NorthWestern Reports 2012 Financial Results

Reports diluted earnings per share of $2.66 for 2012

Guidance for 2013 of $2.40 - $2.55 per diluted share

Increased the quarterly dividend to $0.38 per share, payable March 31, 2013

Feb 14, 2013, 06:00 ET from NorthWestern Corporation

SIOUX FALLS, S.D., Feb. 14, 2013 /PRNewswire/ -- NorthWestern Corporation, d/b/a NorthWestern Energy (NYSE: NWE), reported financial results for the year ended December 31, 2012.  Net income was $98.4 million, or $2.66 per diluted share, for the year ended December 31, 2012, compared with net income of $92.6 million, or $2.53 per diluted share, for the year ended December 31, 2011.  

"Our net income and cash flows from operations improved in 2012, compared with 2011.  Those results were driven by higher gross margin, primarily due to a favorable arbitration decision, partially offset by higher operating expenses, an impairment charge related to our decision to shelve the Mountain States Transmission Intertie (MSTI) project and higher income taxes," said Bob Rowe, Chief Executive Officer.  "Our continued focus is to remain committed to funding our distribution system infrastructure project and transmission infrastructure improvements while we seek additional regulated energy supply resources to provide our customers long-term price stability and resource adequacy." 

Annual Summary Financial Results

Three Months Ended December 31,

Twelve Months Ended December 31,

2012

2011

2012

2011

Total Revenues

$

280,773

$

283,209

$

1,070,342

$

1,117,316

Cost of Sales

67,550

124,036

395,434

494,559

Gross Margin

213,223

159,173

674,908

622,757

Operating Expenses

Operating, general and administrative

74,241

63,906

269,966

267,160

Mountain States Transmission Intertie impairment

24,039

Property and other taxes

23,279

20,571

97,674

89,122

Depreciation

26,680

25,364

106,044

100,926

Total Operating Expenses

124,200

109,841

497,723

457,208

Operating Income

89,023

49,332

177,185

165,549

Interest Expense, net

(15,464)

(16,122)

(65,062)

(66,859)

Other Income

1,238

1,674

4,372

3,931

Income Before Income Taxes

74,797

34,884

116,495

102,621

Income Tax Expense

(16,100)

(768)

(18,089)

(10,065)

Net Income

$

58,697

$

34,116

$

98,406

$

92,556

Average Common Shares Outstanding

37,218

36,271

36,847

36,258

Basic Earnings per Average Common Share

$

1.58

$

0.94

$

2.67

$

2.55

Diluted Earnings per Average Common Share

$

1.57

$

0.93

$

2.66

$

2.53

Dividends Declared per Average Common Share

$

0.37

$

0.36

$

1.48

$

1.44

 

Significant items during 2012

  • Improvement in net income of approximately $5.9 million as compared with 2011, due primarily to:
    • Higher gross margin of $52.2 million, largely due to a $47.9 million pre-tax gain associated with a favorable arbitration decision;
    • Higher operating expenses of $40.5 million, primarily due to:
      • a charge of approximately $24.0 million in the third quarter of 2012 for the impairment of substantially all of the capitalized preliminary survey and investigative costs associated with the MSTI project; and
      • higher other operating expenses of $16.5 million, primarily related to property taxes and depreciation;
    • a reduction of interest expense of $1.8 million due to lower rates on debt outstanding and higher capitalization of accumulated funds used during construction on projects; and
    • higher income tax expense of $8.0 million.
  • Purchased and placed into service the 40 MW Spion Kop wind project in Montana for approximately $84 million.
  • Received approval from the MPSC to include our Battle Creek production assets in natural gas rate base.
  • Purchased natural gas production interests in northern Montana's Bear Paw Basin for approximately $19 million.
  • Successfully accessed the capital markets to fund growth projects and extend debt maturities by:
    • Entering into an equity distribution agreement with UBS Securities LLC. Under this agreement we have received net proceeds of approximately $28.5 million from the sale of 815,416 common shares, after commissions and other fees; and
    • Issuing $90 million of first mortgage bonds at 4.15% and $60 million of first mortgage bonds at 4.30%, maturing in 2042 and 2052, respectively.

Summary Financial Results

The following table reconciles the primary changes from 2011 to 2012:

Year Ended

Pre-tax

Net

EPS

Income

Income(1)

Diluted

2011 reported

$

102.6

$

92.6

$

2.53

Gross Margin  

Gain on qualifying facility arbitration

47.9

29.5

0.79

DSM lost revenues

5.9

3.6

0.10

Montana property tax tracker

4.0

2.5

0.07

Gas production

3.3

2.0

0.05

Transmission capacity

2.3

1.4

0.04

South Dakota natural gas rate increase

1.7

1.0

0.03

Natural gas retail volumes

(5.5)

(3.4)

(0.09)

Electric retail volumes

(1.5)

(0.9)

(0.02)

DGGS revenues

(3.8)

(2.3)

(0.06)

Operating expenses recovered in trackers

(1.3)

(0.8)

(0.02)

Other

(0.8)

(0.5)

(0.01)

               Subtotal - Gross Margin

52.2

32.1

0.88

OG&A Expense  

Legal and professional fees

(3.9)

(2.4)

(0.06)

Employee benefits and labor

(2.8)

(1.7)

(0.05)

Plant operator costs

1.9

1.2

0.03

Nonemployee directors deferred compensation

1.7

1.0

0.03

Operating expenses recovered in trackers

1.3

0.8

0.02

Other

(1.0)

(0.6)

(0.02)

               Subtotal - OG&A Expense

(2.8)

(1.7)

(0.05)

Other  

MSTI impairment

(24.0)

(14.8)

(0.40)

Depreciation expense

(5.1)

(3.1)

(0.08)

Property and other taxes

(8.6)

(5.3)

(0.14)

Interest expense

1.8

1.1

0.03

Other income

0.5

0.3

0.01

Items related to income tax and other items  

Prior year permanent return to accrual adjustments

(2.0)

(0.05)

Flow-through repairs deductions

3.0

0.08

Flow-through of state bonus depreciation deduction

(4.8)

(0.13)

State income tax and other, net

0.7

0.02

Impact of higher share count

(0.04)

All other, net

(0.2)

0.3

               Total EPS impact of above items

0.13

2012 reported

$

116.5

$

98.4

$

2.66

(1) Income Tax Benefit (Expense) calculation on reconciling items assumes effective tax rate of 38.5%.

 

For more information see www.northwesternenergy.com/documents/investor/Q412.pdf

Significant Drivers

Gross Margin

Consolidated gross margin for the year ended December 31, 2012 was $674.9 million compared with $622.7 million for the same period of 2011.  Consolidated gross margin increased $52.2 million primarily due to:

  • A $47.9 million pre-tax gain associated with a favorable arbitration decision related to a dispute over energy and capacity rates on a QF contract;
  • An increase in demand side management lost revenues recovered through our supply trackers related to efficiency measures implemented by customers;
  • An increase in Montana property taxes included in a tracker as compared to 2011;
  • An increase in gas production margin due to the inclusion of Battle Creek in rates, including approximately $1.1 million that we had deferred in prior periods based on the difference between our cost of service and current natural gas market prices. The acquisition of the Bear Paw Basin assets in the third quarter of 2012 also contributed to the higher gas production margin;
  • An increase in transmission capacity revenues due to higher demand to transmit energy for others across our transmission lines; and 
  • An increase in South Dakota natural gas rates implemented in December 2011.

These increases were partly offset by the following:

  • A decrease in natural gas retail volumes, and to a lesser extent electric residential retail volumes, due primarily to warmer winter and spring weather;
  • Lower Dave Gates Generating Station (DGGS) related revenues primarily due to the deferral of an additional $13.7 million of DGGS FERC jurisdictional revenues, offset in part by higher DGGS Montana Public Service Commission (MPSC) jurisdictional revenues of approximately $7.2 million due to the regulatory flow-through treatment of the state bonus depreciation deduction during 2011 and approximately $2.7 million that we had deferred in 2011 pending outcome of allocation uncertainty in Montana; and
  • Lower revenues for operating expenses recovered in trackers, primarily due to lower environmental remediation costs, partly offset by increases in costs for customer efficiency programs.

Operating, General and Administrative Expenses

Consolidated operating, general and administrative expenses were $270.0 million for the year ended December 31, 2012 as compared with $267.2 million during the same period of 2011.  The increase in operating, general and administrative expenses of $2.8 million was primarily due to:

  • An increase in legal and professional fees due in part to the DGGS FERC proceeding, the QF arbitration matter and asset acquisitions discussed above; and
  • Higher employee benefits and labor expenses primarily due to increased medical costs in 2012.

These increases were partly offset by the following:

  • Lower plant operator costs at Colstrip Unit 4 and Big Stone offset in part by higher plant operator costs at Coyote due to the timing of scheduled maintenance;
  • Non-employee directors deferred compensation decreased as compared to the prior year, primarily due to changes in our stock price. Directors may defer their board fees into deferred shares held in a rabbi trust. If the market value of our stock goes up, deferred compensation expense increases; however, we  account for the deferred shares as trading securities and their increase in value is reflected in other income with no impact on net income; and
  • Lower operating expenses recovered from customers primarily due to lower environmental remediation costs, partly offset by increases in costs for customer efficiency programs. These costs are included in our supply trackers and have no impact on operating income.

MSTI

We recorded a pre-tax charge of approximately $24.0 million in the third quarter of 2012 for the impairment of substantially all of the capitalized preliminary survey and investigative costs associated with MSTI.

Property and Other Taxes

Consolidated property and other taxes were $97.7 million for the year ended December 31, 2012 as compared with $89.1 million during the same period of 2011.  This increase was due primarily to higher assessed property valuations in Montana and plant additions. 

Depreciation Expense

Consolidated depreciation expense was $106.0 million for the year ended December 31, 2012 as compared with $100.9 million during the same period of 2011.  This increase was due primarily to plant additions.

Interest Expense

Consolidated interest expense was $65.1 million for the year ended December 31, 2012 as compared with $66.9 million during the same period of 2011.  The decrease was primarily due to lower interest rates on debt outstanding and higher capitalization of AFUDC.

Income Tax Expense

Consolidated income tax expense for the year ended December 31, 2012 was $18.1 million as compared with $10.1 million in same period of 2011.  The effective tax rate for the year ended December 31, 2012 was 15.5% as compared with 9.8% for the same period of 2011.  The increase in income tax expense for 2012 was primarily due to higher taxable income.  The effective tax rate differs from the federal statutory tax rate of 35% primarily due to repairs and state tax bonus depreciation deductions.

The following table summarizes the significant differences from the Federal statutory rate, which result in reduced income tax expense:

Year Ended December 31,

(in millions)

2012

2011

Income Before Income Taxes

$

116.5

$

102.6

Income tax calculated at 35% Federal statutory rate

(40.8)

(35.9)

Permanent or flow through adjustments:

Flow-through repairs deductions

16.4

13.4

Flow-through of state bonus depreciation deduction

2.8

7.6

Recognition of state NOL benefit

2.4

2.4

Prior year permanent return to accrual adjustments

1.9

3.9

State income tax & other, net

(0.8)

(1.5)

22.7

25.8

Income tax expense

$

(18.1)

$

(10.1)

 

Regulated Operations

In the regulated operations for the year ended December 31, 2012, electric gross margin improved by $57.4 million, due primarily to the $47.9 million pre-tax gain related to the favorable arbitration decision related to the QF dispute and an increase in demand side management lost revenues recovered in supply trackers. 

Natural gas gross margin declined by $5.1 million, due primarily to reduced retail volumes driven by warmer winter and spring weather. 

Fourth Quarter Financial Results

Consolidated net income for the fourth quarter ended December 31, 2012, was $58.7 million, or $1.57/diluted share, compared with $34.1 million, or $.93/diluted share for the fourth quarter in 2011.

The increase was primarily due to an increase in gross margin, driven by the pre-tax gain on the favorable arbitration decision related to the QF dispute, offset by increases in operating expenses and income tax expense, when compared with the prior fourth quarter.

Liquidity and Capital Resources

As of December 31, 2012, cash and cash equivalents were $9.8 million compared with $5.9 million at December 31, 2011.  The Company had $173.6 million available from its revolving credit facility at December 31, 2012, compared with $130.1 million at December 31, 2011. 

Dividend Increase

NorthWestern's Board of Directors declared a quarterly common stock dividend of $0.38 per share, an increase from $.37 per share, payable March 31, 2013, to common shareholders of record as of March 15, 2013. 

Significant Items Not Contemplated in 2012 Guidance

A reconciliation of items not factored into our 2012 earnings guidance of $2.30 to $2.40 per diluted earnings per share is as follows (net of tax). The amount calculated below represents a non-GAAP measure that may provide users of this financial information with additional meaningful information regarding the impact of certain items on the Company's expected earnings.  The Company believes the following presentation is more representative of our ongoing earnings than the GAAP EPS, also represented below.  Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, the reported operating results or cash flows from operations or any other measure of performance prepared in accordance with GAAP.  In addition, the presentation of these measures may not be comparable to similarly titled measures other companies use.

Actual

Actual

Actual

Actual

Q1 2012

Q2 2012

Q3 2012

Q4 2012

2012

Reported Diluted EPS

$

0.88

$

0.31

$

(0.10)

$

1.57

$

2.66

Non-GAAP Adjustments:

Weather

0.09

0.05

(0.06)

0.06

0.14

Release of DGGS deferral

(0.05)

(0.05)

Lost revenue recovery related to 2010/2011

(0.05)

(0.05)

DGGS - FERC ALJ initial decision related to 2011

0.12

0.12

MSTI impairment

0.40

0.40

QF decision (favorable)

(0.79)

(0.79)

Income tax benefit -MT NOL

(0.06)

(0.06)

Adjusted Diluted EPS

$

0.92

$

0.31

$

0.36

$

0.78

$

2.37

 

2013 Earnings Outlook

NorthWestern expects its 2013 earnings to be $2.40 - 2.55 per diluted share.

Bridge

2012 Reported GAAP (diluted EPS)

$

2.66

2012 Non-GAAP adjustments:

Weather

$

0.14

Release of MPSC DGGS deferral

$

(0.05)

Lost revenue recovery related to 2010/2011

$

(0.05)

DGGS - FERC ALJ Decision - portion related to 2011 (unfavorable)

$

0.12

MSTI Impairment (unfavorable)

$

0.40

QF Decision (favorable)

$

(0.79)

Income tax adjustment - benefit from MT NOL

$

(0.06)

2012 Non-GAAP Earnings

$

2.37

2013 Expectations/Assumptions

Gross Margin increase over 2012

$

0.20

$

0.25

Spion Kop wind & Bear Paw gas fields addition

$

0.10

$

0.13

Decrease in pension expense

$

0.31

$

0.32

Increase in DSIP expenses

$

(0.23)

$

(0.22)

Scheduled maintenance at jointly owned plants

$

(0.08)

$

(0.07)

Increased operating expenses

$

(0.09)

$

(0.08)

Increased property taxes (ex Spion Kop & Bear Paw)

$

(0.07)

$

(0.06)

Increased depreciation expense

$

(0.09)

$

(0.09)

Increased AFUDC (debt and equity)

$

0.05

$

0.05

Dilution estimated on equity issuance

$

(0.07)

$

(0.05)

2013 Expectations/Assumptions

$

0.03

$

0.18

2013 diluted EPS Range

$

2.40

$

2.55

Basic assumptions include the following expectations:

  • A consolidated income tax rate of approximately 12% - 16% of pre-tax income;
  • Colstrip Unit 4, Big Stone, and Coyote generation plants are scheduled for routine maintenance during second quarter of 2013
  • Diluted average shares outstanding of 38.1 million; and
  • Normal weather in the Company's electric and natural gas service territories for 2013.

Company Hosting Investor Conference Call

NorthWestern will host an investor conference call today at 4:00 pm Eastern Time to review its financial results for the year ended December 31, 2012.

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 6:00 p.m. ET on February 14, 2013 through March 14, 2013, at (888) 203-1112 access code 7514599.

Annual Meeting

The Company's Annual Meeting of Stockholders will be held on Thursday, April 25, 2013, in Huron, South Dakota. The record date for the annual meeting is February 25, 2013. The annual meeting notice, proxy statement, annual report to stockholders and voting instructions will be provided approximately 40 days prior to the meeting date to stockholders as of the record date.

About NorthWestern Energy

NorthWestern Energy is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 673,200 customers in Montana, South Dakota and Nebraska.  More information on NorthWestern Energy is available on the Company's Web site at www.northwesternenergy.com.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, the information under "2013 Earnings Outlook".  Forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will."  These statements are based upon our current expectations and speak only as of the date hereof.  Our actual future business and financial performance may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, including, but not limited to:

  • potential adverse federal, state, or local legislation or regulation or adverse determinations by regulators could have a material effect on our liquidity, results of operations and financial condition;
  • changes in availability of trade credit, creditworthiness of counterparties, usage, commodity prices, fuel supply costs or availability due to higher demand, shortages, weather conditions, transportation problems or other developments, may reduce revenues or may increase operating costs, each of which could adversely affect our liquidity and results of operations;
  • unscheduled generation outages or forced reductions in output, maintenance or repairs, which may reduce revenues and increase cost of sales or may require additional capital expenditures or other increased operating costs; and
  • adverse changes in general economic and competitive conditions in the U.S. financial markets and in our service territories.

Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. 

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measure

This press release includes financial information prepared in accordance with GAAP, as well as other financial measures, such as Gross Margin and adjusted EPS, that are considered a "non-GAAP financial measures." Generally, a non-GAAP financial measure is a numerical measure of a company's financial performance, financial position or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Gross Margin (Revenues less Cost of Sales) 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. Gross Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow recovery of operating costs. Our Gross Margin measure may not be comparable to other companies' Gross Margin measure. Furthermore, this measure is not intended to replace operating income as determined in accordance with GAAP as an indicator of operating performance.

 

NORTHWESTERN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in thousands, except per share amounts)

Three Months Ended December 31,

Twelve Months Ended December 31,

2012

2011

2012

2011

Revenues

Electric

$

199,838

$

195,538

$

805,554

$

797,562

Gas

80,582

87,364

263,394

318,335

Other

353

307

1,394

1,419

Total Revenues

280,773

283,209

1,070,342

1,117,316

Operating Expenses

Cost of Sales

67,550

124,036

395,434

494,559

Operating, general and administrative

74,241

63,906

269,966

267,160

Mountain States Transmission Intertie impairment

24,039

Property and other taxes

23,279

20,571

97,674

89,122

Depreciation

26,680

25,364

106,044

100,926

Total Operating Expenses

191,750

233,877

893,157

951,767

Operating Income

89,023

49,332

177,185

165,549

Interest Expense, net

(15,464)

(16,122)

(65,062)

(66,859)

Other Income

1,238

1,674

4,372

3,931

Income Before Income Taxes

74,797

34,884

116,495

102,621

Income Tax Expense

(16,100)

(768)

(18,089)

(10,065)

Net Income

$

58,697

$

34,116

$

98,406

$

92,556

Average Common Shares Outstanding

37,218

36,271

36,847

36,258

Basic Earnings per Average Common Share

$

1.58

$

0.94

$

2.67

$

2.55

Diluted Earnings per Average Common Share

$

1.57

$

0.93

$

2.66

$

2.53

Dividends Declared per Average Common Share

$

0.37

$

0.36

$

1.48

$

1.44

 

NORTHWESTERN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

December 31, 2012

December 31, 2011

ASSETS

Current Assets

$

303,128

$

290,199

Property, Plant, and Equipment, Net

2,435,590

2,213,267

Goodwill

355,128

355,128

Regulatory Assets

367,890

308,804

Other Noncurrent Assets

23,797

43,040

Total Assets

$

3,485,533

$

3,210,438

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Maturities of Long-term Debt and Capital Leases

$

1,612

$

5,162

Short-term Borrowings

122,934

166,934

Other Current Liabilities

324,719

303,858

Long-term Capital Leases

31,562

32,918

Long-term Debt

1,055,074

905,049

Noncurrent Regulatory Liabilities

276,618

265,987

Deferred Income Taxes

363,928

282,406

Other Noncurrent Liabilities

375,054

389,012

Total Liabilities

2,551,501

2,351,326

Total Shareholders' Equity

934,032

859,112

Total Liabilities and Shareholders' Equity

$

3,485,533

$

3,210,438

 

NORTHWESTERN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Twelve Months Ended December 31,

2012

2011

2010

Operating Activities

Net income

$

98,406

$

92,556

$

77,376

Non-cash items

132,029

167,090

137,448

Changes in operating assets and liabilities

20,758

(25,889)

4,096

Cash Provided by Operating Activities

251,193

233,757

218,920

Cash Used in Investing Activities

(322,213)

(188,521)

(240,676)

Cash Provided (Used in) Financing Activities

74,914

(45,542)

23,646

Net Increase (Decrease) in Cash and Cash Equivalents

3,894

(306)

1,890

Cash and Cash Equivalents, beginning of period

5,928

6,234

4,344

Cash and Cash Equivalents, end of period

$

9,822

$

5,928

$

6,234

 

NORTHWESTERN CORPORATION

REGULATED ELECTRIC SEGMENT

Twelve Months Ended December 31,

(Unaudited)

Results

2012

2011

Change

% Change

(dollars in millions)

Retail revenue

$

747.9

$

729.7

$

18.2

2.5

%

Regulatory amortization

10.0

8.6

1.4

16.3

%

   Total retail revenues

757.9

738.3

19.6

2.7

%

Transmission

46.4

44.1

2.3

5.2

%

Ancillary Services

(6.1)

7.8

(13.9)

(178.2)

%

Wholesale

3.0

1.9

1.1

57.9

%

Other

4.4

5.4

(1.0)

(18.5)

%

Total Revenues

$

805.6

$

797.5

$

8.1

1.0

%

Total Cost of Sales

277.8

327.1

(49.3)

(15.1)

%

Gross Margin

$

527.8

$

470.4

$

57.4

12.2

%

 

Revenues

Megawatt Hours (MWH)

Avg. Customer Counts

2012

2011

2012

2011

2012

2011

(in thousands)

Retail Electric

Montana

$

255,623

$

250,988

2,356

2,394

273,984

272,131

South Dakota

47,696

46,869

544

565

48,929

48,685

    Residential

303,319

297,857

2,900

2,959

322,913

320,816

Montana

308,077

302,591

3,199

3,197

62,102

61,571

South Dakota

69,639

65,614

938

919

12,113

11,946

Commercial

377,716

368,205

4,137

4,116

74,215

73,517

Industrial

37,835

37,378

2,876

2,833

74

72

Other

29,074

26,298

199

170

5,990

5,875

Total Retail Electric

$

747,944

$

729,738

10,112

10,078

403,192

400,280

Total Wholesale Electric

$

2,959

$

1,928

183

106

N/A

N/A

 

Degree Days

2012 as compared with:

Heating Degree-Days

2012

2011

Historic Average

2011

Historic Average

Montana

7,331

8,094

7,959

9% warmer

8% warmer

South Dakota

6,387

8,074

7,773

21% warmer

18% warmer

 

NORTHWESTERN CORPORATION

REGULATED NATURAL GAS SEGMENT

Twelve Months Ended December 31,

(Unaudited)

Results

2012

2011

Change

% Change

(dollars in millions)

Retail revenues

$

220.8

$

274.8

$

(54.0)

(19.7)

%

Regulatory amortization

7.9

2.5

5.4

216.0

     Total retail revenues

228.7

277.3

(48.6)

(17.5)

Wholesale and other

34.7

41.0

(6.3)

(15.4)

Total Revenues

263.4

318.3

(54.9)

(17.2)

Total Cost of Sales

117.6

167.4

(49.8)

(29.7)

Gross Margin

$

145.8

$

150.9

$

(5.1)

(3.4)

%

 

Revenue

Dekatherms (Dkt)

Avg. Customer Counts

2012

2011

2012

2011

2012

2011

(in thousands)

Retail Gas

Montana

$

102,884

$

124,001

11,826

13,170

159,431

158,514

South Dakota

21,085

25,633

2,351

2,918

37,915

37,515

Nebraska

19,223

23,855

2,129

2,605

36,595

36,586

Residential

143,192

173,489

16,306

18,693

233,941

232,615

Montana

51,978

63,346

6,082

6,787

22,326

22,176

South Dakota

13,446

18,591

2,116

2,665

5,980

5,915

Nebraska

10,250

16,915

1,674

2,668

4,580

4,586

Commercial

75,674

98,852

9,872

12,120

32,886

32,677

Industrial

1,021

1,464

121

162

272

278

Other

905

1,044

118

126

150

147

Total Retail Gas

$

220,792

$

274,849

26,417

31,101

267,249

265,717

 

Degree Days

2012 as compared with:

Heating Degree-Days

2012

2011

Historic Average

2011

Historic Average

Montana

7,331

8,094

7,959

9% warmer

8% warmer

South Dakota

6,387

8,074

7,773

21% warmer

18% warmer

Nebraska

5,175

6,493

6,432

20% warmer

20% warmer

 

NORTHWESTERN CORPORATION

FOURTH QUARTER SEGMENT RESULTS

(Unaudited)

(in thousands)

Three Months Ended

December 31, 2012

Electric

Gas

Other

Eliminations

Total

Operating revenues

$

199,838

$

80,582

$

353

$

$

280,773

Cost of sales

32,923

34,626

67,549

Gross margin

166,915

45,956

353

213,224

Operating, general and administrative

49,847

20,573

3,821

74,241

Property and other taxes

17,129

6,147

3

23,279

Depreciation

21,789

4,883

8

26,680

Operating income (loss)

78,150

14,353

(3,479)

89,024

Interest expense

(12,861)

(2,404)

(199)

(15,464)

Other income

812

399

27

1,238

Income tax (expense) benefit

(17,368)

(443)

420

(17,391)

Net income (loss)

$

48,733

$

11,905

$

(3,231)

$

$

57,407

 

Three Months Ended

December 31, 2011

Electric

Gas

Other

Eliminations

Total

Operating revenues

$

195,538

$

87,364

$

307

$

$

283,209

Cost of sales

80,534

43,502

124,036

Gross margin

115,004

43,862

307

159,173

Operating, general and administrative

43,235

19,781

890

63,906

Property and other taxes

15,488

5,080

3

20,571

Depreciation

20,656

4,701

7

25,364

Operating income (loss)

35,625

14,300

(593)

49,332

Interest expense

(13,518)

(2,327)

(277)

(16,122)

Other income

1,140

507

27

1,674

Income tax (expense) benefit

5,496

(3,191)

(3,073)

(768)

Net income (loss)

$

28,743

$

9,289

$

(3,916)

$

$

34,116

 

Twelve Months Ended

December 31, 2012

Electric

Gas

Other

Eliminations

Total

Operating revenues

$

805,554

$

263,394

$

1,394

$

$

1,070,342

Cost of sales

277,826

117,608

395,434

Gross margin

527,728

145,786

1,394

674,908

Operating, general and administrative

187,599

75,971

6,396

269,966

MSTI impairment

24,039

24,039

Property and other taxes

72,755

24,907

12

97,674

Depreciation

86,559

19,452

33

106,044

Operating income (loss)

156,776

25,456

(5,047)

177,185

Interest expense

(55,118)

(9,063)

(881)

(65,062)

Other income

2,630

1,633

109

4,372

Income tax (expense) benefit

(22,298)

(692)

4,901

(18,089)

Net income (loss)

$

81,990

$

17,334

$

(918)

$

$

98,406

 

 

Twelve Months Ended

December 31, 2011

Electric

Gas

Other

Eliminations

Total

Operating revenues

$

797,562

$

318,335

$

1,419

$

$

1,117,316

Cost of sales

327,126

167,433

494,559

Gross margin

470,436

150,902

1,419

622,757

Operating, general and administrative

183,503

80,431

3,226

267,160

Property and other taxes

66,425

22,686

11

89,122

Depreciation

81,859

19,034

33

100,926

Operating income (loss)

138,649

28,751

(1,851)

165,549

Interest expense

(54,394)

(10,432)

(2,033)

(66,859)

Other income

2,563

1,258

110

3,931

Income tax (expense) benefit

(14,049)

(3,472)

7,456

(10,065)

Net income (loss)

$

72,769

$

16,105

$

3,682

$

$

92,556

SOURCE NorthWestern Corporation



RELATED LINKS

http://www.northwesternenergy.com