NorthWestern Energy Group, Inc. · NASDAQ:NWE
NorthWestern Energy — Investor Presentation (March 2011)
21 slides from NorthWestern Energy's investor presentation, Mar 1, 2011
Slide 1: 2011 Investor Update
2011 Investor Update San Francisco, CA Febr ar 28th – March 1st, 2011 February
Slide 2: Forward-looking statement
forward--looking statement… forward During the course of this presentation, there will be forward-looking statements within the meaning of the “safe harbor” provisions of the P i t Securities Private S iti Litigation Liti ti Reform R f Act A t off 1995. 1995 Forward-looking F d l ki statements often
Slide 3: Who we are
who we are… 665,000 customers » 399,000 electric » 266,000 natural gas Approximately 123,000 square miles of service territory in Montana, South Dakota, and Nebraska » 27,500 27 500 miles of electric T&D lines » 9,200 miles of natural gas T&D pipelines » 20 Bcf natural gas storage » 8.4 Bcf natu
Slide 4: NorthWestern's attributes
NorthWestern’s attributes… Solid operations » Cost competitive » Above-average reliability » Award-winning customer service Single A secured credit ratings with a strong balance sheet and liquidity » January 21, 2011 Moody’s upgraded secured and unsecured ratings to A2 and Baa1, respectively » A
Slide 5: Strong credit ratings
strong credit ratings… Agency Secured Unsecured Outlook Standard & Poor's A- BBB Stable Moody's y Investor Services A2 Baa1 Stable Fitch Ratings A- BBB+ Stable A security rating is not a recommendation to buy, sell or hold securities. Such rating may be subject to revision or withdrawal at any time
Slide 6: Strong balance sheet and liquidity
strong balance sheet and liquidity… Total liquidity of approximately $165 million as of February 2011 Total Debt / Total capitalization of 56.6% 56 6%(1) In past two years refinanced nearly all outstanding debt » In May 2010 we refinanced existing $225 million, 5.875% Senior Secured Notes due
Slide 7: Strong cash flows
strong cash flows… (1) Utility maintenance capex only, excludes investment growth projects. (2) 2009 Cash Flow from Operations adjusted to add back pension funding in excess of expense and Ammondson settlement paid.. Earnings trend and NOLs provide strong cash flows to fund future investment. 7
Slide 8: Solid pension funding position
solid pension funding position… Size of bubble represents relative size of pension plan assets. ALLETE, E ALLETE Empire i Di District, t i t IDACORP, IDACORP Vectren, V t W t and Westar, d NorthWestern are updated for 12/31/10 funded status. The remaining companies present their 12/31/09 funded stat
Slide 9: And sustainable dividend
and sustainable dividend… (1) 2011 estimated payout range assumes midpoint of guidance range $2.25 - $2.40 Goal for dividend payout ratio of 60% - 70%. Current dividend yield about 5% with year-over-year dividend growth. 9
Slide 10: Reaffirming 2011 EPS guidance
reaffirming 2011 EPS guidance… 10
Slide 11: 2010 to 2011 earnings bridge
2010 to 2011 earnings bridge… 2010 Reported EPS (GAAP) $2.14 Insurance recoveries (0.08) Montana rate adjustment (0.05) Weather - Montana 0.06 2010 Earnings Earnings, comparable with guidance of $1 $1.95 95 - $2 $2.10 10 $2 07 $2.07 Low High Mill Creek net income 0.16 to 0.18 Montana rate adjustment
Slide 12: Constructive regulatory environment
constructive regulatory environment… Montana » Electric and natural gas general rate case ♦ September p 2010: Joint stipulation p with MCC filed with MPSC resulting g in a net $6.7 $ million increase to revenue predicated upon a 10.25% ROE and 5.76% cost of debt (7.92% ROR) ♦ December 2010: Final
Slide 13: Regulatory environment continued
regulatory environment con’t con’t…… South Dakota » Expect to file natural gas rate cases during 2011 pending 2010 results » Expect to file an environmental rider on the Big Stone & Neal plant for emissions compliance projects » Election results ♦ Prior Chairman Dusty Johnson (R) re-elected but th
Slide 14: Regulatory milestones in 2011
regulatory milestones in 2011… Montana South Dakota Distribution Infrastructure Natural Gas Rate Case Request for accounting order (MPSC) Q1 File rate case pending 2010 results (SDPUC) Q2 Submit formal proposal for approval (MPSC) Q2 Prudency Review for Mill Creek Environmental Riders for Big Sto
Slide 15: Longer term investment opportunities
longer term investment opportunities… Distribution system enhancements » Incremental rate based investment to enhance reliability and capacity, improve rural service, and prepare the system for adaptation of new technologies. Energy supply » Big g Stone and Neal plants’ p pollution p control equ
Slide 16: Potential project summary
potential project summary… Note: Color / label indicate NorthWestern Energy's current probability of execution and timing of expenditures. Opportunity to increase and diversify earnings as compared with our existing $1.8 billion rate base (including Mill Creek). 16
Slide 17: In summary
in summary… Solid operations Single Si l A secured d credit dit ratings ti with ith a strong t balance sheet and liquidity Positive earnings and ROE trend Strong cash flows Competitive total shareholder return with a dividend that has increased every year since 2005 Constructive regulato
Slide 18: Appendix
appendix... NorthWestern Energy Bright 18 Delivering a Brigt ee PP
Slide 19: Appendix - income statement
appendix - income statement… (in thousands) Year Ended December 31, 2010 2009 Variance Operating Revenues $ 1,110,720 $ 1,141,910 $ (31,190) Cost of Sales 531 089 531,089 573 686 573,686 (42 597) (42,597) Gross Margin 579,631 568,224 11,407 Operating Expenses Operating, general & administrative 237,
Slide 20: Appendix - balance sheet
appendix - balance sheet… (in thousands) Year Ended December 31, 2010 2009 Cash 6,234 4,344 Restricted cash 12,862 13,608 Accounts receivable receivable, net 143 304 143,304 143 759 143,759 Inventories 50,701 47,305 Other current assets 89,953 55,811 Goodwill 355,128 355,128 PP&E and ther non-curren
Slide 21: Appendix - cash flow
appendix - cash flow… Year Ended December 31, (in thousands) 2010 2009 Net Income $ 77,376 $ 73,420 p Depreciation 91,769 , 89,039 , Amort. of debt issue costs, discount, deferred hedge gain and nonvested shares 3,449 3,795 Equity portion of allowance for funds used during construction (6,564) (2,11
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