DocumentFor Immediate Release
May 4, 2023
NW Natural Holdings Reports First Quarter 2023 Results
PORTLAND, ORE. — Northwest Natural Holding Company, (NYSE: NWN) (NW Natural Holdings), reported financial results and highlights including:
•Reported net income of $71.7 million ($2.01 per share) for the first three months of 2023, compared to earnings of $56.2 million ($1.80 per share) for the same period in 2022
•Added nearly 8,100 natural gas meters in the last 12 months for a growth rate of 1.0% as of March 31, 2023
•Completed construction on Dakota City renewable natural gas (RNG) facility, which is designed to provide environmental attributes on behalf of NW Natural customers
•Broadening its scope, NW Natural Water launched an operations & maintenance service business
•Honored as one of the 2023 World's Most Ethical Companies® by Ethisphere for the second year in a row1
•Reaffirmed 2023 earnings guidance in the range of $2.55 to $2.75 per share and our long-term earnings per share growth rate target of 4% to 6% compounded annually from 2022 through 2027
"We're continuing to work on behalf of our customers to provide safe, reliable utility service and execute on the decarbonization and growth opportunities in front of us," said David H. Anderson, president and CEO of NW Natural Holdings. "I'm pleased with our strong first quarter and the progress we've made securing renewable natural gas. In addition, I'm proud of NW Natural Holdings being named one of the 2023 World's Most Ethical Companies® by Ethisphere for the second year running. This designation reflects our long-standing commitment to leadership in business integrity through best-in-class ethics, compliance and governance practices."
Net income increased $15.5 million to $71.7 million (or $2.01 per share) for the first three months of 2023, compared to $56.2 million (or $1.80 per share) for the same period in 2022. Results reflected new rates in Oregon and Washington for our natural gas utility, customer growth and lower pension expense, offset by higher operations and maintenance expenses.
KEY EVENTS
NW Natural's Second RNG Facility Comes Online
NW Natural continues to pursue RNG supply on behalf of our customers under the landmark Oregon Senate Bill 98, which supports renewable energy procurement and investment by natural gas utilities. Operations commenced on the first RNG facility under Senate Bill 98 with Tyson Foods and BioCarbN in January 2022. In April 2023, operations at the second RNG facility began. To date, NW Natural has invested approximately $20 million in two RNG facilities on behalf of gas utility customers.
NW Natural Water Launches a Water Operations & Maintenance Service Business
NW Natural Water launched its services business by acquiring King Water Company in Washington and is poised to sign agreements with an additional water services company in Oregon. The two businesses support a combined 15,000 connections. This business provides operations and maintenance services to water and wastewater system owners and works to create value by leveraging shared personnel, technology and expertise to support delivery of clean, reliable water at a reasonable cost. With this expansion, NW Natural Water has an opportunity to further broaden its scope, expand its footprint, and help smaller systems improve customer service, compliance, and reliability. We believe our first steps in this sector provide a strong platform that can support a larger scale in the coming years.
1 “World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of Ethisphere LLC
Upon closing of these agreements, NW Natural Water will serve over 168,000 people through nearly 68,000 meters and provide operation and maintenance services to an additional 15,000 connections.
FIRST QUARTER RESULTS
We primarily operate through our natural gas distribution segment, which is operated through a regulated utility and principally engaged in the delivery of natural gas to customers in Oregon and southwest Washington. The segment also includes the portion of the Mist underground storage facility used to serve gas utility customers, the North Mist gas storage expansion, and RNG development and procurement.
Other business activities are reported through other results and primarily include Interstate Storage Services and third-party asset management services for the Mist facility in Oregon; NW Natural Water, which holds our water and wastewater utility operations and continues to pursue acquisitions in the water and wastewater sector; and NW Natural Renewables, which is an unregulated RNG business.
The following financial comparisons are for the first three months of 2023 and 2022 with individual year-over-year drivers below presented on an after-tax basis using a statutory tax rate of 26.5% unless otherwise noted.
NW Natural Holdings' year-to-date results are summarized by business segment in the table below:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, |
| 2023 | | 2022 | | Change |
| In thousands, except per share data | Amount | Per Share | | Amount | Per Share | | Amount | Per Share |
| Net income: | | | | | | | | |
Natural Gas Distribution segment | $ | 71,951 | | $ | 2.02 | | | $ | 55,390 | | $ | 1.77 | | | $ | 16,561 | | $ | 0.25 | |
Other | (280) | | (0.01) | | | 849 | | 0.03 | | | (1,129) | | (0.04) | |
| Consolidated | $ | 71,671 | | $ | 2.01 | | | $ | 56,239 | | $ | 1.80 | | | $ | 15,432 | | $ | 0.21 | |
| | | | | | | | |
Diluted Shares | | 35,708 | | | | 31,212 | | | | 4,496 | |
Natural Gas Distribution Segment
Natural Gas Distribution segment net income increased $16.6 million (or $0.25 per share) reflecting new rates in Oregon and Washington that went into effect on Nov. 1, 2022, partially offset by higher operating expenses. Earnings per share was affected by issuing 4.5 million of common shares over the last twelve months.
Margin increased $29.3 million primarily due to new rates, which contributed $19.4 million; the amortization of deferrals approved in the rate case contributed $3.8 million; and customer growth of 1.0% over the last 12 months contributed $2.0 million.
Operations and maintenance expense increased $8.7 million or 21% as a result of higher payroll costs; the amortization of deferrals approved in the rate case, which is offset by revenues; information technology costs; and contractor labor.
Depreciation and general taxes collectively increased by $3.3 million due to additional capital investments in the distribution system including several significant information technology projects that were placed into service in September 2022.
Other income, net reflected a benefit of $2.6 million primarily from lower pension expense, interest income from invested cash, and higher equity Allowance for Funds Used During Construction (AFUDC).
Interest expense increased $2.8 million due to higher long-term debt balances.
Other
Other net income decreased $1.1 million (or $0.04 per share) reflecting lower net income from NW Natural Holding's other businesses as a result of higher costs including interest expense, partially offset by higher net income from asset management revenues from NW Natural.
BALANCE SHEET AND CASH FLOWS
During the first three months of 2023, the Company generated $176.9 million in operating cash flows, compared to $141.0 million for the same period in 2022. The Company used $73.0 million in investing activities during the first three months of 2023 primarily for natural gas utility capital expenditures, compared to $69.8 million used in investing activities during the same period in 2022. Net cash provided by financing activities was $11.2 million for the first three months of 2023, compared to $62.8 million used in financing activities during the same period in 2022. As of March 31, 2023, NW Natural Holdings held cash of $140.8 million.
2023 GUIDANCE AND LONG-TERM TARGETS
NW Natural Holdings is reaffirming 2023 earnings guidance in the range of $2.55 to $2.75 per share. This guidance assumes continued customer growth, average weather conditions, and no significant changes in prevailing regulatory policies, mechanisms, or outcomes, or significant local, state or federal laws, legislation or regulations. NW Natural Holdings' long-term earnings per share growth rate target is 4% to 6% compounded annually from 2022 through 2027.
DIVIDEND DECLARED
The board of directors of NW Natural Holdings declared a quarterly dividend of 48.50 cents per share on the Company’s common stock. The dividend is payable on May 15, 2023 to shareholders of record on April 28, 2023. The Company's current indicated annual dividend rate is $1.94 per share. Future dividends are subject to board of director discretion and approval.
CONFERENCE CALL AND WEBCAST
As previously announced, NW Natural Holdings will host a conference call and webcast today to discuss its first quarter 2023 financial and operating results.
| | | | | |
| Date and Time: | Thursday, May 4, 2023 8 a.m. PT (11 a.m. ET) |
| Phone Numbers: | United States 1-833-470-1428 Canada 1-833-950-0062 International 1-929-526-1599 Passcode 182535 |
The call will also be webcast in a listen-only format for the media and general public and can be accessed at ir.nwnaturalholdings.com. A replay of the conference call will be available on our website and by dialing 1-866-813-9403 (U.S.), 1-226-828-7578 (Canada), and +44-204-525-0658 (international). The replay access code is 608638.
ABOUT NW NATURAL HOLDINGS
Northwest Natural Holding Company, (NYSE: NWN) (NW Natural Holdings), is headquartered in Portland, Oregon and has been doing business for over 160 years in the Pacific Northwest. It owns NW Natural Gas Company (NW Natural), NW Natural Water Company (NW Natural Water), NW Natural Renewables Holdings (NW Natural Renewables), and other business interests.
We have a longstanding commitment to safety, environmental stewardship and the energy transition, and taking care of our employees and communities. NW Natural Holdings was recognized by Ethisphere® in 2022 and 2023 as one of the World’s Most Ethical Companies®. NW Natural consistently leads the industry with high J.D. Power & Associates customer satisfaction scores. Learn more in our latest ESG Report at nwnatural.com/about-us/the-company/sustainability.
NW Natural is a local distribution company that currently provides natural gas service to approximately 2.5 million people in more than 140 communities through more than 795,000 meters in Oregon and Southwest Washington with one of the most modern pipeline systems in the nation. NW Natural owns and operates 21.6 Bcf of underground gas storage capacity in Oregon.
NW Natural Water provides water distribution and wastewater services to communities throughout the Pacific Northwest, Texas and Arizona. Upon closing of these agreements, NW Natural Water will serve over 168,000 people through nearly 68,000 meters and provide operation and maintenance services to an additional 15,000 connections. Learn more about our water business at nwnaturalwater.com.
NW Natural Renewables is an unregulated business committed to leading in the energy transition by providing cost-effective solutions to support decarbonization in the utility, commercial, industrial and transportation sectors. Learn more at nwnaturalrenewables.com.
Additional information is available at nwnaturalholdings.com.
“World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of Ethisphere LLC
Investor Contact:
Nikki Sparley
Phone: 503-721-2530
Email: nikki.sparley@nwnatural.com
Media Contact:
David Roy
Phone: 503-610-7157
Email: david.roy@nwnatural.com
Forward-Looking Statements
This press release, and other presentations made by NW Holdings 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," “continues,” “could,” "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, assumptions, estimates, expectations, timing, goals, strategies, commitments, future events, investments, timing and amount of capital expenditures, targeted capital structure, risks, risk profile, stability, acquisitions and timing, approval, completion and integration thereof, the likelihood and success associated with any transaction, utility system and infrastructure investments, system modernization, reliability and resiliency, global, national and local economies, customer and business growth, continued expansion of service territories, customer satisfaction ratings, weather, performance and service during weather events, customer rates or rate recovery and the timing and magnitude of potential rate changes and the potential outcome of rate cases, environmental remediation cost recoveries, environmental initiatives, decarbonization and the role of natural gas and the gas delivery system, including decarbonization goals and timelines, energy efficiency measures, use of renewable sources, renewable natural gas purchases, projects, investments and other renewable initiatives, including the construction of RNG facilities, and timing, magnitude and completion thereof, unregulated renewable natural gas strategy and initiatives, renewable hydrogen projects or investments and timing, magnitude, approvals and completion thereof, procurement of renewable natural gas or hydrogen for customers, technology and policy innovations, strategic goals and visions, water and wastewater acquisitions, partnerships, and investment strategy and financial effects of water and wastewater acquisitions, expected growth and safety benefits of facility upgrade investments, diversity, equity and inclusion initiatives, operating plans of third parties, financial results, including estimated income, availability and sources of liquidity, expenses, positions, revenues, returns, cost of capital, timing, and earnings, earnings guidance and estimated future growth rates, future dividends, commodity costs and sourcing asset management activities, performance, timing, outcome, or effects of regulatory proceedings or mechanisms or approvals, including OPUC approval of the Oregon general rate case settlements, regulatory prudence reviews, anticipated regulatory actions or filings, accounting treatment of future events, effects of legislation or changes in laws or regulations, effects, extent, severity and duration of COVID-19, and any resulting economic disruption therefrom, geopolitical uncertainty and other statements that are other than statements of historical facts.
Forward-looking statements are based on current expectations and assumptions regarding its business, the economy, geopolitical factors, 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. Actual results may differ materially from those contemplated by the forward-looking statements. You are therefore cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future operational, economic 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 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
quarterly reports filed thereafter, which, among others, outline legal, regulatory and legislative risks, COVID-19 risks, macroeconomic and geopolitical risks, growth and strategic risks, operational risks, and environmental risks.
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 NW Holdings or NW Natural, are expressly qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, and NW Holdings and NW Natural undertake 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 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.
NON-GAAP FINANCIAL MEASURES
In addition to presenting the results of operations and earnings amounts in total, certain financial measures are expressed in cents per share, which are non-GAAP financial measures. All references to EPS are on the basis of diluted shares. Such non-GAAP financial measures are used to analyze our financial performance because we believe they provide useful information to our investors and creditors in evaluating our financial condition and results of operations. Our non-GAAP financial measures should not be considered a substitute for, or superior to, measures calculated in accordance with U.S. GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently than how such measures are calculated in this report, limiting the usefulness of those measures for comparative purposes. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in the tables above.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| NORTHWEST NATURAL HOLDINGS |
| Consolidated Income Statement and Financial Highlights (Unaudited) |
| First Quarter 2023 |
| | | | Three Months Ended | | Twelve Months Ended | |
| In thousands, except per share amounts, customer, and degree day data | | | March 31, | | March 31, | |
| | | | 2023 | | 2022 | Change | 2023 | | 2022 | Change |
| Operating revenues | | | | | $ | 462,423 | | | $ | 350,301 | | 32% | $ | 1,149,475 | | | $ | 894,755 | | 28% |
| | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | |
| Cost of gas | | | | | 205,749 | | | 145,588 | | 41 | 489,796 | | | 325,692 | | 50 |
| Operations and maintenance | | | | | 71,817 | | | 57,485 | | 25 | 238,999 | | | 209,521 | | 14 |
| Environmental remediation | | | | | 5,375 | | | 4,703 | | 14 | 13,061 | | | 10,864 | | 20 |
| General taxes | | | | | 14,219 | | | 12,104 | | 17 | 43,146 | | | 39,368 | | 10 |
| Revenue taxes | | | | | 19,042 | | | 13,360 | | 43 | 47,508 | | | 35,436 | | 34 |
| Depreciation | | | | | 31,465 | | | 28,429 | | 11 | 119,743 | | | 113,866 | | 5 |
| Other operating expenses | | | | | 1,248 | | | 994 | | 26 | 3,875 | | | 3,959 | | (2) |
| Total operating expenses | | | | | 348,915 | | | 262,663 | | 33 | 956,128 | | | 738,706 | | 29 |
| Income from operations | | | | | 113,508 | | | 87,638 | | 30 | 193,347 | | | 156,049 | | 24 |
| Other income (expense), net | | | | | 1,606 | | | (954) | | (268) | 3,763 | | | (9,971) | | (138) |
| Interest expense, net | | | | | 18,296 | | | 11,522 | | 59 | 60,021 | | | 44,882 | | 34 |
| Income before income taxes | | | | | 96,818 | | | 75,162 | | 29 | 137,089 | | | 101,196 | | 35 |
| Income tax expense | | | | | 25,147 | | | 18,923 | | 33 | 35,354 | | | 25,808 | | 37 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Net income | | | | | $ | 71,671 | | | $ | 56,239 | | 27 | $ | 101,735 | | | $ | 75,388 | | 35 |
| | | | | | | | | | | | |
| Common shares outstanding: | | | | | | | | | | | | |
| Average diluted for period | | | | | 35,708 | | | 31,212 | | | 35,095 | | | 30,868 | | |
| End of period | | | | | 35,929 | | | 31,380 | | | 35,929 | | | 31,380 | | |
| | | | | | | | | | | | | |
| Per share of common stock information: | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Diluted earnings | | | | | $ | 2.01 | | | $ | 1.80 | | | $ | 2.90 | | | $ | 2.44 | | |
| Dividends paid per share | | | | | 0.4850 | | | 0.4825 | | | 1.9350 | | | 1.9250 | | |
| Book value, end of period | | | | | 34.74 | | | 31.48 | | | 34.74 | | | 31.48 | | |
| Market closing price, end of period | | | | | 47.56 | | | 51.72 | | | 47.56 | | | 51.72 | | |
| | | | | | | | | | | | |
| Capital structure, end of period: | | | | | | | | | | | | |
| Common stock equity | | | | | 43.7 | % | | 41.8 | % | | 43.7 | % | | 41.8 | % | |
| Long-term debt | | | | | 45.3 | % | | 44.1 | % | | 45.3 | % | | 44.1 | % | |
| Short-term debt (including current maturities of long-term debt) | | | | | 11.0 | % | | 14.1 | % | | 11.0 | % | | 14.1 | % | |
| Total | | | | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % | |
| | | | | | | | | | | | | |
| Natural Gas Distribution segment operating statistics: | | | | | | | | | | | | |
| Meters - end of period | | | | | 796,848 | | | 788,772 | | 1.0% | 796,848 | | | 788,772 | | 1.0% |
| Volumes in therms: | | | | | | | | | | | | |
| Residential and commercial sales | | | | | 330,665 | | | 293,927 | | | 803,330 | | | 699,159 | | |
| Industrial sales and transportation | | | | | 132,384 | | | 134,459 | | | 483,670 | | | 482,882 | | |
| Total volumes sold and delivered | | | | | 463,049 | | | 428,386 | | | 1,287,000 | | | 1,182,041 | | |
| Operating revenues: | | | | | | | | | | | | |
| Residential and commercial sales | | | | | $ | 412,307 | | | $ | 314,607 | | | $ | 979,070 | | | $ | 766,817 | | |
| Industrial sales and transportation | | | | | 29,144 | | | 21,273 | | | 94,681 | | | 69,193 | | |
| Other distribution revenues | | | | | 1,610 | | | 607 | | | 2,947 | | | 1,724 | | |
| Other regulated services | | | | | 4,709 | | | 4,911 | | | 19,426 | | | 19,213 | | |
| Total operating revenues | | | | | 447,770 | | | 341,398 | | | 1,096,124 | | | 856,947 | | |
| Less: Cost of gas | | | | | 205,805 | | | 145,644 | | | 490,022 | | | 325,916 | | |
| Less: Environmental remediation expense | | | | | 5,375 | | | 4,698 | | | 13,066 | | | 10,859 | | |
| Less: Revenue taxes | | | | | 18,975 | | | 13,324 | | | 47,278 | | | 35,269 | | |
| Margin, net | | | | | $ | 217,615 | | | $ | 177,732 | | | $ | 545,758 | | | $ | 484,903 | | |
| Degree days: | | | | | | | | | | | | |
| Average (25-year average) | | | | | 1,323 | | | 1,326 | | | 2,683 | | | 2,692 | | |
| Actual | | | | | 1,385 | | | 1,217 | | 14% | 2,880 | | | 2,334 | | 23% |
| Percent colder (warmer) than average weather | | | | | 5 | % | | (8) | % | | 7 | % | | (13) | % | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| NORTHWEST NATURAL HOLDINGS | | | | |
| Consolidated Balance Sheets (Unaudited) | | March 31, |
| In thousands | | 2023 | | 2022 |
| Assets: | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 140,821 | | | $ | 24,325 | |
| Accounts receivable | | 164,157 | | | 103,131 | |
| Accrued unbilled revenue | | 59,542 | | | 41,772 | |
| Allowance for uncollectible accounts | | (6,760) | | | (2,488) | |
| Regulatory assets | | 126,546 | | | 64,481 | |
| Derivative instruments | | 8,507 | | | 84,438 | |
| Inventories | | 41,392 | | | 33,377 | |
| | | | |
| Other current assets | | 41,968 | | | 42,329 | |
| Total current assets | | 576,173 | | | 391,365 | |
| Non-current assets: | | | | |
| Property, plant, and equipment | | 4,320,476 | | | 4,041,894 | |
| Less: Accumulated depreciation | | 1,164,498 | | | 1,137,138 | |
| Total property, plant, and equipment, net | | 3,155,978 | | | 2,904,756 | |
| Regulatory assets | | 311,419 | | | 297,546 | |
| Derivative instruments | | 1,432 | | | 6,955 | |
| Other investments | | 93,611 | | | 96,266 | |
| Operating lease right of use asset, net | | 72,699 | | | 74,416 | |
| Assets under sales-type leases | | 133,159 | | | 137,837 | |
| Goodwill | | 149,836 | | | 70,570 | |
| Other non-current assets | | 97,789 | | | 74,923 | |
| Total non-current assets | | 4,015,923 | | | 3,663,269 | |
| Total assets | | $ | 4,592,096 | | | $ | 4,054,634 | |
| Liabilities and equity: | | | | |
| Current liabilities: | | | | |
| Short-term debt | | $ | 72,500 | | | $ | 332,500 | |
| Current maturities of long-term debt | | 240,712 | | | 339 | |
| Accounts payable | | 111,152 | | | 130,557 | |
| Taxes accrued | | 31,372 | | | 14,258 | |
| Interest accrued | | 13,089 | | | 10,886 | |
| Regulatory liabilities | | 57,523 | | | 111,791 | |
| Derivative instruments | | 44,370 | | | 3,855 | |
| Operating lease liabilities | | 1,700 | | | 1,303 | |
| Other current liabilities | | 71,662 | | | 52,778 | |
| Total current liabilities | | 644,080 | | | 658,267 | |
| Long-term debt | | 1,294,590 | | | 1,044,667 | |
| Deferred credits and other non-current liabilities: | | | | |
| Deferred tax liabilities | | 376,237 | | | 353,746 | |
| Regulatory liabilities | | 669,328 | | | 652,977 | |
| Pension and other postretirement benefit liabilities | | 147,890 | | | 164,530 | |
| Derivative instruments | | 15,382 | | | 592 | |
| Operating lease liabilities | | 78,302 | | | 79,162 | |
| Other non-current liabilities | | 117,980 | | | 112,749 | |
| Total deferred credits and other non-current liabilities | | 1,405,119 | | | 1,363,756 | |
| Equity: | | | | |
| Common stock | | 824,304 | | | 602,382 | |
| Retained earnings | | 430,597 | | | 396,769 | |
| Accumulated other comprehensive loss | | (6,594) | | | (11,207) | |
| Total equity | | 1,248,307 | | | 987,944 | |
| Total liabilities and equity | | $ | 4,592,096 | | | $ | 4,054,634 | |
| | | | | | | | | | | | | | |
| NORTHWEST NATURAL HOLDINGS | | | | |
| Consolidated Statements of Cash Flows (Unaudited) | | Three Months Ended March 31, |
| In thousands | | 2023 | | 2022 |
| Operating activities: | | | | |
| Net income | | $ | 71,671 | | | $ | 56,239 | |
| Adjustments to reconcile net income to cash provided by operations: | | | | |
| Depreciation | | 31,465 | | | 28,429 | |
| Regulatory amortization of gas reserves | | 833 | | | 1,481 | |
| Deferred income taxes | | 5,228 | | | 8,780 | |
| Qualified defined benefit pension plan (benefit) expense | | (791) | | | 1,441 | |
| | | | |
| Deferred environmental expenditures, net | | (4,113) | | | (4,345) | |
| Environmental remediation expense | | 5,375 | | | 4,703 | |
| | | | |
| | | | |
| Asset optimization revenue sharing bill credits | | (10,471) | | | (41,102) | |
| Other | | 8,509 | | | 6,325 | |
| Changes in assets and liabilities: | | | | |
| Receivables, net | | 38,727 | | | 38,664 | |
| Inventories | | 46,129 | | | 23,885 | |
| Income and other taxes | | 25,567 | | | 14,436 | |
| Accounts payable | | (47,773) | | | (16,487) | |
| Deferred gas costs | | (11,300) | | | 11,728 | |
| Asset optimization revenue sharing | | 7,769 | | | (646) | |
| Decoupling mechanism | | (1,303) | | | 4,434 | |
| Cloud-based software | | (3,673) | | | (416) | |
| Other, net | | 15,012 | | | 3,488 | |
| Cash provided by operating activities | | 176,861 | | | 141,037 | |
| Investing activities: | | | | |
| Capital expenditures | | (71,265) | | | (68,514) | |
| Acquisitions, net of cash acquired | | (468) | | | — | |
| | | | |
| | | | |
| | | | |
| Other | | (1,285) | | | (1,236) | |
| Cash used in investing activities | | (73,018) | | | (69,750) | |
| Financing activities: | | | | |
| | | | |
| | | | |
| Proceeds from common stock issued, net | | 16,669 | | | 9,938 | |
| Long-term debt issued | | 200,000 | | | — | |
| | | | |
| | | | |
| | | | |
| Changes in other short-term debt, net | | (185,700) | | | (57,000) | |
| Cash dividend payments on common stock | | (16,532) | | | (14,452) | |
| Other | | (3,250) | | | (1,250) | |
| Cash provided by (used in) financing activities | | 11,187 | | | (62,764) | |
| Increase in cash, cash equivalents and restricted cash | | 115,030 | | | 8,523 | |
| Cash, cash equivalents and restricted cash, beginning of period | | 40,964 | | | 27,120 | |
| Cash, cash equivalents and restricted cash, end of period | | $ | 155,994 | | | $ | 35,643 | |
| | | | |
| Supplemental disclosure of cash flow information: | | | | |
| Interest paid, net of capitalization | | $ | 14,904 | | | $ | 7,977 | |
| Income taxes paid, net of refunds | | 1,300 | | | 773 | |
| | | | |
| Reconciliation of cash, cash equivalents and restricted cash: | | | | |
| Cash and cash equivalents | | $ | 140,821 | | | $ | 24,325 | |
| Restricted cash included in other current assets | | 15,173 | | | 11,318 | |
| Cash, cash equivalents and restricted cash | | $ | 155,994 | | | $ | 35,643 | |
