Northwestern Energy Group, Inc. · NASDAQ:NWE
Northwestern Energy — Investor Presentation (February 2009)
25 slides from Northwestern Energy's investor presentation, Feb 23, 2009
Slide 1: Investor Update
Investor Update San Francisco & Los Angeles February 23 & 24, 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… 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) MT – 222 MW – regulated as of 1/1/09 SD – 312 MW – regulated Total Assets: $2,593 MM (2) Total Cap
Slide 4: NorthWestern's attributes
NorthWestern’s attributes … Increasing earnings Colstrip Unit 4 into rates effective Jan. 1, 2009 Expected to add $9 million or $.25/share in earnings over 2008 Rate case to be filed in Montana on electric and gas distribution business in 2Q ‘09 Strong cash flows Steady earnings growth and strong ca
Slide 5: regulatory update
regulatory update… Rate case to be filed in Montana in 2009 Filing will include both electric and natural gas distribution businesses Expect to file in 2Q 2009 on 2008 test year Expect decision by April 1, 2010 Mill Creek Generation Station filed with MPSC Filed for pre-approval on the plant in Augu
Slide 6: generation growth highlights
generation growth highlights… Mill Creek Generating Unit in Montana 120-150 MW plant near Anaconda, MT Built for regulation services to balance supply and load for NWE’s Balancing Area Rate-based cost of service investment Estimated to cost approximately $200 million Existing services are becoming m
Slide 7: Mill Creek timeline
Mill Creek timeline… The Mill Creek Generation Station has been filed for pre-approval, with the MPSC w/decision expected in 2Q ’09. 7
Slide 8: transmission opportunities intro
transmission opportunities intro … New generation in Montana mostly wind and will need to find an end user. 8
Slide 9: Montana wind potential
Montana wind potential… Very strong wind regime in Montana. 9
Slide 10: state by state renewable standards
state by state renewable standards… 10
Slide 11: export "delivery" system for MSTI
export “delivery” system for MSTI… 11
Slide 12: 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 NorthWestern announced joint development agreement with others Portland General Puget Sound Energy Pacificorp Avist
Slide 13: transmission project developments
transmission project developments… 230 kV “Collector System” Our project with no partners Informational meeting with customers in Spring 2009 Open Season early ‘09 to determine configuration Provides gathering system for new generation to access MSTI and network system benefits Cost estimate of “col
Slide 14: transmission project developments cont'd: MSTI
transmission project developments cont’d… MSTI Developing a request for FERC declaratory order on incentive rate principles Beginning an updated Open Season for long term contracts to be completed by early 2009 Continuing the public outreach process Expect to complete the WECC path rating process Q1
Slide 15: 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 cap ex is funded 100% by free cash flow. MSTI project is now slated for early 2014 and capex has been modified accordingly. Don’t anticipate needing equity unle
Slide 16: growth project potential
growth project potential… Annual Earnings (in millions) Cost of Project Opportunity * Timing Mill Creek Generatation Station $ 200 to $ 200 $ 10.0 to $ 10.0 Jan 2011 Colstrip 500 kV transmission upgrade ** $ 50 to $ 60 $ 2.5 to $ 3.0 Jan 2012 South Dakota Peaking generation $ 75 to $ 90 $ 3.8 to $ 4
Slide 17: base earnings of company since '05
base earnings of company since ’05… $2.50 CAGR = 5.98% Earnings $2.00 profile is improving. $1.50 $1.00 $0.50 $0.00 2005 2006 2007 2008 2009 P 2005 2006 2007 2008 2009 P GAAP earnings per share $ 1.73 $ 1.06 $ 1.45 $ 1.77 $1.85 - $2.00 Adjustments: Weather $ (0.01) $ (0.05) $ 0.01 $ - $ - Nat Gas re
Slide 18: 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 Retail electric volumes expected to approximate 2008 Wholesale electric volumes in SD expected to decrease due
Slide 19: strong balance sheet
strong balance sheet… Audited (Dollars in 000's) December 31 2008 2007 Cash 11,292 12,773 Restricted Cash 14,727 14,482 Accounts Receivable, Net 155,672 143,482 Inventories 70,741 63,586 Other Current Assets 60,985 44,031 Goodwill 355,128 355,128 PP&E and Other Non-current Assets 2,093,492 1,913,898
Slide 20: liquidity highlights
liquidity highlights… Liquidity position remains strong Total liquidity currently in the $130 million range Debt maturities in late 2009 Unsecured revolver matures on Nov. 1, 2009 Current balance is $60 million Current rate is LIBOR + .75% The $100 million non-recourse loan to purchase our interest
Slide 21: 2009 financing plan
2009 financing plan … Issue up to $350 million of long-term senior debt securities refinance our Colstrip loan maturing in December 2009 finance a portion of the proposed Mill Creek Generation Station fund utility capital expenditures provide funds for general corporate purposes MPSC authorized issu
Slide 22: credit ratings
credit ratings… Fitch S&P Moody’s Senior Secured Rating BBB+ A- (MT) Baa2 BBB+ (SD) Senior Unsecured BBB BBB Baa3 Outlook Stable Stable Positive Fitch upgraded in January 2009. 22
Slide 23: net operating loss balance
net operating loss balance… in 000's 2008 NOL Balance $ 350,200 40% tax rate Estimated cash savings 140,080 (less FIN 48 reserve) -115,105 Estimated cash savings (net of FIN 48) 24,975 The Net Operating Loss position, excluding the FIN 48 reserve, shields taxes into 2012 The Company potentially has
Slide 24: NorthWestern = value
NorthWestern = value… Value Dividend yield of about 6.1% Currently trading at approximately book value Improved regulatory relationships Opportunity for growth January 1, 2009 rate basing our 222 MW interest in CU4 Montana T&D rate case to be filed in 2009 expecting a rate increase request effective
Slide 25: summary
summary… 2009 earnings will be entirely from regulated business Objectives achieved Recent rate relief received in all jurisdictions related to focus on Outstanding bankruptcy litigation nearly completed core business Strong balance sheet No equity required for existing core business Solid foundatio