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Note 5 - Other Investments

9 Months Ended

Jun. 30, 2025

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.  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 project is targeted for 2028.

AFUDC attributable to MVP construction was recognized during the prior year and is included in the equity in earnings of unconsolidated affiliate in the tables below.  AFUDC ceased in June 2024 when MVP went into commercial operation.

The Company participates in the earnings of the LLC proportionate to its level of investment, favorably adjusted for a basis difference between the Company's capital account 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 book 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 condensed consolidated statements of income.  The Company received three quarterly cash distributions totaling approximately $2.7 million from the LLC during the first nine months of fiscal 2025 and expects future quarterly distributions to be of a similar magnitude to those received to date.

Midstream assesses the value of its investment in the LLC on at least a quarterly basis, and no impairment indicators were identified in fiscal 2025 or 2024.

Investment balances of MVP and Southgate, as of June 30, 2025 and  September 30, 2024, are reflected in the table below:

Balance Sheet location:		June 30, 2025				September 30, 2024
Other Assets:
MVP		$	20,717,161			$	20,948,347
Southgate			159,769				108,875
Investment in unconsolidated affiliates		$	20,876,930			$	21,057,222

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

		Nine Months Ended June 30,
		2025				2024
Cash investment		$	50,894			$	8,743
Equity in earnings of unconsolidated affiliate			2,427,470				2,979,823
Distribution from unconsolidated affiliate			(2,658,656	)			—
Change in investment in unconsolidated affiliates		$	(180,292	)		$	2,988,566

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 June 30,								Nine Months Ended June 30,
		2025				2024				2025				2024
Revenue		$	139,410,586			$	3,723,469			$	424,079,412			$	3,723,469
Operating expenses			(75,210,039	)			(10,822,325	)			(221,547,701	)			(10,822,325	)
AFUDC			45,553				38,815,497				111,088				343,916,298
Other income, net			1,612,418				1,899,904				4,989,603				7,799,966
Net income		$	65,858,518			$	33,616,545			$	207,632,402			$	344,617,408

		Balance Sheets
		June 30, 2025				September 30, 2024
Assets:
Current assets		$	229,791,783			$	263,966,727
Construction work in progress			—				1,568,267
Property, plant and equipment, net			9,448,500,810				9,522,815,742
Other assets			8,963,640				13,732,299
Total assets		$	9,687,256,233			$	9,802,083,035
Liabilities and Equity:
Current liabilities		$	69,667,426			$	168,645,751
Noncurrent liabilities			1,120,286				68,965
Capital			9,616,468,521				9,633,368,319
Total liabilities and equity		$	9,687,256,233			$	9,802,083,035

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- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

+ References

Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef
-Topic 740
-SubTopic 323
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478156/740-323-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481687/323-10-50-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481687/323-10-50-3

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 323
-Publisher FASB
-URI https://asc.fasb.org/323/tableOfContent

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