Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

NW Natural Holdings Reports Third Quarter 2022 Results


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

"This quarter highlights our commitment to decarbonization, diversification, and growth," said David H. Anderson, president and CEO of NW Natural Holdings. "We believe our gas utility system will play a critical role in helping move to a low-carbon, renewable energy future. With our new competitive renewables strategy, we're able to assist a broader group of customers with the energy transition and we're making progress on our first project. Our water & wastewater company closed its largest transaction to date. I'm proud of our achievements and our long-term growth prospects."

For the third quarter of 2022, the net loss decreased $1.1 million to a net loss of $19.6 million (or $0.56 per share), compared to a net loss of $20.7 million (or $0.67 per share) for the same period in 2021. The third quarter reflects the seasonal nature of the gas utility's earnings where the majority of revenues are generated during the winter heating season in the first and fourth quarters each year. 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. NW Natural's other activities contributed higher net income driven by increased asset management revenues, partially offset by higher interest expense.

Year-to-date net income increased $0.2 million to $38.4 million (or $1.14 per share), compared to $38.1 million (or $1.24 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 that did not recur in 2022. Earnings per share was also affected by a 2.9 million common share issuance on April 1, 2022 and share issuances through Holdings' at the market program.

KEY EVENTS AND INITIATIVES

Received Order in NW Natural's Oregon General Rate Case
On Oct. 24, 2022, the OPUC issued an order approving the multi-party settlements in NW Natural's general rate case. The order increased the revenue requirement $59.4 million including final adjustments for capital projects placed into service and the deprecation study. That compares to an original requested revenue requirement increase of $73.5 million. The order 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 $1.76 billion, or an increase of $320 million since the last rate case. New rates in Oregon were effective beginning Nov. 1, 2022.

Water and Wastewater Utilities
In October 2022, NW Natural Water closed its acquisition of the Far West water and wastewater utilities in Yuma, Arizona adding 25,000 customers and entering a fifth state. In August 2022, two acquisitions were closed for approximately 1,400 connections in Washington near NW Natural Water's existing Cascadia Water utilities. In addition, in May 2022, NW Natural Water closed the purchase of a water and wastewater utility, representing approximately 150 connections, in Texas. NW Natural Water currently serves over 150,000 people through approximately 61,000 connections across five states.

Competitive Renewables
NW Natural Renewables Holdings, LLC (NW Natural Renewables), a competitive renewable natural gas (RNG) supplier, is investing in two renewable natural gas (RNG) facilities that are currently under construction and expected to begin production in the spring of 2023. NW Natural Renewables is an unregulated subsidiary of NW Natural Holdings committed to leading the energy transition and providing renewable fuels to the utility, commercial, industrial and transportation sectors.

2021 Environment, Social, and Governance (ESG) Report Issued
On August 31, 2022, we issued our third ESG report, which outlines some of the important work NW Natural Holdings is focused on. The report highlights our longstanding commitments and progress related to safety, environmental stewardship, and taking care of our employees and communities. It also features goals that we're pursuing related to a renewable future and carbon neutral vision for our gas utility, diversifying into and growing our water and wastewater utility business, and actively working to continue advancing diversity, equity and inclusion in our workplace and our wider community. Additional information is available on our investor relations website.

THIRD QUARTER RESULTS

The following financial comparisons are for the third 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' third quarter results are summarized by business segment in the table below:

 

Three Months Ended September 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

$

(23,016

)

$

(0.66

)

$

(23,297

)

$

(0.76

)

$

281

$

0.10

Other

 

3,429

 

 

0.10

 

 

2,642

 

 

0.09

 

 

787

 

 

0.01

 

Consolidated

$

(19,587

)

$

(0.56

)

$

(20,655

)

$

(0.67

)

$

1,068

 

$

0.11

 

 

 

 

 

 

 

 

Diluted Shares

 

 

34,939

 

 

 

30,696

 

 

 

4,243

 

Natural Gas Distribution Segment
Natural gas distribution segment net income increased $0.3 million (or $0.10 per share) primarily reflecting higher margin and lower pension expense, partially offset by higher operations and maintenance expense.

Margin increased $0.5 million reflecting customer growth and new rates in Washington.

Operations and maintenance expense increased $1.7 million as a result of higher information technology costs, expenses mainly from contractor labor for safety and reliability projects, and professional service fees.

Depreciation and general taxes collectively increased by $0.7 million due to additional capital investments in the distribution system. In addition, we placed two significant information technology projects into service in September 2022.

Other income, net reflected a benefit of $2.5 million primarily from lower pension expense.

Other
Other net income increased $0.8 million reflecting $1.9 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 lower net income of $1.1 million primarily from higher interest expense.

YEAR-TO-DATE RESULTS

The following financial comparisons are for the first nine 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:

 

Nine Months Ended September 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

$

32,531

$

0.97

$

29,247

$

0.95

$

3,284

 

$

0.02

 

Other

 

5,836

 

 

0.17

 

 

8,891

 

 

0.29

 

 

(3,055

)

 

(0.12

)

Consolidated

$

38,367

 

$

1.14

 

$

38,138

 

$

1.24

 

$

229

 

$

(0.10

)

 

 

 

 

 

 

 

Diluted Shares

 

 

33,539

 

 

 

30,708

 

 

 

2,831

 

Natural Gas Distribution Segment
Natural Gas Distribution segment net income increased $3.3 million (or $0.02 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 $6.6 million reflecting new rates in Washington and customer growth, which collectively contributed $4.9 million. In addition, margin increased $1.7 million due to higher usage from colder comparative weather, net of the loss from the Oregon gas cost incentive sharing mechanism. Weather was 3% warmer than average weather for the first nine months of 2022, compared to 12% warmer than average weather for the same period in 2021.

Operations and maintenance expense increased $8.2 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 $1.5 million as we continue to invest in our natural gas utility system.

Other income, net increased $6.4 million driven by lower pension costs primarily related to higher returns and lower interest costs.

Other
Other net income decreased $3.1 million (or $0.12 per share) reflecting $1.6 million lower net income from NW Natural's other activities driven by asset management revenues from a February 2021 cold weather event that did not recur. In addition, NW Natural Holding's other businesses reported lower net income of $1.5 million primarily from higher interest expense.

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 nine months of 2022, the Company generated $166.0 million in operating cash flows, compared to $181.7 million for the same period in 2021. The Company used $257.0 million in investing activities during the first nine months of 2022 primarily for natural gas utility capital expenditures, compared to $203.5 million used in investing activities during the same period in 2021. Net cash provided by financing activities was $184.2 million for the first nine months of 2022, compared to $14.0 million used in financing activities during the same period in 2021. As of September 30, 2022, NW Natural Holdings held cash of $108.6 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 48.50 cents per share on the Company's common stock. The dividend is payable on Nov. 15, 2022 to shareholders of record on Oct. 31, 2022. The Company's current indicated annual dividend rate is $1.94 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 third quarter 2022 financial and operating results.

Date and Time:

Tuesday, Nov. 8, 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 485752

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 664421.

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, Texas and Arizona. NW Natural Water serves 150,000 people through approximately 61,000 connections. 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, future 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, including variants and subvariants, 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, geopolitical factors, 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, which, among others, outline legal, regulatory and legislative risks, COVID-19 risks, growth and strategic risks, operational risks, and environmental risks.

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)

Third Quarter 2022

 

Three Months Ended

 

 

 

Nine Months Ended

 

 

 

Twelve Months Ended

 

 

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

September 30,

 

 

 

September 30,

 

 

 

September 30,

 

 

2022

2021

 

Change

 

2022

2021

 

Change

 

2022

2021

 

Change

Operating revenues

$

116,839

 

$

101,447

 

15

%

$

662,100

 

$

566,310

 

17

%

$

956,190

 

$

826,583

 

16

%

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of gas

 

36,105

 

 

25,266

 

43

 

 

261,413

 

 

178,669

 

46

 

 

375,058

 

 

267,935

 

40

 

Operations and maintenance

 

50,745

 

 

47,329

 

7

 

 

161,405

 

 

149,567

 

8

 

 

216,065

 

 

195,440

 

11

 

Environmental remediation

 

980

 

 

806

 

22

 

 

7,950

 

 

6,092

 

30

 

 

11,796

 

 

9,289

 

27

 

General taxes

 

9,572

 

 

9,061

 

6

 

 

30,665

 

 

29,344

 

5

 

 

39,954

 

 

37,498

 

7

 

Revenue taxes

 

4,437

 

 

3,891

 

14

 

 

26,037

 

 

22,226

 

17

 

 

38,551

 

 

32,765

 

18

 

Depreciation

 

29,026

 

 

28,438

 

2

 

 

85,565

 

 

84,679

 

1

 

 

114,420

 

 

111,917

 

2

 

Other operating expenses

 

901

 

 

1,047

 

(14

)

 

2,815

 

 

2,794

 

1

 

 

3,918

 

 

4,249

 

(8

)

Total operating expenses

 

131,766

 

 

115,838

 

14

 

 

575,850

 

 

473,371

 

22

 

 

799,762

 

 

659,093

 

21

 

Income (loss) from operations

 

(14,927

)

 

(14,391

)

4

 

 

86,250

 

 

92,939

 

(7

)

 

156,428

 

 

167,490

 

(7

)

Other income (expense), net

 

1,636

 

 

(2,216

)

(174

)

 

908

 

 

(8,355

)

(111

)

 

(3,296

)

 

(12,397

)

(73

)

Interest expense, net

 

13,054

 

 

11,175

 

17

 

 

36,156

 

 

33,329

 

8

 

 

47,313

 

 

44,042

 

7

 

Income (loss) before income taxes

 

(26,345

)

 

(27,782

)

(5

)

 

51,002

 

 

51,255

 

?

 

 

105,819

 

 

111,051

 

(5

)

Income tax expense (benefit)

 

(6,758

)

 

(7,127

)

(5

)

 

12,635

 

 

13,117

 

(4

)

 

26,924

 

 

27,107

 

(1

)

Net income (loss) from continuing operations

 

(19,587

)

 

(20,655

)

(5

)

 

38,367

 

 

38,138

 

1

 

 

78,895

 

 

83,944

 

(6

)

Income from discontinued operations, net of tax

 

?

 

 

?

 

 

 

?

 

 

?

 

 

 

?

 

 

6,241

 

(100

)

Net income (loss)

$

(19,587

)

$

(20,655

)

(5

)

$

38,367

 

$

38,138

 

1

 

$

78,895

 

$

90,185

 

(13

)

 

 

 

 

 

 

 

 

 

 

Common shares outstanding:

 

 

 

 

 

 

 

 

 

Average diluted for period

 

34,939

 

 

30,696

 

 

 

33,539

 

 

30,708

 

 

 

32,911

 

 

30,676

 

 

End of period

 

35,098

 

 

30,730

 

 

 

35,098

 

 

30,730

 

 

 

35,098

 

 

30,730

 

 

 

 

 

 

 

 

 

 

 

 

Per share of common stock information:

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) from continuing operations

$

(0.56

)

$

(0.67

)

 

$

1.14

 

$

1.24

 

 

$

2.40

 

$

2.74

 

 

Diluted earnings from discontinued operations, net of tax

 

?

 

 

?

 

 

 

?

 

 

?

 

 

 

?

 

 

0.20

 

 

Diluted earnings (loss)

 

(0.56

)

 

(0.67

)

 

 

1.14

 

 

1.24

 

 

 

2.40

 

 

2.94

 

 

Dividends paid per share

 

0.4825

 

 

0.4800

 

 

 

1.4475

 

 

1.4400

 

 

 

1.9300

 

 

1.9200

 

 

Book value, end of period

 

31.94

 

 

29.01

 

 

 

31.94

 

 

29.01

 

 

 

31.94

 

 

29.01

 

 

Market closing price, end of period

 

44.91

 

 

45.99

 

 

 

44.91

 

 

45.99

 

 

 

44.91

 

 

45.99

 

 

 

 

 

 

 

 

 

 

 

 

Capital structure, end of period:

 

 

 

 

 

 

 

 

 

Common stock equity

 

43.1

%

 

40.4

%

 

 

43.1

%

 

40.4

%

 

 

43.1

%

 

40.4

%

 

Long-term debt

 

49.5

%

 

41.5

%

 

 

49.5

%

 

41.5

%

 

 

49.5

%

 

41.5

%

 

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

 

7.4

%

 

18.1

%

 

 

7.4

%

 

18.1

%

 

 

7.4

%

 

18.1

%

 

Total

 

100.0

%

 

100.0

%

 

 

100.0

%

 

100.0

%

 

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

Natural Gas Distribution segment operating statistics:

 

 

 

 

 

 

 

 

 

Meters - end of period

 

790,511

 

 

781,727

 

1.1

%

 

790,511

 

 

781,727

 

1.1

%

 

790,511

 

 

781,727

 

1.1

%

Volumes in therms:

 

 

 

 

 

 

 

 

 

Residential and commercial sales

 

53,929

 

 

55,597

 

 

 

495,303

 

 

455,888

 

 

 

742,469

 

 

692,348

 

 

Industrial sales and transportation

 

104,632

 

 

105,632

 

 

 

360,197

 

 

350,175

 

 

 

491,743

 

 

474,046

 

 

Total volumes sold and delivered

 

158,561

 

 

161,229

 

 

 

855,500

 

 

806,063

 

 

 

1,234,212

 

 

1,166,394

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

Residential and commercial sales

$

78,459

 

$

71,979

 

 

$

552,858

 

$

470,923

 

 

$

812,729

 

$

701,082

 

 

Industrial sales and transportation

 

19,581

 

 

14,000

 

 

 

60,380

 

 

45,472

 

 

 

80,207

 

 

61,955

 

 

Other distribution revenues

 

351

 

 

292

 

 

 

1,367

 

 

1,278

 

 

 

1,796

 

 

1,597

 

 

Other regulated services

 

4,904

 

 

4,771

 

 

 

14,722

 

 

14,321

 

 

 

19,488

 

 

19,192

 

 

Total operating revenues

 

103,295

 

 

91,042

 

 

 

629,327

 

 

531,994

 

 

 

914,220

 

 

783,826

 

 

Less: Cost of gas

 

36,258

 

 

25,322

 

 

 

261,678

 

 

178,837

 

 

 

375,379

 

 

268,160

 

 

Less: Environmental remediation expense

 

975

 

 

806

 

 

 

7,945

 

 

6,092

 

 

 

11,791

 

 

9,289

 

 

Less: Revenue taxes

 

4,375

 

 

3,838

 

 

 

25,907

 

 

22,143

 

 

 

38,364

 

 

32,682

 

 

Margin, net

$

61,687

 

$

61,076

 

 

$

333,797

 

$

324,922

 

 

$

488,686

 

$

473,695

 

 

Degree days:

 

 

 

 

 

 

 

 

 

Average (25-year average)

 

9

 

 

9

 

 

 

1,640

 

 

1,640

 

 

 

2,692

 

 

2,687

 

 

Actual

 

?

 

 

4

 

(100

)%

 

1,591

 

 

1,447

 

10

%

 

2,522

 

 

2,425

 

4

%

Percent colder (warmer) than average weather

 

(100

)%

 

(56

)%

 

 

(3

)%

 

(12

)%

 

 

(6

)%

 

(10

)%

 

 

NORTHWEST NATURAL HOLDINGS

Consolidated Balance Sheets (Unaudited)

 

September 30,

In thousands

 

2022

 

2021

Assets:

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

108,556

 

 

$

19,502

 

Accounts receivable

 

 

50,850

 

 

 

39,209

 

Accrued unbilled revenue

 

 

16,857

 

 

 

16,809

 

Allowance for uncollectible accounts

 

 

(2,171

)

 

 

(2,702

)

Regulatory assets

 

 

104,830

 

 

 

80,638

 

Derivative instruments

 

 

62,710

 

 

 

105,175

 

Inventories

 

 

98,725

 

 

 

59,997

 

Other current assets

 

 

41,414

 

 

 

39,551

 

Total current assets

 

 

481,771

 

 

 

358,179

 

Non-current assets:

 

 

 

 

Property, plant, and equipment

 

 

4,207,328

 

 

 

3,919,096

 

Less: Accumulated depreciation

 

 

1,166,150

 

 

 

1,112,734

 

Total property, plant, and equipment, net

 

 

3,041,178

 

 

 

2,806,362

 

Regulatory assets

 

 

301,660

 

 

 

325,071

 

Derivative instruments

 

 

8,008

 

 

 

24,555

 

Other investments

 

 

96,569

 

 

 

76,027

 

Operating lease right of use asset, net

 

 

73,145

 

 

 

75,634

 

Assets under sales-type leases

 

 

135,480

 

 

 

140,189

 

Goodwill

 

 

74,732

 

 

 

69,789

 

Other non-current assets

 

 

88,169

 

 

 

53,419

 

Total non-current assets

 

 

3,818,941

 

 

 

3,571,046

 

Total assets

 

$

4,300,712

 

 

$

3,929,225

 

Liabilities and equity:

 

 

 

 

Current liabilities:

 

 

 

 

Short-term debt

 

$

141,000

 

 

$

399,500

 

Current maturities of long-term debt

 

 

50,614

 

 

 

278

 

Accounts payable

 

 

118,274

 

 

 

94,897

 

Taxes accrued

 

 

18,080

 

 

 

16,558

 

Interest accrued

 

 

11,086

 

 

 

9,315

 

Regulatory liabilities

 

 

111,551

 

 

 

164,168

 

Derivative instruments

 

 

19,594

 

 

 

9,818

 

Operating lease liabilities

 

 

1,361

 

 

 

1,213

 

Other current liabilities

 

 

39,796

 

 

 

39,218

 

Total current liabilities

 

 

511,356

 

 

 

734,965

 

Long-term debt

 

 

1,287,006

 

 

 

916,026

 

Deferred credits and other non-current liabilities:

 

 

 

 

Deferred tax liabilities

 

 

349,633

 

 

 

323,925

 

Regulatory liabilities

 

 

663,547

 

 

 

665,390

 

Pension and other postretirement benefit liabilities

 

 

160,196

 

 

 

202,287

 

Derivative instruments

 

 

18,824

 

 

 

268

 

Operating lease liabilities

 

 

78,469

 

 

 

79,789

 

Other non-current liabilities

 

 

110,825

 

 

 

115,114

 

Total deferred credits and other non-current liabilities

 

 

1,381,494

 

 

 

1,386,773

 

Equity:

 

 

 

 

Common stock

 

 

786,094

 

 

 

573,578

 

Retained earnings

 

 

345,570

 

 

 

330,109

 

Accumulated other comprehensive loss

 

 

(10,808

)

 

 

(12,226

)

Total equity

 

 

1,120,856

 

 

 

891,461

 

Total liabilities and equity

 

$

4,300,712

 

 

$

3,929,225

 

NORTHWEST NATURAL HOLDINGS

 

 

 

 

Consolidated Statements of Cash Flows (Unaudited)

 

Nine Months Ended September 30,

In thousands

 

2022

 

2021

Operating activities:

 

 

 

 

Net income

 

$

38,367

 

 

$

38,138

 

Adjustments to reconcile net income to cash provided by operations:

 

 

 

 

Depreciation

 

 

85,565

 

 

 

84,679

 

Regulatory amortization of gas reserves

 

 

4,527

 

 

 

11,606

 

Deferred income taxes

 

 

7,759

 

 

 

2,748

 

Qualified defined benefit pension plan expense

 

 

4,013

 

 

 

12,075

 

Contributions to qualified defined benefit pension plans

 

 

?

 

 

 

(9,590

)

Deferred environmental expenditures, net

 

 

(14,437

)

 

 

(14,952

)

Environmental remediation expense

 

 

7,950

 

 

 

6,092

 

Asset optimization revenue sharing bill credits

 

 

(41,102

)

 

 

(9,053

)

Other

 

 

16,640

 

 

 

14,868

 

Changes in assets and liabilities:

 

 

 

 

Receivables, net

 

 

114,755

 

 

 

83,826

 

Inventories

 

 

(41,463

)

 

 

(17,307

)

Income and other taxes

 

 

19,447

 

 

 

19,620

 

Accounts payable

 

 

(30,010

)

 

 

(18,057

)

Deferred gas costs

 

 

(1,785

)

 

 

(33,379

)

Asset optimization revenue sharing

 

 

17,629

 

 

 

41,407

 

Decoupling mechanism

 

 

7,124

 

 

 

(9,172

)

Cloud-based software

 

 

(17,332

)

 

 

(6,851

)

Other, net

 

 

(11,686

)

 

 

(14,974

)

Cash provided by operating activities

 

 

165,961

 

 

 

181,724

 

Investing activities:

 

 

 

 

Capital expenditures

 

 

(251,842

)

 

 

(212,376

)

Acquisitions, net of cash acquired

 

 

(2,352

)

 

 

(375

)

Proceeds from the sale of assets

 

 

539

 

 

 

2,712

 

Proceeds from sale of equity method investment

 

 

?

 

 

 

7,000

 

Other

 

 

(3,349

)

 

 

(482

)

Cash used in investing activities

 

 

(257,004

)

 

 

(203,521

)

Financing activities:

 

 

 

 

Proceeds from common stock issued, net

 

 

190,929

 

 

 

2,107

 

Long-term debt issued

 

 

290,000

 

 

 

55,000

 

Long-term debt retired

 

 

?

 

 

 

(95,000

)

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

 

 

(248,500

)

 

 

190,000

 

Cash dividend payments on common stock

 

 

(46,434

)

 

 

(41,827

)

Other

 

 

(1,802

)

 

 

(1,240

)

Cash provided by financing activities

 

 

184,193

 

 

 

14,015

 

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

 

 

93,150

 

 

 

(7,782

)

Cash, cash equivalents and restricted cash, beginning of period

 

 

27,120

 

 

 

35,454

 

Cash, cash equivalents and restricted cash, end of period

 

$

120,270

 

 

$

27,672

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

Interest paid, net of capitalization

 

$

31,774

 

 

$

30,910

 

Income taxes paid, net of refunds

 

 

2,106

 

 

 

6,980

 

 

 

 

 

 

Reconciliation of cash, cash equivalents and restricted cash:

 

 

 

 

Cash and cash equivalents

 

$

108,556

 

 

$

19,502

 

Restricted cash included in other current assets

 

 

11,714

 

 

 

8,170

 

Cash, cash equivalents and restricted cash

 

$

120,270

 

 

$

27,672

 

 


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