NW Natural Holdings Reports Second Quarter 2021 Results

Rhea-AI Summary

Northwest Natural Holdings (NWN) reported a net loss of $0.02 per share for Q2 2021, an improvement from a loss of $0.17 per share in Q2 2020. Year-to-date, net income rose to $1.92 per share, up from $1.41 per share in 2020. The company added nearly 12,000 natural gas meters, achieving a growth rate of 1.6%. NWN reaffirmed its 2021 earnings guidance between $2.40 and $2.60 per share. The firm filed a settlement in its Washington general rate case, aiming for a revenue increase starting November 2021.

Positive

• Year-to-date net income increased $15.7 million to $58.8 million (or $1.92 per share), compared to $43.1 million (or $1.41 per share) in 2020.
• Added nearly 12,000 natural gas meters with a growth rate of 1.6%.
• Reaffirmed 2021 earnings guidance in the range of $2.40 to $2.60 per share.

Negative

• Reported a net loss of $0.02 per share for Q2 2021, although it was an improvement from Q2 2020.
• Higher operations and maintenance expenses impacted profitability, with a $2.6 million rise in costs.

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

• Reported a net loss of $0.02 per share for the second quarter of 2021, compared to a net loss of $0.17 per share from continuing operations for the same period in 2020
• Earned net income of $1.92 per share for the first six months of 2021, compared to earnings from continuing operations of $1.41 per share for the same period in 2020
• Added nearly 12,000 natural gas meters in the last 12 months with a growth rate of 1.6%
• Filed a multi-party settlement in the Washington general rate case
• Continued working to contract for renewable natural gas, including issuing a request for proposal in July 2021
• Reaffirmed 2021 earnings guidance in the range of $2.40 to $2.60 per share

"The Company continues to perform well, and we're executing on our growth opportunities," said David H. Anderson, president and CEO of NW Natural Holdings. "Our mission is to continue providing essential energy and water services to customers safely and reliably, striving to put renewables on our natural gas pipeline, and investing in water and wastewater utilities."

For the second quarter of 2021, net income increased $4.4 million to a $0.7 million net loss (or $0.02 per share), compared to a net loss from continuing operations of $5.1 million (or $0.17 per share) for the same period in 2020. Results reflected new rates in Oregon for our natural gas utility, customer growth, and lower financial impacts from COVID-19, partially offset by higher operations and maintenance expenses and higher depreciation and general tax expenses as we continued to invest in our gas utility system.

Year-to-date net income increased $15.7 million to $58.8 million (or $1.92 per share), compared to $43.1 million (or $1.41 per share) for the same period in 2020. Results reflected new rates in Oregon for our natural gas utility, customer growth, and lower financial impacts from COVID-19, partially offset by higher depreciation and general tax expenses and higher operations and maintenance expenses. In addition, net income from our other activities increased primarily due to higher asset management revenues.

KEY EVENTS AND INITIATIVES

The after-tax drivers below are based on a statutory tax rate of 26.5%.

Settlement Filed in NW Natural's Washington General Rate Case

On December 18, 2020, NW Natural filed a request for a general rate increase with the Washington Utilities and Transportation Commission (WUTC). Approximately 10% of NW Natural’s revenues are derived from its Washington customers. The original filing included a requested increase in annual revenue requirements over two years to recover operating costs and infrastructure and technology investments. This included a $6.3 million increase in the first year beginning November 1, 2021 (Year One) and a $3.2 million increase in the second year beginning November 1, 2022 (Year Two).

On July 27, 2021, NW Natural and other parties filed a settlement with the WUTC. Under the multi-party settlement, NW Natural's revenue requirement would increase $5.0 million in Year One and up to an additional $3.0 million increase in Year Two. The settlement included a cost of capital of 6.814% for both years and rate base of $247.3 million as of November 1, 2022 or an increase of $31.2 million for Year 1 and $21.4 million for Year 2. The settlement is subject to review and approval by the WUTC with new rates requested to take effect Nov. 1, 2021.

Coronavirus (COVID-19)

NW Natural Holdings continues to operate with a focus on the safety of our employees and customers. We benefit from a resilient business model with nearly 90% of our natural gas utility margin coming from the residential and commercial sectors and a majority of our utility margin decoupled and weather normalized. Customer growth from residential construction and conversions remained strong. The number of commercial customers has been stable for several consecutive quarters. The customer growth rate was 1.6% for the 12 months ended June 30, 2021.

We estimate the financial effects of COVID-19 in the income statement to be $1.7 million (after-tax) for the first half of 2021, compared to approximately $4 million (after-tax) for the same period in 2020. The change in financial effects year-over-year includes $1.8 million (after-tax) from 2020 that was subsequently deferred to a regulatory asset in the third quarter of 2020. The 2021 financial effects include $0.7 million (after-tax) of revenue we expect to recognize in a future period related to forgone late fees. The remaining $1.0 million (after-tax) will not be recovered through rates as it primarily relates to lower natural gas distribution margin from customers that stopped natural gas service and lower usage from customers that are not covered under decoupled rate schedules.

February 2021 Winter Weather Event

In February 2021, NW Natural experienced a severe winter storm in its service territory. This event coincided with the weather event that affected much of the mid-continent of the United States and resulted in elevated gas prices across the country. 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 was a $6.5 million benefit for customers and a net benefit to shareholders of $2.8 million (after-tax) from the combined effect of asset management revenues reflected in NW Natural's other segment offset by lower utility margin from a loss on the Oregon gas cost incentive sharing mechanism.

Renewable Natural Gas (RNG)

NW Natural continues to pursue RNG for the natural gas pipeline under the landmark Oregon Senate Bill 98, which supports renewable energy procurement and investment by natural gas utilities. NW Natural has options to invest up to a total estimated $38 million in four separate RNG development projects that will access biogas derived from water treatment at Tyson Foods’ processing plants. Construction on our first RNG facility with BioCarbN and Tyson Foods' is expected to begin in September 2021 with completion and commissioning planned for early 2022. In July 2021, we signed a multi-year RNG purchase agreement with Element Markets. With the addition of this most recent contract, NW Natural has signed agreements with options to purchase or develop RNG totaling about 2% of NW Natural’s annual sales volume in Oregon, enough to heat about 36,000 homes. Additionally, in July 2021, NW Natural initiated a request for proposal (RFP) for additional RNG purchase or investment opportunities.

2020 Environment, Social, and Governance (ESG) Report Issued

On August 2, 2021, we issued our second 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.

SECOND QUARTER RESULTS

The following financial comparisons are for the second quarter of 2021 and 2020 with individual year-over-year drivers below presented on an after-tax basis using a statutory tax rate of 26.5% unless otherwise noted.

NW Natural Holdings' second quarter results are summarized by business segment in the table below:

		Three Months Ended June 30,
		2021										2020										Change
In thousands, except per share data		Amount					Per Share					Amount					Per Share					Amount					Per Share
Net income (loss) from continuing operations:
Natural Gas Distribution segment		(1,381		)			$	(0.05	)			$	(6,347	)			$	(0.21	)			$	4,966				$	0.16
Other		657					0.03					1,215					0.04					(558		)			(0.01		)
Consolidated		$	(724	)			$	(0.02	)			$	(5,132	)			$	(0.17	)			$	4,408				$	0.15
Diluted Shares							30,664										30,537										127

Natural Gas Distribution Segment

Natural Gas Distribution segment net income increased $5.0 million (or $0.16 per share) primarily reflecting new rates in Oregon as a result of a general rate case, which was effective beginning Nov. 1, 2020 and lower COVID financial impacts.

Margin increased $8.5 million reflecting new rates in Oregon and customer growth, which collectively contributed $7.0 million. In addition, lower COVID financial impacts contributed $0.4 million.

Operations and maintenance expense increased $2.6 million as a result of higher expenses mainly from higher employee benefit costs, professional service fees, and higher lease expense associated with our new headquarters and operations center, partially offset by lower expenses related to COVID. Depreciation expense and general taxes increased $2.3 million related to higher property, plant, and equipment as we continue to invest in our system.

Interest expense decreased $0.8 million mainly due to repaying the financings undertaken in March 2020 as a precautionary measure to support liquidity as the pandemic unfolded.

Other

Other net income decreased $0.6 million (or $0.01 per share) reflecting higher project costs at the holding company.

YEAR-TO-DATE RESULTS

The following financial comparisons are for the first six months of 2021 and 2020 with individual year-over-year drivers below presented on an after-tax basis using a statutory tax rate of 26.5% unless otherwise noted.

NW Natural Holdings' year-to-date results are summarized by business segment in the table below:

		Six Months Ended June 30,
		2021								2020								Change
In thousands, except per share data		Amount				Per Share				Amount				Per Share				Amount				Per Share
Net income from continuing operations:
Natural Gas Distribution segment		$	52,544			$	1.71			$	41,596			$	1.36			$	10,948			$	0.35
Other		6,249				0.21				1,548				0.05				4,701				0.16
Consolidated		$	58,793			$	1.92			$	43,144			$	1.41			$	15,649			$	0.51
Diluted Shares						30,671								30,559								112

Natural Gas Distribution Segment

Natural Gas Distribution segment net income increased $10.9 million (or $0.35 per share) primarily reflecting new rates in Oregon as a result of a general rate case, which was effective beginning Nov. 1, 2020 and lower COVID financial impacts.

Margin increased $22.1 million reflecting new rates in Oregon and customer growth, which collectively contributed $22.6 million. This was partially offset by a $2.1 million increase in loss from the gas cost incentive sharing mechanism as a result of purchasing higher priced gas during a February cold weather event than what was forecasted for the year.

Operations and maintenance expense increased $4.7 million as a result of higher expenses mainly from increased employee compensation and benefit costs, higher lease expense associated with our new headquarters and operations center, and professional service fees, partially offset by lower costs associated with COVID. Depreciation expense and general taxes increased $5.5 million related to higher property, plant, and equipment.

Other

Other net income increased $4.7 million (or $0.16 per share) reflecting $5.3 million of higher net income from NW Natural's other activities offset by a loss of $0.6 million from NW Natural Holdings' other activities. For NW Natural, the benefit in other activities was primarily driven by higher asset management revenues from the aforementioned February 2021 weather event. NW Natural Holdings' other activities reported higher project costs at the holding company.

BALANCE SHEET AND CASH FLOWS

During the first six months of 2021, the Company generated $194.3 million in operating cash flows or an increase of $32.2 million compared to the same period in 2020 due to higher net income and lower net working capital requirements. The Company used $127.9 million in investing activities during the first six months of 2021 primarily for natural gas utility capital expenditures, compared to $160.4 million used in investing activities during the same period in 2020 for utility capital expenditures and the acquisition of several water and wastewater utilities. Net cash used in financing activities was $73.5 million for the first six months of 2021 or a change of $201.8 million compared to the same period in 2020 primarily due to several financings undertaken in March 2020 that strengthened our liquidity position as a precaution as the COVID-19 pandemic unfolded. As of June 30, 2021, NW Natural Holdings held cash of $20.1 million.

2021 GUIDANCE

NW Natural Holdings reaffirmed 2021 earnings guidance in the range of $2.40 to $2.60 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.

DIVIDEND DECLARED

In 2021, the Board of Directors of NW Natural Holdings declared a quarterly dividend of $0.48 cents per share on the Company’s common stock. The dividend is payable on August 13, 2021 to shareholders of record on July 30, 2021, reflecting an annual indicated dividend rate of $1.92 per share. Future dividends are subject to Board of Director discretion and approval.

CONFERENCE CALL AND WEBCAST

As previously announced, NW Natural Holdings will host a conference call and webcast today to discuss its second quarter 2021 financial and operating results.

Date and Time:		Thursday, August 5, 2021
		8 a.m. PT (11 a.m. ET)
Phone Numbers:		United States: 1-866-267-6789
		Canada: 1-855-669-9657
		International: 1-412-902-4110

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 1-877-344-7529 (U.S.), 1-855-669-9658 (Canada), and 1-412-317-0088 (international). The replay access code is 10154449.

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), and other business interests.

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 780,000 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 20 Bcf of underground gas storage capacity in Oregon.

NW Natural Water provides water distribution and wastewater services to communities throughout the Pacific Northwest and Texas. NW Natural Water currently serves approximately 64,000 people through about 27,000 connections. Learn more about our water business at nwnaturalwater.com.

Additional information is available at nwnaturalholdings.com.

Forward-Looking Statements

This report, 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, capital expenditures, targeted capital structure, risks, risk profile, stability, acquisitions and timing, 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, environmental remediation cost recoveries, environmental initiatives, decarbonization and the role of natural gas and the gas delivery system, including use of renewable sources, renewable natural gas purchases, projects or investments and timing, magnitude and completion thereof, renewable hydrogen projects or investments and timing, magnitude and completion thereof, procurement of renewable natural gas or hydrogen for customers, 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 and earnings guidance, dividends, commodity costs and sourcing asset management activities, performance, timing, outcome, or effects of regulatory proceedings or mechanisms or approvals, including WUTC approval of the Washington general rate case multi-party settlement, regulatory prudence reviews, anticipated regulatory actions or filings, accounting treatment of future events, effects of legislation or changes in laws or regulations, effects, extent, severity and duration of COVID-19 and resulting economic disruption, the impact of mitigating factors and other efforts to mitigate risks posed by its spread, ability of our workforce, customers or suppliers to operate or conduct business, COVID-19 financial impact, expenses, cost savings measures and cost recovery including through regulatory deferrals and the timing and magnitude thereof, impact on capital projects, governmental actions and timing thereof, including actions to reopen the economy, and other statements that are other than statements of historical facts.

Forward-looking statements are based on current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual results may differ materially from those contemplated by the forward-looking statements. You are therefore cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future operational, economic or financial performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed by reference to the factors described in Part I, Item 1A "Risk Factors", and Part II, Item 7 and Item 7A "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosure about Market Risk" in the most recent Annual Report on Form 10-K and in Part I, Items 2 and 3 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosures About Market Risk", and Part II, Item 1A, "Risk Factors", in the quarterly reports filed thereafter.

All forward-looking statements made in this report and all subsequent forward-looking statements, whether written or oral and whether made by or on behalf of NW Holdings or NW Natural, are expressly qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, and NW Holdings and NW Natural undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. New factors emerge from time to time and it is not possible to predict all such factors, nor can it assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements.

NORTHWEST NATURAL HOLDINGS
Consolidated Income Statement and Financial Highlights (Unaudited)
Second Quarter 2021
		Three Months Ended											Six Months Ended											Twelve Months Ended
In thousands, except per share amounts, customer, and degree day data		June 30,											June 30,											June 30,
		2021				2020				Change			2021				2020				Change			2021				2020				Change
Operating revenues		$	148,917			$	134,971			10	%		$	464,863			$	420,122			11	%		$	818,420			$	757,703			8	%
Operating expenses:
Cost of gas		41,193				41,210				—			153,403				149,748				2			266,410				264,095				1
Operations and maintenance		50,047				43,983				14			102,238				92,904				10			189,463				180,127				5
Environmental remediation		1,509				1,622				(7	)		5,286				5,627				(6	)		9,350				11,673				(20	)
General taxes		8,914				8,373				6			20,283				18,268				11			37,093				33,750				10
Revenue taxes		5,671				4,454				27			18,335				16,197				13			32,429				30,100				8
Depreciation and amortization		28,144				25,836				9			56,241				50,511				11			109,413				98,048				12
Other operating expenses		815				551				48			1,747				1,479				18			3,969				3,191				24
Total operating expenses		136,293				126,029				8			357,533				334,734				7			648,127				620,984				4
Income from operations		12,624				8,942				41			107,330				85,388				26			170,293				136,719				25
Other income (expense), net		(2,597		)		(3,040		)		(15	)		(6,139		)		(6,615		)		(7	)		(13,468		)		(12,936		)		4
Interest expense, net		11,028				12,706				(13	)		22,154				23,174				(4	)		42,032				45,000				(7	)
Income (loss) before income taxes		(1,001		)		(6,804		)		(85	)		79,037				55,599				42			114,793				78,783				46
Income tax expense (benefit)		(277		)		(1,672		)		(83	)		20,244				12,455				63			28,871				15,797				83
Net income (loss) from continuing operations		(724		)		(5,132		)		(86	)		58,793				43,144				36			85,922				62,986				36
Income (loss) from discontinued operations, net of tax		—				280				(100	)		—				(498		)		(100	)		7,006				(2,901		)		(342	)
Net income (loss)		$	(724	)		$	(4,852	)		(85	)		$	58,793			$	42,646			38			$	92,928			$	60,085			55
Common shares outstanding:
Average diluted for period		30,664				30,537							30,671				30,559							30,636				30,517
End of period		30,672				30,546							30,672				30,546							30,672				30,546
Per share of common stock information:
Diluted earnings (loss) from continuing operations		$	(0.02	)		$	(0.17	)					$	1.92			$	1.41						$	2.80			$	2.06
Diluted earnings (loss) from discontinued operations, net of tax		—				0.01							—				(0.01		)					0.23				(0.10		)
Diluted earnings (loss)		(0.02		)		(0.16		)					1.92				1.40							3.03				1.96
Dividends paid per share		0.4800				0.4775							0.9600				0.9550							1.9175				1.9075
Book value, end of period		30.09				28.94							30.09				28.94							30.09				28.94
Market closing price, end of period		52.52				55.79							52.52				55.79							52.52				55.79
Capital structure, end of period:
Common stock equity		43.2			%	42.7			%				43.2			%	42.7			%				43.2			%	42.7			%
Long-term debt		42.8			%	44.3			%				42.8			%	44.3			%				42.8			%	44.3			%
Short-term debt (including current maturities of long-term debt)		14.0			%	13.0			%				14.0			%	13.0			%				14.0			%	13.0			%
Total		100.0			%	100.0			%				100.0			%	100.0			%				100.0			%	100.0			%
Natural Gas Distribution segment operating statistics:
Meters - end of period		780,279				768,304				1.6	%		780,279				768,304				1.6	%		780,279				768,304				1.6	%
Volumes in therms:
Residential and commercial sales		102,469				99,815							400,291				386,687							690,875				700,474
Industrial sales and transportation		111,245				107,398							244,543				241,443							468,726				481,025
Total volumes sold and delivered		213,714				207,213							644,834				628,130							1,159,601				1,181,499
Operating revenues:
Residential and commercial sales		$	120,360			$	109,399						$	398,944			$	364,803						$	695,487			$	649,391
Industrial sales and transportation		14,093				12,667							31,472				29,861							60,289				58,183
Other distribution revenues		396				5							986				968							1,944				1,755
Other regulated services		4,765				4,921							9,550				9,847							18,825				19,653
Total operating revenues		139,614				126,992							440,952				405,479							776,545				728,982
Less: Cost of gas		41,249				41,265							153,515				149,860							266,635				264,319
Less: Environmental remediation expense		1,509				1,622							5,286				5,627							9,350				11,673
Less: Revenue taxes		5,650				4,454							18,305				16,197							32,399				30,100
Margin, net		$	91,206			$	79,651						$	263,846			$	233,795						$	468,161			$	422,890
Degree days:
Average (25-year average)		305				308							1,631				1,650							2,687				2,723
Actual		182				189				(4	)%		1,443				1,404				3	%		2,423				2,503				(3	)%
Percent colder (warmer) than average weather		(40		)	%	(39		)	%				(12		)	%	(15		)	%				(10		)	%	(8		)	%

NORTHWEST NATURAL HOLDINGS
Consolidated Balance Sheets (Unaudited)		June 30,
In thousands		2021				2020
Assets:
Current assets:
Cash and cash equivalents		$	20,084			$	137,057
Accounts receivable		60,713				35,196
Accrued unbilled revenue		13,592				15,393
Allowance for uncollectible accounts		(3,283		)		(1,592		)
Regulatory assets		60,672				30,021
Derivative instruments		46,168				5,996
Inventories		39,024				44,009
Gas reserves		8,444				13,646
Income taxes receivable		6,000				—
Other current assets		22,427				20,318
Discontinued operations current assets		—				16,392
Total current assets		273,841				316,436
Non-current assets:
Property, plant, and equipment		3,849,792				3,608,902
Less: Accumulated depreciation		1,093,863				1,062,299
Total property, plant, and equipment, net		2,755,929				2,546,603
Gas reserves		29,852				41,459
Regulatory assets		330,710				324,358
Derivative instruments		7,912				3,958
Other investments		47,725				62,130
Operating lease right of use asset, net		76,294				78,566
Assets under sales-type leases		141,408				146,208
Goodwill		69,313				70,183
Other non-current assets		50,516				51,446
Total non-current assets		3,509,659				3,324,911
Total assets		$	3,783,500			$	3,641,347
Liabilities and equity:
Current liabilities:
Short-term debt		$	240,000			$	233,000
Current maturities of long-term debt		60,274				35,209
Accounts payable		97,854				79,903
Taxes accrued		15,143				18,535
Interest accrued		7,425				7,234
Regulatory liabilities		103,210				41,126
Derivative instruments		3,393				3,067
Operating lease liabilities		1,228				931
Other current liabilities		43,946				54,323
Discontinued operations current liabilities		—				13,574
Total current liabilities		572,473				486,902
Long-term debt		915,501				918,887
Deferred credits and other non-current liabilities:
Deferred tax liabilities		325,600				297,995
Regulatory liabilities		645,046				632,400
Pension and other postretirement benefit liabilities		203,854				218,493
Derivative instruments		453				1,658
Operating lease liabilities		80,088				80,159
Other non-current liabilities		117,659				120,852
Total deferred credits and other non-current liabilities		1,372,700				1,351,557
Equity:
Common stock		569,785				562,766
Retained earnings		365,501				331,648
Accumulated other comprehensive loss		(12,460		)		(10,413		)
Total equity		922,826				884,001
Total liabilities and equity		$	3,783,500			$	3,641,347

NORTHWEST NATURAL HOLDINGS
Consolidated Statements of Cash Flows (Unaudited)		Six Months Ended June 30,
In thousands		2021				2020
Operating activities:
Net income		$	58,793			$	42,646
Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization		56,241				50,511
Regulatory amortization of gas reserves		7,597				8,567
Deferred income taxes		1,048				(2,004		)
Qualified defined benefit pension plan expense		7,874				8,892
Contributions to qualified defined benefit pension plans		(9,590		)		(8,470		)
Deferred environmental expenditures, net		(9,625		)		(9,897		)
Amortization of environmental remediation		5,286				5,627
Other		1,610				(5,931		)
Changes in assets and liabilities:
Receivables, net		73,133				73,954
Inventories		3,666				(52		)
Income and other taxes		21,467				20,966
Accounts payable		(17,239		)		(18,919		)
Deferred gas costs		(26,962		)		115
Asset optimization revenue sharing		36,872				(11,657		)
Decoupling mechanism		(6,860		)		4,281
Other, net		(9,030		)		3,967
Discontinued operations		—				(547		)
Cash provided by operating activities		194,281				162,049
Investing activities:
Capital expenditures		(130,108		)		(122,282		)
Acquisitions, net of cash acquired		(55		)		(37,940		)
Leasehold improvement expenditures		(163		)		(7,519		)
Proceeds from the sale of assets		2,234				7,905
Other		209				263
Discontinued operations		—				(846		)
Cash used in investing activities		(127,883		)		(160,419		)
Financing activities:
Proceeds from common stock issued		—				68
Long-term debt issued		55,000				150,000
Long-term debt retired		(35,000		)		(75,000		)
Proceeds from term loan due within one year		100,000				150,000
Repayments of commercial paper, maturities greater than 90 days		(195,025		)		—
Change in other short-term debt, net		30,500				(66,100		)
Cash dividend payments on common stock		(27,842		)		(27,679		)
Other		(1,175		)		(3,007		)
Cash (used in) provided by financing activities		(73,542		)		128,282
Increase (decrease) in cash, cash equivalents and restricted cash		(7,144		)		129,912
Cash, cash equivalents and restricted cash, beginning of period		35,454				12,636
Cash, cash equivalents and restricted cash, end of period		$	28,310			$	142,548
Supplemental disclosure of cash flow information:
Interest paid, net of capitalization		$	21,971			$	23,156
Income taxes paid, net of refunds		7,405				544
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents		$	20,084			$	137,057
Restricted cash included in other current assets		8,226				5,491
Cash, cash equivalents and restricted cash		$	28,310			$	142,548

 

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FAQ

What were NW Natural's earnings for Q2 2021?

NW Natural reported a net loss of $0.02 per share for Q2 2021.

How did NW Natural perform in the first half of 2021?

Year-to-date, NW Natural's net income rose to $1.92 per share, an increase from $1.41 per share in 2020.

What is NW Natural's growth rate for the last year?

NW Natural added nearly 12,000 natural gas meters, achieving a growth rate of 1.6%.

What is the 2021 earnings guidance for NW Natural?

NW Natural reaffirmed its 2021 earnings guidance in the range of $2.40 to $2.60 per share.

What is the significance of the filed settlement in Washington?

The settlement aims for a revenue increase of $5 million in Year One starting November 2021.