Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Non-Deal Roadshow (July 2009)
22 slides from Northwestern Energy's roadshow presentation, Jul 30, 2009
Slide 1: Investor Update
Investor Update Chicago, Milwaukee & Minneapolis July 29-31, 2009
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
who we are… 656,000 customers 392,000 electric 264,000 natural gas Approximately 123,000 square miles of service territory in Montana, Nebraska and South Dakota Total generation (mostly base load coal) MT – 222 MW – regulated as of 1/1/09 SD – 312 MW – regulated Total Assets: $2,720 MM (1) Total Cap
Slide 4: NorthWestern's attributes
NorthWestern’s attributes… Solid operations Cost competitive Above-average reliability Award-winning customer service Increasing earnings Colstrip Unit 4 into rates effective Jan. 1, 2009 Expected to add $9 million or $.25/share over 2008 earnings Estimate includes outage period Rate case to be file
Slide 5: Regulatory update
regulatory update… Rate case to be filed in Montana in 2009 Filing will include both electric and natural gas distribution businesses Expect to file in 3Q 2009 on 2008 test year Expect decision by July 1, 2010 Mill Creek Generation Station filed with MPSC MPSC approval in 2Q 2009 Construction underw
Slide 6: 2009 year to date results
2009 year to date results… Unaudited (Dollars in 000's) Six Months Ended June 30, Gross Margin increased 2009 2008 Variance mainly due to transfer of Operating Revenues 606,616 662,481 (55,865) interest in CU4 into regulated Cost of Sales 314,850 378,438 (63,588) electric and offset by reduced Gross
Slide 7: 2009 income guidance
2009 income guidance… $1.75 to $1.85 per fully diluted share Drivers Reduced wheeling transmission revenues in Montana for the remainder of 2009 2009 net income will increase by approximately $9 million or $.25 per share as a result of the inclusion of our interest in Colstrip Unit 4 in regulated el
Slide 8: Strong balance sheet
strong balance sheet… (Dollars in 000's) June 30, December 31, 2009 2008 Cash 22,963 11,292 Restricted Cash 16,640 14,727 Accounts Receivable, Net 97,962 155,672 Inventories 47,350 70,741 Other Current Assets 75,459 60,985 Goodwill 355,128 355,128 PP&E and Other Non-current Assets 2,104,468 2,093,49
Slide 9: Liquidity highlights
liquidity highlights… Liquidity position remains strong Total liquidity currently in the $270 million range Recently issued $250 million in First Mortgage Bonds 10 year maturity with interest rate of 6.34% Primarily used proceeds to: Prepay our Colstrip loan that was to mature in December 2009 Prepa
Slide 10: Credit ratings
credit ratings… Fitch S&P Moody’s Senior Secured Rating BBB+ A- (MT) Baa1 BBB+ (SD) Senior Unsecured BBB BBB Baa2 Outlook Stable Stable Positive Fitch upgraded in January 2009 and Moody’s upgraded in March 2009. 10
Slide 11: Generation growth highlights
generation growth highlights… Mill Creek Generating Unit in Montana Existing regulating services are becoming more expensive and scarce 150 MW plant near Anaconda, MT To be built for regulation services to balance supply and load for NWE’s Balancing Area Rate-based cost of service investment Estimat
Slide 12: Our proposed transmission projects
our proposed transmission projects… 12
Slide 13: Generation plans shifting to wind
generation plans shifting to wind… New generation in Montana mostly wind and will need to find an end user. 13
Slide 14: Supply - Montana wind potential
supply - Montana wind potential… Very strong wind regime in Montana. 14
Slide 15: Demand - renewable standards
demand - renewable standards… The current renewable percentage of NorthWestern’s electric supply in Montana is a little more than 8%. 15
Slide 16: Our transmission developments
our transmission developments… Colstrip 500 kV Upgrade Line already exists – represents an upgrade Upgrades substation capacity Increases load capacity of existing line by 500-600 MW’s Needed to relieve congestion to the West Market interest is increasing for Montana’s high quality wind profile Nort
Slide 17: Transmission project developments
transmission project developments… 230 kV “Collector System” Provides gathering system for new generation to access MSTI and network system benefits Our project with no partners In 2Q ’09, FERC approved NorthWestern’s proposal to directly assign the cost of the project to the generators The FERC fou
Slide 18: Transmission project developments cont'd: MSTI
transmission project developments cont’d… MSTI Provides additional capacity on a historically constrained path, and connects expanding new renewable markets in Idaho, Utah and the Southwest U.S. Total project cost estimated from $800 million to $1 billion Considering strategic partners Plan to be op
Slide 19: Capex spending - next few years
capex spending – next few years… Includes more than $1 billion of potential generation and transmission growth projects. Non-discretionary capex is funded 100% by free cash flow. MSTI project is now slated for early 2014 and capex has been modified accordingly. Company doesn’t anticipate needing equ
Slide 20: Growth project potential
growth project potential… Annual Earnings (in millions) Cost of Project Opportunity * Timing Mill Creek Generation Station $ 200 to $ 200 $ 10.0 to $ 10.0 Dec 2010 Colstrip 500 kV transmission upgrade ** $ 50 to $ 75 $ 2.5 to $ 3.8 Jan 2012 South Dakota Peaking generation $ 75 to $ 90 $ 3.8 to $ 4.5
Slide 21: Growth project milestones '09 & '10
growth project milestones ’09 & ’10… Mill Creek Mill Creek 2009 2010 Expect decision from the MPSC (APPROVED) Q2 Complete construction Q4 Begin construction Q3 Start up, commissioning and completion Q4 500 kV upgrade 500 kV upgrade 2009 2010 Complete engineering and planning studies Q4 Run subscript
Slide 22: Summary
summary… Value Dividend yield in excess of 5.4% Strong financial profile All debt is investment grade rated 2009 earnings expected to increase over 2008 Strong cash flows from increasing earnings and NOLs expected into 2012 Improving regulatory relationships Opportunity for growth Montana T&D rate c