NW Natural Reports Results for the Three and Six Months Ended June 30, 2015
PORTLAND, OR -- (Marketwired) -- 08/04/15 --
- Consolidated net income was $2.2 million for the second quarter of 2015, or $0.08 per share, compared to $1.1 million, or $0.04 per share, in 2014.
- Customer growth rate was 1.5% at June 30, 2015, with over 10,000 customers added over the last twelve months.
- Combined Heat and Power (CHP) program filing was submitted to the Public Utility Commission of Oregon (OPUC) under Senate Bill (SB) 844.
- North Mist gas storage expansion project permitting and land acquisition work continued.
- Earnings guidance for 2015 remains unchanged and is expected to be in the range of $1.77 to $1.97 per share or $2.10 to $2.30 per share excluding the effects of the first quarter $15.0 million pre-tax environmental charge.
Northwest Natural Gas Company, dba NW Natural (NYSE: NWN), reported consolidated net income of $2.2 million for the second quarter of 2015, or $0.08 per share, compared to net income of $1.1 million, or $0.04 per share, for the second quarter of 2014. Consolidated net income was $30.7 million, or $1.12 per share, for the first six months of 2015, compared to net income of $39.0 million, or $1.43 per share, for the same period of 2014. Year-to-date results were impacted by a $15 million regulatory disallowance associated with a February 2015 OPUC Order in the Company's Site Remediation and Recovery Mechanism (SRRM) docket. Excluding the disallowance, net income for the first six months of 2015 increased $0.8 million to $39.8 million or $1.45 per share. The Company's earnings are typically lower during the second and third quarters due to the impact of decreased heating requirements affecting utility results.
"Second quarter results were solid with improved utility margin, continued customer growth, and higher revenues from our gas storage business," said Gregg Kantor, Chief Executive Officer. "In addition, we continued to execute on our long-term growth initiatives with the submission of our first Carbon Solutions Program filing under the SB 844 rules and filing of the permit for the North Mist storage expansion."
"Finally, the Company has made several key changes to its executive management team including promoting David Anderson to President of the Company and hiring Greg Hazelton as our Chief Financial Officer," said Kantor. "Both are strong leaders who will continue the utility's long legacy of service to its customers and shareholders."
Consolidated Results For the second quarter of 2015, consolidated net income increased $1.1 million compared to the same period last year. The increase was primarily due to the following: a $0.9 million increase in utility margin, a $0.3 million increase in gas storage operating revenues, and a $1.2 million decrease in interest expense, offset by a $0.6 million increase in operations and maintenance expense.
The second quarter results are highlighted on the following table:
Three Months Ended June 30,
---------------------------------------------
2015 2014
----------------- ------------------ --------
In thousands, except per share Per
data Amount Share Amount Per Share Change
------------------------------------------------ ------------------ --------
Net income:
Utility segment $ 2,245 $ 0.08 $ 2,205 $ 0.08 40
Gas storage segment (86) -- (1,157) (0.04) 1,071
Other 38 -- 23 -- 15
----------------- ------------------ --------
Consolidated net income $ 2,197 $ 0.08 $ 1,071 $ 0.04 $ 1,126
================= ================== ========
Utility margin $70,715 $69,795 $ 920
Gas storage operating revenues 5,333 5,038 295
For the first six months of 2015, consolidated net income decreased $8.3 million compared to the same period last year primarily due to a $9.1 million after-tax charge resulting from the disallowance associated with the February 2015 OPUC Order in our SRRM docket. Excluding the charge, consolidated net income increased $0.8 million due to a $1.2 million increase in utility margin, a $4.5 million increase in other income, and a $2.3 million decrease in interest expense. These positive factors were offset by a $2.2 million decrease in gas storage revenues and a $4.3 million increase in operations and maintenance expense primarily at the utility.
The six month results are highlighted on the following table:
Six Months Ended June 30,
--------------------------------------
2015 2014
-------------- -------------- --------
Per Per
In thousands, except per share data Amount Share Amount Share Change
---------------------------------------------------- -------------- --------
Net income:
Utility segment $ 30,580 $1.12 $ 38,224 $1.41 $(7,644)
Gas storage segment 28 -- 470 0.02 (442)
Other 75 -- 261 -- (186)
-------------- -------------- --------
Consolidated net income $ 30,683 $1.12 $ 38,955 $1.43 $(8,272)
Adjustments:
Regulatory environmental
disallowance, net of taxes
$5,925((1)) 9,075 0.33 -- -- 9,075
-------------- -------------- --------
Adjusted consolidated net income((1)) $ 39,758 $1.45 $ 38,955 $1.43 $ 803
============== ============== ========
Utility margin $201,316 $200,089 $ 1,227
Gas storage operating revenues 10,636 12,873 (2,237)
((1)) Regulatory environmental disallowance of $15 million is recorded in
utility operations and maintenance expense. Adjusted earnings per share
(EPS) and net income are non-GAAP measures based on the after-tax
disallowance. EPS is calculated using the combined federal and state
statutory tax rate of 39.5% and 27.4 million dilutive shares for the first
six months of 2015.
Utility Results For the three months ended June 30, 2015, utility net income was flat at $2.2 million compared to the same period in 2014. Results were driven by a $0.9 million increase in utility margin and a $0.7 million decrease in interest expense, offset by a $1.5 million increase in operations and maintenance expense.
For the six months ended June 30, 2015, utility net income decreased $7.6 million to $30.6 million compared to the same period last year. The primary factor impacting the 2015 results was the $9.1 million after-tax charge for the environmental disallowance, which is reflected in operations and maintenance expense. Excluding the charge, utility net income increased $1.4 million due to higher utility margin and other income and lower interest expense, offset by an increase in operations and maintenance expense.
Customer growth. NW Natural's customer growth rate for the trailing 12-month period ended June 30, 2015 was 1.5%. The Company added over 10,000 customers during the trailing 12-month period and now serves approximately 707,000 customers.
Utility Volumes and Margin. Utility volume and margin highlights include:
Three Months Six Months
Ended June 30, Ended June 30,
----------------------- -----------------------
In thousands 2015 2014 2015 2014
--------------------------------------------------- -----------------------
Gas sales & transportation
deliveries 207,886 208,253 537,863 614,470
Utility margin $ 70,715 $ 69,795 $ 201,316 $ 200,089
Change % Change
------------------------- ----------------------
In thousands QTD YTD QTD YTD
----------------------------------------------------- ----------------------
Gas sales & transportation
deliveries (367) (76,607) (0.2)% (12.5)%
Utility margin $ 920 $ 1,227 1.3 % 0.6 %
For the quarter, total gas sales and transportation deliveries decreased slightly compared to the same period last year. Utility margin for the quarter increased $0.9 million over last year due to customer growth, added loads under higher commercial rate schedules, rate-base returns on investments, and gains from gas cost incentive sharing.
For the six month period, total gas sales and transportation deliveries decreased 76.6 million therms, or 12.5%, compared to the same period last year due to warmer weather. Average temperatures in the period were 18% warmer than a year ago and 22% warmer than normal. Utility margin for the first six months increased $1.2 million over last year due to customer growth, added loads under higher commercial rate schedules, rate-base returns on investments, and gains from gas cost incentive sharing. These gains were offset by lower customer usage from warmer weather primarily during the first quarter heating season, which impacts utility margins from our Washington customers where we do not have a weather normalization mechanism in place, and from our Oregon customers who opted out of the weather normalization mechanism.
Combined Heat and Power (CHP) Program. In June 2015, NW Natural submitted its first filing related to a CHP program under the SB 844 rules. SB 844 incents gas utilities in Oregon to reduce carbon emissions. The submitted CHP program would pay owners of new commercial- and industrial-scale CHP systems for verified carbon emissions reductions. A final order on this program is expected to be issued within six months of the OPUC receiving the application of the program or at a later time as agreed to by the Company. Additionally, we expect to submit a residential heating conversion program in 2015 to replace fuel oil consumption with cleaner burning natural gas.
Environmental Site Remediation and Recovery Mechanism (SRRM). As a result of the OPUC Order in the SRRM docket, $15 million of the $95 million in total environmental remediation expenses deferred through 2012 were disallowed. The OPUC found the $95 million to be prudent but disallowed this amount from rate recovery based on its determination of how an earnings test should apply to years between 2003 and 2012, with adjustments for factors the OPUC deemed relevant. The Company recognized the $15 million pre-tax disallowance, or $9.1 million after-tax charge, during the first quarter of 2015.
The Company submitted the compliance filing required by the OPUC Order on March 31, 2015, demonstrating the proposed implementation of the Order and SRRM. The Company is engaged in discussions with the parties to resolve issues they have raised regarding the compliance filing and expects resolution of these matters in the second half of 2015. The compliance filing is subject to review and final approval by the OPUC and, as a consequence thereof, additional or different implementation procedures could be required, which may, among other things, result in additional impacts to earnings.
In addition, the Company requested clarification from the OPUC regarding the amount of insurance proceeds to be held in a secured account. In July 2015, the Company entered into an all-party settlement regarding this issue, which is pending OPUC review and approval. Under the proposed settlement, the Company would accrue interest on the portion of insurance proceeds to be used to offset future environmental expenses at an interest rate equal to the five-year treasury rate plus 100 basis points. Currently, these insurance proceeds total approximately $96 million on a pre-tax basis.
Gas Storage Results For the second quarter of 2015, the gas storage segment net loss decreased $1.1 million to $0.1 million compared to the same period last year. Improved results were mainly driven by a $0.3 million increase in operating revenues from slightly higher contract prices for the 2015-16 gas storage year and a $0.9 million decrease in operating expenses from lower repair and power costs at our Gill Ranch facility.
For the first six months of 2015, gas storage net income decreased $0.4 million to less than $0.1 million compared to the same period last year primarily due to a $2.2 million decrease in operating revenues from lower market pricing for the 2014-15 gas storage year, which ended on March 31, 2015. Over the past few years, market prices for natural gas storage, particularly in California, have been negatively affected by the abundant supply of natural gas, low volatility of natural gas prices, and surplus gas storage capacity. We contracted capacity for the 2014-15 gas storage year with shorter-term contracts at lower market prices than in previous years and re-contracted for the 2015-16 year at slightly higher prices. In addition, operating expenses decreased $1.0 million mainly due to lower repair and power costs at our Gill Ranch facility compared to the prior year.
Consolidated Operations and Maintenance (O&M) Expense Operations and maintenance highlights include:
Three Months Six Months
Ended June 30, Ended June 30, Change
--------------- --------------- --------------
In thousands 2015 2014 2015 2014 QTD YTD
--------------------------------------------- --------------- --------------
Operations and maintenance $35,311 $34,731 $89,427 $70,117 $ 580 $19,310
Environmental disallowance -- -- 15,000 -- -- 15,000
--------------- --------------- --------------
Adjusted operations and
maintenance (non-GAAP) $35,311 $34,731 $74,427 $70,117 $ 580 $ 4,310
For the second quarter of 2015, operations and maintenance expense increased $0.6 million compared to the same period last year due to a $2.2 million increase in compensation and benefit expense including pension and employee incentive costs, as well as higher wage rates under the new union labor contract, which became effective June 1, 2014. These items were offset by a $1.3 million decrease in repair and power costs at our Gill Ranch gas storage facility and a $0.3 million decrease in non-payroll costs primarily associated with contract work and professional services.
For the first six months of 2015, operations and maintenance expense increased $19.3 million compared to the same period last year mainly due to the effect of a $15 million pre-tax charge for the environmental disallowance; the Company also expensed an additional $1 million related to the Order. Other contributing factors were a $4.0 million increase in compensation and benefit expense including health care, pension, and employee incentive costs, as well as higher wage rates under the new union labor contract, and a $1.1 million increase in non-payroll costs primarily associated with ongoing growth initiatives and facilities costs. These increases were offset by a $1.8 million decrease in repair and power costs at our Gill Ranch gas storage facility.
Other Income and Expense, Net Other income and expense, net highlights include:
Three Months Six Months
Ended June 30, Ended June 30, Change
--------------- --------------- ---------------
In thousands 2015 2014 2015 2014 QTD YTD
-------------------------------------------- --------------- ---------------
Other income and expense,
net $ 1,135 $ 262 $ 6,184 $ 1,645 $ 873 $ 4,539
Other income for the second quarter of 2015 increased $0.9 million compared to the same period last year reflecting a decrease in regulatory interest expense due to the application of insurance proceeds under the SRRM.
Other income for the first six months of 2015 increased $4.5 million compared to the same period last year reflecting the recognition of net $5.3 million related to the equity component in interest income from our deferred environmental expenses. We realized the equity component of interest on these deferred regulatory asset balances as a result of the OPUC SRRM Order in February 2015. Offsetting the $5.3 million was a $0.8 million increase in interest expense primarily related to the receipt of insurance proceeds in the first quarter of 2014.
Cash Flows Cash provided by operations for the first six months of 2015 was $167 million, compared to $233 million for the same period in 2014. The decrease is primarily due to receiving $91 million of environmental insurance recoveries in 2014, which did not recur in 2015, and other working capital changes.
Earnings Guidance for 2015 The Company reaffirmed earnings guidance for 2015 in the range of $1.77 to $1.97 per share. As adjusted, our earnings guidance is $2.10 to $2.30 per share for 2015 excluding the effects of the $15.0 million pre-tax charge, which is equivalent to $0.33 per share after-tax(1), for the regulatory disallowance associated with the OPUC order on the recovery of past environmental cost deferrals. The Company's 2015 earnings guidance assumes continued customer growth from our utility segment, average weather conditions for the remainder of the year, slow recovery of the gas storage market, and no other significant changes in prevailing legislative and regulatory policies or outcomes.
(1)Impact on earnings per share assumes average shares outstanding of 27.4 million and an income tax rate of 39.5%.
Dividend Declaration The board of directors of NW Natural declared a quarterly dividend of 46.5 cents a share on the Company's common stock. The dividends will be payable on Aug. 14, 2015 to shareholders of record on July 31, 2015. Currently, the Company's indicated annual dividend rate is $1.86 per share.
Presentation of Results In addition to presenting the results of operations and earnings amounts in total, certain financial measures are expressed in cents per share or exclude the after-tax regulatory disallowance related to the OPUC's 2015 environmental order, which are non-GAAP financial measures. We present net income, EPS, and operations and maintenance expense excluding the regulatory disallowance along with the GAAP measures to illustrate the magnitude of this disallowance on ongoing business and operational results. Although the excluded amounts are properly included in the determination of these items under GAAP, we believe the amount and nature of such disallowance make period to period comparisons of operations difficult or potentially confusing. Financial measures are expressed in cents per share as these amounts reflect factors that directly impact earnings, including income taxes. All references in this section to EPS are on the basis of diluted shares. We use such non-GAAP measures to analyze our financial performance because we believe they provide useful information to our investors and creditors in evaluating our financial condition and results of operations.
Conference Call Arrangements As previously reported, NW Natural will conduct a conference call and webcast starting at 8 a.m. Pacific Time (11 a.m. Eastern Time) on August 4, 2015 to review the Company's financial and operating results for three and six months ended June 30, 2015.
To hear the conference call live, please dial 1-866-267-6789 within the United States and 1-855-669-9657 from Canada. To access the conference replay, please call 1-877-344-7529 and enter the conference identification pass code (10067641). To hear the replay from international locations, please dial 1-412-317-0088.
To hear the conference by webcast, log on to NW Natural's corporate website at nwnatural.com.
Forward-Looking Statements This report, and other presentations made by NW Natural 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," "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, goals, strategies, future events, investments, customer growth, weather, commodity and other costs, customer rates or rate recovery, environmental cost recoveries, allocation of environmental insurance settlement proceeds, levels and pricing of gas storage contracts, gas storage development or costs or timing related thereto, business development and energy efficiency programs including programs under SB 844, financial positions, capital expenditures, gas reserves and investments and regulatory recoveries related thereto, free cash flow levels, revenues and earnings and timing thereof, dividends, effects of regulatory disallowance, performance, outcomes, timing or effects of future regulatory proceedings or future regulatory approvals, regulatory prudence reviews, effects and implementation of regulatory mechanisms, including, but not limited to, SRRM, and other statements that are other than statements of historical facts.
Forward-looking statements are based on our current expectations and assumptions regarding our 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. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future 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 Company's 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 Company's 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 the Company, are expressly qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we 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 for the Company 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.
About NW Natural NW Natural (NYSE: NWN) is headquartered in Portland, Ore., and provides natural gas service to about 707,000 residential, commercial, and industrial customers through 14,000 miles of mains and service lines in western Oregon and southwestern Washington. It is the largest independent natural gas utility in the Pacific Northwest with $2.9 billion in total assets. NW Natural and its subsidiaries currently own and operate underground gas storage facilities with designed storage capacity of approximately 31 Bcf in Oregon and California. Additional information is available at www.nwnatural.com.
NORTHWEST NATURAL GAS COMPANY
Comparative Income Statements
(Consolidated - Unaudited)
Three Months Ended June 30,
---------------------------------------
In thousands, except per share
amounts 2015 2014 Change % Change
----------------------------------------------------------------------------
Income from operations $ 12,914 $ 13,266 $ (352) (3)%
Net Income 2,197 1,071 1,126 105
Diluted average shares of common
stock outstanding 27,388 27,182 206 1
Diluted earnings per share of common
stock 0.08 0.04 0.04 100
Six Months Ended June 30,
---------------------------------------
In thousands, except per share
amounts 2015 2014 Change % Change
----------------------------------------------------------------------------
Income from operations $ 65,915 $ 88,294 $(22,379) (25)%
Net income 30,683 38,955 (8,272) (21)
Diluted average shares of common
stock outstanding 27,378 27,158 220 1
Diluted earnings per share of common
stock 1.12 1.43 (0.31) (22)
Twelve Months Ended June 30,
---------------------------------------
In thousands, except per share
amounts 2015 2014 Change % Change
----------------------------------------------------------------------------
Income from operations $120,586 $143,751 $(23,165) (16)%
Net income 50,420 59,728 (9,308) (16)
Diluted average shares of common
stock outstanding 27,319 27,096 223 1
Diluted earnings per share of common
stock 1.85 2.20 (0.35) (16)
NORTHWEST NATURAL GAS COMPANY
Consolidated Balance Sheets (Unaudited) June 30,
In thousands 2015 2014
-------------------------------------------------------------- -------------
Assets:
Current assets:
Cash and cash equivalents $ 4,466 $ 17,240
Accounts receivable 32,041 38,621
Accrued unbilled revenue 12,760 14,592
Allowance for uncollectible accounts (723) (1,404)
Regulatory assets 63,016 38,265
Derivative instruments 1,023 11,191
Inventories 76,511 60,808
Gas reserves 18,214 20,373
Income taxes receivable -- --
Deferred tax assets 12,693 4,915
Other current taxes 15,348 14,518
------------- -------------
Total current assets 235,349 219,119
------------- -------------
Non-current assets:
Property, plant, and equipment 3,042,671 2,965,226
Less: Accumulated depreciation 893,722 879,296
------------- ------------
Total property, plant, and equipment, net 2,148,949 2,085,930
Gas reserves 121,355 130,280
Regulatory assets 342,806 267,248
Derivative instruments 1,369 1,202
Other investments 68,147 67,689
Restricted cash 4,500 3,000
Other non-current assets 9,404 12,646
------------- -------------
Total non-current assets 2,696,530 2,567,995
------------- -------------
Total assets $2,931,879 $2,787,114
============= =============
Liabilities and equity:
Current liabilities:
Short-term debt $ 190,300 $ 74,200
Current maturities of long-term debt -- 100,000
Accounts payable 49,505 68,973
Taxes accrued 8,782 15,769
Interest accrued 5,922 7,053
Regulatory liabilities 26,712 26,742
Derivative instruments 15,017 1,490
Other current liabilities 31,332 34,507
------------- -------------
Total current liabilities 327,570 328,734
------------- -------------
Long-term debt 621,700 621,700
------------- -------------
Deferred credits and other non-current
liabilities:
Deferred tax liabilities 524,099 489,892
Regulatory liabilities 328,646 309,327
Pension and other postretirement benefit
liabilities 233,554 145,861
Derivative instruments 1,077 191
Other non-current liabilities 118,269 120,423
------------- -------------
Total deferred credits and other non-current
liabilities 1,205,645 1,065,694
------------- -------------
Equity:
Common stock 378,887 369,315
Retained earnings 407,490 407,698
Accumulated other comprehensive loss (9,413) (6,027)
------------- -------------
Total equity 776,964 770,986
------------- -------------
Total liabilities and equity $2,931,879 $2,787,114
============= =============
NORTHWEST NATURAL GAS COMPANY Six Months Ended
Consolidated Statements of Cash Flows (Unaudited) June 30,
In thousands 2015 2014
--------------------------------------------------------------- ------------
Operating activities:
Net income $ 30,683 $ 38,955
Adjustments to reconcile net income to cash
provided by operations:
Depreciation and amortization 40,341 39,298
Regulatory amortization of gas reserves 10,023 8,680
Deferred tax liabilities, net 6,886 989
Non-cash expenses related to qualified
defined benefit pension plans 3,032 2,540
Contributions to qualified defined benefit
pension plans (5,810) (6,000)
Deferred environmental (expenditures), net of
recoveries (5,659) 92,104
Non-cash regulatory disallowance of prior
environmental cost deferrals 15,000 --
Non-cash interest income on deferred
environmental expenses (5,322) --
Other 418 1,010
Changes in assets and liabilities:
Receivables 85,121 89,951
Inventories 1,321 (139)
Taxes accrued (249) 8,447
Accounts payable (37,532) (24,472)
Interest accrued (157) (50)
Deferred gas costs 21,718 (18,812)
Other, net 7,670 744
------------ ------------
Cash provided by operating activities 167,484 233,245
------------ ------------
Investing activities:
Capital expenditures (58,072) (52,489)
Utility gas reserves (1,945) (18,632)
Restricted cash (1,500) 1,000
Other 201 (1,043)
------------ ------------
Cash used in investing activities (61,316) (71,164)
------------ ------------
Financing activities:
Common stock issued, net 812 3,733
Long-term debt retired (40,000) (20,000)
Change in short-term debt (44,400) (114,000)
Cash dividend payments on common stock (25,398) (24,938)
Other (2,250) 893
------------ ------------
Cash used in financing activities (111,236) (154,312)
------------ ------------
(Decrease) increase in cash and cash equivalents (5,068) 7,769
Cash and cash equivalents, beginning of period 9,534 9,471
------------ ------------
Cash and cash equivalents, end of period $ 4,466 $ 17,240
============ ============
------------------------------------------------- ------------ ------------
Supplemental disclosure of cash flow information:
Interest paid $ 19,615 $ 23,270
Income taxes paid (net of refunds) 4,625 14,945
------------------------------------------------- ------------ ------------
NORTHWEST NATURAL GAS COMPANY
Financial Highlights (Unaudited)
Second Quarter - 2015
Three Months Ended Six Months Ended
June 30, June 30,
In thousands,
except per
share
amounts,
customer, and
degree day
data 2015 2014 Change 2015 2014 Change
------------------------- ---------- ---------- ----------
Operating
revenues $138,280 $133,169 4% $399,945 $426,555 (6)%
Operating
expenses:
Cost of gas 62,176 58,280 7 187,881 213,481 (12)
Operations
and
maintenance 35,311 34,731 2 89,427 70,117 28
General taxes 7,649 7,183 6 16,381 15,365 7
Depreciation
and
amortization 20,230 19,709 3 40,341 39,298 3
---------- ---------- ---------- ----------
Total
operating
expenses 125,366 119,903 5 334,030 338,261 (1)
---------- ---------- ---------- ----------
Income from
operations 12,914 13,266 (3) 65,915 88,294 (25)
Other income
and expense,
net 1,135 262 333 6,184 1,645 276
Interest
expense, net 10,438 11,677 (11) 20,919 23,219 (10)
---------- ---------- ---------- ----------
Income before
income taxes 3,611 1,851 95 51,180 66,720 (23)
Income tax
expense 1,414 780 81 20,497 27,765 (26)
---------- ---------- ---------- ----------
Net income $ 2,197 $ 1,071 105 $ 30,683 $ 38,955 (21)
========== ========== ========== ==========
Common shares
outstanding:
Average
diluted for
period 27,388 27,182 27,378 27,158
End of period 27,363 27,147 27,363 27,147
Per share
information:
Diluted
earnings per
share $ 0.08 $ 0.04 1.12 1.43
Dividends
declared per
share of
common stock 0.465 0.460 0.930 0.920
Book value
per share,
end of
period 28.39 28.40 28.39 28.40
Market
closing
price, end
of period 42.18 47.15 42.18 47.15
Capital
Structure,
end of
period:
Common stock
equity 48.9% 49.2% 48.9% 49.2%
Long-term
debt 39.1 39.7 39.1 39.7
Short-term
debt
(including
amounts due
in one year) 12.0 11.1 12.0 11.1
---------- ---------- ---------- ----------
Total 100.0% 100.0% 100.0% 100.0%
Utility
operating
statistics:
Customers, end
of period 707,539 697,422 1.5% 707,539 697,422 1.5%
Utility
volumes
(therms):
Residential
and
commercial
sales 97,066 96,533 303,883 370,689
Industrial
sales and
transportati
on 110,820 111,720 233,980 243,781
---------- ---------- ---------- ----------
Total utility
volumes sold
and delivered 207,886 208,253 537,863 614,470
Utility
operating
revenues:
Residential
and
commercial
sales $117,919 $113,186 $358,831 $383,188
Industrial
sales and
transportati
on 17,138 16,855 37,664 38,367
Other
revenues 1,131 1,166 2,537 2,643
Less: Revenue
taxes 3,297 3,132 9,835 10,628
---------- ---------- ---------- ----------
Total utility
operating
revenues 132,891 128,075 389,197 413,570
Less: Cost of
gas 62,176 58,280 187,881 213,481
---------- ---------- ---------- ----------
Utility margin $ 70,715 $ 69,795 $201,316 $200,089
========== ========== ========== ==========
Degree days:
Average (25-
year
average) 691 691 2,546 2,546
Actual 512 530 (3)% 1,993 2,420 (18)%
Percent colder
(warmer) than
average
weather (26)% (23)% (22)% (5)%
Twelve Months Ended
June 30,
In thousands,
except per
share
amounts,
customer, and
degree day
data 2015 2014 Change
-------------- ------------ -----------
Operating
revenues $ 727,427 $ 775,498 (6)%
Operating
expenses:
Cost of gas 339,890 385,278 (12)
Operations
and
maintenance 156,292 139,756 12
General taxes 30,423 29,247 4
Depreciation
and
amortization 80,236 77,466 4
------------ -----------
Total
operating
expenses 606,841 631,747 (4)
------------ -----------
Income from
operations 120,586 143,751 (16)
Other income
and expense,
net 6,472 4,344 49
Interest
expense, net 42,263 46,195 (9)
------------ -----------
Income before
income taxes 84,795 101,900 (17)
Income tax
expense 34,375 42,172 (18)
------------ -----------
Net income $ 50,420 $ 59,728 (16)
============ ===========
Common shares
outstanding:
Average
diluted for
period 27,319 27,096
End of period 27,363 27,147
Per share
information:
Diluted
earnings per
share $ 1.85 $ 2.20
Dividends
declared per
share of
common stock 1.86 1.84
Book value
per share,
end of
period 28.39 28.40
Market
closing
price, end
of period 42.18 47.15
Capital
Structure,
end of
period:
Common stock
equity 48.9% 49.2%
Long-term
debt 39.1 39.7
Short-term
debt
(including
amounts due
in one year) 12.0 11.1
------------ -----------
Total 100.0% 100.0%
Utility
operating
statistics:
Customers, end
of period 707,539 697,422 1.5%
Utility
volumes
(therms):
Residential
and
commercial
sales 554,097 670,618
Industrial
sales and
transportati
on 462,286 477,996
------------ -----------
Total utility
volumes sold
and delivered 1,016,383 1,148,614
Utility
operating
revenues:
Residential
and
commercial
sales $ 648,083 $ 689,917
Industrial
sales and
transportati
on 73,289 72,499
Other
revenues 3,877 3,926
Less: Revenue
taxes 18,044 19,192
------------ -----------
Total utility
operating
revenues 707,205 747,150
Less: Cost of
gas 339,890 385,278
------------ -----------
Utility margin $ 367,315 $ 361,872
============ ===========
Degree days:
Average (25-
year
average) 4,240 4,240
Actual 3,365 4,304 (22)%
Percent colder
(warmer) than
average
weather (21)% 2%
Investor Contact: Nikki Sparley Phone: 503-721-2530 Email: [email protected] Media Contact: Melissa Moore Phone: 503-220-2436 Email: [email protected]
Source: Northwest Natural Gas Company