NorthWestern Reports Third Quarter 2010 Financial Results

Reports $9.0 million improvement in pretax income during the third quarter of 2010

Reports EPS of $.40/diluted share compared with $.52/diluted share in 3Q 2009 (3Q 2009 included a $12.4 million benefit for a tax accounting method change)

Reports YTD EPS of $1.51/diluted share compared with $1.32/diluted share for YTD 2009

Declares a $.34/share dividend for 4Q 2010

Oct 28, 2010, 07:00 ET from NorthWestern Corporation

SIOUX FALLS, S.D., Oct. 28 /PRNewswire-FirstCall/ -- NorthWestern Corporation d/b/a NorthWestern Energy (NYSE: NWE) reported financial results for the quarter ended Sept. 30, 2010.

Significant achievements for the quarter include:

  • Improvement in income before income taxes of approximately $9.0 million compared with 2009;
  • The Company was granted an interim rate increase by the Montana Public Service Commission ("MPSC"), subject to refund, effective July 8, 2010.  In September, the Company reached a proposed Stipulation with the Montana Consumer Counsel ("MCC"), which, if approved, by the MPSC would result in a $6.7 million annual net increase in our Montana rates; and
  • Completed the purchase of a majority interest in the Battle Creek Natural Gas Field on the Sweetgrass Arch in Blaine County, Montana (Battle Creek Field) for $11.4 million.

Financial Results

Consolidated net income was $14.4 million or $.40 per diluted share for the quarter ended Sept. 30, 2010, compared with consolidated net income of $18.9 million or $.52 per diluted share for the quarter ended Sept. 30, 2009.  Consolidated income tax expense for the three months ended September 30, 2010 was $4.7 million, an increase of $13.5 million, as compared with an $8.8 million income tax benefit in the same period of 2009. The increase in income tax expense was primarily due to lower tax benefits recognized for repair costs compared with the third quarter of 2009.  During the third quarter of 2009, we received the notification from the IRS for a tax accounting method change for repair costs and recognized approximately $12.4 million of income tax benefit related to repair cost deductions for 2008 and the first three quarters of 2009.

Consolidated net income for the nine months ended Sept. 30, 2010, was $54.8 million or $1.51 per diluted share, an increase of $7.0 million from $47.8 million or $1.32 per diluted share for the same period in 2009.  

"Income before taxes improved significantly in the third quarter of 2010 due primarily to an increase in gross margins, continued focus on cost control, and the capitalization of allowance for funds used during construction related to the Mill Creek Generating Station," said Bob Rowe, President and CEO.  "In addition, we made significant progress on the rate case in Montana during the third quarter of 2010."

The following tables reconcile the primary changes from 2009 to 2010:

Three Months Ended

Nine Months Ended

Pre-tax

Net

EPS - Fully

Pre-tax

Net

EPS - Fully

($millions, except EPS)

Income

Income (1)

Diluted

Income

Income (1)

Diluted

Q3 2009 reported

$         10.1

$         18.9

$         0.52

$         55.7

$         47.8

$         1.32

Insurance reserves

1.3

0.8

0.02

4.1

2.5

0.07

Other Income (mainly AFUDC)

1.9

1.2

0.03

3.7

2.3

0.06

Postretirement health care

1.0

0.6

0.02

3.0

1.8

0.05

Pension

1.0

0.6

0.02

2.9

1.8

0.05

Electric retail volumes

2.7

1.7

0.05

2.0

1.2

0.03

Montana electric interim rate increases (2)

1.6

1.0

0.03

1.6

1.0

0.03

DSM lost revenues

-

-

-

1.6

1.0

0.03

Montana property tax tracker

0.2

0.1

-

1.3

0.8

0.02

Transmission capacity

1.3

0.8

0.02

1.5

0.9

0.02

Labor

(0.8)

(0.5)

(0.01)

1.5

0.9

0.02

Loss on capacity contract in 2009

-

-

-

1.5

0.9

0.02

Reclamation settlement

-

-

-

1.0

0.6

0.02

Interest expense

1.0

0.6

0.02

1.0

0.6

0.02

Jointly owned plant operations

(0.5)

(0.3)

(0.01)

0.7

0.4

0.01

Bad debt expense

-

-

-

0.7

0.4

0.01

Legal and professional fees

-

-

-

0.5

0.3

0.01

Natural gas retail volumes

0.4

0.2

0.01

-

-

-

Operating and maintenance

(2.1)

(1.3)

(0.04)

(1.1)

(0.7)

(0.02)

South Dakota wholesale electric

(0.5)

(0.3)

(0.01)

(1.1)

(0.7)

(0.02)

Insurance recoveries and settlements

0.6

0.4

0.01

(1.5)

(0.9)

(0.02)

Depreciation

(0.8)

(0.5)

(0.01)

(1.7)

(1.0)

(0.03)

QF supply costs

-

-

-

(3.6)

(2.2)

(0.06)

Property & other taxes

0.3

0.2

0.01

(5.1)

(3.1)

(0.09)

Inc. tax - accounting method change in '09

-

(10.1)

(0.28)

-

(5.5)

(0.15)

Inc. tax - Valuation allowance release

-

-

-

-

2.2

0.06

All other, net

0.4

0.3

-

2.6

1.5

0.05

Subtotal

(0.12)

0.19

Q3 2010 reported

$         19.1

$         14.4

$         0.40

$         72.8

$         54.8

$         1.51

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

(2) Subject to refund

For more information see www.northwesternenergy.com/documents/investor/Q310.pdf

Consolidated gross margin for the third quarter of 2010 was $134.9 million compared with $127.7 million for the third quarter of 2009.  The improvement in consolidated gross margin was substantially due to an increase in electric volumes related to warmer summer weather in South Dakota, improved transmission capacity revenues, and an interim increase in Montana electric rates (subject to refund).  Partially offsetting this increase were lower average wholesale electric prices.

Consolidated gross margin for the nine months ended Sept. 30, 2010, increased $8.9 million to $428.4 million compared with $419.5 million in the same period of 2009.  

Consolidated operating, general and administrative expenses increased to $58.5 million for the quarter ended Sept. 30, 2010, as compared with $57.9 million for the quarter ended Sept. 30, 2009.  The increase was due primarily to increased operating and maintenance costs, increased labor costs, and increased plant operations costs at our Colstrip plant, offset by lower insurance claims, lower postretirement health care costs and lower pension expense.

Consolidated operating, general and administrative expenses decreased $10.3 million to $173.9 million for the nine months ended Sept. 30, 2010, as compared with $184.2 million in same period of 2009.

Property and other taxes were $20.5 million for the three months ended Sept. 30, 2010, as compared with $20.8 million in the third quarter of 2009.  For the nine months ended Sept. 30, 2010, property and other taxes were $68.5 million compared with $63.4 million in the same period of 2009.  The increase was primarily due to higher assessed property valuations in Montana.

Depreciation expense was $22.8 million for the three months ended Sept. 30, 2010, as compared with $22.0 million in the third quarter of 2009.  For the nine months ended Sept. 30, 2010, depreciation expense was $68.7 million compared with $67.0 million in the same period of 2009.  These increases were primarily due to plant additions.    

Interest expense for the three months ended Sept. 30, 2010, was $16.3 million, a decrease of $1.0 million from the third quarter of 2009.  This decrease was primarily due to $0.9 million capitalized for the debt portion of allowance for funds used during construction ("AFUDC"), that was primarily related to the Mill Creek Generating Station.   Consolidated interest expense was $49.4 million for the nine months ended Sept. 30, 2010, a decrease of $1.0 million for the same period in 2009.  The decrease in interest expense for the nine months is due primarily to $2.7 million capitalized for AFUDC, partially offset by increased interest expense due to higher outstanding debt.

Consolidated other income for the three months ended Sept. 30, 2010, was $2.3 million, as compared with $0.4 million in the third quarter of 2009.  This includes approximately $1.5 million capitalized for the equity portion of AFUDC, that was primarily related to the Mill Creek Generating Station.  The Company expects to capitalize an additional approximately $1.9 million of AFUDC related to the Mill Creek Generating Station through the remainder of the year.  Consolidated other income for the nine months ended September 30, 2010 was $4.9 million, as compared with $1.2 million in the same period of 2009. This includes an increase of approximately $3.8 million capitalized for the equity portion of AFUDC.

Consolidated income tax expense for the three months ended Sept. 30, 2010, was $4.7 million, as compared with an $8.8 million income tax benefit in the same period of 2009. The effective tax rate in 2010 was 24.7 percent as compared with (87.1) percent for the same period of 2009. The increase in the effective tax rate was primarily due to lower tax benefits recognized for repair costs.  For the three months ended September 30, 2010, we recognized approximately $2.3 million of income tax benefit related to repair cost deductions. Consolidated income tax expense for the nine months ended Sept. 30, 2010 was $18.0 million as compared with $7.9 million in the same period of 2009.  The effective tax rate in 2010 was 24.7% as compared with 14.1% for the same period of 2009, and we expect our effective tax rate for 2010 to be approximately 25%.  The reduction in effective tax rate versus the statutory rate in 2010 is primarily due to a tax benefit of $6.9 million recognized for repair costs.

Results from Operations

Electric gross margin for the quarter ended Sept. 30, 2010, was $110.9 million, compared with $106.1 million for the same period of 2009.  The increase in margin is due largely to a weather-related increase in South Dakota retail volumes and to a lesser extent increased average usage in Montana, higher demand to transmit energy for others across our lines, and an interim increase in Montana rates (subject to refund).   These increases were offset in part by a decrease in property taxes included in a tracker as compared with the same period in 2009 and lower average wholesale prices in South Dakota

Retail electric volumes for the quarter ended Sept. 30, 2010, totaled 2,522,000 megawatt hours compared with 2,487,000 megawatt hours for the quarter ended Sept. 30, 2009.  Retail residential and commercial volumes increased from favorable weather and customer growth, while industrial volumes declined in Montana due primarily to the weaker economy.  Wholesale electric volumes were 258,000 megawatt hours for the quarter ended Sept. 30, 2010, an increase from 190,000 megawatt hours for the same period in 2009.  Wholesale volumes increased in Montana due to higher plant availability, while wholesale volumes decreased in South Dakota with lower plant utilization due to market conditions.

Electric gross margin for the nine months ended Sept. 30, 2010, was $326.2 million compared with $321.2 million for the same period of 2009.  

Retail electric volumes for the nine months ended Sept. 30, 2010 totaled 7,390,000 megawatt hours compared with 7,448,000 megawatt hours for the nine months ended Sept. 30, 2009.  Wholesale electric volumes were 779,000 megawatt hours for the nine months ended Sept. 30, 2010, an increase from 587,000 megawatt hours for the same period in 2009.  

Natural gas gross margin was $23.7 million for the quarter ended Sept. 30, 2010, compared with $21.9 million during the third quarter of 2009.  This increase in margin is primarily due to an increase in Montana property taxes included in a tracker as compared with the same period in 2009 and increased retail gas volumes in Montana due to higher average usage per customer. Revenues related to property taxes fluctuate depending upon volumes and estimated property tax expense.

Retail natural gas volumes were 2,318,000 dekatherms for the quarter ended Sept. 30, 2010 compared with 2,163,000 dekatherms for the same period in 2009.  

Natural gas gross margin was $101.3 million for the nine months ended Sept. 30, 2010 compared with $100.2 million during the same period of 2009.  

Retail natural gas volumes were 21,405,000 dekatherms for the nine months ended Sept. 30, 2010, compared with 21,450,000 dekatherms for the same period in 2009.  The decline in volumes is primarily due to warmer winter weather in Montana during the first quarter of 2010.

Liquidity and Capital Resources

As of Sept. 30, 2010, our total net liquidity was approximately $147.1 million, including $6.6 million of cash and $140.5 million of revolving credit facility availability.  Revolver availability was $142.5 million as of Oct. 22, 2010.  

Cash provided by operating activities totaled $188.3 million for the nine months ended Sept. 30, 2010, as compared with $129.3 million during the nine months ended Sept. 30, 2009. This increase in operating cash flows is primarily related to a decrease in contributions to the qualified pension plans of $64.4 million, as compared with the same period in 2009, and an increase in deposits received related to transmission interconnection requests of approximately $12.0 million, which were offset in part by a $10.8 million prepayment of a power purchase agreement in 2009.

Cash used in investing activities increased by approximately $62.6 million as compared with the nine months ended September 30, 2009 due primarily to increased property, plant and equipment additions related to the Mill Creek Generating Station project and Battle Creek Field acquisition.

Cash used in financing activities totaled approximately $8.0 million during the nine months ended Sept. 30, 2010, as compared with $19.1 million during the same period in 2009. During the nine months ended Sept. 30, 2010, we made net debt repayments of $6.1 million, received proceeds from net revolver borrowings of $43.0 million, paid deferred financing costs of $8.0 million and paid dividends on common stock of $36.7 million.  During the nine months ended Sept. 30, 2009, we received net proceeds from the issuance of debt of $249.8 million, made net debt repayments of $221.8 million, paid deferred financing costs of $10.4 million and paid dividends on common stock of $36.1 million.

Rate Case Update

In October 2009, the Company filed a request with the MPSC for an annual electric transmission and distribution revenue increase of $15.5 million, and an annual natural gas transmission, storage and distribution revenue increase of $2.0 million.  In September 2010, the Company and the MCC filed a joint Stipulation and Settlement Agreement ("Stipulation") regarding the rate filing.  Specific terms of the Stipulation, which is subject to MPSC approval, include:

  • An increase in base electric rates of $7.7 million;
  • A decrease in base natural gas rates of approximately $1.0 million; and
  • An authorized overall rate of return of 7.92 percent, using an authorized rate of return on equity of 10.25 percent, cost of long-term debt of 5.76 percent and a capital structure of 52 percent debt and 48 percent equity.

A hearing on the rate case was held in September 2010, and the Company expects the MPSC to issue a final order during the fourth quarter of 2010.  The MPSC approved interim rates, subject to refund, that went into effect on July 8, 2010.  The Company recognized $1.6 million in revenues during the third quarter, consistent with the proposed Stipulation.

2010 Earnings Outlook

NorthWestern reaffirms its earnings outlook for 2010 to be $1.95 - $2.10 per fully diluted share.  

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

  • Excludes approximately $.06/share for the 2010 estimated effect of the Montana rate increase proposed by the Stipulation, which is pending approval by the MPSC;
  • The release of the second quarter 2010 valuation allowance of approximately $.06/share against certain state NOL carryforwards is excluded from the earnings outlook;
  • The tax benefit associated with the IRS approval of a tax accounting method to deduct repairs is included in the earnings outlook;
  • Fully diluted average shares outstanding of 36.5 million; and
  • Normal weather in the Company's electric and natural gas service territories for the remainder of 2010.

Dividend

NorthWestern's Board of Directors declared a quarterly common stock dividend of 34 cents per share, payable on Dec. 31, 2010, to common shareholders of record as of Dec. 15, 2010.

Company Hosting Investor Conference Call

NorthWestern will host an investor conference call today at 4:00 p.m. Eastern Time to review its financial results for the quarter ended Sept. 30, 2010.

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 5:00 pm Eastern Time today through Nov. 28, 2010, at 800-475-6701, access code 174792.

About NorthWestern Energy

NorthWestern Energy is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 661,000 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 "2010 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 adverse effect on our liquidity, results of operations and financial condition;
  • 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 CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(in thousands, except per share amounts)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2010

2009

2010

2009

Revenues

  Electric

$

203,585

$

198,416

$

592,262

$

579,277

  Gas                                                                   

36,963

34,179

225,882

253,976

  Other                                                                  

270

291

906

6,249

    Total Revenues                                                         

240,818

232,886

819,050

839,502

Operating Expenses

  Cost of sales                                                            

105,922

105,183

390,685

420,033

  Operating, general and administrative                                         

58,437

57,893

173,871

184,210

  Property and other taxes                                                   

20,535

20,866

68,487

63,401

  Depreciation                                                             

22,825

21,977

68,697

66,959

    Total Operating Expenses                                                 

207,719

205,919

701,740

734,603

Operating Income                                                          

33,099

26,967

117,310

104,899

Interest Expense, net                                                       

(16,306)

(17,267)

(49,413)

(50,403)

Other Income                                                             

2,315

403

4,921

1,192

Income Before Income Taxes                                                 

19,108

10,103

72,818

55,688

Income Tax (Expense) Benefit                                                

(4,729)

8,797

(18,030)

(7,877)

Net Income                                                               

$

14,379

$

18,900

$

54,788

$

47,811

Average Common Shares Outstanding                                         

36,196

35,968

36,181

35,947

Basic Earnings per Average Common Share                                     

$

0.40

$

0.53

$

1.51

$

1.33

Diluted Earnings per Average Common Share                                    

$

0.40

$

0.52

$

1.51

$

1.32

Dividends Declared per Average Common Share                                 

$

0.340

$

0.335

$

1.02

$

1.01

NORTHWESTERN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

September 30,

2010

December 31, 2009

(unaudited)

ASSETS

Current Assets                                   

$

253,778

$

264,827

Property, Plant, and Equipment, Net                   

2,075,215

1,964,121

Goodwill                                         

355,128

355,128

Regulatory Assets                                 

179,517

182,382

Other Noncurrent Assets                           

35,736

28,674

Total Assets                               

$

2,899,374

$

2,795,132

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Maturities of Long-term Debt and Capital Leases   

$

7,839

$

7,320

Current Liabilities                                 

291,478

287,672

Long-term Capital Leases                           

34,619

35,570

Long-term Debt                                   

1,017,764

981,296

Noncurrent Regulatory Liabilities                     

247,724

238,332

Deferred Income Taxes                             

194,158

161,188

Other Noncurrent Liabilities                         

295,757

296,730

Total Liabilities                             

2,089,339

2,008,108

Total Shareholders' Equity                       

810,035

787,024

Total Liabilities and Shareholders' Equity          

$

2,899,374

$

2,795,132

NORTHWESTERN CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

(in thousands)

Nine Months Ended September 30,

2010

2009

Operating Activities

Net income                                                           

$

54,788

$

47,811

Non-cash items                                                       

98,721

95,416

Changes in operating assets and liabilities                                   

34,801

(13,916)

Cash Provided by Operating Activities                                 

188,310

129,311

Cash Used in Investing Activities                                      

(178,078)

(115,529)

Cash Used in Financing Activities                                      

(8,015)

(19,031)

Net Increase (Decrease) in Cash and Cash Equivalents                   

$

2,217

$

(5,249)

Cash and Cash Equivalents, beginning of period                              

$

4,344

$

11,292,

Cash and Cash Equivalents, end of period                              

$

6,561

$

6,043

NORTHWESTERN CORPORATION

ELECTRIC SEGMENT

Three Months Ended September 30, 2010

(Unaudited)

Results

2010

2009

Change

% Change

(in millions)

Retail revenue                     

$

173.0

$

163.3

$

9.7

5.9

%

Transmission                      

12.5

11.2

1.3

11.6

Wholesale                         

11.5

11.1

0.4

3.6

Regulatory amortization and other     

6.6

13.1

(6.5)

(49.6)

Total Revenues                   

203.6

198.7

4.9

2.5

Total Cost of Sales               

92.7

92.6

0.1

0.1

Gross Margin                    

$

110.9

$

106.1

$

4.8

4.5

%

Revenues

Megawatt Hours (MWH)

Avg. Customer Counts

2010

2009

2010

2009

2010

2009

(in thousands)

Retail Electric

     Montana         

$

51,731

$

49,248

523

515

269,750

267,382

     South Dakota     

12,441

10,776

149

122

48,464

48,256

  Residential       

64,172

60,024

672

637

318,214

315,638

     Montana         

73,345

70,030

828

828

61,125

60,602

     South Dakota     

17,372

16,539

248

230

11,911

11,792

  Commercial       

90,717

86,569

1,076

1,058

73,036

72,394

     Industrial         

8,612

8,079

694

717

71

71

     Other            

9,462

8,592

80

75

7,607

7,728

Total Retail Electric  

$

172,963

$

163,264

2,522

2,487

398,928

395,831

Wholesale Electric

     Montana         

$

10,524

$

9,464

205

126

N/A

N/A

     South Dakota     

1,040

1,636

53

64

N/A

N/A

Total Wholesale Electric

$

11,564

$

11,100

258

190

N/A

N/A

2010 as compared to:

Cooling Degree Days

2009

Historic Average

Montana                   

29% cooler

25% cooler

South Dakota               

87% warmer

17% warmer

NORTHWESTERN CORPORATION

ELECTRIC SEGMENT

Nine Months Ended September 30, 2010

(Unaudited)

Results

2010

2009

Change

% Change

(in millions)

Retail revenue                

$

493.1

$

494.8

$

(1.7)

(0.3)

%

Transmission                 

35.0

33.5

1.5

4.5

Wholesale                   

34.5

32.8

1.7

5.2

Regulatory amortization and other 

29.7

19.0

10.7

56.3

Total Revenues             

592.3

580.1

12.2

2.1

Total Cost of Sales          

266.1

258.9

7.2

2.8

Gross Margin               

$

326.2

$

321.2

$

5.0

1.6

%

Revenues

Megawatt Hours (MWH)

Avg. Customer Counts

2010

2009

2010

2009

2010

2009

(in thousands)

Retail Electric

     Montana       

$

162,540

$

162,708

1,698

1,682

270,348

268,337

     South Dakota   

34,775

33,818

435

402

48,435

48,211

  Residential     

197,315

196,526

2,133

2,084

318,783

316,548

     Montana       

203,203

203,324

2,357

2,373

60,900

60,374

     South Dakota   

48,118

47,960

700

660

11,794

11,656

  Commercial    

251,321

251,284

3,057

3,033

72,694

72,030

     Industrial       

24,508

27,292

2,055

2,183

71

72

     Other         

20,002

19,743

145

148

6,011

6,070

Total Retail Electric

$

493,146

$

494,845

7,390

7,448

397,559

394,720

Wholesale Electric

     Montana       

$

30,689

$

28,355

597

426

N/A

N/A

     South Dakota   

3,796

4,429

182

161

N/A

N/A

Total Wholesale Electric

$

34,485

$

32,784

779

587

N/A

N/A

2010 as compared to:

Cooling Degree Days

2009

Historic Average

Montana                   

28% cooler

27% cooler

South Dakota               

85% warmer

15% warmer

NORTHWESTERN CORPORATION

NATURAL GAS SEGMENT

Three Months Ended September 30, 2010

(Unaudited)

Results

2010

2009

Change

% Change

(in millions)

Retail revenue       

$

25.4

$

23.0

$

2.4

10.4

%

Wholesale and other 

11.5

11.2

0.3

2.7

Total Revenues   

36.9

34.2

2.7

7.9

Total Cost of Sales 

13.2

12.3

0.9

7.3

Gross Margin     

$

23.7

$

21.9

$

1.8

8.2

%

Revenues

Dekatherms (Dkt)

Customer Counts

2010

2009

2010

2009

2010

2009

(in thousands)

Retail Gas

     Montana     

$

11,391

$

10,259

940

822

156,925

155,546

     South Dakota 

1,714

1,698

120

124

36,844

36,353

     Nebraska     

2,136

1,973

157

164

36,121

36,008

  Residential   

15,241

13,930

1,217

1,110

229,890

227,907

     Montana     

6,476

5,987

582

527

21,920

21,780

     South Dakota 

1,557

1,357

198

212

5,810

5,749

     Nebraska     

1,875

1,560

299

297

4,488

4,408

  Commercial   

9,908

8,904

1,079

1,036

32,218

31,937

     Industrial     

160

134

16

12

282

293

     Other        

61

58

6

5

146

142

Total Retail Gas 

$

25,370

$

23,026

2,318

2,163

262,536

260,279

2010 as compared with:

Heating Degree-Days

2009

Historic Average

Montana                           

60% cooler

4% cooler

South Dakota                       

45% warmer

48% warmer

Nebraska                           

54% warmer

54% warmer

NORTHWESTERN CORPORATION

NATURAL GAS SEGMENT

Nine Months Ended September 30, 2010

(Unaudited)

Results

2010

2009

Change

% Change

(in millions)

Retail revenue       

$

189.4

$

217.9

$

(28.5)

(13.1)

%

Wholesale and other 

36.5

36.4

0.1

0.3

Total Revenues 

225.9

254.3

(28.4)

(11.2)

Total Cost of Sales

124.6

154.1

(29.5)

(19.1)

Gross Margin   

$

101.3

$

100.2

$

1.1

1.1

%

Revenues

Dekatherms (Dkt)

Customer Counts

2010

2009

2010

2009

2010

2009

(in thousands)

Retail Gas

     Montana       

$

75,852

$

86,934

8,198

8,338

157,694

156,662

     South Dakota   

20,778

26,132

2,141

2,251

37,167

36,676

     Nebraska      

19,248

22,432

2,045

1,981

36,457

36,360

  Residential     

115,878

135,498

12,384

12,570

231,318

229,698

     Montana       

38,545

44,401

4,188

4,311

22,029

21,945

     South Dakota   

18,474

19,984

2,438

2,282

5,880

5,810

     Nebraska      

14,617

16,152

2,175

2,094

4,542

4,496

  Commercial    

71,636

80,537

8,801

8,687

32,451

32,251

     Industrial       

1,239

1,149

140

114

287

296

     Other         

625

727

80

79

146

142

Total Retail Gas   

$

189,378

$

217,911

21,405

21,450

264,202

262,387

2010 as compared with:

Heating Degree-Days

2009

Historic Average

Montana                       

3% cooler

3% warmer

South Dakota                   

5% warmer

Remained flat

Nebraska                       

4% cooler

2% cooler

NORTHWESTERN CORPORATION

SEGMENT RESULTS

(Unaudited)

(in thousands)

Three Months Ended

September 30, 2010

Electric

Gas

Other

Eliminations

Total

Operating revenues                                                   

$

203,585

$

36,963

$

270

$

$

240,818

Cost of sales                                                         

92,691

13,231

105,922

Gross margin                                                        

110,894

23,732

270

134,896

Operating, general and administrative                                     

42,331

17,429

(1,323)

58,437

Property and other taxes                                               

15,569

5,041

(75)

20,535

Depreciation                                                         

18,439

4,378

8

22,825

Operating income (loss)                                                

34,555

(3,116)

1,660

33,099

Interest expense                                                     

(12,202)

(3,116)

(988)

(16,306)

Other income                                                         

2,109

179

27

2,315

Income tax (expense) benefit                                           

(6,551)

3,543

(1,721)

(4,729)

Net income (loss)                                                     

$

17,911

$

(2,510)

$

(1,022)

$

$

14,379

Three Months Ended

September 30, 2009

Electric

Gas

Other

Eliminations

Total

Operating revenues                                                   

$

198,689

$

34,205

$

291

$

(299)

$

232,886

Cost of sales                                                         

92,592

12,326

265

105,183

Gross margin                                                        

106,097

21,879

26

(299)

127,703

Operating, general and administrative                                     

40,834

17,701

(343)

(299)

57,893

Property and other taxes                                               

15,351

5,479

36

20,866

Depreciation                                                         

17,772

4,197

8

21,977

Operating income (loss)

32,140

(5,498)

325

26,967

Interest expense                                                     

(13,056)

(3,243)

(968)

(17,267)

Other income                                                         

310

67

26

403

Income tax (expense) benefit                                           

789

5,694

2,314

8,797

Net income (loss)                                                     

$

20,183

$

(2,980)

$

1,697

$

$

18,900

NORTHWESTERN CORPORATION

SEGMENT RESULTS

(Unaudited)

(in thousands)

Nine Months Ended

September 30, 2010

Electric

Gas

Other

Eliminations

Total

Operating revenues                                                    

$

592,262

$

225,882

$

906

$

$

819,050

Cost of sales                                                         

266,052

124,633

390,685

Gross margin                                                         

326,210

101,249

906

428,365

Operating, general and administrative                                       

124,220

52,455

(2,804)

173,871

Property and other taxes                                                

50,625

17,853

9

68,487

Depreciation                                                          

55,562

13,110

25

68,697

Operating income                                                      

95,803

17,831

3,676

117,310

Interest expense                                                       

(37,309)

(9,717)

(2,387)

(49,413)

Other income                                                         

4,515

326

80

4,921

Income tax (expense) benefit                                             

(17,490)

(1,041)

501

(18,030)

Net income                                                           

$

45,519

$

7,399

$

1,870

$

$

54,788

Nine Months Ended

September 30, 2009

Electric

Gas

Other

Eliminations

Total

Operating revenues                                                   

$

580,139

$

254,338

$

6,248

$

(1,223)

$

839,502

Cost of sales                                                         

258,964

154,105

6,964

420,033

Gross margin                                                         

321,175

100,233

(716)

(1,223)

419,469

Operating, general and administrative                                      

128,575

58,806

(1,948)

(1,223)

184,210

Property and other taxes                                               

46,433

16,857

111

63,401

Depreciation                                                         

54,113

12,821

25

66,959

Operating income                                                     

92,054

11,749

1,096

104,899

Interest expense                                                      

(37,963)

(9,629)

(2,811)

(50,403)

Other income                                                         

783

322

87

1,192

Income tax (expense) benefit                                            

(12,066)

1,571

2,618

(7,877)

Net income                                                           

$

42,808

$

4,013

$

990

$

$

47,811

SOURCE NorthWestern Corporation



RELATED LINKS

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