Artist Monte Dolack Black Eagle dam Madison Missouri RiverRiver Montana at Three Forks, MT Investor Update Presentation 8-K on April 25, 2016
About NorthWestern South Dakota Operations Electric 62,800 customers 3,550 miles transmission & distribution lines 440 MW nameplate owned power generation Natural Gas 45,700 customers 1,625 miles of transmission and distribution…
NWE: An Investment for the Long Term 100% Regulated electric & natural gas utility business Pure Electric 100 year history of competitive customer rates, system reliability and customer satisfaction & Gas Utility Solid economic…
A Diversified Electric and Gas Utility Gross Margin in 2015: Gross Margin in 2015: Electric: 663M Montana: 729M Natural Gas: 178M South Dakota: 102M Nebraska: 10M Above data reflects full year 2015 results. Jurisdiction and service…
NorthWestern Energy Profile Financial and Company Statistics 6 See Non-GAAP Financial Measure slide in appendix for Net Debt and EBITDA reconciliation
Solid Economic Indicators Unemployment rates in all three of our states are meaningfully below National Average. Customer growth rates historically exceed National Averages. Source: NorthWestern customer growth - 2008-2015 Forms…
Strong Utility Foundation Electric source: Edison Electric Institute Typical Bills and Average Rates Report, 1/1/16 Natural gas source: US EIA - Monthly residential supply and delivery rates as of 1/29/16 System Average…
Track Record of Delivering Results Return on Equity within 9.5% - 11.0% band over the last 5 years. Annual dividend increases since emergence in 2004. 5 Year (2011-2015) Avg. Return on Equity: 10.4% 5 Year (2011-2015) CAGR…
Investment for Our Customers Benefit Over the past 7 years we have been reintegrating our Montana energy supply portfolio and making additional investments across our entire service territory to enhance system safety,…
Total Shareholder Return 13 member peer group: ALE (Allete), AVA (Avista), BKH (Black Hills), EE (El Paso Electric), GXP (Great Plains), IDA (IDA Corp), MGEE (Madison Gas & Electric), 11 OGE (OGE Energy), OTTR (Otter Tail Power),…
Strong Cash Flows Components of Free Cash Flow While maintenance capex and total dividend payments have continued to grow since 2011 (16.6% and 14.8% CAGR respectively), Cash Flow from Operations has continued to outpace…
Balance Sheet Strength and Liquidity 13
2016 Updated Earnings Guidance 2.60 - 3.20-3.35 2.75 Our recently updated 2016 guidance range of 3.20 - 3.35 (originally 3.20 - 3.40) per diluted share is based upon, but not limited to, the following major assumptions and…
The Hydro Facilities Overview of Hydro Facilities Hydro Asset Integration Montana Asset Optimization Study: As part of reintegrating the hydro facilities into our generation portfolio, we initiated an asset optimization study to…
South Dakota Electric Operations Beethoven Wind Project: In September 2015, we completed the purchase of the 80 MW Beethoven wind project, near Tripp, South Dakota for approximately 143 million from BayWa r.e. Wind LLC. The SDPUC granted…
Infrastructure Projects In Montana, our Distribution System Infrastructure Project (DSIP) and Transmission System Infrastructure Project (TSIP), both of which are currently in process, are to maintain a safe and reliable electric…
Montana 2015 Electric Supply Resource Plan Capacity Expansion with Supply Plan The resource initiatives and actions Montana developed in 2015 Electricity Supply supply plan Resource Procurement Plan identify would add the critical…
Capital Spending Forecast .0M * Current estimated cumulative capital spending for 2016 through 2020 is 1.66 billion. This reflects a 187 million increase from the capital plan included in our 2015 10-K; approximately 122…
Natural Gas Reserves Opportunity We continue to pursue opportunities to secure Total Annual Need low cost gas reserves for our customers. Three acquisitions totaling approximately 100 million since First 6 Bcf annual production…
Clean Owned & Contracted Supply Portfolio * Wind Owned delivered in 2015 includes a partial year of production from the Beethoven wind farm, which was acquired on September 25, 2015. Based upon 2015 delivered electric portfolio,…
EPAs 2030 carbon target for Montana NWEs CO2 intensity* decreased by approximately 37% with the addition of the hydro facilities to our Montana generation portfolio. However EPAs Clean Power Plan targets are statewide and…
DGGS Update Still waiting on FERC 23
Regulatory Update Regulatory Item Current / Anticipated Action FERC April 2014 order regarding cost allocation at DGGS Awaiting a rehearing request that was filed in May 2014. between retail and wholesale customers. If unsuccessful…
Summary Financial Results (First Quarter) 27
Gross Margin (First Quarter) (dollars in millions) Three Months Ended March 31, 2016 2015 Variance Electric 157.7 172.1 (14.4) (8.4%) Natural Gas 59.4 61.5 (2.1) (3.4%) Gross Margin 217.1 233.6 (16.5) (7.1%) Decrease in gross…
Weather (First Quarter) Minimum Temperature from Normal Maximum Temperature from Normal Over a 122 year history, the first three months of 2016 was the 2nd warmest period in Montana, the 3rd warmest in South Dakota and the 4th…
Operating Expenses (First Quarter) (dollars in millions) Three Months Ended March 31, 2016 2015 Variance Operating, general & admin. 79.9 81.1 (1.2) (1.5%) Property and other taxes 35.4 32.8 2.6 7.9% Depreciation and depletion 39.9…
Operating to Net Income (First Quarter) (dollars in millions) Three Months Ended March 31, 2016 2015 Variance Operating Income 61.9 83.9 (22.0) (26.2%) Interest Expense (24.5) (23.1) (1.4) 6.1% Other Income 3.1 0.6 2.5 417.0%…
Balance Sheet 32
Cash Flow 15.3 million increase in cash provided by operating activities is primarily due to an 18.4 million settlement of interest rate swaps during the first quarter of 2015. 33
Income Tax Reconciliation (First Quarter) Income tax expense was 7.5 million lower primarily due to lower pretax income. 34
Non GAAP Adjusted Earnings (First Quarter 16 vs 15) The non-GAAP measures presented in the table above are being shown to reflect significant items 35 that were not contemplated in our original guidance, however they should not be…
Non-GAAP Adjusted EPS The non-GAAP measures presented in the table above are being shown to reflect significant items that were not contemplated in our original guidance, however they should not be considered a 36 substitute for…
2015 to 2016 Reconciliation (First Quarter) Three Months Ended March 31 Pre-tax Net EPS (1) (millions, except EPS) Incom e Incom e Diluted 2015 reported 61.4 51.4 1.09 Gross Margin South Dakota electric rate increase 8.6 5.3…
Big Stone and Neal Air Quality Projects Big Stone Power Plant Neal Power Plant 38
EPAs Clean Power Plan (CPP) If the CPP rules were utility specific, NorthWestern would be in Source: www.eenews.net/interactive/clean_power_plan excellent shape. but emission targets are established at a state level. NorthWesterns…
Meeting Montana Customer Demands Light Load Hours (MWh's) 400,000 Conveyance of Kerr Dam to Confederated Salish and Kootenai Tribes 300,000 MWh's 200,000 100,000 - Hydro Contracted Owned Generation Light Load Demand…
2015 System Statistics Owned Energy Supply Transmission Distribution (2) Electric (MW) MT SD Total 2015 Tx for Others MT SD Total Demand MT SD / NE Total Base load coal 222 210 432 Electric (GWh) 11,300 100 11,400 Daily MWs 750…
Experienced & Engaged Board of Directors Dr. E. Linn Draper Jr. Dana J. Dykhouse Robert C. Rowe Chairman of the Board Committees: Human Committees: None Independent Resources (chair), Audit CEO and President Director since…
Strong Executive Team Robert C. Rowe Patrick R. Corcoran Crystal D. Lail President and Vice President Vice President and Chief Executive Officer Government and Controller Current position since 2008 Regulatory Affairs Current…
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