NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 1
 | NorthWestern Corporation d/b/a NorthWestern Energy 3010 W. 69th Street Sioux Falls, SD 57108 www.northwesternenergy.com | |
NYSE: NWE News Release FOR IMMEDIATE RELEASE | Media Contact: Claudia Rapkoch (866) 622-8081 claudia.rapkoch@northwestern.com Investor Relations Contact: Travis Meyer (605) 978-2967 travis.meyer@northwestern.com | |
NORTHWESTERN REPORTS THIRD QUARTER 2013 FINANCIAL RESULTS
Company reports diluted earnings per share of $0.40 for third quarter 2013
Reaffirms full year 2013 guidance of $2.45 - $2.60 per diluted share
Declares a quarterly dividend of $0.38 per share, payable December 31, 2013
SIOUX FALLS, S.D. - October 24, 2013 - NorthWestern Corporation d/b/a NorthWestern Energy (NYSE: NWE) reported financial results for the quarter ended September 30, 2013. Net income was $15.6 million or $0.40 per diluted share, for the quarter ended September 30, 2013, compared with a net loss of $3.8 million, or a loss of $0.10 per diluted share, for the quarter ended September 30, 2012. The loss in the third quarter last year was primarily related to the impairment of the Mountain States Transmission Intertie (MSTI) project and the revenue deferral due to the FERC ALJ’s nonbinding decision regarding revenue allocation at our Dave Gates Generating Station (DGGS).
“We are very excited about our recently announced $900 million hydro acquisition and the long-term benefits it will provide all of our stakeholders for decades to come. There is no resource better suited to serve the needs of our Montana customers. We continue to be keenly focused on our day-to-day responsibilities of delivering safe and reliable services to our customers while delivering a fair return to our investors,” said Bob Rowe, Chief Executive Officer. "This was another solid quarter demonstrating that commitment."
| Summary Financial Results | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| (in thousands, except per share amounts) | 2013 | 2012 | 2013 | 2012 | |||||||||||
| Total Revenues | $ | 262,248 | $ | 235,866 | $ | 835,429 | $ | 789,569 | |||||||
| Cost of Sales | 104,298 | 93,061 | 343,407 | 327,884 | |||||||||||
| Gross Margin | 157,950 | 142,805 | 492,022 | 461,685 | |||||||||||
| Operating Expenses | |||||||||||||||
| Operating, general and administrative | 72,540 | 63,056 | 208,741 | 195,725 | |||||||||||
| MSTI impairment | — | 24,039 | — | 24,039 | |||||||||||
| Property and other taxes | 25,956 | 24,796 | 77,525 | 74,395 | |||||||||||
| Depreciation | 28,053 | 26,505 | 84,685 | 79,364 | |||||||||||
| Total Operating Expenses | 126,549 | 138,396 | 370,951 | 373,523 | |||||||||||
| Operating Income | 31,401 | 4,409 | 121,071 | 88,162 | |||||||||||
| Interest Expense, net | (17,056 | ) | (17,743 | ) | (50,976 | ) | (49,598 | ) | |||||||
| Other Income | 3,117 | 974 | 6,760 | 3,134 | |||||||||||
| Income (Loss) Before Income Taxes | 17,462 | (12,360 | ) | 76,855 | 41,698 | ||||||||||
| Income Tax (Expense) Benefit | (1,815 | ) | 8,588 | (8,965 | ) | (1,989 | ) | ||||||||
| Net Income (Loss) | $ | 15,647 | $ | (3,772 | ) | $ | 67,890 | $ | 39,709 | ||||||
| Average Common Shares Outstanding | 38,459 | 37,201 | 37,983 | 36,723 | |||||||||||
| Basic Earnings (Loss) per Average Common Share | $ | 0.41 | $ | (0.10 | ) | $ | 1.79 | $ | 1.09 | ||||||
| Diluted Earnings (Loss) per Average Common Share | $ | 0.40 | $ | (0.10 | ) | $ | 1.78 | $ | 1.08 | ||||||
| Dividends Declared per Common Share | $ | 0.38 | $ | 0.37 | $ | 1.14 | $ | 1.11 | |||||||
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 2
Significant items during the third quarter
| • | Entered into an agreement with PPL Montana, LLC (PPL Montana), a wholly owned subsidiary of PPL Corporation to purchase PPL Montana’s hydro-electric generating facilities and associated assets located in Montana, which includes approximately 633 megawatts of hydro-electric generation capacity, for a purchase price of $900 million (Hydro Transaction); and |
| • | An improvement in net income of approximately $19.4 million as compared with the same period in 2012, due primarily to: |
| ◦ | $15.1 Million - Improvement in gross margin primarily due to: |
| ▪ | Higher FERC DGGS revenue due to $11.4 million deferral recorded in the third quarter of 2012 related to the FERC ALJ nonbinding decision; |
| ▪ | Increased recovery of electric Demand Side Management (DSM) lost revenues; |
| ▪ | The acquisition of the Spion Kop wind farm in the fourth quarter of 2012; |
| ▪ | An increase in natural gas production margin due to the full period effect of the acquisition of production assets in the third quarter of 2012; |
| ▪ | An increase in Montana natural gas delivery rates implemented in April 2013; and |
| ▪ | An increase in property taxes included in a tracker. |
| ▪ | These increases were partly offset by a decrease in electric retail volumes due to cooler summer weather and less customer irrigation, lower revenues for operating expenses recovered in trackers and a decrease in electric transmission revenues due primarily to the outage at Colstrip Unit 4. |
| ◦ | $24.0 Million - Improvement from the absence of the MSTI impairment in the third quarter 2012. |
| ◦ | $0.6 Million - Reduced interest expense due to higher interest on DGGS accrued during the third quarter 2012 partially offset by higher debt outstanding in 2013. |
| ◦ | $2.1 Million - Increased other income due to the change in value of deferred shares held in trust for non-employee directors deferred compensation (offset in expense). |
These improvements were partially offset by:
| ◦ | $9.4 Million - Increased operating, general and administrative expenses primarily due to: |
| ▪ | Distribution System Infrastructure Project (DSIP) expense; |
| ▪ | Hydro Transaction legal and professional fees; |
| ▪ | Increased labor costs; |
| ▪ | Higher plant operator costs; |
| ▪ | Non-employee directors deferred compensation due to changes in our stock price (offset in other income); and |
| ▪ | Higher bad debt expense. |
| ▪ | These increases were partly offset by decreased pension expense (net of higher other employee benefit costs) and lower operating expenses recovered in trackers. |
| ◦ | $1.2 Million - Higher property and other taxes |
| ◦ | $1.6 Million - Increased depreciation expense |
| ◦ | $10.4 Million - Increased income tax expense |
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 3
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 4
| Reconciliation of Primary Changes from 2012 to 2013 | |||||||||||||||||||||
| Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | ||||||||||||||||||||
| Pre-tax | Net | EPS | Pre-tax | Net | EPS | ||||||||||||||||
| ($millions, except EPS) | Income | Income(1) | Diluted | Income | Income(1) | Diluted | |||||||||||||||
| 2012 reported | $ | (12.4 | ) | $ | (3.8 | ) | $ | (0.10 | ) | $ | 41.7 | $ | 39.7 | $ | 1.08 | ||||||
| Gross Margin | |||||||||||||||||||||
| DGGS | 10.2 | 6.3 | 0.16 | 5.1 | 3.1 | 0.08 | |||||||||||||||
| DSM lost revenues | 5.0 | 3.1 | 0.08 | — | — | — | |||||||||||||||
| Spion Kop | 1.6 | 1.0 | 0.03 | 4.6 | 2.8 | 0.07 | |||||||||||||||
| Natural gas production | 1.2 | 0.7 | 0.02 | 7.0 | 4.3 | 0.11 | |||||||||||||||
| Montana natural gas rate increase | 1.2 | 0.7 | 0.02 | 2.1 | 1.3 | 0.03 | |||||||||||||||
| Property tax trackers | 0.9 | 0.6 | 0.02 | 1.9 | 1.2 | 0.03 | |||||||||||||||
| Electric retail volumes | (3.5 | ) | (2.2 | ) | (0.06 | ) | (0.5 | ) | (0.3 | ) | (0.01 | ) | |||||||||
| Operating expenses recovered in trackers | (1.9 | ) | (1.2 | ) | (0.03 | ) | (2.4 | ) | (1.5 | ) | (0.04 | ) | |||||||||
| Electric transmission revenue | (0.4 | ) | (0.2 | ) | (0.01 | ) | 3.6 | 2.3 | 0.06 | ||||||||||||
| Natural gas retail volumes | — | — | — | 3.4 | 2.1 | 0.06 | |||||||||||||||
| Natural gas transportation capacity | — | — | — | 1.1 | 0.7 | 0.02 | |||||||||||||||
| Electric QF supply costs | — | — | — | 1.0 | 0.6 | 0.02 | |||||||||||||||
| Other | 0.8 | 0.5 | 0.01 | 3.6 | 2.2 | 0.06 | |||||||||||||||
| Subtotal - Gross Margin | 15.1 | 9.3 | 0.24 | 30.5 | 18.8 | 0.49 | |||||||||||||||
| OG&A Expense | |||||||||||||||||||||
| DSIP expenses | (3.3 | ) | (2.0 | ) | (0.05 | ) | (8.8 | ) | (5.4 | ) | (0.14 | ) | |||||||||
| Hydro Transaction related legal and professional fees | (2.8 | ) | (1.7 | ) | (0.05 | ) | (3.3 | ) | (2.0 | ) | (0.05 | ) | |||||||||
| Labor | (1.7 | ) | (1.0 | ) | (0.03 | ) | (2.8 | ) | (1.7 | ) | (0.04 | ) | |||||||||
| Plant operator costs | (1.6 | ) | (1.0 | ) | (0.03 | ) | (3.0 | ) | (1.8 | ) | (0.05 | ) | |||||||||
| Nonemployee directors deferred compensation | (1.5 | ) | (0.9 | ) | (0.02 | ) | (2.6 | ) | (1.6 | ) | (0.04 | ) | |||||||||
| Bad debt expense | (0.6 | ) | (0.4 | ) | (0.01 | ) | (1.0 | ) | (0.6 | ) | (0.02 | ) | |||||||||
| Pension and employee benefits | 3.1 | 1.9 | 0.05 | 10.7 | 6.6 | 0.17 | |||||||||||||||
| Operating expenses recovered in trackers | 1.9 | 1.2 | 0.03 | 2.4 | 1.5 | 0.04 | |||||||||||||||
| Natural gas production | — | — | — | (1.6 | ) | (1.0 | ) | (0.03 | ) | ||||||||||||
| Other | (2.9 | ) | (1.8 | ) | (0.05 | ) | (3.0 | ) | (1.8 | ) | (0.05 | ) | |||||||||
| Subtotal - OG&A Expense | (9.4 | ) | (5.7 | ) | (0.16 | ) | (13.0 | ) | (7.8 | ) | (0.21 | ) | |||||||||
| Other | |||||||||||||||||||||
| MSTI Impairment | 24.0 | 14.8 | 0.40 | 24.0 | 14.8 | 0.40 | |||||||||||||||
| Depreciation expense | (1.6 | ) | (1.0 | ) | (0.03 | ) | (5.3 | ) | (3.3 | ) | (0.09 | ) | |||||||||
| Property and other taxes | (1.2 | ) | (0.7 | ) | (0.02 | ) | (3.1 | ) | (1.9 | ) | (0.05 | ) | |||||||||
| Interest expense | 0.6 | 0.4 | 0.01 | (1.4 | ) | (0.9 | ) | (0.02 | ) | ||||||||||||
| Other Income | 2.1 | 1.3 | 0.03 | 3.7 | 2.2 | 0.06 | |||||||||||||||
| Income tax and other items | |||||||||||||||||||||
| Flow-through repairs deductions | 1.3 | 0.03 | 3.4 | 0.09 | |||||||||||||||||
| Flow-through of state bonus depreciation deduction | 0.5 | 0.01 | 1.1 | 0.03 | |||||||||||||||||
| Production tax credits | 0.5 | 0.01 | 2.1 | 0.06 | |||||||||||||||||
| Prior year permanent return to accrual adjustments | (1.9 | ) | (0.05 | ) | (2.4 | ) | (0.06 | ) | |||||||||||||
| Recognition of state NOL benefit / valuation allowance release | (0.1 | ) | — | (0.1 | ) | — | |||||||||||||||
| State income tax and other, net | (0.3 | ) | (0.01 | ) | 1.2 | 0.03 | |||||||||||||||
| Impact of higher share count | (0.02 | ) | (0.07 | ) | |||||||||||||||||
| All other, net | 0.3 | 1.0 | 0.06 | (0.2 | ) | 1.0 | 0.04 | ||||||||||||||
| Total EPS impact of above items | 0.50 | 0.70 | |||||||||||||||||||
| 2013 reported | $ | 17.5 | $ | 15.6 | $ | 0.40 | $ | 76.9 | $ | 67.9 | $ | 1.78 | |||||||||
| (1) Income Tax Benefit (Expense) calculation on reconciling items assumes effective tax rate of 38.5%. | |||||||||||||||||||||
Significant Drivers
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 5
Gross Margin
Consolidated gross margin for the quarter ended September 30, 2013 was $158.0 million compared with $142.9 million for the same period of 2012. Consolidated gross margin increased $15.1 million primarily due to the following:
| • | Higher DGGS revenue primarily due to the inclusion in 2012 results of the deferral of $11.4 million related to the FERC ALJ nonbinding decision; |
| • | A $5.8 million increase in electric DSM lost revenues recovered through our supply trackers related to efficiency measures implemented by customers, offset in part by a decrease of $0.8 million related to natural gas DSM lost revenues. The three months ended September 30, 2013 included recognition of approximately $4.6 million in revenues related to prior periods (including $2.3 million related to calendar year 2012) that we had previously deferred pending approval of our electric tracker filing; |
| • | Gross margin from the acquisition of the Spion Kop wind farm in the fourth quarter of 2012; |
| • | An increase in natural gas production margin, primarily due to the full period effect of the acquisition of natural gas production assets in the third quarter of 2012; |
| • | An increase in Montana natural gas delivery rates implemented in April 2013; and |
| • | An increase in property taxes included in a tracker. |
These increases were partly offset by:
| • | A decrease in electric retail volumes due primarily to cooler summer weather and reduced customer irrigation; |
| • | Lower revenues for operating expenses recovered in trackers, primarily related to customer efficiency programs; and |
| • | A decrease in electric transmission revenues due primarily to an outage at Colstrip Unit 4 during the third quarter of 2013. We expect the outage at Colstrip Unit 4 to have a negative impact on transmission revenues for the remainder of 2013. |
Consolidated gross margin for the nine months ended September 30, 2013 was $492.1 million compared with $461.6 million for the same period of 2012.
Operating, General and Administrative Expenses
Consolidated operating, general and administrative expenses were $72.5 million for the quarter ended September 30, 2013 as compared with $63.1 million during the same period of 2012. The increase in operating, general and administrative expenses of $9.4 million was primarily due to:
| • | Incremental operating and maintenance costs related to the phase-in of DSIP during 2012 and 2011 were deferred in accordance with the Montana Public Service Commission's (MPSC) approval of an accounting order. Incremental DSIP costs for 2013 forward are being expensed as incurred and the amounts previously deferred are being amortized over five years. During the third quarter of 2013 we amortized approximately $0.8 million and incurred incremental DSIP expenses of approximately $2.5 million; |
| • | Legal and professional fees associated with the Hydro Transaction; |
| • | Increased labor costs due primarily to compensation increases and a larger number of employees; |
| • | Higher plant operator costs due primarily to the Spion Kop acquisition and higher maintenance and outage costs at Colstrip Unit 4; |
| • | Non-employee directors deferred compensation increased as compared to the prior year, primarily due to changes in our stock price. Directors may defer their board fees into deferred shares held in a rabbi trust. If the market value of our stock goes up, deferred |
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 6
compensation expense increases; however, we account for the deferred shares as trading securities and their increase in value is reflected in other income with no impact on net income; and
| • | Higher bad debt expense. |
These increases were partly offset by:
| • | Decreased pension expense, offset in part by higher other employee benefit costs. Our Montana pension costs are included in expense on a pay as you go (cash funding) basis. We received a pension accounting order from the MPSC in 2008, which based our Montana pension expense on an average of our funding requirements for calendar years 2005 through 2012 in order to smooth the impact of increased cash funding. We expect our 2013 Montana pension expense to be approximately $17.0 million to $20.0 million lower than 2012 on an annualized basis due to the expiration of this order and our current cash funding estimate; and |
| • | Lower operating expenses recovered in trackers, primarily related to customer efficiency programs. |
Consolidated operating, general and administrative expenses were $208.7 million for the nine months ended September 30, 2013 as compared with $195.7 million during the same period of 2012.
Property and Other Taxes
Property and other taxes were $26.0 million for the quarter ended September 30, 2013, as compared with $24.8 million in the same period of 2012. This increase was primarily due to higher estimated property valuations in Montana and plant additions. We estimate property taxes throughout each year and update to the actual expense when we receive our Montana property tax bills in November.
Property and other taxes were $77.5 million for the nine months ended September 30, 2013, as compared with $74.4 million in the same period of 2012.
Depreciation Expense
Depreciation expense was $28.1 million for the quarter ended September 30, 2013, as compared with $26.5 million in the same period of 2012. This reflects an increase in depreciation expense due to plant additions, offset in part by a reduction in depreciation rates of approximately $1.5 million as a result of new depreciation studies conducted by an independent consultant and implemented during the second quarter of 2013. These studies reflect longer asset lives on our electric and natural gas assets in Montana, and electric assets in South Dakota. We expect depreciation expense to be reduced due to the change in rates by approximately $1.5 million for the remainder of 2013.
Depreciation expense was $84.7 million for the nine months ended September 30, 2013, as compared with $79.4 million in the same period of 2012.
Interest Expense
Consolidated interest expense was $17.1 million for the quarter ended September 30, 2013 as compared with $17.7 million during the same period of 2012. This decrease was primarily due to higher interest accrued on DGGS deferred revenues in 2012 due to the FERC ALJ nonbinding decision as discussed above partially offset by higher debt outstanding in 2013.
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 7
Consolidated interest expense was $51.0 million for the nine months ended September 30, 2013 as compared with $49.6 million during the same period of 2012.
Income Tax Expense
Consolidated income tax expense for the quarter ended September 30, 2013 was $1.8 million as compared with a $8.6 million benefit in the same period of 2012. Our effective tax rate for the quarter ended September 30, 2013 was 10.4% as compared with (69.5)% for the same period of 2012. The effective tax rate differs from the federal statutory tax rate of 35% primarily due to the regulatory impact of flowing through federal and state tax benefit of repairs deductions, state tax benefit of bonus depreciation deductions and production tax credits.
Consolidated income tax expense for the nine months ended September 30, 2013 was $9.0 million as compared with $2.0 million in same period of 2012. The effective tax rate for the nine months ended September 30, 2013 was 11.7% as compared with 4.8% for the same period of 2012.
The following table summarizes the significant differences from the federal statutory rate, which result in reduced income tax expense:
| (in millions) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||
| Income (Loss) Before Income Taxes | $ | 17.5 | $ | (12.4 | ) | $ | 76.9 | $ | 41.7 | ||||||
| Income tax calculated at 35% federal statutory rate | 6.1 | (4.3 | ) | 26.9 | 14.6 | ||||||||||
| Permanent or flow through adjustments: | |||||||||||||||
| Flow-through repairs deductions | (3.1 | ) | (1.8 | ) | (12.9 | ) | (9.5 | ) | |||||||
| Flow-through of state bonus depreciation deduction | (0.8 | ) | (0.3 | ) | (3.3 | ) | (2.2 | ) | |||||||
| Production tax credits | (0.5 | ) | — | (2.1 | ) | — | |||||||||
| Prior year permanent return to accrual adjustments | — | (1.9 | ) | 0.5 | (1.9 | ) | |||||||||
| Recognition of state net operating loss benefit / valuation allowance release | — | (0.1 | ) | — | (0.1 | ) | |||||||||
| State income tax and other, net | 0.1 | (0.2 | ) | (0.1 | ) | 1.1 | |||||||||
| (4.3 | ) | (4.3 | ) | (17.9 | ) | (12.6 | ) | ||||||||
| Income tax expense (benefit) | $ | 1.8 | $ | (8.6 | ) | $ | 9.0 | $ | 2.0 | ||||||
Liquidity and Capital Resources
As of September 30, 2013, cash and cash equivalents were $10.9 million compared with $18.2 million at September 30, 2012. The Company had $197.0 million available from its revolving credit facility at September 30, 2013, compared with $294.0 million at September 30, 2012.
Dividend Declared
NorthWestern's Board of Directors declared a quarterly common stock dividend of $0.38 per share, payable December 31, 2013, to common shareholders of record as of December 13, 2013.
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 8
2013 Earnings Guidance Reaffirmed
NorthWestern reaffirms the updated 2013 earnings guidance range of $2.45 - $2.60 per diluted share. Basic assumptions incorporate the following expectations:
| • | A consolidated income tax rate of approximately 12% of pre-tax income; |
| • | Normal weather in our electric and natural gas service territories for the remainder of 2013; |
| • | Excludes any potential additional impact as a result of the FERC decision regarding revenue allocation at our Dave Gates Generating Station; and |
| • | Diluted average shares outstanding of 38.3 million. |
Significant Items Not Contemplated in Guidance
A reconciliation of items not factored into our updated 2013 and final 2012 earnings guidance of $2.45 - $2.60 and $2.30 - $2.40 per diluted share, respectively, is as follows. The amount below represents an after-tax non-GAAP measure that may provide users of this financial information with additional meaningful information regarding the impact of certain items on the Company's expected earnings. More information on this measure can be found in the "Non-GAAP Financial Measures" section below.
| 2013 | Q1 2013 | Q2 2013 | Q3 2013 | Q4 2013 | YTD 2013 | ||||||||||
| Reported GAAP diluted EPS | $ | 1.01 | $ | 0.37 | $ | 0.40 | $ | 1.78 | |||||||
| Non-GAAP Adjustments: | |||||||||||||||
| Weather | (0.02 | ) | (0.02 | ) | (0.04 | ) | |||||||||
| Hydro Transaction related legal and professional fees | 0.05 | 0.05 | |||||||||||||
| DSM lost revenue recovery - portion related to 2012 | (0.04 | ) | (0.04 | ) | |||||||||||
| Adjusted Diluted EPS | $ | 1.01 | $ | 0.35 | $ | 0.39 | — | $ | 1.75 | ||||||
| 2012 | Q1 2012 | Q2 2012 | Q3 2012 | Q4 2012 | FY 2012 | ||||||||||
| Reported GAAP diluted EPS | $ | 0.88 | $ | 0.31 | $ | (0.10 | ) | $ | 1.57 | $ | 2.66 | ||||
| Non-GAAP Adjustments: | |||||||||||||||
| Weather | 0.09 | 0.05 | (0.06 | ) | 0.06 | 0.14 | |||||||||
| Release of MPSC DGGS deferral | (0.05 | ) | (0.05 | ) | |||||||||||
| DSM Lost revenue recovery related to 2010/2011 | (0.05 | ) | (0.05 | ) | |||||||||||
| DGGS FERC ALJ initial decision - portion related to 2011 | 0.12 | 0.12 | |||||||||||||
| MSTI Impairment | 0.40 | 0.40 | |||||||||||||
| Favorable CELP arbitration decision | (0.79 | ) | (0.79 | ) | |||||||||||
| Income tax adjustment - benefit from MT NOL | (0.06 | ) | (0.06 | ) | |||||||||||
| Adjusted Diluted EPS | $ | 0.92 | $ | 0.31 | $ | 0.36 | $ | 0.78 | $ | 2.37 | |||||
Company Hosting Investor Conference Call
As previously announced, NorthWestern will host an investor conference call and webcast today at 4:00 pm Eastern Time to review its financial results. The conference call will be webcast live on the Internet at http://www.northwesternenergy.com under the “Our Company / Investor Relations / Presentations and Webcasts” heading or by visiting www.videonewswire.com/event.asp?id=96365. To listen, please go to the site at least 10 minutes in advance of the call to register. An archived webcast will be available shortly after the call.
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 9
A telephonic replay of the call will be available beginning at 6:00 p.m. ET on October 24, 2013 through November 24, 2013, at (888) 203-1112 access code 8605196.
About NorthWestern Energy
NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 673,200 customers in Montana, South Dakota and Nebraska. More information on NorthWestern Energy is available on the Company's Web site at www.northwesternenergy.com.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, the information under “2013 Earnings Outlook”. Forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” or “will.” These statements are based upon our current expectations and speak only as of the date hereof. Our actual future business and financial performance may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including, but not limited to:
| • | potential adverse federal, state, or local legislation or regulation, including costs of compliance with existing and future environmental requirements, as well as adverse determinations by regulators, could have a material effect on our liquidity, results of operations and financial condition; |
| • | changes in availability of trade credit, creditworthiness of counterparties, usage, commodity prices, fuel supply costs or availability due to higher demand, shortages, weather conditions, transportation problems or other developments, may reduce revenues or may increase operating costs, each of which could adversely affect our liquidity and results of operations; |
| • | unscheduled generation outages or forced reductions in output, maintenance or repairs, which may reduce revenues and increase cost of sales or may require additional capital expenditures or other increased operating costs; and |
| • | adverse changes in general economic and competitive conditions in the U.S. financial markets and in our service territories. |
Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, actual results may differ materially from those contemplated in any forward-looking statement due to the timing and likelihood of the closing of the purchase of PPL Montana LLC's hydro-electric generating facilities.
Non-GAAP Financial Measures
This press release includes 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 numerical measure of a company's financial performance, financial position or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Gross Margin (Revenues less Cost of Sales)
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 10
is a non-GAAP financial measure due to the exclusion of depreciation from the measure. Gross Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow recovery of operating costs. Adjusted Diluted EPS is another non-GAAP measure. The Company believes the presentation of Adjusted Diluted EPS is more representative of our normal earnings than the GAAP EPS due to the exclusion (or inclusion) of certain impacts that are not reflective of ongoing earnings.
The presentation of these non-GAAP measures is intended to supplement investors' understanding of our financial performance and not to replace other GAAP measures as an indicator of actual operating performance. Our measures may not be comparable to other companies' similarly titled measures.
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 11
NORTHWESTERN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Revenues | ||||||||||||||||
| Electric | $ | 227,103 | $ | 202,485 | $ | 637,667 | $ | 605,716 | ||||||||
| Gas | 34,772 | 32,965 | 196,652 | 182,812 | ||||||||||||
| Other | 373 | 416 | 1,110 | 1,041 | ||||||||||||
| Total Revenues | 262,248 | 235,866 | 835,429 | 789,569 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Cost of Sales | 104,298 | 93,061 | 343,407 | 327,884 | ||||||||||||
| Operating, general and administrative | 72,540 | 63,056 | 208,741 | 195,725 | ||||||||||||
| MSTI Impairment | — | 24,039 | — | 24,039 | ||||||||||||
| Property and other taxes | 25,956 | 24,796 | 77,525 | 74,395 | ||||||||||||
| Depreciation | 28,053 | 26,505 | 84,685 | 79,364 | ||||||||||||
| Total Operating Expenses | 230,847 | 231,457 | 714,358 | 701,407 | ||||||||||||
| Operating Income | 31,401 | 4,409 | 121,071 | 88,162 | ||||||||||||
| Interest Expense, net | (17,056 | ) | (17,743 | ) | (50,976 | ) | (49,598 | ) | ||||||||
| Other Income | 3,117 | 974 | 6,760 | 3,134 | ||||||||||||
| Income (Loss) Before Income Taxes | 17,462 | (12,360 | ) | 76,855 | 41,698 | |||||||||||
| Income Tax (Expense) Benefit | (1,815 | ) | 8,588 | (8,965 | ) | (1,989 | ) | |||||||||
| Net Income (Loss) | $ | 15,647 | $ | (3,772 | ) | $ | 67,890 | $ | 39,709 | |||||||
| Average Common Shares Outstanding | 38,459 | 37,201 | 37,983 | 36,723 | ||||||||||||
| Basic Earnings (Loss) per Average Common Share | $ | 0.41 | $ | (0.10 | ) | $ | 1.79 | $ | 1.09 | |||||||
| Diluted Earnings (Loss) per Average Common Share | $ | 0.40 | $ | (0.10 | ) | $ | 1.78 | $ | 1.08 | |||||||
| Dividends Declared per Average Share | $ | 0.38 | $ | 0.37 | $ | 1.14 | $ | 1.11 | ||||||||
Average shares used in computing the basic and diluted earnings per share are as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
| Basic computation | 38,459 | 37,201 | 37,983 | 36,723 | ||||||||
| Dilutive effect of | ||||||||||||
| Restricted stock and performance share awards (1,2) | 186 | — | 181 | 71 | ||||||||
| Diluted computation | 38,645 | 37,201 | 38,164 | 36,794 | ||||||||
(1) Performance share awards are included in diluted weighted average number of shares outstanding based upon what would be issued if the end of the most recent reporting period was the end of the term of the award.
(2) In periods in which a net loss has been incurred, all potentially dilutive shares are considered antidilutive and thus are
excluded from the calculation. For the three months ended September 30, 2012, we had 173,624 potentially dilutive restricted stock and performance share awards which were not included in the calculation.
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 12
NORTHWESTERN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
| September 30, 2013 | December 31, 2012 | ||||||
| ASSETS | |||||||
| Current assets | $ | 280,661 | $ | 303,128 | |||
| Property, plant, and equipment, net | 2,573,562 | 2,435,590 | |||||
| Goodwill | 355,128 | 355,128 | |||||
| Regulatory assets | 395,746 | 367,890 | |||||
| Other noncurrent assets | 28,553 | 23,797 | |||||
| Total Assets | $ | 3,633,650 | $ | 3,485,533 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
| Current maturities of long-term debt and capital leases | $ | 1,659 | $ | 1,612 | |||
| Short-term borrowings | 102,980 | 122,934 | |||||
| Other current liabilities | 313,325 | 324,719 | |||||
| Long-term capital leases | 30,315 | 31,562 | |||||
| Long-term debt | 1,055,091 | 1,055,074 | |||||
| Deferred income taxes | 397,856 | 363,928 | |||||
| Noncurrent regulatory liabilities | 343,597 | 276,618 | |||||
| Other noncurrent liabilities | 384,545 | 375,054 | |||||
| Total Liabilities | 2,629,368 | 2,551,501 | |||||
| Total Shareholders' Equity | 1,004,282 | 934,032 | |||||
| Total Liabilities and Shareholders' Equity | $ | 3,633,650 | $ | 3,485,533 | |||
NORTHWESTERN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| Nine Months Ended September 30, | |||||||
| 2013 | 2012 | ||||||
| Operating Activities | |||||||
| Net income | $ | 67,890 | $ | 39,709 | |||
| Non-cash items | $ | 123,627 | $ | 123,995 | |||
| Changes in operating assets and liabilities | $ | (20,179 | ) | $ | 58,924 | ||
| Cash Provided by Operating Activities | $ | 171,338 | $ | 222,628 | |||
| Cash Used in Investing Activities | $ | (150,064 | ) | $ | (175,981 | ) | |
| Cash Used in Financing Activities | $ | (20,175 | ) | $ | (34,379 | ) | |
| Increase in Cash and Cash Equivalents | $ | 1,099 | $ | 12,268 | |||
| Cash and Cash Equivalents, beginning of period | $ | 9,822 | $ | 5,928 | |||
| Cash and Cash Equivalents, end of period | $ | 10,921 | $ | 18,196 | |||
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 13
NORTHWESTERN CORPORATION
REGULATED ELECTRIC SEGMENT
Three Months Ended
September 30,
September 30,
(Unaudited)
| Results | ||||||||||||||
| 2013 | 2012 | Change | % Change | |||||||||||
| (dollars in millions) | ||||||||||||||
| Retail revenue | $ | 201.5 | $ | 203.3 | $ | (1.8 | ) | (0.9 | )% | |||||
| Regulatory Amortization | 11.8 | (5.2 | ) | 17.0 | (326.9 | ) | ||||||||
| Total Retail Revenue | 213.3 | 198.1 | 15.2 | 7.7 | ||||||||||
| Transmission | 11.2 | 11.6 | (0.4 | ) | (3.4 | ) | ||||||||
| Ancillary services | 0.4 | (9.2 | ) | 9.6 | (104.3 | ) | ||||||||
| Wholesale | 0.8 | 0.8 | — | — | ||||||||||
| Other | 1.4 | 1.2 | 0.2 | 16.7 | ||||||||||
| Total Revenues | $ | 227.1 | $ | 202.5 | $ | 24.6 | 12.1 | |||||||
| Total Cost of Sales | 95.3 | 83.8 | 11.5 | 13.7 | ||||||||||
| Gross Margin | $ | 131.8 | $ | 118.7 | $ | 13.1 | 11.0 | % | ||||||
| Revenues | Megawatt Hours (MWH) | Avg. Customer Counts | |||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Retail Electric | |||||||||||||||||||||||
| Montana | $ | 65,455 | $ | 63,951 | $ | 575 | $ | 587 | $ | 274,835 | $ | 273,130 | |||||||||||
| South Dakota | 12,698 | 13,947 | 146 | 158 | 49,350 | 48,940 | |||||||||||||||||
| Residential | 78,153 | 77,898 | 721 | 745 | 324,185 | 322,070 | |||||||||||||||||
| Montana | 83,624 | 83,605 | 823 | 867 | 62,639 | 62,179 | |||||||||||||||||
| South Dakota | 18,502 | 19,643 | 255 | 259 | 12,154 | 12,235 | |||||||||||||||||
| Commercial | 102,126 | 103,248 | 1,078 | 1,126 | 74,793 | 74,414 | |||||||||||||||||
| Industrial | 10,105 | 10,011 | 737 | 806 | 74 | 74 | |||||||||||||||||
| Other | 11,131 | 12,148 | 91 | 103 | 7,813 | 7,816 | |||||||||||||||||
| Total Retail Electric | $ | 201,515 | $ | 203,305 | $ | 2,627 | $ | 2,780 | $ | 406,865 | $ | 404,374 | |||||||||||
| Total Wholesale Electric | $ | 845 | $ | 781 | $ | 39 | $ | 41 | $ | — | $ | — | |||||||||||
| Degree Days | 2013 as compared with: | |||||||||||
| Cooling Degree-Days | 2013 | 2012 | Historic Average | 2012 | Historic Average | |||||||
| Montana | 393 | 395 | 259 | 1% cooler | 52% warmer | |||||||
| South Dakota | 702 | 911 | 639 | 23% cooler | 10% warmer | |||||||
| Degree Days | 2013 as compared with: | |||||||||||
| Heating Degree-Days | 2013 | 2012 | Historic Average | 2012 | Historic Average | |||||||
| Montana | 231 | 244 | 357 | 5% warmer | 35% warmer | |||||||
| South Dakota | 60 | 65 | 90 | 8% warmer | 33% warmer | |||||||
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 14
NORTHWESTERN CORPORATION
REGULATED ELECTRIC SEGMENT
Nine Months Ended
September 30,
September 30,
(Unaudited)
| Results | ||||||||||||||
| 2013 | 2012 | Change | % Change | |||||||||||
| (dollars in millions) | ||||||||||||||
| Retail revenue | $ | 581.5 | $ | 561.9 | $ | 19.6 | 3.5 | % | ||||||
| Regulatory Amortization | 11.9 | 10.8 | 1.1 | 10.2 | ||||||||||
| Total Retail Revenue | 593.4 | 572.7 | 20.7 | 3.6 | ||||||||||
| Transmission | 37.3 | 33.7 | 3.6 | 10.7 | ||||||||||
| Ancillary Services | 1.1 | (6.5 | ) | 7.6 | (116.9 | ) | ||||||||
| Wholesale | 2.0 | 2.4 | (0.4 | ) | (16.7 | ) | ||||||||
| Other | 3.9 | 3.4 | 0.5 | 14.7 | ||||||||||
| Total Revenues | $ | 637.7 | $ | 605.7 | $ | 32.0 | 5.3 | |||||||
| Total Cost of Sales | 260.9 | 244.9 | 16.0 | 6.5 | ||||||||||
| Gross Margin | $ | 376.8 | $ | 360.8 | $ | 16.0 | 4.4 | % | ||||||
| Revenues | Megawatt Hours (MWH) | Avg. Customer Counts | |||||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Retail Electric | |||||||||||||||||||||||
| Montana | $ | 198,375 | $ | 188,768 | $ | 1,751 | $ | 1,749 | $ | 275,913 | $ | 273,711 | |||||||||||
| South Dakota | 37,150 | 36,993 | 447 | 424 | 49,250 | 48,887 | |||||||||||||||||
| Residential | 235,525 | 225,761 | 2,198 | 2,173 | 325,163 | 322,598 | |||||||||||||||||
| Montana | 238,482 | 230,498 | 2,356 | 2,416 | 62,638 | 62,046 | |||||||||||||||||
| South Dakota | 52,009 | 52,887 | 722 | 712 | 12,168 | 12,116 | |||||||||||||||||
| Commercial | 290,491 | 283,385 | 3,078 | 3,128 | 74,806 | 74,162 | |||||||||||||||||
| Industrial | 31,089 | 28,185 | 2,194 | 2,217 | 74 | 74 | |||||||||||||||||
| Other | 24,352 | 24,600 | 168 | 178 | 6,129 | 6,101 | |||||||||||||||||
| Total Retail Electric | $ | 581,457 | $ | 561,931 | $ | 7,638 | $ | 7,696 | $ | 406,172 | $ | 402,935 | |||||||||||
| Total Wholesale Electric | $ | 2,022 | $ | 2,382 | $ | 97 | $ | 137 | $ | — | $ | — | |||||||||||
| Degree Days | 2013 as compared with: | |||||||||||
| Cooling Degree-Days | 2013 | 2012 | Historic Average | 2012 | Historic Average | |||||||
| Montana | 438 | 450 | 300 | 3% cooler | 46% warmer | |||||||
| South Dakota | 752 | 1,061 | 696 | 29% cooler | 8% warmer | |||||||
| Degree Days | 2013 as compared with: | |||||||||||
| Heating Degree-Days | 2013 | 2012 | Historic Average | 2012 | Historic Average | |||||||
| Montana | 4,721 | 4,488 | 4,947 | 5% colder | 5% warmer | |||||||
| South Dakota | 6,174 | 4,375 | 5,573 | 41% colder | 11% colder | |||||||
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 15
NORTHWESTERN CORPORATION
REGULATED NATURAL GAS SEGMENT
Three Months Ended
September 30,
September 30,
(Unaudited)
| Results | ||||||||||||||
| 2013 | 2012 | Change | % Change | |||||||||||
| (dollars in millions) | ||||||||||||||
| Retail revenues | $ | 22.8 | $ | 19.9 | $ | 2.9 | 14.6 | % | ||||||
| Regulatory amortization | 3.2 | 5.1 | (1.9 | ) | (37.3 | ) | ||||||||
| Total retail revenues | 26.0 | 25.0 | 1.0 | 4.0 | ||||||||||
| Wholesale and other | 8.8 | 8.0 | 0.8 | 10.0 | ||||||||||
| Total Revenues | 34.8 | 33.0 | 1.8 | 5.5 | ||||||||||
| Total Cost of Sales | 9.0 | 9.2 | (0.2 | ) | (2.2 | ) | ||||||||
| Gross Margin | $ | 25.8 | $ | 23.8 | $ | 2.0 | 8.4 | % | ||||||
| Revenue | Dekatherms (Dkt) | Avg. Customer Counts | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||
| (in thousands) | |||||||||||||||||||
| Retail Gas | |||||||||||||||||||
| Montana | $ | 9,770 | $ | 8,795 | 807 | 758 | 159,197 | 158,524 | |||||||||||
| South Dakota | 1,916 | 1,757 | 124 | 113 | 37,846 | 37,551 | |||||||||||||
| Nebraska | 2,257 | 1,887 | 157 | 149 | 36,315 | 36,222 | |||||||||||||
| Residential | 13,943 | 12,439 | 1,088 | 1,020 | 233,358 | 232,297 | |||||||||||||
| Montana | 6,042 | 5,171 | 581 | 515 | 22,271 | 22,181 | |||||||||||||
| South Dakota | 1,296 | 1,130 | 171 | 171 | 5,971 | 5,931 | |||||||||||||
| Nebraska | 1,281 | 985 | 185 | 187 | 4,538 | 4,517 | |||||||||||||
| Commercial | 8,619 | 7,286 | 937 | 873 | 32,780 | 32,629 | |||||||||||||
| Industrial | 145 | 93 | 12 | 10 | 262 | 269 | |||||||||||||
| Other | 94 | 68 | 10 | 8 | 156 | 150 | |||||||||||||
| Total Retail Gas | $ | 22,801 | $ | 19,886 | 2,047 | 1,911 | 266,556 | 265,345 | |||||||||||
| Degree Days | 2013 as compared with: | ||||||||
| Heating Degree-Days | 2013 | 2012 | Historic Average | 2012 | Historic Average | ||||
| Montana | 231 | 244 | 357 | 5% warmer | 35% warmer | ||||
| South Dakota | 60 | 65 | 90 | 8% warmer | 33% warmer | ||||
| Nebraska | 21 | 27 | 49 | 22% warmer | 57% warmer | ||||
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 16
NORTHWESTERN CORPORATION
REGULATED NATURAL GAS SEGMENT
Nine Months Ended
September 30,
September 30,
(Unaudited)
| Results | ||||||||||||||
| 2013 | 2012 | Change | % Change | |||||||||||
| (dollars in millions) | ||||||||||||||
| Retail revenues | $ | 173.5 | $ | 150.0 | $ | 23.5 | 15.7 | % | ||||||
| Regulatory amortization | (6.3 | ) | 7.3 | (13.6 | ) | (186.3 | ) | |||||||
| Total retail revenues | 167.2 | 157.3 | 9.9 | 6.3 | ||||||||||
| Wholesale and other | 29.5 | 25.5 | 4.0 | 15.7 | ||||||||||
| Total Revenues | 196.7 | 182.8 | 13.9 | 7.6 | ||||||||||
| Total Cost of Sales | 82.5 | 83.0 | (0.5 | ) | (0.6 | ) | ||||||||
| Gross Margin | $ | 114.2 | $ | 99.8 | $ | 14.4 | 14.4 | % | ||||||
| Revenue | Dekatherms (Dkt) | Avg. Customer Counts | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||
| (in thousands) | |||||||||||||||||||
| Retail Gas | |||||||||||||||||||
| Montana | $ | 72,171 | $ | 67,049 | 8,014 | 7,656 | 160,330 | 159,316 | |||||||||||
| South Dakota | 20,227 | 15,447 | 2,354 | 1,709 | 38,146 | 37,792 | |||||||||||||
| Nebraska | 18,774 | 14,234 | 2,012 | 1,578 | 36,656 | 36,520 | |||||||||||||
| Residential | 111,172 | 96,730 | 12,380 | 10,943 | 235,132 | 233,628 | |||||||||||||
| Montana | 37,338 | 34,409 | 4,252 | 4,004 | 22,443 | 22,329 | |||||||||||||
| South Dakota | 13,498 | 9,656 | 2,119 | 1,545 | 6,028 | 5,961 | |||||||||||||
| Nebraska | 10,016 | 7,880 | 1,496 | 1,279 | 4,596 | 4,571 | |||||||||||||
| Commercial | 60,852 | 51,945 | 7,867 | 6,828 | 33,067 | 32,861 | |||||||||||||
| Industrial | 776 | 672 | 88 | 80 | 264 | 273 | |||||||||||||
| Other | 720 | 641 | 97 | 85 | 157 | 150 | |||||||||||||
| Total Retail Gas | $ | 173,520 | $ | 149,988 | 20,432 | 17,936 | 268,620 | 266,912 | |||||||||||
| Degree Days | 2013 as compared with: | ||||||||
| Heating Degree-Days | 2013 | 2012 | Historic Average | 2012 | Historic Average | ||||
| Montana | 4,721 | 4,488 | 4,947 | 5% colder | 5% warmer | ||||
| South Dakota | 6,174 | 4,375 | 5,573 | 41% colder | 11% colder | ||||
| Nebraska | 4,741 | 3,611 | 4,584 | 31% colder | 3% colder | ||||
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 17
NORTHWESTERN CORPORATION
SEGMENT RESULTS
Three Months Ended
September 30,
September 30,
(Unaudited)
(in thousands)
| Three Months Ended | |||||||||||||||||||
| September 30, 2013 | Electric | Gas | Other | Eliminations | Total | ||||||||||||||
| Operating revenues | $ | 227,103 | $ | 34,772 | $ | 373 | $ | — | $ | 262,248 | |||||||||
| Cost of sales | 95,264 | 9,034 | — | — | 104,298 | ||||||||||||||
| Gross margin | 131,839 | 25,738 | 373 | — | 157,950 | ||||||||||||||
| Operating, general and administrative | 49,155 | 18,521 | 4,864 | — | 72,540 | ||||||||||||||
| Property and other taxes | 19,381 | 6,572 | 3 | — | 25,956 | ||||||||||||||
| Depreciation | 22,150 | 5,895 | 8 | — | 28,053 | ||||||||||||||
| Operating income (loss) | 41,153 | (5,250 | ) | (4,502 | ) | — | 31,401 | ||||||||||||
| Interest expense | (14,302 | ) | (2,560 | ) | (194 | ) | — | (17,056 | ) | ||||||||||
| Other income | 2,213 | 878 | 26 | — | 3,117 | ||||||||||||||
| Income tax (expense) benefit | (8,412 | ) | 3,520 | 3,077 | — | (1,815 | ) | ||||||||||||
| Net income (loss) | $ | 20,652 | $ | (3,412 | ) | $ | (1,593 | ) | $ | — | $ | 15,647 | |||||||
| Three Months Ended | |||||||||||||||||||
| September 30, 2012 | Electric | Gas | Other | Eliminations | Total | ||||||||||||||
| Operating revenues | $ | 202,485 | $ | 32,965 | $ | 416 | $ | — | $ | 235,866 | |||||||||
| Cost of sales | 83,814 | 9,247 | — | — | 93,061 | ||||||||||||||
| Gross margin | 118,671 | 23,718 | 416 | — | 142,805 | ||||||||||||||
| Operating, general and administrative | 44,711 | 17,452 | 893 | — | 63,056 | ||||||||||||||
| MSTI Impairment | 24,039 | — | — | — | 24,039 | ||||||||||||||
| Property and other taxes | 18,621 | 6,172 | 3 | — | 24,796 | ||||||||||||||
| Depreciation | 21,636 | 4,860 | 9 | — | 26,505 | ||||||||||||||
| Operating income (loss) | 9,664 | (4,766 | ) | (489 | ) | — | 4,409 | ||||||||||||
| Interest expense | (15,181 | ) | (2,363 | ) | (199 | ) | — | (17,743 | ) | ||||||||||
| Other income | 405 | 541 | 28 | — | 974 | ||||||||||||||
| Income tax benefit (expense) | 5,762 | 3,102 | (276 | ) | — | 8,588 | |||||||||||||
| Net income (loss) | $ | 650 | $ | (3,486 | ) | $ | (936 | ) | $ | — | $ | (3,772 | ) | ||||||
NorthWestern Reports Third Quarter 2013 Financial Results
October 24, 2013
Page 18
NORTHWESTERN CORPORATION
SEGMENT RESULTS
Nine Months Ended
September 30,
September 30,
(Unaudited)
(in thousands)
| Nine Months Ended | |||||||||||||||||||
| September 30, 2013 | Electric | Gas | Other | Eliminations | Total | ||||||||||||||
| Operating revenues | $ | 637,667 | $ | 196,652 | $ | 1,110 | $ | — | $ | 835,429 | |||||||||
| Cost of sales | 260,879 | 82,528 | — | — | 343,407 | ||||||||||||||
| Gross margin | 376,788 | 114,124 | 1,110 | — | 492,022 | ||||||||||||||
| Operating, general and administrative | 142,594 | 56,899 | 9,248 | — | 208,741 | ||||||||||||||
| Property and other taxes | 57,549 | 19,968 | 8 | — | 77,525 | ||||||||||||||
| Depreciation | 67,454 | 17,206 | 25 | — | 84,685 | ||||||||||||||
| Operating income (loss) | 109,191 | 20,051 | (8,171 | ) | — | 121,071 | |||||||||||||
| Interest expense | (42,840 | ) | (7,553 | ) | (583 | ) | — | (50,976 | ) | ||||||||||
| Other income | 4,926 | 1,753 | 81 | — | 6,760 | ||||||||||||||
| Income tax (expense) benefit | (12,792 | ) | (153 | ) | 3,980 | — | (8,965 | ) | |||||||||||
| Net income (loss) | $ | 58,485 | $ | 14,098 | $ | (4,693 | ) | $ | — | $ | 67,890 | ||||||||
| Nine Months Ended | |||||||||||||||||||
| September 30, 2012 | Electric | Gas | Other | Eliminations | Total | ||||||||||||||
| Operating revenues | $ | 605,716 | $ | 182,812 | $ | 1,041 | $ | — | $ | 789,569 | |||||||||
| Cost of sales | 244,902 | 82,982 | — | — | 327,884 | ||||||||||||||
| Gross margin | 360,814 | 99,830 | 1,041 | — | 461,685 | ||||||||||||||
| Operating, general and administrative | 137,753 | 55,397 | 2,575 | — | 195,725 | ||||||||||||||
| MSTI impairment | 24,039 | — | — | — | 24,039 | ||||||||||||||
| Property and other taxes | 55,628 | 18,759 | 8 | — | 74,395 | ||||||||||||||
| Depreciation | 64,770 | 14,569 | 25 | — | 79,364 | ||||||||||||||
| Operating income (loss) | 78,624 | 11,105 | (1,567 | ) | — | 88,162 | |||||||||||||
| Interest expense | (42,257 | ) | (6,660 | ) | (681 | ) | — | (49,598 | ) | ||||||||||
| Other income | 1,818 | 1,235 | 81 | — | 3,134 | ||||||||||||||
| Income tax (expense) benefit | (3,322 | ) | 522 | 811 | — | (1,989 | ) | ||||||||||||
| Net income (loss) | $ | 34,863 | $ | 6,202 | $ | (1,356 | ) | $ | — | $ | 39,709 | ||||||||