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NorthWestern Reports 2008 Financial Results

February 13, 2009 | About:

Press Release: NorthWestern Reports 2008 Financial Results

SIOUX FALLS, S.D., Feb. 13 /PRNewswire-FirstCall/ -- NorthWesternCorporation d/b/a NorthWestern Energy (NYSE: NWE) reported financial resultsfor the year ended Dec. 31, 2008. Highlights for the year include: -- Net income increased $14.4 million, or 27%, to $67.6 million for 2008compared with $53.2 million in 2007; -- The Montana Public Service Commission (MPSC) approved the inclusion inutility rate base of our 30% interest in Colstrip Unit 4, at a value of $407million, effective January 1, 2009; -- Completed a share buyback program of approximately 3.1 million sharesfor approximately $78 million; -- Settled the Montana electric and natural gas general rate filing,resulting in a $15 million increase to base rates; -- Filed for advanced approval with the MPSC to construct a 150 MW MillCreek Generating Station, at an estimated cost of $206 million and obtainedthe air quality permit for Mill Creek Generation Station; -- Filed the Major Facilities Siting Agreement with the MontanaDepartment of Environmental Quality related to proposed Mountain StatesTransmission Intertie line; and -- Credit ratings upgraded by Standard & Poors, and Moody's InvestorsService during 2008. In addition, our credit ratings from Fitch were upgradedin January 2009. Annual Financial Results Consolidated net income was $67.6 million or $1.77 per diluted share forthe year ended Dec. 31, 2008, a 27.1% increase compared with consolidated netincome of $53.2 million or $1.44 per diluted share for the year ended Dec. 31,2007. "We are delighted with our increase in 2008 net income and prospects for2009," said Bob Rowe, President and CEO. "Our strong core operations, balancesheet and credit ratings provide the foundation to facilitate our proposedgeneration and transmission projects, which will alleviate congestion,increase reliability and provide additional flexibility to customers."

Three Months Ended          Year Ended                                      December 31,           December 31,                                    2008       2007       2008         2007    OPERATING REVENUES            $326,068   $308,024  $1,260,793  $1,200,060    COST OF SALES                  189,799    168,851     698,740     668,405    GROSS MARGIN                   136,269    139,173     562,053     531,655    OPERATING EXPENSES       Operating, general and        administrative              48,816     47,955     226,164     221,566       Property and other taxes     14,704     25,935      80,602      87,581       Depreciation                 21,463     21,002      85,071      82,415    TOTAL OPERATING EXPENSES        84,983     94.892     391,837     391,562    OPERATING INCOME                51,286     44,281     170,216     140,093    Interest Expense               (16,474)   (14,562)    (63,952)    (56,942)    Other (Expense) Income             (82)       781       1,558       2,428    Income Before Income Taxes      34,730     30,500     107,822      85,579    Income Tax Expense             (13,462)   (12,062)    (40,221)    (32,388)    Net Income                     $21,268    $18,438     $67,601     $53,191    Average Common Shares     Outstanding                    35,921     38,284      37,976      36,623    Basic Earnings per Average     Common Share                    $0.59      $0.48       $1.78       $1.45    Diluted Earnings per Average     Common Share                    $0.59      $0.52       $1.77       $1.44    Dividends Declared per Average     Common Share                    $0.33      $0.33       $1.32       $1.28
Consolidated gross margin for 2008 was $562.1 million compared with $531.7million for 2007. The increase in gross margin was primarily due to thecombination of an increase in electric rates in Montana and gas rates inMontana, South Dakota and Nebraska, and an 11.7% increase in volumes in ourregulated gas segment due primarily to colder winter weather. Electricwholesale margin improved from increased plant availability and higher averageprices. Partly offsetting these increases was a reduction in revenues relatedto the recovery in rates of our Montana property taxes. The decrease was dueto lower 2008 property taxes, a credit to customers related to the propertytax settlement discussed below, and a change in the calculation by the MPSC toreduce the allocation of property taxes to Montana electric retail customers.Unregulated electric margin also decreased due to lower average contractprices and higher fuel supply costs partially offset by higher volumes due toincreased plant availability. Consolidated operating, general and administrative expenses increasedslightly to $226.1 million for the year ended Dec. 31, 2008 as compared with$221.6 million during 2007. The increase was due primarily to an increase inpension, labor and benefits expense offset by insurance reimbursements andlitigation settlement proceeds, and a decrease in operating lease expenserelated to the purchase of our previously leased interest in Colstrip Unit 4.In addition, the Company recognized a $12.6 million reduction to 2007operating, general and administrative expenses due to a settlement to recoverenvironmental clean-up costs in South Dakota. Property and other tax expenses were $80.6 million for the year ended Dec.31, 2008 compared with $87.6 million during 2007. This $7.0 million decreasewas due to a $4.6 million property tax refund in Montana as a result of asettlement with the Montana Department of Revenue, and a reduction ofapproximately $2.4 million due to a lower property tax valuation in Montana ascompared with 2007. Depreciation expense was $85.1 million for the year ended Dec. 31, 2008compared with $82.4 million during 2007. The increase in depreciation expensewas related primarily to the purchase of the previously leased interest inColstrip Unit 4. Interest expense was $64.0 million for the year ended Dec. 31, 2008compared with $56.9 million for the year ended Dec. 31, 2007, primarilyrelated to the additional debt incurred for the purchase of the previouslyleased interest in Colstrip Unit 4. Fourth Quarter Financial Results Consolidated net income for the fourth quarter ended Dec. 31, 2008 was$21.3 million, an increase of $2.9 million, or 15.8%, over $18.4 million thefourth quarter in 2007. The increase was primarily due to rate increases,litigation settlement proceeds and lower 2008 property taxes. These itemswere partially offset by a credit to customers related to a property taxsettlement, a change in the calculation by the MPSC to reduce the allocationof property taxes to Montana electric retail customers, lower environmentalexpense in 2007 due to a settlement to recover manufactured gas plant clean-upcosts in our South Dakota natural gas rate case, and an increase in interestexpense. Results from Regulated Operations Regulated electric gross margin for the year ended Dec. 31, 2008 was$363.8 million, up 4.8%, compared with $347.0 million for 2007. This $16.8million increase was primarily due to rate increases of approximately $10million and lower QF supply costs of approximately $5 million. We recordedgains (reduced cost of sales) related to our QF liability of $5.9 million in2008 and $0.9 million in 2007 as actual QF output and variable pricing termswere lower than our estimate. Wholesale margin also improved from increasedplant availability and higher average prices. These increases were partlyoffset by a decrease in revenues related to the recovery in rates of ourMontana property taxes. The decrease was due to lower 2008 property taxes, acredit to customers related to the property tax settlement and a change in thecalculation by the MPSC to reduce the allocation of property taxes to Montanaelectric retail customers. Regulated retail electric volumes for the year ended Dec. 31, 2008 totaled10,164,000 megawatt hours compared with 9,953,000 megawatt hours for the yearended 2007, a 2.1% increase. The increase was due primarily to residentialand commercial customer growth and an increase in industrial volumes.Wholesale electric volumes were 265,000 megawatt hours for the year ended Dec.31, 2008, an increase from 155,000 megawatt hours for 2007, due primarily toincreased plant availability from the South Dakota generation facilities. Regulated electric gross margin for the fourth quarter of 2008 was $83.7million as compared with $86.4 million for the same period in 2007. Thedecrease was due primarily to a decrease in revenues related to the recoveryof our Montana property taxes in rates, as mentioned above. Regulated retail electric volumes for the fourth quarter of 2008 totaled2,536,000 megawatt hours as compared with 2,453,000 megawatt hours in the sameperiod in 2007. Regulated wholesale electric volumes for the fourth quarterof 2008 were 63,000 megawatt hours, an increase from 36,000 megawatt hours inthe same period in 2007, due to an increase in plant availability. Regulated natural gas gross margin was $145.0 million for the year endedDec. 31, 2008 compared with $127.6 million during 2007. The increase wasprimarily due to increased volumes and rate increases. Volumes increased11.7% primarily due to colder winter weather in all our service territories,along with 1.2% customer growth. Regulated retail natural gas volumes were 32,263,000 dekatherms for theyear ended Dec. 31, 2008, an increase of 11.7% compared with 28,894,000dekatherms for the same period in 2007. The increase in volumes was primarilydue to colder winter weather and 1.2% customer growth. In addition to thecolder weather, the increase in South Dakota commercial volumes was alsorelated to higher grain drying requirements due to harvest conditions in ourservice territory. Regulated natural gas gross margin for the fourth quarter of 2008 was$41.2 million compared with $38.7 million for the same period in 2007. Theincrease was primarily due to rate increases and increased volumes due tocolder weather and customer growth. Regulated retail natural gas volumes were 9,693,000 dekatherms for thefourth quarter of 2008 compared with 8,858,000 dekatherms for the same periodin 2007. Results from Unregulated Operations Gross margin from unregulated electric operations was $54.2 million forthe year ended Dec. 31, 2008, compared with $56.2 million during 2007,primarily due to lower average prices related to the agreement to commit 21MWs of unit contingent power at Mid-C minus $19 per MWH as part of the jointstipulation in the 2007 rate case, a full year effect of the agreement toprovide 90 MW of unit contingent power at an average of approximately $36/MWhand higher fuel supply costs partially offset by an increase in volumes fromhigher plant availability. Unregulated electric volumes were 1,812,000 megawatt hours for the yearended Dec. 31, 2008 compared with 1,638,000 megawatt hours during 2007.Unregulated electric volumes increased from higher energy available to sell ascompared with 2007 due to increased plant availability. Unregulated electric gross margin for the fourth quarter of 2008 was $11.6million as compared with $14.1 million in the same period in 2007 primarilydue to reversing a previously unrealized gain of approximately $3.7 millionassociated with forward sales contracts. Unregulated retail electric volumes for the fourth quarter of 2008 totaled481,000 megawatt hours as compared with 448,000 megawatt hours in the sameperiod in 2007. Liquidity and Capital Resources As of Dec 31, 2008, cash and cash equivalents were $11.3 million comparedwith $12.8 million at Dec. 31, 2007. The Company had $74.9 million availablefrom its credit revolver at Dec. 31, 2008 compared with $158.7 million at Dec.31, 2007. The decrease in credit revolver availability was due primarily tothe share buyback program of approximately $78 million completed during thethird quarter of 2008. Cash provided by operating activities totaled $198.3 million during theyear ended Dec. 31, 2008, compared with $202.0 million during year ended Dec.31, 2007. This difference is due to the combination of a $14.5 million changein our supply tracker from an over collected position to an under collectedposition, an increase in accounts receivable of $18.5 million due to colderwinter weather and higher average prices in December 2008, and increasedpension funding of approximately $10.1 million. These decreases in operatingcash flows were offset in part by higher net income, improved operating cashflows related to our Colstrip Unit 4 lease buyout of approximately $6.0million, and the inclusion in 2007 operating cash flows of an additionalsemi-annual Colstrip Unit 4 lease payment of $16.1 million due to timing ofpayments. The Company used $124.4 million for investment activities during the yearended Dec. 31, 2008 compared with $256.5 million for the year ended Dec. 31,2007. Capital expenditures for the year ended Dec. 31, 2008 were $124.6million as compared with $117.1 million in 2007. In addition, in 2007 theCompany used $141.3 million to complete the purchase of our previously leasedinterest in the Colstrip Unit 4 generating facility. The Company used $75.4 million in financing activities during the yearended Dec. 31, 2008 compared with financing activities providing $65.4 millionfor the year ended Dec. 31, 2007. Cash used to repurchase shares under ourpreviously announced plan was approximately $77.7 million. In addition, wereceived proceeds during 2007 of $68.8 million from the exercise of warrants. Dividend NorthWestern's Board of Directors declared a yearly common stock dividendof 33.5 cents per share, payable on Mar. 31, 2009, to common shareholders ofrecord as of Mar. 15, 2009. Significant Items Not Contemplated in 2008 Guidance A reconciliation of items not factored into our 2008 GAAP earningsguidance of $1.65 to $1.80 per fully diluted earnings per share is as follows(net of tax). The amount calculated below represents a non-GAAP measure thatmay provide users of this financial information with additional meaningfulcomparisons between current results and results the Company originallycontemplated in 2008 guidance. Non-GAAP financial measures should be viewedin addition to, and not as an alternative to, the reported operating resultsor cash flows from operations or any other measure of performance prepared inaccordance with GAAP. In addition, the presentation of these measures may notbe comparable to similarly titled measures other companies use.

EPS    Diluted Income per Average Common Share (per GAAP)               $1.77    D&O insurance recoveries                                         -(.10)    Environmental insurance recoveries                               -(.03)    Increase in pension expense                                       +.14    Transaction costs related to the Colstrip Unit 4 sales process    +.05    Diluted Income per average common share after considering     items above                                                     $1.83
2009 Earnings Outlook NorthWestern expects its earnings for 2009 to be $1.85 - $2.00/fullydiluted share. The major assumptions include, but are not limited to, the followingexpectations:

--  2009 net income will increase by approximately $9 million or $.25 per        share as a result of the inclusion of our interest in Colstrip Unit 4        in regulated electric rate base;    --  Pension expense will be flat with the 2008 pension expense;    --  Retail electric volumes will be flat compared to 2008 volumes;    --  Wholesale electric volumes in South Dakota will decrease due to a        planned outage in 2009;    --  Residential and Commercial natural gas volumes will be relatively flat        compared with 2008 volumes;    --  Fully diluted average shares outstanding of 36.5 million; and    --  Normal weather in the Company's electric and natural gas service        territories for 2009.
Annual Meeting The Company's Annual Meeting of Stockholders will be held on Wednesday,April 22, 2009 in Butte, Montana. The record date for the Annual Meeting isFebruary 23, 2009. The proxy statement and annual report to stockholders willbe available on the Company's Web site at http://www.northwesternenergy.comapproximately 40 days prior to the meeting date. Company Hosting Investor Conference Call NorthWestern will host an investor conference call today at 2:00 pmEastern Time (1:00 p.m. Central Time) to review its financial results for theyear ended Dec. 31, 2008. The conference call will be webcast live on the Internet athttp://www.northwesternenergy.com under the "Investor Information" heading.To listen, please go to the site at least 10 minutes in advance of the call toregister. An archived webcast will be available shortly after the call. A telephonic replay of the call will be available beginning at 3:00 p.m.ET on Feb. 13, 2009, through March 13, 2009, at 800-475-6701, access code984444. About NorthWestern Energy NorthWestern Energy is one of the largest providers of electricity andnatural gas in the Upper Midwest and Northwest, serving approximately 656,000customers in Montana, South Dakota and Nebraska. More information onNorthWestern Energy is available on the Company's Web site athttp://www.northwesternenergy.com. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements within the meaningof the "safe harbor" provisions of the Private Securities Litigation ReformAct of 1995, including, without limitation, the information under "2008Earnings Outlook". Forward-looking statements often address our expectedfuture 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 ofthe date hereof. Our actual future business and financial performance maydiffer materially and adversely from those expressed in any forward-lookingstatements as a result of various factors and uncertainties, including, butnot limited to: -- potential adverse federal, state, or local legislation or regulationor adverse determinations by regulators could have a material adverse effecton our liquidity, results of operations and financial condition; -- unanticipated 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 wouldadversely affect our liquidity; -- unscheduled generation outages or forced reductions in output,maintenance or repairs, which may reduce revenues and increase operating costsor may require additional capital expenditures or other increased operatingcosts; and -- adverse changes in general economic and competitive conditions in theU.S. financial markets and in our service territories. Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reportson Form 10-Q, recent Current Reports on Form 8-K and other Securities andExchange Commission filings discuss some of the important risk factors thatmay affect our business, results of operations and financial condition.

We undertake no obligation to publicly update or revise anyforward-looking statements, whether as a result of new information, futureevents or otherwise.                           NORTHWESTERN CORPORATION                         CONSOLIDATED BALANCE SHEETS                                (in thousands)                                                        December    December                                                           31,         31,                                                          2008        2007    ASSETS    Current Assets                                       313,417     278,354    Property, Plant, and Equipment, Net                1,839,699   1,770,880    Goodwill                                             355,128     355,128    Regulatory Assets                                    233,102     123,041    Other Noncurrent Assets                               20,691      19,977      Total Assets                                    $2,762,037  $2,547,380    LIABILITIES AND SHAREHOLDERS' EQUITY    Current Maturities of Long-term Debt and Capital     Leases                                             $229,238     $21,006    Current Liabilities                                  359,339     300,833    Long-term Capital Leases                              36,798      38,002    Long-term Debt                                       634,011     787,360    Noncurrent Regulatory Liabilities                    222,969     194,959    Deferred Income Taxes                                114,707      74,046    Other Noncurrent Liabilities                         401,442     308,150      Total Liabilities                                1,998,504   1,724,356    Total Shareholders' Equity                           763,533     823,024    Total Liabilities and Shareholders' Equity        $2,762,037  $2,547,380                           NORTHWESTERN CORPORATION                    CONSOLIDATED STATEMENTS OF CASH FLOWS                                (in thousands)                                                    Year Ended December 31,                                                  2008      2007        2006    Continuing Operating Activities    Net income                                   $67,601   $53,191    $37,900    Non-cash items                               132,335   113,083    114,299    Changes in operating assets and liabilities   (1,610)   35,690     12,879    Cash Provided by Operating Activities        198,326   201,964    165,078    Cash Used in Investing Activities           (124,363) (256,499)   (71,225)    Cash (Used in) Provided by Financing     Activities                                  (75,444)   65,378   (102,012)    Change in Net Assets of Discontinued     Operations                                       --        --      7,695    Net (Decrease) Increase in Cash and Cash     Equivalents                                 $(1,481)  $10,843      $(761)    Cash and Cash Equivalents, beginning of     period                                      $12,773    $1,930     $2,691    Cash and Cash Equivalents, end of period     $11,292   $12,773     $1,930                           NORTHWESTERN CORPORATION            YEAR ENDED DECEMBER 31, 2008 AND 2007 SEGMENT RESULTS                                 (Unaudited)    December 31,        Regulated    Unregulated     2008          Electric     Gas    Electric  Other  Eliminations  Total    Operating     revenues      $774,229  $416,675  $77,680  $30,039  $(37,830) $1,260,793    Cost of sales   410,471   271,690   23,463   29,141   (36,025)    698,740    Gross margin    363,758   144,985   54,217      898    (1,805)    562,053    Operating,     general and     administrative 149,913    68,912   15,928   (6,784)   (1,805)    226,164    Property and     other taxes     56,310    21,381    2,898       13        --      80,602    Depreciation     61,734    15,980    7,324       33        --      85,071    Operating     income          95,801    38,712   28,067    7,636        --     170,216    Interest     expense        (36,757)  (12,637) (10,911)  (3,647)       --     (63,952)    Other income        547     1,001      154     (144)       --       1,558    Income tax     expense        (20,219)  (10,027)  (6,971)  (3,004)       --     (40,221)    Income from     operations     $39,372   $17,049  $10,339     $841       $--     $67,601    December 31,        Regulated    Unregulated     2007          Electric     Gas    Electric  Other  Eliminations  Total    Operating     revenues      $736,657  $363,584  $74,231  $56,748  $(31,160) $1,200,060    Cost of sales   389,681   253,958   18,079   54,222   (29,535)    668,405    Gross margin    346,976   127,626   56,152    2,526    (1,625)    531,655    Operating,     general and     administrative 133,091    52,008   28,662    9,430    (1,625)    221,566    Property and     other taxes     61,281    22,959    3,301       40        --      87,581    Depreciation     61,912    16,592    3,782      129        --      82,415    Operating     income (loss)   90,692    36,067   20,407   (7,073)       --     140,093    Interest     expense        (39,132)  (13,464)  (2,849)  (1,497)       --     (56,942)    Other income        801       505       57    1,065        --       2,428    Income tax     (expense)     benefit        (18,631)   (8,509)  (7,341)   2,093        --     (32,388)    Income (loss)     from     operations     $33,730   $14,599  $10,274  $(5,412)      $--     $53,191                           NORTHWESTERN CORPORATION                          REGULATED ELECTRIC SEGMENT                                 (Unaudited)                                                    Results                                    2008         2007     Change    % Change                                                 (in millions)    Total Revenues                $774.2       $736.7      $37.5        5.1%    Total Cost of Sales            410.4        389.7       20.7        5.3    Gross Margin                  $363.8       $347.0      $16.8        4.8%    % GM/Rev                        47.0%        47.1%                                                   Volumes MWH                                        2008      2007      Change  % Change                                                   (in thousands)    Retail Electric          Montana                      2,285     2,235         50      2.2%          South Dakota                   513       505          8      1.6       Residential                     2,798     2,740         58      2.1          Montana                      3,190     3,213        (23)    (0.7)          South Dakota                   872       827         45      5.4       Commercial                      4,062     4,040         22      0.5          Industrial                   3,122     2,992        130      4.3          Other                          182       181          1      0.6    Total Retail Electric             10,164     9,953        211      2.1%    Wholesale Electric                   265       155        110     71.0%    Average Customer Counts            2008      2007      Change   % Change    Retail Electric          Montana                    266,100   262,481      3,619      1.4%          South Dakota                47,967    47,713        254      0.5       Residential                   314,067   310,194      3,873      1.2          Montana                     59,595    58,319      1,276      2.2          South Dakota                11,492    11,336        156      1.4       Commercial                     71,087    69,655      1,432      2.1          Industrial                      71        71         --       --          Other                        5,823     5,802         21      0.4    Total Retail Electric            391,048   385,722      5,326      1.4%                                           2008 as compared with:    Cooling Degree-Days                  2007           Historic Average    Montana                           42% colder             8% warmer    South Dakota                      31% colder            16% colder                           NORTHWESTERN CORPORATION                        REGULATED NATURAL GAS SEGMENT                                 (Unaudited)                                                     Results                                    2008         2007     Change    % Change                                                  (in millions)    Total Revenues                $416.7       $363.6      $53.1       14.6%    Total Cost of Sales            271.7        236.0       35.7       15.1    Gross Margin                  $145.0       $127.6      $17.4       13.6%    % GM/Rev                        34.8%        35.1%                                               Volumes Dekatherms                                       2008      2007     Change    % Change                                                 (in thousands)    Retail Gas          Montana                     13,426    12,101     1,325      10.9%          South Dakota                 2,975     2,771       204       7.4          Nebraska                     2,717     2,519       198       7.9       Residential                    19,118    17,391     1,727       9.9          Montana                      6,754     6,091       663      10.9          South Dakota                 3,104     2,444       660      27.0          Nebraska                     2,962     2,655       307      11.6       Commercial                     12,820    11,190     1,630      14.6          Industrial                     207       169        38      22.5          Other                          118       144       (26)    (18.1)    Total Retail Gas                  32,263    28,894     3,369      11.7%    Average Customer Counts            2008      2007      Change   % Change    Retail Gas          Montana                    155,409   152,939      2,470      1.6%          South Dakota                36,620    36,662        (42)    (0.1)          Nebraska                    36,466    36,343        123      0.3       Residential                   228,495   225,944      2,551      1.1          Montana                     21,703    21,261        442      2.1          South Dakota                 5,780     5,765         15      0.3          Nebraska                     4,532     4,523          9      0.2       Commercial                     32,015    31,549        466      1.5          Industrial                     303       311         (8)    (2.6)          Other                          140       140         --       --    Total Retail Gas                 260,953   257,944      3,009      1.2%                                          2008 as compared with:    Heating Degree-Days                2007             Historic Average    Montana                          9% colder              1% colder    South Dakota                     9% colder              2% colder    Nebraska                        11% colder              2% colder                           NORTHWESTERN CORPORATION                         UNREGULATED ELECTRIC SEGMENT                                 (Unaudited)                                                   Results                                    2008         2007     Change    % Change                                                (in millions)    Total Revenues                 $77.7        $74.2       $3.5      4.7%    Total Cost of Sales             23.5         18.0        5.5     30.6%    Gross Margin                   $54.2        $56.2      $(2.0)    (3.6)%    % GM/Rev                        69.8%        75.7%                                                   Volumes MWH                                        2008      2007    Change    % Change                                                 (in thousands)    Wholesale Electric                 1,812     1,638       174      10.6%                           NORTHWESTERN CORPORATION                        FOURTH QUARTER SEGMENT RESULTS                                 (Unaudited)                     Three Months Ended December 31, 2008                        Regulated    Unregulated                   Electric     Gas    Electric  Other  Eliminations  Total    Operating     revenues      $190,623  $118,850  $20,616   $5,575   $(9,596)   $326,068    Cost of sales   106,921    77,694    8,991    5,371    (9,178)    189,799    Gross margin     83,702    41,156   11,625      204      (418)    136,269    Operating,     general and     administrative  34,159    15,195    5,468   (5,588)     (418)     48,816    Property and     other taxes     10,163     4,026      512        3        --      14,704    Depreciation     15,531     4,055    1,869        8        --      21,463    Operating     income          23,849    17,880    3,776    5,781        --      51,286    Interest     expense         (8,619)   (2,762)  (2,554)  (2,539)       --     (16,474)    Other income       (344)      144       21       97        --         (82)    Income tax     expense         (4,409)   (5,615)    (513)  (2,925)       --     (13,462)    Income from     operations     $10,477    $9,647     $730     $414       $--      21,268                     Three Months Ended December 31. 2007                        Regulated    Unregulated                   Electric     Gas    Electric  Other  Eliminations   Total    Operating     revenues      $185,491  $106,313  $18,557   $6,794   $(9,131)   $308,024    Cost of sales    99,078    67,574    4,413    6,513    (8,727)    168,851    Gross margin     86,413    38,739   14,144      281      (404)    139,173    Operating,     general and     administrative  36,320     4,518    4,967    2,554      (404)     47,955    Property and     other taxes     18,241     6,861      830        3        --      25,935    Depreciation     15,958     4,422    1,360     (738)       --      21,002    Operating     income          15,894    22,938    6,987   (1,538)       --      44,281    Interest     expense         (9,578)   (3,346)  (1,269)    (369)       --     (14,562)    Other income        204       217       15      345        --         781    Income tax     expense         (1,487)   (7,025)  (2,358)  (1,192)       --     (12,062)    Income from     operations      $5,033   $12,784   $3,375  $(2,754)      $--     $18,438
Annual Meeting The Company's Annual Meeting of Stockholders will be held on Wednesday,April 22, 2009 in Butte, Montana. The record date for the Annual Meeting isFebruary 23, 2009. The proxy statement and annual report to stockholders willbe available on the Company's Web site at http://www.northwesternenergy.comapproximately 40 days prior to the meeting date. Company Hosting Investor Conference Call NorthWestern will host an investor conference call today at 2:00 pmEastern Time (1:00 p.m. Central Time) to review its financial results for theyear ended Dec. 31, 2008. The conference call will be webcast live on the Internet athttp://www.northwesternenergy.com under the "Investor Information" heading.To listen, please go to the site at least 10 minutes in advance of the call toregister. An archived webcast will be available shortly after the call. A telephonic replay of the call will be available beginning at 3:00 p.m.ET on Feb. 13, 2009, through March 13, 2009, at 800-475-6701, access code984444. About NorthWestern Energy NorthWestern Energy is one of the largest providers of electricity andnatural gas in the Upper Midwest and Northwest, serving approximately 656,000customers in Montana, South Dakota and Nebraska. More information onNorthWestern Energy is available on the Company's Web site athttp://www.northwesternenergy.com. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements within the meaningof the "safe harbor" provisions of the Private Securities Litigation ReformAct of 1995, including, without limitation, the information under "2008Earnings Outlook". Forward-looking statements often address our expectedfuture 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 ofthe date hereof. Our actual future business and financial performance maydiffer materially and adversely from those expressed in any forward-lookingstatements as a result of various factors and uncertainties, including, butnot limited to: -- potential adverse federal, state, or local legislation or regulationor adverse determinations by regulators could have a material adverse effecton our liquidity, results of operations and financial condition; -- unanticipated 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 wouldadversely affect our liquidity; -- unscheduled generation outages or forced reductions in output,maintenance or repairs, which may reduce revenues and increase operating costsor may require additional capital expenditures or other increased operatingcosts; and -- adverse changes in general economic and competitive conditions in theU.S. financial markets and in our service territories. Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reportson Form 10-Q, recent Current Reports on Form 8-K and other Securities andExchange Commission filings discuss some of the important risk factors thatmay affect our business, results of operations and financial condition.

Source: PRNewsWire

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