Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Q3 2021 Earnings Presentation
38 slides from Northwestern Energy's earnings presentation, Oct 25, 2021
Slide 1: 2021 Third Quarter Earnings Webcast
2021 Third Quarter Earnings Webcast October 25, 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 third quarter of 2021 Boulder River, Montana increased $5.7 million, as compared to the same period in 2020. – Diluted earnings per share increased $0.10 as compared to the same period in 2020. – After adjusting for weather differences and a non-cash liability
Slide 4: Summary Financial Results
Summary Financial Results (Third Quarter) (1) (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure . 4 See Appendix slide 36 for a reconciliation and additional disclosure.
Slide 5: Gross Margin
Gross Margin (Third Quarter) (dollars in millions) Three Months Ended September 30, 2021 2020 Variance Electric $ 198.1 $ 183.0 $ 15.1 8.3% Natural Gas 29.2 29.6 (0.4) (1.4%) (1) Total Gross Margin $ 227.3 $ 212.6 $ 14.7 6.9% (1) Gross Margin, defined as Increase in gross margin due to the following
Slide 6: Weather
Weather (Third Quarter) We estimate favorable weather in Q3 2021 resulted in a $3.4M pretax benefit as compared to normal and $4.0M pretax benefit as compared to Q3 2020. 6
Slide 7: Operating Expenses
Operating Expenses (Third Quarter) (dollars in millions) Three Months Ended September 30, 2021 2020 Variance Operating, general & admin. $ 80.9 $ 73.3 $ 7.6 10.4% Property and other taxes 43.6 45.3 (1.7) (3.8)% Depreciation and depletion 47.1 44.3 2.8 6.3% Operating Expenses $ 171.6 $ 162.9 $ 8.7 5.
Slide 8: Operating to Net Income
Operating to Net Income (Third Quarter) (dollars in millions) Three Months Ended September 30, 2021 2020 Variance Operating Income $ 55.7 $ 49.7 $ 6.0 12.1% Interest Expense (23.3) (23.7) 0.4 1.7% Other Income 5.3 0.8 4.5 562.5% Income Before Taxes 37.7 26.8 10.9 40.7% Income Tax (Expense) / Benefit
Slide 9: Cash Flow
Cash Flow Cash from operating activities decreased by $100.9 million primarily due to an $106.9 million* net increase in under collection of energy supply costs from customers in the current period, and a refund of approximately $20.5 million to our FERC regulated customers in 2021. These reductions
Slide 10: Adjusted Non-GAAP Earnings
Adjusted Non-GAAP Earnings (Third 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 ca
Slide 11: Diluted Earnings Per Share
Diluted Earnings Per Share Non-GAAP Adjusted EPS Growth Averaged 4.3% from 2013 - 2020 NorthWestern confirms its 2021 earnings guidance range of $3.43 to $3.58 per diluted share based upon, but not limited to, the following major assumptions and expectations: • COVID-19 related reduction in our comm
Slide 12: Regulatory Update
Regulatory Update • We will not make a general rate case filing 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 of a motion requesting to delay the implementation of our Mo
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-
Slide 14: Generation Portfolio Update
Generation Portfolio Update Montana • On May 19, 2021 we made a filing requesting approval to acquire electric Construction of capacity resources identified through our January 2020 RFP, including: 60MW project at Huron, SD • Laurel Generation Station - Construction of 175 MW of flexible reciprocati
Slide 15: ESG Advancements
ESG Advancements NorthWestern has launched 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) • Key Sustain
Slide 16: Conclusion
Conclusion Best Attractive Pure Strong Solid Utility Practices Future Electric & Corporate Growth Earnings & Gas Utility Foundation Cash Flows Governance Prospects 16
Slide 17: Appendix
Cr Appendix 17
Slide 18: Income Tax Reconciliation
Appendix Income Tax Reconciliation (Third Quarter) 18
Slide 19: Balance Sheet
Balance Sheet (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 Othe
Slide 20: Segment Results
Appendix Segment Results (Third Quarter) (1) (1) 20 (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. See Appendix slide 36 for a reconciliation and addi tional disclosure.
Slide 21: Electric Segment
Appendix Electric Segment (Third Quarter) (1) 21 (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. See Appendix slide 36 for a reconciliation and addi tional disclosure.
Slide 22: Natural Gas Segment
Appendix Natural Gas Segment (Third Quarter) (1) 22 (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. See Appendix slide 36 for a reconciliation and addi tional disclosure.
Slide 23: Summary Financial Results
Appendix Summary Financial Results (Nine Months Ended September 30) (1) 23 (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. See Appendix slide 36 for a reconciliation and addi tional disclosure.
Slide 24: Gross Margin
Appendix Gross Margin (Nine Months Ended September 30) (dollars in millions) Nine Months Ended September 30, 2021 2020 Variance(1) Electric $ 580.2 $ 533.4 $ 46.8 8.8% Natural Gas 133.6 131.4 2.2 1.7% Total Gross Margin $ 713.8 $ 664.8 $ 49.0 7.4% Increase in gross margin due to the following factor
Slide 25: Weather
Appendix Weather (Nine Months Ended September 30) We estimate favorable weather through the first nine months of 2021 has contributed approximately $4.1M pretax benefit as compared to normal and $8.2M pretax benefit as compared to 25 the same period in 2020.
Slide 26: Operating Expenses
Appendix Operating Expenses (Nine Months Ended September 30) (dollars in millions) Nine Months Ended September 30, 2021 2020 Variance Operating, general & admin. $ 238.9 $ 224.0 $ 14.9 6.7% Property and other taxes 138.3 136.8 1.5 1.1% Depreciation and depletion 140.9 134.3 6.6 4.9% Operating Expens
Slide 27: Operating to Net Income
Appendix Operating to Net Income (Nine Months Ended September 30) (dollars in millions) Nine Months Ended September 30, 2021 2020 Variance Operating Income $ 195.7 $ 169.7 $ 26.0 15.3% Interest Expense (70.3) (72.3) 2.0 2.8% Other Income / (Expense) 13.9 (1.0) 14.9 1,490.0% Income Before Taxes 139.4
Slide 28: Income Tax Reconciliation
Appendix Income Tax Reconciliation (Nine Months Ended September 30) 28
Slide 29: Adjusted Non-GAAP Earnings
Appendix Adjusted Non-GAAP Earnings (Nine Months Ended September 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
Slide 30: Segment Results
Appendix Segment Results (Nine Months Ended September 30) (1) (1) 30 (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. See Appendix slide 36 for a reconciliation and addi tional disclosure.
Slide 31: Electric Segment
Appendix Electric Segment (Nine Months Ended September 30) (1) 31 (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. See Appendix slide 36 for a reconciliation and addi tional disclosure.
Slide 32: Natural Gas Segment
Appendix Natural Gas Segment (Nine Months Ended September 30) (1) 32 (1) Gross Margin, defined as revenues less cost of sales, is a non-GAAP Measure. See Appendix slide 36 for a reconciliation and addi tional disclosure.
Slide 33: Quarterly PCCAM Impacts
Appendix Quarterly PCCAM Impacts We recover the cost of our electric and natural gas supply through tracking mechanisms. The natural gas supply tracking mechanism in each of our jurisdictions, and electric supply tracking mechanism in South Dakota are designed to provide stable recovery of supply co
Slide 34: Qualified Facility Earnings Adjustment
Appendix Qualified Facility Earnings Adjustment $4.3 million YTD benefit * due to a more favorable adjustment of our electric QF liability (unrecoverable costs associated with PURPA contracts as part of a 2002 stipulation with the MPSC and other parties) reflecting a $7.9 million gain in 2021 (a), a
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 servic es are included as revenue credits to our MPSC jurisdictional customers. Therefore, we do not separately reflect FERC authorized ra
Slide 36: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures Reconciliation of Operating Revenues to Gross Margin These materials include financial information prepared in accordance w ith GAAP, as w ell as other financial measures, such as Gross Margin and Adjusted Diluted EPS, that are considered “non-GAAP financial meas
Slide 37: Non-GAAP Financial Measures
Appendix Non-GAAP Financial Measures These materials include financial information prepared in accordance w ith GAAP, as w ell 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 n
Slide 38: Delivering a bright future
[ Delivering a bright future
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