Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Deutsche Bank Energy, Utilities, and Power Conference 2009
22 slides from Northwestern Energy's conference presentation, May 27, 2009
Slide 1: Deutsche Bank Energy, Utilities, and Power Conference
Deutsche Bank Energy, Utilities, and Power Conference The Loews Miami Beach Miami, FL May 27, 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: $2,791 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 Ongoing EPS growth of 6.2% from ’05 to ‘08 Colstrip Unit 4 into rates effective Jan. 1, 2009 Expected to add $9 million or $.25/share in earnings over 2008 Rate c
Slide 5: Regulatory update
regulatory update… Mill Creek Generation Station approved by MPSC Filed for pre-approval on the plant in August 2008 Decision to approve on May 19, 2009 Cost of plant estimated to be $201.8 million Debt/equity structure of 50/50; authorized ROE of 10.25% Rate case to be filed in Montana in 2009 Fili
Slide 6: 2009 first quarter results
2009 first quarter results… Unaudited (Dollars in 000's) Three Months Ended March 31, Gross Margin increased 2009 2008 Variance mainly due to transfer of Operating Revenues 370,903 385,975 (15,072) interest in CU4 into regulated Electric ($5.8M) and other Cost of Sales 208,010 229,084 (21,074) misce
Slide 7: 2009 income guidance
2009 income guidance… $1.85 to $2.00 per fully diluted share Drivers CU4 increase expected to be approximately $9 million or $.25/share Pension expense expected to be flat compared to 2008 Planned insurance recoveries will offset our Q1 insurance reserve expense increase Retail electric and natural
Slide 8: Strong balance sheet
strong balance sheet… Audited (Dollars in 000's) March 31, December 31, 2009 2008 Cash 83,246 11,292 Restricted Cash 14,948 14,727 Accounts Receivable, Net 142,377 155,672 Inventories 34,929 70,741 Other Current Assets 73,651 60,985 Goodwill 355,128 355,128 PP&E and Other Non-current Assets 2,087,57
Slide 9: Liquidity highlights
liquidity highlights… Liquidity position remains strong Total liquidity currently in the $275 million range Recently issued $250 million in First Mortgage Bonds 10 year maturity with interest rate of 6.34% Primarily used proceeds to: Refinance our Colstrip loan maturing in December 2009 Pay down our
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 120-150 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 MPS
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 Informational meeting with customers in 2Q 2009 Open Season 3Q ‘09 to determine demand Cost estimate of “collector” projec
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: Cap ex spending - next few years
cap ex 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 eq
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 2011 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 Decision from the MPSC Q2 Complete construction Q4 Begin construction (if approved) Q3 Start up, commissioning and completion Q4 500 kV upgrade 500 kV upgrade 2009 2010 Complete engineering and planning studies Q4 Run subscription
Slide 22: Summary
summary… Value Dividend yield in excess of 6.0% Currently trading at approximately book value Strong financial profile All debt is investment grade rated 2009 earnings expected to increase 5%-13% over 2008 Strong cash flows from increasing earnings and NOLs expected into 2012 Improving regulatory re
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