Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Q3 2015 Earnings Presentation
33 slides from Northwestern Energy's earnings presentation, Oct 22, 2015
Slide 1: Third Quarter 2015 Earnings Webcast
Third Quarter 2015 Earnings Webcast October 22, 2015 Beethoven Wind Farm
Slide 2: Presenting Today
Presenting Today 2 Bob Rowe, President & CEO Brian Bird, Vice President & CFO
Slide 3: Forward Looking Statements
3 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 1995. Forward-looking statements often address our expected future business and financia
Slide 4: Recent Significant Activities
Recent Significant Activities 4 • Net income of $23.8 million reported in the third quarter of 2015 as compared with $30.2 million the same period in 2014. • The decrease was primarily the result of a $16.9 million tax benefit recognized in the third quarter last year partially offset by the income
Slide 5: Summary Financial Results (Third Quarter)
Summary Financial Results (Third Quarter) 5
Slide 6: Gross Margin (Third Quarter)
6 Gross Margin (Third Quarter) (dollars in millions) Three Months Ended September 30, 2015 2014 Variance Electric $ 172.3 $ 127.7 $ 44.6 34.9% Natural Gas 26.8 29.6 (2.8) (9.5%) Gross Margin $ 199.1 $ 157.3 $ 41.8 26.6% Increase in gross margin due to the following factors: $ 40.4 Hydro operations $
Slide 7: Weather (Third Quarter)
Weather (Third Quarter) 7 Maximum Temperature from Normal Minimum Temperature from Normal
Slide 8: Operating Expenses (Third Quarter)
Operating Expenses (Third Quarter) 8 Increase in operating expenses due mainly to the following factors: $11.2 million increase in OG&A $ 10.8 Hydro operations $ 3.5 Non-employee directors deferred compensation $ (0.6) Hydro transaction costs $ (0.5) Bad debt expense $ (2.0) Other $7.9 million incre
Slide 9: Operating to Net Income (Third Quarter)
Operating to Net Income (Third Quarter) 9 $3.2 million increase in interest expenses was primarily due to increased debt outstanding associated with the hydro transaction. $4.2 million increase in other income due primarily to a $3.5 million increase in the value of deferred shares held in trust for
Slide 10: EPS - GAAP to Non-GAAP ('15 vs '14)
EPS - GAAP to Non-GAAP (‘15 vs ’14) 10
Slide 11: Adjusted Earnings (Third Quarter '15 vs '14)
Adjusted Earnings (Third Quarter ‘15 vs ’14) 11 The non-GAAP measures presented in the table above are being shown to reflect significant items that were not contemplated in our original guidance, however they should not be considered a substitute for financial results and measures determined or cal
Slide 12: Adjusted Earnings (YTD '15 vs '14)
Adjusted Earnings (YTD ‘15 vs ’14) 12 The non-GAAP measures presented in the table above are being shown to reflect significant items that were not contemplated in our original guidance, however they should not be considered a substitute for financial results and measures determined or calculated in
Slide 13: Updated 2015 Earnings Guidance
Updated 2015 Earnings Guidance 13 We narrowed the 2015 adjusted earnings guidance range to $3.10 - $3.25 (previously $3.10 - $3.30) per diluted share based upon, but not limited to, the following major assumptions and expectations: • Normal weather in our electric and natural gas service territories
Slide 14: Balance Sheet
Balance Sheet (dollars in millions) As of September 30, As of December 31, 2015 2014 Cash Restricted cash Accounts receivable, net Inventories Other current assets Goodwill PP&€E and other non-current assets Total Assets Payables Short-term borrowings Shareholders' equity Total Liabilities and Equit
Slide 15: Cash Flow
Cash Flow 15 Year-to-date Cash from Operations has increase by $100 million as compared to prior year primarily due to increased income and a reduction in the under collection of supply costs in our trackers.
Slide 16: South Dakota Rate Filing
South Dakota Rate Filing 16 Original Request (Docket EL14-106) $1.8 million revenue benefit recognized in the third quarter 2015 reflects increase for base electric delivery rates only. If the settlement agreement is approved, we anticipate a fourth quarter benefit from the acquisition of the Beetho
Slide 17: Beethoven Wind Acquisition
17 Beethoven Wind Acquisition We reached an agreement with the SDPUC staff and intervenors to include $9.0 million of revenue annually into base rates. The commission is expected to make a final determination in the case by the end of 2015. Opportunity: In September 2015, we completed the purchase o
Slide 18: The Hydro Facilities
The Hydro Facilities 18 Overview of Hydro Facilities Black Eagle Despite the 2015 drought conditions in western Montana, the hydro assets have generated at targeted capacity (5 year historical average). Talen Energy’s recently announced sale of 292 MW of hydro generation for $860 million to Brookfie
Slide 19: 'Clean' Owned & Contracted Supply Portfolio
19 ‘Clean’ Owned & Contracted Supply Portfolio Base upon nameplate capacity approximately 54% of our total company owned and contracted supply portfolio is renewable or support renewables. Charts above are calculated using nameplate megawatts and include long-term contracts extending beyond 5 years.
Slide 20: Other Activity
Other Activity 20 • Dave Gates Generating Station (DGGS) • In April 2014, FERC issued a decision to allocate only a fraction of the costs to FERC jurisdictional customers. • In May 2014, we filed a request for rehearing, which remains pending (uncertain on the timeline for FERC to act). • Consistent
Slide 21: Capital Spending Forecast
Capital Spending Forecast 21 Current estimated cumulative capital spending for 2015 through 2019 is $1.45 billion. We anticipate funding the capital projects with a combination of cash flows (aided by NOLs) and long-term debt. If other opportunities arise that are not in the above projections (natur
Slide 22: Delivering a bright future
Upelivering a bright future
Slide 23: 2014 to 2015 Reconciliation (3rd Qtr & YTD)
23 2014 to 2015 Reconciliation (3rd Qtr & YTD) Appendix
Slide 24: Segment Results (Third Quarter)
24 Segment Results (Third Quarter) Net Income from our electric segment is approximately $5M better than 2014. This was primarily a result of the addition of hydro offset by income tax benefit in the third quarter of 2014. Also, in our Other segment, we recognized a tax benefit in 2014 from the rele
Slide 25: Electric Segment (Third Quarter)
25 Electric Segment (Third Quarter) Appendix
Slide 26: Natural Gas Segment (Third Quarter)
26 Natural Gas Segment (Third Quarter) Appendix
Slide 27: Income Tax Reconciliation (Third Quarter)
Income Tax Reconciliation (Third Quarter) 27 Appendix
Slide 28: Segment Results (YTD thru Qtr 3)
28 Segment Results (YTD thru Qtr 3) YTD the net Income from our electric segment is approximately $24M better than 2014. This was primarily a result of the addition of hydro offset by income tax benefit in the third quarter of 2014. Natural gas is down about $9M compared to 2014, largely due to warm
Slide 29: Electric Segment (YTD thru Qtr 3)
29 Electric Segment (YTD thru Qtr 3) Appendix
Slide 30: Natural Gas Segment (YTD thru Qtr 3)
30 Natural Gas Segment (YTD thru Qtr 3) Appendix
Slide 31: Income Tax Reconciliation (YTD thru Qtr 3)
Income Tax Reconciliation (YTD thru Qtr 3) 31 Appendix
Slide 32: Heating and Cooling Degree Days
32 Heating and Cooling Degree Days Appendix
Slide 33: These materials include financial information prepared in accordance with GAAP, as well as other
These materials include financial information prepared in accordance with GAAP, as well as other financial measures, such as Gross Margin and Adjusted Diluted EPS, that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company's financi