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Note 5 - Other Investments

12 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

5.	OTHER INVESTMENTS

Midstream owns a less than 1% equity investment in the LLC that owns and operates the MVP. The Company accounts for its interest in the LLC under the equity method of accounting given the LLC maintains specific ownership accounts for each investor, and also considering the Company's rights under the LLC management agreement and the Company's involvement as a customer of the MVP. The Company has been using the equity method since the inception of its investment in fiscal 2016. Following receipt of authorization from the FERC, the MVP entered commercial operation on June 14, 2024 and became available for interruptible or short-term firm transportation service. On July 1, 2024, the MVP commenced long-term firm capacity obligations. Midstream is also a less than 1% investor, accounted for under the cost method, in Southgate, which is in the design and permitting phase. Completion of the Southgate pipeline is targeted for June 2028.

While under construction, AFUDC provided the majority of the income recognized by Midstream. The amount of AFUDC recognized during the current and prior year is included in the equity in earnings of unconsolidated affiliate in the tables below. AFUDC ceased in June 2024 when the pipeline went into commercial operation.

The Company participates in the earnings of the LLC proportionate to its level of investment. With the MVP now in operation, the Company recognizes its share of earnings from the LLC, favorably adjusted for a basis difference between the Company's proportional share of assets and its carrying value that arose when the Company recorded an other-than-temporary impairment of its investment in 2022. This basis difference amortization is a favorable non-cash adjustment to income over the operational life of the MVP, which is 40 years. The Company's share of earnings from the LLC and the basis difference amortization are presented under equity in earnings of unconsolidated affiliate on the consolidated statements of income. The Company participates in quarterly cash distributions by the LLC, the first of which was in October 2024. The Company's share was approximately $800,000.

Midstream assesses the value of its investment in the LLC on at least a quarterly basis, and no impairment indicators were identified in fiscal 2024 or 2023.

Funding for Midstream's investments has been provided through equity contributions from Resources and unsecured promissory notes as detailed in Note 7.

The investments in the LLC are included in the consolidated balance sheets as follows:

		*September 30*
Balance Sheet location:		*2024*				*2023*
Other Assets:
MVP		$	20,948,347			$	17,096,476
Southgate			108,875				90,617
Investment in unconsolidated affiliates		$	21,057,222			$	17,187,093

The change in the investment in unconsolidated affiliates is provided below:

		*September 30*
		*2024*				*2023*
Cash investment		$	18,258			$	2,133,534
Change in accrued capital calls			—				(804,506	)
Equity in earnings of unconsolidated affiliate			3,851,871				2,084,990
Change in investment in unconsolidated affiliates		$	3,870,129			$	3,414,018

Summary unaudited financial statements of MVP are presented below. Southgate financial statements, which are accounted for under the cost method, are not included:

		*Income Statements*
		*Years Ended September 30*
		*2024*				*2023*
Revenue		$	143,052,597			$	—
Operating expenses			(78,822,028	)			—
AFUDC			343,922,690				203,721,584
Other income, net			9,900,128				2,091,886
Net income		$	418,053,387			$	205,813,470

		*Balance Sheets*
		*September 30*
		*2024*				*2023*
Assets:
Current assets		$	263,966,727			$	795,787,358
Construction work in progress			1,568,267				7,499,128,254
Property, plant and equipment, net			9,522,815,742				—
Other assets			13,732,299				11,639,586
Total assets		$	9,802,083,035			$	8,306,555,198

Liabilities and Equity:
Current liabilities		$	168,645,751			$	236,947,158
Noncurrent liabilities			68,965				—
Capital			9,633,368,319				8,069,608,040
Total liabilities and equity		$	9,802,083,035			$	8,306,555,198