Reports Increase in Net Income Due to Income Tax Benefit Reductions
in Income Tax and Operating Expenses Offset Gross Margin Declines
Increases 2009 GAAP Earnings Guidance SIOUX FALLS, S.D., Oct. 28
/PRNewswire-FirstCall/ -- NorthWestern Corporation d/b/a
NorthWestern Energy (NYSE:NWE) reported financial results for the
quarter ended Sept. 30, 2009. Highlights for the quarter include:
-- Net income increased to $18.9 million in the third quarter of
2009 compared with $13.4 million in the third quarter of 2008, led
by a $12.4 million tax benefit from the repairs expense deduction;
-- Obtained Internal Revenue Service (IRS) approval of a tax
accounting method to deduct repairs that would have previously been
capitalized;. -- Operating income for the third quarter of 2009
declined approximately $8.4 million from the same period in 2008;
-- Gross margin for the third quarter of 2009 declined
approximately $14 million from the same period in 2008; -- Third
quarter 2009 operating, general, and administrative expenses were
$5.5 million less than the third quarter of 2008; -- Received an
upgrade of the Company's senior secured credit ratings by Moody's
Investors Service from Baa1 to A3; -- Priced $55 million of 30-year
maturity Montana First Mortgage Bonds at a fixed interest rate of
5.71%; -- Contributed approximately $76.4 million to qualified
pension plans during the first nine months of 2009 and have
achieved a year-to-date return of approximately 20%; and --
Quarterly dividend of 33.5 cents per share declared for
shareholders of record on Dec. 15, 2009, payable on Dec. 31, 2009.
"Net income improved in the third quarter 2009 primarily because we
received an IRS approval to change a tax accounting method enabling
us to immediately expense certain repairs that we had previously
capitalized for tax purposes," said Bob Rowe, President and CEO.
"Our gross margin and operating income declined in light of mild
weather and a slowing economy but we have improved our cost
management, which partially contributed to our reduction in the
operating expenses for the quarter." Financial Results Consolidated
net income was $18.9 million or $.52 per diluted share for the
quarter ended Sept. 30, 2009, a 41% increase compared with
consolidated net income of $13.4 million or $.35 per diluted share
for the quarter ended Sept. 30, 2008. The increase in net income
was primarily due to an income tax adjustment, a reduction in
pension expense due to timing, the transfer of our interest in
Colstrip Unit 4 (CU4) to rate base, and reductions in other
operational expenses. These increases were partially offset by the
absence of a mark-to-market gain from prior year, a net reduction
in insurance recoveries and settlements received compared with
2008, a reduction in retail electric volumes caused by mild weather
and the slower economy, and an increase in interest expense. For a
reconciliation of the primary drivers for the quarter, see the
table below. Consolidated net income for the nine months ended
Sept. 30, 2009 was $47.8 million, an increase of $1.5 million over
$46.3 million in 2008. The increase in net income was primarily due
to an income tax adjustment, the transfer of CU4 to rate base, and
a reduction in the timing of pension expense. These increases were
partially offset by a reduction in retail electric and natural gas
volumes caused by mild weather, an increase in labor costs, the
absence of a mark-to-market gain related to a forward contract in
place in 2008, an increase in insurance reserves, a decrease in
wholesale revenues related to a reduction in electric pricing in
South Dakota, a decrease in transmission capacity revenues, a net
reduction in insurance recoveries and settlements received compared
with 2008 and an increase of post retirement health care costs. The
following tables reconcile the primary changes in 2009 results from
2008: Year-to-Date Third Quarter Third Quarter -------------
------------- Net Net Income Income Pretax (1) EPS Pretax (1) EPS
------ --- --- ------ --- --- ($millions, except EPS) 2008 reported
$20.9 $13.4 $0.35 $73.1 $46.3 $1.19 Lower average share counts - -
0.02 - - 0.09 Tax accounting change - 12.4 0.34 - 12.4 0.34 Pension
expense (timing) 8.9 5.5 0.15 3.8 2.3 0.06 Colstrip Unit 4 in rate
base 3.7 2.3 0.06 14.1 8.7 0.24 Bad debt expense 1.0 0.6 0.02 0.3
0.2 0.01 Legal and professional fees 0.8 0.5 0.01 2.5 1.5 0.04
Stock based compensation and short-term incentive 0.8 0.5 0.01 2.2
1.4 0.04 Insurance reserves - - - (3.7) (2.3) (0.06) QF supply
costs - - - (1.1) (0.7) (0.02) Loss on capacity contract (0.3)
(0.2) (0.01) (1.5) (0.9) (0.03) Colstrip Unit 4 operating expense
(outage related) (0.5) (0.3) (0.01) (2.4) (1.5) (0.04) Wholesale
electric prices and volumes (0.7) (0.4) (0.01) (3.5) (2.2) (0.06)
Post retirement health care (0.7) (0.4) (0.01) (2.1) (1.3) (0.04)
MT property tax tracker (0.8) (0.5) (0.01) (2.9) (1.8) (0.05) Labor
increases (1.0) (0.6) (0.02) (4.2) (2.6) (0.07) Regulated electric
transmission (1.7) (1.0) (0.03) (3.3) (2.0) (0.06) Retail electric
and natural gas volumes (2.6) (1.6) (0.04) (4.8) (3.0) (0.08)
Insurance recoveries & settlements (6.3) (3.9) (0.11) (1.7)
(1.0) (0.03) 2008 unrealized gain on forward contract (10.2) (6.3)
(0.17) (3.8) (2.3) (0.06) All other, net (1.2) (1.0) (0.02) (5.3)
(3.5) (0.09) ----- ----- ------ ----- ----- ------ Subtotal $0.17
$0.13 ----- ----- 2009 reported $10.1 $18.9 $0.52 $55.7 $47.8 $1.32
===== ===== ===== ===== ===== ===== (1) Net Income calculation on
reconciling items assumes normal effective tax rate of 38.5%. For
more information see
http://www.northwesternenergy.com/documents/investor/Q309.pdf
Consolidated gross margin for the third quarter of 2009 was $127.7
million compared with $141.7 million for the third quarter of 2008.
The decrease in gross margin was primarily due to the absence of a
third quarter 2008 gain on forward contracts of approximately $10.2
million, mild weather affecting margins by approximately $2.6
million and reduced transmission revenues of approximately $1.7
million. Offsetting the decrease to gross margin was the effect of
approximately $3.7 million in rates related to placing CU4 into
rate base in 2009. Consolidated gross margin for the nine months
ended Sept. 30, 2009 was $419.5 million, a decrease of $6.3 million
over the first nine months of 2008 due primarily to the absence of
the mark-to-market gain on the forward contracts, reduced electric
and natural gas volumes caused by mild weather, and reduced
transmission capacity revenues due to less demand to transmit
energy for others across our transmission lines, offset by placing
CU4 into rate base in 2009. Consolidated operating, general and
administrative expenses were $57.9 million for the third quarter of
2009 compared with $63.4 million for the third quarter of 2008. The
decrease was due primarily to a reduction in pension expenses of
approximately $8.9 million compared with the third quarter of 2008.
This was offset by a net decrease in insurance recoveries and
settlements, increased labor costs due primarily to compensation
increases, and higher postretirement health care costs due to
changes in actuarial assumptions and plan asset losses.
Consolidated operating, general and administrative expenses were
$184.2 million for the nine months ended Sept. 30, 2009 as compared
with $177.3 million in same period of 2008. The increase was due
primarily to an increase in labor costs, an increase for insurance
reserves, a reduction in insurance recoveries and settlements, and
higher postretirement health care costs, offset in part by a
reduction in pension expenses. Property and other taxes were $20.8
million in the third quarter of 2009 compared with $21.7 million in
the same period of 2008. For the nine months ended Sept. 30, 2009,
property and other taxes were $63.4 million compared with $65.9
million in the same period of 2008. The decreases were due to lower
assessed property valuations. Depreciation expense was $22.0
million in the third quarter of 2009 compared with $21.3 million in
the same period of 2008. For the nine months ended Sept. 30, 2009,
depreciation expense was $67.0 million compared with $63.6 million
in the same period of 2008. The increases were due to plant
additions. Interest expense was $17.3 million for the third quarter
of 2009 compared with $15.6 million for the third quarter of 2008,
primarily related to the additional debt outstanding. For the nine
months ended Sept. 30, 2009, interest expense was $50.4 million
compared with $47.5 million in the same period of 2008. Results
from Operations Electric gross margin for the third quarter of 2009
was $106.1 million, down $12.9 million for the same period in 2008,
after considering the transfer of CU4 from the unregulated electric
segment to the regulated electric segment. The decline in net
electric gross margin is primarily due to the absence of a third
quarter 2008 $10.2 million gain on forward contracts and by a
decrease in South Dakota wholesale margin due to lower sales at
lower average prices, decreased retail volumes due to cooler summer
weather and lower usage per customer, lower transmission capacity
revenues with less demand to transmit energy for others across our
lines, and higher QF related supply costs based on actual QF
pricing and output. This decline in electric margin was offset in
part by the transfer of Colstrip Unit 4 to the regulated utility.
Regulated retail electric volumes for the third quarter of 2009
totaled 2,487,000 megawatt hours compared with 2,626,000 megawatt
hours for the third quarter of 2008. The decrease was due primarily
to cooler summer weather than the same period in 2008. Wholesale
electric volumes were 190,000 megawatt hours for the third quarter
2009, an increase from 71,000 megawatt hours for the same period of
2008, due to transferring CU4 to the regulated utility. Regulated
electric gross margin for the nine months ended Sept. 30, 2009
decreased $1.5 million as compared with the same period in 2008,
after considering the transfer of CU4 from unregulated electric
segment to the regulated electric segment. The decrease is due
primarily to the same reasons discussed above for the quarter ended
Sept. 30, 2009. Regulated retail electric volumes for the nine
months ended Sept. 30, 2009 totaled 7,448,000 megawatt hours, a
decrease of 2.4% as compared with the same period in 2008.
Regulated wholesale electric volumes for the first nine months in
2009 were 587,000 megawatt hours, an increase from 202,000 megawatt
hours in the same period in 2008, due primarily to transferring CU4
to the regulated utility. Regulated natural gas gross margin was
$21.9 million for the third quarter of 2009 compared with $22.8
million for the third quarter in 2008. The decrease was primarily
due to lower average usage per customer. Regulated retail natural
gas volumes were 2,163,000 dekatherms for the third quarter of
2009, compared with 2,344,000 dekatherms for the same period in
2008. The decrease in volumes was primarily due to milder weather
in the Montana service territory, the weaker economy and efficiency
measures. Regulated natural gas gross margin for the first nine
months of 2009 was $100.2 million compared with $103.8 million for
the same period in 2008. The decrease was primarily due to
decreased volumes due to milder weather in Montana and Nebraska.
Regulated retail natural gas volumes were 21,450,000 dekatherms for
the first nine months of 2009 compared with 22,571,000 dekatherms
for the same period in 2008. Liquidity and Capital Resources As of
Sept. 30, 2009, our total net liquidity was approximately $226.9
million, including $6.0 million of cash and 220.9 million of
revolving credit facility availability. In addition, Moody's
upgraded our senior secured credit rating on August 3, 2009, from
Baa1 to A3. Cash provided by operating activities totaled $129.3
million during the first nine months of 2009, compared with $176.7
million during the nine months ended Sept. 30, 2008. This decrease
in operating cash flows is primarily related to pension funding of
$76.4 million, which was an increase of approximately $54.5 million
as compared with the nine months ended Sept. 30, 2008, and a $10.8
million prepayment of a power purchase agreement, offset by lower
commodity prices reflected in the change in accounts receivable and
accounts payable, as well as decreased cash outflows for natural
gas storage injections. The Company used $115.5 million for
investment activities during the nine months ended Sept. 30, 2009
compared with $80.9 million for the nine months ended Sept. 30,
2008. The increase was due to increased property, plant and
equipment additions. Cash used in financing activities totaled
approximately $19.1 million during the nine months ended Sept. 30,
2009 as compared with $100.0 million during the nine months ended
Sept. 30, 2008. During the nine months ended Sept. 30, 2009, the
Company received net proceeds from the issuance of debt of $249.8
million, made net debt repayments of $221.8 million, paid deferred
financing costs of $10.4 million and paid dividends on common stock
of $36.1 million. During the nine months ended Sept. 30, 2008, the
Company had net borrowings of $18.0 million, paid dividends on
common stock of $38.0 million and used cash to repurchase shares
under a previously approved plan of approximately $77.7 million.
Growth Projects Update Mill Creek Generation Station: --
Construction began in June 2009; -- An official ground breaking
event occurred on August 27, 2009; -- The Company has capitalized
approximately $40.5 million in construction work in process related
to this project; -- The total capital cost of the project is
expected to be approximately $202 million, upon completion; and --
The plant is scheduled to be operational by December 31, 2010.
Colstrip Transmission System Upgrade: -- The Company and the
Colstrip Transmission System owners are conducting a technical
study to determine the range of improvements and expect it to be
completed by the end of 2009; -- The Company anticipates the
Partner Participation Agreement to be completed in early 2010; --
The Company's capital cost of the project is estimated to be
approximately $41 million, if all partners to the Colstrip
Transmission System participate in the upgrade; -- The commencement
of the construction is expected in the Summer of 2011; and -- The
upgrades to the system are expected to be completed by the end of
the third quarter of 2012. Renewable Collector System in Montana:
-- The Company is planning to conduct a second open season process
in the first half of 2010; -- The Joint System Impact/Facility
Study is expected to be completed by the end of the first half of
2010; -- The Company's assumed capital on the project is
approximately $220 million; and -- The lines are scheduled to be
operational by the second quarter of 2014. Mountain States
Transmission Intertie (MSTI): -- Public meetings educating
communities and land owners are planned throughout the fourth
quarter of 2009 and will continue into 2010; -- The Company is
planning to conduct a second open season process by the end of the
first half of 2010; -- The draft Environmental Impact Study, which
will include the Rate Impact Study, is planned to be released by
the agencies by the end of the first quarter of 2010; -- The
Company has submitted Part I of the Department of Energy loan
application for consideration under the Federal Loan Guarantees for
Electric Power Transmission Infrastructure Investment Projects; --
As of Sept. 30, 2009, the Company has capitalized approximately
$9.6 million for preliminary survey, siting, permitting,
environmental and engineering costs; -- The Company estimates
capitalizing approximately $2 million more in costs by the end of
2009; and expects the total cost of the project will be
approximately $1 billion; -- MSTI is expected to be placed in
service by the first quarter of 2015. Dividend NorthWestern's Board
of Directors declared a quarterly common stock dividend of 33.5
cents per share, payable on Dec. 31, 2009, to common shareholders
of record as of Dec. 15, 2009. 2009 Earnings Revised and Fourth
Quarter Outlook The current weak economic conditions have resulted,
and we believe will likely continue to result in weaker customer
demand. While customer counts increased, retail residential and
commercial electric volumes were down 3% and industrial volumes
were down 9% for the third quarter of 2009 as compared with the
same quarter of 2008. This volume reduction, while due in part to
energy efficiency measures and milder weather, is also largely due
to weak economic conditions, particularly for commercial and
industrial customers. Our margins are minimally impacted by changes
in industrial demand due to our rate structure. We expect to
continue to experience relatively flat residential demand as well
as reduced commercial and industrial demand during the remainder of
2009. The weak economy also contributed to a 13% decrease in
transmission capacity revenues, which we expect to continue through
the end of 2009. In addition, we expect the effective tax rate for
the year ended Dec. 31, 2009 to be approximately 20.0%, primarily
due to the repair expense deduction, discussed above.
NorthWestern's estimate for earnings per share in 2009 had been in
the range of $1.75 - $1.85 per fully diluted share. Due primarily
to the IRS approval of a tax accounting method change to deduct
repairs that would have previously been capitalized, we are
revising the estimate for earnings per share in 2009 to be in the
range of $1.95 - $2.05. The guidance assumptions for 2009 include:
-- Our year to date results through September 30, 2009; -- An
effective tax rate for the full year 2009 to be approximately 20%
and about 30% for the fourth quarter of 2009; -- Wholesale electric
pricing in South Dakota continues at the current levels; -- The
lower transmission capacity demand continues; -- We expect to
continue to experience relatively flat residential demand as well
as reduced commercial and industrial demand during the remainder of
2009; -- No further insurance recoveries for 2009; -- Fully diluted
average shares outstanding of 36.3 million; and -- Normal weather
in the Company's electric and natural gas service territories for
the fourth quarter of 2009. Company Hosting Investor Conference
Call NorthWestern will host an investor conference call tomorrow
(Oct. 29) at 11:00 am Eastern Time (10:00 a.m. Central Time) to
review its financial results for the quarter ended Sept. 30, 2009.
The conference call will be webcast live on the Internet at
http://www.northwesternenergy.com/ under the "Investor Information"
heading. To listen, please go to the site at least 10 minutes in
advance of the call to register. An archived webcast will be
available shortly after the call. A telephonic replay of the call
will be available beginning at noon ET on Oct. 29, 2009, through
Nov. 29, 2009, at 800-475-6701, access code 118865. About
NorthWestern Energy NorthWestern Energy is one of the largest
providers of electricity and natural gas in the Upper Midwest and
Northwest, serving approximately 656,000 customers in Montana,
South Dakota and Nebraska. More information on NorthWestern Energy
is available on the Company's Web site at
http://www.northwesternenergy.com/. 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 "2009 Earnings
Revised and Fourth Quarter Outlook". Forward-looking statements
often address our expected future business and financial
performance, and often contain words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," or "will."
These statements are based upon our current expectations and speak
only as of the date hereof. Our actual future business and
financial performance may differ materially and adversely from
those expressed in any forward-looking statements as a result of
various factors and uncertainties, including, but not limited to:
-- potential adverse federal, state, or local legislation or
regulation or adverse determinations by regulators could have a
material adverse effect on our liquidity, results of operations and
financial condition; -- changes in availability of trade credit,
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 would 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 Annual Report on Form 10-K, recent and forthcoming
Quarterly Reports on Form 10-Q, recent Current 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.
NORTHWESTERN CORPORATION CONSOLIDATED BALANCE SHEETS (in thousands)
September 30, December 31, 2009 2008 ---- ---- (unaudited) ASSETS
Current Assets $237,412 $313,417 Property, Plant, and Equipment,
Net 1,899,525 1,839,699 Goodwill 355,128 355,128 Regulatory Assets
233,525 233,102 Other Noncurrent Assets 28,888 20,691 ------ ------
Total Assets $2,754,478 $2,762,037 ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY Current Maturities of
Long-term Debt and Capital Leases $7,310 $229,238 Current
Liabilities 319,749 359,339 Long-term Capital Leases 35,882 36,798
Long-term Debt 884,280 634,011 Noncurrent Regulatory Liabilities
235,881 222,969 Deferred Income Taxes 149,072 114,707 Other
Noncurrent Liabilities 346,670 401,442 ------- ------- Total
Liabilities 1,978,844 1,998,504 --------- --------- Total
Shareholders' Equity 775,634 763,533 ------- ------- Total
Liabilities and Shareholders' Equity $2,754,478 $2,762,037
========== ========== NORTHWESTERN CORPORATION CONSOLIDATED
STATEMENTS OF INCOME (Unaudited) (in thousands, except per share
amounts) Three Nine Months Ended Months Ended September 30,
September 30, 2009 2008 2009 2008 ---- ---- ---- ---- Revenues
Electric $198,416 $207,687 $579,277 $582,687 Gas 34,179 45,603
253,976 297,357 Other 291 18,954 6,249 54,681 --- ------ -----
------ Total Revenues 232,886 272,244 839,502 934,725 -------
------- ------- ------- Operating Expenses Cost of sales 105,183
130,503 420,033 508,941 Operating, general and administrative
57,893 63,411 184,210 177,348 Property and other taxes 20,866
21,718 63,401 65,898 Depreciation 21,977 21,292 66,959 63,608
------ ------ ------ ------ Total Operating Expenses 205,919
236,924 734,603 815,795 ------- ------- ------- ------- Operating
Income 26,967 35,320 104,899 118,930 ------ ------ ------- -------
Interest Expense (17,267) (15,629) (50,403) (47,478) Other Income
403 1,218 1,192 1,640 --- ----- ----- ----- Income Before Income
Taxes 10,103 20,909 55,688 73,092 Income Tax Benefit (Expense)
8,797 (7,530) (7,877) (26,759) ----- ------ ------ ------- Net
Income $18,900 $13,379 $47,811 $46,333 ------- ------- -------
------- Average Common Shares Outstanding 35,968 38,057 35,947
38,665 ------ ------ ------ ------ Basic Earnings per Average
Common Share $0.53 $0.35 $1.33 $1.20 ----- --- ----- ----- Diluted
Earnings per Average Common Share $0.52 $0.35 $1.32 $1.19 --- ---
----- ----- Dividends Declared per Average Common Share $0.335
$0.33 $1.01 $0.99 ------ ----- ----- ----- NORTHWESTERN CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Nine Months Ended September 30, 2009 2008 ---- ---- Operating
Activities Net income $47,811 $46,333 Non-cash items 95,416 92,607
Changes in operating assets and liabilities (13,916) 37,809 -------
------ Cash Provided by Operating Activities 129,311 176,749 Cash
Used in Investing Activities (115,529) (80,930) Cash Used In
Financing Activities (19,031) (100,017) Net Decrease in Cash and
Cash Equivalents $(5,249) $(4,198) ------- ------- Cash and Cash
Equivalents, beginning of period $11,292 $12,773 ------- -------
Cash and Cash Equivalents, end of period $6,043 $8,575 ======
====== NORTHWESTERN CORPORATION REGULATED ELECTRIC SEGMENT Three
months ended Sept. 30, 2009 (Unaudited) Results ------- 2009 2008
Change % Change ---- ---- ------ ------- (in millions) Retail
revenue $163.3 $191.2 $(27.9) (14.6)% Transmission 11.2 12.9 (1.7)
(13.2) Wholesale 11.1 2.3 8.8 382.6 Regulatory Amortization and
Other 13.1 1.6 11.5 718.8 ---- --- ---- ----- Total Revenues 198.7
208.0 (9.3) (4.5) Total Cost of Sales 92.6 113.3 (20.7) (18.3) ----
----- ----- ----- Gross Margin $106.1 $94.7 $11.4 12.0% ------
----- ----- ---- Megawatt Avg. Customer Revenues Hours (MWH) Counts
-------- ---------- ------ 2009 2008 2009 2008 2009 2008 ---- ----
---- ---- ---- ---- (in thousands) Retail Electric Montana $49,248
$58,008 515 532 267,382 265,258 South Dakota 10,776 11,984 122 130
48,256 47,947 ------ ------ --- --- ------ ------ Residential
60,024 69,992 637 662 315,638 313,205 ------ ------ --- --- -------
------- Montana 70,030 80,770 828 853 60,602 59,817 South Dakota
16,539 18,148 230 237 11,792 11,605 ------ ------ --- --- ------
------ Commercial 86,569 98,918 1,058 1,090 72,394 71,422 ------
------ ----- ----- ------ ------ Industrial 8,079 11,914 717 786 71
71 Other 8,592 10,411 75 88 7,728 7,640 ----- ------ -- -- -----
----- Total Retail Electric $163,264 $191,235 2,487 2,626 395,831
392,338 ======== ======== ===== ===== ======= ======= Wholesale
Electric Montana $9,464 $ - 126 - N/A N/A South Dakota 1,636 2,268
64 71 N/A N/A ----- ----- -- -- --- --- Total Wholesale Electric
$11,100 $2,268 190 71 N/A N/A ======= ====== === == === === 2009 as
compared to: -------------------- Historic Cooling Degree-Days 2008
Average ---------------------- ---- ------- Montana 5% colder 10%
warmer South Dakota 30% colder 37% colder NORTHWESTERN CORPORATION
REGULATED ELECTRIC SEGMENT Nine months ended Sept. 30, 2009
(Unaudited) Results ------- 2009 2008 Change % Change ---- ----
------ -------- (in millions) Retail revenue $494.8 $538.6 $(43.8)
(8.1)% Transmission 33.5 36.8 (3.3) (9.0) Wholesale 32.8 8.1 24.7
304.9 Regulatory Amortization and Other 19.0 0.1 18.9 18900.0 ----
--- ---- ------- Total Revenues 580.1 583.6 (3.5) (0.6) Total Cost
of Sales 258.9 303.5 (44.6) (14.7) ----- ----- ----- ----- Gross
Margin $321.2 $280.1 $41.1 14.7% ------ ------ ----- ---- Avg.
Customer Revenues MWHs Counts -------- ---- ------ 2009 2008 2009
2008 2009 2008 ---- ---- ---- ---- ---- ---- (in thousands) Retail
Electric Montana $162,708 $178,571 1,682 1,699 268,337 265,727
South Dakota 33,818 34,417 402 394 48,211 47,912 ------ ------ ---
--- ------ ------ Residential 196,526 212,988 2,084 2,093 316,548
313,639 ------- ------- ----- ----- ------- ------- Montana 203,324
220,209 2,373 2,408 60,374 59,471 South Dakota 47,960 49,208 660
658 11,656 11,486 ------ ------ --- --- ------ ------ Commercial
251,284 269,417 3,033 3,066 72,030 70,957 ------- ------- -----
----- ------ ------ Industrial 27,292 35,026 2,183 2,320 72 71
Other 19,743 21,129 148 151 6,070 5,951 ------ ------ --- --- -----
----- Total Retail Electric $494,845 $538,560 7,448 7,630 394,720
390,618 ======== ======== ===== ===== ======= ======= Wholesale
Electric Montana $28,355 $ - 426 - N/A N/A South Dakota 4,429 8,115
161 202 N/A N/A ----- ----- --- --- --- --- Wholesale Electric
$32,784 $8,115 587 202 N/A N/A ======= ====== === === === === 2009
as compared to: -------------------- Historic Cooling Degree-Days
2008 Average ------------------- ---- ------- Montana 6% colder 5%
colder South Dakota 24% colder 37% colder NORTHWESTERN CORPORATION
REGULATED NATURAL GAS SEGMENT Three months ended Sept. 30, 2009
(Unaudited) Results ------- 2009 2008 Change % Change ---- ----
------ -------- (in millions) Retail revenue $23.0 $37.5 $(14.5)
(38.7)% Wholesale and other 11.2 8.1 3.1 38.3 ---- --- --- ----
Total Revenues 34.2 45.6 (11.4) (25.0) Total Cost of Sales 12.3
22.8 (10.5) (46.1) ---- ---- ----- ----- Gross Margin $21.9 $22.8
$(0.9) (3.9)% ----- ----- ----- ---- Dekatherms Customer Revenues
(Dkt) Counts -------- ----- ------ 2009 2008 2009 2008 2009 2008
---- ---- ---- ---- ---- ---- (in thousands) Retail Gas Montana
$10,259 $16,189 822 941 155,546 154,403 South Dakota 1,698 2,496
124 126 36,353 36,169 Nebraska 1,973 2,922 164 160 36,008 35,960
----- ----- --- --- ------ ------ Residential 13,930 21,607 1,110
1,227 227,907 226,532 ------ ------ ----- ----- ------- -------
Montana 5,987 9,266 527 571 21,780 21,601 South Dakota 1,357 3,156
212 246 5,749 5,684 Nebraska 1,560 3,127 297 278 4,408 4,461 -----
----- --- --- ----- ----- Commercial 8,904 15,549 1,036 1,095
31,937 31,746 ----- ------ ----- ----- ------ ------ Industrial 134
228 12 15 293 301 Other 58 107 5 7 142 140 -- --- - - --- --- Total
Retail Gas $23,026 $37,491 2,163 2,344 260,279 258,719 =======
======= ===== ===== ======= ======= 2009 as compared with:
--------------------- Historic Heating Degree-Days 2008 Average
------------------- ---- ------- Montana 34% warmer 35% warmer
South Dakota 10% colder 4% colder Nebraska 2% colder 6% colder
NORTHWESTERN CORPORATION REGULATED NATURAL GAS SEGMENT Nine months
ended Sept. 30, 2009 (Unaudited) Results ------- 2009 2008 Change %
Change ---- ---- ------ -------- (in millions) Retail revenue
$217.9 $267.9 $(50.0) (18.7)% Wholesale and other 36.4 29.9 6.5
21.7 ---- ---- --- ---- Total Revenues 254.3 297.8 (43.5) (14.6)
Total Cost of Sales 154.1 194.0 (39.9) (20.6) ----- ----- -----
----- Gross Margin $100.2 $103.8 $(3.6) (3.5)% ------ ------ -----
---- Customer Revenues Dkt Counts -------- --- ------ 2009 2008
2009 2008 2009 2008 ---- ---- ---- ---- ---- ---- (in thousands)
Retail Gas Montana $86,934 $110,886 8,338 9,033 156,662 155,236
South Dakota 26,132 29,284 2,251 2,322 36,676 36,527 Nebraska
22,432 25,068 1,981 2,091 36,360 36,397 ------ ------ ----- -----
------ ------ Residential 135,498 165,238 12,570 13,446 229,698
228,160 ------- ------- ------ ------ ------- ------- Montana
44,401 56,202 4,311 4,563 21,945 21,685 South Dakota 19,984 23,333
2,282 2,166 5,810 5,761 Nebraska 16,152 20,384 2,094 2,157 4,496
4,524 ------ ------ ----- ----- ----- ----- Commercial 80,537
99,919 8,687 8,886 32,251 31,970 ------ ------ ----- ----- ------
------ Industrial 1,149 1,765 114 150 296 304 Other 727 950 79 89
142 140 --- --- -- -- --- --- Total Retail Gas $217,911 $267,872
21,450 22,571 262,387 260,574 ======== ======== ====== ======
======= ======= 2009 as compared with: ----------------------
Historic Heating Degree-Days 2008 Average ------------------- ----
------- Montana 8% warmer 5% warmer South Dakota Remained flat 5%
colder Nebraska 7% warmer 2% warmer NORTHWESTERN CORPORATION
SEGMENT INFORMATION Three Months Ended September 30, 2009
(Unaudited) (in thousands) Regulated Three Months Ended ---------
September 30, 2009 Electric Gas Other Eliminations Total -------
--- ----- ------------ ----- Operating revenues $198,689 $34,205
$291 $(299) $232,886 Cost of sales 92,592 12,326 265 - 105,183
------ ------ --- --- ------- Gross margin 106,097 21,879 26 (299)
127,703 ------- ------ -- ---- ------- Operating, general and
administrative 40,834 17,701 (343) (299) 57,893 Property and other
taxes 15,351 5,479 36 - 20,866 Depreciation 17,772 4,197 8 - 21,977
------ ----- --- --- ------ Operating income (loss) 32,140 (5,498)
325 - 26,967 ------ ------ --- --- ------ Interest expense (13,056)
(3,243) (968) - (17,267) Other income 310 67 26 - 403 Income tax
benefit 789 5,694 2,314 - 8,797 --- ----- ----- --- ----- Net
income (loss) $20,183 $(2,980) $1,697 $- $18,900 --- ----- ------
--- ------- Three Months Ended Regulated Unregulated September 30,
--------- ----------- 2008 Electric Gas Electric Other Eliminations
Total -------- --- -------- ----- ------------ ----- Operating
revenues $208,020 $45,651 $20,091 $7,889 (9,407) $272,244 Cost of
sales 113,299 22,803 (4,184) 7,611 (9,026) 130,503 ------- ------
------ ----- ----- ------- Gross margin 94,721 22,848 24,275 278
(381) 141,741 ------ ------ ------ --- --- ------- Operating,
general and administrative 45,882 20,058 3,563 (5,711) ( 381)
63,411 Property and other taxes 15,380 5,543 792 3 - 21,718
Depreciation 15,416 4,041 1,827 8 - 21,292 ------ ----- ----- ---
--- ------ Operating income (loss) 18,043 (6,794) 18,093 5,978 -
35,320 ------ ------ ------ ----- --- ------ Interest expense
(9,679) (3,389) (2,189) (372) - (15,629) Other income 306 298 1 613
--- 1,218 Income tax (expense) benefit (3,477) 3,750 (6,303)
(1,500) - (7,530) ------ ----- ------ ------ --- ------ Net income
(loss) $5,193 $(6,135) $9,602 $4,719 $- $13,379 ------ -------
------ ------ --- ------- NORTHWESTERN CORPORATION SEGMENT
INFORMATION Nine Months Ended September 30, 2009 (Unaudited) (in
thousands) Nine Months Ended Regulated September 30, --------- 2009
Electric Gas Other Eliminations Total -------- --- -----
------------ ----- Operating revenues $580,139 $254,338 $6,248
$(1,223) $839,502 Cost of sales 258,964 154,105 6,964 - 420,033
------- ------- ----- - ------- Gross margin 321,175 100,233 (716)
(1,223) 419,469 ------- ------- ---- ------ ------- Operating,
general and administrative 128,575 58,806 (1,948) (1,223) 184,210
Property and other taxes 46,433 16,857 111 - 63,401 Depreciation
54,113 12,821 25 - 66,959 ------ ------ -- --- ------ Operating
income 92,054 11,749 1,096 - 104,899 ------ ------ ----- ---
------- Interest expense (37,963) (9,629) (2,811) - (50,403) Other
income 783 322 87 --- 1,192 Income tax (expense) benefit (12,066)
1,571 2,618 - (7,87) ------- ----- ----- --- ------ Net income
$42,808 $4,013 $990 $- 47,811 --- --- ---- --- ------ Nine Months
Ended Regulated Unregulated September 30, --------- -----------
2008 Electric Gas Electric Other Eliminations Total -------- ---
-------- ----- ------------ ----- Operating revenues $583,606
$297,825 $57,064 $24,464 $(28,234) $934,725 Cost of sales 303,550
193,996 14,472 23,770 (26,847) 508,941 ------- ------- ------
------ ------- ------- Gross margin 280,056 103,829 42,592 694
(1,387) 425,784 ------- ------- ------ --- ------ -------
Operating, general and administrative 115,755 53,717 10,459 (1,196)
(1,387) 177,348 Property and other taxes 46,147 17,355 2,386 10 -
65,898 Depreciation 46,203 11,925 5,455 25 - 63,608 ------ ------
----- -- - ------ Operating income 71,951 20,832 24,292 1,855 -
118,930 ------ ------ ------ ----- - ------- Interest expense
(28,138 ) (9,874) (8,358) (1,108) - (47,478) Other income (expense)
891 857 133 (241) - 1,640 Income tax expense (15,810 ) (4,413)
(6,457) (79) - (26,759) ------- ----- ------ --- --- ------- Net
income $28,894 $7,402 $9,610 $427 $- $46,333 ------- ------ ------
---- --- ------- DATASOURCE: NorthWestern Corporation CONTACT:
Media, Claudia Rapkoch, 1-866-622-8081, , or Investor Relations,
Dan Rausch, +1-605-978-2902, , both of NorthWestern Energy Web
Site: http://www.northwesternenergy.com/
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