Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Midwest Utilities Seminar (April 2011)
21 slides from Northwestern Energy's conference presentation, Apr 4, 2011
Slide 1: Midwest Utilities Seminar
Chicago, IL April4, 2011 Midwest Utilities Seminar Wellington Shields & Co.
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 $165 million as of February 2011 ¾ Total Debt / Total capitalization of 56.6% ( 1 ) ¾ In past two years refinanced nearly all outstanding debt » In May 2010 we refinanced existing $225 million, 5.875% Senior Secured Notes due 201
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: 2010 to 2011 earnings bridge
2010 to 2011 earnings bridge… ¾ The basic assumptions include, but are not limited to, the following expectations: » A consolidated income tax rate of approximately 20% - 24% of pre-tax income; » Fully diluted average shares outstanding of 36.4 million; and » Normal weather in the Company’s electric
Slide 12: Constructive regulatory environment
constructive regulatory environment… ¾ Montana » Electric and natural gas general rate case ♦ September 2010: Joint stipulation with Montana Consumer Counsel (MCC) filed with MPSC resulting in a net $6.7 million increase to revenue predicated upon a 10.25% ROE and 5.76% cost of debt (7.92% ROR) ♦ De
Slide 13: Regulatory environment con't
regulatory environment con’t… ¾ South Dakota » Expect to file natural gas rate cases during 2011 pending 2010 results » Expect to file an environmental rider on the Big Stone & Neal plant for emissions compliance projects » Election results ♦ Prior Chairman Dusty Johnson (R) re-elected but then appo
Slide 14: Regulatory milestones in 2011
Montana Distribution Infrastructure P Decision in favor of accounting order (MPSC) Q1 Prudency Review for Mill Creek P Interim rate filing (MPSC) 2010 Q4 ¾ Compliance filing (MPSC) Q1 ¾ FERC tariff filing (FERC) Q2 Approval for Montana Wind Projects ¾ Pre - approval filing (MPSC) Q2 Natural Gas - Ra
Slide 15: 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 16: Potential project summary
potential project summary… Note: Color / label indicate NorthWestern Energy's current probability of execution and timing of expenditures.
Slide 17: 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 18: Appendix
appendix…
Slide 19: Appendix - income statement
appendix - income statement…
Slide 20: Balance sheet
Cash Restricted cash Accounts receivable, net Inventories ‘Other current assets Goodwill PP8E and ther non-current assets Total Assets Payables Short-term debt & capital leases ‘Other current abilities: Long-term debt & capital leases ‘Other non-current liabilities Shareholders’ equity Total Liabili
Slide 21: Cash flow statement
Ended December 31, (in thousands) 2010 2008 Net income $s 77376 $s 73420 Depreciation 91,769 89.039 ‘Amort of debtissue costs, discount, deferred hedge gain and nomvested shares 3449 3,795 Equity portion of allowance for funds used during construction (6.564) 2.113) (Gain) Loss on sale of assets 1 2
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