Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Q1 2022 Earnings Presentation
35 slides from Northwestern Energy's earnings presentation, Apr 29, 2022
Slide 1: 2022 First Quarter Earnings Webcast
Black Eagle Dam at Sunset 2022 First Quarter Earnings Webcast April 29, 2022
Slide 2: Presenting Today / Forward Looking Statements
Presenting Today Bob Rowe Brian Bird Crystal Lail CEO President & COO Vice President & CFO Forward Looking Statements During the course of this presentation, there will be forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of
Slide 3: Recent Highlights
Recent Highlights Financial results in line with expectations for the quarter… • Net income of $59.1 million or $1.08 diluted earnings per share • Non-GAAP EPS of $59.5 or $1.09 diluted earning per share • Expected long-term annual EPS growth rate of 3% - 6% • Reaffirming full year non-GAAP guidanc
Slide 4: Summary Financial Results
Summary Financial Results (First Quarter) (1) 4 (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.
Slide 5: EPS Bridge to First Quarter 2022
EPS Bridge to First Quarter 2022 After-tax Earnings Per Share First quarter earnings in line with our expectations. See slide 8 and “Non-GAAP We estimate unfavorable weather in Q1 2022 resulted in a $0.6 million Financial Measures” slide in the appendix for additional pretax detriment as compared to
Slide 6: Utility Margin Bridge to Q1 2022
Utility Margin Bridge to Q1 2022 Pre-tax Earnings NOTE: Utility Margin is a non-GAAP Measure See appendix slide titled $2.8 Million (1.1%) increase in Utility Margin “Explaining Utility Margin” for additional disclosure. 6 due to items that impact Net Income.
Slide 7: Operating Expense Bridge to Q1 2022
Operating Expense Bridge to Q1 2022 Pre-tax Earnings NOTE: Operating Expense excludes fuel, purchased supply and direct $5.8 Million (3.3%) increase in Operating Expenses transmission expense. due to items that impact Net Income. 7
Slide 8: Q1 2022 GAAP to Non-GAAP Earnings
Q1 2022 GAAP to Non-GAAP Earnings The adjusted non-GAAP measures presented in the table are being shown to reflect significant items that are non- recurring or a variance from normal weather, however they should not be considered a substitute for financial results and measures determined or calculat
Slide 9: Cash Flow
Cash Flow (First Quarter) Cash from Operating Activities increased by $130 million primarily due to: • $95.5 million increase* in collection of energy supply costs from customers incurred in the prior period, which includes costs incurred during a February 2021 prolonged cold weather event, and the
Slide 10: 2022 Earnings Bridge
2022 Earnings Bridge Guiding down to $3.20 to $3.40 primarily due to equity needed to support increased capital investment. • An increased, yet more sustainable, level of operating expenses, along with dilution from equity financing of capital investment, is expected to be partially offset by organi
Slide 11: Capital Investment Forecast and Funding
Capital Investment Forecast and Funding $2.4 billion of low-risk capital investment forecasted over the next five years to address grid modernization and renewable energy integration. This sustainable level of capex is expected to drive annualized rate base growth of approximately 4%-5%. We expect t
Slide 12: Hydro Conditions
Hydro Conditions Much needed snowfall blanketed Western Montana last week, improving Snow Water Equivalent percentages – now reporting only slightly below their thirty year medians. (Missouri, Madison & Clark Fork Rivers and West Rosebud Creek) 12
Slide 13: Looking Forward
Looking Forward 58 megawatt Bob Glanzer generating project in South Dakota… Performance and emissions testing underway Total construction costs of approximately $86 million ($80.8 million through March 31, 2022) Commercial operation expected in May 2022 175 megawatt Yellowstone County genera
Slide 14: Our Net-Zero Vision
Our Net-Zero Vision Over the past 100 years, NorthWestern Energy has maintained our commitment to provide customers with reliable and affordable electric and natural gas service while also being good stewards of the environment. We have responded to climate change, its implications and risks, by inc
Slide 15: Conclusion
Conclusion Best Attractive Pure Strong Solid Utility Practices Future Electric & Earnings & Foundation Corporate Growth Gas Utility Cash Flows Governance Prospects 15
Slide 16: Appendix
Cr Appendix 16
Slide 17: Utility Margin
Appendix Utility Margin (First Quarter) (dollars in millions) Three Months Ended March 31, 2022 2021 Variance Electric $ 194.1 $ 189.9 $ 4.2 2.2% Natural Gas 65.3 66.4 (1.1) (1.7%) Total Utility Margin $ 259.4 $ 256.3 $ 3.1 1.2% (1) Increase in utility margin due to the following factors: $ 3.0 High
Slide 18: Operating Expenses
Appendix Operating Expenses (First Quarter) (dollars in millions) Three Months Ended March 31, (1) We have included the change in the non- service cost component 2022 2021 Variance of our pension and other postretirement Operating & maintenance $ 52.8 $ 51.8 $ 1.0 1.9% benefits, which is recorded wi
Slide 19: Operating to Net Income
Appendix Operating to Net Income (First Quarter) (dollars in millions) Three Months Ended March 31, 2022 2021 Variance Operating Income $ 79.2 $ 80.9 $ (1.7) (2.1%) Interest expense (23.7) (23.5) (0.2) (0.9%) Other income, net 4.7 5.6 (0.9) (16.1%) Income Before Taxes 60.2 63.1 (2.9) (4.6%) Income t
Slide 20: Tax Reconciliation
Appendix Tax Reconciliation (First Quarter) 20
Slide 21: 2022 Earnings Bridge (detailed)
Appendix 2022 Earnings Bridge (detailed) NorthWestern affirms its 2022 earnings guidance range of $3.20 - $3.40 per diluted share. Cash Tax Outlook We anticipate production tax and other credits to largely offset federal cash tax obligations into 2023. Effective Tax Rate Outlook Assuming no signific
Slide 22: EPS Range to Meet Guidance
Appendix EPS Range to Meet Guidance The adjusted non-GAAP measures presented in the table are being shown to reflect significant items that are non- recurring or a variance from normal weather, however they should not be considered a substitute for financial results and measures determined or calcul
Slide 23: Rate Base & Authorized Return Summary
Appendix Rate Base & Authorized Return Summary (1) The revenue requirement associated with the FERC regulated portion of Montana electric transmission and ancillary services are included as revenue credits to our MPSC jurisdictional customers. Therefore, we do not separately reflect FERC authorized
Slide 24: De-risking the Montana Capacity Deficit
Appendix De-risking the Montana Capacity Deficit NorthWestern has made significant progress to de-risk the capacity deficit between now and 2025. These near term capacity solutions allow time for clarity on Colstrip arbitration, further development in the western markets, and ongoing technological a
Slide 25: Alternative Capacity Considerations
Appendix Alternative Capacity Considerations We expect to build the 175MW nameplate Yellowstone County Reciprocating Internal Combustion Engine (RICE) generation facility for approximately $275 million with capacity generation output of roughly 160 MW*. If we were to build wind or solar to provide t
Slide 26: Quarterly PCCAM Impacts
Appendix Quarterly PCCAM Impacts Pre-tax Millions In 2017, the Montana legislature revised the statute regarding our recovery of electric supply costs. In response, the MPSC approved a new design for our electric tracker in 2018, effective July 1, 2017. The revised electric tracker, or PCCAM establi
Slide 27: Qualified Facility Earnings Adjustment
Appendix Qualified Facility Earnings Adjustment Our electric QF liability consists of unrecoverable costs associated with contracts covered under PURPA that are part of a 2002 stipulation with the MPSC and other parties. Risks / losses associated with these contracts are born by shareholders, not cu
Slide 28: Balance Sheet
Appendix Balance Sheet Debt to Total Capitalization down from last year and remains within our targeted 50% - 55% range. 28
Slide 29: Segment Results
Appendix Segment Results (First Quarter) (1) (1) 29 (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.
Slide 30: Electric Segment
Appendix Electric Segment (First Quarter) (1) 30 (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.
Slide 31: Natural Gas Segment
Appendix Natural Gas Segment (First Quarter) (1) 31 (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.
Slide 32: Explaining Utility Margin
Appendix Explaining Utility Margin Management believes that Utility Margin provides a useful measure for investors and other financial statement users to analyze our financial performance in that it excludes the effect on total revenues caused by volatility in energy costs and associated regulatory
Slide 33: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures 33
Slide 34: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures This presentation includes financial information prepared in accordance with GAAP, as well as other financial measures, such as Utility Margin, Adjusted Non-GAAP pretax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS that are considered “no
Slide 35: Sincienra a
Sincienra a bright future
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