NorthWestern Reports Third Quarter 2024 Financial Results
NorthWestern Energy reported Q3 2024 net income of $46.8 million ($0.76 per share), up from $29.3 million ($0.48 per share) in Q3 2023. The improved performance was driven by new base rates in Montana and South Dakota, higher electric transmission revenues, and an income tax benefit. The company revised its 2024 non-GAAP EPS guidance to $3.32-$3.47 from $3.42-$3.62 due to delayed Montana interim rate relief. The Yellowstone County Generating Station began serving customers in October 2024, with total costs expected between $310-$320 million. The company declared a quarterly dividend of $0.65 per share.
NorthWestern Energy ha riportato un reddito netto nel Q3 2024 di 46,8 milioni di dollari (0,76 dollari per azione), in aumento rispetto ai 29,3 milioni di dollari (0,48 dollari per azione) del Q3 2023. Questa performance migliorata è stata sostenuta da nuove tariffe base nel Montana e nel South Dakota, da maggiori entrate da trasmissione elettrica e da un beneficio fiscale. L'azienda ha rivisto la propria guida per l'EPS non-GAAP per il 2024 a 3,32-3,47 dollari, rispetto ai precedenti 3,42-3,62 dollari, a causa del ritardo nel sollievo tariffario temporaneo in Montana. La Yellowstone County Generating Station ha iniziato a servire i clienti nell'ottobre 2024, con costi totali previsti tra i 310 e i 320 milioni di dollari. L'azienda ha dichiarato un dividendo trimestrale di 0,65 dollari per azione.
NorthWestern Energy reportó un ingreso neto de 46,8 millones de dólares ($0,76 por acción) en el tercer trimestre de 2024, en comparación con 29,3 millones de dólares ($0,48 por acción) en el tercer trimestre de 2023. El rendimiento mejorado fue impulsado por nuevas tarifas base en Montana y Dakota del Sur, mayores ingresos por transmisión eléctrica y un beneficio fiscal. La compañía revisó su guía de EPS no-GAAP para 2024 a $3.32-$3.47, desde $3.42-$3.62, debido a la demora en la ayuda tarifaria interina en Montana. La Estación Generadora del Condado de Yellowstone comenzó a atender a los clientes en octubre de 2024, con costos totales esperados entre 310 y 320 millones de dólares. La compañía declaró un dividendo trimestral de $0.65 por acción.
NorthWestern Energy는 2024년 3분기 순이익이 4,680만 달러(주당 0.76달러)로, 2023년 3분기의 2,930만 달러(주당 0.48달러)에서 증가했다고 보고했습니다. 성과 개선은 몬태나와 사우스다코타의 새로운 기본 요금, 더 높은 전기 전송 수익, 세금 혜택에 의해 촉진되었습니다. 회사는 몬태나의 임시 요금 구제 지연으로 인해 2024년 비-GAAP EPS 지침을 3.32-3.47달러로 수정했습니다. 옐로스톤 카운티 발전소는 2024년 10월에 고객에게 서비스를 시작하였으며, 총 비용은 3억 1천만에서 3억 2천만 달러로 예상됩니다. 회사는 주당 0.65달러의 분기 배당금을 선언했습니다.
NorthWestern Energy a annoncé un revenu net de 46,8 millions de dollars (0,76 dollar par action) pour le troisième trimestre 2024, en hausse par rapport à 29,3 millions de dollars (0,48 dollar par action) pour le troisième trimestre 2023. Cette performance améliorée a été soutenue par de nouveaux tarifs de base dans le Montana et le Dakota du Sud, des revenus de transmission électrique en hausse et un avantage fiscal. L'entreprise a révisé ses prévisions d'EPS non-GAAP pour 2024 à 3,32-3,47 dollars, contre 3,42-3,62 dollars en raison d'un retard dans l'aide tarifaire temporaire dans le Montana. La Statuette de Génération du Comté de Yellowstone a commencé à servir des clients en octobre 2024, avec des coûts totaux prévus entre 310 et 320 millions de dollars. L'entreprise a déclaré un dividende trimestriel de 0,65 dollar par action.
NorthWestern Energy meldete für das 3. Quartal 2024 einen Nettoverdienst von 46,8 Millionen US-Dollar (0,76 US-Dollar pro Aktie), im Vergleich zu 29,3 Millionen US-Dollar (0,48 US-Dollar pro Aktie) im 3. Quartal 2023. Die verbesserte Leistung wurde durch neue Basispreise in Montana und South Dakota, höhere Einnahmen aus der elektrischen Übertragung und einen Steuervorteil angetrieben. Das Unternehmen überarbeitete seine Prognose für das nicht-GAAP EPS 2024 auf 3,32-3,47 US-Dollar von zuvor 3,42-3,62 US-Dollar aufgrund von Verzögerungen bei der vorübergehenden Tariferleichterung in Montana. Das Yellowstone County Generating Station begann im Oktober 2024 mit der Versorgung von Kunden, wobei die Gesamtkosten zwischen 310 und 320 Millionen US-Dollar geschätzt werden. Das Unternehmen erklärte eine vierteljährliche Dividende von 0,65 US-Dollar pro Aktie.
- Net income increased 59.7% to $46.8 million in Q3 2024 vs $29.3 million in Q3 2023
- EPS grew to $0.76 from $0.48 year-over-year
- Yellowstone County 175 MW plant completed and operational as of October 2024
- Secured $70 million grant for Colstrip Transmission System Upgrade
- Revised down 2024 EPS guidance to $3.32-$3.47 from $3.42-$3.62
- Yellowstone County plant costs increased to $310-320 million due to legal challenges and delays
- Higher operating costs, depreciation, and interest expenses impacted earnings
- Dividend payout ratio currently above targeted 60-70% range
Insights
The Q3 2024 results show significant improvement with
Notable developments include:
- Yellowstone County 175MW plant completion with total costs of
$310-320 million - Strategic acquisitions of Energy West Montana assets (
$39 million ) and Puget Sound Energy's Colstrip stake - Significant rate review activities across Montana, South Dakota and Nebraska seeking substantial revenue increases
While earnings growth is solid, higher costs from depreciation, operations and interest expenses remain headwinds. The
The completion of the Yellowstone County Generating Station marks a critical capacity addition ahead of winter demand. However, legal challenges and construction delays pushed costs higher than initially projected. The potential acquisition of additional Colstrip Units 3 & 4 stakes would give NorthWestern majority control (
The North Plains Connector project represents transformative transmission infrastructure connecting eastern and western grids. The
-
Third quarter 2024 GAAP EPS of
$0.76 $0.48 -
Third quarter 2024 adjusted non-GAAP EPS of
$0.65 $0.49 -
Announces
$0.65 -
Revises 2024 earnings guidance in light of delayed
Montana interim rate decision
Third quarter earnings were driven by rate relief in
"As we continue to execute on our strategic priorities, we are pleased to report another quarter of solid earnings growth," said Brian Bird, President and CEO. "We remain committed to providing reliable and affordable energy for our customers. Yellowstone County Generating Station began to serve customers in October, providing critical capacity as we go into the winter season. Meanwhile, we are actively working with the commissions in
THIRD QUARTER 2024 COMPARED TO THIRD QUARTER 2023
The increase in net income was primarily due to new base rates in
EARNINGS GUIDANCE
We are revising our 2024 non-GAAP EPS guidance range to
This guidance is based upon, but not limited to, the following major assumptions:
- Normal weather in our service territories;
-
Interim rates in
Montana in December 2024; -
An effective income tax rate of approximately
9% -11% ; and - Diluted average shares outstanding of approximately 61.4 million.
We are also affirming our long-term (5 year) diluted earnings per share growth guidance of
Dividend Declared
NorthWestern Energy Group's Board of Directors declared a quarterly common stock dividend of
Additional information regarding this release can be found in the earnings presentation at https://www.northwesternenergy.com/investors/earnings.
COMPANY UPDATES
Construction of the new generation facility was substantially completed and the plant placed in service in October 2024. The lawsuit challenging the Yellowstone County Generating Station air quality permit, which required us to suspend construction activities for a period of time, as well as additional related legal and construction challenges, delayed the project timing and have increased costs. As of September 30, 2024, total costs of approximately
Regulatory Update
Rate reviews are necessary to recover the cost of providing safe, reliable service, while contributing to earnings growth and achieving our financial objectives. We regularly review the need for electric and natural gas rate relief in each state in which we provide service. Our ongoing rate review activity includes the following:
Montana Rate Review - In July 2024, we filed a
Our filing included a request for interim base rates to be effective October 1, 2024. Implementation of interim base rates, if any, has been delayed beyond our requested effective date as the MPSC has not yet made a decision on the interim rate request.
The MPSC has developed its procedural schedule for our rate review request including a hearing scheduled to commence on April 22, 2025. If a final order is not received by May 23, 2025, which is 270 days from acceptance of our filing, we intend to implement, as permitted by the MPSC regulations, our requested rates, which will be subject to refund, until a final order is received.
South Dakota Natural Gas Rate Review - In June 2024, we filed a natural gas rate review with the South Dakota Public Utilities Commission. The filing requests a base rate annual revenue increase of
Nebraska Natural Gas Rate Review - In June 2024, we filed a natural gas rate review with the Nebraska Public Service Commission (NPSC). The filing requests a base rate annual revenue increase of
Environmental Protection Agency (EPA) Rules
On April 25, 2024, the EPA released Greenhouse Gas (GHG) Rules for existing coal-fired facilities and new coal and natural gas-fired facilities as well as Mercury and Air Toxics Standard (MATS) Rules. Compliance with the rules will require expensive upgrades at Colstrip Units 3 and 4 with proposed compliance dates that may not be achievable and / or require technology that is unproven, resulting in significant impacts to costs of the facilities. The final MATS and GHG Rules require compliance as early as 2027 and 2032, respectively.
Acquisition of Energy West Montana Assets
On July 29, 2024, we entered into an Asset Purchase Agreement with Hope Utilities to acquire its Energy West natural gas utility distribution system and operations serving approximately 33,000 customers located near
On July 30, 2024, we entered into a definitive agreement (the Agreement) with Puget Sound Energy (Puget) to acquire Puget's 25 percent interest in each of Units 3 and 4 (collectively representing 370 megawatts) at the Colstrip Generating Station for
Acquisition of Puget’s entire ownership interest, in addition to the previously disclosed acquisition of Avista’s 15 percent interest in each of Colstrip Units 3 and 4 (collectively representing 222 megawatts), would result in our ownership of 55 percent of the facility with the ability to guide operating and maintenance investments. This provides capacity to help us meet our obligation to provide reliable and cost effective power to our customers in
Transmission Investment
In August 2024, the
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(in millions) |
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Reconciliation of gross margin to utility margin: |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|||||||||||||
Operating Revenues |
|
$ |
345.2 |
|
$ |
321.1 |
$ |
1,140.4 |
|
$ |
1,066.1 |
|||||
Less: Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) |
|
|
87.9 |
|
|
|
88.9 |
|
|
339.1 |
|
|
|
322.0 |
|
|
Less: Operating and maintenance |
|
|
55.9 |
|
|
|
53.2 |
|
|
167.4 |
|
|
|
163.9 |
|
|
Less: Property and other taxes |
|
|
41.6 |
|
|
|
43.3 |
|
|
125.0 |
|
|
|
132.6 |
|
|
Less: Depreciation and depletion |
|
|
57.0 |
|
|
|
52.2 |
|
|
170.6 |
|
|
|
157.8 |
|
|
Gross Margin |
|
|
102.8 |
|
|
|
83.5 |
|
|
338.3 |
|
|
|
289.8 |
|
|
Operating and maintenance |
|
|
55.9 |
|
|
|
53.2 |
|
|
167.4 |
|
|
|
163.9 |
|
|
Property and other taxes |
|
|
41.6 |
|
|
|
43.3 |
|
|
125.0 |
|
|
|
132.6 |
|
|
Depreciation and depletion |
|
|
57.0 |
|
|
|
52.2 |
|
|
170.6 |
|
|
|
157.8 |
|
|
Utility Margin(1) |
|
$ |
257.3 |
|
|
$ |
232.2 |
|
$ |
801.3 |
|
|
$ |
744.1 |
|
|
(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below. |
||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions, except per share amounts) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues |
$ |
345.2 |
|
$ |
321.1 |
|
$ |
1,140.4 |
|
$ |
1,066.1 |
||||
Fuel, purchased supply and direct transmission expense(1) |
|
87.9 |
|
|
|
88.9 |
|
|
|
339.1 |
|
|
|
322.0 |
|
Utility Margin (2) |
|
257.3 |
|
|
|
232.2 |
|
|
|
801.3 |
|
|
|
744.1 |
|
|
|
|
|
|
|
|
|
||||||||
Operating and maintenance |
|
55.9 |
|
|
|
53.2 |
|
|
|
167.4 |
|
|
|
163.9 |
|
Administrative and general |
|
34.9 |
|
|
|
29.4 |
|
|
|
106.7 |
|
|
|
94.1 |
|
Property and other taxes |
|
41.6 |
|
|
|
41.8 |
|
|
|
125.0 |
|
|
|
131.0 |
|
Depreciation and depletion |
|
57.0 |
|
|
|
52.2 |
|
|
|
170.6 |
|
|
|
157.8 |
|
Total Operating Expenses (3) |
|
189.4 |
|
|
|
176.6 |
|
|
|
569.7 |
|
|
|
546.8 |
|
Operating income |
|
67.9 |
|
|
|
55.6 |
|
|
|
231.6 |
|
|
|
197.3 |
|
Interest expense, net |
|
(33.4 |
) |
|
|
(28.7 |
) |
|
|
(96.3 |
) |
|
|
(85.1 |
) |
Other income, net |
|
9.1 |
|
|
|
4.1 |
|
|
|
19.6 |
|
|
|
12.9 |
|
Income before income taxes |
|
43.7 |
|
|
|
31.0 |
|
|
|
155.0 |
|
|
|
125.1 |
|
Income tax benefit (expense) |
|
3.2 |
|
|
|
(1.7 |
) |
|
|
(11.4 |
) |
|
|
(14.1 |
) |
Net Income |
|
46.8 |
|
|
|
29.3 |
|
|
|
143.6 |
|
|
|
111.0 |
|
Basic Shares Outstanding |
|
61.3 |
|
|
|
60.4 |
|
|
|
61.3 |
|
|
|
60.0 |
|
Earnings per Share - Basic |
$ |
0.76 |
|
|
$ |
0.48 |
|
|
$ |
2.34 |
|
|
$ |
1.85 |
|
Diluted Shares Outstanding |
|
61.4 |
|
|
|
60.5 |
|
|
|
61.4 |
|
|
|
60.0 |
|
Earnings per Share - Diluted |
$ |
0.76 |
|
|
$ |
0.48 |
|
|
$ |
2.34 |
|
|
$ |
1.85 |
|
|
|
|
|
|
|
|
|
||||||||
Dividends Declared per Common Share |
$ |
0.65 |
|
|
$ |
0.64 |
|
|
$ |
1.95 |
|
|
$ |
1.92 |
|
(1) Exclusive of depreciation and depletion expense. |
|||||||||||||||
(2) Utility Margin is a Non-GAAP financial measure. See "Reconciliation of gross margin to utility margin" above and “Non-GAAP Financial Measures” below. |
|||||||||||||||
(3) Excluding fuel, purchased supply and direct transmission expense. |
|||||||||||||||
Note: Subtotal variances may exist due to rounding. |
|||||||||||||||
RECONCILIATION OF PRIMARY CHANGES DURING THE QUARTER
|
Three Months Ended
|
||||||||||||||
|
Pre-tax
|
|
Income
|
|
Net
|
|
Diluted
|
||||||||
|
(in millions, except EPS) |
|
|
||||||||||||
Third Quarter, 2023 |
$ |
31.0 |
|
|
$ |
(1.7 |
) |
|
$ |
29.3 |
|
|
$ |
0.48 |
|
Variance in revenue and fuel, purchased supply, and direct transmission expense(1) items impacting net income: |
|
|
|
|
|
|
|
||||||||
Base rates |
|
17.2 |
|
|
|
(4.4 |
) |
|
|
12.8 |
|
|
|
0.21 |
|
Electric transmission revenue |
|
5.9 |
|
|
|
(1.5 |
) |
|
|
4.4 |
|
|
|
0.07 |
|
Electric retail volumes |
|
3.6 |
|
|
|
(0.9 |
) |
|
|
2.7 |
|
|
|
0.04 |
|
|
|
1.5 |
|
|
|
(0.4 |
) |
|
|
1.1 |
|
|
|
0.02 |
|
|
|
0.9 |
|
|
|
(0.2 |
) |
|
|
0.7 |
|
|
|
0.01 |
|
Non-recoverable |
|
0.6 |
|
|
|
(0.2 |
) |
|
|
0.4 |
|
|
|
0.01 |
|
Natural gas retail volumes |
|
(0.3 |
) |
|
|
0.1 |
|
|
|
(0.2 |
) |
|
|
— |
|
Production tax credits, offset within income tax benefit |
|
(0.2 |
) |
|
|
0.2 |
|
|
|
— |
|
|
|
— |
|
Other |
|
(1.2 |
) |
|
|
0.3 |
|
|
|
(0.9 |
) |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
||||||||
Variance in expense items(2) impacting net income: |
|
|
|
|
|
|
|
||||||||
Operating, maintenance, and administrative |
|
(5.5 |
) |
|
|
1.4 |
|
|
|
(4.1 |
) |
|
|
(0.07 |
) |
Depreciation |
|
(4.8 |
) |
|
|
1.2 |
|
|
|
(3.6 |
) |
|
|
(0.06 |
) |
Interest expense |
|
(4.7 |
) |
|
|
1.2 |
|
|
|
(3.5 |
) |
|
|
(0.06 |
) |
Property and other taxes not recoverable within trackers |
|
(1.9 |
) |
|
|
0.5 |
|
|
|
(1.4 |
) |
|
|
(0.02 |
) |
Gas repairs safe harbor method change |
|
— |
|
|
|
7.0 |
|
|
|
7.0 |
|
|
|
0.12 |
|
Other |
|
1.5 |
|
|
|
0.6 |
|
|
|
2.1 |
|
|
|
0.03 |
|
Dilution from higher share count |
|
|
|
|
|
|
|
(0.01 |
) |
||||||
Third Quarter, 2024 |
$ |
43.6 |
|
|
$ |
3.2 |
|
|
$ |
46.8 |
|
|
$ |
0.76 |
|
Change |
|
|
|
|
$ |
17.5 |
|
|
$ |
0.28 |
|
||||
(1) Exclusive of depreciation and depletion shown separately below |
|||||||||||||||
(2) Excluding fuel, purchased supply, and direct transmission expense |
|||||||||||||||
(3) Income Tax (Expense) Benefit calculation on reconciling items assumes blended federal plus state effective tax rate of |
|||||||||||||||
EXPLANATION OF CONSOLIDATED RESULTS
Three Months Ended September 30, 2024 Compared with the Three Months Ended September 30, 2023
Consolidated gross margin for the three months ended September 30, 2024 was
|
|
Three Months Ended
|
||||||
(in millions) |
|
|
2024 |
|
|
|
2023 |
|
|
|
|||||||
Reconciliation of gross margin to utility margin: |
|
|
|
|
||||
Operating Revenues |
|
$ |
345.2 |
|
$ |
321.1 |
||
Less: Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) |
|
|
87.9 |
|
|
|
88.9 |
|
Less: Operating and maintenance |
|
|
55.9 |
|
|
|
53.2 |
|
Less: Property and other taxes |
|
|
41.6 |
|
|
|
43.3 |
|
Less: Depreciation and depletion |
|
|
57.0 |
|
|
|
52.2 |
|
Gross Margin |
|
|
102.8 |
|
|
|
83.5 |
|
Operating and maintenance |
|
|
55.9 |
|
|
|
53.2 |
|
Property and other taxes |
|
|
41.6 |
|
|
|
43.3 |
|
Depreciation and depletion |
|
|
57.0 |
|
|
|
52.2 |
|
Utility Margin(1) |
|
$ |
257.3 |
|
|
$ |
232.2 |
|
(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below. |
||||||||
|
Three Months Ended September 30, |
|||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
Change |
|
% Change |
|||
|
(dollars in millions) |
|||||||||||||
Utility Margin |
|
|
|
|
|
|
|
|||||||
Electric |
$ |
225.7 |
|
$ |
202.0 |
|
$ |
23.7 |
|
11.7 |
% |
|||
Natural Gas |
|
31.6 |
|
|
|
30.2 |
|
|
|
1.4 |
|
|
4.6 |
|
Total Utility Margin(1) |
$ |
257.3 |
|
|
$ |
232.2 |
|
|
$ |
25.1 |
|
|
10.8 |
% |
(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below. |
||||||||||||||
Consolidated utility margin for the three months ended September 30, 2024 was
Primary components of the change in utility margin include the following (in millions):
|
Utility Margin
|
||
Utility Margin Items Impacting Net Income |
|
||
Base rates |
$ |
17.2 |
|
Transmission revenue due to market conditions and rates |
|
5.9 |
|
Electric retail volumes |
|
3.6 |
|
|
|
1.5 |
|
|
|
0.9 |
|
Non-recoverable |
|
0.6 |
|
Natural gas retail volumes |
|
(0.3 |
) |
Other |
|
(1.2 |
) |
Change in Utility Margin Items Impacting Net Income |
|
28.2 |
|
Utility Margin Items Offset Within Net Income |
|
||
Property and other taxes recovered in revenue, offset in property and other taxes |
|
(2.0 |
) |
Operating expenses recovered in revenue, offset in operating and maintenance expense |
|
(0.9 |
) |
Production tax credits, offset in income tax expense |
|
(0.2 |
) |
Change in Utility Margin Items Offset Within Net Income |
|
(3.1 |
) |
Increase in Consolidated Utility Margin(1) |
$ |
25.1 |
|
(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below. |
|||
Higher electric retail volumes were driven by favorable weather in
Under the PCCAM, net supply costs higher or lower than the PCCAM base rate (PCCAM Base) (excluding qualifying facility costs) are allocated 90 percent to
|
Three Months Ended September 30, |
|||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
Change |
|
% Change |
|||
($ in millions) |
|
|||||||||||||
Operating Expenses (excluding fuel, purchased supply and direct transmission expense) |
|
|
|
|
|
|
|
|||||||
Operating and maintenance |
$ |
55.9 |
|
$ |
53.2 |
|
$ |
2.7 |
|
|
5.1 |
% |
||
Administrative and general |
|
34.9 |
|
|
|
29.4 |
|
|
|
5.5 |
|
|
18.7 |
|
Property and other taxes |
|
41.6 |
|
|
|
41.8 |
|
|
|
(0.2 |
) |
|
(0.5 |
) |
Depreciation and depletion |
|
57.0 |
|
|
|
52.2 |
|
|
|
4.8 |
|
|
9.2 |
|
Total Operating Expenses (excluding fuel, purchased supply and direct transmission expense) |
$ |
189.4 |
|
|
$ |
176.6 |
|
|
$ |
12.8 |
|
|
7.2 |
% |
Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were
|
Operating
|
||
|
2024 vs. 2023 |
||
Operating Expenses (excluding fuel, purchased supply and direct transmission expense) Impacting Net Income |
|
||
Depreciation expense due to plant additions and higher depreciation rates |
$ |
4.8 |
|
Insurance expense, primarily due to increased wildfire risk premiums |
|
3.4 |
|
Labor and benefits(1) |
|
3.0 |
|
Electric generation maintenance |
|
1.9 |
|
Property and other taxes not recoverable within trackers |
|
1.9 |
|
Technology implementation and maintenance expenses |
|
(0.1 |
) |
Partial recovery from previously impaired alternative energy storage investment |
|
(0.5 |
) |
Uncollectible accounts |
|
(1.1 |
) |
Other |
|
(1.1 |
) |
Change in Items Impacting Net Income |
|
12.2 |
|
|
|
||
Operating Expenses Offset Within Net Income |
|
||
Property and other taxes recovered in trackers, offset in revenue |
|
(2.0 |
) |
Operating and maintenance expenses recovered in trackers, offset in revenue |
|
(0.9 |
) |
Deferred compensation, offset in other income |
|
2.8 |
|
Pension and other postretirement benefits, offset in other income(1) |
|
0.7 |
|
Change in Items Offset Within Net Income |
|
0.6 |
|
Increase in Operating Expenses (excluding fuel, purchased supply and direct transmission expense) |
$ |
12.8 |
|
(1) In order to present the total change in labor and benefits, we have included the change in the non-service cost component of our pension and other postretirement benefits, which is recorded within other income on our Condensed Consolidated Statements of Income. This change is offset within this table as it does not affect our operating expenses. |
|||
We estimate property taxes throughout each year, and update those estimates based on valuation reports received from the Montana Department of Revenue. Under
Consolidated operating income for the three months ended September 30, 2024 was
Consolidated interest expense was
Consolidated other income was
Consolidated income tax benefit was
The following table summarizes the differences between our effective tax rate and the federal statutory rate ($ in millions):
|
Three Months Ended September 30, |
||||||||||||
|
2024 |
|
2023 |
||||||||||
Income Before Income Taxes |
$ |
43.7 |
|
|
|
|
$ |
31.0 |
|
|
|
||
|
|
|
|
|
|
|
|
||||||
Income tax calculated at federal statutory rate |
|
9.2 |
|
|
21.0 |
% |
|
|
6.5 |
|
|
21.0 |
% |
|
|
|
|
|
|
|
|
||||||
Permanent or flow-through adjustments: |
|
|
|
|
|
|
|
||||||
State income tax, net of federal provisions |
|
0.1 |
|
|
0.1 |
|
|
|
0.1 |
|
|
0.4 |
|
Gas repairs safe harbor method change |
|
(7.0 |
) |
|
(16.0 |
) |
|
|
— |
|
|
— |
|
Flow-through repairs deductions |
|
(4.6 |
) |
|
(10.5 |
) |
|
|
(4.2 |
) |
|
(13.5 |
) |
Production tax credits |
|
(2.4 |
) |
|
(5.6 |
) |
|
|
(1.3 |
) |
|
(4.1 |
) |
Amortization of excess deferred income tax |
|
(0.2 |
) |
|
(0.5 |
) |
|
|
(0.3 |
) |
|
(1.0 |
) |
Income tax return to accrual adjustment |
|
— |
|
|
— |
|
|
|
0.4 |
|
|
1.3 |
|
Plant and depreciation flow-through items |
|
1.8 |
|
|
4.2 |
|
|
|
0.4 |
|
|
1.2 |
|
Other, net |
|
(0.1 |
) |
|
— |
|
|
|
0.1 |
|
|
0.2 |
|
|
|
(12.4 |
) |
|
(28.3 |
) |
|
|
(4.8 |
) |
|
(15.5 |
) |
|
|
|
|
|
|
|
|
||||||
Income tax (benefit) expense |
$ |
(3.2 |
) |
|
(7.3 |
)% |
|
$ |
1.7 |
|
|
5.5 |
% |
We compute income tax expense for each quarter based on the estimated annual effective tax rate for the year, adjusted for certain discrete items. Our effective tax rate typically differs from the federal statutory tax rate primarily due to the regulatory impact of flowing through federal and state tax benefits of repairs deductions, state tax benefit of accelerated tax depreciation deductions (including bonus depreciation when applicable) and production tax credits.
Consolidated net income for the three months ended September 30, 2024 was
LIQUIDITY AND OTHER CONSIDERATIONS
Liquidity and Capital Resources
As of September 30, 2024, our total net liquidity was approximately
Earnings Per Share
Basic earnings per share are computed by dividing earnings applicable to common stock by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of common stock equivalent shares that could occur if unvested shares were to vest. Common stock equivalent shares are calculated using the treasury stock method, as applicable. The dilutive effect is computed by dividing earnings applicable to common stock by the weighted average number of common shares outstanding plus the effect of the outstanding unvested restricted stock and performance share awards. Average shares used in computing the basic and diluted earnings per share are as follows:
|
Three Months Ended |
||||
|
September 30,
|
|
September 30,
|
||
Basic computation |
61,301,696 |
|
60,442,164 |
||
Dilutive effect of: |
|
|
|
||
Performance share awards(1) |
95,279 |
|
|
35,533 |
|
Diluted computation |
61,396,975 |
|
|
60,477,697 |
|
|
Nine Months Ended |
||||
|
September 30,
|
|
September 30,
|
||
Basic computation |
61,285,570 |
|
60,010,609 |
||
Dilutive effect of: |
|
|
|
||
Performance share awards(1) |
69,136 |
|
|
31,311 |
|
Diluted computation |
61,354,706 |
|
|
60,041,920 |
|
(1) Performance share awards are included in diluted weighted average number of shares outstanding based upon what would be issued if the end of the most recent reporting period was the end of the term of the award. |
|||||
As of September 30, 2024, there were 16,015 shares from performance and restricted share awards which were antidilutive and excluded from the earnings per share calculations, compared to 32,649 shares as of September 30, 2023.
Adjusted Non-GAAP Earnings
We reported GAAP earnings of
(in millions, except EPS) |
|
||||||||||
|
|
|
|
||||||||
Three Months Ended September 30, 2024 |
|||||||||||
|
Pre-tax
|
Net(1)
|
Diluted
|
||||||||
2024 Reported GAAP |
$ |
43.7 |
|
$ |
46.8 |
|
$ |
0.76 |
|
||
|
|
|
|
||||||||
Non-GAAP Adjustments: |
|||||||||||
Unfavorable weather as compared to normal |
|
0.4 |
|
|
0.3 |
|
|
0.01 |
|
||
Partial recovery from a previously impaired alternative energy storage investment |
|
(0.5 |
) |
|
(0.4 |
) |
|
(0.01 |
) |
||
Natural gas repairs safe harbor method change |
|
— |
|
|
(7.0 |
) |
|
(0.11 |
) |
||
|
|
|
|
||||||||
2024 Adj. Non-GAAP |
$ |
43.6 |
|
$ |
39.7 |
|
$ |
0.65 |
|
||
|
|
|
|
||||||||
|
|
|
|
||||||||
Three Months Ended September 30, 2023 |
|||||||||||
|
Pre-tax
|
Net(1)
|
Diluted
|
||||||||
2023 Reported GAAP |
$ |
31.0 |
|
$ |
29.3 |
|
$ |
0.48 |
|
||
|
|
|
|
||||||||
Non-GAAP Adjustments: |
|||||||||||
Unfavorable weather as compared to normal |
|
0.9 |
|
|
0.7 |
|
|
0.01 |
|
||
|
|
|
|
||||||||
2023 Adj. Non-GAAP |
$ |
31.9 |
|
$ |
30.0 |
|
$ |
0.49 |
|
||
|
|
|
|
||||||||
(1) Income tax rate on reconciling items assumes blended federal plus state effective tax rate of |
|||||||||||
Company Hosting Earnings Webcast
NorthWestern will also host an investor earnings webcast on Wednesday, October 30, 2024, at 3:00 p.m. Eastern time to review its financial results for the quarter ending September 30, 2024. To register for the webcast, please visit www.northwesternenergy.com/earnings-registration. After registration, a link to access the event will be emailed to the address provided. Please note that a unique and valid email address is required for each attendee to access the webinar. Please go to the site at least 10 minutes in advance of the webinar to register. An archived webcast will be available shortly after the event and remain active for one year.
NorthWestern Energy - DELIVERING A BRIGHT FUTURE
NorthWestern Energy Group, Inc., doing business as NorthWestern Energy, provides essential energy infrastructure and valuable services that enrich lives and empower communities while serving as long-term partners to our customers and communities. We work to deliver safe, reliable, and innovative energy solutions that create value for customers, communities, employees, and investors. We do this by providing low-cost and reliable service performed by highly-adaptable and skilled employees. We provide electricity and / or natural gas to approximately 775,300 customers in
Non-GAAP Financial Measures
This press release includes financial information prepared in accordance with GAAP, as well as other financial measures, such as Utility Margin, Adjusted Non-GAAP pretax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.
We define Utility Margin as Operating Revenues less fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion) as presented in our Condensed Consolidated Statements of Income. This measure differs from the GAAP definition of Gross Margin due to the exclusion of Operating and maintenance, Property and other taxes, and Depreciation and depletion expenses, which are presented separately in our Condensed Consolidated Statements of Income. A reconciliation of Utility Margin to Gross Margin, the most directly comparable GAAP measure, is included in the press release above.
Management believes that Utility Margin provides a useful measure for investors and other financial statement users to analyze our financial performance in that it excludes the effect on total revenues caused by volatility in energy costs and associated regulatory mechanisms. This information is intended to enhance an investor's overall understanding of results. Under our various state regulatory mechanisms, as detailed below, our supply costs are generally collected from customers. In addition, Utility Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow for recovery of operating costs, as well as to analyze how changes in loads (due to weather, economic or other conditions), rates and other factors impact our results of operations. Our Utility Margin measure may not be comparable to that of other companies' presentations or more useful than the GAAP information provided elsewhere in this report.
Management also believes the presentation of Adjusted Non-GAAP pre-tax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS is more representative of normal earnings than GAAP pre-tax income, net income and EPS due to the exclusion (or inclusion) of certain impacts that are not reflective of ongoing earnings. The presentation of these non-GAAP measures is intended to supplement investors' understanding of our financial performance and not to replace other GAAP measures as an indicator of actual operating performance. Our measures may not be comparable to other companies' similarly titled measures.
Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, the information under "Reconciliation of Non-GAAP Items." Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. We caution that while we make such statements in good faith and believe such statements are based on reasonable assumptions, including without limitation, management's examination of historical operating trends, data contained in records and other data available from third parties, we cannot assure you that we will achieve our projections. Factors that may cause such differences include, but are not limited to:
- adverse determinations by regulators, as well as potential adverse federal, state, or local legislation or regulation, including costs of compliance with existing and future environmental requirements, and wildfire damages in excess of liability insurance coverage, could have a material effect on our liquidity, results of operations and financial condition;
- the impact of extraordinary external events and natural disasters, such as a wide-spread or global pandemic, geopolitical events, earthquake, flood, drought, lightning, weather, wind, and fire, could have a material effect on our liquidity, results of operations and financial condition;
- acts of terrorism, cybersecurity attacks, data security breaches, or other malicious acts that cause damage to our generation, transmission, or distribution facilities, information technology systems, or result in the release of confidential customer, employee, or Company information;
- supply chain constraints, recent high levels of inflation for product, services and labor costs, and their impact on capital expenditures, operating activities, and/or our ability to safely and reliably serve our customers;
- changes in availability of trade credit, creditworthiness of counterparties, usage, commodity prices, fuel supply costs or availability due to higher demand, shortages, weather conditions, transportation problems or other developments, may reduce revenues or may increase operating costs, each of which could adversely affect our liquidity and results of operations;
- unscheduled generation outages or forced reductions in output, maintenance or repairs, which may reduce revenues and increase operating costs or may require additional capital expenditures or other increased operating costs; and
-
adverse changes in general economic and competitive conditions in the
U.S. financial markets and in our service territories.
Our 2023 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, reports on Form 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241028378519/en/
Investor Relations Contact:
Travis Meyer (605) 978-2967
travis.meyer@northwestern.com
Media Contact:
Jo Dee Black (866) 622-8081
jodee.black@northwestern.com
Source: NorthWestern Energy Group, Inc.
FAQ
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