DISCUSSION OF RESULTS BY SEGMENTThe following discussion of the earnings of each segment is summarized in a tabular form at pages 9 through 12 of this report. It may be helpful to refer to those tables while reviewing this discussion. Exploration and Production Segment The Exploration and Production segment operations are carried out by Seneca Resources Corporation (“Seneca”). Seneca explores for, develops and produces natural gas and oil reserves in California, Appalachia and Kansas. Seneca completed the sale of its offshore Gulf of Mexico assets in April 2011. The Exploration and Production segment’s earnings in the fourth quarter of fiscal 2012 of $22.1 million, or $0.26 per share, decreased $8.7 million, or $0.11 per share, when compared with the prior year’s fourth quarter. Overall production of natural gas and crude oil for the fourth quarter of 24.6 Bcfe increased approximately 7.8 Bcfe compared to the prior year’s fourth quarter. Production from Seneca’s Appalachian properties increased 62.9 percent, due to a 7.9 Bcfe, or 78.2 percent, increase in Marcellus production. Crude oil production in California increased 4.3 percent due to additional wells drilled at the Sespe and Midway Sunset fields. Changes in commodity prices realized after hedging also impacted earnings. The weighted average natural gas price received by Seneca (after hedging) for the quarter ended September 30, 2012, was $3.98 per thousand cubic feet (“Mcf”), a decrease of $1.51 per Mcf compared to the prior year’s fourth quarter. Higher crude oil prices realized after hedging increased earnings. The weighted average oil price received by Seneca (after hedging) for the quarter ended September 30, 2012, was $88.98 per Barrel (“Bbl”), an increase of $6.74 per Bbl. Depletion and lease operating expenses (“LOE”) for the current year’s fourth quarter increased over last year’s fourth quarter due in part to the higher production activity. On a per unit basis, depletion decreased $0.06 per thousand cubic feet equivalent (“Mcfe”) due to higher reserves at fiscal year end. LOE decreased $0.20 per Mcfe due to higher production and lower steam fuel costs in California. Operating Results were also reduced by higher property, franchise and other taxes due to the Pennsylvania impact fee (see discussion below), higher interest expense, due to a higher outstanding debt balance, and higher state income taxes.