Company reports GAAP diluted earnings per share of $0.32 for the quarter, affirms $510 million capital plan for 2023 and announces a $0.64 per share quarterly dividend payable September 29, 2023
BUTTE, Mont. and SIOUX FALLS, S.D., July 24, 2023 (GLOBE NEWSWIRE) -- NorthWestern Corporation d/b/a NorthWestern Energy ( NWE) reported financial results for the three months ended June 30, 2023. Net income for the period was $19.1 million, or $0.32 per diluted share, as compared with net income of $29.8 million, or $0.54 per diluted share, for the same period in 2022. This decrease was primarily due to unfavorable weather driving lower electric and natural gas retail volumes and transmission revenues, higher operating, administrative and general costs, higher depreciation and depletion expense, higher interest expense, and higher income tax expense, partly offset by higher Montana interim rates, and lower non-recoverable Montana electric supply costs. In addition to lower net income, diluted earnings per share decreased due to equity issuances during 2022 that increased average shares outstanding in 2023.
Non-GAAP Adjusted diluted earnings per share for the quarter ended June 30, 2023 was $0.35 as compared to $0.54 for the same period in 2022. See “Adjusted Non-GAAP Earnings” and “Non-GAAP Financial Measures” sections below for more information on these measures.
"Second quarter earnings were impacted by unfavorable weather. Absent the weather impact, the quarter was in line with our expectations," said Brian Bird, President and Chief Executive Officer. “We are executing on our regulatory priorities, including the settlement agreement pending approval from the Montana Public Service. In addition, in mid-June we filed our first electric rate review in South Dakota since 2015 seeking recovery of nearly thirty percent of rate base that is not included in customer rates today. We look forward to working with the South Dakota staff and commission in that filing as well. Rate relief from these two filings will provide a path for meaningful earnings growth which is critically important to attracting the right long-term investors and fairly priced capital, putting the Company in a strong financial position to successfully serve our customers. Completing both of these incredibly comprehensive filings within the last twelve months was a significant undertaking by many of our dedicated and talented employees. We are grateful for their efforts." Bird concludes, "We remain on track to complete our $510 million capital plan for the year, including the 175 megawatt Yellowstone County Generating Station in Montana. After receiving significant legislative and judicial support on the project, construction has resumed and the station is expected to be available to serve our customers by the end of third quarter 2024."
Additional information regarding this release can be found in the earnings presentation found at:
https://www.northwesternenergy.com/about-us/investors/financials/earnings
CONSOLIDATED STATEMENT OF INCOME
| (in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| Reconciliation of gross margin to utility margin: | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Operating Revenues(1) | $ | 290.5 | $ | 323.0 | $ | 745.1 | $ | 717.4 | ||||||||
| Less: Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) | 67.6 | 95.0 | 233.1 | 230.1 | ||||||||||||
| Less: Operating and maintenance | 54.9 | 53.3 | 110.7 | 106.1 | ||||||||||||
| Less: Property and other taxes | 40.1 | 46.9 | 89.3 | 93.8 | ||||||||||||
| Less: Depreciation and depletion | 52.4 | 48.2 | 105.6 | 97.1 | ||||||||||||
| Gross Margin | $ | 75.5 | $ | 79.6 | $ | 206.4 | $ | 190.3 | ||||||||
| Operating and maintenance | 54.9 | 53.3 | 110.7 | 106.1 | ||||||||||||
| Property and other taxes | 40.1 | 46.9 | 89.3 | 93.8 | ||||||||||||
| Depreciation and depletion | 52.4 | 48.2 | 105.6 | 97.1 | ||||||||||||
| Utility Margin(1) | $ | 222.9 | $ | 228.0 | $ | 512.0 | $ | 487.3 | ||||||||
(1) Decrease in revenues is primarily related to pass-through supply costs and non-cash regulatory amortizations. (2) Utility Margin is a Non-GAAP financial measure. See “Non-GAAP Financial Measures” section below. | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| (in millions, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenues(1) | $ | 290.5 | $ | 323.0 | $ | 745.0 | $ | 717.5 | ||||||||
| Fuel, purchased supply and direct transmission expense(2) | 67.6 | 95.0 | $ | 233.1 | $ | 230.1 | ||||||||||
| Utility Margin(3) | 222.9 | 228.0 | $ | 511.9 | $ | 487.4 | ||||||||||
| Operating and maintenance | 54.8 | 53.3 | $ | 110.7 | $ | 106.1 | ||||||||||
| Administrative and general | 30.0 | 27.2 | $ | 64.7 | $ | 58.9 | ||||||||||
| Property and other taxes | 40.1 | 46.9 | $ | 89.3 | $ | 93.7 | ||||||||||
| Depreciation and depletion | 52.4 | 48.2 | $ | 105.6 | $ | 97.1 | ||||||||||
| Total Operating Expenses(4) | 177.3 | 175.6 | $ | 370.3 | $ | 355.8 | ||||||||||
| Operating income | 45.6 | 52.3 | $ | 141.6 | $ | 131.6 | ||||||||||
| Interest expense, net | (28.4 | ) | (24.0 | ) | $ | (56.4 | ) | $ | (47.7 | ) | ||||||
| Other income, net | 4.1 | 2.9 | $ | 8.8 | $ | 7.6 | ||||||||||
| Income before income taxes | 21.3 | 31.2 | $ | 94.0 | $ | 91.4 | ||||||||||
| Income tax expense | (2.1 | ) | (1.4 | ) | $ | (12.4 | ) | $ | (2.5 | ) | ||||||
| Net Income | 19.1 | 29.8 | $ | 81.7 | $ | 88.9 | ||||||||||
| Basic Shares Outstanding | 59.8 | 54.3 | 59.8 | 54.2 | ||||||||||||
| Earnings per Share – Basic | $ | 0.32 | $ | 0.55 | $ | 1.37 | $ | 1.64 | ||||||||
| Diluted Shares Outstanding | 59.8 | 55.1 | 59.8 | 55.0 | ||||||||||||
| Earnings per Share – Diluted | $ | 0.32 | $ | 0.54 | $ | 1.37 | $ | 1.62 | ||||||||
| Dividends Declared per Common Share | $ | 0.64 | $ | 0.63 | $ | 1.28 | $ | 1.26 | ||||||||
(1) Decrease in revenues is primarily related to pass-through supply costs and non-cash regulatory amortizations. (2) Exclusive of depreciation and depletion expense. (3) Utility Margin is a Non-GAAP financial measure. See "Reconciliation of gross margin to utility margin" above and “Non-GAAP Financial Measures” below. (4) Excluding fuel, purchased supply and direct transmission expense. | ||||||||||||||||
RECONCILIATION OF PRIMARY CHANGES DURING THE QUARTER
| Three Months Ended June 30, 2023 vs. 2022 | ||||||||||||||||
| Pre-tax Income | Income Tax (Expense) Benefit (3) | Net Income | Diluted Earnings Per Share | |||||||||||||
| (in millions, except EPS) | ||||||||||||||||
| Second Quarter, 2022 | $ | 31.2 | $ | (1.4 | ) | $ | 29.8 | $ | 0.54 | |||||||
| Variance in revenue and fuel, purchased supply, and direct transmission expense(1) items impacting net income: | ||||||||||||||||
| Lower natural gas retail volumes | (5.3 | ) | 1.3 | (4.0 | ) | (0.07 | ) | |||||||||
| Lower electric retail volumes | (3.5 | ) | 0.9 | (2.6 | ) | (0.05 | ) | |||||||||
| Lower electric transmission revenue | (1.7 | ) | 0.4 | (1.3 | ) | (0.02 | ) | |||||||||
| Montana interim rates (subject to refund) | 7.1 | (1.8 | ) | 5.3 | 0.10 | |||||||||||
| Montana property tax tracker collections | 3.3 | (0.8 | ) | 2.5 | 0.04 | |||||||||||
| Lower non-recoverable Montana electric supply costs due to higher electric supply revenues and lower electric supply costs | 3.0 | (0.8 | ) | 2.2 | 0.04 | |||||||||||
| Natural gas transportation | 0.4 | (0.1 | ) | 0.3 | 0.01 | |||||||||||
| Other | (0.4 | ) | 0.1 | (0.3 | ) | (0.01 | ) | |||||||||
| Variance in expense items(2) impacting net income: | ||||||||||||||||
| Higher operating, maintenance, and administrative expenses | (7.2 | ) | 1.8 | (5.4 | ) | (0.10 | ) | |||||||||
| Higher interest expense | (4.4 | ) | 1.1 | (3.3 | ) | (0.06 | ) | |||||||||
| Higher depreciation expense | (4.2 | ) | 1.1 | (3.1 | ) | (0.05 | ||||||||||
