EX-99 2 ex991_pressrelease.htm


 

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:

Dan Rausch

(605) 978-2902

daniel.rausch@northwestern.com

 

 

NORTHWESTERN REPORTS FIRST QUARTER 2009 RESULTS

 

Reports diluted EPS of $.63/share

Reaffirms guidance for 2009 of $1.85 - $2.00 per fully diluted share

Declares dividend of 33.5 cents per share

Announces the results of the annual shareholder meeting

 

SIOUX FALLS, S.D. – Apr. 23, 2009 – NorthWestern Corporation d/b/a NorthWestern Energy (NYSE: NWE) reported financial results for the quarter ended March 31, 2009.

 

Highlights for the quarter include:

 

•

Reports net income of $22.8 million, or $.63/diluted share, compared with net income of $23.5 million in 1Q 2008, or $.59/diluted share;

 

o

The increase in EPS was due primarily to the share buy back concluded in the third quarter of 2008.

 

•

Moody’s Investors Service (Moody’s) upgraded the senior secured to Baa1 from Baa2 and unsecured credit ratings to Baa2 from Baa3;

 

•

Issued $250 million of First Mortgage Bonds at 6.34% due in 2019;

 

o

As of March 31, 2009, total net liquidity was approximately $260.0 million, including $83.2 million of cash and $176.8 million of revolving credit facility availability.

 

•

Total net liquidity increased to approximately $260 million as of March 31, 2009;

 

•

Montana Public Service Commission (MPSC) conducted hearings related to our proposed Mill Creek Generation Station and a decision is expected in the second quarter of 2009;

 

•

Placed our ownership interest in Colstrip Unit 4 into utility rate base at a value of $407 million, pursuant to a 2008 MPSC order; and

 

•

Gross Margin increased to $162.9 million for the first quarter of 2009 compared with $156.9 million for the same period of 2008.

 

First Quarter Financial Results

 

Consolidated net income was $22.8 million or $.63 per diluted share for the quarter ended March 31, 2009, compared with consolidated net income of $23.5 million or $.59 per diluted share for the quarter ended March 31, 2008. Computed diluted shares were 36.3 million at March 31, 2009 compared with 39.4 million diluted shares at March 31, 2008. The decrease in the

 

NorthWestern Reports First Quarter 2009 Financial Results

April 23, 2009

Page 2

 

 

number of computed diluted shares is due to a share buyback conducted in the third quarter of 2008.

 

“During the first quarter of 2009, our gross margin, electric volumes and our customer counts all improved when compared with the first quarter of 2008,” said Bob Rowe, President and CEO. “Also, indicative of our continued improving financial condition and the fact that we have essentially completed our goal of exiting all non-regulated business activities, Moody’s upgraded our debt in January 2009.”

 

Consolidated gross margin for the first quarter of 2009 was $162.9 million compared with $156.9 million for the first quarter of 2008. The improvement in consolidated gross margin was primarily due to the transfer of our interest in Colstrip Unit 4 to Montana utility rate base and represents our return on rate base. Gross Margin (Revenues less Cost of Sales) is a non-GAAP financial measure due to the exclusion of depreciation from the measure. The presentation of Gross Margin is intended to supplement investors’ understanding of our operating performance.  Our Gross Margin measure may not be comparable to other companies’ Gross Margin measure. 

 

Consolidated operating, general and administrative expenses increased to $65.4 million for the quarter ended March 31, 2009 as compared with $60.1 million for the quarter ended March 31, 2008. The increase was due primarily to increased insurance reserves, higher pension expense related to our Montana plan, and increased labor and benefit costs due to a combination of compensation increases and severance costs.

 

Property and other taxes were $24.3 million for the three months ended March 31, 2009 as compared with $23.6 million in the first quarter of 2008. The increase was due to higher estimated property valuations.

 

Depreciation expense was $22.7 million for the three months ended March 31, 2009 as compared with $21.1 million in the first quarter of 2008. This increase was primarily due to 2008 plant additions.

 

Interest expense for the three months ended March 31, 2009 was $15.1 million, a decrease of $1.0 million, or 6.2%, from the first quarter of 2008. This decrease was primarily related to lower interest rates on our variable rate debt.

 

Income tax expense for the three months ended March 31, 2009 was $13.1 million as compared with $13.2 million in the first quarter of 2008. Our effective tax rate for 2009 was 36.4% as compared with 36.0% for 2008.

 

Results from Operations

 

Regulated electric gross margin for the quarter ended March 31, 2009 was $113.2 million, up 20.9%, compared with $93.6 million for the same period of 2008. This improvement is primarily due to the transfer of Colstrip Unit 4 to the regulated utility, which is reflected as an increase in retail revenue and a reduction to cost of sales. Prior to the transfer of Colstrip Unit 4, its results were reflected in the unregulated electric segment through December 31, 2008,

 

Regulated retail electric volumes for the quarter ended March 31, 2009 totaled 2,663,000 megawatt hours compared with 2,634,000 megawatt hours for the quarter ended 2008, a 1.1% increase. The increase was due primarily to residential and commercial customer growth.

 

NorthWestern Reports First Quarter 2009 Financial Results

April 23, 2009

Page 3

 

 

Wholesale electric volumes were 243,000 megawatt hours for the quarter ended March 31, 2009, an increase from 49,000 megawatt hours for the same period in 2008. The increase was primarily due to the transfer of Colstrip Unit 4 to the regulated utility from the unregulated electric segment.

 

Regulated natural gas gross margin was $49.9 million for the quarter ended March 31, 2009 compared with $50.3 million during the first quarter of 2008. Regulated retail natural gas volumes were 13,870,000 dekatherms for the quarter ended March 31, 2009 compared with 14,172,000 dekatherms for the same period in 2008. The decline in gross margin and volumes is primarily due to warmer winter weather in Montana and Nebraska.

 

Liquidity and Capital Resources

 

As of March 31, 2009, cash and cash equivalents were $83.2 million compared with $11.3 million at Dec. 31, 2008. The Company had $176.8 million available from credit facilities at March 31, 2009 compared with $74.9 million at Dec. 31, 2008. The increase in credit revolver availability was due primarily to issuance of $250 million of Montana First Mortgage Bonds in March 2009. The proceeds were used to redeem the $100 million term loan held by Colstrip Lease Holdings LLC and repay outstanding borrowings on the credit facility.

 

Cash provided by operating activities totaled $65.1 million during the quarter ended March 31, 2009, compared with $78.0 million during the quarter ended March 31, 2008. This decrease in operating cash flows is primarily related to increased pension funding of approximately $21.3 million, offset by improvements associated with the timing of energy supply costs collections in the first quarter of 2009 as compared with 2008.

 

The Company used $18.2 million for investment activities during the quarter ended March 31, 2009 compared with $14.0 million for the quarter ended March 31, 2008. Capital expenditures for the quarter ended March 31, 2009 were $18.5 million as compared with $14.0 million in 2008.

 

The Company’s financing activities provided $25.0 million during the quarter ended March 31, 2009 compared with financing activities using $43.0 million for the quarter ended March 31, 2008. During the first quarter of 2009 the Company issued debt of $250 million, made debt repayments of $211.3 million, and paid dividends on common stock of $12.0 million. During the first quarter of 2008, we made debt repayments of $30.0 million and paid dividends on common stock of $12.9 million.

 

Dividend

 

NorthWestern’s Board of Directors declared a quarterly common stock dividend of 33.5 cents per share, payable on June 30, 2009, to common shareholders of record as of June 15, 2009.

 

2009 Earnings Outlook

 

NorthWestern reaffirms its earnings for 2009 to be $1.85 - $2.00/fully diluted share.

 

The major assumptions include, but are not limited to, the following expectations:

 

 

•

2009 net income will increase by approximately $9 million or $.25 per share as a result of the inclusion of our interest in Colstrip Unit 4 in regulated electric rate base;

 

•

Pension expense is estimated to be flat with the 2008 pension expense;

 

NorthWestern Reports First Quarter 2009 Financial Results

April 23, 2009

Page 4

 

 

 

•

Planned insurance recoveries will offset our Q1 insurance reserve expense increase;

 

•

Retail electric volumes will be flat compared to 2008 volumes;

 

•

Wholesale electric volumes in South Dakota will decrease due to a planned outage in 2009;

 

•

Residential and commercial natural gas volumes will be relatively flat compared with 2008 volumes;

 

•

Fully diluted average shares outstanding of 36.5 million; and

 

•

Normal weather is assumed in the Company’s electric and natural gas service territories for the rest of 2009.

 

Results of Annual Shareholder Meeting

 

At its 2009 Annual Meeting of Stockholders held yesterday, NorthWestern’s stockholders elected E. Linn Draper, Jr., Stephen P. Adik, Dorothy M. Bradley, Dana J. Dykhouse, Julia L. Johnson, Philip L. Maslowe, D. Louis Peoples and Robert C. Rowe to a one-year term on the Board.

 

Stockholders approved a proposal to create the NorthWestern Energy Employee Stock Purchase Plan, or ESPP. The ESPP is a broad-based plan that allows eligible employees to purchase shares of our common stock at a discount (to be determined in accordance with the terms of the ESPP, but not more than 15 percent) to the average high and low price on the date of the purchase. The number of common shares available for purchase under the ESPP will be 500,000 shares.

 

Stockholders also ratified Deloitte & Touche, LLP as the company’s independent registered public accounting firm for the year ending December 31, 2009.

 

Company Hosting Investor Conference Call

 

NorthWestern will host an investor conference call today at 11:00 am Eastern Time to review its financial results for the quarter ended March 31, 2009.

 

The conference call will be webcast live on the Internet at http://www.northwesternenergy.com under the “Investor Information” heading. 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.

 

A telephonic replay of the call will be available beginning at noon today through May 22, 2009, at 800-475-6701, access code 996081.

 

About NorthWestern Energy

 

NorthWestern Energy is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 656,000 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 “2009 Earnings Outlook”.  Forward-looking statements often address our expected future business and financial performance, and often contain

 

NorthWestern Reports First Quarter 2009 Financial Results

April 23, 2009

Page 5

 

 

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 or adverse determinations by regulators could have a material adverse effect on our liquidity, results of operations and financial condition;

 

 

•

unanticipated changes in availability of trade credit, 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 would adversely affect our liquidity;

 

 

•

unscheduled generation outages or forced reductions in output, maintenance or repairs, which may reduce revenues and increase operating costs 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.

 

# # #

 

 

NorthWestern Reports First Quarter 2009 Financial Results

April 23, 2009

Page 6

 

 

NORTHWESTERN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

(in thousands, except per share amounts)

 

 

 

Three Months Ended March 31,

 

 

 

2009

 

2008

 

Revenues

 

 

 

 

 

 

 

Electric

 

$

207,987

 

$

196,619

 

Gas

 

158,803

 

171,643

 

Other

 

4,113

 

17,713

 

Total Revenues

 

370,903

 

385,975

 

Operating Expenses

 

 

 

 

 

Cost of sales

 

208,010

 

229,084

 

Operating, general and administrative

 

65,419

 

60,071

 

Property and other taxes

 

24,289

 

23,640

 

Depreciation

 

22,722

 

21,091

 

Total Operating Expenses

 

320,440

 

333,886

 

Operating Income

 

50,463

 

52,089

 

Interest Expense

 

(15,134

)

(16,080

)

Other Income

 

591

 

662

 

Income Before Income Taxes

 

35,920

 

36,671

 

Income Tax Expense

 

(13,107

)

(13,220

)

Net Income

 

$

22,813

 

$

23,451

 

 

Average Common Shares Outstanding

 

35,934

 

38,972

 

Basic Earnings per Average Common Share

 

$

0.63

 

$

0.60

 

Diluted Earnings per Average Common Share

 

$

0.63

 

$

0.59

 

Dividends Declared per Average Common Share

 

$

0.335

 

$

0.33

 

 

NorthWestern Reports First Quarter 2009 Financial Results

April 23, 2009

Page 7

 

 

NORTHWESTERN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

March 31,  2009

 

 

December 31, 2008

 

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current Assets

 

$

349,151

 

$

313,417

 

Property, Plant, and Equipment, Net

 

 

1,839,603

 

 

1,839,699

 

Goodwill

 

 

355,128

 

 

355,128

 

Regulatory Assets

 

 

226,190

 

 

233,102

 

Other Noncurrent Assets

 

 

21,777

 

 

20,691

 

Total Assets

 

$

2,791,849

 

$

2,762,037

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current Maturities of Long-term Debt and Capital Leases

 

$

21,494

 

$

229,238

 

Current Liabilities

 

 

349,685

 

 

359,339

 

Long-term Capital Leases

 

 

36,499

 

 

36,798

 

Long-term Debt

 

 

880,464

 

 

634,011

 

Noncurrent Regulatory Liabilities

 

 

231,924

 

 

222,969

 

Deferred Income Taxes

 

 

133,634

 

 

114,707

 

Other Noncurrent Liabilities

 

 

363,639

 

 

401,442

 

Total Liabilities

 

 

2,017,339

 

 

1,998,504

 

Total Shareholders’ Equity

 

 

774,510

 

 

763,533

 

Total Liabilities and Shareholders’ Equity

 

$

2,791,849

 

$

2,762,037

 

 

 

NORTHWESTERN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

 

Three Months Ended March 31,

 

 

 

2009

 

2008

 

Operating Activities

 

 

 

 

 

Net income

 

$

22,813

 

$

23,451

 

Non-cash items

 

37,447

 

35,181

 

Changes in operating assets and liabilities

 

4,870

 

19,323

 

Cash Provided by Operating Activities

 

65,130

 

77,955

 

 

 

 

 

 

 

Cash Used in Investing Activities

 

(18,189

)

(13,954

)

 

 

 

 

 

 

Cash Provided by (Used In) Financing Activities

 

25,013

 

(43,019

)

 

 

 

 

 

 

Net Increase in Cash and Cash Equivalents

 

$

71,954

 

$

20,982

 

Cash and Cash Equivalents, beginning of period

 

$

11,292

 

$

12,773

 

Cash and Cash Equivalents, end of period

 

$

83,246

 

$

33,755

 

 

 

NorthWestern Reports First Quarter 2009 Financial Results

April 23, 2009

Page 8

 

 

NORTHWESTERN CORPORATION

REGULATED ELECTRIC SEGMENT

(Unaudited)

 

 

 

 

Results

 

 

 

2009

 

2008

 

Change

 

% Change

 

 

 

(in millions)

 

Retail revenue

 

180.5

 

181.3

 

(0.8

)

0.4

%

Transmission

 

11.9

 

11.2

 

0.7

 

6.3

 

Wholesale

 

11.1

 

2.1

 

9.0

 

428.6

 

Other

 

4.5

 

2.1

 

2.4

 

114.3

 

Total Revenues

 

208.0

 

196.7

 

11.3

 

5.7

 

Total Cost of Sales

 

94.8

 

103.1

 

(8.3

)

(8.1

)

Gross Margin

 

$

113.2

 

$

93.6

 

$

19.6

 

20.9

%

 

 

 

Revenues

 

Volumes MWH

 

Avg. Customer Counts

 

 

 

2009

 

2008

 

2009

 

2008

 

2009

 

2008

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

Retail Electric

 

 

 

 

 

 

 

 

 

 

 

 

 

Montana

 

$

66,094

 

$

67,294

 

679

 

668

 

269,003

 

266,104

 

South Dakota

 

13,547

 

12,631

 

171

 

160

 

48,194

 

47,908

 

Residential

 

79,641

 

79,925

 

850

 

828

 

317,197

 

314,012

 

Montana

 

68,892

 

69,852

 

796

 

799

 

60,202

 

59,148

 

South Dakota

 

16,673

 

15,684

 

228

 

222

 

11,475

 

11,331

 

Commercial

 

85,565

 

85,536

 

1,024

 

1,021

 

71,677

 

70,479

 

Industrial

 

10,947

 

11,490

 

765

 

761

 

72

 

72

 

Other

 

4,311

 

4,367

 

24

 

24

 

4,643

 

4,653

 

Total Retail Electric

 

$

180,464

 

$

181,318

 

2,663

 

2,634

 

393,589

 

389,216

 

Wholesale Electric

 

11,131

 

2,066

 

243

 

49

 

N/A

 

N/A

 

 

 

 

NorthWestern Reports First Quarter 2009 Financial Results

April 23, 2009

Page 9

 

 

NORTHWESTERN CORPORATION

REGULATED NATURAL GAS SEGMENT

(Unaudited)

 

 

 

Results

 

 

 

2009

 

2008

 

Change

 

% Change

 

 

 

(in millions)

 

Retail revenue

 

144.4

 

151.9

 

(7.5

)

(4.9

) %

Wholesale and other

 

14.4

 

19.7

 

(5.3

)

26.9

 

Total Revenues

 

158.8

 

171.6

 

(12.8

)

(7.5

)

Total Cost of Sales

 

108.9

 

121.3

 

(12.4

)

(10.2

)

Gross Margin

 

$

49.9

 

$

50.3

 

$

(0.4

)

(0.8

)%

 

 

 

Revenues

 

Volumes (Dkt)

 

Customer Counts

 

 

 

2009

 

2008

 

2009

 

2008

 

2009

 

2008

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

Retail Gas

 

 

 

 

 

 

 

 

 

 

 

 

 

Montana

 

$

55,524

 

$

60,744

 

5,383

 

5,568

 

157,395

 

155,758

 

South Dakota

 

18,690

 

18,688

 

1,577

 

1,607

 

37,105

 

36,912

 

Nebraska

 

15,443

 

15,167

 

1,316

 

1,405

 

36,813

 

36,888

 

Residential

 

89,657

 

94,599

 

8,276

 

8,580

 

231,313

 

229,558

 

Montana

 

28,271

 

30,265

 

2,735

 

2,757

 

22,046

 

21,685

 

South Dakota

 

14,296

 

13,934

 

1,497

 

1,378

 

5,887

 

5,839

 

Nebraska

 

10,942

 

11,311

 

1,231

 

1,284

 

4,582

 

4,593

 

Commercial

 

53,509

 

55,510

 

5,463

 

5,419

 

32,515

 

32,117

 

Industrial

 

803

 

1,289

 

79

 

119

 

299

 

306

 

Other

 

476

 

505

 

52

 

54

 

142

 

141

 

Total Retail Gas

 

$

144,445

 

$

151,903

 

13,870

 

14,172

 

264,269

 

262,122

 

 

 

 

2009 as compared with:

 

Heating Degree-Days

 

2008

 

Historic Average

 

Montana

 

2% warmer

 

2% warmer

 

South Dakota

 

1% colder

 

5% colder

 

Nebraska

 

8% warmer

 

4% warmer

 

 

 

NorthWestern Reports First Quarter 2009 Financial Results

April 23, 2009

Page 10

 

 

NORTHWESTERN CORPORATION

SEGMENT INFORMATION

(Unaudited)

(in thousands)

Three months ended,

 

Regulated

 

 

 

 

 

 

 

March 31, 2009

 

Electric

 

Gas

 

Other

 

Eliminations

 

Total

 

Operating revenues

 

$

207,987

 

$

158,803

 

$

4,651

 

$

(538

)

$

370,903

 

Cost of sales

 

94,748

 

108,938

 

4,324

 

—

 

208,010

 

Gross margin

 

113,239

 

49,865

 

327

 

(538

)

162,893

 

Operating, general and administrative

 

42,979

 

21,815

 

1,163

 

(538

)

65,419

 

Property and other taxes

 

18,017

 

6,227

 

45

 

—

 

24,289

 

Depreciation

 

18,391

 

4,323

 

8

 

—

 

22,722

 

Operating income (loss)

 

33,852

 

17,500

 

(889

)

—

 

50,463

 

Interest expense

 

(11,150

)

(3,068

)

(916

)

—

 

(15,134

)

Other income

 

291

 

268

 

32

 

—

 

591

 

Income tax (expense) benefit

 

(8,067

)

(5,475

)

435

 

—

 

(13,107

)

Net income (loss)

 

$

14,926

 

$

9,225

 

$

(1,338)

 

$

—

 

 

22,813

 

 

Total assets

 

$

1,956,083

 

$

824,058

 

$

11,708

 

$

—

 

$

2,791,849

 

Capital expenditures

 

$

14,846

 

$

3,663

 

$

—

 

$

—

 

$

18,509

 

 

Three months ended,

 

Regulated

 

Unregulated

 

 

 

 

 

 

 

March 31, 2008

 

Electric

 

Gas

 

Electric

 

Other

 

Eliminations

 

Total

 

Operating revenues

 

$

196,619

 

$

171,643

 

$

20,404

 

$

7,922

 

$

(10,613

)

$

385,975

 

Cost of sales

 

103,055

 

121,308

 

7,032

 

7,764

 

(10,075

)

229,084

 

Gross margin

 

93,564

 

50,335

 

13,372

 

158

 

(538

)

156,891

 

Operating, general and administrative

 

35,370

 

17,924

 

3,677

 

3,638

 

(538

)

60,071

 

Property and other taxes

 

16,429

 

6,328

 

879

 

4

 

—

 

23,640

 

Depreciation

 

15,395

 

3,883

 

1,805

 

8

 

—

 

21,091

 

Operating income (loss)

 

26,370

 

22,200

 

7,011

 

(3,492

)

—

 

52,089

 

Interest expense

 

(9,306

)

(3,230

)

(3,176

)

(368

)

—

 

(16,080

)

Other income

 

257

 

309

 

13

 

83

 

—

 

662

 

Income tax (expense) benefit

 

(5,687

)

(7,290

)

(1,715

)

1,472

 

—

 

(13,220

)

Net income (loss)

 

$

11,634

 

$

11,989

 

$

2,133

 

$

(2,305

)

$

—

 

$

23,451

 

 

Total assets

 

$

1,532,317

 

$

748,111

 

$

250,229

 

$

17,649

 

$

—

 

$

2,548,306

 

Capital expenditures

 

$

10,738

 

$

2,726

 

$

493

 

$

—

 

$

—

 

$

13,957