NWN Northwest Natural Holding Company

Reaffirmed 2024 guidance and long-term EPS growth rate target of 4-6%

Northwest Natural Holding Company (NYSE: NWN) (NW Natural Holdings) reported financial results and highlights including:

• Reported a net loss of $27.2 million ($0.71 per share) for the third quarter of 2024, compared to a net loss of $23.7 million ($0.65 per share) for the same period in 2023
• Reported net income of $33.9 million ($0.88 per share) for the first nine months of 2024, compared to net income of $49.2 million ($1.37 per share) for the same period in 2023 primarily due to regulatory lag
• Added nearly 17,000 gas and water utility connections in the last 12 months for a combined growth rate of 1.9% as of September 30, 2024, mainly driven by strong water acquisitions
• Invested $294 million in our gas and water systems in the first nine months of 2024 to support growth and greater reliability and resiliency
• New rates went into effect on Nov. 1, 2024 related to NW Natural's Oregon general rate case and the Purchased Gas Adjustment (PGA) mechanism for Oregon and Washington customers, which includes estimated gas costs for the upcoming winter heating season
• Closed Puttman/ICH water acquisition, adding customers and a strong pipeline of growth opportunities
• Increased our dividend for the 69th consecutive year to an annual indicated dividend rate of $1.96 per share
• Reaffirmed 2024 earnings per share (EPS) guidance in the range of $1.94 to $2.14 on a GAAP basis or $2.20 to $2.40 on a non-GAAP Adjusted Basis, and long-term EPS growth rate target of 4% to 6% from 2022 through 2027

"The Company continues to perform well," said David H. Anderson, CEO of NW Natural Holdings. "Our focus in 2024 is operating safe, reliable systems and executing on our capital plan, regulatory dockets, and growth opportunities. I'm happy to report that we're making good progress on all fronts. We remain focused on maintaining our systems and affordability for our customers. Today customers are paying less for their natural gas service than they did 20 years ago. I'm confident our hard work this year positions us well for long-term growth and creating value for stakeholders."

KEY EVENTS

Received Order in NW Natural's Oregon General Rate Case

On Oct. 25, 2024, the OPUC issued an order approving the all-party settlements in NW Natural's general rate case and resolving the remaining outstanding items. The order increased the revenue requirement by $93.3 million including final adjustments for capital projects placed into service and the depreciation study. The order included a capital structure of 50% common equity and 50% long-term debt, return on equity of 9.4%, cost of capital of 7.056%, and rate base of $2.09 billion, or an increase of $334 million since the last rate case. As part of the resolution of the line extension allowance, NW Natural was required to forego recovery of $13.7 million of rate base related to line extension costs. This resulted in a non-cash, pre-tax charge of $13.7 million (approximately $10.1 million after-tax) in the fourth quarter of 2024. New rates in Oregon were effective beginning Nov. 1, 2024 with an average Oregon residential customer bill increasing 4.7%.

NW Natural Water Closed Acquisition of Puttman & ICH Water

NW Natural Water closed the acquisition of Infrastructure Capital Holdings (ICH), which includes the assets of Puttman Infrastructure (Puttman). This added wastewater and recycled water customers across Oregon, Idaho and California. Tom Puttman joined the company as president of NW Natural Water in September. The transaction expands NW Natural Water’s utility portfolio as well as its services business and marks its first investments in the recycled water segment and entry into the California market.

NW Natural Renewables RNG Facilities Reach Substantial Completion

NW Natural Renewables Holdings, LLC (NW Natural Renewables) executed agreements to invest in two renewable natural gas (RNG) facilities for 20 years with EDL to secure RNG supply. Both facilities have reached substantial completion and operations of the facilities began in the third quarter of 2024. NW Natural Renewables made a payment to EDL for $26 million for the first facility and began receiving RNG from the facility in the third quarter of 2024. NW Natural Renewables expects to close and make the second contribution of approximately $25 million for the second facility by the end of 2024 and begin receiving RNG thereafter. NW Natural Renewables has contracted to sell the RNG supply to investment grade counterparties under long-term, fixed-volume, primarily fixed-price contracts. Both facilities are expected to produce earnings and cash flows in 2025.

2024 GUIDANCE AND LONG-TERM TARGETS

NW Natural Holdings reaffirmed its 2024 GAAP EPS guidance of $1.94 to $2.14, or $2.20 to $2.40 on a non-GAAP Adjusted Basis2 excluding the $13.7 million non-cash, pre-tax regulatory charge (approximately $10.1 million or $0.26 per share after-tax1) related to the Oregon general rate case recorded in the fourth quarter of 2024. This guidance assumes continued customer growth, average weather conditions, and no significant changes in prevailing regulatory policies, mechanisms, or outcomes, or significant local, state or federal laws, legislation or regulations.

2024 EPS Guidance Reconciliation Table

GAAP EPS Guidance

$1.94 to $2.14

Regulatory Disallowance1

0.26

Adjusted EPS Guidance2

$2.20 to $2.40

NW Natural Holdings reaffirmed its long-term EPS growth rate target of 4% to 6% compounded annually from 2022 through 2027. 2022 EPS was $2.54.

1 Impact on EPS assumes average diluted shares of 39.0 million and an income tax rate of 26.5%. 2 See "Non-GAAP Financial Measures" for a definition and further information on Adjusted Basis EPS.

DIVIDEND DECLARED

The board of directors of NW Natural Holdings declared a quarterly dividend of 49 cents per share on the Company’s common stock. The dividend is payable on November 15, 2024 to shareholders of record on October 31, 2024. The Company's current indicated annual dividend rate is $1.96 per share. Future dividends are subject to board of director discretion and approval.

THIRD QUARTER RESULTS

We primarily operate through our natural gas distribution segment, which is a regulated utility principally engaged in the delivery of natural gas to customers in Oregon and southwest Washington. The segment also includes the portion of the Mist underground storage facility used to serve gas utility customers, the North Mist gas storage expansion, and renewable natural gas development and procurement for the utility.

Other business activities are reported through "Other" results and primarily include Interstate Storage Services and third-party asset management services for the Mist facility in Oregon; NW Natural Water, which holds our water and wastewater utility operations; and NW Natural Renewables, which is a renewable fuels business.

NW Natural Holdings' third quarter results are summarized by business segment in the table below:

 

Three Months Ended September 30,

 

2024

2023

Change

In thousands, except per share data

Amount

Per Share

Amount

Per Share

Amount

Per Share

Net income (loss):

 

 

 

 

 

 

Natural Gas Distribution segment

$

(30,404

)

$

(0.79

)

$

(24,160

)

$

(0.66

)

$

(6,244

)

$

(0.13

)

Other

 

3,237

 

 

0.08

 

 

473

 

 

0.01

 

 

2,764

 

 

0.07

 

Consolidated

$

(27,167

)

$

(0.71

)

$

(23,687

)

$

(0.65

)

$

(3,480

)

$

(0.06

)

 

 

 

 

 

 

 

Diluted Shares

 

 

38,394

 

 

 

36,214

 

 

 

2,180

 

Natural Gas Distribution Segment

The third quarter reflects the seasonal nature of the gas utility's earnings where the majority of revenues are generated during the winter heating season in the first and fourth quarters each year. Natural Gas Distribution segment net income decreased $6.2 million (or $0.13 per share) primarily reflecting regulatory lag from higher depreciation and lower other income.

Margin remained consistent with the prior year.

Operations and maintenance expense increased $1.3 million as a result of higher payroll and benefits primarily related to additional staffing in key areas and a 6% pay increase for union employees as a result of a new union contract, which began June 1, 2024. This was partially offset by lower contractor labor costs.

Depreciation and general taxes collectively increased by $3.6 million primarily due to continued investment in our system.

Other income, net reflected a $4.6 million decrease primarily from lower interest income from invested cash, higher pension expense, lower regulatory interest income, and lower equity Allowance for Funds Used During Construction (AFUDC).

Interest expense decreased $0.5 million due to higher debt AFUDC partially offset by higher short-term debt balances.

Income taxes decreased $2.8 million dollars due to the decrease in pre-tax results.

Other

Net income from the Company's other business activities increased $2.8 million (or $0.07 per share) reflecting $1.5 million higher revenues from gas storage operations, a $0.5 million improvement in water results related to net income from the Puttman/ICH acquisition, and a $0.4 million reduction in business development expenses.

YEAR-TO-DATE RESULTS

NW Natural Holdings' year-to-date results by business segment are summarized in the table below:

 

Nine Months Ended September 30,

 

2024

2023

Change

In thousands, except per share data

Amount

Per Share

Amount

Per Share

Amount

Per Share

Net income (loss):

 

 

 

 

 

 

Natural Gas Distribution segment

$

32,324

$

0.84

$

47,520

$

1.32

$

(15,196

)

$

(0.48

)

Other

 

1,545

 

0.04

 

1,708

 

0.05

 

(163

)

 

(0.01

)

Consolidated

$

33,869

$

0.88

$

49,228

$

1.37

$

(15,359

)

$

(0.49

)

 

 

 

 

 

 

 

Diluted Shares

 

 

38,412

 

 

35,980

 

 

2,432

 

Natural Gas Distribution Segment

Natural Gas Distribution segment net income decreased $15.2 million (or $0.48 per share) primarily reflecting regulatory lag from higher depreciation and general taxes, as well as lower other income.

Margin increased $0.9 million primarily due to the amortization of deferrals and customer growth which among other miscellaneous items contributed $7.2 million. Partially offsetting these items was a $4.5 million reduction in margin due to warmer comparative weather and the effect of customers not covered by the weather normalization mechanism. Weather was 13% warmer than average in the first nine months of 2024, compared to 2% colder than average weather for the same period of 2023. In addition, there was a $1.8 million decline in gains on the Oregon gas cost incentive sharing mechanism due to lower commodity price volatility and higher than estimated gas costs during the cold weather event in January 2024.

Operations and maintenance expense decreased $2.5 million as a result of lower employee benefit expenses and contractor costs; partially offset by higher payroll, information technology costs, and the amortization of deferrals approved in the last rate case, which is offset by revenues.

Depreciation and general taxes increased by $8.1 million primarily due to additional capital investments in the distribution system.

Other income, net declined $12.6 million primarily from higher pension expense, lower interest income due to a lower level of invested cash, lower regulatory interest income, and lower equity AFUDC.

Interest expense increased $1.4 million primarily due to higher short- and long-term debt balances.

Income taxes decreased $3.5 million dollars due to the decrease in pre-tax results.

Other

Net income from the Company's other business activities decreased $0.2 million (or $0.01 per share) primarily reflecting a $2.7 million gain on a settlement recognized in the second quarter of 2023 partially offset by lower holding company operating expenses.

BALANCE SHEET AND CASH FLOWS

During the first nine months of 2024, the Company generated $219.7 million in operating cash flows, compared to $301.5 million for the same period in 2023. The decrease in operating cash flows is primarily related to the payment to EDL for the RNG facility, higher pension contributions and changes in accounts receivable, payables and gas storage inventories related to comparatively warmer weather in 2024 vs. 2023. The Company used $326.3 million in investing activities during the first nine months of 2024 primarily for natural gas utility capital expenditures and also the Puttman/ICH water acquisition, compared to $250.5 million used in investing activities predominately for capital expenditures during the same period in 2023. Net cash provided by financing activities was $103.8 million for the first nine months of 2024, compared to net cash provided by financing activities of $79.5 million during the same period in 2023. The increase in financing activities is primarily due to higher equity issuances. As of September 30, 2024, NW Natural Holdings held cash of $35.0 million.

CONFERENCE CALL AND WEBCAST

As previously announced, NW Natural Holdings will host a conference call and webcast today to discuss its third quarter 2024 financial and operating results.

Date and Time:

Tuesday, Nov. 12, 2024

8 a.m. PT (11 a.m. ET)

Phone Numbers:

United States 1-833-470-1428

International 1-404-975-4839

Passcode 766404

The call will also be webcast in a listen-only format for the media and general public and can be accessed at ir.nwnaturalholdings.com. A replay of the conference call will be available on our website and by dialing 1-866-813-9403 (U.S.) and 1-929-458-6194 (international). The replay access code is 236464.

ABOUT NW NATURAL HOLDINGS

Northwest Natural Holding Company, (NYSE: NWN) (NW Natural Holdings), is headquartered in Portland, Oregon and has been doing business for over 165 years in the Pacific Northwest. It owns NW Natural Gas Company (NW Natural), NW Natural Water Company (NW Natural Water), NW Natural Renewables Holdings (NW Natural Renewables), and other business interests.

We have a longstanding commitment to safety, environmental stewardship and the energy transition, and taking care of our employees and communities. NW Natural Holdings was recognized by Ethisphere® for the third consecutive year in 2024 as one of the World’s Most Ethical Companies®. NW Natural consistently leads the industry with high J.D. Power & Associates customer satisfaction scores. Learn more in our latest Community and Sustainability Report at ir.nwnaturalholdings.com/sustainability.

NW Natural is a local distribution company that currently provides natural gas service to approximately 2 million people in more than 140 communities through more than 800,000 meters in Oregon and Southwest Washington with one of the most modern pipeline systems in the nation. NW Natural owns and operates 21.6 Bcf of underground gas storage capacity in Oregon.

NW Natural Water provides water distribution and water and wastewater services to communities throughout the Pacific Northwest, Texas and Arizona. NW Natural Water serves over 188,000 people through approximately 76,000 meters and provides operation and maintenance services to an additional 22,000 connections. Learn more about our water business at nwnaturalwater.com.

NW Natural Renewables is committed to leading in the energy transition by providing renewable fuels to support decarbonization in the utility, commercial, industrial and transportation sectors. Learn more at nwnaturalrenewables.com.

Additional information is available at nwnaturalholdings.com.

“World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of Ethisphere LLC

Forward-Looking Statements

This press release, and other presentations made by NW Holdings from time to time, may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipates," "assumes," “continues,” “could,” "intends," "plans," "seeks," "believes," "estimates," "expects," "will" and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements regarding the following: plans, objectives, assumptions, estimates, expectations, timing, goals, strategies, commitments, future events, financial positions, financial performance, investments, valuations, timing and amount of capital expenditures, targeted capital structure, risks, risk profile, stability, acquisitions and timing, approval, completion and integration thereof, the likelihood and success associated with any transaction, utility system, technology and infrastructure investments, system modernization, reliability and resiliency, global, national and local economies, customer and business growth, continued expansion of service territories, customer satisfaction ratings, weather, performance and service during weather events, customer rates or rate recovery and the timing and magnitude of potential rate changes and the potential outcome of rate cases, environmental remediation cost recoveries, environmental initiatives, decarbonization and the role of natural gas and the gas delivery system, including decarbonization goals and timelines, energy efficiency measures, use of renewable sources, renewable natural gas purchases, projects, investments and other renewable initiatives, and timing, magnitude and completion thereof, unregulated renewable natural gas strategy and initiatives, hydrogen projects or investments and timing, magnitude, approvals and completion thereof, procurement of renewable natural gas or hydrogen for customers, technology and policy innovations, strategic goals and visions, water, wastewater and water services acquisitions, personnel additions, partnerships, and investment strategy and financial effects of water, wastewater and water services acquisitions, expected growth and safety benefits of facility upgrade investments, operating plans of third parties, financial results, including estimated income, availability and sources of liquidity, capital markets, financing transactions, expenses, positions, revenues, returns, cost of capital, timing, and earnings, earnings guidance and estimated future growth rates, future dividends, commodity costs and sourcing, asset management activities, performance, timing, outcome, or effects of regulatory proceedings or mechanisms or approvals, regulatory prudence reviews, anticipated regulatory actions or filings, accounting treatment of future events, economic and political conditions, effects of legislation or changes in laws or regulations, effects, extent, severity and duration of epidemics and pandemics, and any resulting economic disruption therefrom, inflation, geopolitical uncertainty and other statements that are other than statements of historical facts.

Forward-looking statements are based on current expectations and assumptions regarding its business, the economy, geopolitical factors, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual results may differ materially from those contemplated by the forward-looking statements. You are therefore cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future operational, economic or financial performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed by reference to the factors described in Part I, Item 1A "Risk Factors", and Part II, Item 7 and Item 7A "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosure about Market Risk" in the most recent Annual Report on Form 10-K and in Part I, Items 2 and 3 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosures About Market Risk", and Part II, Item 1A, "Risk Factors", in the quarterly reports filed thereafter, which, among others, outline legal, regulatory and legislative risks, public health risks, financial, macroeconomic and geopolitical risks, growth and strategic risks, operational risks, business continuity and technology risks, environmental risks and risks related to our water and renewables businesses.

All forward-looking statements made in this report and all subsequent forward-looking statements, whether written or oral and whether made by or on behalf of NW Holdings or NW Natural, are expressly qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, and NW Holdings and NW Natural undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. New factors emerge from time to time and it is not possible to predict all such factors, nor can it assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements.

NON-GAAP FINANCIAL MEASURES

Management uses "adjusted net income" and "adjusted basis earnings per share," both of which are non-GAAP financial measures, when evaluating NW Natural Holdings' overall performance. Management believes that these non-GAAP measures provide meaningful information to investors about NW Natural Holdings' performance because they eliminate the impacts of significant discrete items that can affect the comparison of period-over-period results. In addition to presenting the results of operations and earnings amounts in total, certain financial measures are expressed in cents per share, which are non-GAAP financial measures. All references to EPS are on the basis of diluted shares.

Such non-GAAP financial measures are used to analyze our financial performance because we believe they provide useful information to our investors and creditors in evaluating our financial condition and results of operations. Our non-GAAP financial measures should not be considered a substitute for, or superior to, measures calculated in accordance with U.S. GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently than how such measures are calculated in this report, limiting the usefulness of those measures for comparative purposes. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in the tables above.

NORTHWEST NATURAL HOLDINGS

Consolidated Income Statement and Financial Highlights (Unaudited)

Third Quarter 2024

 

Three Months Ended

 

Nine Months Ended

 

Twelve Months Ended

 

In thousands, except per share amounts,

customer, and degree day data

September 30,

 

September 30,

 

September 30,

 

2024

2023

Change

2024

2023

Change

2024

2023

Change

Operating revenues

$

136,934

 

$

141,479

 

(3

)%

$

782,118

 

$

841,761

 

(7

)%

$

1,137,832

 

$

1,217,014

 

(7

)%

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of gas

 

38,902

 

 

49,180

 

(21

)

 

287,589

 

 

357,362

 

(20

)

 

430,064

 

 

525,584

 

(18

)

Operations and maintenance

 

63,940

 

 

61,524

 

4

 

 

202,504

 

 

200,160

 

1

 

 

276,110

 

 

263,422

 

5

 

Environmental remediation

 

1,151

 

 

1,032

 

12

 

 

9,226

 

 

8,547

 

8

 

 

13,578

 

 

12,986

 

5

 

General taxes

 

10,886

 

 

10,577

 

3

 

 

38,207

 

 

35,685

 

7

 

 

48,770

 

 

46,051

 

6

 

Revenue taxes

 

5,275

 

 

5,523

 

(4

)

 

32,730

 

 

33,750

 

(3

)

 

47,651

 

 

49,539

 

(4

)

Depreciation

 

34,552

 

 

30,061

 

15

 

 

101,412

 

 

92,819

 

9

 

 

134,174

 

 

123,961

 

8

 

Other operating expenses

 

1,560

 

 

1,159

 

35

 

 

4,249

 

 

3,664

 

16

 

 

6,117

 

 

4,470

 

37

 

Total operating expenses

 

156,266

 

 

159,056

 

(2

)

 

675,917

 

 

731,987

 

(8

)

 

956,464

 

 

1,026,013

 

(7

)

(Loss) income from operations

 

(19,332

)

 

(17,577

)

10

 

 

106,201

 

 

109,774

 

(3

)

 

181,368

 

 

191,001

 

(5

)

Other income (expense), net

 

930

 

 

5,004

 

(81

)

 

(198

)

 

13,228

 

(101

)

 

4,429

 

 

13,523

 

(67

)

Interest expense, net

 

19,060

 

 

19,406

 

(2

)

 

58,902

 

 

56,676

 

4

 

 

78,792

 

 

73,767

 

7

 

(Loss) income before income taxes

 

(37,462

)

 

(31,979

)

17

 

 

47,101

 

 

66,326

 

(29

)

 

107,005

 

 

130,757

 

(18

)

Income tax (benefit) expense

 

(10,295

)

 

(8,292

)

24

 

 

13,232

 

 

17,098

 

(23

)

 

28,496

 

 

33,593

 

(15

)

Net (loss) income

$

(27,167

)

$

(23,687

)

15

 

$

33,869

 

$

49,228

 

(31

)

$

78,509

 

$

97,164

 

(19

)

 

 

 

 

 

 

 

 

 

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

Average diluted for period

 

38,394

 

 

36,214

 

 

 

38,412

 

 

35,980

 

 

 

37,808

 

 

35,814

 

 

End of period

 

40,121

 

 

36,576

 

 

 

40,121

 

 

36,576

 

 

 

40,121

 

 

36,576

 

 

 

 

 

 

 

 

 

 

 

 

Per share of common stock information:

 

 

 

 

 

 

 

 

 

Diluted (loss) earnings

$

(0.71

)

$

(0.65

)

 

$

0.88

 

$

1.37

 

 

$

2.08

 

$

2.71

 

 

Dividends paid per share

 

0.4875

 

 

0.4850

 

 

 

1.4625

 

 

1.4550

 

 

 

1.9500

 

 

1.9400

 

 

Book value, end of period

 

33.82

 

 

33.34

 

 

 

33.82

 

 

33.34

 

 

 

33.82

 

 

33.34

 

 

Market closing price, end of period

 

40.82

 

 

38.16

 

 

 

40.82

 

 

38.16

 

 

 

40.82

 

 

38.16

 

 

 

 

 

 

 

 

 

 

 

 

Capital structure, end of period:

 

 

 

 

 

 

 

 

 

Common stock equity

 

43.9

%

 

42.0

%

 

 

43.9

%

 

42.0

%

 

 

43.9

%

 

42.0

%

 

Long-term debt

 

50.3

%

 

49.0

%

 

 

50.3

%

 

49.0

%

 

 

50.3

%

 

49.0

%

 

Short-term debt (including current maturities of long-term debt)

 

5.8

%

 

9.0

%

 

 

5.8

%

 

9.0

%

 

 

5.8

%

 

9.0

%

 

Total

 

100.0

%

 

100.0

%

 

 

100.0

%

 

100.0

%

 

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

Natural Gas Distribution segment operating statistics:

 

 

 

 

 

 

 

 

 

Meters - end of period

 

800,421

 

 

795,754

 

0.6

%

 

800,421

 

 

795,754

 

0.6

%

 

800,421

 

 

795,754

 

0.6

%

Volumes in therms:

 

 

 

 

 

 

 

 

 

Residential and commercial sales

 

55,692

 

 

55,555

 

 

 

474,981

 

 

509,197

 

 

 

701,539

 

 

780,486

 

 

Industrial sales and transportation

 

102,066

 

 

103,139

 

 

 

340,840

 

 

348,912

 

 

 

462,847

 

 

474,460

 

 

Total volumes sold and delivered

 

157,758

 

 

158,694

 

 

 

815,821

 

 

858,109

 

 

 

1,164,386

 

 

1,254,946

 

 

Operating Revenues

 

 

 

 

 

 

 

 

 

Residential and commercial sales

$

90,850

 

$

98,327

 

 

$

647,326

 

$

705,016

 

 

$

957,382

 

$

1,033,528

 

 

Industrial sales and transportation

 

17,504

 

 

20,828

 

 

 

61,229

 

 

73,210

 

 

 

85,905

 

 

99,640

 

 

Other distribution revenues

 

770

 

 

737

 

 

 

3,535

 

 

3,715

 

 

 

4,360

 

 

4,292

 

 

Other regulated services

 

4,880

 

 

4,732

 

 

 

14,640

 

 

14,167

 

 

 

19,375

 

 

19,073

 

 

Total operating revenues

 

114,004

 

 

124,624

 

 

 

726,730

 

 

796,108

 

 

 

1,067,022

 

 

1,156,533

 

 

Less: Cost of gas

 

38,743

 

 

49,235

 

 

 

287,542

 

 

357,530

 

 

 

430,073

 

 

525,713

 

 

Less: Environmental remediation expense

 

1,151

 

 

1,032

 

 

 

9,226

 

 

8,547

 

 

 

13,578

 

 

12,991

 

 

Less: Revenue taxes

 

5,188

 

 

5,425

 

 

 

32,581

 

 

33,559

 

 

 

47,454

 

 

49,279

 

 

Margin, net

$

68,922

 

$

68,932

 

 

$

397,381

 

$

396,472

 

 

$

575,917

 

$

568,550

 

 

Degree days:

 

 

 

 

 

 

 

 

 

Average (25-year average)

 

9

 

 

10

 

 

 

1,642

 

 

1,629

 

 

 

2,699

 

 

2,675

 

 

Actual

 

—

 

 

—

 

—

%

 

1,424

 

 

1,658

 

(14

)%

 

2,246

 

 

2,779

 

(19

)%

Percent colder (warmer) than average weather (1)

 

NM

 

 

NM

 

 

 

(13

)%

 

2

%

 

 

(17

)%

 

4

%

 

 

(1) NM indicates that the calculated value is not meaningful.

NORTHWEST NATURAL HOLDINGS

Consolidated Balance Sheets (Unaudited)

September 30,

In thousands

2024

2023

Assets:

 

 

Current assets:

 

 

Cash and cash equivalents

$

35,047

 

$

156,616

 

Accounts receivable

 

53,123

 

 

51,999

 

Accrued unbilled revenue

 

23,818

 

 

24,626

 

Allowance for uncollectible accounts

 

(2,885

)

 

(2,312

)

Regulatory assets

 

136,275

 

 

108,525

 

Derivative instruments

 

8,948

 

 

23,454

 

Inventories

 

108,651

 

 

94,585

 

Other current assets

 

45,873

 

 

49,947

 

Total current assets

 

408,850

 

 

507,440

 

Non-current assets:

 

 

Property, plant, and equipment

 

4,858,066

 

 

4,468,602

 

Less: Accumulated depreciation

 

1,245,725

 

 

1,189,968

 

Total property, plant, and equipment, net

 

3,612,341

 

 

3,278,634

 

Regulatory assets

 

322,781

 

 

312,665

 

Derivative instruments

 

1,377

 

 

6,188

 

Other investments

 

82,478

 

 

104,562

 

Operating lease right of use asset, net

 

69,402

 

 

71,477

 

Assets under sales-type leases

 

126,712

 

 

130,952

 

Goodwill

 

181,393

 

 

152,399

 

Other non-current assets

 

139,035

 

 

100,801

 

Total non-current assets

 

4,535,519

 

 

4,157,678

 

Total assets

$

4,944,369

 

$

4,665,118

 

Liabilities and equity:

 

 

Current liabilities:

 

 

Short-term debt

$

159,814

 

$

71,000

 

Current maturities of long-term debt

 

20,796

 

 

190,728

 

Accounts payable

 

96,260

 

 

99,326

 

Taxes accrued

 

17,759

 

 

17,120

 

Interest accrued

 

12,909

 

 

13,940

 

Regulatory liabilities

 

127,640

 

 

88,376

 

Derivative instruments

 

70,807

 

 

46,603

 

Operating lease liabilities

 

1,868

 

 

1,815

 

Other current liabilities

 

59,532

 

 

61,149

 

Total current liabilities

 

567,385

 

 

590,057

 

Long-term debt

 

1,555,000

 

 

1,424,572

 

Deferred credits and other non-current liabilities:

 

 

Deferred tax liabilities

 

389,281

 

 

375,917

 

Regulatory liabilities

 

708,948

 

 

683,262

 

Pension and other postretirement benefit liabilities

 

138,800

 

 

145,991

 

Derivative instruments

 

15,714

 

 

21,085

 

Operating lease liabilities

 

76,530

 

 

77,475

 

Other non-current liabilities

 

135,661

 

 

127,219

 

Total deferred credits and other non-current liabilities

 

1,464,934

 

 

1,430,949

 

Equity:

 

 

Common stock

 

986,545

 

 

851,288

 

Retained earnings

 

377,685

 

 

373,231

 

Accumulated other comprehensive loss

 

(7,180

)

 

(4,979

)

Total equity

 

1,357,050

 

 

1,219,540

 

Total liabilities and equity

$

4,944,369

 

$

4,665,118

 

 

NORTHWEST NATURAL HOLDINGS

Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended September 30,

In thousands

2024

2023

Operating activities:

 

 

Net income

$

33,869

 

$

49,228

 

Adjustments to reconcile net income to cash provided by operations:

 

 

Depreciation

 

101,412

 

 

92,819

 

Amortization

 

14,544

 

 

13,482

 

Deferred income taxes

 

5,939

 

 

6,678

 

Qualified defined benefit pension plan expense (benefit)

 

3,047

 

 

(1,823

)

Contributions to qualified defined benefit pension plans

 

(17,850

)

 

—

 

Deferred environmental expenditures, net

 

(18,775

)

 

(14,887

)

Environmental remediation expense

 

9,226

 

 

8,547

 

Asset optimization revenue sharing bill credits

 

(29,198

)

 

(10,471

)

Other

 

8,300

 

 

7,129

 

Changes in assets and liabilities:

 

 

Receivables, net

 

130,676

 

 

182,297

 

Inventories

 

4,092

 

 

(6,484

)

Income and other taxes

 

9,806

 

 

8,770

 

Accounts payable

 

(11,501

)

 

(39,695

)

Deferred gas costs

 

(7,703

)

 

(8,678

)

Asset optimization revenue sharing

 

10,743

 

 

18,667

 

Decoupling mechanism

 

1,989

 

 

(12,328

)

Cloud-based software

 

(20,307

)

 

(12,316

)

Regulatory accounts

 

17,312

 

 

16,218

 

RNG facility prepayment

 

(26,046

)

 

—

 

Other, net

 

122

 

 

4,350

 

Cash provided by operating activities

 

219,697

 

 

301,503

 

Investing activities:

 

 

Capital expenditures

 

(294,261

)

 

(242,747

)

Acquisitions, net of cash acquired

 

(28,819

)

 

(3,248

)

Purchase of equity method investment

 

(1,000

)

 

(1,000

)

Other

 

(2,215

)

 

(3,525

)

Cash used in investing activities

 

(326,295

)

 

(250,520

)

Financing activities:

 

 

Proceeds from common stock issued, net

 

90,563

 

 

40,955

 

Long-term debt issued

 

150,000

 

 

330,000

 

Long-term debt retired

 

(150,000

)

 

(50,000

)

Changes in other short-term debt, net

 

70,034

 

 

(187,200

)

Cash dividend payments on common stock

 

(53,781

)

 

(50,114

)

Payment of financing fees

 

(901

)

 

(2,042

)

Shares withheld for tax purposes

 

(1,319

)

 

(1,313

)

Other

 

(814

)

 

(753

)

Cash provided by financing activities

 

103,782

 

 

79,533

 

(Decrease) increase in cash, cash equivalents and restricted cash

 

(2,816

)

 

130,516

 

Cash, cash equivalents and restricted cash, beginning of period

 

49,624

 

 

40,964

 

Cash, cash equivalents and restricted cash, end of period

$

46,808

 

$

171,480

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

Interest paid, net of capitalization

$

57,837

 

$

51,970

 

Income taxes paid, net of refunds

 

15,831

 

 

18,963

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash:

 

 

Cash and cash equivalents

$

35,047

 

$

156,616

 

Restricted cash included in other current and non-current assets

 

11,761

 

 

14,864

 

Cash, cash equivalents and restricted cash

$

46,808

 

$

171,480

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241112602547/en/

Investor Contact: Nikki Sparley Phone: 503-721-2530 Email: nikki.sparley@nwnatural.com

Media Contact: David Roy Phone: 503-610-7157 Email: david.roy@nwnatural.com