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Note 6 - Other Investments

3 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

6.	Other Investments

Midstream owns a less than 1% equity investment in the LLC constructing the MVP. Midstream is also a less than 1% investor, accounted for under the cost method, in Southgate. Since inception, the MVP has encountered various legal and regulatory issues that have substantially delayed the completion of the project, including a period in 2022 where work on the projected was halted. With the passage of the FRA and certain judicial rulings in mid-2023, construction work was restarted.

While under construction, AFUDC has provided the majority of the income recognized by Midstream. The LLC temporarily suspended accruing AFUDC on the project for portions of prior periods. AFUDC accruals resumed in June 2023 when construction activities restarted. 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. As the MVP project nears completion, AFUDC on completed segments will cease and will only be recorded on areas still being constructed.

Midstream reassesses the value of its investment in the LLC on at least a quarterly basis, and no impairment indicators were identified in fiscal 2023 or during the first fiscal quarter of 2024. As noted above, developments in 2023 on the legislative and legal fronts were favorable. The MVP project is not yet completed and adverse developments, as well as potential macroeconomic factors related to interest rates, cost increases, or other unanticipated events could erode fair value leading to new indicators or impairment.

Funding for Midstream's investments has been provided through equity contributions from Resources and unsecured promissory notes as detailed in Note 9. Midstream expects to refinance the notes maturing in 2024.

The Company will participate in the earnings generated from the transportation of natural gas through both pipelines proportionate to its level of investment once the pipelines are placed in service.

Investment balances of MVP and Southgate, as of December 31, 2023 and September 30, 2023, are reflected in the table below:

Balance Sheet location:		December 31, 2023				September 30, 2023
Other Assets:
MVP		$	18,564,311			$	17,096,476
Southgate			90,617				90,617
Investment in unconsolidated affiliates		$	18,654,928			$	17,187,093

		Three Months Ended December 31,
Income Statement location:			2023				2022
Equity in earnings of unconsolidated affiliate		$	1,467,835			$	1,232

		December 31, 2023				September 30, 2023
Undistributed earnings, net of income taxes, of MVP in retained earnings, excluding impairment		$	10,773,811			$	9,683,797

The undistributed earnings does not include the impairment of the investment in the LLC.

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

		Three Months Ended December 31,
		2023				2022
Cash investment		$	—			$	818,178
Change in accrued capital calls			—				39,466
Equity in earnings of unconsolidated affiliate			1,467,835				1,232
Change in investment in unconsolidated affiliates		$	1,467,835			$	858,876

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
		Three Months Ended December 31,
		2023				2022
AFUDC		$	158,562,141			$	—
Other income, net			2,663,569				160,472
Net income		$	161,225,710			$	160,472

		Balance Sheets
		December 31, 2023				September 30, 2023
Assets:
Current assets		$	349,417,551			$	795,787,358
Construction work in progress			8,468,379,830				7,499,128,254
Other assets			12,160,170				11,639,586
Total assets		$	8,829,957,551			$	8,306,555,198

Liabilities and Equity:
Current liabilities		$	371,508,693			$	236,947,158
Capital			8,458,448,858				8,069,608,040
Total liabilities and equity		$	8,829,957,551			$	8,306,555,198