NorthWestern Energy Group, Inc. · NASDAQ:NWE
NorthWestern Energy — Shareholder Meeting (May 2008)
20 slides from NorthWestern Energy's shareholder meeting presentation, May 21, 2008
Slide 1: Annual Meeting of Stockholders
Annual Meeting of Stockholders New York Marriott Downtown Hotel May 21, 2008
Slide 2: Forward-looking statement
forward-looking statement… 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 financial
Slide 3: Stated objectives upon emergence
stated objectives upon emergence… Focus on core transmission and distribution business Resolve outstanding bankruptcy litigation Asset sales of unregulated businesses Attain investment grade rating Develop strategy to redeploy excess free cash flow . 3
Slide 4: Then and now
then – and now… (in thousands except otherwise indicated) At emergence Currently Operations # Unregulated Businesses (units) 4 1* # Of Customers 617.2 649.6 Annual Volumes Electric (thousands of megawatt hours) 9,228 9,952 Natural Gas (thousands dekatherms) 28,886 28,894 Annual Capital Expenditures
Slide 5: Environmental stewardship
environmental stewardship… Significant Significantreduction reductionof ofenvironmental environmentalissues. issues. Montana Sediment removal at Milltown Dam » Dam spillway was removed in 2008 » River is free flowing Have met current Renewable Portfolio Standards » Seeking new sources of wind power
Slide 6: Financial results – 2007 income
financial results – 2007 income… (Dollars in 000's) Year Ended December 31, 2007 2006 Variance % Change Operating Revenues 1,200,060 1,132,653 67,407 Cost of Sales 668,405 613,582 54,823 Gross Margin 531,655 519,071 12,584 2.4% Operating Expenses Operating, general & administrative 221,566 240,215 (
Slide 7: Financial results – 2007 balance sheet
financial results – 2007 balance sheet… Unaudited (Dollars in 000's) December Debt 31, Ratings 2007 2006 Cash 12,773 1,930 Restricted Cash 14,482 15,836 Accounts Receivable, Net 143,482 149,793 Inventories 63,586 60,543 Other Current Assets 44,031 40,372 Goodwill 355,128 435,076 PP&E and Other Non-c
Slide 8: Financial highlights
financial highlights… EBITDA(1) Interest Expense ($ in millions) ($ in millions) 84 223 57 188 219 186 61 56 2004 2005 2006 2007 2004 2005 2006 2007 Cash Flow from Operations Capital Expenditures(2) ($ in millions) ($ in millions) 165 202 146 147 80 117 81 101 2004 2005 2006 2007 2004 2005 2006 2007
Slide 9: Earnings trend
earnings trend… ($ in millions) Net Income 69 59 49 53 11* 63 11 38 2004 2005 2006 2007 2008Est Source: Company reports and SEC filings. Note: Full year 2004 results show combined results for NorthWstern’s predecessor company from January 1, 2004 to October 31, 2004 and for NorthWestern from Novembe
Slide 10: Drivers to improve near term earnings
drivers to improve near term earnings… Earnings EarningsPer PerShare ShareGuidance Guidancefor for2008: 2008: $1.60 $1.60to to$1.75 $1.75per perdiluted share. diluted share. Current rate case relief » Rate cases approved in South Dakota and Nebraska ♦ Settled natural gas rate case with a base rate i
Slide 11: 2008 1Q results
2008 1Q results… (000's) Three Months Ended March 31, 2008 2007 B(W) % Change Operating Revenues 385,975 366,565 19,410 5.3% Cost of Sales 229,084 219,278 (9,806) -4.5% Gross Margin 156,891 147,287 9,604 6.5% Operating Expenses Operating, general & administrative 60,071 62,448 2,377 3.8% Property an
Slide 12: Delivering a bright future
delivering a bright future… VISION: VISION: To Tobe bethe thetop topperforming performingutility utilityin inour ourregion. region. Operationally strong » Above-average reliability » Award-winning customer service ♦ ServiceOne award for fourth consecutive year Financially strong » Steady earnings gr
Slide 13: Generation growth highlights
generation growth highlights… Mill Creek Generating Unit in Montana What: 120-150 MW – built for regulation services to balance supply and load Why: Existing services are becoming more expensive and scarce South Dakota Peaking Generation What: Construction of two 45 MW combustion turbines – one unit
Slide 14: Transmission growth highlights
transmission growth highlights… 500 KV Upgrade and Collector System in Montana What: » Upgrade the existing Colstrip 500 kV line to add approximately 500 to 600 MW of additional transfer capability » Construction of a 230 kV line from Great Falls to Three Rivers that will tie into MSTI at the new To
Slide 15: Distribution growth highlights
distribution growth highlights… South Dakota/Nebraska Natural Gas Pipeline Expansions What: » Potential acquisition of a South Dakota pipeline » Upgrade that pipeline for POET, Big Stone Ethanol expansion in SD ($10.5M) » Construction of a 44-mile pipeline from Trailblazer pipeline to Grand Island,
Slide 16: Growth project potential
growth project potential… Opportunity Opportunityto tonearly nearlydouble doublethe therate ratebase baseand andearnings earningsover overthe thenext nextfew fewyears. years. (in millions) Annual Earnings Opportunity * Cost of Project Timing Mill Creek Generator $ 7.5 to $ 10.0 $ 150.0 to $ 200.0 Ja
Slide 17: NorthWestern – value and growth
Northwestern – value and growth… Montana regulatory clarity forthcoming » General rate case stipulation » Montana Consumer Council request for investigation related to bankruptcy stipulation » Colstrip Unit 4 Value » Dividend yield of 5.4% » Currently trading at approximately 1.1x book value Opportu
Slide 18: Colstrip Unit 4 strategic alternatives
Colstrip Unit 4 strategic alternatives… Options under consideration » Sale of the plant » Retain plant and place into rate base » Retain plant as unregulated Next steps » Complete strategic review to maximize value of the asset ♦ Complete the bid process related to sale option ♦ Work with regulators
Slide 19: Summary
summary… Nearly all consolidated earnings from regulated Objectives achieved business related to focus on Rate relief received in all jurisdictions core business Outstanding bankruptcy litigation nearly completed Attained investment grade ratings Superior cash flows Strong balance sheet Solid founda
Slide 20: NorthWestern Energy
NorthWestern Energy Delivering a Bright Future