NorthWestern Reports Third Quarter 2012 Financial Results

Reports loss per share of $0.10 for quarter

Guidance for 2012 of $2.30 - $2.40 per fully diluted share (adjusted for non-GAAP items)

Announced a quarterly dividend of $0.37 per share, payable December 31, 2012

24 Oct, 2012, 06:00 ET from NorthWestern Corporation

SIOUX FALLS, S.D., Oct. 24, 2012 /PRNewswire/ -- NorthWestern Corporation, d/b/a NorthWestern Energy, (NYSE: NWE), reported financial results for the quarter ended September 30, 2012.  Net loss was $3.8 million, or $(0.10) per fully diluted share, for the quarter ended September 30, 2012, compared with net income of $14.9 million, or $0.41 per fully diluted share, for the quarter ended September 30, 2011.  

"Our core business continues to perform to expectations.  However, we recorded a quarterly loss as a result of two previously-disclosed items: our decision to shelve the Mountain States Transmission Intertie project and the unfavorable, although non-binding, decision by a FERC administrative law judge regarding the allocation of costs at our Dave Gates Generating Station," said Bob Rowe.  "We are disappointed with these items' effect on our quarterly results.  Our focus is to remain committed to funding our distribution improvement plan and transmission infrastructure improvements while we seek additional regulated energy supply resources to provide our customers long-term price stability and resource adequacy." 

Significant items during third quarter of 2012

  • A pre-tax charge of approximately $24 million in the third quarter of 2012 for the impairment of substantially all of the capitalized preliminary survey and investigative costs associated with the Mountain States Transmission Intertie (MSTI) project.
  • Received a non-binding initial decision made by a FERC Administrative Law Judge (ALJ) concerning the allocation of costs at our Dave Gates Generating Station (DGGS), which concluded that NorthWestern should recover only approximately 4.4% of revenues from FERC jurisdictional customers, resulting in a deferral of $11.4 million of revenues.  NorthWestern plans to appeal this decision through customary channels.
  • Closed on $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.
  • Completed the purchase of natural gas production interests in northern Montana's Bear Paw Basin for approximately $19.5 million. The purchase also includes a 75% interest in the Lodge Creek and Willow Creek Gas Gathering Systems.
  • Filed with the Montana Public Service Commission a request to increase natural gas rates by $15.7 million to account for investments in its natural gas transmission, distribution and storage systems and to implement pipeline integrity and infrastructure improvements, as well as cover increased expenses. 

Summary Financial Results

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

Three Months Ended

Nine Months Ended

Pre-tax

Net

EPS

Pre-tax

Net

EPS

Income

Income(1)

Diluted

Income

Income(1)

Diluted

2011 reported

$

15.5

$

14.9

$

0.41

$

67.7

$

58.4

$

1.60

Gross Margin

DGGS

(9.6)

(5.9)

(0.16)

(4.6)

(2.8)

(0.08)

Natural gas retail volumes

(0.3)

(0.2)

(0.01)

(6.3)

(3.9)

(0.11)

Electric retail volumes

3.8

2.3

0.06

(0.4)

(0.2)

(0.01)

Operating expenses recovered in trackers

1.4

0.9

0.02

1.4

0.9

0.02

Montana property tax tracker

1.4

0.9

0.02

2.4

1.5

0.04

South Dakota natural gas rate increase

0.3

0.2

0.01

1.3

0.8

0.02

Gas production

(0.8)

(0.5)

(0.01)

DSM lost revenues

5.1

3.1

0.08

Transmission capacity

1.4

0.9

0.02

Other

(0.1)

(0.1)

(1.4)

(0.9)

(0.02)

    Subtotal - Gross Margin

(3.1)

(1.9)

(0.06)

(1.9)

(1.1)

(0.05)

OG&A Expense

Operating and maintenance

2.3

1.4

0.04

Insurance settlements and recoveries

2.3

1.4

0.04

1.4

0.9

0.02

Labor

1.6

1.0

0.03

1.1

0.7

0.02

Abandoned gas transmission project

0.8

0.5

0.01

0.8

0.5

0.01

Bad debt expense

1.0

0.6

0.02

Plant operator costs

0.7

0.4

0.01

Operating expenses recovered in energy supply trackers

(1.4)

(0.9)

(0.02)

Other

(0.1)

(0.1)

0.3

0.2

0.01

    Subtotal - OG&A Expense

3.2

1.9

0.06

7.6

4.7

0.13

Other

MSTI impairment

(24)

(14.8)

(0.4)

(24)

(14.8)

(0.4)

Depreciation expense

(1.3)

(0.8)

(0.02)

(3.8)

(2.3)

(0.06)

Property and other taxes

(2.2)

(1.4)

(0.04)

(5.8)

(3.6)

(0.1)

Interest Expense

(1)

(0.6)

(0.02)

1.1

0.7

0.02

Other Income

0.6

0.4

0.01

0.9

0.6

0.02

Items related to income tax

Prior year permanent return to accrual adjustments

1.9

0.05

4.5

0.12

Flow-through repairs deductions

(1.4)

(0.04)

0.8

0.02

Flow-through of state bonus depreciation deduction

(0.9)

(0.02)

(2.3)

(0.06)

Recognition of state net operating loss benefit/valuation allowance release

0.1

(2.3)

(0.06)

State income tax and other, net

(0.2)

(0.01)

(2.5)

(0.07)

All other, net

(0.1)

(1)

$

(0.02)

(0.1)

(1.1)

$

(0.03)

    Total EPS impact of above items

(0.51)

(0.52)

2012 reported

$

(12.4)

$

(3.8)

$

(0.1)

$

41.7

$

39.7

$

1.08

 

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

For more information see http://www.northwesternenergy.com/documents/investor/Q312.pdf.

Significant Drivers

Gross Margin

Consolidated gross margin for the third quarter of 2012 was $142.9 million compared with $146.0 million for same period of 2011.  Consolidated gross margin decreased $3.1 million primarily due to the $11.4 million deferral of DGGS FERC related revenue, offset in part by higher DGGS retail revenues due to the regulatory treatment of bonus depreciation by the Montana Public Service Commission.

This decrease was partly offset by the following improvements:

  • Warmer summer weather increasing electric customer usage for cooling during the third quarter of 2012;
  • Higher revenues for operating expenses recovered in trackers, primarily related to customer efficiency programs and environmental remediation costs; and
  • An increase in Montana property taxes included in a tracker as compared to the same period in 2011.

Consolidated gross margin for the nine months ended September 30, 2012 was $461.6 million compared with $463.5 million for same period of 2011.

Operating, General and Administrative Expenses

Consolidated operating, general and administrative expenses were $63.1 million for the quarter ended September 30, 2012 as compared with $66.3 million during the same period of 2011.  The decrease in operating, general and administrative expenses of $3.2 million was primarily due to lower insurance settlements as 2011 results included an increase of $2.3 million related to a  settlement with a former employee and the write-off of an abandoned gas transmission project due to the pursuit of a more cost effective solution, as well as decreased labor costs primarily due to a lower incentive accrual, offset in part by compensation increases and a higher number of employees. 

These decreases were offset in part by higher operating expenses primarily related to costs incurred for customer efficiency programs, which are recovered from customers through supply trackers and have no impact on operating income. 

Consolidated operating, general and administrative expenses were $195.7 million for the nine months ended September 30, 2012 as compared with $203.3 million during the same period of 2011.

MSTI

We recorded a pre-tax charge of approximately $24 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 $24.8 million for the quarter ended September 30, 2012 as compared with $22.6 million during the same period of 2011.  This increase was due primarily to higher assessed property valuations in Montana and plant additions.  The higher assessed property valuations are primarily due to a lower capitalization rate used by the Montana Department of Revenue.

Consolidated property and other taxes were $74.4 million for the nine months ended September 30, 2012 as compared with $68.5 million during the same period of 2011.

Depreciation Expense

Consolidated depreciation expense was $26.5 million for the three months ended September 30, 2012  as compared with $25.2 million during the same period of 2011.  This increase was due primarily to plant additions.

Consolidated depreciation expense was $79.4 million for the nine months ended September 30, 2012 as compared with $75.6 million during the same period of 2011.

Interest Expense

Consolidated interest expense was $17.7 million for the quarter ended September 30, 2012 as compared with $16.7 million during the same period of 2011.  This increase was primarily due to an increase in debt outstanding and interest accrued on DGGS deferred revenues, partially offset by higher capitalization of AFUDC.

Consolidated interest expense was $49.6 million for the nine months ended September 30, 2012 as compared with $50.7 million during the same period of 2011.

Income Tax Expense

Consolidated income tax benefit in the third quarter of 2012 was $8.6 million as compared with $0.6 million income tax expense in same period of 2011.  The effective tax rate for the three months ended September 30, 2012 was (69.5)% (a tax benefit) as compared with 4.1% for the same period of 2011.  The decrease in income tax expense for the third quarter of 2012 was primarily due to lower taxable income.  The effective tax rate differs from the federal statutory tax rate of 35.0% primarily due to repairs and state tax bonus depreciation deductions.

Consolidated income tax expense for the nine months ended September 30, 2012 was $2.0 million as compared with $9.3 million in same period of 2011.  The effective tax rate for the nine months ended September 30, 2012 was 4.8% as compared with 13.7% for the same period of 2011.

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

Three Months Ended September 30,

Nine Months Ended September 30,

(in millions)

2012

2011

2012

2011

Income Before Income Taxes

(12.4)

15.5

41.7

67.7

Income tax calculated at 35% federal statutory rate

4.3

(5.4)

(14.6)

(23.7)

Permanent or flow through adjustments:

Prior year permanent return to accrual adjustments

1.9

1.9

(2.6)

Flow-through repairs deductions

1.8

3.2

9.5

8.7

Flow-through of state bonus depreciation deduction

0.3

1.2

2.2

4.5

Recognition of state net operating loss benefit/valuation allowance release

0.1

0.1

2.4

State income tax and other, net

0.2

0.4

(1.1)

1.4

4.3

4.8

12.6

14.4

Income tax benefit (expense)

8.6

(0.6)

(2.0)

(9.3)

Regulated Operations

In the regulated operations for the three months ended September 30, 2012, electric gross margin declined by $2.7 million, due primarily to the revenue deferral related to the initial decision of the FERC ALJ concerning DGGS cost allocation offset in part by higher DGGS retail revenues due to regulatory treatment of bonus depreciation and higher volumes due to warmer summer weather.  Natural gas gross margin declined by $0.4 million, due primarily to reduced volumes driven by lower customer usage. 

For the nine months ended September 30, 2012, in the regulated operations, electric gross margin improved by $5.4 million, and natural gas gross margin declined by $7.2 million

Liquidity and Capital Resources

As of September 30, 2012, cash and cash equivalents were $18.2 million compared with $5.9 million at December 31, 2011.  The Company had $294.0 million available from its revolving credit facility at September 30, 2012, compared with $130.1 million at December 31, 2011. 

Dividend Declaration

NorthWestern's Board of Directors declared a quarterly common stock dividend of $0.37 per share, payable December 31, 2012, to common shareholders of record as of December 14, 2012. 

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 fully 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 estimated 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.

2012

Actual

Actual

Actual

est. low

est. high

Low

High

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q4 2012

2012

2012

Reported EPS

$

0.88

$

0.31

$

(0.10)

$

0.71

$

0.81

$

1.80

$

1.90

Non-GAAP Adjustments:

Weather

0.09

0.05

(0.06)

0.08

0.08

Release of DGGS deferral

(0.05)

(0.05)

(0.05)

Lost revenue recovery related to 2010/2011

(0.05)

(0.05)

(0.05)

FERC ALJ Decision related to 2011

0.12

0.12

0.12

MSTI write-off

0.40

0.40

0.40

Adjusted EPS

$

0.92

$

0.31

$

0.36

$

0.71

$

0.81

$

2.30

$

2.40

2012 Earnings Outlook

NorthWestern expects its 2012 earnings, as adjusted above, for 2012 to be $2.30 - $2.40 per fully diluted share. 

Basic assumptions include the following expectations:

  • DGGS cost allocation methodology consistent with the Initial Decision, excluding the 2011 effect of the Initial Decision;
  • Excludes any potential effect of an arbitration decision in the Colstrip Energy Limited Partnership (CELP) matter, which is expected in the fourth quarter of 2012.  The Company currently estimates that, if CELP prevailed entirely, we could be required to increase our QF liability by approximately $30 million. If we prevailed entirely, we could reduce our QF liability by up to $52 million.
  • Fully diluted average shares outstanding of 37.1 million for 2012; and
  • Normal weather in the Company's electric and natural gas service territories for the fourth quarter of 2012.

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 quarter and the nine months ended September 30, 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 October 24, 2012, through November 23, 2012, at (888) 203-1112 access code 3754155.

About NorthWestern Energy

NorthWestern Energy is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 668,300 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 "2012 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, Gross Margin, and adjusted EPS, that is considered a "non-GAAP financial measure." 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 (LOSS) INCOME

(Unaudited)

(in thousands, except per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

2012

2011

2012

2011

Revenues

Electric

$

202,485

$

206,613

$

605,716

$

602,024

Gas

32,965

37,067

182,812

230,971

Other

416

361

1,041

1,112

Total Revenues

235,866

244,041

789,569

834,107

Operating Expenses

Cost of sales

93,061

98,045

327,884

370,523

Operating, general and administrative

63,056

66,332

195,725

203,254

Mountain States Transmission Intertie impairment

24,039

24,039

Property and other taxes

24,796

22,605

74,395

68,551

Depreciation

26,505

25,181

79,364

75,562

Total Operating Expenses

231,457

212,163

701,407

717,890

Operating Income

4,409

31,878

88,162

116,217

Interest Expense, net

(17,743)

(16,694)

(49,598)

(50,737)

Other Income

974

346

3,134

2,257

(Loss) Income Before Income Taxes

(12,360)

15,530

41,698

67,737

Income Tax Benefit (Expense)

8,588

(635)

(1,989)

(9,297)

Net (Loss) Income

$

(3,772)

$

14,895

$

39,709

$

58,440

Average Common Shares Outstanding

37,201

36,262

36,723

36,254

Basic (Loss) Earnings per Average Common Share

$

(0.10)

$

0.41

$

1.09

$

1.61

Diluted (Loss) Earnings per Average Common Share

$

(0.10)

$

0.41

$

1.08

$

1.60

Dividends Declared per Average Common Share

$

0.37

$

0.36

$

1.11

$

1.08

 

NORTHWESTERN CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

September 30,

2012

December 31,

2011

ASSETS

Current Assets

$

287,124

$

290,199

Property, Plant, and Equipment, Net

2,319,173

2,213,267

Goodwill

355,128

355,128

Regulatory Assets

320,956

308,804

Other Noncurrent Assets

24,565

43,040

Total Assets

$

3,306,946

$

3,210,438

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Maturities of Long-term Debt and Capital Leases

$

1,585

$

5,162

Commercial Paper

166,934

Current Liabilities

320,131

303,858

Long-term Capital Leases

31,979

32,918

Long-term Debt

1,055,067

905,049

Noncurrent Regulatory Liabilities

273,744

265,987

Deferred Income Taxes

339,851

282,406

Other Noncurrent Liabilities

395,770

389,012

Total Liabilities

2,418,127

2,351,326

Total Shareholders' Equity

888,819

859,112

Total Liabilities and Shareholders' Equity

$

3,306,946

$

3,210,438

 

NORTHWESTERN CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Nine Months Ended September 30,

2012

2011

Operating Activities

Net income

$

39,709

$

58,440

Non-cash items

123,995

109,325

Changes in operating assets and liabilities

58,924

42,740

Cash Provided by Operating Activities

222,628

210,505

Cash Used in Investing Activities

(175,981)

(124,275)

Cash Used In Financing Activities

(34,379)

(86,470)

Net Increase (Decrease) in Cash and Cash Equivalents

12,268

(240)

Cash and Cash Equivalents, beginning of period

5,928

6,234

Cash and Cash Equivalents, end of period

$

18,196

$

5,994

 

NORTHWESTERN CORPORATION

REGULATED ELECTRIC SEGMENT

Three Months Ended September 30,

(Unaudited)

Results

2012

2011

Change

% Change

(dollars in millions)

Retail revenues

$

203.3

$

189.2

$

14.1

7.5%

Regulatory amortization

(5.2)

2.0

(7.2)

(360.0)%

     Total retail revenues

198.1

191.2

6.9

3.6%

Transmission

11.6

11.5

0.1

0.9%

Ancillary services

(9.2)

2.2

(11.4)

(518.2)%

Wholesale

0.8

0.4

0.4

100.0%

Other

1.2

1.3

(0.1)

(7.7)%

Total Revenues

$

202.5

$

206.6

$

(4.1)

(2.0)%

Total Cost of Sales

83.8

85.2

(1.4)

(1.6)%

Gross Margin

$

118.7

$

121.4

$

(2.7)

(2.2)%

Revenues

Megawatt Hours (MWH)

Avg. Customer Counts

2012

2011

2012

2011

2012

2011

(in thousands)

Retail Electric

Montana

$

63,951

$

58,531

587

552

273,130

271,073

South Dakota

13,947

12,858

158

150

48,940

48,664

   Residential 

77,898

71,389

745

702

322,070

319,737

Montana

83,605

79,634

867

840

62,179

61,623

South Dakota

19,643

18,076

259

250

12,235

12,054

Commercial

103,248

97,710

1,126

1,090

74,414

73,677

Industrial

10,011

8,961

806

718

74

73

Other

12,148

11,179

103

92

7,816

7,627

Total Retail Electric

$

203,305

$

189,239

2,780

2,602

404,374

401,114

Total Wholesale Electric

$

781

$

378

41

15

Degree Days

2012 as compared with:

Heating Degree-Days

2012

2011

Historic

Average

2011

Historic

Average

Montana

244

235

367

4% colder

34% warmer

South Dakota

65

70

83

7% warmer

22% warmer

 

NORTHWESTERN CORPORATION

REGULATED ELECTRIC SEGMENT

Nine Months Ended September 30,

(Unaudited)

Results

2012

2011

Change

% Change

(dollars in millions)

Retail revenues

$

561.9

$

552.4

$

9.5

1.7%

Regulatory amortization

10.8

6.0

4.8

80.0%

     Total retail revenues

572.7

558.4

14.3

2.6%

Transmission

33.7

32.3

1.4

4.3%

Ancillary services

(6.5)

5.3

(11.8)

(222.6)%

Wholesale

2.4

1.5

0.9

60.0%

Regulatory amortization and other

3.4

4.5

(1.1)

(24.4)%

Total Revenues

$

605.7

$

602.0

$

3.7

0.6%

Total Cost of Sales

244.9

246.6

(1.7)

(0.7)%

Gross Margin

$

360.8

$

355.4

$

5.4

1.5%

Revenues

Megawatt Hours (MWH)

Avg. Customer Counts

2012

2011

2012

2011

2012

2011

                 (in thousands)

Retail Electric

Montana

$

188,768

$

187,856

1,749

1,786

273,711

271,975

South Dakota

36,993

36,556

424

448

48,887

48,660

   Residential 

225,761

224,412

2,173

2,234

322,598

320,635

Montana

230,498

228,556

2,416

2,407

62,046

61,516

South Dakota

52,887

49,748

712

702

12,116

11,938

Commercial

283,385

278,304

3,128

3,109

74,162

73,454

Industrial

28,185

27,723

2,217

2,113

74

72

Other

24,600

21,936

178

150

6,101

5,953

Total Retail Electric

$

561,931

$

552,375

7,696

7,606

402,935

400,114

Total Wholesale Electric

$

2,382

$

1,507

137

88

Degree Days

2012 as compared with:

Heating Degree-Days

2012

2011

Historic

Average

2011

Historic

Average

Montana

4,488

5,235

5,007

14% warmer

10% warmer

South Dakota

4,375

6,211

5,683

30% warmer

23% warmer

 

NORTHWESTERN CORPORATION

REGULATED NATURAL GAS SEGMENT

Three Months Ended September 30,

(Unaudited)

Results

2012

2011

Change

% Change

(dollars in millions)

Retail revenues

$

19.9

$

23.7

$

(3.8)

(16.0)%

Regulatory amortization

5.1

5.2

(0.1)

(1.9)

     Total retail revenues

25.0

28.9

(3.9)

(13.5)

Wholesale and other

8.0

8.1

(0.1)

(1.2)

Total Revenues

33.0

37.0

(4.0)

(10.8)

Total Cost of Sales

9.2

12.8

(3.60

(28.1)

Gross Margin

$

23.8

$

24.2

$

(0.40)

(1.7)%

Revenues

Dekatherms (Dkt)

Avg. Customer Counts

2012

2011

2012

2011

2012

2011

       (in thousands)

Retail Gas

Montana

$

8,795

$

10,151

758

790

158,524

157,491

South Dakota

1,757

1,717

113

121

37,551

37,167

Nebraska

1,887

2,204

149

155

36,222

36,175

Residential

12,439

14,072

1,020

1,066

232,297

230,833

Montana

5,171

6,020

515

525

22,181

22,024

South Dakota

1,130

1,462

171

199

5,931

5,854

Nebraska

985

1,883

187

289

4,517

4,528

Commercial

7,286

9,365

873

1,013

32,629

32,406

Industrial

93

136

10

13

269

275

Other

68

82

8

8

150

147

Total Retail Gas

$

19,886

$

23,655

1,911

2,100

265,345

263,661

Degree Days

2012 as compared with:

Heating Degree-Days

2012

2011

Historic

Average

2011

Historic

Average

Montana

244

235

367

4% colder

34% warmer

South Dakota

65

70

83

7% warmer

22% warmer

Nebraska

27

49

46

45% warmer

41% warmer

 

NORTHWESTERN CORPORATION

REGULATED NATURAL GAS SEGMENT

Nine Months Ended September 30,

(Unaudited)

Results

2012

2011

Change

% Change

(dollars in millions)

Retail revenues

$

150.0

$

199.4

$

(49.4)

(24.8)%

Regulatory amortization

7.3

(0.8)

8.1

(1,012.5)

     Total retail revenues

157.3

198.6

(41.3)

(20.8)

Wholesale and other

25.5

32.3

(6.8)

(21.1)

Total Revenues

182.8

230.9

(48.1)

(20.8)

Total Cost of Sales

83.0

123.9

(40.9)

(33.0)

Gross Margin

$

99.8

$

107.0

$

(7.2)

(6.7)%

Revenue

Dekatherms (Dkt)

Avg. Customer Counts

2012

2011

2012

2011

2012

2011

                               (in thousands)

Retail Gas

Montana

$

67,049

$

85,553

7,656

8,883

159,316

158,457

South Dakota

15,447

20,589

1,709

2,333

37,792

37,388

Nebraska

14,234

18,571

1,578

2,038

36,520

36,525

Residential

96,730

124,713

10,943

13,254

233,628

232,370

Montana

34,409

44,543

4,004

4,667

22,329

22,188

South Dakota

9,656

14,742

1,545

2,107

5,961

5,899

Nebraska

7,880

13,591

1,279

2,143

4,571

4,577

Commercial

51,945

72,876

6,828

8,917

32,861

32,664

Industrial

672

1,055

80

115

273

279

Other

641

763

85

93

150

146

Total Retail Gas

$

149,988

$

199,407

17,936

22,379

266,912

265,459

Degree Days

2012 as compared with:

Heating Degree-Days

2012

2011

Historic

Average

2011

Historic

Average

Montana

4,488

5,235

5,007

14% warmer

10% warmer

South Dakota

4,375

6,211

5,683

30% warmer

23% warmer

Nebraska

3,611

4,847

4,684

26% warmer

23% warmer

 

NORTHWESTERN CORPORATION

THIRD QUARTER SEGMENT RESULTS

(Unaudited)

(in thousands)

Three Months Ended

September 30, 2012

Electric

Gas

Other

Eliminations

Total

Operating revenues

$

202,485

$

32,965

$

416

$

$

235,866

Cost of sales

83,814

9,247

93,061

Gross margin

118,671

23,718

416

142,805

Operating, general and administrative

44,711

17,452

893

63,056

MSTI impairment

24,039

24,039

Property and other taxes

18,621

6,172

3

24,796

Depreciation

21,636

4,860

9

26,505

Operating income (loss)

9,664

(4,766)

(489)

4,409

Interest expense

(15,181)

(2,363)

(199)

(17,743)

Other income

405

541

28

974

Income tax benefit (expense)

5,762

3,102)

(276)

8,588

Net income (loss)

$

650

$

(3,486)

$

(936)

$

$

(3,772)

Three Months Ended

September 30, 2011

Electric

Gas

Other

Eliminations