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NW Natural Holdings Reports Second Quarter 2022 Results

August 4, 2022

PORTLAND, Ore.--(BUSINESS WIRE)-- Northwest Natural Holding Company, (NYSE: NWN) (NW Natural Holdings), reported financial results and highlights including:

  • Reported net income of $1.7 million ($0.05 per share) for the second quarter of 2022, compared to a net loss of $0.7 million ($0.02 per share) for the same period in 2021
  • Earned net income of $58.0 million ($1.77 per share) for the first six months of 2022, compared to earnings of $58.8 million ($1.92 per share) for the same period in 2021
  • Earnings per share in 2022 was affected by a 2.9 million common share issuance on April 1, 2022
  • Added nearly 10,200 natural gas meters in the last 12 months for a growth rate of 1.3% as of June 30, 2022
  • Filed multi-party settlements in the Oregon general rate case
  • Began approval process with the Public Utility Commission of Oregon (OPUC) for a one megawatt hydrogen project
  • Reaffirmed 2022 earnings guidance in the range of $2.45 to $2.65 per share and our long-term earnings per share growth rate target of 4% to 6%

"The Company continues to perform well and serve customers safely and reliably this quarter," said David H. Anderson, president and CEO of NW Natural Holdings. "Paving the way to incorporate low-carbon energy resources into its system, NW Natural initiated the approval process with the Oregon Commission in July to develop its clean hydrogen production facility — a first-of-its-kind in Oregon. We're making progress on behalf of our customers and stakeholders as we execute on the decarbonization and growth opportunities in front of us."

For the second quarter of 2022, net income increased $2.4 million to net income of $1.7 million (or $0.05 per share), compared to a net loss of $0.7 million (or $0.02 per share) for the same period in 2021. Results reflected higher margin from customer growth and new rates in Washington for our natural gas utility and lower pension expense, partially offset by higher operations and maintenance expenses.

Year-to-date net income decreased $0.8 million to $58.0 million (or $1.77 per share), compared to $58.8 million (or $1.92 per share) for the same period in 2021. Results reflected customer growth and new rates in Washington for our natural gas utility and lower pension expense, offset by higher operations and maintenance expenses. Net income from our other activities decreased primarily due to lower asset management revenues related to a severe winter storm in February 2021. Earnings per share was affected by a 2.9 million common share issuance on April 1, 2022.

KEY EVENTS AND INITIATIVES

Settlements Reached in Oregon General Rate Case for NW Natural

On Dec. 17, 2021, NW Natural filed a request for a general rate increase with the Public Utility Commission of Oregon (OPUC). The original filing included a requested $73.5 million annual revenue requirement increase and an increase in average rate base of $294 million to support long-planned investments related to safety, reliability, and information technology upgrades.

On May 31, 2022, NW Natural, the OPUC staff, the Oregon Citizens’ Utility Board (CUB), the Alliance of Western Energy Consumers (AWEC), and the Small Business Utility Advocates (SBUA) filed a settlement with the OPUC regarding the majority of revenue requirement items in the case. Under the settlement, NW Natural's revenue requirement would increase $62.7 million. The settlement included a capital structure of 50% common equity and 50% long-term debt, return on equity of 9.4%, cost of capital of 6.836%, and rate base of $1.77 billion, or an increase of $337 million since the last rate case. The settlement is subject to review and approval by the OPUC.

On June 29, 2022, NW Natural, the OPUC staff, the Oregon CUB, AWEC, and the Coalition of Communities of Color, Climate Solutions, Verde, Columbia Riverkeeper, Oregon Environmental Council, Community Energy Project, and Sierra Club (Coalition) filed a second settlement with the OPUC addressing the following items: providing information on the decoupling calculation for new customers, foregoing deposits for new residential customers, updating the Oregon low-income energy efficiency program, and recovery of the COVID-19 deferral over the next two years beginning Nov. 1, 2022. The June settlement did not change the revenue requirement reached in the first settlement. Both settlements are subject to review and approval by the OPUC.

The remaining items in the rate case are as follows: the capital allowance provided for each new customer to connect to the system, the cost recovery and rate spread of the Lexington RNG facility, and the automatic adjustment clause for RNG investments, which allows the cost of the RNG facility to be included in rates outside a rate case.

New rates in Oregon are expected to take effect Nov. 1, 2022.

Gas Utility Submits Clean Hydrogen Project Application

In July, NW Natural filed to open a docket with the OPUC seeking approval for a one megawatt (MW) power-to-gas facility. The facility is designed to produce clean hydrogen by leveraging Eugene Water & Electric Board's (EWEB's) power generated from hydro, wind, and nuclear energy. The project is intended to be installed on EWEB's Eugene campus and generate up to 4,300 MMBtu of clean hydrogen annually to blend into NW Natural's system at up to 5% for the initial phase and up to 10% over time at this facility.

The primary objective for the project is to use NW Natural’s tight system, one of the most modern in the U.S., to begin the planning for hydrogen integration to support the Company’s decarbonization goals. The project can also provide hands-on experience in the generation, distribution and storage of low-carbon energy sources across increasingly interdependent gas and electric grids.

The project is being filed for OPUC approval under Senate Bill 844. This Bill is unique to Oregon and designed to support gas utility projects that reduce greenhouse gas emissions that would not otherwise be undertaken in the normal course of business.

This project filing follows two years of 5% hydrogen blend tests successfully completed at NW Natural’s Sherwood, Oregon operating facility.

Water and Wastewater Utilities

In May 2022, NW Natural Water signed two purchase agreements for water utilities, representing approximately 1,400 connections in Washington near its existing Cascadia Water utilities. The acquisitions received approval by the Washington Utilities and Transportation Commission in July 2022 and are expected to close in August 2022. In addition, NW Natural Water closed the purchase of a water and wastewater utility, representing approximately 150 connections in Texas.

In December 2021, NW Natural Water agreed to purchase the water and wastewater utilities of Far West Water & Sewer, Inc. located in Yuma, Arizona. In March 2022, we filed our acquisition application with the Arizona Corporation Commission and in June 2022 Arizona staff recommended approval of the Far West acquisition. The docket is currently awaiting Commission review, which is expected in August or early September.

When all pending acquisitions close, NW Natural Water will serve over 150,000 people through approximately 61,000 connections in five states.

SECOND QUARTER RESULTS

The following financial comparisons are for the second quarter of 2022 and 2021 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,

 

2022

2021

Change

In thousands, except per share data

Amount

Per Share

Amount

Per Share

Amount

Per Share

Net income (loss):

 

 

 

 

 

 

Natural Gas Distribution segment

$

157

$

$

(1,381

)

$

(0.05

)

$

1,538

$

0.05

Other

 

1,558

 

0.05

 

657

 

 

0.03

 

 

901

 

0.02

Consolidated

$

1,715

$

0.05

$

(724

)

$

(0.02

)

$

2,439

$

0.07

 

 

 

 

 

 

 

Diluted Shares

 

 

34,352

 

 

30,664

 

 

 

3,688

Natural Gas Distribution Segment

Natural gas distribution segment net income increased $1.5 million (or $0.05 per share) primarily reflecting higher margin and lower pension expense, partially offset by higher operations and maintenance expense.

Margin increased $2.3 million reflecting customer growth and new rates in Washington, which collectively contributed $1.7 million. In addition, higher usage from colder weather contributed $0.6 million, net of the loss from the Oregon gas cost incentive sharing mechanism.

Operations and maintenance expense increased $3.0 million as a result of higher expenses mainly from contractor labor for safety and reliability projects, professional service fees, and information technology costs.

Other income, net reflected a benefit of $2.1 million primarily from lower pension expense.

Other

Other net income increased $0.9 million (or $0.02 per share) reflecting $0.6 million higher net income from NW Natural's other activities driven by increased asset management revenues. In addition, NW Natural Holding's other businesses reported higher net income of $0.3 million primarily from lower business development costs.

YEAR-TO-DATE RESULTS

The following financial comparisons are for the first six months of 2022 and 2021 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,

 

2022

2021

Change

In thousands, except per share data

Amount

Per Share

Amount

Per Share

Amount

Per Share

Net income:

 

 

 

 

 

 

Natural Gas Distribution segment

$

55,547

$

1.70

$

52,544

$

1.71

$

3,003

 

$

(0.01

)

Other

 

2,407

 

0.07

 

6,249

 

0.21

 

(3,842

)

 

(0.14

)

Consolidated

$

57,954

$

1.77

$

58,793

$

1.92

$

(839

)

$

(0.15

)

 

 

 

 

 

 

 

Diluted Shares

 

 

32,805

 

 

30,671

 

 

2,134

 

Natural Gas Distribution Segment

Natural Gas Distribution segment net income increased $3.0 million (and earnings per share decreased $0.01 per share) primarily reflecting new rates in Washington as a result of a general rate case, which was effective beginning Nov. 1, 2021. Earnings per share was affected by a 2.9 million common share issuance on April 1, 2022.

Margin increased $6.1 million reflecting new rates in Washington and customer growth, which collectively contributed $4.4 million. In addition, margin increased $2.2 million due to higher usage from colder comparative weather, net of the loss from the Oregon gas cost incentive sharing mechanism. Weather was 2% warmer than average weather for the first six months of 2022, compared to 12% warmer than average weather for the same period in 2021.

Operations and maintenance expense increased $6.5 million as a result of higher contractor labor for safety and reliability projects, expenses related to information technology maintenance and support, amortization expense related to cloud-computing arrangements, and professional service fees.

Depreciation and general taxes increased $0.8 million as we continue to invest in our natural gas utility system.

Other income, net increased $3.9 million driven by lower pension costs primarily related to higher returns and lower interest costs.

Other

Other net income decreased $3.8 million (or $0.14 per share) reflecting $3.6 million lower net income from NW Natural's other activities driven by asset management revenues from a February 2021 cold weather event.

February 2021 Winter Weather Event

In February 2021, NW Natural experienced a severe winter storm in its service territory. 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 resulted in a net benefit to shareholders of $2.8 million from the combined effect of $4.6 million of asset management revenues reflected in NW Natural's other segment offset by lower utility margin from a $1.8 million of loss on the Oregon gas cost incentive sharing mechanism.

BALANCE SHEET AND CASH FLOWS

During the first six months of 2022, the Company generated $196.6 million in operating cash flows, compared to $194.3 million for the same period in 2021. The Company used $169.7 million in investing activities during the first six months of 2022 primarily for natural gas utility capital expenditures, compared to $127.9 million used in investing activities during the same period in 2021. Net cash used in financing activities was $24.0 million for the first six months of 2022, compared to $73.5 million used in financing activities during the same period in 2021. As of June 30, 2022, NW Natural Holdings held cash of $17.2 million.

2022 GUIDANCE AND LONG-TERM TARGETS

NW Natural Holdings reaffirmed 2022 earnings guidance in the range of $2.45 to $2.65 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. NW Natural Holdings reaffirmed its long-term earnings per share growth rate target of 4% to 6% compounded annually from 2022 through 2027.

DIVIDEND DECLARED

The board of directors of NW Natural Holdings declared a quarterly dividend of 48.25 cents per share on the Company’s common stock. The dividend is payable on Aug. 15, 2022 to shareholders of record on July 29, 2022. The Company's current indicated annual dividend rate is $1.93 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 2022 financial and operating results.

Date and Time:

Thursday, Aug. 4, 2022

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

Phone Numbers:

United States 1-844-200-6205

Canada 1-833-950-0062

International 1-929-526-1599

Passcode 452188

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 1-866-813-9403 (U.S.), 1-226-828-7578 (Canada), and +44-204-525-0658 (international). The replay access code is 931705.

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), NW Natural Renewables Holdings (NW Natural Renewables), and other business interests. We have a longstanding commitment to safety, environmental stewardship and the energy transition, and taking care of our employees and communities.

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 790,000 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 21 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. With all pending acquisitions closed, NW Natural Water will serve nearly 150,000 people through approximately 61,000 connections in five states. Learn more about our water business at nwnaturalwater.com.

Additional information is available at nwnaturalholdings.com.

Forward-Looking Statements

This press release, 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, timing and amount of capital expenditures, targeted capital structure, risks, risk profile, stability, acquisitions and timing, approval, 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 and the potential outcome of rate cases, environmental remediation cost recoveries, environmental initiatives, decarbonization and the role of natural gas and the gas delivery system, including decarbonization goals and timelines, energy efficiency measures, use of renewable sources, renewable natural gas purchases, projects, investments and other renewable initiatives and timing, magnitude and completion thereof, unregulated renewable natural gas strategy and initiatives, renewable hydrogen projects or investments and timing, magnitude, approvals and completion thereof, procurement of renewable natural gas or hydrogen for customers, technology and policy innovations, 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, earnings guidance and estimated future growth rates, dividends, commodity costs and sourcing asset management activities, performance, timing, outcome, or effects of regulatory proceedings or mechanisms or approvals, including OPUC approval of the Oregon general rate case settlements, 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, 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 2022

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

Twelve Months Ended
June 30,

 

In thousands, except per share amounts, customer, and degree day data

 

 

 

2022

2021

Change

2022

2021

Change

2022

2021

Change

Operating revenues

$

194,960

 

$

148,917

 

31

%

$

545,261

 

$

464,863

 

17

%

$

940,798

 

$

818,420

 

15

%

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of gas

 

79,720

 

 

41,193

 

94

 

 

225,308

 

 

153,403

 

47

 

 

364,219

 

 

266,410

 

37

 

Operations and maintenance

 

53,175

 

 

50,047

 

6

 

 

110,660

 

 

102,238

 

8

 

 

212,649

 

 

189,463

 

12

 

Environmental remediation

 

2,267

 

 

1,509

 

50

 

 

6,970

 

 

5,286

 

32

 

 

11,622

 

 

9,350

 

24

 

General taxes

 

8,989

 

 

8,914

 

1

 

 

21,093

 

 

20,283

 

4

 

 

39,443

 

 

37,093

 

6

 

Revenue taxes

 

8,240

 

 

5,671

 

45

 

 

21,600

 

 

18,335

 

18

 

 

38,005

 

 

32,429

 

17

 

Depreciation

 

28,110

 

 

28,144

 

 

 

56,539

 

 

56,241

 

1

 

 

113,832

 

 

109,413

 

4

 

Other operating expenses

 

920

 

 

815

 

13

 

 

1,914

 

 

1,747

 

10

 

 

4,064

 

 

3,969

 

2

 

Total operating expenses

 

181,421

 

 

136,293

 

33

 

 

444,084

 

 

357,533

 

24

 

 

783,834

 

 

648,127

 

21

 

Income from operations

 

13,539

 

 

12,624

 

7

 

 

101,177

 

 

107,330

 

(6

)

 

156,964

 

 

170,293

 

(8

)

Other income (expense), net

 

226

 

 

(2,597

)

(109

)

 

(728

)

 

(6,139

)

(88

)

 

(7,148

)

 

(13,468

)

(47

)

Interest expense, net

 

11,580

 

 

11,028

 

5

 

 

23,102

 

 

22,154

 

4

 

 

45,434

 

 

42,032

 

8

 

Income (loss) before income taxes

 

2,185

 

 

(1,001

)

(318

)

 

77,347

 

 

79,037

 

(2

)

 

104,382

 

 

114,793

 

(9

)

Income tax expense (benefit)

 

470

 

 

(277

)

(270

)

 

19,393

 

 

20,244

 

(4

)

 

26,555

 

 

28,871

 

(8

)

Net income (loss) from continuing operations

 

1,715

 

 

(724

)

(337

)

 

57,954

 

 

58,793

 

(1

)

 

77,827

 

 

85,922

 

(9

)

Income from discontinued operations, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

7,006

 

(100

)

Net income (loss)

$

1,715

 

$

(724

)

(337

)

$

57,954

 

$

58,793

 

(1

)

$

77,827

 

$

92,928

 

(16

)

 

 

 

 

 

 

 

 

 

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

Average diluted for period

 

34,352

 

 

30,664

 

 

 

32,805

 

 

30,671

 

 

 

31,799

 

 

30,636

 

 

End of period

 

34,754

 

 

30,672

 

 

 

34,754

 

 

30,672

 

 

 

34,754

 

 

30,672

 

 

 

 

 

 

 

 

 

 

 

 

Per share of common stock information:

 

 

 

 

 

 

 

 

 

Diluted earnings from continuing operations

$

0.05

 

$

(0.02

)

 

$

1.77

 

$

1.92

 

 

$

2.45

 

$

2.80

 

 

Diluted earnings from discontinued operations, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

0.23

 

 

Diluted earnings

 

0.05

 

 

(0.02

)

 

 

1.77

 

 

1.92

 

 

 

2.45

 

 

3.03

 

 

Dividends paid per share

 

0.4825

 

 

0.4800

 

 

 

0.9650

 

 

0.9600

 

 

 

1.9275

 

 

1.9175

 

 

Book value, end of period

 

32.77

 

 

30.09

 

 

 

32.77

 

 

30.09

 

 

 

32.77

 

 

30.09

 

 

Market closing price, end of period

 

53.10

 

 

52.52

 

 

 

53.10

 

 

52.52

 

 

 

53.10

 

 

52.52

 

 

 

 

 

 

 

 

 

 

 

 

Capital structure, end of period:

 

 

 

 

 

 

 

 

 

Common stock equity

 

47.3

%

 

43.2

%

 

 

47.3

%

 

43.2

%

 

 

47.3

%

 

43.2

%

 

Long-term debt

 

43.4

%

 

42.8

%

 

 

43.4

%

 

42.8

%

 

 

43.4

%

 

42.8

%

 

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

 

9.3

%

 

14.0

%

 

 

9.3

%

 

14.0

%

 

 

9.3

%

 

14.0

%

 

Total

 

100.0

%

 

100.0

%

 

 

100.0

%

 

100.0

%

 

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

Natural Gas Distribution segment operating statistics:

 

 

 

 

 

 

 

 

 

Meters - end of period

 

790,438

 

 

780,279

 

1.3

%

 

790,438

 

 

780,279

 

1.3

%

 

790,438

 

 

780,279

 

1.3

%

Volumes in therms:

 

 

 

 

 

 

 

 

 

Residential and commercial sales

 

147,447

 

 

102,469

 

 

 

441,374

 

 

400,291

 

 

 

744,137

 

 

690,875

 

 

Industrial sales and transportation

 

121,106

 

 

111,245

 

 

 

255,565

 

 

244,543

 

 

 

492,743

 

 

468,726

 

 

Total volumes sold and delivered

 

268,553

 

 

213,714

 

 

 

696,939

 

 

644,834

 

 

 

1,236,880

 

 

1,159,601

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

Residential and commercial sales

$

159,792

 

$

120,360

 

 

$

474,399

 

$

398,944

 

 

$

806,249

 

$

695,487

 

 

Industrial sales and transportation

 

19,526

 

 

14,093

 

 

 

40,799

 

 

31,472

 

 

 

74,626

 

 

60,289

 

 

Other distribution revenues

 

409

 

 

396

 

 

 

1,016

 

 

986

 

 

 

1,737

 

 

1,944

 

 

Other regulated services

 

4,907

 

 

4,765

 

 

 

9,818

 

 

9,550

 

 

 

19,355

 

 

18,825

 

 

Total operating revenues

 

184,634

 

 

139,614

 

 

 

526,032

 

 

440,952

 

 

 

901,967

 

 

776,545

 

 

Less: Cost of gas

 

79,776

 

 

41,249

 

 

 

225,420

 

 

153,515

 

 

 

364,443

 

 

266,635

 

 

Less: Environmental remediation expense

 

2,272

 

 

1,509

 

 

 

6,970

 

 

5,286

 

 

 

11,622

 

 

9,350

 

 

Less: Revenue taxes

 

8,208

 

 

5,650

 

 

 

21,532

 

 

18,305

 

 

 

37,827

 

 

32,399

 

 

Margin, net

$

94,378

 

$

91,206

 

 

$

272,110

 

$

263,846

 

 

$

488,075

 

$

468,161

 

 

Degree days:

 

 

 

 

 

 

 

 

 

Average (25-year average)

 

305

 

 

305

 

 

 

1,631

 

 

1,631

 

 

 

2,692

 

 

2,687

 

 

Actual

 

374

 

 

182

 

105

%

 

1,591

 

 

1,443

 

10

%

 

2,526

 

 

2,423

 

4

%

Percent colder (warmer) than average weather

 

23

%

 

(40

)%

 

 

(2

)%

 

(12

)%

 

 

(6

)%

 

(10

)%

 

NORTHWEST NATURAL HOLDINGS

 

 

Consolidated Balance Sheets (Unaudited)

June 30,

In thousands

2022

2021

Assets:

 

 

Current assets:

 

 

Cash and cash equivalents

$

17,209

 

$

20,084

 

Accounts receivable

 

68,583

 

 

60,713

 

Accrued unbilled revenue

 

18,060

 

 

13,592

 

Allowance for uncollectible accounts

 

(1,356

)

 

(3,283

)

Regulatory assets

 

92,803

 

 

60,672

 

Derivative instruments

 

60,652

 

 

46,168

 

Inventories

 

65,983

 

 

39,024

 

Income taxes receivable

 

 

 

6,000

 

Other current assets

 

36,060

 

 

30,871

 

Total current assets

 

357,994

 

 

273,841

 

Non-current assets:

 

 

Property, plant, and equipment

 

4,129,236

 

 

3,849,792

 

Less: Accumulated depreciation

 

1,150,555

 

 

1,093,863

 

Total property, plant, and equipment, net

 

2,978,681

 

 

2,755,929

 

Regulatory assets

 

301,855

 

 

330,710

 

Derivative instruments

 

9,121

 

 

7,912

 

Other investments

 

96,027

 

 

77,577

 

Operating lease right of use asset, net

 

73,754

 

 

76,294

 

Assets under sales-type leases

 

136,673

 

 

141,408

 

Goodwill

 

70,714

 

 

69,313

 

Other non-current assets

 

75,699

 

 

50,516

 

Total non-current assets

 

3,742,524

 

 

3,509,659

 

Total assets

$

4,100,518

 

$

3,783,500

 

Liabilities and equity:

 

 

Current liabilities:

 

 

Short-term debt

$

222,700

 

$

240,000

 

Current maturities of long-term debt

 

351

 

 

60,274

 

Accounts payable

 

135,364

 

 

97,854

 

Taxes accrued

 

11,324

 

 

15,143

 

Interest accrued

 

7,425

 

 

7,425

 

Regulatory liabilities

 

97,277

 

 

103,210

 

Derivative instruments

 

15,918

 

 

3,393

 

Operating lease liabilities

 

1,315

 

 

1,228

 

Other current liabilities

 

47,624

 

 

43,946

 

Total current liabilities

 

539,298

 

 

572,473

 

Long-term debt

 

1,045,530

 

 

915,501

 

Deferred credits and other non-current liabilities:

 

 

Deferred tax liabilities

 

355,470

 

 

325,600

 

Regulatory liabilities

 

658,925

 

 

645,046

 

Pension and other postretirement benefit liabilities

 

162,511

 

 

203,854

 

Derivative instruments

 

9,475

 

 

453

 

Operating lease liabilities

 

78,826

 

 

80,088

 

Other non-current liabilities

 

111,704

 

 

117,659

 

Total deferred credits and other non-current liabilities

 

1,376,911

 

 

1,372,700

 

Equity:

 

 

Common stock

 

767,826

 

 

569,785

 

Retained earnings

 

381,963

 

 

365,501

 

Accumulated other comprehensive loss

 

(11,010

)

 

(12,460

)

Total equity

 

1,138,779

 

 

922,826

 

Total liabilities and equity

$

4,100,518

 

$

3,783,500

 

NORTHWEST NATURAL HOLDINGS

 

 

Consolidated Statements of Cash Flows (Unaudited)

Six Months Ended June 30,

In thousands

2022

2021

Operating activities:

 

 

Net income

$

57,954

 

$

58,793

 

Adjustments to reconcile net income to cash provided by operations:

 

 

Depreciation

 

56,539

 

 

56,241

 

Regulatory amortization of gas reserves

 

2,984

 

 

7,597

 

Deferred income taxes

 

10,659

 

 

1,048

 

Qualified defined benefit pension plan expense

 

2,882

 

 

7,874

 

Contributions to qualified defined benefit pension plans

 

 

 

(9,590

)

Deferred environmental expenditures, net

 

(9,608

)

 

(9,625

)

Environmental remediation expense

 

6,970

 

 

5,286

 

Asset optimization revenue sharing bill credits

 

(41,102

)

 

(9,053

)

Other

 

9,961

 

 

10,663

 

Changes in assets and liabilities:

 

 

Receivables, net

 

96,453

 

 

73,133

 

Inventories

 

(8,721

)

 

3,666

 

Income and other taxes

 

17,241

 

 

21,467

 

Accounts payable

 

(13,728

)

 

(17,239

)

Deferred gas costs

 

2,607

 

 

(26,962

)

Asset optimization revenue sharing

 

3,929

 

 

36,872

 

Decoupling mechanism

 

9,669

 

 

(6,860

)

Other, net

 

(8,125

)

 

(9,030

)

Cash provided by operating activities

 

196,564

 

 

194,281

 

Investing activities:

 

 

Capital expenditures

 

(167,696

)

 

(130,108

)

Acquisitions, net of cash acquired

 

 

 

(55

)

Proceeds from the sale of assets

 

345

 

 

2,234

 

Other

 

(2,336

)

 

46

 

Cash used in investing activities

 

(169,687

)

 

(127,883

)

Financing activities:

 

 

Proceeds from common stock issued, net

 

174,053

 

 

 

Long-term debt issued

 

692

 

 

55,000

 

Long-term debt retired

 

 

 

(35,000

)

Proceeds from term loan due within one year

 

 

 

100,000

 

Repayment of commercial paper, maturities greater than three months

 

 

 

(195,025

)

Changes in other short-term debt, net

 

(166,800

)

 

30,500

 

Cash dividend payments on common stock

 

(30,311

)

 

(27,842

)

Other

 

(1,596

)

 

(1,175

)

Cash used in financing activities

 

(23,962

)

 

(73,542

)

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

 

2,915

 

 

(7,144

)

Cash, cash equivalents and restricted cash, beginning of period

 

27,120

 

 

35,454

 

Cash, cash equivalents and restricted cash, end of period

$

30,035

 

$

28,310

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

Interest paid, net of capitalization

$

22,867

 

$

21,971

 

Income taxes paid, net of refunds

 

1,086

 

 

7,405

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash:

 

 

Cash and cash equivalents

$

17,209

 

$

20,084

 

Restricted cash included in other current assets

 

12,826

 

 

8,226

 

Cash, cash equivalents and restricted cash

$

30,035

 

$

28,310

 

 

Investor Contact:
Nikki Sparley
Phone: 503-721-2530
Email: nikki.sparley@nwnatural.com

Media Contact:
David Roy
Phone: 503-610-7157
Email: david.roy@nwnatural.com

Source: NW Natural

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