Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — FY2021 Earnings Presentation
39 slides from Northwestern Energy's earnings presentation, Feb 14, 2022
Slide 1: 2021 - Full Year Earnings Webcast
Helena, Montana 2021 - Full Year Earnings Webcast February 14, 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: 2021 and Recent Highlights
2021 and Recent Highlights Solid Financial Results… • Net income of $186.8 million or $3.60 diluted earnings per share. o Non-GAAP EPS of $3.51 is within guidance range and a 4.8% increase over non-GAAP results in 2020. • Expected long-term EPS growth rate of 3% - 6% Record Capital Investment… • 202
Slide 4: Summary Financial Results
Summary Financial Results (Full Year) (1) 4 (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.
Slide 5: Utility Margin
Utility Margin (Full Year) (dollars in millions) Twelve Months Ended December 31, 2021 2020 Variance Electric $ 757.4 $ 704.2 $ 53.2 7.6% Natural Gas 189.4 188.3 1.1 0.6% (1) Total Utility Margin $ 946.8 $ 892.5 $ 54.3 6.1% Increase in utility margin due to the following factors: $ 25.1 Electric tra
Slide 6: Weather
Weather (Full Year) We estimate overall unfavorable weather in 2021 resulted in a $1.1 million pretax detriment as compared to normal and a $8.7 million benefit as compared to 2020. 6 Degrees Fahrenheit from Average
Slide 7: Operating Expenses
Operating Expenses (Full Year) (dollars in millions) Twelve Months Ended December 31, 2021 2020 Variance Operating & maintenance $ 208.3 $ 203.0 $ 5.3 2.6% $13.1 Administrative & general 101.9 94.1 7.8 8.3% Property and other taxes 173.4 179.5 (6.1) (3.4%) Depreciation and depletion 187.5 179.7 7.8
Slide 8: Operating to Net Income
Operating to Net Income (Full Year) (dollars in millions) Twelve Months Ended December 31, 2021 2020 Variance Operating Income $ 275.7 $ 236.2 $ 39.5 16.7% Interest expense (93.7) (96.8) 3.1 3.2% Other income, net 8.2 4.8 3.4 70.8% Income Before Taxes 190.2 144.2 46.0 31.9% Income tax (expense) / be
Slide 9: Cash Flow
Cash(Full FlowYear) Cash from Operating Activities decreased by $132 million primarily due to: • $122M net increase in under collection of energy supply costs, which includes costs related to the February 2021 prolonged cold weather event ($80M electric and $42M natural gas); • A refund of approxima
Slide 10: Non-GAAP Earnings
Non-GAAP Earnings (Full Year) The adjusted non-GAAP measures presented in the table are being shown to reflect significant items that are non-recurring or variance from normal weather, however they should not be considered a substitute for financial results and measures determined or calculated in a
Slide 11: 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 12: 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 13: De-risking the Montana Capacity Deficit
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 advances.
Slide 14: Conclusion
Conclusion Best Attractive Pure Strong Solid Utility Practices Future Electric & Earnings & Foundation Corporate Growth Gas Utility Cash Flows Governance Prospects 14
Slide 15: Appendix
CT Appendix 15
Slide 16: Detailed 2022 Earnings Bridge
Appendix Detailed 2022 Earnings Bridge 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 significan
Slide 17: 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 18: Quarterly PCCAM Impacts
Appendix Quarterly PCCAM Impacts 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 established a baseline o
Slide 19: 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 20: Additional materials for twelve month results
Appendix Additional materials for twelve month results 20
Slide 21: Income Tax Reconciliation
Appendix Income Tax Reconciliation (Full Year) 21
Slide 22: Balance Sheet
Appendix Balance Sheet Debt to Total Capitalization down from last year and remains within our targeted 50% - 55% range. 22
Slide 23: Segment Results
Appendix Segment Results (Full Year) (1) (1) 23 (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.
Slide 24: Electric Segment
Appendix Electric Segment (Full Year) (1) 24 (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.
Slide 25: Natural Gas Segment
Appendix Natural Gas Segment (Full Year) (1) 25 (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.
Slide 26: Additional materials for three month results
Appendix Additional materials for three month results 26
Slide 27: Summary Financial Results
Appendix Summary Financial Results (Three Months Ended December 31) (1) 27 (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.
Slide 28: Utility Margin
Appendix Utility Margin (Three Months Ended December 31) (dollars in millions) Three Months Ended December 31, 2021 2020 Variance(1) Electric $ 177.2 $ 170.8 $ 6.4 3.7% Natural Gas 55.7 56.8 (1.1) (1.9)% Total Utility Margin $ 232.9 $ 227.6 $ 5.3 2.3% Increase in utility margin due to the following
Slide 29: Weather
Appendix Weather (Three Months Ended December 31) We estimate unfavorable weather for the 4th quarter 2021 has contributed approximately $5.2M pretax detriment as compared to normal and $0.5M pretax benefit as compared to the same period in 2020. 29 Degrees Fahrenheit from Average
Slide 30: Operating Expenses
Appendix Operating Expenses (Three Months Ended December 31) (dollars in millions) Three Months Ended December 31, 2021 2020 Variance Operating & maintenance $ 49.0 $ 55.6 $ (6.6) (11.9%) Administrative & general 22.3 17.5 $(1.8) 4.8 27.4% Property and other taxes 35.1 42.7 (7.6) (17.8%) Depreciatio
Slide 31: Operating to Net Income
Appendix Operating to Net Income (Three Months Ended December 31) (dollars in millions) Three Months Ended December 31, 2021 2020 Variance Operating Income $ 80.0 $ 66.6 $ 13.5 20.3% Interest Expense (23.4) (24.5) 1.1 4.5% Other (Expense) Income, net (5.7) 5.8 (11.5) (198.3%) Income Before Taxes 50.
Slide 32: Income Tax Reconciliation
Appendix Income Tax Reconciliation (Three Months Ended December 31) 32
Slide 33: Adjusted Non-GAAP Earnings
Appendix Adjusted Non-GAAP Earnings (Three Months Ended December 31) The adjusted non-GAAP measures presented in the table are being shown to reflect significant items that are non-recurring or variance from normal weather, however they should not be considered a substitute for financial results and
Slide 34: Electric Segment
Appendix Electric Segment (Three Months Ended December 31) (1) 34 (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.
Slide 35: Natural Gas Segment
Appendix Natural Gas Segment (Three Months Ended December 31) (1) 35 (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.
Slide 36: 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 37: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures 37
Slide 38: 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 39: Upetivering a bright future
Upetivering a bright future
NorthWestern Energy Group — FY2021 Earnings Presentation on 6ix