Exhibit
Exhibit 99.1
|
| |
FOR IMMEDIATE RELEASE: | November 3, 2015 |
NW Natural Reports Results for the
Three and Nine Months Ended September 30, 2015
___________________________________________________
| |
• | Improved results with consolidated net loss of $6.7 million for the third quarter of 2015, or $0.24 per share, compared to $8.7 million, or $0.32 per share, in 2014. |
| |
• | Added over 10,500 customers in the last twelve months with a customer growth rate of 1.5% at Sept. 30, 2015. |
| |
• | Ranked first in residential customer satisfaction for large gas utilities in the West and marks 14 consecutive years of posting top three scores (2014 J.D. Power and Associates Study). |
| |
• | Announced 60th consecutive year of dividend increases in the fourth quarter of 2015. |
| |
• | Decreased residential customer rates approximately 7% in Oregon and 14% in Washington effective Nov. 1, 2015. |
| |
• | Reaffirmed earnings guidance for 2015, which is expected to range from $1.77 to $1.97 per share or $2.10 to $2.30 per share excluding the effects of the first quarter $15.0 million pre-tax environmental charge. |
___________________________________________________
PORTLAND, ORE.—Northwest Natural Gas Company, dba NW Natural (NYSE: NWN), reported a consolidated net loss of $6.7 million for the third quarter of 2015, or $0.24 per share, compared to a net loss of $8.7 million, or $0.32 per share, for the third quarter of 2014. Consolidated net income was $24.0 million, or $0.88 per share, for the first nine months of 2015, compared to net income of $30.2 million, or $1.11 per share, for the same period of 2014. Year-to-date results were impacted by a $15 million regulatory disallowance associated with a February 2015 Public Utility Commission of Oregon (OPUC) Order in the Company's Site Remediation and Recovery Mechanism (SRRM) docket. Excluding the disallowance, net income for the first nine months of 2015 increased $2.9 million to $33.1 million or $1.21 per share. The Company's results typically reflect a loss during the third quarter due to the impact of decreased heating requirements affecting utility results.
"Third quarter results were favorable with increased utility margin, continued customer growth, and lower operating expenses," said Gregg Kantor, Chief Executive Officer. "In addition, we once again ranked first in the J.D. Power residential customer satisfaction survey of large gas utilities in the West. We also announced a dividend increase for the fourth quarter of 2015, marking 60 consecutive years of increasing dividends paid. These achievements reflect our long-standing commitment to deliver excellent service to our customers and solid returns to our shareholders."
Consolidated Results
For the third quarter of 2015, consolidated net loss was $2.0 million lower compared to the same period last year. Improved results were primarily due to the following: a $1.5 million increase in utility margin, a $0.8 million increase in gas storage operating revenues, a $0.9 million decrease in operations and maintenance expense, and a $0.7 million decrease in interest expense.
The third quarter results are highlighted on the following table:
|
| | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, |
| 2015 | | 2014 | | |
In thousands, except per share data | Amount | Per Share | | Amount | Per Share | | Change |
Net income (loss): | | | | | | | |
Utility segment | $ | (7,529 | ) | $ | (0.28 | ) | | $ | (8,808 | ) | $ | (0.32 | ) | | $ | 1,279 |
|
Gas storage segment | 799 |
| 0.04 |
| | 2 |
| — |
| | 797 |
|
Other | 45 |
| — |
| | 73 |
| — |
| | (28 | ) |
Consolidated net loss | $ | (6,685 | ) | $ | (0.24 | ) | | $ | (8,733 | ) | $ | (0.32 | ) | | $ | 2,048 |
|
Utility margin | $ | 51,619 |
| | | $ | 50,134 |
| | | $ | 1,485 |
|
Gas storage operating revenues | 5,596 |
| | | 4,782 |
| | | 814 |
|
For the first nine months of 2015, consolidated net income decreased $6.2 million compared to the same period last year primarily due to a $9.1 million after-tax charge resulting from the disallowance associated with the February 2015 OPUC Order in our SRRM docket. Excluding the charge, consolidated net income increased $2.9 million due to a $2.7 million increase in utility margin, a $4.9 million increase in other income, and a $3.0 million decrease in interest expense. These positive factors were offset by a $1.4 million decrease in gas storage operating revenues and a $3.4 million increase in operations and maintenance expense primarily at the utility.
The nine month results are highlighted on the following table:
|
| | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2015 | | 2014 | | |
In thousands, except per share data | Amount | Per Share | | Amount | Per Share | | Change |
Net income (loss): | | | | | | | |
Utility segment | $ | 23,051 |
| $ | 0.84 |
| | $ | 29,416 |
| $ | 1.08 |
| | $ | (6,365 | ) |
Gas storage segment | 827 |
| 0.04 |
| | 472 |
| 0.02 |
| | 355 |
|
Other | 120 |
| — |
| | 334 |
| 0.01 |
| | (214 | ) |
Consolidated net income | $ | 23,998 |
| $ | 0.88 |
| | $ | 30,222 |
| $ | 1.11 |
| | $ | (6,224 | ) |
Adjustments: | | | | | | | |
Regulatory environmental disallowance, net of taxes $5,925(1) | 9,075 |
| 0.33 |
| | — |
| — |
| | 9,075 |
|
Adjusted consolidated net income(1) | $ | 33,073 |
| $ | 1.21 |
| | $ | 30,222 |
| $ | 1.11 |
| | $ | 2,851 |
|
Utility margin | $ | 252,935 |
| | | $ | 250,223 |
| | | $ | 2,712 |
|
Gas storage operating revenues | 16,232 |
| | | 17,655 |
| | | (1,423 | ) |
(1) Regulatory environmental disallowance of $15 million is recorded in utility operations and maintenance expense. Adjusted earnings per share (EPS) and net income are non-GAAP measures based on the after-tax disallowance. EPS is calculated using the combined federal and state statutory tax rate of 39.5% and 27.4 million dilutive shares for the first nine months of 2015.
Utility Results
For the three months ended Sept. 30, 2015, utility net loss was $1.3 million lower compared to the same period in 2014. Results were driven by a $1.5 million increase in utility margin, a $0.6 million decrease in operations and maintenance expense, and a $0.7 million decrease in interest expense, offset by a $0.3 million net negative impact related to an increase in depreciation expense, a decrease in other income, and a decrease in general tax expense.
For the nine months ended Sept. 30, 2015, utility net income decreased $6.4 million to $23.1 million compared to the same period last year. The primary factor impacting the 2015 results was the $9.1 million after-tax charge for the environmental disallowance, which is reflected in operations and maintenance expense.
Excluding the charge, utility net income increased $2.7 million primarily due to higher utility margin, an increase in other income, and other offsetting factors.
Customer Growth. NW Natural's customer growth rate for the trailing 12-month period ended Sept. 30, 2015 was 1.5%. The Company added over 10,500 customers during the trailing 12-month period and now serves approximately 707,000 customers.
Utility Volumes and Margin. Utility volume and margin highlights include:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, | | Change | | % Change |
In thousands | | 2015 | | 2014 | | 2015 | | 2014 | | QTD | YTD | | QTD | YTD |
Gas sales & transportation deliveries | | 154,664 |
| | 152,329 |
| | 692,527 |
| | 766,799 |
| | 2,335 |
| (74,272 | ) | | 1.5 | % | (9.7 | )% |
Utility margin | | $ | 51,619 |
| | $ | 50,134 |
| | $ | 252,935 |
| | $ | 250,223 |
| | $ | 1,485 |
| $ | 2,712 |
| | 3.0 | % | 1.1 | % |
For the quarter, total gas sales and transportation deliveries increased slightly due to greater customer usage and customer growth compared to the same period last year. Utility margin for the quarter increased $1.5 million over last year due to customer growth, added loads under higher commercial rate schedules, rate-base returns on certain investments, and gains from gas cost incentive sharing.
For the nine month period, total gas sales and transportation deliveries decreased 74.3 million therms, or 10%, compared to the same period last year due to warmer weather. Average temperatures for the first nine months of 2015 were 15% warmer than a year ago and 22% warmer than average primarily due to warmer temperatures in the first quarter of 2015. Utility margin for the first nine months increased $2.7 million over last year due to customer growth, added loads under higher commercial rate schedules, rate-base returns on certain investments, and gains from gas cost incentive sharing. These gains were offset by lower customer usage from warmer weather primarily during the heating season in the first quarter. Weather impacts utility margins from our Washington customers where the Company does not have a weather normalization mechanism in place and our Oregon customers who opted out of the weather normalization mechanism.
Gas Reserves. The Company has invested approximately $188 million through its gas reserves program to date. The original investment with Encana Oil & Gas (USA) Inc. totaled $178 million and continues to earn a rate of return with a carrying cost for the rate base investment included in Oregon customers' cost of gas. Under the amended agreement with Jonah Energy LLC, the Company invested in seven wells totaling approximately $10 million. In September 2015, the OPUC adopted an all-party settlement related to these additional wells, under which volumes produced are included in the Company's Oregon PGA beginning Nov. 1, 2015 at a fixed rate of $0.4725 per therm, which approximates the 10-year hedge rate plus financing costs at the inception of the investment.
Environmental Site Remediation and Recovery Mechanism (SRRM). As a result of the OPUC Order in the SRRM docket, $15 million of the $95 million in total environmental remediation expenses deferred through 2012 were disallowed. The OPUC found the $95 million to be prudent but disallowed the $15 million from rate recovery based on its determination of how an earnings test should apply to the years between 2003 and 2012, with adjustments for other factors the OPUC deemed relevant. The Company recognized the $15 million pre-tax disallowance, or $9.1 million after-tax charge, during the first quarter of 2015.
The Company submitted the required compliance filing demonstrating the proposed implementation of the Order and SRRM in March 2015. In September 2015, as a result of discussions with the parties, the Company withdrew its original compliance filing and submitted a revised filing noting the parties could potentially raise two issues with the proposed implementation of the Order. First, the Company believes the February 2015 Order reflected the Commission’s determination of the total disallowance to be borne by the Company for prior periods; however, the Company anticipates the parties will question whether interest on the $15 million charge should be separately disallowed. This interest would total approximately $3 million. Second, the Company anticipates discussions concerning how state allocation rates from the Order are applied to its environmental
remediation sites. However, the Company believes the effect on current regulatory deferrals related to the state allocation issue would be insignificant.
The Company is engaged in the Commission’s process with the parties to resolve issues they have raised regarding the filing and expects resolution of these matters in the first half of 2016. Although the parties continue discussions related to the revised compliance filing, approximately $13 million of environmental costs will be recovered in Oregon rates beginning Nov. 1, 2015 through Oct. 31, 2016. The revised compliance filing is subject to final review and approval by the OPUC and as a consequence thereof, additional or different implementation procedures could be required, which may, among other things, result in additional impacts on earnings.
The Company requested clarification from the OPUC regarding the amount of Oregon-allocated insurance proceeds to be held in a secured account. In September 2015, the OPUC adopted an all-party settlement which provided that the Company did not need to obtain a secured account. Instead, the Company must accrue interest on the Oregon-allocated pre-tax insurance proceeds of $96 million at an interest rate equal to the five-year treasury rate plus 100 basis points. These insurance proceeds will be used to offset future environmental expenses.
Gas Storage Results
For the third quarter of 2015, the gas storage segment reported net income of $0.8 million, compared to net income of less than $0.1 million for the same period last year. Improved results were mainly driven by a $0.8 million increase in operating revenues from slightly higher contract prices for the 2015-16 gas storage year and a $0.5 million decrease in operating expenses primarily due to lower compensation costs and property taxes at our Gill Ranch facility.
For the first nine months of 2015, gas storage net income increased $0.4 million to $0.8 million compared to the same period last year primarily due to a $1.4 million decrease in operating expenses mainly due to lower repair and power costs at our Gill Ranch facility and a $0.9 million decrease in interest expense related to the retirement of $20 million of Gill Ranch's debt in June of 2014. These decreases were offset by a $1.4 million reduction in operating revenues mainly due to lower contract prices for the 2014-15 gas storage year.
Consolidated Operations and Maintenance (O&M) Expense
Operations and maintenance highlights include: |
| | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | Nine Months Ended September 30, | Change |
In thousands | 2015 | 2014 | | 2015 | 2014 | | QTD | YTD |
Operations and maintenance | $ | 32,031 |
| $ | 32,968 |
| | $ | 121,458 |
| $ | 103,085 |
| | $ | (937 | ) | $ | 18,373 |
|
Environmental disallowance | — |
| — |
| | 15,000 |
| — |
| | — |
| 15,000 |
|
Adjusted operations and maintenance (non-GAAP) | $ | 32,031 |
| $ | 32,968 |
| | $ | 106,458 |
| $ | 103,085 |
| | $ | (937 | ) | $ | 3,373 |
|
For the third quarter of 2015, operations and maintenance expense decreased $0.9 million compared to the same period last year due to a $1.2 million decrease in utility non-payroll expense, primarily due to lower contract work costs, offset by a $0.3 million increase in benefit expense including higher employee incentive and pension costs.
For the first nine months of 2015, operations and maintenance expense increased $18.4 million compared to the same period last year mainly due to the effect of a $15 million pre-tax charge for the environmental disallowance; the Company also expensed an additional $1 million related to the Order. Excluding the charge, other contributing factors were a $4.3 million increase in compensation and benefit expense including increased employee incentive, pension, and health care costs, as well as higher wage rates under the new union labor contract, which became effective June 1, 2014. These increases were partially offset by a $1.9 million decrease in repair and power costs at our Gill Ranch gas storage facility.
Other Income and Expense, Net
Other income and expense, net highlights include:
|
| | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, | | Change |
In thousands | 2015 | 2014 | | 2015 | 2014 | | QTD | YTD |
Other income and expense, net | $ | 746 |
| $ | 407 |
| | $ | 6,930 |
| $ | 2,052 |
| | $ | 339 |
| $ | 4,878 |
|
Other income for the third quarter of 2015 increased $0.3 million compared to the same period last year primarily due to a decrease in regulatory interest expense from the application of insurance proceeds under the SRRM, partially offset by a decrease in interest income from environmental assets accruing interest at a lower rate under the SRRM.
Other income for the first nine months of 2015 increased $4.9 million compared to the same period last year due to the recognition of a net $5.3 million related to the equity earnings included in interest income from our deferred environmental expenses as a result of the OPUC SRRM Order received in February 2015. Offsetting the $5.3 million was a $0.4 million decrease in interest income primarily from environmental assets accruing interest at a lower rate under the SRRM, partially offset by a decrease in regulatory interest expense from the application of insurance proceeds under the SRRM.
Cash Flows
Cash provided by operations for the first nine months of 2015 was $173 million, compared to $215 million for the same period in 2014. The decrease is primarily due to receiving $102 million of environmental insurance recoveries in the first nine months of 2014, which did not recur in 2015, and other working capital changes.
Earnings Guidance for 2015
The Company reaffirmed earnings guidance for 2015 in the range of $1.77 to $1.97 per share. As adjusted, our earnings guidance is $2.10 to $2.30 per share for 2015 excluding the effects of the $15.0 million pre-tax charge, which is equivalent to $0.33 per share after-tax1, for the regulatory disallowance associated with the OPUC order on the recovery of past environmental cost deferrals. The Company’s 2015 earnings guidance assumes continued customer growth from our utility segment, average weather conditions for the remainder of the year, slow recovery of the gas storage market, and no other significant changes in prevailing legislative and regulatory policies or outcomes.
1Impact on earnings per share assumes average shares outstanding of 27.4 million and an income tax rate of 39.5%.
Dividend Declaration
The board of directors of NW Natural declared a quarterly dividend of 46.75 cents per share on the Company’s common stock. The dividends will be payable on Nov. 13, 2015 to shareholders of record on Oct. 30, 2015. Currently, the Company’s indicated annual dividend rate is $1.87 per share.
Presentation of Results
In addition to presenting the results of operations and earnings amounts in total, certain financial measures are expressed in cents per share or exclude the after-tax regulatory disallowance related to the OPUC's 2015 environmental order, which are non-GAAP financial measures. We present net income, EPS, and operations and maintenance expense excluding the regulatory disallowance along with the GAAP measures to illustrate the magnitude of this disallowance on ongoing business and operational results. Although the excluded amounts are properly included in the determination of these items under GAAP, we believe the amount and nature of such disallowance make period to period comparisons of operations difficult or potentially confusing. Financial measures are expressed in cents per share as these amounts reflect factors that directly impact earnings, including income taxes. All references in this section to EPS are on the basis of diluted shares. We use such non-GAAP measures 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.
Conference Call Arrangements
As previously reported, NW Natural will conduct a conference call and webcast starting at 8 a.m. Pacific Time (11 a.m. Eastern Time) on Nov. 3, 2015 to review the Company's financial and operating results for three and nine months ended Sept. 30, 2015.
To hear the conference call live, please dial 1-866-267-6789 within the United States and 1-855-669-9657 from Canada. To access the conference replay, please call 1-877-344-7529 and enter the conference identification pass code (10073891). To hear the replay from international locations, please dial 1-412-317-0088.
To hear the conference by webcast, log on to NW Natural's corporate website at nwnatural.com.
Forward-Looking Statements
This report, and other presentations made by NW Natural 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," "intends," "plans," "seeks," "believes," "estimates," "expects" and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements regarding the following: plans, objectives, goals, strategies, future events, investments, customer growth, weather, commodity and other costs, customer rates or rate recovery, environmental cost recoveries, allocation of environmental insurance settlement proceeds, levels and pricing of gas storage contracts, financial positions, capital expenditures, gas reserves and investments and regulatory recoveries related thereto, free cash flow levels, revenues and earnings and timing thereof, dividends, effects of regulatory disallowance, performance, outcomes, timing or effects of future regulatory proceedings or future regulatory approvals, regulatory prudence reviews, effects and implementation of regulatory mechanisms, including, but not limited to, SRRM, legislative outcomes, and other statements that are other than statements of historical facts.
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy 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. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future 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 Company's 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 Company's quarterly reports filed thereafter.
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 the Company, are expressly qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we 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 for the Company 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.
About NW Natural
NW Natural (NYSE:NWN) is headquartered in Portland, Ore., and provides natural gas service to about 707,000 residential, commercial, and industrial customers through 14,000 miles of mains and service lines in western Oregon and southwestern Washington. It is the largest independent natural gas utility in the Pacific Northwest with $3.0 billion in total assets. NW Natural and its subsidiaries currently own and operate underground gas storage facilities with designed storage capacity of approximately 31 Bcf in Oregon and California. Additional information is available at www.nwnatural.com.
# # #
|
| | | |
Investor Contact: | | Media Contact: | |
Nikki Sparley | | Melissa Moore | |
Phone: 503-721-2530 | | Phone: 503-220-2436 | |
Email: n1s@nwnatural.com | | Email: msm@nwnatural.com | |
| | | |
|
| | | | | | | | | | | | | | |
NORTHWEST NATURAL GAS COMPANY |
Comparative Income Statements |
(Consolidated - Unaudited) |
| | | | | | | | | | |
| | | | | | | | | | |
| | Three Months Ended September 30, |
In thousands, except per share amounts | 2015 | | 2014 | | Change | | % Change |
Loss from operations | $ | (1,873 | ) | | $ | (5,077 | ) | | $ | 3,204 |
| | 63 | % |
Net loss | | (6,685 | ) | | | (8,733 | ) | | | 2,048 |
| | 23 |
|
| | | | | | | | | | |
Diluted average shares of common stock outstanding | | 27,363 |
| | | 27,189 |
| | | 174 |
| | 1 |
|
Diluted loss per share of common stock | | (0.24 | ) | | | (0.32 | ) | | | 0.08 |
| | 25 |
|
| | | | | | | | | | |
| | Nine Months Ended September 30, |
In thousands, except per share amounts | 2015 | | 2014 | | Change | | % Change |
Income from operations | $ | 64,042 |
| | $ | 83,217 |
| | $ | (19,175 | ) | | (23 | )% |
Net income | | 23,998 |
| | | 30,222 |
| | | (6,224 | ) | | (21 | ) |
| | | | | | | | | | |
Diluted average shares of common stock outstanding | | 27,399 |
| | | 27,195 |
| | | 204 |
| | 1 |
|
Diluted earnings per share of common stock | | 0.88 |
| | | 1.11 |
| | | (0.23 | ) | | (21 | ) |
| | | | | | | | | | |
| | Twelve Months Ended September 30, |
In thousands, except per share amounts | 2015 | | 2014 | | Change | | % Change |
Income from operations | $ | 123,790 |
| | $ | 142,461 |
| | $ | (18,671 | ) | | (13 | )% |
Net income | | 52,468 |
| | | 59,228 |
| | | (6,760 | ) | | (11 | ) |
| | | | | | | | | | |
Diluted average shares of common stock outstanding | | 27,370 |
| | | 27,158 |
| | | 212 |
| | 1 |
|
Diluted earnings per share of common stock | | 1.92 |
| | | 2.18 |
| | | (0.26 | ) | | (12 | ) |
|
| | | | | | | | | | |
NORTHWEST NATURAL GAS COMPANY | | | | | | |
Consolidated Balance Sheets (Unaudited) | | | September 30, |
In thousands | | | 2015 | | | 2014 |
Assets: | | | | | | |
Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 5,227 |
| | $ | 8,275 |
|
| Accounts receivable | | | 29,800 |
| | | 30,468 |
|
| Accrued unbilled revenue | | | 15,752 |
| | | 12,442 |
|
| Allowance for uncollectible accounts | | | (308 | ) | | | (840 | ) |
| Regulatory assets | | | 82,712 |
| | | 52,250 |
|
| Derivative instruments | | | 2,956 |
| | | 5,587 |
|
| Inventories | | | 80,974 |
| | | 86,600 |
|
| Gas reserves | | | 17,822 |
| | | 21,455 |
|
| Income taxes receivable | | | — |
| | | 7,639 |
|
| Deferred tax assets | | | 15,663 |
| | | 5,100 |
|
| Other current taxes | | | 27,313 |
| | | 19,158 |
|
| | Total current assets | | | 277,911 |
| | | 248,134 |
|
Non-current assets: | | | | | | |
| Property, plant, and equipment | | | 3,072,998 |
| | | 2,990,662 |
|
| Less: Accumulated depreciation | | | 905,137 |
| | | 883,568 |
|
| | Total property, plant, and equipment, net | | | 2,167,861 |
| | | 2,107,094 |
|
| Gas reserves | | | 117,784 |
| | | 131,745 |
|
| Regulatory assets | | | 333,953 |
| | | 263,321 |
|
| Derivative instruments | | | 299 |
| | | 602 |
|
| Other investments | | | 68,503 |
| | | 67,980 |
|
| Restricted cash | | | 4,500 |
| | | 3,000 |
|
| Other non-current assets | | | 7,554 |
| | | 11,648 |
|
| | Total non-current assets | | | 2,700,454 |
| | | 2,585,390 |
|
| | Total assets | | $ | 2,978,365 |
| | $ | 2,833,524 |
|
Liabilities and equity: | | | | | | |
Current liabilities: | | |
|
| | |
|
|
| Short-term debt | | $ | 225,200 |
| | $ | 190,000 |
|
| Current maturities of long-term debt | | | — |
| | | 40,000 |
|
| Accounts payable | | | 54,425 |
| | | 71,018 |
|
| Taxes accrued | | | 11,854 |
| | | 11,876 |
|
| Interest accrued | | | 9,800 |
| | | 10,427 |
|
| Regulatory liabilities | | | 34,127 |
| | | 23,352 |
|
| Derivative instruments | | | 21,949 |
| | | 5,520 |
|
| Other current liabilities | | | 27,924 |
| | | 33,481 |
|
| | Total current liabilities | | | 385,279 |
| | | 385,674 |
|
Long-term debt | | | 621,700 |
| | | 621,700 |
|
Deferred credits and other non-current liabilities: | | | | | | |
| Deferred tax liabilities | | | 527,336 |
| | | 499,809 |
|
| Regulatory liabilities | | | 334,490 |
| | | 312,500 |
|
| Pension and other postretirement benefit liabilities | | | 228,861 |
| | | 142,502 |
|
| Derivative instruments | | | 3,540 |
| | | 551 |
|
| Other non-current liabilities | | | 117,950 |
| | | 118,531 |
|
| | Total deferred credits and other non-current liabilities | | | 1,212,177 |
| | | 1,073,893 |
|
Equity: | | | | | | |
| Common stock | | | 380,208 |
| | | 371,657 |
|
| Retained earnings | | | 388,082 |
| | | 386,461 |
|
| Accumulated other comprehensive loss | | | (9,081 | ) | | | (5,861 | ) |
| | Total equity | | | 759,209 |
| | | 752,257 |
|
| | Total liabilities and equity | | $ | 2,978,365 |
| | $ | 2,833,524 |
|
|
| | | | | | | | | | | |
NORTHWEST NATURAL GAS COMPANY | | | Nine Months Ended |
Consolidated Statements of Cash Flows (Unaudited) | | | September 30, |
In thousands | | | 2015 | | | 2014 |
Operating activities: | | | | | | |
| Net income | | $ | 23,998 |
| | $ | 30,222 |
|
| Adjustments to reconcile net income to cash provided by operations: | | | | | | |
| | Depreciation and amortization | | | 60,683 |
| | | 59,236 |
|
| | Regulatory amortization of gas reserves | | | 13,606 |
| | | 13,795 |
|
| | Deferred tax liabilities, net | | | 7,153 |
| | | 10,721 |
|
| | Non-cash expenses related to qualified defined benefit pension plans | | | 4,238 |
| | | 3,795 |
|
| | Contributions to qualified defined benefit pension plans | | | (11,780 | ) | | | (10,500 | ) |
| | Deferred environmental (expenditures), net of recoveries | | | (8,063 | ) | | | 89,537 |
|
| | Non-cash regulatory disallowance of prior environmental cost deferrals
| | | 15,000 |
| | | — |
|
| | Non-cash interest income on deferred environmental expenses
| | | (5,322 | ) | | | — |
|
| | Other | | | 669 |
| | | (1,692 | ) |
| | Changes in assets and liabilities: | | | | | | |
| | | Receivables | | | 82,586 |
| | | 100,931 |
|
| | | Inventories | | | (3,142 | ) | | | (25,931 | ) |
| | | Taxes accrued | | | 2,823 |
| | | (3,085 | ) |
| | | Accounts payable | | | (36,230 | ) | | | (28,762 | ) |
| | | Interest accrued | | | 3,721 |
| | | 3,324 |
|
| | | Deferred gas costs | | | 27,042 |
| | | (22,173 | ) |
| | | Other, net | | | (4,237 | ) | | | (4,554 | ) |
| | Cash provided by operating activities | | | 172,745 |
| | | 214,864 |
|
Investing activities: | | | | | | |
| Capital expenditures | | | (86,923 | ) | | | (86,552 | ) |
| Utility gas reserves | | | (1,165 | ) | | | (21,734 | ) |
| Restricted cash | | | (1,500 | ) | | | 1,000 |
|
| Other | | | 1,346 |
| | | 82 |
|
| | Cash used in investing activities | | | (88,242 | ) | | | (107,204 | ) |
Financing activities: | | | | | | |
| Common stock issued, net | | | 1,252 |
| | | 5,460 |
|
| Long-term debt retired | | | (40,000 | ) |
|
| (80,000 | ) |
| Change in short-term debt | | | (9,500 | ) | | | 1,800 |
|
| Cash dividend payments on common stock | | | (38,122 | ) | | | (37,442 | ) |
| Other | | | (2,440 | ) | | | 1,326 |
|
| | Cash used in financing activities | | | (88,810 | ) | | | (108,856 | ) |
Decrease in cash and cash equivalents | | | (4,307 | ) | | | (1,196 | ) |
Cash and cash equivalents, beginning of period | | | 9,534 |
| | | 9,471 |
|
Cash and cash equivalents, end of period | | $ | 5,227 |
| | $ | 8,275 |
|
| | | | | | | | | |
Supplemental disclosure of cash flow information: | | | | | | |
| Interest paid | | $ | 25,264 |
| | $ | 30,701 |
|
| Income taxes paid (net of refunds) | | | 10,631 |
| | | 14,945 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
NORTHWEST NATURAL GAS COMPANY |
Financial Highlights (Unaudited) |
Third Quarter - 2015 |
| |
| | | | | | | | | | | | | | | | | | | |
| | | 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, | |
2015 | | 2014 | Change | 2015 | | 2014 | Change | 2015 | | 2014 | Change |
Operating revenues | $ | 93,128 |
| | $ | 87,199 |
| 7% | $ | 493,073 |
| | $ | 513,754 |
| (4)% | $ | 733,356 |
| | $ | 774,502 |
| (5)% |
| | | | | | | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | | | |
| Cost of gas | | 35,856 |
| | | 32,227 |
| 11 | | 223,737 |
| | | 245,708 |
| (9) | | 343,519 |
| | | 383,850 |
| (11) |
| Operations and maintenance | | 32,031 |
| | | 32,968 |
| (3) | | 121,458 |
| | | 103,085 |
| 18 | | 155,355 |
| | | 140,088 |
| 11 |
| General taxes | | 6,772 |
| | | 7,143 |
| (5) | | 23,153 |
| | | 22,508 |
| 3 | | 30,052 |
| | | 29,436 |
| 2 |
| Depreciation and amortization | | 20,342 |
| | | 19,938 |
| 2 | | 60,683 |
| | | 59,236 |
| 2 | | 80,640 |
| | | 78,667 |
| 3 |
| Total operating expenses | | 95,001 |
| | | 92,276 |
| 3 | | 429,031 |
| | | 430,537 |
| — | | 609,566 |
| | | 632,041 |
| (4) |
Income (loss) from operations | | (1,873 | ) | | | (5,077 | ) | 63 | | 64,042 |
| | | 83,217 |
| (23) | | 123,790 |
| | | 142,461 |
| (13) |
Other income and expense, net | | 746 |
| | | 407 |
| 83 | | 6,930 |
| | | 2,052 |
| 238 | | 6,811 |
| | | 3,451 |
| 97 |
Interest expense, net | | 10,111 |
| | | 10,805 |
| (6) | | 31,030 |
| | | 34,024 |
| (9) | | 41,569 |
| | | 45,653 |
| (9) |
Income (loss) before income taxes | | (11,238 | ) | | | (15,475 | ) | 27 | | 39,942 |
| | | 51,245 |
| (22) | | 89,032 |
| | | 100,259 |
| (11) |
Income tax expense (benefit) | | (4,553 | ) | | | (6,742 | ) | 32 | | 15,944 |
| | | 21,023 |
| (24) | | 36,564 |
| | | 41,031 |
| (11) |
Net income (loss) | $ | (6,685 | ) | | $ | (8,733 | ) | 23 | $ | 23,998 |
| | $ | 30,222 |
| (21) | $ | 52,468 |
| | $ | 59,228 |
| (11) |
| | | | | | | | | | | | | | | | | | |
Common shares outstanding: | | | | | | | | | | | | | | | | | | |
| Average diluted for period | | 27,363 |
| | | 27,189 |
| | | 27,399 |
| | | 27,195 |
| | | 27,370 |
| | | 27,158 |
| |
| End of period | | 27,367 |
| | | 27,203 |
| | | 27,367 |
| | | 27,203 |
| | | 27,367 |
| | | 27.203 |
| |
| | | | | | | | | | | | | | | | | | | |
Per share information: | | | | | | | | | | | | | | | | | | |
| Diluted earnings (loss) per share | $ | (0.24) | | $ | (0.32) | | $ | 0.88 | | $ | 1.11 | | $ | 1.92 | | $ | 2.18 | |
| Dividends declared per share of common stock | | 0.465 | | | 0.460 | | | 1.395 | | | 1.380 | | | 1.86 | | | 1.84 | |
| Book value per share, end of period | | 27.74 | | | 27.65 | | | 27.74 | | | 27.65 | | | 27.74 | | | 27.65 | |
| Market closing price, end of period | | 45.84 | | | 42.25 | | | 45.84 | | | 42.25 | | | 45.84 | | | 42.25 | |
| | | | | | | | | | | | | | | | | | |
Capital Structure, end of period: | | | | | | | | | | | | | | | | | | |
| Common stock equity | | 47.3 | % | | | 46.9 | % | | | 47.3 | % | | | 46.9 | % | | | 47.3 | % | | | 46.9 | % | |
| Long-term debt | | 38.7 |
| | | 38.8 |
| | | 38.7 |
| | | 38.8 |
| | | 38.7 |
| | | 38.8 |
| |
| Short-term debt (including amounts due in one year) | | 14.0 |
| | | 14.3 |
| | | 14.0 |
| | | 14.3 |
| | | 14.0 |
| | | 14.3 |
| |
| Total | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | |
| | | | | | | | | | | | | | | | | | | |
Utility operating statistics: | | | | | | | | | | | | | | | | | | |
Customers, end of period | | 706,566 |
| | | 695,902 |
| 1.5% | | 706,566 |
| | | 695,902 |
| 1.5% | | 706,566 |
| | | 695,902 |
| 1.5% |
Utility volumes (therms): | | | | | | | | | | | | | | | | | | |
| Residential and commercial sales | | 53,662 |
| | | 49,843 |
| | | 357,545 |
| | | 420,532 |
| | | 557,916 |
| | | 666,409 |
| |
| Industrial sales and transportation | | 101,002 |
| | | 102,486 |
| | | 334,982 |
| | | 346,267 |
| | | 460,802 |
| | | 475,401 |
| |
Total utility volumes sold and delivered | | 154,664 |
| | | 152,329 |
| | | 692,527 |
| | | 766,799 |
| | | 1,018,718 |
| | | 1,141,810 |
| |
Utility operating revenues: | | | | | | | | | | | | | | | | | | |
| Residential and commercial sales | $ | 73,236 |
| | $ | 68,369 |
| | $ | 432,067 |
| | $ | 451,557 |
| | $ | 652,950 |
| | $ | 690,702 |
| |
| Industrial sales and transportation | | 15,959 |
| | | 15,588 |
| | | 53,623 |
| | | 53,955 |
| | | 73,660 |
| | | 73,462 |
| |
| Other revenues | | 651 |
| | | 602 |
| | | 3,188 |
| | | 3,245 |
| | | 3,926 |
| | | 3,928 |
| |
| Less: Revenue taxes | | 2,371 |
| | | 2,198 |
| | | 12,206 |
| | | 12,826 |
| | | 18,217 |
| | | 19,286 |
| |
Total utility operating revenues | | 87,475 |
| | | 82,361 |
| | | 476,672 |
| | | 495,931 |
| | | 712,319 |
| | | 748,806 |
| |
| Less: Cost of gas | | 35,856 |
| | | 32,227 |
| | | 223,737 |
| | | 245,708 |
| | | 343,519 |
| | | 383,850 |
| |
Utility margin | $ | 51,619 |
| | $ | 50,134 |
| | $ | 252,935 |
| | $ | 250,223 |
| | $ | 368,800 |
| | $ | 364,956 |
| |
Degree days: | | | | | | | | | | | | | | | | | | |
| Average (25-year average) | | 95 |
| | | 95 |
| | | 2,641 |
| | | 2,641 |
| | | 4,240 |
| | | 4,240 |
| |
| Actual | | 75 |
| | | 18 |
| 317% | | 2,068 |
| | | 2,438 |
| (15)% | | 3,422 |
| | | 4,236 |
| (19)% |
Percent colder (warmer) than average weather | | (21 | )% | | | (81 | )% | | | (22 | )% | | | (8 | )% | | | (19 | )% | | | — | % | |