Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Investor Presentation (April 2008)
17 slides from Northwestern Energy's investor presentation, Apr 8, 2008
Slide 1: Investor Update
Investor Update April 8, 2008
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 financia
Slide 3: Who we are
who we are … 650,000 customers 388,000 electric 262,000 natural gas Approximately 123,000 square miles of service territory in Montana, Nebraska and South Dakota Total Generation (mostly base load coal) Electric transmission lines Natural gas distribution lines Supplier-owned electric or natural gas
Slide 4: Business overview
business overview … Regulated Operations (89% of Gross Margins) One of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 650,000 customers in Montana, South Dakota and Nebraska Electric Operations (65%) Gas Operations (24%) Montana Montana
Slide 5: NorthWestern's future
NorthWestern’s future … Operationally strong Cost competitive Above-average reliability Award-winning customer service Financially strong Stable earnings and cash flow profile Approximately a 50/50 debt to total capitalization ratio Secured credit ratings of A-(MT) BBB+(SD) / BBB / Baa3 Unsecured cr
Slide 6: 2007 full year results
2007 full year results … Unaudited (Dollars in 000's) Year Ended December 31, 2007 2006 Variance Operating Revenues 1,200,060 1,132,653 67,407 Cost of Sales 668,405 613,582 54,823 Gross Margin 531,655 519,071 12,584 Operating Expenses Operating, general & administrative 221,566 240,215 (18,649) Prop
Slide 7: Segment information
segment information … Unaudited (Dollars in 000's) ELECTRIC UNREGULATED OTHER / YTD December 31, 2007 GAS UTILITY TOTAL % OF TOTAL UTILITY ELECTRIC ELIMINATIONS Gross Margin Montana 273,185 103,973 56,152 (207) 433,103 81% South Dakota / Nebraska 73,791 23,653 - 1,108 98,552 19% Total 346,976 127,62
Slide 8: Strong balance sheet
strong balance sheet … Debt Ratings (Dollars in 000's) December 31, 2007 2006 Cash 12,773 1,930 Restricted Cash 14,482 15,836 Accounts Receivable, Net 143,482 149,793 Inventories 63,586 60,543 Other Current Assets 44,031 40,372 Goodwill 355,128 435,076 PP&E and Other Non-current Assets 1,913,898 1,6
Slide 9: 2008 guidance bridge from 2007 results
2008 guidance bridge from 2007 results … 2008 Guidance Reported 2007 - EPS fully diluted $ 1.44 Mid-point Guidance for 2008 - diluted $ 1.60 $ 1.75 $ 1.68 Yr over yr increase $ 0.24 per share Bridge to 2008: Pre-tax After-tax shares o/s Rates - MT (net of 21 MW and non-earning rate base) $ 0.18 $ 12
Slide 10: Montana proposed generation landscape
Montana proposed generation landscape … Potential Generation Development in Montana 4,500 4,012 4,000 3,500 3,000 3,000 2,500 2,000 1,526 1,500 1,000 722 770 300 375 268 500 52 - Coal Gas Hydro Wind MATL In-Service Signed Total MT LGIA Existing Generation 10
Slide 11: Growth project developments
growth project developments … Mill Creek Generation Plant Site selected at Mill Creek, near Anaconda, MT Design phase Filing expected by end of 2Q ‘08 Construction to begin upon approval Estimated to be on-line at beginning of 2011 Approximately 120 MW of regulating capacity Approximately $150 milli
Slide 12: Growth project developments cont'd
growth project developments cont’d … MSTI Permitting for 500 KV line Will scale this project to committed long term contracts 230KV, 270 mile line to move 430 MWs; cost = $250M - $300M 345KV, 370 mile line to move 800 MWs; cost = $650M - $700M 500KV, 400 mile line to move 1,500 MWs; cost = $750M - $
Slide 13: Growth project timing
growth project timing … Mill Creek Generation Plant 2008 2009 2010 2011 Planning Construction Operation Cumulative Dollars Spent: $4M-$5M $100M $150 M Colstrip 500 KV upgrade 2008 2009 2010 2011 2012 2013 Planning & Technical Studies Construction Operation Cumulative Dollars Spent: $1M-$2M $100M $20
Slide 14: Growth project potential
growth project potential … (in millions) Annual Earnings Opportunity * Cost of Project Timing MSTI transmission line 500 KV scenario $ 37.5 to $ 45.0 $ 750.0 to $ 900.0 Jan 2013 345 KV scenario $ 32.5 to $ 35.0 $ 650.0 to $ 700.0 Jan 2013 230 KV scenario $ 12.5 to $ 15.0 $ 250.0 to $ 300.0 Jan 2013
Slide 15: CU4 strategic alternatives update
CU4 strategic alternatives update … Credit Suisse engaged in January to help NorthWestern evaluate strategic alternatives Possible sale of NorthWestern’s 30% interest in CU4 Confidential Information Memorandum in market Bids anticipated in early April 2008 Other considerations Evaluate possible tran
Slide 16: Why NorthWestern?
why Northwestern? Value Dividend yield of 5.15% Cash taxes lower than book taxes prior to 2011 Currently trading at approximately 15x projected ’08 earnings Strong balance sheet/credit ratings Opportunity for Growth Possibility of rate base growth in excess of $1 billion Potential additional annual
Slide 17: Summary
summary … Attractive Regional T&D utility with stable customer growth Transmission & Attractive mix of electric and natural gas customers Distribution Business Reliable and cost competitive operations Regulated electric and gas contribute 90% of gross margins Stable and Predictable Cost-based operat