NorthWestern Energy Group, Inc. · NASDAQ:NWE
NorthWestern Energy — Investor Presentation (September 2011)
21 slides from NorthWestern Energy's investor presentation, Sep 19, 2011
Slide 1: Investor Update
Investor Update September 19 19--21, 21 2011
Slide 2: Forward-looking statement
forward--looking statement… forward During the course of this presentation, there will be forward-looking statements within the meaning of the “safe harbor” provisions of the P i t Securities Private S iti Litigation Liti ti Reform R f Act A t off 1995. 1995 Forward-looking F d l ki statements often
Slide 3: Who we are
who we are… 665,000 customers » 399,000 electric » 266,000 natural gas Approximately 123,000 square miles of service territory in Montana, South Dakota, and Nebraska » 27,500 27 500 miles of electric T&D lines » 9,200 miles of natural gas T&D pipelines » 20 Bcf natural gas storage » 8.4 Bcf natu
Slide 4: NorthWestern's attributes
NorthWestern’s attributes… Solid operations » Cost competitive » Above-average reliability » Award-winning customer service Single A secured credit ratings with a strong balance sheet and liquidity » January 21, 2011 Moody’s upgraded secured and unsecured ratings to A2 and Baa1, respectively » A
Slide 5: Strong credit ratings
strong credit ratings… Commercial Agency Secured Unsecured Paper Outlook Standard & Poor's Poor s A- A BBB A-2 A 2 Stable Moody's Investor Services A2 Baa1 Prime-2 Stable Fitch Ratings A- BBB+ F2 Stable A security rating is not a recommendation to buy, sell or hold securities. Such rating may be sub
Slide 6: Strong balance sheet and liquidity
strong balance sheet and liquidity… Total liquidity of approximately $220 million as of August 26, 2011 Total debt / total capitalization of 54.4% 54 4%(1) In past two years refinanced nearly all outstanding debt » Amended and restated revolving credit facility in July of 2011, extending term
Slide 7: Strong cash flows
strong cash flows… (1) Utility maintenance capex only, excludes investment growth projects. (2) 2009 Cash Flow from Operations adjusted to add back pension funding in excess of expense and Ammondson settlement paid.. Earnings trend and NOLs provide strong cash flows to fund future investment. 7
Slide 8: Solid pension funding position
solid pension funding position… As a result of significant g contributions to our p pension plan over the past several years and solid market returns in 2009 and 2010, we are better positioned than our peers at December 31, 2010. Data source: SNL Financial 8
Slide 9: And sustainable dividend
and sustainable dividend… (1) 2011 estimated payout range assumes midpoint of guidance range $2.25 - $2.40 Goal for dividend payout ratio of 60% - 70%. 70% Current dividend yield about 5% with year-over-year dividend growth of approximately 6.3% (2005-2011 CAGR). 9
Slide 10: Reaffirming 2011 EPS guidance
reaffirming 2011 EPS guidance… $2.50 NorthWestern Earnings Per Share $2.40 $2.25 $2.00 $2 14 $2.14 Earnings Per Share e $2.02 $1.77 $1.50 $1.65 $1.44 $1.00 $1 01 $1.01 Fully Diluted E $0.50 Low High $0.00 2005 2006 2007 2008 2009 2010 2011 Guidance The major assumptions include, but are not limite
Slide 11: Constructive regulatory environment
constructive regulatory environment… Montana » Electric and natural gas general rate case ♦ April 2011: MPSC and Company settled the overall rate increase in Montana: ● A net $6.1 $ million increase in annual revenue with authorized electric and natural gas ROE’s set at 10.25% » Dave Gates Generat
Slide 12: Regulatory environment cont'd
regulatory environment cont’d… South Dakota » Filed natural gas rate case on May 20, 2011 ♦ Requesting Req esting $4.1 $4 1 million annual ann al increase (7.2% (7 2% average a erage increase in rates) ♦ $2.7M related to rates (would impact earnings) - $1.4M related to recovery of manufactured gas
Slide 13: Regulatory milestones in 2011
regulatory milestones in 2011… Montana South Dakota Distribution Infrastructure Natural Gas Rate Case Decision in favor of accounting order (MPSC) Q1 Rate filing requesting $4 $4.1M 1M increase (SDPUC) Q2 Prudency Review for DGGS Interim I t i rate t filing fili (MPSC) 2010 Q4 Compliance Fil
Slide 14: Longer term investment opportunities
longer term investment opportunities… Distribution System Infrastructure Plan (DSIP) » Incremental rate based investment to enhance safety, reliability and capacity, improve rural service, and prepare the system for adaptation of new technologies. Energy supply » Big g Stone and Neal plants’ p p
Slide 15: Potential project summary
potential project summary… Note: Color / label indicate NorthWestern Energy's Energy s current probability of execution and timing of expenditures. Opportunity to increase and diversify earnings as compared with our existing $1.8 billion rate base. 15
Slide 16: In summary
in summary… Solid operations Single Si l A secured d credit dit ratings ti with ith a strong t balance sheet and liquidity Positive earnings and ROE trend Strong cash flows Competitive total shareholder return with a dividend that has increased every year since 2005 Constructive regulato
Slide 17: Appendix
appendix... NorthWestern Energy Bright 17 Delivering a Brigt ee PP
Slide 18: Income statement
income statement… (in thousands) Six Months Ended June 30, 2011 2010 Variance Operating Revenues $ 590,066 $ 578,232 $ 11,834 Cost of Sales 272,478 284,763 (12,285) G Gross Margin M i 317 588 317,588 293 469 293,469 24 119 24,119 Operating Expenses Operating, general & administrative 136,922 115,434
Slide 19: Balance sheet
balance sheet… (in thousands) June 30, 2011 December 31, 2010 Cash 4,540 6,234 Restricted cash 14,021 12,862 Accounts receivable, net 106,517 143,304 I Inventories i 44 294 44,294 50 701 50,701 Other current assets 74,704 89,953 Goodwill 355,128 355,128 PP&E and ther non-current assets 2,407,786 2,3
Slide 20: Cash flow
cash flow… Six Months Ended June 30, (in thousands) 2011 2010 Net Income $ 43,545 $ 40,409 Depreciation 50,381 45,872 Amort. of debt issue costs, discount, deferred hedge gain and restricted stock 1,864 1,891 Equity portion of allowance for funds used during construction (552) (2,585) (Gain) loss on
Slide 21: Year over year earnings impacts
year over year earnings impacts… 21
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