- Consolidated earnings were stable with $0.07 per share on net income of $2.0 million for the second quarter of 2016, compared to $0.08 per share and $2.2 million for 2015.
- We connected over 10,500 utility customers during the last twelve months equating to a customer growth rate of 1.5% at June 30, 2016.
- The Company refunded nearly $30 million to customers related to lower than projected wholesale natural gas prices and asset management activities.
- We obtained the environmental siting permit in April 2016 for our North Mist gas storage expansion project, keeping the project on schedule to meet a winter of 2018-19 in service date. The Company is now finalizing a few additional permits, a full project cost estimate including an updated EPC estimate, and anticipates a notice to proceed during the fall of 2016.
- Consolidated earnings for the six months ended June 30, 2016 were $1.40 per share on net income of $38.7 million, compared to $1.12 per share on net income of $30.7 million for 2015. These results include a regulatory disallowance for past environmental costs of $3.3 million pre-tax, or $0.07 per share after tax based on 27.6 million diluted shares, in 2016 and $15.0 million pre-tax, or $0.33 per share after tax based on 27.4 million diluted shares, in 2015. A statutory tax rate of 39.5% was used in both calculations.
- Excluding these charges on a non-GAAP basis, earnings were $1.47 per share for 2016 compared to $1.45 per share for 2015. Please see tabular reconciliation of these measures in Consolidated Results section below.
- The Company reaffirmed earnings guidance for 2016, at $1.98 to $2.18 per share or $2.05 to $2.25 per share adjusted to exclude the effects of the pre-tax charge of $3.3 million, or $0.07 per share after-tax, related to the final environmental implementation order received in January 2016 as described below.
PORTLAND, Ore., Aug. 02, 2016 (GLOBE NEWSWIRE) -- Northwest Natural Gas Company, dba NW Natural (NYSE:NWN), reported earnings per share of $0.07 on net income of $2.0 million for the second quarter of 2016, compared to $0.08 per share on net income of $2.2 million for 2015. Consolidated net income was $38.7 million, or $1.40 per share, for the first six months of 2016, compared to net income of $30.7 million, or $1.12 per share, for the same period of 2015.
Results for both six month periods were affected by non-cash charges related to the Company's environmental regulatory proceeding, which was resolved in January 2016. The first quarter of 2016 included a $3.3 million pre-tax, or $0.07 per share after-tax disallowance(1), from the OPUC's 2016 Order (2016 Order), which was related to the Company's compliance filing under the environmental mechanism. The first quarter of 2015 included a $15.0 million pre-tax charge or $0.33 per share after-tax disallowance from the February 2015 OPUC Order (2015 Order) in the environmental docket. Excluding these charges(2), consolidated net income was $40.7 million, or $1.47 per share for the first six months of 2016, compared to $1.45 per share on net income of $39.8 million for 2015.
“I’m honored to lead this 157-year old Company. Like those before me, I am committed to operating a safe, reliable system in an environmentally responsible way, providing exceptional service to our customers, and continuing to create a solid value for our investors,” said David Anderson, President and CEO of NW Natural. “We had a strong quarter with solid financial results and saw the benefits of lower natural gas prices and continued customer growth. In the months ahead, we will work to leverage the positive momentum in our local economy and to progress our North Mist storage expansion project.”
_________________
(1)Earnings per share (EPS) calculation based on average diluted shares outstanding of 27.6 million and an income tax rate of 39.5%.
(2) See tabular reconciliation of non-GAAP measures in Consolidated Results section below.
Consolidated Results
For the three months ended June 30, 2016, NW Natural earnings remained relatively flat with a $0.01 per share or $0.2 million decrease, compared to the same period in 2015. Results were driven by a $1.3 million decrease in utility margin from significantly warmer weather than 2015 offset by customer growth and a $0.7 million increase in operating and maintenance (O&M) expense, partially offset by a $1.7 million increase in gas storage revenues from higher asset management agreements and improved storage pricing at our Gill Ranch facility.
The second quarter results are summarized in the table below:
| Three Months Ended June 30, | |||||||||||||||||
| 2016 | 2015 | ||||||||||||||||
| In thousands, except per share data | Amount | Per Share | Amount | Per Share | Change | ||||||||||||
| Net income (loss): | |||||||||||||||||
| Utility segment | $ | 507 | $ | 0.02 | $ | 2,245 | $ | 0.08 | $ | (1,738 | ) | ||||||
| Gas storage segment | 1,439 | 0.05 | (86 | ) | — | 1,525 | |||||||||||
| Other | 73 | — | 38 | — | 35 | ||||||||||||
| Consolidated net income | $ | 2,019 | $ | 0.07 | $ | 2,197 | $ | 0.08 | $ | (178 | ) | ||||||
| Utility margin | $ | 69,371 | $ | 70,715 | $ | (1,344 | ) | ||||||||||
| Gas storage operating revenues | 6,992 | 5,333 | 1,659 | ||||||||||||||
For the six months ended June 30, 2016, NW Natural earnings increased $0.28 per share or $8.0 million compared to 2015. The increase was largely due to the non-cash charges related to the 2015 and 2016 Orders. Excluding these charges on a non-GAAP basis, net income increased by $0.9 million primarily from $4.7 million of higher utility margin attributable to customer growth and gains from gas cost incentive sharing and a $1.7 million increase in gas storage revenues, offset by a $5.2 million decrease in other income related to the recognition of $5.3 million of equity earnings on deferred regulatory assets as a result of the 2015 Order.
The six month results are summarized in the table below:
| Six Months Ended June 30, | ||||||||||||||||||
| 2016 | 2015 | |||||||||||||||||
| In thousands, except per share data | Amount | Per Share | Amount | Per Share | Change | |||||||||||||
| Net income: | ||||||||||||||||||
| Utility segment | $ | 36,359 | $ | 1.32 | $ | 30,580 | $ | 1.12 | $ | 5,779 | ||||||||
| Gas storage segment | 2,175 | 0.08 | 28 | — | 2,147 | |||||||||||||
| Other | 126 | — | 75 | — | 51 | |||||||||||||
| Consolidated net income | $ | 38,660 | $ | 1.40 | $ | 30,683 | $ | 1.12 | $ | 7,977 | ||||||||
| Adjustments: | ||||||||||||||||||
| Regulatory environmental disallowance, net of taxes ($1,304 and $5,925)(1) | 1,996 | 0.07 | 9,075 | 0.33 | (7,079 | ) | ||||||||||||
| Adjusted consolidated net income(1) | $ | 40,656 | $ | 1.47 | $ | 39,758 | $ | 1.45 | $ | 898 | ||||||||
| Utility margin | $ | 206,035 | $ | 201,316 | $ | 4,719 | ||||||||||||
| Gas storage operating revenues | 12,361 | 10,636 | 1,725 | |||||||||||||||
(1) Regulatory environmental disallowance of $3.3 million in 2016 is recorded in utility other income and expense, net ($2.8 million) and utility operations and maintenance expense ($0.5 million). Regulatory environmental disallowance of $15.0 million in 2015 is recorded in utility operations and maintenance expense. Adjusted EPS and net income are non-GAAP financial measures based on the after-tax disallowance. EPS is calculated using the combined federal and state statutory tax rate of 39.5% and 27.6 million and 27.4 million diluted shares for the six months ended June 30, 2016 and 2015, respectively.
Utility Results
For the three months ended June 30, 2016, utility segment net income decreased $1.7 million or $0.06 per share due to a $1.3 million decrease in utility margin primarily reflecting significantly warmer weather during the quarter than the same period in 2015 offset by strong customer growth, a $0.9 million increase in O&M expense, and a $0.7 million decrease in other income from lower interest earned on net regulatory assets.
The 7% decrease in deliveries and $1.3 million decrease in margin for the second quarter of 2016 compared to 2015 was mainly due to lower residential and commercial volumes reflecting weather that was 21% warmer than a year ago, and 42% warmer than average. The region experienced exceptionally warm weather during the quarter. Significantly warmer weather can impact utility margins as our Washington customers do not have a weather normalization mechanism in place, and 9% of our Oregon customers have opted out of weather normalization.
For the six months ended June 30, 2016, utility segment net income increased $5.8 million or $0.20 per share due to a $4.7 million increase in utility margin reflecting customer growth and an increase in gas cost incentive sharing gains, a $13.8 million decrease in O&M expense primarily due to the $15.0 million regulatory disallowance as a result of the 2015 Order; and an $8.5 million decrease in other income due to a $2.8 million interest write-off as a result of the 2016 Order and the recognition of $5.3 million of equity earnings on deferred regulatory assets as a result of the 2015 Order.
Although weather for the six months ended June 30, 2016 was comparable to the prior year, deliveries increased 5% due to comparatively colder weather in the first quarter of 2016 during our peak heating season. Weather was 22% warmer than average due to significantly warmer weather in the second quarter of 2016.
Customer Growth. NW Natural achieved a customer growth rate for the trailing 12-month period ended June 30, 2016 of 1.5%, with the Company serving over 718,000 customers at quarter end.
Utility Volume and Margin. The following table presents key utility margin metrics:
| Three Months Ended June 30, | Six Months Ended June 30, | Favorable/(Unfavorable) Change | Favorable/(Unfavorable) % Change | ||||||||||||||||||||||||||||
| (Dollars and therms in thousands) | 2016 | 2015 | 2016 | 2015 | QTD | YTD | QTD | YTD | |||||||||||||||||||||||
| Gas sales and transportation deliveries | 192,933 | 207,886 | 565,482 | 537,863 | (14,953 | ) | 27,619 | (7 | )% | 5 | % | ||||||||||||||||||||
| Weather (in heating degree days) | 403 | 512 | 1,988 | 1,993 | (109 | ) | (5 | ) | (21 | ) | — | ||||||||||||||||||||
| Utility operating revenues | $ | 92,135 | $ | 132,891 | $ | 342,239 | $ | 389,197 | $ | (40,756 | ) | $ | (46,958 | ) | (31 | ) | (12 | ) | |||||||||||||
| Less: Cost of gas | 20,871 | 62,176 | 129,282 | 187,881 | 41,305 | 58,599 | 66 | 31 | |||||||||||||||||||||||
| Environmental remediation expense | 1,893 | — | 6,922 | — | (1,893 | ) | (6,922 | ) | — | — | |||||||||||||||||||||
| Utility margin(1) | $ | 69,371 | $ | 70,715 | $ | 206,035 | $ | 201,316 | $ | (1,344 | ) | $ | 4,719 | (2 | )% | 2 | % | ||||||||||||||
(1) In November 2015 the Company began collecting revenues from customers through the environmental mechanism. These collections are included in utility operating revenues and are offset by the amortization of environmental liabilities presented in the environmental remediation expense line in the operating expense section of the income statement. Utility margin provides a key metric in assessing the performance of the utility segment.
Gas Storage Results
For the three and six months ended June 30, 2016, the Company's gas storage segment net income increased $1.5 million or $0.05 per share and $2.1 million or $0.08 per share, respectively. Results reflected an increase in revenues from our asset management agreements as well as improved pricing at Gill Ranch for the 2016-17 gas storage year. In addition, lower operating costs and interest expense at the Gill Ranch facility contributed to improved results.
Consolidated Operations
For the three months ended June 30, 2016, consolidated O&M expense increased $0.7 million compared to the same period in 2015 due to higher professional services and contractor work. For the six months ended June 30, 2016 consolidated O&M expense decreased $14.5 million compared to the same period in 2015 primarily due to the $15.0 million pre-tax charge from the 2015 Order offset by the higher professional services and contractor work.
For the three months ended June 30, 2016, other income decreased $0.6 million compared to the same period in 2015 due to lower interest earned on net regulatory assets. For the six months ended June 30, 2016 other income decreased $8.0 million compared to the same period in 2015 due to the recognition of $5.3 million of equity earnings from deferred environmental expenses in the first quarter of 2015 as a result of the 2015 Order. In addition, the 2016 Order resulted in a write-off of $2.8 million of interest in the first quarter of 2016.
Cash Flows
Cash provided by operations increased $32.1 million to $199.6 million for the first six months of 2016 due to $20.1 million higher net deferred tax liabilities from the extension of bonus depreciation; $20.4 million increase in cash from lower accounts payable balances reflecting comparatively lower gas prices and volumes sold, and $6.9 million of cash collections under our environmental mechanism as well as positive changes for other working capital items. These items were partially offset by a $31.0 million decrease in cash primarily from the payment of the early refund of gas cost savings to customers in June 2016.
2016 Earnings Guidance
The Company reaffirmed earnings guidance today in the range of $1.98 to $2.18 per share including the effects of the pre-tax charge of $3.3 million or $0.07 per share after-tax(1), related to the 2016 Order. Excluding the charge on a non-GAAP basis, earnings guidance is $2.05 to $2.25 per share. The Company’s 2016 earnings guidance assumes customer growth from the utility segment, average weather conditions, sustainable operations and maintenance expense levels and normal inflationary increases, slow recovery of the gas storage market, the impact of the five-year extension of bonus depreciation resulting from the enactment of the Federal PATH Act of 2015, and no significant changes in prevailing legislative and regulatory policies, mechanisms, or outcomes.
(1)EPS calculation based on average diluted shares outstanding of 27.6 million and an income tax rate of 39.5%.
Dividend Declaration
The board of directors of NW Natural declared a quarterly dividend of 46.75 cents per share on the Company’s common stock. The dividends will be paid on August 15, 2016 to shareholders of record on July 29, 2016. The Company’s indicated annual dividend rate is $1.87 per share.
Presentation of Results
In addition to presenting the results of operations and earnings amounts in total, certain financial measures are expressed in cents per share or exclude the after-tax regulatory charges related to the Orders implementing the SRRM in 2015 and 2016, which are non-GAAP financial measures. The Company presents net income and EPS excluding the regulatory disallowance along with the GAAP measures to illustrate the magnitude of this disallowance on ongoing business and operational results. Although the excluded amounts are properly included in the determination of these items under GAAP, the Company believes the amount and nature of such disallowance make period to period comparisons of operations difficult or potentially confusing. Financial measures are expressed in cents per share as these amounts reflect factors that directly impact earnings, including income taxes. All references in this section to EPS are on the basis of diluted shares. The Company uses such non-GAAP financial measures to analyze its financial performance because it believes they provide useful information to its investors and creditors in evaluating its financial condition and results of operations.
Conference Call Arrangements
As previously reported, NW Natural will conduct a conference call and webcast starting at 8 a.m. Pacific Time (11 a.m. Eastern Time) on August 2, 2016 to review the Company's financial and operating results for the three and six months ended June 30, 2016.
To hear the conference call live, please dial 1-866-267-6789 within the United States and 1-855-669-9657 from Canada. International callers can dial 1-412-902-4110. To access the conference replay, please call 1-877-344-7529 and enter the conference identification pass code 10088843. To hear the replay from Canada, please dial 1-855-669-9658 and from international locations, please dial 1-412-317-0088.
To hear the conference by webcast, log on to NW Natural's corporate website at nwnatural.com.
Forward-Looking Statements
This report, and other presentations made by NW Natural 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, goals, strategies, future events, the economy, investments, customer growth, weather and its impacts, environmental remediation cost recoveries, levels and pricing of gas storage contracts, gas storage development or costs, events or timing related thereto, financial positions, operation and maintenance expense, capital expenditures, free cash flow levels, revenues and earnings and the timing thereof, dividends, effects of regulatory disallowance, performance, effects of legislative policies, including bonus depreciation, timing or effects of future regulatory proceedings or future regulatory approvals, regulatory prudence reviews, effects of and recoveries under regulatory mechanisms, including, but not limited to, SRRM, and other statements that are other than statements of historical facts.
Forward-looking statements are based on the Company's 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. The Company's actual results may differ materially from those contemplated by the forward-looking statements. The Company cautions you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future operational 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 Company's 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 Company's 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 the Company, are expressly qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes 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 for the Company 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.
About NW Natural
NW Natural (NYSE:NWN) is headquartered in Portland, Ore., and provides natural gas service to more than 718,000 residential, commercial, and industrial customers through approximately 14,000 miles of mains and service lines in western Oregon and southwestern Washington. It is the largest independent natural gas utility in the Pacific Northwest with $2.9 billion in total assets. NW Natural and its subsidiaries currently own and operate underground gas storage facilities with storage capacity of approximately 31 Bcf in Oregon and California. Additional information is available at nwnatural.com.
| NORTHWEST NATURAL GAS COMPANY | |||||||||||||||||||||||||||||||
| Financial Highlights (Unaudited) | |||||||||||||||||||||||||||||||
| Second Quarter - 2016 | |||||||||||||||||||||||||||||||
| 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, | ||||||||||||||||||||||||||||
| 2016 | 2015 | Change | 2016 | 2015 | Change | 2016 | 2015 | Change | |||||||||||||||||||||||
| Operating revenues | $ | 99,183 | $ | 138,280 | (28 | )% | $ | 354,712 | $ | 399,945 | (11 | )% | $ | 678,558 | $ | 727,427 | (7 | )% | |||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||
| Cost of gas | 20,871 | 62,176 | (66 | ) | 129,282 | 187,881 | (31 | ) | 268,706 | 339,890 | (21 | ) | |||||||||||||||||||
| Operations and maintenance | 35,962 | 35,311 | 2 | 74,901 | 89,427 | (16 | ) | 142,995 | 156,292 | (9 | ) | ||||||||||||||||||||
| Environmental remediation | 1,893 | — | 100 | 6,922 | — | 100 | 10,435 | — | 100 | ||||||||||||||||||||||
| General taxes | 7,438 | 7,649 | (3 | ) | 16,122 | 16,381 | (2 | ) | 30,022 | 30,423 | (1 | ) | |||||||||||||||||||
| Depreciation and amortization | 20,413 | 20,230 | 1 | 40,807 | 40,341 | 1 | 81,389 | 80,236 | 1 | ||||||||||||||||||||||
| Total operating expenses | 86,577 | 125,366 | (31 | ) | 268,034 | 334,030 | (20 | ) | 533,547 | 606,841 | (12 | ) | |||||||||||||||||||
| Income from operations | 12,606 | 12,914 | (2 | ) | 86,678 | 65,915 | 31 | 145,011 | 120,586 | 20 | |||||||||||||||||||||
| Other income and expense, net | 513 | 1,135 | (55 | ) | (1,796 | ) | 6,184 | (129 | ) | (233 | ) | 6,472 | (104 | ) | |||||||||||||||||
| Interest expense, net | 9,718 | 10,438 | (7 | ) | 19,454 | 20,919 | (7 | ) | 41,074 | 42,263 | (3 | ) | |||||||||||||||||||
| Income before income taxes | 3,401 | 3,611 | (6 | ) | 65,428 | 51,180 | 28 | 103,704 | 84,795 | 22 | |||||||||||||||||||||
| Income tax expense | 1,382 | 1,414 | (2 | ) | 26,768 | 20,497 | 31 | 42,024 | 34,375 | 22 | |||||||||||||||||||||
| Net income | $ | 2,019 | $ | 2,197 | (8 | ) | 38,660 | 30,683 | 26 | $ | 61,680 | $ | 50,420 | 22 | |||||||||||||||||
| Common shares outstanding: | |||||||||||||||||||||||||||||||
| Average diluted for period | 27,632 | 27,388 | 27,591 | 27,378 | 27,519 | 27,319 | |||||||||||||||||||||||||
| End of period | 27,550 | 27,363 | 27,550 | 27,363 | 27,550 | 27,363 | |||||||||||||||||||||||||
| Per share information: | |||||||||||||||||||||||||||||||
| Diluted earnings per share | $ | 0.07 | $ | 0.08 | $ | 1.40 | $ | 1.12 | $ | 2.24 | $ | 1.85 | |||||||||||||||||||
| Dividends declared per share of common stock | 0.4675 | 0.4650 | 0.9350 | 0.9300 | 1.8675 | 1.8600 | |||||||||||||||||||||||||
| Book value per share, end of period | 29.04 | 28.39 | 29.04 | 28.39 | 29.04 | 28.39 | |||||||||||||||||||||||||
| Market closing price, end of period | 64.82 | 42.18 | 64.82 | 42.18 | 64.82 | 42.18 | |||||||||||||||||||||||||
| Capital structure, end of period: | |||||||||||||||||||||||||||||||
| Common stock equity | 51.7 | % | 49.2 | % | 51.7 | % | 49.2 | % | 51.7 | % | 49.2 | % | |||||||||||||||||||
| Long-term debt | 36.8 | 38.8 | 36.8 | 38.8 | 36.8 | 38.8 | |||||||||||||||||||||||||
| Short-term debt (including amounts due in one year) | 11.5 | 12.0 | 11.5 | 12.0 | 11.5 | 12.0 | |||||||||||||||||||||||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||
| Operating statistics: | |||||||||||||||||||||||||||||||
| Customers - end of period | 718,191 | 707,539 | 1.5 | % | 718,191 | 707,539 | 1.5 | % | 718,191 | 707,539 | 1.5 | % | |||||||||||||||||||
| Utility volumes - therms: | |||||||||||||||||||||||||||||||
| Residential and commercial sales | 82,625 | 97,066 | 325,499 | 303,883 | 592,344 | 554,097 | |||||||||||||||||||||||||
| Industrial sales and transportation | 110,308 | 110,820 | 239,983 | 233,980 | 463,887 | 462,286 | |||||||||||||||||||||||||
| Total utility volumes sold and delivered | 192,933 | 207,886 | 565,482 | 537,863 | 1,056,231 | 1,016,383 | |||||||||||||||||||||||||
| Utility operating revenues: | |||||||||||||||||||||||||||||||
| Residential and commercial sales | $ | 82,509 | $ | 117,919 | $ | 320,181 | $ | 358,831 | $ | 606,185 | $ | 648,083 | |||||||||||||||||||
| Industrial sales and transportation | 10,972 | 17,138 | 28,636 | 37,664 | 62,467 | 73,289 | |||||||||||||||||||||||||
| Other revenues | 1,102 | 1,131 | 2,513 | 2,537 | 3,890 | 3,877 | |||||||||||||||||||||||||
| Less: Revenue taxes | 2,448 | 3,297 | 9,091 | 9,835 | 17,290 | 18,044 | |||||||||||||||||||||||||
| Total utility operating revenues | 92,135 | 132,891 | 342,239 | 389,197 | 655,252 | 707,205 | |||||||||||||||||||||||||
| Less: Cost of gas | 20,871 | 62,176 | 129,282 | 187,881 | 268,706 | 339,890 | |||||||||||||||||||||||||
| Environmental remediation expense | 1,893 | — | 6,922 | — | 10,435 | — | |||||||||||||||||||||||||
| Utility margin, net | $ | 69,371 | $ | 70,715 | 206,035 | $ | 201,316 | $ | 376,111 | $ | 367,315 | ||||||||||||||||||||
| Degree days: | |||||||||||||||||||||||||||||||
| Average (25-year average) | 691 | 691 | 2,562 | 2,546 | 4,256 | 4,240 | |||||||||||||||||||||||||
| Actual | 403 | 512 | (21 | )% | 1,988 | 1,993 | —% | 3,453 | 3,365 | 3 | % | ||||||||||||||||||||
| Percent colder (warmer) than average weather | (42 | )% | (26 | )% | (22 | )% | (22 | )% | (19 | )% | (21 | )% | |||||||||||||||||||
| NORTHWEST NATURAL GAS COMPANY | ||||||||||
| Consolidated Balance Sheets (Unaudited) | June 30, | June 30, | ||||||||
| In thousands | 2016 | 2015 | ||||||||
| Assets: | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 5,463 | $ | 4,466 | ||||||
| Accounts receivable | 23,353 | 32,041 | ||||||||
| Accrued unbilled revenue | 14,175 | 12,760 | ||||||||
| Allowance for uncollectible accounts | (570 | ) | (723 | ) | ||||||
| Regulatory assets | 49,004 | 63,016 | ||||||||
| Derivative instruments | 7,445 | 1,023 | ||||||||
| Inventories | 66,171 | 76,511 | ||||||||
| Gas reserves | 15,707 | 18,214 | ||||||||
| Income taxes receivable | — | — | ||||||||
| Deferred tax assets | — | 12,693 | ||||||||
| Other current taxes | 21,312 | 14,007 | ||||||||
| Total current assets | 202,060 | 234,008 | ||||||||
| Non-current assets: | ||||||||||
| Property, plant, and equipment | 3,146,631 | 3,042,671 | ||||||||
| Less: Accumulated depreciation | 932,179 | 893,722 | ||||||||
| Total property, plant, and equipment, net | 2,214,452 | 2,148,949 | ||||||||
| Gas reserves | 108,286 | 121,355 | ||||||||
| Regulatory assets | 344,969 | 342,806 | ||||||||
| Derivative instruments | 3,541 | 1,369 | ||||||||
| Other investments | 67,868 | 68,147 | ||||||||
| Restricted cash | — | 4,500 | ||||||||
| Other non-current assets | 1,968 | 2,782 | ||||||||
| Total non-current assets | 2,741,084 | 2,689,908 | ||||||||
| Total assets | $ | 2,943,144 | $ | 2,923,916 | ||||||
| Liabilities and equity: | ||||||||||
| Current liabilities: | ||||||||||
| Short-term debt | $ | 152,800 | $ | 190,300 | ||||||
| Current maturities of long-term debt | 24,987 | — | ||||||||
| Accounts payable | 57,756 | 49,505 | ||||||||
| Taxes accrued | 6,237 | 8,782 | ||||||||
| Interest accrued | 5,793 | 5,922 | ||||||||
| Regulatory liabilities | 27,300 | 26,712 | ||||||||
| Derivative instruments | 3,471 | 15,017 | ||||||||
| Other current liabilities | 35,289 | 31,332 | ||||||||
| Total current liabilities | 313,633 | 327,570 | ||||||||
| Long-term debt | 570,045 | 613,737 | ||||||||
| Deferred credits and other non-current liabilities: | ||||||||||
| Deferred tax liabilities | 554,400 | 524,099 | ||||||||
| Regulatory liabilities | 341,259 | 328,646 | ||||||||
| Pension and other postretirement benefit liabilities | 219,049 | 233,554 | ||||||||
| Derivative instruments | 474 | 1,077 | ||||||||
| Other non-current liabilities | 144,285 | 118,269 | ||||||||
| Total deferred credits and other non-current liabilities | 1,259,467 | 1,205,645 | ||||||||
| Equity: | ||||||||||
| Common stock | 388,967 | 378,887 | ||||||||
| Retained earnings | 417,857 | 407,490 | ||||||||
| Accumulated other comprehensive loss | (6,825 | ) | (9,413 | ) | ||||||
| Total equity | 799,999 | 776,964 | ||||||||
| Total liabilities and equity | $ | 2,943,144 | $ | 2,923,916 | ||||||
| NORTHWEST NATURAL GAS COMPANY | |||||||||||
| Consolidated Statements of Cash Flows (Unaudited) | Six Months Ended June 30, | ||||||||||
| In thousands | 2016 | 2015 | |||||||||
| Operating activities: | |||||||||||
| Net income | $ | 38,660 | $ | 30,683 | |||||||
| Adjustments to reconcile net income to cash provided by operations: | |||||||||||
| Depreciation and amortization | 40,807 | 40,341 | |||||||||
| Regulatory amortization of gas reserves | 7,647 | 10,023 | |||||||||
| Deferred tax liabilities, net | 27,022 | 6,886 | |||||||||
| Qualified defined benefit pension plan expense | 2,737 | 3,032 | |||||||||
| Contributions to qualified defined benefit pension plans | (6,120 | ) | (5,810 | ) | |||||||
| Deferred environmental (expenditures) recoveries, net | (5,521 | ) | (5,659 | ) | |||||||
| Regulatory disallowance of prior environmental cost deferrals | 3,273 | 15,000 | |||||||||
| Interest expense (income) on deferred environmental expenses | — | (5,322 | ) | ||||||||
| Amortization of environmental remediation | 6,922 | — | |||||||||
| Other | 2,121 | 418 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Receivables | 87,271 | 85,121 | |||||||||
| Inventories | 4,525 | 1,321 | |||||||||
| Taxes accrued | 3,710 | (249 | ) | ||||||||
| Accounts payable | (17,141 | ) | (37,532 | ) | |||||||
| Interest accrued | (80 | ) | (157 | ) | |||||||
| Deferred gas costs | (9,295 | ) | 21,718 | ||||||||
| Other, net | 13,022 | 7,670 | |||||||||
| Cash provided by operating activities | 199,560 | 167,484 | |||||||||
| Investing activities: | |||||||||||
| Capital expenditures | (62,153 | ) | (58,072 | ) | |||||||
| Utility gas reserves | — | (1,945 | ) | ||||||||
| Restricted cash | — | (1,500 | ) | ||||||||
| Other | 2,453 | 201 | |||||||||
| Cash used in investing activities | (59,700 | ) | (61,316 | ) | |||||||
| Financing activities: | |||||||||||
| Common stock issued, net | 4,332 | 812 | |||||||||
| Long-term debt retired | — | (40,000 | ) | ||||||||
| Change in short-term debt | (117,235 | ) | (44,400 | ) | |||||||
| Cash dividend payments on common stock | (25,677 | ) | (25,398 | ) | |||||||
| Other | (28 | ) | (2,250 | ) | |||||||
| Cash used in financing activities | (138,608 | ) | (111,236 | ) | |||||||
| Increase (decrease) in cash and cash equivalents | 1,252 | (5,068 | ) | ||||||||
| Cash and cash equivalents, beginning of period | 4,211 | 9,534 | |||||||||
| Cash and cash equivalents, end of period | $ | 5,463 | $ | 4,466 | |||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Interest paid, net of capitalization | $ | 18,124 | $ | 19,615 | |||||||
| Income taxes paid (refunded) | (7,900 | ) | 4,625 | ||||||||