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NW Natural Holdings Reports Second Quarter 2021 Results

Northwest Natural Holding Company, (NYSE: NWN) (NW Natural Holdings), reported financial results and highlights including:

  • Reported a net loss of $0.02 per share for the second quarter of 2021, compared to a net loss of $0.17 per share from continuing operations for the same period in 2020
  • Earned net income of $1.92 per share for the first six months of 2021, compared to earnings from continuing operations of $1.41 per share for the same period in 2020
  • Added nearly 12,000 natural gas meters in the last 12 months with a growth rate of 1.6%
  • Filed a multi-party settlement in the Washington general rate case
  • Continued working to contract for renewable natural gas, including issuing a request for proposal in July 2021
  • Reaffirmed 2021 earnings guidance in the range of $2.40 to $2.60 per share

"The Company continues to perform well, and we're executing on our growth opportunities," said David H. Anderson, president and CEO of NW Natural Holdings. "Our mission is to continue providing essential energy and water services to customers safely and reliably, striving to put renewables on our natural gas pipeline, and investing in water and wastewater utilities."

For the second quarter of 2021, net income increased $4.4 million to a $0.7 million net loss (or $0.02 per share), compared to a net loss from continuing operations of $5.1 million (or $0.17 per share) for the same period in 2020. Results reflected new rates in Oregon for our natural gas utility, customer growth, and lower financial impacts from COVID-19, partially offset by higher operations and maintenance expenses and higher depreciation and general tax expenses as we continued to invest in our gas utility system.

Year-to-date net income increased $15.7 million to $58.8 million (or $1.92 per share), compared to $43.1 million (or $1.41 per share) for the same period in 2020. Results reflected new rates in Oregon for our natural gas utility, customer growth, and lower financial impacts from COVID-19, partially offset by higher depreciation and general tax expenses and higher operations and maintenance expenses. In addition, net income from our other activities increased primarily due to higher asset management revenues.

KEY EVENTS AND INITIATIVES

The after-tax drivers below are based on a statutory tax rate of 26.5%.

Settlement Filed in NW Natural's Washington General Rate Case

On December 18, 2020, NW Natural filed a request for a general rate increase with the Washington Utilities and Transportation Commission (WUTC). Approximately 10% of NW Natural’s revenues are derived from its Washington customers. The original filing included a requested increase in annual revenue requirements over two years to recover operating costs and infrastructure and technology investments. This included a $6.3 million increase in the first year beginning November 1, 2021 (Year One) and a $3.2 million increase in the second year beginning November 1, 2022 (Year Two).

On July 27, 2021, NW Natural and other parties filed a settlement with the WUTC. Under the multi-party settlement, NW Natural's revenue requirement would increase $5.0 million in Year One and up to an additional $3.0 million increase in Year Two. The settlement included a cost of capital of 6.814% for both years and rate base of $247.3 million as of November 1, 2022 or an increase of $31.2 million for Year 1 and $21.4 million for Year 2. The settlement is subject to review and approval by the WUTC with new rates requested to take effect Nov. 1, 2021.

Coronavirus (COVID-19)

NW Natural Holdings continues to operate with a focus on the safety of our employees and customers. We benefit from a resilient business model with nearly 90% of our natural gas utility margin coming from the residential and commercial sectors and a majority of our utility margin decoupled and weather normalized. Customer growth from residential construction and conversions remained strong. The number of commercial customers has been stable for several consecutive quarters. The customer growth rate was 1.6% for the 12 months ended June 30, 2021.

We estimate the financial effects of COVID-19 in the income statement to be $1.7 million (after-tax) for the first half of 2021, compared to approximately $4 million (after-tax) for the same period in 2020. The change in financial effects year-over-year includes $1.8 million (after-tax) from 2020 that was subsequently deferred to a regulatory asset in the third quarter of 2020. The 2021 financial effects include $0.7 million (after-tax) of revenue we expect to recognize in a future period related to forgone late fees. The remaining $1.0 million (after-tax) will not be recovered through rates as it primarily relates to lower natural gas distribution margin from customers that stopped natural gas service and lower usage from customers that are not covered under decoupled rate schedules.

February 2021 Winter Weather Event

In February 2021, NW Natural experienced a severe winter storm in its service territory. This event coincided with the weather event that affected much of the mid-continent of the United States and resulted in elevated gas prices across the country. To meet expected demand, we purchased additional natural gas supplies at higher than anticipated prices. However, our third-party marketer provided incremental asset management revenues, which more than offset the cost of the incremental gas purchases. The effect of these transactions was a $6.5 million benefit for customers and a net benefit to shareholders of $2.8 million (after-tax) from the combined effect of asset management revenues reflected in NW Natural's other segment offset by lower utility margin from a loss on the Oregon gas cost incentive sharing mechanism.

Renewable Natural Gas (RNG)

NW Natural continues to pursue RNG for the natural gas pipeline under the landmark Oregon Senate Bill 98, which supports renewable energy procurement and investment by natural gas utilities. NW Natural has options to invest up to a total estimated $38 million in four separate RNG development projects that will access biogas derived from water treatment at Tyson Foods’ processing plants. Construction on our first RNG facility with BioCarbN and Tyson Foods' is expected to begin in September 2021 with completion and commissioning planned for early 2022. In July 2021, we signed a multi-year RNG purchase agreement with Element Markets. With the addition of this most recent contract, NW Natural has signed agreements with options to purchase or develop RNG totaling about 2% of NW Natural’s annual sales volume in Oregon, enough to heat about 36,000 homes. Additionally, in July 2021, NW Natural initiated a request for proposal (RFP) for additional RNG purchase or investment opportunities.

2020 Environment, Social, and Governance (ESG) Report Issued

On August 2, 2021, we issued our second ESG report, which outlines some of the important work NW Natural Holdings is focused on. The report highlights our longstanding commitments and progress related to safety, environmental stewardship, and taking care of our employees and communities. It also features goals that we're pursuing related to a renewable future and carbon neutral vision for our gas utility, diversifying into and growing our water and wastewater utility business, and actively working to continue advancing diversity, equity and inclusion in our workplace and our wider community. Additional information is available on our investor relations website.

SECOND QUARTER RESULTS

The following financial comparisons are for the second quarter of 2021 and 2020 with individual year-over-year drivers below presented on an after-tax basis using a statutory tax rate of 26.5% unless otherwise noted.

NW Natural Holdings' second quarter results are summarized by business segment in the table below:

 

Three Months Ended June 30,

 

2021

 

2020

 

Change

In thousands, except per share data

Amount

Per Share

 

Amount

Per Share

 

Amount

Per Share

Net income (loss) from continuing operations:

 

 

 

 

 

 

 

 

Natural Gas Distribution segment

(1,381

)

$

(0.05

)

 

$

(6,347

)

$

(0.21

)

 

$

4,966

 

$

0.16

 

Other

657

 

0.03

 

 

1,215

 

0.04

 

 

(558

)

(0.01

)

Consolidated

$

(724

)

$

(0.02

)

 

$

(5,132

)

$

(0.17

)

 

$

4,408

 

$

0.15

 

 

 

 

 

 

 

 

 

 

Diluted Shares

 

30,664

 

 

 

30,537

 

 

 

127

 

Natural Gas Distribution Segment

Natural Gas Distribution segment net income increased $5.0 million (or $0.16 per share) primarily reflecting new rates in Oregon as a result of a general rate case, which was effective beginning Nov. 1, 2020 and lower COVID financial impacts.

Margin increased $8.5 million reflecting new rates in Oregon and customer growth, which collectively contributed $7.0 million. In addition, lower COVID financial impacts contributed $0.4 million.

Operations and maintenance expense increased $2.6 million as a result of higher expenses mainly from higher employee benefit costs, professional service fees, and higher lease expense associated with our new headquarters and operations center, partially offset by lower expenses related to COVID. Depreciation expense and general taxes increased $2.3 million related to higher property, plant, and equipment as we continue to invest in our system.

Interest expense decreased $0.8 million mainly due to repaying the financings undertaken in March 2020 as a precautionary measure to support liquidity as the pandemic unfolded.

Other

Other net income decreased $0.6 million (or $0.01 per share) reflecting higher project costs at the holding company.

YEAR-TO-DATE RESULTS

The following financial comparisons are for the first six months of 2021 and 2020 with individual year-over-year drivers below presented on an after-tax basis using a statutory tax rate of 26.5% unless otherwise noted.

NW Natural Holdings' year-to-date results are summarized by business segment in the table below:

 

Six Months Ended June 30,

 

2021

 

2020

 

Change

In thousands, except per share data

Amount

Per Share

 

Amount

Per Share

 

Amount

Per Share

Net income from continuing operations:

 

 

 

 

 

 

 

 

Natural Gas Distribution segment

$

52,544

 

$

1.71

 

 

$

41,596

 

$

1.36

 

 

$

10,948

 

$

0.35

 

Other

6,249

 

0.21

 

 

1,548

 

0.05

 

 

4,701

 

0.16

 

Consolidated

$

58,793

 

$

1.92

 

 

$

43,144

 

$

1.41

 

 

$

15,649

 

$

0.51

 

 

 

 

 

 

 

 

 

 

Diluted Shares

 

30,671

 

 

 

30,559

 

 

 

112

 

Natural Gas Distribution Segment

Natural Gas Distribution segment net income increased $10.9 million (or $0.35 per share) primarily reflecting new rates in Oregon as a result of a general rate case, which was effective beginning Nov. 1, 2020 and lower COVID financial impacts.

Margin increased $22.1 million reflecting new rates in Oregon and customer growth, which collectively contributed $22.6 million. This was partially offset by a $2.1 million increase in loss from the gas cost incentive sharing mechanism as a result of purchasing higher priced gas during a February cold weather event than what was forecasted for the year.

Operations and maintenance expense increased $4.7 million as a result of higher expenses mainly from increased employee compensation and benefit costs, higher lease expense associated with our new headquarters and operations center, and professional service fees, partially offset by lower costs associated with COVID. Depreciation expense and general taxes increased $5.5 million related to higher property, plant, and equipment.

Other

Other net income increased $4.7 million (or $0.16 per share) reflecting $5.3 million of higher net income from NW Natural's other activities offset by a loss of $0.6 million from NW Natural Holdings' other activities. For NW Natural, the benefit in other activities was primarily driven by higher asset management revenues from the aforementioned February 2021 weather event. NW Natural Holdings' other activities reported higher project costs at the holding company.

BALANCE SHEET AND CASH FLOWS

During the first six months of 2021, the Company generated $194.3 million in operating cash flows or an increase of $32.2 million compared to the same period in 2020 due to higher net income and lower net working capital requirements. The Company used $127.9 million in investing activities during the first six months of 2021 primarily for natural gas utility capital expenditures, compared to $160.4 million used in investing activities during the same period in 2020 for utility capital expenditures and the acquisition of several water and wastewater utilities. Net cash used in financing activities was $73.5 million for the first six months of 2021 or a change of $201.8 million compared to the same period in 2020 primarily due to several financings undertaken in March 2020 that strengthened our liquidity position as a precaution as the COVID-19 pandemic unfolded. As of June 30, 2021, NW Natural Holdings held cash of $20.1 million.

2021 GUIDANCE

NW Natural Holdings reaffirmed 2021 earnings guidance in the range of $2.40 to $2.60 per share. This guidance assumes continued customer growth, average weather conditions, and no significant changes in prevailing regulatory policies, mechanisms, or outcomes, or significant local, state or federal laws, legislation or regulations.

DIVIDEND DECLARED

In 2021, the Board of Directors of NW Natural Holdings declared a quarterly dividend of $0.48 cents per share on the Company’s common stock. The dividend is payable on August 13, 2021 to shareholders of record on July 30, 2021, reflecting an annual indicated dividend rate of $1.92 per share. Future dividends are subject to Board of Director discretion and approval.

CONFERENCE CALL AND WEBCAST

As previously announced, NW Natural Holdings will host a conference call and webcast today to discuss its second quarter 2021 financial and operating results.

Date and Time:

Thursday, August 5, 2021

8 a.m. PT (11 a.m. ET)

 

Phone Numbers:

United States: 1-866-267-6789

Canada: 1-855-669-9657

International: 1-412-902-4110

The call will also be webcast in a listen-only format for the media and general public and can be accessed at ir.nwnaturalholdings.com. A replay of the conference call will be available on our website and by dialing 1-877-344-7529 (U.S.), 1-855-669-9658 (Canada), and 1-412-317-0088 (international). The replay access code is 10154449.

ABOUT NW NATURAL HOLDINGS

Northwest Natural Holding Company, (NYSE: NWN) (NW Natural Holdings), is headquartered in Portland, Oregon and has been doing business for over 160 years in the Pacific Northwest. It owns NW Natural Gas Company (NW Natural), NW Natural Water Company (NW Natural Water), and other business interests.

NW Natural is a local distribution company that currently provides natural gas service to approximately 2.5 million people in more than 140 communities through more than 780,000 meters in Oregon and Southwest Washington with one of the most modern pipeline systems in the nation. NW Natural consistently leads the industry with high J.D. Power & Associates customer satisfaction scores. NW Natural owns and operates 20 Bcf of underground gas storage capacity in Oregon.

NW Natural Water provides water distribution and wastewater services to communities throughout the Pacific Northwest and Texas. NW Natural Water currently serves approximately 64,000 people through about 27,000 connections. Learn more about our water business at nwnaturalwater.com.

Additional information is available at nwnaturalholdings.com.

Forward-Looking Statements

This report, and other presentations made by NW Holdings from time to time, may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipates," "assumes," "intends," "plans," "seeks," "believes," "estimates," "expects" and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements regarding the following: plans, objectives, assumptions, estimates, expectations, timing, goals, strategies, commitments, future events, investments, capital expenditures, targeted capital structure, risks, risk profile, stability, acquisitions and timing, completion and integration thereof, the likelihood and success associated with any transaction, utility system and infrastructure investments, system modernization, reliability and resiliency, global, national and local economies, customer and business growth, customer satisfaction ratings, weather, performance and service during weather events, customer rates or rate recovery and the timing and magnitude of potential rate changes, environmental remediation cost recoveries, environmental initiatives, decarbonization and the role of natural gas and the gas delivery system, including use of renewable sources, renewable natural gas purchases, projects or investments and timing, magnitude and completion thereof, renewable hydrogen projects or investments and timing, magnitude and completion thereof, procurement of renewable natural gas or hydrogen for customers, strategic goals and visions, the water and wastewater acquisition and investment strategy and financial effects of water and wastewater acquisitions, diversity, equity and inclusion initiatives, operating plans of third parties, financial results, including estimated income, availability and sources of liquidity, expenses, positions, revenues, returns, cost of capital, timing, and earnings and earnings guidance, dividends, commodity costs and sourcing asset management activities, performance, timing, outcome, or effects of regulatory proceedings or mechanisms or approvals, including WUTC approval of the Washington general rate case multi-party settlement, regulatory prudence reviews, anticipated regulatory actions or filings, accounting treatment of future events, effects of legislation or changes in laws or regulations, effects, extent, severity and duration of COVID-19 and resulting economic disruption, the impact of mitigating factors and other efforts to mitigate risks posed by its spread, ability of our workforce, customers or suppliers to operate or conduct business, COVID-19 financial impact, expenses, cost savings measures and cost recovery including through regulatory deferrals and the timing and magnitude thereof, impact on capital projects, governmental actions and timing thereof, including actions to reopen the economy, and other statements that are other than statements of historical facts.

Forward-looking statements are based on current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual results may differ materially from those contemplated by the forward-looking statements. You are therefore cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future operational, economic or financial performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed by reference to the factors described in Part I, Item 1A "Risk Factors", and Part II, Item 7 and Item 7A "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosure about Market Risk" in the most recent Annual Report on Form 10-K and in Part I, Items 2 and 3 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosures About Market Risk", and Part II, Item 1A, "Risk Factors", in the quarterly reports filed thereafter.

All forward-looking statements made in this report and all subsequent forward-looking statements, whether written or oral and whether made by or on behalf of NW Holdings or NW Natural, are expressly qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, and NW Holdings and NW Natural undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. New factors emerge from time to time and it is not possible to predict all such factors, nor can it assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements.

NORTHWEST NATURAL HOLDINGS

Consolidated Income Statement and Financial Highlights (Unaudited)

Second Quarter 2021

 

Three Months Ended

 

Six Months Ended

 

Twelve Months Ended

 

In thousands, except per share amounts,

customer, and degree day data

June 30,

 

June 30,

 

June 30,

 

2021

 

2020

 

Change

2021

 

2020

 

Change

2021

 

2020

 

Change

Operating revenues

$

148,917

 

 

$

134,971

 

 

10

%

$

464,863

 

 

$

420,122

 

 

11

%

$

818,420

 

 

$

757,703

 

 

8

%

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of gas

41,193

 

 

41,210

 

 

 

153,403

 

 

149,748

 

 

2

 

266,410

 

 

264,095

 

 

1

 

Operations and maintenance

50,047

 

 

43,983

 

 

14

 

102,238

 

 

92,904

 

 

10

 

189,463

 

 

180,127

 

 

5

 

Environmental remediation

1,509

 

 

1,622

 

 

(7

)

5,286

 

 

5,627

 

 

(6

)

9,350

 

 

11,673

 

 

(20

)

General taxes

8,914

 

 

8,373

 

 

6

 

20,283

 

 

18,268

 

 

11

 

37,093

 

 

33,750

 

 

10

 

Revenue taxes

5,671

 

 

4,454

 

 

27

 

18,335

 

 

16,197

 

 

13

 

32,429

 

 

30,100

 

 

8

 

Depreciation and amortization

28,144

 

 

25,836

 

 

9

 

56,241

 

 

50,511

 

 

11

 

109,413

 

 

98,048

 

 

12

 

Other operating expenses

815

 

 

551

 

 

48

 

1,747

 

 

1,479

 

 

18

 

3,969

 

 

3,191

 

 

24

 

Total operating expenses

136,293

 

 

126,029

 

 

8

 

357,533

 

 

334,734

 

 

7

 

648,127

 

 

620,984

 

 

4

 

Income from operations

12,624

 

 

8,942

 

 

41

 

107,330

 

 

85,388

 

 

26

 

170,293

 

 

136,719

 

 

25

 

Other income (expense), net

(2,597

)

 

(3,040

)

 

(15

)

(6,139

)

 

(6,615

)

 

(7

)

(13,468

)

 

(12,936

)

 

4

 

Interest expense, net

11,028

 

 

12,706

 

 

(13

)

22,154

 

 

23,174

 

 

(4

)

42,032

 

 

45,000

 

 

(7

)

Income (loss) before income taxes

(1,001

)

 

(6,804

)

 

(85

)

79,037

 

 

55,599

 

 

42

 

114,793

 

 

78,783

 

 

46

 

Income tax expense (benefit)

(277

)

 

(1,672

)

 

(83

)

20,244

 

 

12,455

 

 

63

 

28,871

 

 

15,797

 

 

83

 

Net income (loss) from continuing operations

(724

)

 

(5,132

)

 

(86

)

58,793

 

 

43,144

 

 

36

 

85,922

 

 

62,986

 

 

36

 

Income (loss) from discontinued operations, net of tax

 

 

280

 

 

(100

)

 

 

(498

)

 

(100

)

7,006

 

 

(2,901

)

 

(342

)

Net income (loss)

$

(724

)

 

$

(4,852

)

 

(85

)

$

58,793

 

 

$

42,646

 

 

38

 

$

92,928

 

 

$

60,085

 

 

55

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

Average diluted for period

30,664

 

 

30,537

 

 

 

30,671

 

 

30,559

 

 

 

30,636

 

 

30,517

 

 

 

End of period

30,672

 

 

30,546

 

 

 

30,672

 

 

30,546

 

 

 

30,672

 

 

30,546

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share of common stock information:

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) from continuing operations

$

(0.02

)

 

$

(0.17

)

 

 

$

1.92

 

 

$

1.41

 

 

 

$

2.80

 

 

$

2.06

 

 

 

Diluted earnings (loss) from discontinued operations, net of tax

 

 

0.01

 

 

 

 

 

(0.01

)

 

 

0.23

 

 

(0.10

)

 

 

Diluted earnings (loss)

(0.02

)

 

(0.16

)

 

 

1.92

 

 

1.40

 

 

 

3.03

 

 

1.96

 

 

 

Dividends paid per share

0.4800

 

 

0.4775

 

 

 

0.9600

 

 

0.9550

 

 

 

1.9175

 

 

1.9075

 

 

 

Book value, end of period

30.09

 

 

28.94

 

 

 

30.09

 

 

28.94

 

 

 

30.09

 

 

28.94

 

 

 

Market closing price, end of period

52.52

 

 

55.79

 

 

 

52.52

 

 

55.79

 

 

 

52.52

 

 

55.79

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital structure, end of period:

 

 

 

 

 

 

 

 

 

Common stock equity

43.2

 

%

42.7

 

%

 

43.2

 

%

42.7

 

%

 

43.2

 

%

42.7

 

%

 

Long-term debt

42.8

 

%

44.3

 

%

 

42.8

 

%

44.3

 

%

 

42.8

 

%

44.3

 

%

 

Short-term debt (including current maturities of long-term debt)

14.0

 

%

13.0

 

%

 

14.0

 

%

13.0

 

%

 

14.0

 

%

13.0

 

%

 

Total

100.0

 

%

100.0

 

%

 

100.0

 

%

100.0

 

%

 

100.0

 

%

100.0

 

%

 

 

 

 

 

 

 

 

 

 

 

Natural Gas Distribution segment operating statistics:

 

 

 

 

 

 

 

 

 

Meters - end of period

780,279

 

 

768,304

 

 

1.6

%

780,279

 

 

768,304

 

 

1.6

%

780,279

 

 

768,304

 

 

1.6

%

Volumes in therms:

 

 

 

 

 

 

 

 

 

Residential and commercial sales

102,469

 

 

99,815

 

 

 

400,291

 

 

386,687

 

 

 

690,875

 

 

700,474

 

 

 

Industrial sales and transportation

111,245

 

 

107,398

 

 

 

244,543

 

 

241,443

 

 

 

468,726

 

 

481,025

 

 

 

Total volumes sold and delivered

213,714

 

 

207,213

 

 

 

644,834

 

 

628,130

 

 

 

1,159,601

 

 

1,181,499

 

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

Residential and commercial sales

$

120,360

 

 

$

109,399

 

 

 

$

398,944

 

 

$

364,803

 

 

 

$

695,487

 

 

$

649,391

 

 

 

Industrial sales and transportation

14,093

 

 

12,667

 

 

 

31,472

 

 

29,861

 

 

 

60,289

 

 

58,183

 

 

 

Other distribution revenues

396

 

 

5

 

 

 

986

 

 

968

 

 

 

1,944

 

 

1,755

 

 

 

Other regulated services

4,765

 

 

4,921

 

 

 

9,550

 

 

9,847

 

 

 

18,825

 

 

19,653

 

 

 

Total operating revenues

139,614

 

 

126,992

 

 

 

440,952

 

 

405,479

 

 

 

776,545

 

 

728,982

 

 

 

Less: Cost of gas

41,249

 

 

41,265

 

 

 

153,515

 

 

149,860

 

 

 

266,635

 

 

264,319

 

 

 

Less: Environmental remediation expense

1,509

 

 

1,622

 

 

 

5,286

 

 

5,627

 

 

 

9,350

 

 

11,673

 

 

 

Less: Revenue taxes

5,650

 

 

4,454

 

 

 

18,305

 

 

16,197

 

 

 

32,399

 

 

30,100

 

 

 

Margin, net

$

91,206

 

 

$

79,651

 

 

 

$

263,846

 

 

$

233,795

 

 

 

$

468,161

 

 

$

422,890

 

 

 

Degree days:

 

 

 

 

 

 

 

 

 

Average (25-year average)

305

 

 

308

 

 

 

1,631

 

 

1,650

 

 

 

2,687

 

 

2,723

 

 

 

Actual

182

 

 

189

 

 

(4

)%

1,443

 

 

1,404

 

 

3

%

2,423

 

 

2,503

 

 

(3

)%

Percent colder (warmer) than average weather

(40

)

%

(39

)

%

 

(12

)

%

(15

)

%

 

(10

)

%

(8

)

%

 

NORTHWEST NATURAL HOLDINGS

 

 

 

Consolidated Balance Sheets (Unaudited)

 

June 30,

In thousands

 

2021

 

2020

 

Assets:

 

 

Current assets:

 

 

Cash and cash equivalents

$

20,084

 

$

137,057

 

Accounts receivable

60,713

 

35,196

 

Accrued unbilled revenue

13,592

 

15,393

 

Allowance for uncollectible accounts

(3,283

)

(1,592

)

Regulatory assets

60,672

 

30,021

 

Derivative instruments

46,168

 

5,996

 

Inventories

39,024

 

44,009

 

Gas reserves

8,444

 

13,646

 

Income taxes receivable

6,000

 

 

Other current assets

22,427

 

20,318

 

Discontinued operations current assets

 

16,392

 

Total current assets

273,841

 

316,436

 

Non-current assets:

 

 

Property, plant, and equipment

3,849,792

 

3,608,902

 

Less: Accumulated depreciation

1,093,863

 

1,062,299

 

Total property, plant, and equipment, net

2,755,929

 

2,546,603

 

Gas reserves

29,852

 

41,459

 

Regulatory assets

330,710

 

324,358

 

Derivative instruments

7,912

 

3,958

 

Other investments

47,725

 

62,130

 

Operating lease right of use asset, net

76,294

 

78,566

 

Assets under sales-type leases

141,408

 

146,208

 

Goodwill

69,313

 

70,183

 

Other non-current assets

50,516

 

51,446

 

Total non-current assets

3,509,659

 

3,324,911

 

Total assets

$

3,783,500

 

$

3,641,347

 

Liabilities and equity:

 

 

Current liabilities:

 

 

Short-term debt

$

240,000

 

$

233,000

 

Current maturities of long-term debt

60,274

 

35,209

 

Accounts payable

97,854

 

79,903

 

Taxes accrued

15,143

 

18,535

 

Interest accrued

7,425

 

7,234

 

Regulatory liabilities

103,210

 

41,126

 

Derivative instruments

3,393

 

3,067

 

Operating lease liabilities

1,228

 

931

 

Other current liabilities

43,946

 

54,323

 

Discontinued operations current liabilities

 

13,574

 

Total current liabilities

572,473

 

486,902

 

Long-term debt

915,501

 

918,887

 

Deferred credits and other non-current liabilities:

 

 

Deferred tax liabilities

325,600

 

297,995

 

Regulatory liabilities

645,046

 

632,400

 

Pension and other postretirement benefit liabilities

203,854

 

218,493

 

Derivative instruments

453

 

1,658

 

Operating lease liabilities

80,088

 

80,159

 

Other non-current liabilities

117,659

 

120,852

 

Total deferred credits and other non-current liabilities

1,372,700

 

1,351,557

 

Equity:

 

 

Common stock

569,785

 

562,766

 

Retained earnings

365,501

 

331,648

 

Accumulated other comprehensive loss

(12,460

)

(10,413

)

Total equity

922,826

 

884,001

 

Total liabilities and equity

$

3,783,500

 

$

3,641,347

 

NORTHWEST NATURAL HOLDINGS

 

 

Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended June 30,

In thousands

2021

2020

Operating activities:

 

 

Net income

$

58,793

 

$

42,646

 

Adjustments to reconcile net income to cash provided by operations:

 

 

Depreciation and amortization

56,241

 

50,511

 

Regulatory amortization of gas reserves

7,597

 

8,567

 

Deferred income taxes

1,048

 

(2,004

)

Qualified defined benefit pension plan expense

7,874

 

8,892

 

Contributions to qualified defined benefit pension plans

(9,590

)

(8,470

)

Deferred environmental expenditures, net

(9,625

)

(9,897

)

Amortization of environmental remediation

5,286

 

5,627

 

Other

1,610

 

(5,931

)

Changes in assets and liabilities:

 

 

Receivables, net

73,133

 

73,954

 

Inventories

3,666

 

(52

)

Income and other taxes

21,467

 

20,966

 

Accounts payable

(17,239

)

(18,919

)

Deferred gas costs

(26,962

)

115

 

Asset optimization revenue sharing

36,872

 

(11,657

)

Decoupling mechanism

(6,860

)

4,281

 

Other, net

(9,030

)

3,967

 

Discontinued operations

 

(547

)

Cash provided by operating activities

194,281

 

162,049

 

Investing activities:

 

 

Capital expenditures

(130,108

)

(122,282

)

Acquisitions, net of cash acquired

(55

)

(37,940

)

Leasehold improvement expenditures

(163

)

(7,519

)

Proceeds from the sale of assets

2,234

 

7,905

 

Other

209

 

263

 

Discontinued operations

 

(846

)

Cash used in investing activities

(127,883

)

(160,419

)

Financing activities:

 

 

Proceeds from common stock issued

 

68

 

Long-term debt issued

55,000

 

150,000

 

Long-term debt retired

(35,000

)

(75,000

)

Proceeds from term loan due within one year

100,000

 

150,000

 

Repayments of commercial paper, maturities greater than 90 days

(195,025

)

 

Change in other short-term debt, net

30,500

 

(66,100

)

Cash dividend payments on common stock

(27,842

)

(27,679

)

Other

(1,175

)

(3,007

)

Cash (used in) provided by financing activities

(73,542

)

128,282

 

Increase (decrease) in cash, cash equivalents and restricted cash

(7,144

)

129,912

 

Cash, cash equivalents and restricted cash, beginning of period

35,454

 

12,636

 

Cash, cash equivalents and restricted cash, end of period

$

28,310

 

$

142,548

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

Interest paid, net of capitalization

$

21,971

 

$

23,156

 

Income taxes paid, net of refunds

7,405

 

544

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash:

 

 

Cash and cash equivalents

$

20,084

 

$

137,057

 

Restricted cash included in other current assets

8,226

 

5,491

 

Cash, cash equivalents and restricted cash

$

28,310

 

$

142,548

 

 

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