Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Q2 2021 Earnings Presentation
37 slides from Northwestern Energy's earnings presentation, Jul 28, 2021
Slide 1: 2021 Second Quarter Earnings Webcast
O’Dell Creek - Montana 2021 Second Quarter Earnings Webcast July 28, 2021
Slide 2: Presenting Today / Forward Looking Statements
Presenting Today Bob Rowe, Forward Looking Statements During the course of this presentation, there will be CEO 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
Slide 3: Significant Events
Significant Events • Net income for the second quarter of 2021 increased WEIM active & Pending Participants $15.7 million, as compared to the same period in 2020. – Diluted earnings per share increased $0.29 as compared to the same period in 2020. – After adjusting for weather differences and a non-
Slide 4: Summary Financial Results
Summary Financial Results (Second Quarter) (1) 4 (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure See appendix for additional disclosure.
Slide 5: Gross Margin
Gross Margin (Second Quarter) (dollars in millions) Three Months Ended June 30, 2021 2020 Variance Electric $ 192.2 $ 169.6 $ 22.6 13.3% Natural Gas 38.1 38.7 (0.6) (1.6%) Total Gross Margin $ 230.3 $ 208.3 $ 22.0 10.6% (1) Increase in gross margin due to the following factors: $9.1 Electric transmi
Slide 6: Weather
Weather (Second Quarter) We estimate favorable weather in Q2 2021 resulted in a $2.0M pretax benefit as compared to normal and $1.5M pretax benefit as compared to Q2 2020. 6
Slide 7: Operating Expenses
Operating Expenses (Second Quarter) (dollars in millions) Three Months Ended June 30, 2021 2020 Variance Operating, general & admin. $ 77.1 $ 71.7 $ 5.4 7.5% Property and other taxes 47.3 47.0 0.3 0.6% Depreciation and depletion 46.8 44.8 2.0 4.5% Operating Expenses $ 171.2 $ 163.5 $ 7.7 4.7% Increa
Slide 8: Operating to Net Income
Operating to Net Income (Second Quarter) (dollars in millions) Three Months Ended June 30, 2021 2020 Variance Operating Income $ 59.1 $ 44.8 $ 14.3 31.9% Interest Expense (23.5) (24.3) 0.8 3.3% Other Income 3.0 0.2 2.8 1,400.0% Income Before Taxes 38.6 20.8 17.8 85.6% Income Tax (Expense) / Benefit
Slide 9: Cash Flow
Cash Flow Cash from operating activities decreased by $114.7 million primarily due to an $82.8 million increase in market purchases of supply during the February 2021 cold weather event resulting in an undercollection of supply costs from customers in the current period, and a refund of approximatel
Slide 10: Adjusted Non-GAAP Earnings
Adjusted Non-GAAP Earnings (Second Quarter) 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
Slide 11: Diluted Earnings Per Share
Diluted Earnings Per Share Non-GAAP Adjusted EPS Growth Averaged 4.3% from 2013 - 2020 NorthWestern narrows its previously announced 2021 earnings guidance range of $3.40 to $3.60 per diluted share to $3.43 to $3.58 per diluted share based upon, but not limited to, the following major assumptions an
Slide 12: Looking Forward (Regulatory)
Looking Forward (Regulatory) • We do not expect to make general rate case filings in any of our regulatory jurisdictions during 2021. We have made several other regulatory filings, primarily in our Montana jurisdiction, including: • An April 15, 2021 filing requesting to delay the implementation of
Slide 13: Robust Capital Investment Plan
Robust Capital Investment Plan • $2.1 billion of total capital investment over the five year period. We expect to finance this capital with a combination of cash flows from operations, first mortgage bonds and equity issuances. • During the second quarter of 2021 we initiated a $200 million At-the-M
Slide 14: Generation Portfolio Update
Generation Portfolio Update Montana • A May 19, 2021 filing requesting approval to acquire electric capacity 60 MW of flexible capacity addition in Huron, SD resources identified through our January 2020 RFP, including: • Laurel Generation Station - Construction of 175 MW of flexible reciprocating i
Slide 15: ESG Advancements
ESG Advancements NorthWestern will soon be launching a new website with increased focus on communicating our stewardship and ESG efforts including: • SASB Framework Report (new) • TCFD Framework Report (new) • AGA ESG Methane reporting template (new) • EEI ESG Carbon reporting template (updated) • K
Slide 16: Conclusion
Conclusion Best Attractive Pure Strong Solid Utility Practices Future Electric & Earnings & Foundation Corporate Growth Gas Utility Cash Flows Governance Prospects 16
Slide 17: Appendix
Cr Appendix 17
Slide 18: Income Tax Reconciliation
Income Tax Reconciliation (Second Quarter) 18
Slide 19: Balance Sheet
19 (dollars in millions) Cash and cash equivalents Restricted cash Accounts receivable, net Inventories Other current assets Goodwill PP&E and other non-current assets Total Assets Payables Current Maturities - debt and leases Other current liabilities Long-term debt & capital leases Other non-curre
Slide 20: Segment Results
Appendix Segment Results (Second Quarter) (1) (1) (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. See appendix for additional disclosure. 20
Slide 21: Electric Segment
Appendix Electric Segment (Second Quarter) (1) (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. 21 See appendix for additional disclosure.
Slide 22: Natural Gas Segment
Appendix Natural Gas Segment (Second Quarter) (1) (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. 22 See appendix for additional disclosure.
Slide 23: Summary Financial Results
Appendix Summary Financial Results (Six Months Ended June 30) (1) (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. 23 See appendix for additional disclosure.
Slide 24: Gross Margin
Appendix Gross Margin (Six Months Ended June 30) (dollars in millions) Six Months Ended June 30, 2021 2020 Variance(1) Electric $ 382.1 $ 350.4 $ 31.7 9.0% Natural Gas 104.4 101.9 2.5 2.5% Total Gross Margin $ 486.5 $ 452.3 $ 34.2 7.6% Increase in gross margin due to the following factors: (1) Gross
Slide 25: Weather
Appendix Weather (Six Months Ended June 30) We estimate favorable weather through the first 6 months of 2021 has contributed approximately $0.7M pretax benefit as compared to normal and $4.2M pretax benefit 25 as compared to the same period in 2020.
Slide 26: Operating Expenses
Appendix Operating Expenses (Six Months Ended June 30) (dollars in millions) Six Months Ended June 30, 2021 2020 Variance Operating, general & admin. $ 158.0 $ 150.7 $ 7.3 4.8% Property and other taxes 94.8 91.5 3.3 3.6% Depreciation and depletion 93.8 90.0 3.8 4.2% Operating Expenses $ 346.6 $ 332.
Slide 27: Operating to Net Income
Appendix Operating to Net Income (Six Months Ended June 30) (dollars in millions) Six Months Ended June 30, 2021 2020 Variance Operating Income $ 140.0 $ 120.1 $ 19.9 16.6% Interest Expense (47.0) (48.6) 1.6 3.3% Other Income / (Expense) 8.6 (1.8) 10.4 577.8% Income Before Taxes 101.7 69.7 32.0 45.9
Slide 28: Income Tax Reconciliation
Appendix Income Tax Reconciliation (Six Months Ended June 30) 28
Slide 29: Adjusted Non-GAAP Earnings
Appendix Adjusted Non-GAAP Earnings (Six Months Ended June 30) The adjusted non-GAAP measures presented in the table are being shown to reflect significant items that were non- recurring or variance from normal weather, however they should not be considered a substitute for financial results and mea
Slide 30: Segment Results
Appendix Segment Results (Six Months Ended June 30) (1) (1) (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. 30 See appendix for additional disclosure.
Slide 31: Electric Segment
Appendix Electric Segment (Six Months Ended June 30) (1) (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. 31 See appendix for additional disclosure.
Slide 32: Natural Gas Segment
Appendix Natural Gas Segment (Six Months Ended June 30) (1) (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. 32 See appendix for additional disclosure.
Slide 33: 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 34: Qualified Facility Earnings Adjustment
Appendix Qualified Facility Earnings Adjustment The $6.1 million improvement in 2021 is the result of a favorable adjustment of our electric QF liability (unrecoverable costs associated with the Public Utility Regulatory Policies Act of 1978 (PURPA) contracts as part of a 2002 stipulation with the M
Slide 35: NWE Rate Base and Earnings Profile
Appendix NWE Rate Base and Earnings Profile (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 rat
Slide 36: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures These materials include financial information prepared in accordance with GAAP, as well as other financial measures, such as Gross Margin and Adjusted Diluted EPS, that are considered “non- GAAP financial measures.” Generally, a non-GAAP financial measure is a nu
Slide 37: bright future
| a bright future
NorthWestern Energy Group — Q2 2021 Earnings Presentation on 6ix