Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — D.A. Davidson & Co. 2011 Utility CFO Day
21 slides from Northwestern Energy's conference presentation, May 25, 2011
Slide 1: D.A. Davidson & Co. 2011 Utility CFO Day
Portland, OR May 26, 2011 D.A. Davidson & Co. - 2011 Utility CFO Day
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: Who we are
Located in states with relatively stable economies with opportunity for system investment and grid expansion. Footprint of service territory covers some of the best wind regimes in the United States Unique opportunity to provide transmission services in to two different power markets (West and Midwe
Slide 4: NorthWestern's attributes
NorthWestern’s attributes… ¾ Solid operations » Cost competitive » Above-average reliability » Award-winning customer service ¾ 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… A security rating is not a recommendation to buy, sell or hold securities. Such rating may be subject to revision or withdrawal at any time by the credit rating agency and each rating should be evaluated independently of any other rating.
Slide 6: Strong balance sheet and liquidity
strong balance sheet and liquidity… ¾ Total liquidity of approximately $200 million as of May 20, 2011 ¾ Total debt / total capitalization of 54.3% (2) ¾ In past two years refinanced nearly all outstanding debt » In May 2010 we refinanced existing $225 million, 5.875% Senior Secured Notes due 2014 w
Slide 7: Strong cash flows
Earnings trend and NOLs provide strong cash flows to fund future investment. 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..
Slide 8: Solid pension funding position
As a result of significant contributions to our 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. solid pension funding position… Data source: SNL Financial
Slide 9: Sustainable dividend
Goal for dividend payout ratio of 60% - 70%. Current dividend yield about 5% with year-over-year dividend growth . and sustainable dividend… (1) 2011 estimated payout range assumes midpoint of guidance range $2.25 - $2.40
Slide 10: Reaffirming 2011 EPS guidance
reaffirming 2011 EPS guidance…
Slide 11: Constructive regulatory environment
constructive regulatory environment… ¾ 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 ● Electric and Nat Gas ROE to 10.25% » Dave Gates Generation Station at Mill Creek
Slide 12: Regulatory environment cont'd
regulatory environment cont’d… ¾ South Dakota » Filed natural gas rate case on May 20, 2011 ♦ requesting $4.1 million annual increase (7.2% average increase in rates) ♦ $2.7M related to rates (would affect P&L) - $1.4M related to recovery of manufactured gas plant remediation costs (no operating inc
Slide 13: Regulatory milestones in 2011
Montana Distribution Infrastructure P Decision in favor of accounting order (MPSC) Q1 Prudency Review for DGGS P Interim rate filing (MPSC) 2010 Q4 ü Compliance Filing (MPSC) Q1 ¾ Pre-hearing conference Q2 Approval for Montana Wind Projects ¾ Pre - approval filing (MPSC) Q2 Natural Gas - Rate Base B
Slide 14: Longer term investment opportunities
longer term investment opportunities… ¾ Distribution system enhancements » Incremental rate based investment to enhance safety, reliability and capacity, improve rural service, and prepare the system for adaptation of new technologies. ¾ Energy supply » Big Stone and Neal plants’ pollution control e
Slide 15: Transmission potential project summary
Opportunity to increase and diversify earnings as compared with our existing $1.8 billion rate base. Transmission potential project summary… Note: Color / label indicate NorthWestern Energy's current probability of execution and timing of expenditures.
Slide 16: In summary
in summary… ¾ Solid operations ¾ Single A secured credit ratings with a strong balance sheet and liquidity ¾ Positive earnings and ROE trend ¾ Strong cash flows ¾ Competitive total shareholder return with a dividend that has increased every year since 2005 ¾ Constructive regulatory environment ¾ For
Slide 17: NorthWestern
NorthWestern
Slide 18: Three Months Ended March 31 income statement
(in thousands) Three Months Ended March 31, 2011 2010 Variance Operating Revenues ‘$338,260 $334,173 $s 4,087 Cost of Sales. 162,071 172,827 (10,756) Gross Margin 176,189 161,346 14,843 Operating Expenses Operating, general & administrative 67,383, 58,308 9,075 Property and other taxes 25,396 22.968
Slide 19: Balance sheet and capitalization
(in thousands) March 31, 2014 December 31, 201 Cash 7,180 6,234 Restricted cash 12,596 12,862 Accounts recehable, net 144,725, 143,304 Inventories 26,853 50,701 Other current assets 79,678 89,953 Goodwill 355,128 355,128 PP&E and ther non-current assets 2,390,279 2,379,487 Total Assets $__ 3,016,439
Slide 20: Three Months Ended March 31 cash flows
‘Three Months Ended March 31, {in thousands) 2011 2010 Net income $ 32875 $28,718 Depreciation 25318 22875 ‘Amott of debtissue costs, discount, deferred hedge gain and restricted stock 958 4,021 Equity potion of allowance for funds used during construction (281) (848) Gain on sale of assets : 7) Def
Slide 21: Quarter over quarter earnings impacts
quarter over quarter earnings impacts…
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