily attributable to higher Impact Fees in the Appalachian region as the Company moved into a higher rate tier due to higher NYMEX pricing. (7) The increase in operating expenses is mainly attributed to higher personnel costs, higher abandonment accretion expense and higher environmental remediation costs in the nine months ended June 30, 2025, partially offset by higher abandonment costs recognized in the nine months ended June 30, 2024. (8) Represents the Exploration and Production segment’s share of the premiums paid by the Company to redeem long-term debt. Refer to Note 6 – Capitalization for further discussion. 34 Table of Content Pipeline and Storage Pipeline and Storage Operating Revenues Three Months Ended June 30, Nine Months Ended June 30, (Thousands) 2025 2024 Increase (Decrease) 2025 2024 Increase (Decrease) Firm Transportation $ 80,078 $ 79,537 $ 541 $ 243,388 $ 232,012 $ 11,376 Interruptible Transportation 157 103 54 533 520 13 80,235 79,640 595 243,921 232,532 11,389 Firm Storage Service 25,028 24,612 416 75,309 71,246 4,063 Interruptible Storage Service — — — — 1 (1) Other 316 1,167 (851) 2,535 4,073 (1,538) $ 105,579 $ 105,419 $ 160 $ 321,765 $ 307,852 $ 13,913 Pipeline and Storage Throughput Three Months Ended June 30, Nine Months Ended June 30, (MMcf) 2025 2024 Increase (Decrease) 2025 2024 Increase (Decrease) Firm Transportation 179,033 168,510 10,523 616,644 590,868 25,776 Interruptible Transportation 149 118 31 665 1,508 (843) 179,182 168,628 10,554 617,309 592,376 24,933 2025 Compared with 2024 Operating revenues for the Pipeline and Storage segment were relatively consistent for the quarter ended June 30, 2025 as compared with the quarter ended June 30, 2024. Operating revenues for the Pipeline and Storage segment increased $13.9 million for the nine months ended June 30, 2025 as compared with the nine months ended June 30, 2024. For the nine months ended June 30, 2025, the $11.4 million increase in transportation revenues and $4.1 million increase in storage revenues was primarily attributable to an increase in Supply Corporation's transportation and storage rates effective February 1, 2024 in accordance with Supply Corporation's rate case settlement. The settlement was approved by FERC on June 11, 2024. This increase was partially offset by the impact of a final true-up adjustment recorded in the nine months ended June 30, 2024 to the surcharge for pipeline safety and greenhouse gas costs that ended effective February 1, 2024. The increase in transportation revenues was also partially offset by a decline in revenues associated with miscellaneous contract terminations and revisions. The $1.5 million decrease in other revenues primarily reflects lower cashout revenues, which are completely offset by purchased gas expense, and an adjustment to match electric surcharge revenues to electric power costs recorded in operation and maintenance expense. Transportation volume for the quarter and nine months ended June 30, 2025 increased by 10.6 Bcf and 24.9 Bcf, respectively, from the prior year's quarter and nine month periods. The increase in transportation volume for both the quarter and nine months ended June 30, 2025 is primarily due to an increase in volume from colder weather. This increase for the nine month period was partially offset by lower capacity utilization with certain contract shippers and certain contract expirations and revisions. Volume fluctuations, other than those caused by the addition or termination of contracts, generally do not have a significant impact on revenues as a result of the straight fixed-variable rate design utilized by Supply Corporation and Empire. 35 Table of Content The Pipeline and Storage segment’s earnings for the quarter ended June 30, 2025 were $28.9 million, a decrease of $1.8 million when compared with earnings of $30.7 million for the quarter ended June 30, 2024. The $1.8 million decrease can be attributed to the following factors: (Millions) Higher operating expenses $ (1.7) (1) Lower other income (1.2) (2) Lower interest expense 0.5 (3) Other items 0.6 $ (1.8) (1) The increase in operating expenses was primarily due to an increase in personnel costs, as well as an increase in outside service expenses, largely related to system integrity and maintenance spending. (2) The decrease in other income was primarily due to a lower average amount outstanding on intercompany short-term notes receivables and a lower weighted average interest rate on those receivables. (3) The decrease in interest expense was primarily driven by a decrease in intercompany short-term borrowings, partially offset by an increase in interest on additional intercompany long-term borrowings associated with the Company's February 2025 debt issuance. The Pipeline and Storage segment’s earnings for the nine months ended June 30, 2025 were $93.0 million, an increase of $7.5 million when compared with earnings of $85.5 million for the nine months ended June 30, 2024. The $7.5 million increase can be attributed to the following factors: (Millions) Higher operating revenues $ 12.2 Lower interest expense 0.8 (1) Higher operating expenses (3.8) (2) Lower other income (1.8) (3) Other items 0.1 $ 7.5 (1) The decrease in interest expense was primarily driven by a decrease in intercompany short-term borrowings, partially offset by an increase in interest on additional intercompany long-term borrowings associated with the Company's February 2025 debt issuance. (2) The increase in operating expenses was primarily due to an increase in personnel costs, as well as an increase in outside service expenses, largely related to system integrity and maintenance spending, and higher power costs related to Empire’s electric motor drive compressor station. The increase in electric power costs is offset by an equal increase in revenue. (3) The decrease in other income was primarily due to a lower average amount outstanding on intercompany short-term notes receivables and a lower weighted average interest rate on those receivables, as well as a decline in non-service pension and post-retirement benefit income. Gathering Gathering Operating Revenues Three Months Ended June 30, Nine Months Ended June 30, (Thousands) 2025 2024 Increase (Decrease) 2025 2024 Increase (Decrease) Gathering Revenues $ 67,873 $ 60,120 $ 7,753 $ 194,034 $ 186,701 $ 7,333 36 Table of Content Gathering Volume Three Months Ended June 30, Nine Months Ended June 30, 2025 2024 Increase (Decrease) 2025 2024 Increase (Decrease) Gathered Volume - (MMcf) 133,271 118,445 14,826 384,003 367,832 16,171 2025 Compared with 2024 Operating revenues for the Ga thering segm ent increased $7.8 million for the quarter ended June 30, 2025 as compared with the quarter ended June 30, 2024 , which was driven primarily by a 14.8 Bcf increase in gathered volume. Gathered volume increased 11.0 Bcf in the Gathering segment's Eastern Development Area (Tioga and Trout Run), consisting of an increase of 14.0 Bcf in the Tioga gathering system and a decrease of 3.0 Bcf in the Trout Run gathering system. The Gathering segment's Western Development Area (Clermont) also contributed an increase of 3.8 Bcf in gathered volume. The net increase in gathered volume can be attributed to an increase in gross natural gas production in the Appalachian region, largely by Seneca, connected to the aforementioned gathering systems. Operating revenue s for the Gathering segm ent increased $7.3 million for the nine months ended June 30, 2025 as compared with the nine months ended June 30, 2024, which was primarily driven by a 16.2 Bcf increase in gathered volume. Gathered volume increased 16.0 Bcf in the Gathering segment's Eastern Development Area (Tioga and Trout Run), consisting of an increase of 33.4 Bcf in the Tioga gathering system and a decrease of 17.4 Bcf in the Trout Run gathering system. Additionally, the Gathering segment's Western Development Area (Clermont) contributed an increase of 0.2 Bcf. The net increase can be attributed to an increase in gross natural gas production in the Appalachian region, largely by Seneca, connected to the aforementioned gathering systems. The Gathering segment’s earnings for the quarter ended June 30, 2025 were $30.0 million, an increase of $5.0 million when compared with earnings of $25.0 million for the quarter ended June 30, 2024. The $5.0 million increase can be attributed to the following factors: (Millions) Higher operating revenues $ 6.1 Higher depreciation expense (0.9) (1) Higher income tax expense (0.2) (2) $ 5.0 (1) The increase in depreciation expense was largely due to additional plant in-service associated with the Tioga gathering system. (2) The increase in income tax expense was largely due to higher state income taxes driven by higher pre-tax income. Th e Gathering segment’s earnings for the nine months ended June 30, 2025 were $83.5 million, an increase of $1.0 million when compared with earnings of $82.5 million for the nine months ended June 30, 2024. The $1.0 million increase can be attributed to the following factors: (Millions) Higher operating revenues $ 5.8 Lower income tax expense 0.7 (1) Higher depreciation expense (2.7) (2) Higher interest expense (1.6) (3) Higher operating expenses (0.8) (4) Premiums paid on early redemption of debt (0.7) (5) Other items 0.3 $ 1.0 (1) The decrease in income tax expense was largely due to lower state income taxes resulting from the application of different state apportionment factors in 2025 vs. 2024, as well as a lower tax rate in Pennsylvania. 37 Table of Content (2) The increase in depreciation expense was largely due to additional plant in-service associated with the Tioga gathering system. (3) The increase in interest expense was primarily driven by additional short-term intercompany borrowings. (4) The increase in operating expenses was primarily due to higher personnel costs. (5) Represents the Gathering segment’s share of the premiums paid by the Company to redeem long-term debt. Refer to Note 6 – Capitalization for further discussion. Utility Utility Operating Revenues Three Months Ended June 30, Nine Months Ended June 30, (Thousands) 2025 2024 Increase (Decrease) 2025 2024 Increase (Decrease) Retail Sales Revenues: Residential $ 118,819 $ 91,267 $ 27,552 $ 546,841 $ 458,847 $ 87,994 Commercial 14,283 10,614 3,669 75,112 62,217 12,895 Industrial 735 496 239 4,030 2,714 1,316 133,837 102,377 31,460 625,983 523,778 102,205 Transportation 21,577 23,185 (1,608) 96,979 95,744 1,235 Other 2,109 (618) 2,727 6,762 (2,066) 8,828 $ 157,523 $ 124,944 $ 32,579 $ 729,724 $ 617,456 $ 112,268 Utility Throughput Three Months Ended June 30, Nine Months Ended June 30, (MMcf) 2025 2024 Increase (Decrease) 2025 2024 Increase (Decrease) Retail Sales: Residential 10,151 8,123 2,028 60,738 53,168 7,570 Commercial 1,658 1,308 350 9,997 8,401 1,596 Industrial 93 62 31 594 389 205 11,902 9,493 2,409 71,329 61,958 9,371 Transportation 13,853 12,819 1,034 55,881 52,984 2,897 25,755 22,312 3,443 127,210 114,942 12,268 Degree Days Three Months Ended June 30, Percent Colder (Warmer) Than Normal 2025 2024 Normal (1) Prior Year (1) Buffalo, NY (2) 843 825 565 (2.1) % 46.0 % Erie, PA 776 813 519 4.8 % 56.6 % Nine Months Ended June 30, Buffalo, NY (2) 6,195 5,825 5,128 (6.0) % 13.6 % Erie, PA 5,693 5,527 4,759 (2.9) % 16.1 % (1) Percents compare actual 2025 degree days to normal degree days and actual 2025 degree days to actual 2024 degree days. (2) Normal degree days changed from NOAA 30-year degree days to NOAA 15-year degree days with the implementation of new base rates in New York effective October 2024. 38 Table of Content 2025 Compared with 2024 Operating revenues for the Utility segment increased $32.6 million for the quarter ended June 30, 2025 as compared with the quarter ended June 30, 2024. This increase resulted from a $31.5 million increase in retail gas sales revenue and a $2.7 million increase in other revenue. The increase in retail gas sales revenue reflects the impact of new base delivery rates in Distribution Corporation's New York jurisdiction pursuant to a settlement approved by the NYPSC on December 19, 2024. Additional details regarding the base rate regulatory proceeding can be found in the Rate Matters section below. The increase in retail gas sales revenue also reflects higher purchased gas revenues resulting from a 2.4 Bcf increase in throughput mainly due to colder weather combined with an increase in the cost of gas sold (per Mcf). It should be noted that under its purchased gas adjustment clauses in New York and Pennsylvania, Distribution Corporation's earnings are not impacted by fluctuations in gas costs. Purchased gas expense recorded on the consolidated income statement matches the revenues collected from customers. The increase in other revenue was mainly due to the elimination of the refund provision that was required to defer and return the income tax benefits resulting from the 2017 Tax Reform Act to customers ($2.8 million). The refund provision is no longer necessary because Distribution Corporation's new base delivery rates now reflect a revenue requirement determined with the current federal income tax rate of 21% and the refund of excess accumulated deferred income taxes. The increases in retail gas sales revenue and other revenue were partially offset by a $1.6 million decrease in transportation revenue, primarily due to the the amortization of certain regulatory assets in accordance with the New York rate settlement, despite a 1.0 Bcf increase in throughput and the impact of new base rates in New York discussed above. Operating revenues for the Utility segment increased $112.3 million for the nine months ended June 30, 2025 as compared with the nine months ended June 30, 2024. The increase resulted from a $102.2 million increase in retail gas sales revenue, a $1.2 million increase in transportation revenue, and an $8.8 million increase in other revenue. The increases in retail gas sales and transportation revenues reflect the impact of new base delivery rates in Distribution Corporation's New York jurisdiction, as mentioned above. The increase in retail gas sales revenue also reflects higher purchased gas revenues resulting from a 9.4 Bcf increase in throughput mainly due to colder weather combined with an increase in the cost of gas sold (per Mcf). The increase in transportation revenue also reflects a 2.9 Bcf increase in throughput due primarily to colder weather, partially offset by the amortization of certain regulatory assets in accordance with the New York rate settlement. The increase in other revenue was largely due to the elimination of the refund provision that was required to defer and return the income tax benefits resulting from the 2017 Tax Reform Act to customers ($10.8 million), as discussed above, partially offset by decreases in capacity release revenues ($0.9 million), other gas revenues ($0.7 million), and late payment charges billed to customers ($0.4 million). The Utility segment’s earnings for the quarter ended June 30, 2025 were $5.0 million, an increase of $2.4 million when compared with earnings of $2.6 million for the quarter ended June 30, 2024. The increase can be attributed to the following factors: (Millions) Higher other income $ 3.2 (1) Impact of new base rates in New York 2.8 Impact of higher customer usage 2.7 Higher operating expenses (2.1) (2) Higher interest expense (2.0) (3) Higher depreciation expense (1.2) (4) Higher income tax expense (1.2) (5) Other items 0.2 $ 2.4 (1) The increase in other income reflects the recognition of non-service pension and post-retirement benefit income in accordance with the New York rate settlement. (2) The increase in operating expenses is attributable to higher personnel costs, partially offset by amortizations of certain regulatory assets and a reduction in uncollectible expenses as a result of a tracker implemented, both of which were associated with the New York rate settlement. (3) The increase in interest expense is mainly attributed to an increase in long-term intercompany debt balances. (4) The increase in depreciation expense is attributable to higher average property, plant and equipment balances. (5) The increase in income tax expense was primarily driven by updates to the amortization of excess deferred income taxes in accordance with the New York rate settlement. 39 Table of Content The impact of weather variations on cash flows and customer bills in the Utility segment is mitigated by a WNA. The WNA, which covers the eight-month period from October through May, has had a stabilizing effect on earnings for the Utility segment. In addition, in periods of colder than normal weather, the WNA benefits the Utility segment's customers. For the quarter ended June 30, 2025, the WNA preserved earnings of approximately $1.3 million in the Utility segment’s New York rate jurisdiction and preserved earnings of approximately $0.5 million in the Utility segment's Pennsylvania rate jurisdiction, as the weather was warmer than normal on a cycle-bill basis in both jurisdictions. For the quarter ended June 30, 2024, the WNA preserved earnings in the Utility segment’s New York rate jurisdiction of approximately $1.7 million and preserved earnings in the Utility segment’s Pennsylvania rate jurisdiction of approximately $1.4 million, as the weather was warmer than normal in both jurisdictions. The Utility segment’s earnings for the nine months ended June 30, 2025 were $101.0 million, an increase of $27.2 million when compared with earnings of $73.8 million for the nine months ended June 30, 2024. The increase can be attributed to the following factors: (Millions) Impact of new base rates in New York $ 25.2 Higher other income 14.9 (1) Impact of higher customer usage 5.4 Higher operating expenses (6.7) (2) Higher interest expense (5.7) (3) Higher depreciation expense (2.6) (4) Higher income tax expense (2.3) (5) Lower other operating revenues (1.4) Other items 0.4 $ 27.2 (1) The increase in other income reflects the recognition of non-service pension and post-retirement benefit income in accordance with the New York rate settlement. (2) The increase in operating expenses is attributable to higher personnel costs partially offset by amortizations of certain regulatory assets associated with the New York rate settlement. (3) The increase in interest expense is mainly attributed to an increase in both short-term and long-term intercompany debt balances. (4) The increase in depreciation expense is attributable to higher average property, plant and equipment balances. (5) The increase in income tax expense was primarily driven by updates to the amortization of excess deferred income taxes in accordance with the New York rate settlement and higher state income tax expense due to higher pre-tax income. For the nine months ended June 30, 2025, the WNA preserved earnings in the Utility segment’s New York rate jurisdiction of approximately $3.9 million and preserved earnings in the Utility segment’s Pennsylvania rate jurisdiction of approximately $1.7 million, as the weather was warmer than normal on a cycle-bill basis in both jurisdictions. For the nine months ended June 30, 2024, the WNA preserved earnings in the Utility segment’s New York rate jurisdiction of approximately $8.1 million and preserved earnings in the Utility segment’s Pennsylvania rate jurisdiction of approximately $5.5 million, as the weather was warmer than normal in both jurisdictions. Corporate and All Other 2025 Compared with 2024 Corporate and All Other operations recorded a net loss of $0.7 million for the quarter ended June 30, 2025, which was relatively consistent with the net loss of $0.4 million for the quarter ended June 30, 2024. For the nine months ended June 30, 2025, Corporate and All Other operations recorded a net loss of $4.1 million, a decrease of $4.9 million when compared with earnings of $0.8 million for the nine months ended June 30, 2024. The decrease for the nine-month period was primarily attributable to changes in unrealized gains and losses on investments in equity securities. During nine months ended June 30, 2025, the Company recorded unrealized losses of $1.4 million. During the nine months ended June 30, 2024, the Company recorded unrealized gains of $1.4 million. Also contributing to the decrease included higher interest expense ($2.7 million) 40 Table of Content mainly due to a higher average amount of long-term borrowings and higher operating expense ($1.7 million) mainly due to higher legal and consulting fees and outside service expenses. These changes were partially offset by realized gains from investment securities sold during the current nine-month period ($1.2 million), an increase in interest income on temporary cash investments ($0.8 million), and a decrease in non-service pension and post-retirement benefit costs ($0.4 million). Other Income (Deductions) Net other income on the Consolidated Statements of Income was $8.5 million for the quarter ended June 30, 2025, compared to net other income of $3.2 million for the quarter ended June 30, 2024, for an increase of $5.3 million. This increase can be attributed primarily to a $4.7 million increase in non-service pension and post-retirement benefit income, primarily due to the recognition of non-service pension and post-retirement benefit income in accordance with Distribution Corporation's New York rate settlement, along with a $1.2 million change in the quarter-over-quarter revaluation of the contingent consideration received as part of the 2022 California asset sale. Also contributing to the increase was an increase in the quarter-over-quarter unrealized gains on investment securities of $0.9 million. Partially offsetting these increases, was a decrease in interest income of $1.4 million. Net other income on the Consolidated Statements of Income was $31.5 million for the nine months ended June 30, 2025, compared to net other income of $13.0 million for the nine months ended June 30, 2024, for an increase of $18.5 million. This increase can be attributed primarily to a $21.1 million increase in non-service pension and post-retirement benefit income, as discussed above, along with a $4.1 million change in the year-over-year revaluation of the contingent consideration received as part of the 2022 California asset sale. These increases were offset by year-over-year changes in the value of investment securities. During the nine months ended June 30, 2025, there were net losses of $0.3 million on investment securities, compared to net gains of $2.0 million on investment securities during the nine months ended June 30, 2024. Other offsetting factors were the non-recurrence of $2.0 million of business interruption insurance proceeds received during the nine months ended June 30, 2024 related to a pipeline outage that impacted Seneca's ability to market its gas, along with a $1.9 million decrease in interest income. Interest Expense on Long-Term Debt Interest expense on long-term debt on the Consolidated Statement of Income increased $1.5 million for the quarter ended June 30, 2025 as compared to the quarter ended June 30, 2024. For the nine months ended June 30, 2025, interest expense on long-term debt increased $17.6 million as compared with the nine months ended June 30, 2024. These increases are primarily due to higher average balances and a higher weighted average interest rate on long-term debt. On February 19, 2025, the Company issued $500 million of 5.50% notes and $500 million of 5.95% notes. On March 6, 2025, the Company redeemed $450 million of 5.20% notes and $500 million of 5.50% notes and paid early redemption premiums totaling $2.4 million that were recorded as interest expense on long-term debt in the Exploration and Production and Gathering segments. The Company also redeemed $50 million of 7.38% notes on June 13, 2025. In addition, in April 2024, the Company elected to draw a total of $300.0 million under a delayed draw term loan credit facility. These borrowings had a locked-in weighted average interest rate of 5.86% and 5.99% for the quarter and nine months ended June 30, 2025, respectively. CAPITAL RESOURCES AND LIQUIDITY The Company’s primary source of cash during the nine-month period ended June 30, 2025 consisted of cash provided by operating activities and net proceeds from long-term borrowings. The Company’s primary source of cash during the nine-month period ended June 30, 2024 consisted of cash provided by operating activities and net proceeds from long-term borrowings. The Company expects to have adequate amounts of cash available to meet both its short-term and long-term cash requirements for at least the next twelve months and for the foreseeable future thereafter. During the remainder of 2025, the Company expects to use cash provided by operating activities and short-term borrowings to fund the Company's capital expenditures. Looking forward to 2026, based on current commodity prices, cash provided by operating activities is again expected to exceed capital expenditures. The Company also has a delayed draw term loan that matures in February 2026, which the Company anticipates funding with cash on hand as well as short-term or long-term borrowings. These cash flow projections do not reflect the impact of acquisitions or divestitures that may arise in the future. 41 Table of Content Operating Cash Flow Internally generated cash from operating activities consists of net income available for common stock, adjusted for non-cash expenses, non-cash income, gains and losses associated with investing and financing activities, and changes in operating assets and liabilities. Non-cash items include depreciation, depletion and amortization, impairment of assets, deferred income taxes and stock-based compensation. Cash provided by operating activities in the Utility and Pipeline and Storage segments may vary substantially from period to period because of the impact of rate cases. In the Utility segment, supplier refunds, over- or under-recovered purchased gas costs, weather and regulatory lag may also significantly impact cash flow. The impact of weather on cash flow is tempered in the Pipeline and Storage segment by the straight fixed-variable rate design used by Supply Corporation and Empire. The weather impact on cash flow in the Utility segment is mitigated by a WNA in both its New York and Pennsylvania rate jurisdictions. Because of the seasonal nature of the heating business in the Utility segment, revenues in this business are relatively high during the heating season, primarily the first and second quarters of the fiscal year, and receivable balances historically increase during these periods from the receivable balances at September 30. The storage gas inventory normally declines during the first and second quarters of the fiscal year and is replenished during the third and fourth quarters. For storage gas inventory accounted for under the LIFO method, the current cost of replacing gas withdrawn from storage is recorded in the Consolidated Statements of Income and a reserve for gas replacement is recorded in the Consolidated Balance Sheets under the caption "Other Accruals and Current Liabilities." Such reserve is reduced as the inventory is replenished. Cash provided by operating activities in the Exploration and Production segment may vary from period to period as a result of changes in the commodity prices of natural gas as well as changes in production. The Company uses various derivative financial instruments, including price swap agreements and no cost collars, in an attempt to manage this energy commodity price risk. The pricing protection obtained from derivative financial instruments will fluctuate over time as instruments expire and are replaced with new instruments reflecting current commodity prices of natural gas. Net cash provided by operating activities totaled $862.3 million for the nine months ended June 30, 2025, a decrease of $5.7 million compared with $868.0 million provided by operating activities for the nine months ended June 30, 2024. The decrease in cash provided by operating activities primarily reflects lower cash provided by operating activities in the Utility segment, partially offset by higher cash provided by operating activities in the Exploration and Production segment. The decrease in the Utility segment is driven by the timing of gas cost recovery, partially offset by the impact of higher revenues resulting from the base rate increase in Distribution Corporation's New York rate jurisdiction. The increase in the Exploration and Production segment is due to the timing of cash receipts and hedge settlements from natural gas production in the Appalachian region. 42 Table of Content Investing Cash Flow Expenditures for Long-Lived Assets The Company’s expenditures for long-lived assets totaled $596.0 million during the nine months ended June 30, 2025 and $655.5 million during the nine months ended June 30, 2024. The table below presents these expenditures: Total Expenditures for Long-Lived Assets Nine Months Ended June 30, 2025 2024 Increase (Decrease) (Millions) Exploration and Production: Capital Expenditures $ 354.4 (1) $ 399.8 (2) $ (45.4) Pipeline and Storage: Capital Expenditures 58.1 (1) 68.8 (2) (10.7) Gathering: Capital Expenditures 58.2 (1) 69.1 (2) (10.9) Utility: Capital Expenditures 128.3 (1) 117.5 (2) 10.8 All Other: Capital Expenditures 0.5 0.3 0.2 Eliminations (3.5) — (3.5) $ 596.0 $ 655.5 $ (59.5) (1) At June 30, 2025, capital expenditures for the Exploration and Production segment, the Pipeline and Storage segment, the Gathering segment and the Utility segment included $61.5 million, $5.7 million, $11.6 million and $9.8 million, respectively, of non-cash capital expenditures. At September 30, 2024, capital expenditures for the Exploration and Production segment, the Pipeline and Storage segment, the Gathering segment and the Utility segment included $63.3 million, $14.4 million, $21.7 million and $20.6 million, respectively, of non-cash capital expenditures. (2) At June 30, 2024, capital expenditures for the Exploration and Production segment, the Pipeline and Storage segment, the Gathering segment and the Utility segment included $50.9 million, $7.0 million, $14.6 million and $8.0 million, respectively, of non-cash capital expenditures. At September 30, 2023, capital expenditures for the Exploration and Production segment, the Pipeline and Storage segment, the Gathering segment and the Utility segment included $43.2 million, $31.8 million, $20.6 million and $13.6 million, respectively, of non-cash capital expenditures. Exploration and Production The Exploration and Production segment capital expenditures for the nine months ended June 30, 2025 were primarily well drilling and completion expenditures in the Appalachian region, and included $104.3 million in the Marcellus Shale area and $239.2 million in the Utica Shale area. These amounts included $182.6 million spent to develop proved undeveloped reserves. The Exploration and Production segment capital expenditures for the nine months ended June 30, 2024 were primarily well drilling and completion expenditures in the Appalachian region, and included $60.2 million in the Marcellus Shale area and $325.7 million in the Utica Shale area. These amounts included $248.9 million spent to develop proved undeveloped reserves. Pipeline and Storage The Pipeline and Storage segment capital expenditures for the nine months ended June 30, 2025 and June 30, 2024 were primarily for additions, improvements and replacements to this segment's transmission and gas storage systems, which included system modernization expenditures that enhance the reliability and safety of the systems and reduce emissions. In addition, due to the continuing demand for pipeline capacity to move natural gas from new wells being drilled in Appalachia, specifically in the Marcellus and Utica Shale producing areas, Supply Corporation and Empire have completed and continue to pursue expansion projects designed to move anticipated Marcellus and Utica production gas to other interstate pipelines, on-system markets, and markets beyond the Supply Corporation and Empire pipeline systems. Expansion and modernization projects where the Company has forecasted a significant amount of investment in preliminary survey and investigation costs and/or capital expenditures, and where a precedent agreement has been executed, is discussed below. 43 Table of Content Supply Corporation has designed a project that would allow for the transportation of 190,000 Dth per day of shale gas supplies from a new interconnection in northwest Tioga County, Pennsylvania to an existing Supply Corporation interconnection with Tennessee Gas Pipeline Company, LLC at Ellisburg and a new virtual delivery point into an existing Transcontinental Gas Pipe Line Company, LLC (“Transco”) capacity lease, providing access to Mid-Atlantic markets (“Tioga Pathway Project”). The Tioga Pathway Project involves the construction of approximately 19 miles of new pipeline and the replacement of approximately four miles of existing pipeline on the Supply Corporation system. Supply Corporation has executed a Precedent Agreement with Seneca for 190,000 Dth per day of transportation capacity and filed a Section 7(b)/7(c) application with the FERC on August 21, 2024. FERC issued the Section 7(b)/7(c) certificate on May 5, 2025. Construction on the Tioga Pathway Project is expected to commence in early calendar 2026. This project has a projected in-service date of late calendar year 2026 and an estimated capital cost of approximately $101 million. As of June 30, 2025, approximately $4.3 million has been spent to study this project, all of which has been included in Deferred Charges on the Consolidated Balance Sheet at June 30, 2025. Additionally, Supply Corporation concluded an open season on February 26, 2025, and based on interest in that open season, designed a project that would allow for the transportation of 205,000 Dth per day of natural gas supplies from its existing Line N pipeline system to a new interconnection with the Shippingport Power Station, a natural gas power generation facility under development in Beaver County, Pennsylvania, which is expected support a co-located data center (the "Shippingport Lateral Project"). In order to provide this new natural gas transportation capacity, Supply Corporation expects to construct an approximately 7.5 mile pipeline lateral from its existing Line N pipeline system to a direct interconnection with the facility with the incremental capacity expected to come online as early as Fall 2026 and an estimated capital cost of approximately $57 million. Supply Corporation has executed a Precedent Agreement with Shippingport Power Station, LLC, the facility developer, for 100% of the capacity for the Shippingport Lateral Project. As of June 30, 2025, approximately $0.4 million has been spent to study this project, all of which has been included in Deferred Charges on the Consolidated Balance Sheet at June 30, 2025. Gathering The majority of the Gathering segment capital expenditures for the nine months ended June 30, 2025 included expenditures related to the continued expansion of Midstream Company's Tioga and Trout Run gathering systems. These expenditures were largely attributable to the installation of new in-field gathering pipelines related to bringing new development online and system optimization, as well as the continued development of centralized station facilities, including increased dehydration capacity and compression horsepower. The majority of the Gathering segment capital expenditures for the nine months ended June 30, 2024 included expenditures related to the continued expansion of Midstream Company's Tioga and Clermont gathering systems. These expenditures were largely attributable to the installation of new in-field gathering pipelines related to bringing new development online and system optimization, as well as the continued development of centralized station facilities, including increased dehydration capacity and compression horsepower. Utility The majority of the Utility segment capital expenditures for the nine months ended June 30, 2025 and June 30, 2024 were made for main and service line improvements and replacements that enhance the reliability and safety of the system and reduce emissions. Expenditures were also made for main extensions. Project Funding During the nine months ended June 30, 2025 and fiscal 2024, the Company has been financing capital expenditures with cash from operations and short-term debt. Going forward, the Company expects to use cash on hand, cash from operations and short-term or long-term borrowings, as needed, to finance capital expenditures. The level of short-term and/or long-term borrowings will depend upon the amount of cash provided by operations, which, in turn, will likely be most impacted by natural gas production and the associated commodity price realizations in the Exploration and Production segment. It will also likely depend on the timing of gas cost and base rate recovery in the Utility segment as well as the timing of base rate recovery in the Pipeline and Storage segment. The Company continuously evaluates capital expenditures and potential investments in corporations, partnerships, and other business entities. The amounts are subject to modification for opportunities such as the acquisition of attractive natural gas properties, accelerated development of existing natural gas properties, natural gas storage and transmission facilities, natural gas 44 Table of Content generation facilities, natural gas gathering and compression facilities and the expansion of natural gas transmission line capacities, regulated utility assets and other opportunities as they may arise. The amounts are also subject to modification for opportunities involving emission reductions and/or energy transition including investments directly related to low- and no-carbon fuels. While the majority of capital expenditures in the Utility segment are necessitated by the continued need for replacement and upgrading of mains and service lines, the magnitude of future capital expenditures or other investments in the Company’s business segments depends, to a large degree, upon market and regulatory conditions as well as legislative actions. Financing Cash Flow Consolidated short-term debt decreased $29.2 million when comparing the balance sheet at June 30, 2025 to the balance sheet at September 30, 2024. The maximum amount of short-term debt outstanding during the nine months ended June 30, 2025 was $330.0 million. In addition to cash provided by operating activities, the Company continues to consider short-term debt (consisting of short-term notes payable to banks and commercial paper) an important source of cash for temporarily financing items such as capital expenditures, asset purchases, gas-in-storage inventory, unrecovered purchased gas costs, margin calls on derivative financial instruments, repurchases of stock, other working capital needs and repayment of long-term debt. Fluctuations in these items can have a significant impact on the amount and timing of short-term debt. As of June 30, 2025, the Company had outstanding commercial paper of $61.5 million and did not have any short-term notes payable to banks. The Company is a party to a syndicated Credit Agreement (as amended from time to time, the “Credit Agreement”) that provides a $1.0 billion unsecured committed revolving credit facility. In January 2025, the Company and the banks in the syndicate consented to a second one-year extension of the maturity date of the Credit Agreement, such that the Company has aggregate commitments available in the full amount of $1.0 billion through February 23, 2029. In May 2025, the total lenders under the Credit Agreement increased to twelve as a new lender joined the syndicate, assuming a portion of an existing lender's commitment. The total amount available to be issued under the Company’s commercial paper program is $500.0 million. The commercial paper program is backed by the Credit Agreement. The Company also has uncommitted lines of credit with financial institutions for general corporate purposes. Borrowings under these uncommitted lines of credit would be made at competitive market rates. The uncommitted credit lines are revocable at the option of the financial institution and are reviewed on an annual basis. The Company anticipates that its uncommitted lines of credit generally will be renewed or substantially replaced by similar lines. Other financial institutions may also provide the Company with uncommitted or discretionary lines of credit in the future. On February 14, 2024, the Company entered into a Term Loan Agreement (the “Term Loan Agreement”) with six lenders, all of which are lenders under the Credit Agreement. The Term Loan Agreement provides a $300.0 million unsecured committed delayed draw term loan facility with a maturity date of February 14, 2026, and the Company has the ability to select interest periods of one, three or six months for borrowings. In April 2024, pursuant to the delayed draw mechanism, the Company elected to draw a total of $300.0 million under the facility. After deducting debt issuance costs, the net proceeds to the Company amounted to $299.4 million. The Company used the proceeds for general corporate purposes, which included the redemption of outstanding commercial paper. Borrowings under the Term Loan Agreement currently bear interest at a rate equal to SOFR for the applicable interest period, plus an adjustment of 0.10%, plus a spread of 1.375%. The current weighted average locked-in interest rate is 5.82% until mid-August 2025. Both the Credit Agreement and the Term Loan Agreement provide that the Company's debt to capitalization ratio will not exceed 0.65 at the last day of any fiscal quarter. For purposes of calculating the debt to capitalization ratio, the Company's total capitalization will be increased by adding back 50% of the aggregate after-tax amount of non-cash charges directly arising from any ceiling test impairment occurring on or after July 1, 2018, not to exceed $400 million. Since that date, the Company recorded non-cash, after-tax ceiling test impairments totaling $797.0 million. As a result, at June 30, 2025, $398.5 million was added back to the Company's total capitalization for purposes of calculating the debt to capitalization ratio under the Credit Agreement and the Term Loan Agreement. In addition, for purposes of calculating the debt to capitalization ratio, the following amounts included in Accumulated Other Comprehensive Income (Loss) on the Company's consolidated balance sheet will be excluded from the determination of comprehensive shareholders’ equity: all unrealized gains or losses on commodity-related derivative financial instruments, and up to $10 million in unrealized gains or losses on other derivative financial instruments. As a result of these exclusions, such unrealized gains or losses will not positively or negatively affect the calculation of the debt to capitalization ratio. At June 30, 2025, the Company’s debt to capitalization ratio, as calculated under the agreements, was 0.45. The constraints specified in the Credit Agreement and the Term Loan Agreement would have 45 Table of Content permitted an additional $3.60 billion in short-term and/or long-term debt to be outstanding at June 30, 2025 before the Company’s debt to capitalization ratio exceeded 0.65. A downgrade in the Company’s credit ratings could increase borrowing costs, negatively impact the availability of capital from banks, commercial paper purchasers and other sources, and require the Company's subsidiaries to post letters of credit, cash or other assets as collateral with certain counterparties. If the Company is not able to maintain investment grade credit ratings, it may not be able to access commercial paper markets. However, the Company expects that it could borrow under its credit facilities or rely upon other liquidity sources. The Credit Agreement and the Term Loan Agreement each contain a cross-default provision whereby the failure by the Company or its significant subsidiaries to make payments under other borrowing arrangements, or the occurrence of certain events affecting those other borrowing arrangements, could trigger an obligation to repay any amounts outstanding under the Credit Agreement or Term Loan Agreement, as applicable. In particular, a repayment obligation could be triggered if (i) the Company or any of its significant subsidiaries fails to make a payment when due of any principal or interest on any other indebtedness aggregating $40.0 million or more or (ii) an event occurs that causes, or would permit the holders of any other indebtedness aggregating $40.0 million or more to cause, such indebtedness to become due prior to its stated maturity. On February 19, 2025, the Company issued $500.0 million of 5.50% notes due March 15, 2030 and $500.0 million of 5.95% notes due March 15, 2035. After deducting underwriting discounts, commissions and other debt issuance costs, the net proceeds to the Company amounted to $495.2 million and $493.5 million, respectively. The holders of the notes may require the Company to repurchase their notes at a price equal to 101% of the principal amount in the event of both a change in control and a ratings downgrade to a rating below investment grade. Additionally, the interest rate payable on the notes will be subject to adjustment from time to time, with a maximum adjustment of 2.00%, such that the coupon will not exceed 7.50% on the 5.50% notes and 7.95% on the 5.95% notes, if certain change of control events involving a material subsidiary result in a downgrade of the credit rating assigned to the notes to a rating below investment grade. A downgrade with a resulting increase to the coupon does not preclude the coupon from returning to its original rate if the Company's credit rating is subsequently upgraded. The proceeds of these debt issuances were used for general corporate purposes, including the March 6, 2025 redemptions of $450.0 million of the Company's 5.20% notes that were scheduled to mature in July 2025 and $500.0 million of the Company's 5.50% notes that were scheduled to mature in January 2026. The Company redeemed those notes for $450.8 million and $503.3 million, respectively, plus accrued interest. The remaining proceeds of the debt issuances were used to repay a portion of short-term borrowings the Company incurred to fund a trust for the benefit of holders of $50.0 million of 7.38% notes under the Company's 1974 indenture prior to the June 13, 2025 maturity date of these notes. Placing these funds in trust enabled the Company to cancel and discharge the 1974 indenture. This relieved the Company from its obligations to comply with the 1974 indenture's covenants. The funds were paid out of the trust on June 13, 2025 for the redemption of the $50.0 million of 7.38% notes, leaving no notes outstanding under the 1974 indenture. The Current Portion of Long-Term Debt at June 30, 2025 consisted of a $300.0 million long-term delayed draw term loan that matures in February 2026. The Current Portion of Long-Term Debt at September 30, 2024 consisted of $50.0 million of 7.38% notes that matured in June 2025 and $450.0 million of 5.20% notes with a maturity date in July 2025. As discussed above, the Company redeemed the $450.0 million of 5.20% notes on March 6, 2025. The Company's present liquidity position is believed to be adequate to satisfy known demands. The Company’s embedded cost of long-term debt was 4.92% at June 30, 2025 and 4.91% at June 30, 2024. On March 8, 2024, the Company’s Board of Directors authorized the Company to implement a share repurchase program, whereby the Company may repurchase outstanding shares of common stock, up to an aggregate amount of $200 million in the open market or through privately negotiated transactions, including through the use of trading plans intended to qualify under SEC Rule 10b5-1, in accordance with applicable securities laws and other restrictions. In April 2025, repurchases under the program were temporarily paused. As a result, the Company expects completion of the program will extend into calendar 2026. The timing and amount of future repurchases under this program will depend on a number of factors, including but not limited to stock price, market conditions, applicable securities laws (including SEC Rule 10b-18), corporate and regulatory requirements, and capital and liquidity needs. During the nine months ended June 30, 2025, the Company executed transactions to repurchase 828,720 shares at an average price of $64.37 per share, for a total cost of $53.8 million (including broker fees and excise taxes). Share repurchases that settled during the nine months ended June 30, 2025 were funded with cash provided by operating activities and/or short-term borrowings. As of June 30, 2025, the Company has repurchased 1,974,979 shares under the share repurchase program at an average price of $59.70, for a total cost of $119.0 million (including broker fees and excise taxes). It is expected that future 46 Table of Content repurchases, if any, under this program will continue to be funded with cash provided by operating activities and/or through the use of short-term borrowings. The program has no fixed expiration date. OTHER MATTERS In addition to the legal proceedings disclosed in Part II, Item 1 of this report, the Company is involved in other litigation and regulatory matters arising in the normal course of business. These other matters may include, for example, negligence claims and tax, regulatory or other governmental audits, inspections, investigations or other proceedings. These matters may involve state and federal taxes, safety, compliance with regulations, rate base, cost of service and purchased gas cost issues, among other things. While these normal-course matters could have a material effect on earnings and cash flows in the period in which they are resolved, they are not expected to change materially the Company’s present liquidity position, nor are they expected to have a material adverse effect on the financial condition of the Company. The Company did not make any contributions to its tax-qualified, noncontributory defined benefit retirement plan (Retirement Plan) during the nine months ended June 30, 2025, and does not anticipate making any such contributions during the remainder of fiscal 2025. The Company also did not make any contributions to its VEBA trusts for its other post-retirement benefits during the nine months ended June 30, 2025, and does not anticipate making any such contributions during the remainder of fiscal 2025. Market Risk Sensitive Instruments Rules adopted by the CFTC and other regulators could adversely impact the Company. While many of those rules place specific conditions on the operations of swap dealers rather than directly on the Company, concern remains that swap dealers with whom the Company may transact will pass along their increased costs stemming from final rules through higher transaction costs and prices or other direct or indirect costs. Some of those rules also may apply directly to the Company and adversely impact its ability to trade swaps and over-the-counter derivatives, whether due to increased costs, limitations on trading capacity or for other reasons. Additionally, given the enforcement authority granted to the CFTC on anti-market manipulation, anti-fraud and anti-disruptive trading practices, it is difficult to predict how the evolving enforcement priorities of the CFTC will impact our business. Should the Company violate any laws or regulations applicable to our hedging activities, it could be subject to CFTC enforcement action and material penalties and sanctions. The authoritative guidance for fair value measurements and disclosures requires consideration of the impact of nonperformance risk (including credit risk) from a market participant perspective in the measurement of the fair value of assets and liabilities. At June 30, 2025, the Company determined that nonperformance risk associated with its natural gas price swap agreements, natural gas no cost collars and foreign currency contracts would have no material impact on its financial position or results of operation. To assess nonperformance risk, the Company considered information such as any applicable collateral posted, master netting arrangements, and applied a market-based method by using the counterparty's (assuming the derivative is in a gain position) or the Company’s (assuming the derivative is in a loss position) credit default swaps rates. For a complete discussion of all other market risk sensitive instruments used by the Company, refer to “Market Risk Sensitive Instruments” in Item 7 of the Company’s 2024 Form 10-K. Rate Matters Utility Operation Delivery rates for both the New York and Pennsylvania divisions are regulated by the states’ respective public utility commissions and typically are changed only when approved through a procedure known as a “rate case.” In both jurisdictions, delivery rates do not reflect the recovery of purchased gas costs. Prudently-incurred gas costs are recovered through operation of automatic adjustment clauses, and are collected primarily through a separately-stated “supply charge” on the customer bill. New York Jurisdiction Distribution Corporation's current delivery rates in its New York jurisdiction were approved by the NYPSC in an order issued on December 19, 2024 with rates effective January 1, 2025 (“2024 Rate Order”). The 2024 Rate Order authorizes a three-year rate plan effective October 1, 2024, with a make-whole provision allowing full recovery of revenues that would have been billed at the new rates between October 1, 2024 and December 31, 2024. It also reflects a return on equity of 9.7% and authorizes a revenue requirement increase of $57.3 million in fiscal 2025, an additional revenue requirement increase of 47 Table of Content $15.8 million in fiscal 2026, and an additional revenue requirement increase of $12.7 million in fiscal 2027. The revenue requirement for each year of the three-year plan has been reduced by $14 million for actuarial projections of income that is expected to be recognized for qualified pension and other post-retirement benefits. Qualified pension and other post-retirement benefit income or costs are matched with amounts included in revenue resulting in zero impact to earnings. The 2024 Rate Order approves the continuation of several ratemaking mechanisms, including revenue decoupling and WNA, and establishes a number of new cost trackers and regulatory deferrals. It also includes an earnings sharing mechanism, gas safety and customer service performance metrics (including maintaining the Company’s leak prone pipe replacement program), and provisions that will facilitate achievement of the emissions reduction goals of the CLCPA. Pennsylvania Jurisdiction Distribution Corporation’s current delivery rates in its Pennsylvania jurisdiction were approved by the PaPUC in an order issued on June 15, 2023 with rates effective August 1, 2023 (“2023 Rate Order”). The 2023 Rate Order provided for, among other things, an increase in Distribution Corporation’s annual base rate operating revenues of $23 million and authorized a new weather normalization adjustment mechanism. On April 10, 2024, Distribution Corporation filed with the PaPUC a petition for approval of a distribution system improvement charge (“DSIC”) to recover, between base rate cases, capital expenses related to eligible property constructed or installed to rehabilitate, improve and replace portions of the Company’s natural gas distribution system. The DSIC petition was approved by the PaPUC on December 5, 2024, and on January 1, 2025, the Company initiated recovery of eligible costs on incremental rate base added after September 30, 2024. During the quarters ended March 31, 2025 and June 30, 2025, Distribution Corporation recovered $0.2 million and $0.3 million, respectively, from customers. Pipeline and Storage Supply Corporation's rate settlement, approved June 11, 2024, provides that Supply Corporation may make a rate filing for new rates to be effective at any time. As well, any party can make a filing under NGA Section 5. Supply Corporation has no rate case currently on file. On March 17, 2025, FERC approved an amendment to Empire's 2019 rate case settlement, which provides for a modest reduction in Empire’s transportation unit rates, effective November 1, 2025. This settlement amendment is estimated to decrease Empire's revenues on a yearly basis by approximately $0.5 million. As well, the revenue sharing mechanism under the 2019 rate case settlement was adjusted and Empire committed to undertake greenhouse gas and reliability reporting. Empire will not be able to file a new Section 4 rate case before April 30, 2027 and is required to file a Section 4 rate case by May 31, 2031. Environmental Matters The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. The Company has established processes for the ongoing evaluation of its operations to identify potential environmental exposures and to comply with regulatory requirements. In 2021, the Company set methane intensity reduction targets at each of its businesses, an absolute greenhouse gas emissions reduction target for the consolidated Company, and greenhouse gas reduction targets associated with the Company’s utility delivery system. In 2022, the Company began measuring progress against these reduction targets. The Company's ability to estimate accurately the time, costs and resources necessary to meet emissions targets may be impacted as environmental exposures, technology and opportunities change and regulatory and policy updates are issued. For further discussion of the Company's environmental exposures, refer to Item 1 at Note 7 – Commitments and Contingencies under the heading “Environmental Matters.” While the current federal administration has initiated efforts to roll-back and/or limit certain environmental initiatives, legislative and regulatory measures concerning climate change and greenhouse gas emissions are in various phases of discussion or implementation in the United States. These efforts include legislation, legislative proposals and new regulations, and private party litigation related to greenhouse gas emissions. Legislation or regulation that aims to reduce greenhouse gas emissions could also include emissions limits, reporting requirements, carbon taxes, cap-and-invest and cap-and-trade programs, restrictive permitting, increased efficiency standards, and incentives or mandates to conserve energy or use renewable energy sources. For example, the EPA's regulations, which impose stringent leak detection and repair requirements and address reporting and control of methane and volatile organic compound emissions, were further expanded with the 48 Table of Content agency's March 2024 publication and finalization of the Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources and its May 2024 finalization of the Greenhouse Gas Reporting Program, Part 98 - Subpart W Final Rule. Additionally, a number of states have adopted energy strategies or plans with aggressive goals for the reduction of greenhouse gas emissions. Pennsylvania has a methane reduction framework with the stated goal of reducing methane emissions from well sites, compressor stations and pipelines. In New York, the CLCPA, which was passed in 2019, mandates reducing greenhouse gas emissions by 40% from 1990 levels by 2030, and by 85% from 1990 levels by 2050, with the remaining emission reduction achieved by controlled offsets. The CLCPA also requires electric generators to meet 70% of demand with renewable energy by 2030 and 100% with zero emissions generation by 2040. Statements from New York's Governor and other state authorities have acknowledged that the near term targets of the statute may not be achievable in the required timeframes. The NYPSC has initiated and/or modified various proceedings in an effort to help the State meet these emissions reduction targets. In May 2023, New York State passed legislation that prohibits the installation of fossil fuel burning equipment and building systems in new buildings commencing on or after December 31, 2025, subject to certain exemptions. In addition, the NYDEC, in conjunction with the New York State Energy Research and Development Authority, is developing a cap-and-invest program in the state, although issuance of certain key regulations necessary to implement the program has been delayed. The above-enumerated initiatives could impact the Company's customer base and assets, and could also increase the Company’s cost of environmental compliance by increasing reporting requirements, requiring retrofitting of existing equipment, requiring installation of new equipment, and/or requiring the purchase of emission allowances. They could also reduce demand for natural gas and delay or otherwise negatively affect efforts to obtain permits and other regulatory approvals. Changing market conditions and new regulatory requirements, as well as unanticipated or inconsistent application of existing laws and regulations by federal and state administrative agencies, make it difficult to predict a long-term business impact across twenty or more years. Federal, state or local governments may also provide tax advantages and other subsidies to support alternative energy sources, mandate the use of specific fuels or technologies, or promote research into new technologies to reduce the cost and increase the scalability of alternative energy sources. Effects of Inflation The Company’s operations are sensitive to increases in the rate of inflation because of its operational and capital spending requirements in both its regulated and non-regulated businesses. For the regulated businesses, recovery of increasing costs from customers can be delayed by the regulatory process of a rate case filing. For the non-regulated businesses, prices received for services performed or products produced are determined by market factors that are not necessarily correlated to the underlying costs required to provide the service or product. Safe Harbor for Forward-Looking Statements The Company is including the following cautionary statement in this Quarterly Report on Form 10-Q to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by, or on behalf of, the Company. Forward-looking statements include statements concerning plans, objectives, goals, projections, strategies, future events or performance, and underlying assumptions and other statements which are other than statements of historical facts. From time to time, the Company may publish or otherwise make available forward-looking statements of this nature. All such subsequent forward-looking statements, whether written or oral and whether made by or on behalf of the Company, are also expressly qualified by these cautionary statements. Certain statements contained in this report, including, without limitation, statements regarding future prospects, plans, objectives, goals, projections, estimates of oil and gas quantities, strategies, future events or performance and underlying assumptions, capital structure, anticipated capital expenditures, completion of construction projects, projections for pension and other post-retirement benefit obligations, impacts of the adoption of new authoritative accounting and reporting guidance, and possible outcomes of litigation or regulatory proceedings, as well as statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “predicts,” “projects,” “believes,” “seeks,” “will,” “may,” and similar expressions, are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and accordingly 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 are expressed in good faith and are believed by the Company to have a reasonable basis, but there can be no assurance that management’s expectations, beliefs or projections will result or be achieved or accomplished. In addition to other factors and matters discussed elsewhere herein, the following are important factors that, in the view of the Company, could cause actual results to differ materially from those discussed in the forward-looking statements: 49 Table of Content 1. 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; 2. Governmental/regulatory actions, initiatives and proceedings, including those involving rate cases (which address, among other things, target rates of return, rate design, retained natural gas and system modernization), environmental/safety requirements, affiliate relationships, industry structure, and franchise renewal; 3. Changes in economic conditions, including the imposition of additional tariffs on U.S. imports and related retaliatory tariffs, inflationary pressures, supply chain issues, liquidity challenges, and global, national or regional recessions, and their effect on the demand for, and customers’ ability to pay for, the Company’s products and services; 4. The Company’s ability to estimate accurately the time and resources necessary to meet emissions targets; 5. Governmental/regulatory actions and/or market pressures to reduce or eliminate reliance on natural gas; 6. Impairments under the SEC's full cost ceiling test for natural gas reserves; 7. Changes in the price of natural gas; 8. The creditworthiness or performance of the Company’s key suppliers, customers and counterparties; 9. 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; 10. The Company's ability to complete strategic transactions; 11. Changes in price differentials between similar quantities of natural gas sold at different geographic locations, and the effect of such changes on commodity production, revenues and demand for pipeline transportation capacity to or from such locations; 12. The impact of information technology disruptions, cybersecurity or data security breaches, including the impact of issues that may arise from the use of artificial intelligence technologies; 13. Factors affecting the Company’s ability to successfully identify, drill for and produce economically viable natural gas reserves, including among others geology, lease availability and costs, title disputes, weather conditions, water availability and disposal or recycling opportunities of used water, 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; 14. Increased costs or delays or changes in plans with respect to Company projects or related projects of other companies, as well as difficulties or delays in obtaining necessary governmental approvals, permits or orders or in obtaining the cooperation of interconnecting facility operators; 15. Increasing health care costs and the resulting effect on health insurance premiums and on the obligation to provide other post-retirement benefits; 16. Other changes in price differentials between similar quantities of natural gas having different quality, heating value, hydrocarbon mix or delivery date; 17. The cost and effects of legal and administrative claims against the Company or activist shareholder campaigns to effect changes at the Company; 18. Negotiations with the collective bargaining units representing the Company's workforce, including potential work stoppages during negotiations; 19. Uncertainty of natural gas reserve estimates; 20. Significant differences between the Company’s projected and actual production levels for natural gas; 21. Changes in demographic patterns and weather conditions (including those related to climate change); 22. Changes in the availability, price or accounting treatment of derivative financial instruments; 50 Table of Content 23. 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; 24. Economic disruptions or uninsured losses resulting from major accidents, fires, severe weather, natural disasters, terrorist activities or acts of war, as well as economic and operational disruptions due to third-party outages; 25. Significant differences between the Company’s projected and actual capital expenditures and operating expenses; or 26. 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. Forward-looking and other statements in this Quarterly Report on Form 10-Q regarding methane and greenhouse gas reduction plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current and forward-looking statements regarding methane and greenhouse gas emissions may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future. Item 3. Quantitative and Qualitative Disclosures About Market Risk Refer to the "Market Risk Sensitive Instruments" section in Item 2 – MD&A.