NW Natural Reports Results for the Three and Nine Months Ended September 30, 2015
PORTLAND, OR -- (Marketwired) -- 11/03/15 -- Northwest Natural Gas Company, dba NW Natural (NYSE: NWN)
- Improved results with consolidated net loss of $6.7 million for the third quarter of 2015, or $0.24 per share, compared to $8.7 million, or $0.32 per share, in 2014.
- Added over 10,500 customers in the last twelve months with a customer growth rate of 1.5% at Sept. 30, 2015.
- Ranked first in residential customer satisfaction for large gas utilities in the West and marks 14 consecutive years of posting top three scores (2014 J.D. Power and Associates Study).
- Announced 60th consecutive year of dividend increases in the fourth quarter of 2015.
- Decreased residential customer rates approximately 7% in Oregon and 14% in Washington effective Nov. 1, 2015.
- Reaffirmed earnings guidance for 2015, which is expected to range from $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 a consolidated net loss of $6.7 million for the third quarter of 2015, or $0.24 per share, compared to a net loss of $8.7 million, or $0.32 per share, for the third quarter of 2014. Consolidated net income was $24.0 million, or $0.88 per share, for the first nine months of 2015, compared to net income of $30.2 million, or $1.11 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 Public Utility Commission of Oregon (OPUC) Order in the Company's Site Remediation and Recovery Mechanism (SRRM) docket. Excluding the disallowance, net income for the first nine months of 2015 increased $2.9 million to $33.1 million or $1.21 per share. The Company's results typically reflect a loss during the third quarter due to the impact of decreased heating requirements affecting utility results.
"Third quarter results were favorable with increased utility margin, continued customer growth, and lower operating expenses," said Gregg Kantor, Chief Executive Officer. "In addition, we once again ranked first in the J.D. Power residential customer satisfaction survey of large gas utilities in the West. We also announced a dividend increase for the fourth quarter of 2015, marking 60 consecutive years of increasing dividends paid. These achievements reflect our long-standing commitment to deliver excellent service to our customers and solid returns to our shareholders."
Consolidated Results For the third quarter of 2015, consolidated net loss was $2.0 million lower compared to the same period last year. Improved results were primarily due to the following: a $1.5 million increase in utility margin, a $0.8 million increase in gas storage operating revenues, a $0.9 million decrease in operations and maintenance expense, and a $0.7 million decrease in interest expense.
The third quarter results are highlighted on the following table:
Three Months Ended September 30,
----------------------------------------------
2015 2014
----------------- ----------------- --------
In thousands, except per Per Per
share data Amount Share Amount Share Change
-------- ------- -------- ------- --------
Net income (loss):
Utility segment $ (7,529) $ (0.28) $ (8,808) $ (0.32) $ 1,279
Gas storage segment 799 0.04 2 -- 797
Other 45 -- 73 -- (28)
-------- ------- -------- ------- --------
Consolidated net loss $ (6,685) $ (0.24) $ (8,733) $ (0.32) $ 2,048
======== ======= ======== ======= ========
Utility margin $ 51,619 $ 50,134 $ 1,485
Gas storage operating
revenues 5,596 4,782 814
For the first nine months of 2015, consolidated net income decreased $6.2 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 $2.9 million due to a $2.7 million increase in utility margin, a $4.9 million increase in other income, and a $3.0 million decrease in interest expense. These positive factors were offset by a $1.4 million decrease in gas storage operating revenues and a $3.4 million increase in operations and maintenance expense primarily at the utility.
The nine month results are highlighted on the following table:
Nine Months Ended September 30,
------------------------------------------
2015 2014
---------------- ---------------- --------
In thousands, except per share Per Per
data Amount Share Amount Share Change
-------- ------- -------- ------- --------
Net income (loss):
Utility segment $ 23,051 $ 0.84 $ 29,416 $ 1.08 $ (6,365)
Gas storage segment 827 0.04 472 0.02 355
Other 120 -- 334 0.01 (214)
-------- ------- -------- ------- --------
Consolidated net income $ 23,998 $ 0.88 $ 30,222 $ 1.11 $ (6,224)
Adjustments:
Regulatory environmental
disallowance, net of taxes
$5,925(1) 9,075 0.33 -- -- 9,075
-------- ------- -------- ------- --------
Adjusted consolidated net
income(1) $ 33,073 $ 1.21 $ 30,222 $ 1.11 $ 2,851
======== ======= ======== ======= ========
Utility margin $252,935 $250,223 $ 2,712
Gas storage operating revenues 16,232 17,655 (1,423)
(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 nine months of 2015.
Utility Results For the three months ended Sept. 30, 2015, utility net loss was $1.3 million lower compared to the same period in 2014. Results were driven by a $1.5 million increase in utility margin, a $0.6 million decrease in operations and maintenance expense, and a $0.7 million decrease in interest expense, offset by a $0.3 million net negative impact related to an increase in depreciation expense, a decrease in other income, and a decrease in general tax expense.
For the nine months ended Sept. 30, 2015, utility net income decreased $6.4 million to $23.1 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 $2.7 million primarily due to higher utility margin, an increase in other income, and other offsetting factors.
Customer Growth. NW Natural's customer growth rate for the trailing 12-month period ended Sept. 30, 2015 was 1.5%. The Company added over 10,500 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
Ended September Nine Months Ended
30, September 30, Change % Change
--------------- ----------------- --------------- ------------
In thousands 2015 2014 2015 2014 QTD YTD QTD YTD
------- ------- -------- -------- ------ -------- ----- ------
Gas sales &
transportation
deliveries 154,664 152,329 692,527 766,799 2,335 (74,272) 1.5% (9.7)%
Utility
margin $51,619 $50,134 $252,935 $250,223 $1,485 $2,712 3.0% 1.1%
For the quarter, total gas sales and transportation deliveries increased slightly due to greater customer usage and customer growth compared to the same period last year. Utility margin for the quarter increased $1.5 million over last year due to customer growth, added loads under higher commercial rate schedules, rate-base returns on certain investments, and gains from gas cost incentive sharing.
For the nine month period, total gas sales and transportation deliveries decreased 74.3 million therms, or 10%, compared to the same period last year due to warmer weather. Average temperatures for the first nine months of 2015 were 15% warmer than a year ago and 22% warmer than average primarily due to warmer temperatures in the first quarter of 2015. Utility margin for the first nine months increased $2.7 million over last year due to customer growth, added loads under higher commercial rate schedules, rate-base returns on certain investments, and gains from gas cost incentive sharing. These gains were offset by lower customer usage from warmer weather primarily during the heating season in the first quarter. Weather impacts utility margins from our Washington customers where the Company does not have a weather normalization mechanism in place and our Oregon customers who opted out of the weather normalization mechanism.
Gas Reserves. The Company has invested approximately $188 million through its gas reserves program to date. The original investment with Encana Oil & Gas (USA) Inc. totaled $178 million and continues to earn a rate of return with a carrying cost for the rate base investment included in Oregon customers' cost of gas. Under the amended agreement with Jonah Energy LLC, the Company invested in seven wells totaling approximately $10 million. In September 2015, the OPUC adopted an all-party settlement related to these additional wells, under which volumes produced are included in the Company's Oregon PGA beginning Nov. 1, 2015 at a fixed rate of $0.4725 per therm, which approximates the 10-year hedge rate plus financing costs at the inception of the investment.
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 the $15 million from rate recovery based on its determination of how an earnings test should apply to the years between 2003 and 2012, with adjustments for other 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 required compliance filing demonstrating the proposed implementation of the Order and SRRM in March 2015. In September 2015, as a result of discussions with the parties, the Company withdrew its original compliance filing and submitted a revised filing noting the parties could potentially raise two issues with the proposed implementation of the Order. First, the Company believes the February 2015 Order reflected the Commission's determination of the total disallowance to be borne by the Company for prior periods; however, the Company anticipates the parties will question whether interest on the $15 million charge should be separately disallowed. This interest would total approximately $3 million. Second, the Company anticipates discussions concerning how state allocation rates from the Order are applied to its environmental remediation sites. However, the Company believes the effect on current regulatory deferrals related to the state allocation issue would be insignificant.
The Company is engaged in the Commission's process with the parties to resolve issues they have raised regarding the filing and expects resolution of these matters in the first half of 2016. Although the parties continue discussions related to the revised compliance filing, approximately $13 million of environmental costs will be recovered in Oregon rates beginning Nov. 1, 2015 through Oct. 31, 2016. The revised compliance filing is subject to final review and 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 on earnings.
The Company requested clarification from the OPUC regarding the amount of Oregon-allocated insurance proceeds to be held in a secured account. In September 2015, the OPUC adopted an all-party settlement which provided that the Company did not need to obtain a secured account. Instead, the Company must accrue interest on the Oregon-allocated pre-tax insurance proceeds of $96 million at an interest rate equal to the five-year treasury rate plus 100 basis points. These insurance proceeds will be used to offset future environmental expenses.
Gas Storage Results For the third quarter of 2015, the gas storage segment reported net income of $0.8 million, compared to net income of less than $0.1 million for the same period last year. Improved results were mainly driven by a $0.8 million increase in operating revenues from slightly higher contract prices for the 2015-16 gas storage year and a $0.5 million decrease in operating expenses primarily due to lower compensation costs and property taxes at our Gill Ranch facility.
For the first nine months of 2015, gas storage net income increased $0.4 million to $0.8 million compared to the same period last year primarily due to a $1.4 million decrease in operating expenses mainly due to lower repair and power costs at our Gill Ranch facility and a $0.9 million decrease in interest expense related to the retirement of $20 million of Gill Ranch's debt in June of 2014. These decreases were offset by a $1.4 million reduction in operating revenues mainly due to lower contract prices for the 2014-15 gas storage year.
Consolidated Operations and Maintenance (O&M) Expense Operations and maintenance highlights include:
Three Months Ended Nine Months Ended
September 30, September 30, Change
------------------ ----------------- --------------
In thousands 2015 2014 2015 2014 QTD YTD
-------- -------- -------- -------- ----- -------
Operations and
maintenance $ 32,031 $ 32,968 $121,458 $103,085 $(937) $18,373
Environmental
disallowance -- -- 15,000 -- -- 15,000
-------- -------- -------- -------- ----- -------
Adjusted operations and
maintenance (non-GAAP) $ 32,031 $ 32,968 $106,458 $103,085 $(937) $ 3,373
For the third quarter of 2015, operations and maintenance expense decreased $0.9 million compared to the same period last year due to a $1.2 million decrease in utility non-payroll expense, primarily due to lower contract work costs, offset by a $0.3 million increase in benefit expense including higher employee incentive and pension costs.
For the first nine months of 2015, operations and maintenance expense increased $18.4 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. Excluding the charge, other contributing factors were a $4.3 million increase in compensation and benefit expense including increased employee incentive, pension, and health care costs, as well as higher wage rates under the new union labor contract, which became effective June 1, 2014. These increases were partially offset by a $1.9 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 Ended Nine Months Ended
September 30, September 30, Change
------------------ ----------------- -------------
In thousands 2015 2014 2015 2014 QTD YTD
-------- -------- -------- -------- ------ ------
Other income and expense,
net $ 746 $ 407 $ 6,930 $ 2,052 $ 339 $4,878
Other income for the third quarter of 2015 increased $0.3 million compared to the same period last year primarily due to a decrease in regulatory interest expense from the application of insurance proceeds under the SRRM, partially offset by a decrease in interest income from environmental assets accruing interest at a lower rate under the SRRM.
Other income for the first nine months of 2015 increased $4.9 million compared to the same period last year due to the recognition of a net $5.3 million related to the equity earnings included in interest income from our deferred environmental expenses as a result of the OPUC SRRM Order received in February 2015. Offsetting the $5.3 million was a $0.4 million decrease in interest income primarily from environmental assets accruing interest at a lower rate under the SRRM, partially offset by a decrease in regulatory interest expense from the application of insurance proceeds under the SRRM.
Cash Flows Cash provided by operations for the first nine months of 2015 was $173 million, compared to $215 million for the same period in 2014. The decrease is primarily due to receiving $102 million of environmental insurance recoveries in the first nine months of 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 46.75 cents per share on the Company's common stock. The dividends will be payable on Nov. 13, 2015 to shareholders of record on Oct. 30, 2015. Currently, the Company's indicated annual dividend rate is $1.87 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 Nov. 3, 2015 to review the Company's financial and operating results for three and nine months ended Sept. 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 (10073891). 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, 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, legislative outcomes, 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 $3.0 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 September 30,
-----------------------------------------
In thousands, except per share
amounts 2015 2014 Change % Change
--------- --------- --------- --------
Loss from operations $ (1,873) $ (5,077) $ 3,204 63%
Net loss (6,685) (8,733) 2,048 23
Diluted average shares of common
stock outstanding 27,363 27,189 174 1
Diluted loss per share of common
stock (0.24) (0.32) 0.08 25
Nine Months Ended September 30,
-----------------------------------------
In thousands, except per share
amounts 2015 2014 Change % Change
--------- --------- --------- --------
Income from operations $ 64,042 $ 83,217 $ (19,175) (23)%
Net income 23,998 30,222 (6,224) (21)
Diluted average shares of common
stock outstanding 27,399 27,195 204 1
Diluted earnings per share of
common stock 0.88 1.11 (0.23) (21)
Twelve Months Ended September 30,
-----------------------------------------
In thousands, except per share
amounts 2015 2014 Change % Change
--------- --------- --------- --------
Income from operations $ 123,790 $ 142,461 $ (18,671) (13)%
Net income 52,468 59,228 (6,760) (11)
Diluted average shares of common
stock outstanding 27,370 27,158 212 1
Diluted earnings per share of
common stock 1.92 2.18 (0.26) (12)
NORTHWEST NATURAL GAS COMPANY
Consolidated Balance Sheets (Unaudited) September 30,
In thousands 2015 2014
----------- -----------
Assets:
Current assets:
Cash and cash equivalents $ 5,227 $ 8,275
Accounts receivable 29,800 30,468
Accrued unbilled revenue 15,752 12,442
Allowance for uncollectible accounts (308) (840)
Regulatory assets 82,712 52,250
Derivative instruments 2,956 5,587
Inventories 80,974 86,600
Gas reserves 17,822 21,455
Income taxes receivable -- 7,639
Deferred tax assets 15,663 5,100
Other current taxes 27,313 19,158
----------- -----------
Total current assets 277,911 248,134
----------- -----------
Non-current assets:
Property, plant, and equipment 3,072,998 2,990,662
Less: Accumulated depreciation 905,137 883,568
----------- -----------
Total property, plant, and equipment, net 2,167,861 2,107,094
Gas reserves 117,784 131,745
Regulatory assets 333,953 263,321
Derivative instruments 299 602
Other investments 68,503 67,980
Restricted cash 4,500 3,000
Other non-current assets 7,554 11,648
----------- -----------
Total non-current assets 2,700,454 2,585,390
----------- -----------
Total assets $ 2,978,365 $ 2,833,524
=========== ===========
Liabilities and equity:
Current liabilities:
Short-term debt $ 225,200 $ 190,000
Current maturities of long-term debt -- 40,000
Accounts payable 54,425 71,018
Taxes accrued 11,854 11,876
Interest accrued 9,800 10,427
Regulatory liabilities 34,127 23,352
Derivative instruments 21,949 5,520
Other current liabilities 27,924 33,481
----------- -----------
Total current liabilities 385,279 385,674
----------- -----------
Long-term debt 621,700 621,700
----------- -----------
Deferred credits and other non-current liabilities:
Deferred tax liabilities 527,336 499,809
Regulatory liabilities 334,490 312,500
Pension and other postretirement benefit
liabilities 228,861 142,502
Derivative instruments 3,540 551
Other non-current liabilities 117,950 118,531
----------- -----------
Total deferred credits and other non-current
liabilities 1,212,177 1,073,893
----------- -----------
Equity:
Common stock 380,208 371,657
Retained earnings 388,082 386,461
Accumulated other comprehensive loss (9,081) (5,861)
----------- -----------
Total equity 759,209 752,257
----------- -----------
Total liabilities and equity $ 2,978,365 $ 2,833,524
=========== ===========
NORTHWEST NATURAL GAS COMPANY Nine Months Ended
Consolidated Statements of Cash Flows (Unaudited) September 30,
In thousands 2015 2014
----------- -----------
Operating activities:
Net income $ 23,998 $ 30,222
Adjustments to reconcile net income to cash
provided by operations:
Depreciation and amortization 60,683 59,236
Regulatory amortization of gas reserves 13,606 13,795
Deferred tax liabilities, net 7,153 10,721
Non-cash expenses related to qualified defined
benefit pension plans 4,238 3,795
Contributions to qualified defined benefit
pension plans (11,780) (10,500)
Deferred environmental (expenditures), net of
recoveries (8,063) 89,537
Non-cash regulatory disallowance of prior
environmental cost deferrals 15,000 --
Non-cash interest income on deferred
environmental expenses (5,322) --
Other 669 (1,692)
Changes in assets and liabilities:
Receivables 82,586 100,931
Inventories (3,142) (25,931)
Taxes accrued 2,823 (3,085)
Accounts payable (36,230) (28,762)
Interest accrued 3,721 3,324
Deferred gas costs 27,042 (22,173)
Other, net (4,237) (4,554)
----------- -----------
Cash provided by operating activities 172,745 214,864
----------- -----------
Investing activities:
Capital expenditures (86,923) (86,552)
Utility gas reserves (1,165) (21,734)
Restricted cash (1,500) 1,000
Other 1,346 82
----------- -----------
Cash used in investing activities (88,242) (107,204)
----------- -----------
Financing activities:
Common stock issued, net 1,252 5,460
Long-term debt retired (40,000) (80,000)
Change in short-term debt (9,500) 1,800
Cash dividend payments on common stock (38,122) (37,442)
Other (2,440) 1,326
----------- -----------
Cash used in financing activities (88,810) (108,856)
----------- -----------
Decrease in cash and cash equivalents (4,307) (1,196)
Cash and cash equivalents, beginning of period 9,534 9,471
----------- -----------
Cash and cash equivalents, end of period $ 5,227 $ 8,275
=========== ===========
---------------------------------------------------------------------------
Supplemental disclosure of cash flow information:
Interest paid $ 25,264 $ 30,701
Income taxes paid (net of refunds) 10,631 14,945
---------------------------------------------------------------------------
NORTHWEST NATURAL GAS COMPANY
Financial Highlights (Unaudited)
Third Quarter - 2015
Three Months Ended Nine Months Ended
In thousands,
except per
share amounts,
customer, and
degree day data September 30, September 30,
2015 2014 Change 2015 2014 Change
-------- -------- -------- --------
Operating
revenues $ 93,128 $ 87,199 7% $493,073 $513,754 (4)%
Operating
expenses:
Cost of gas 35,856 32,227 11 223,737 245,708 (9)
Operations and
maintenance 32,031 32,968 (3) 121,458 103,085 18
General taxes 6,772 7,143 (5) 23,153 22,508 3
Depreciation
and
amortization 20,342 19,938 2 60,683 59,236 2
-------- -------- -------- --------
Total operating
expenses 95,001 92,276 3 429,031 430,537 --
-------- -------- -------- --------
Income (loss)
from operations (1,873) (5,077) 63 64,042 83,217 (23)
Other income and
expense, net 746 407 83 6,930 2,052 238
Interest
expense, net 10,111 10,805 (6) 31,030 34,024 (9)
-------- -------- -------- --------
Income (loss)
before income
taxes (11,238) (15,475) 27 39,942 51,245 (22)
Income tax
expense
(benefit) (4,553) (6,742) 32 15,944 21,023 (24)
-------- -------- -------- --------
Net income
(loss) $ (6,685) $ (8,733) 23 $ 23,998 $ 30,222 (21)
======== ======== ======== ========
Common shares
outstanding:
Average diluted
for period 27,363 27,189 27,399 27,195
End of period 27,367 27,203 27,367 27,203
Per share
information:
Diluted
earnings
(loss) per
share $ (0.24) $ (0.32) $ 0.88 $ 1.11
Dividends
declared per
share of
common stock 0.465 0.460 1.395 1.380
Book value per
share, end of
period 27.74 27.65 27.74 27.65
Market closing
price, end of
period 45.84 42.25 45.84 42.25
Capital
Structure, end
of period:
Common stock
equity 47.3% 46.9% 47.3% 46.9%
Long-term debt 38.7 38.8 38.7 38.8
Short-term debt
(including
amounts due in
one year) 14.0 14.3 14.0 14.3
-------- -------- -------- --------
Total 100.0% 100.0% 100.0% 100.0%
Utility
operating
statistics:
Customers, end
of period 706,566 695,902 1.5% 706,566 695,902 1.5%
Utility volumes
(therms):
Residential and
commercial
sales 53,662 49,843 357,545 420,532
Industrial
sales and
transportation 101,002 102,486 334,982 346,267
-------- -------- -------- --------
Total utility
volumes sold
and delivered 154,664 152,329 692,527 766,799
Utility
operating
revenues:
Residential and
commercial
sales $ 73,236 $ 68,369 $432,067 $451,557
Industrial
sales and
transportation 15,959 15,588 53,623 53,955
Other revenues 651 602 3,188 3,245
Less: Revenue
taxes 2,371 2,198 12,206 12,826
-------- -------- -------- --------
Total utility
operating
revenues 87,475 82,361 476,672 495,931
Less: Cost of
gas 35,856 32,227 223,737 245,708
-------- -------- -------- --------
Utility margin $ 51,619 $ 50,134 $252,935 $250,223
======== ======== ======== ========
Degree days:
Average (25-
year average) 95 95 2,641 2,641
Actual 75 18 317% 2,068 2,438 (15)%
Percent colder
(warmer) than
average weather (21)% (81)% (22)% (8)%
Twelve Months Ended
In thousands,
except per
share amounts,
customer, and
degree day data September 30,
2015 2014 Change
---------- ----------
Operating
revenues $ 733,356 $ 774,502 (5)%
Operating
expenses:
Cost of gas 343,519 383,850 (11)
Operations and
maintenance 155,355 140,088 11
General taxes 30,052 29,436 2
Depreciation
and
amortization 80,640 78,667 3
---------- ----------
Total operating
expenses 609,566 632,041 (4)
---------- ----------
Income (loss)
from operations 123,790 142,461 (13)
Other income and
expense, net 6,811 3,451 97
Interest
expense, net 41,569 45,653 (9)
---------- ----------
Income (loss)
before income
taxes 89,032 100,259 (11)
Income tax
expense
(benefit) 36,564 41,031 (11)
---------- ----------
Net income
(loss) $ 52,468 $ 59,228 (11)
========== ==========
Common shares
outstanding:
Average diluted
for period 27,370 27,158
End of period 27,367 27.203
Per share
information:
Diluted
earnings
(loss) per
share $ 1.92 $ 2.18
Dividends
declared per
share of
common stock 1.86 1.84
Book value per
share, end of
period 27.74 27.65
Market closing
price, end of
period 45.84 42.25
Capital
Structure, end
of period:
Common stock
equity 47.3% 46.9%
Long-term debt 38.7 38.8
Short-term debt
(including
amounts due in
one year) 14.0 14.3
---------- ----------
Total 100.0% 100.0%
Utility
operating
statistics:
Customers, end
of period 706,566 695,902 1.5%
Utility volumes
(therms):
Residential and
commercial
sales 557,916 666,409
Industrial
sales and
transportation 460,802 475,401
---------- ----------
Total utility
volumes sold
and delivered 1,018,718 1,141,810
Utility
operating
revenues:
Residential and
commercial
sales $ 652,950 $ 690,702
Industrial
sales and
transportation 73,660 73,462
Other revenues 3,926 3,928
Less: Revenue
taxes 18,217 19,286
---------- ----------
Total utility
operating
revenues 712,319 748,806
Less: Cost of
gas 343,519 383,850
---------- ----------
Utility margin $ 368,800 $ 364,956
========== ==========
Degree days:
Average (25-
year average) 4,240 4,240
Actual 3,422 4,236 (19)%
Percent colder
(warmer) than
average weather (19)% --%
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