EX-99.3 4 exh993investorpresq123.htm EX-99.3 EARNINGS PRESENTATION Q1 2023 exh993investorpresq123
2023 First Quarter Earnings Webcast April 28, 2023 Overlooking Billings, Montana


 
Presenting Today 2 Forward Looking Statements During the course of this presentation, there will be forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” or “will.” The information in this presentation is based upon our current expectations as of the date of this document unless otherwise noted. Our actual future business and financial performance may differ materially and adversely from our expectations expressed in any forward- looking statements. We undertake no obligation to revise or publicly update our forward-looking statements or this presentation for any reason. Although our expectations and beliefs are based on reasonable assumptions, actual results may differ materially. The factors that may affect our results are listed in certain of our press releases and disclosed in the Company’s 10-K and 10-Q along with other public filings with the SEC. Crystal Lail Vice President & CFO Brian Bird President & CEO


 
 Regulatory execution • Reached constructive multi-party settlement in Montana rate review (currently pending commission approval) • Received final approval necessary for holding company formation  Safely executed on capital plan • Nearly $150 million invested during the first quarter on track for a targeted $510 million capital plan for 2023. • Continue to expect Yellowstone County Generating Station to be ready to serve our customers during 2024.  Driving reliability and affordability • Announced agreement with Avista to transfer its Colstrip ownership: 222 megawatts, effective December 31, 2025  Strong and growing service territories. • Overall 1.4% customer growth (vs first quarter 2022) • Lowest unemployment rates in the nation SD #1, NE #2 and MT #4 (US Bureau of Labor Statistics, April 21, 2023) First Quarter 3 NorthWestern recognized with the EEI Emergency Response Award in January 2023 for storm recovery in both Montana and South Dakota during 2022.


 
First Quarter 2023 Financial Results 4 *See slide 7 and “Non-GAAP Financial Measures” slide in the appendix for additional detail on this measure. First Quarter Net Income vs Prior Period • GAAP: ↑ $3.4 Million (or 5.8%) • Non-GAAP*: ↑ $3.5 Million (or 5.9%) First Quarter EPS vs Prior Period • GAAP: ↓ $0.03 (or 2.8%) • Non-GAAP*: ↓ $0.04 (or 2.9%)


 
First Quarter Financial Results 5 (1) (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure. ( )


 
First Quarter EPS Bridge 6 Solid improvement in first quarter net income but offset by dilution from higher outstanding share count. After-tax Earnings Per Share See slide 7 and “Non-GAAP Financial Measures” slide in the appendix for additional detail on this measure.


 
First Quarter Non-GAAP Earnings 7 The adjusted non- GAAP measures presented in the table are being shown to reflect significant items that are non-recurring or a variance from normal weather, however they should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. (1) As a result of the adoption of Accounting Standard Update 2017-07 in March 2018, pension and other employee benefit expense is now disaggregated on the GAAP income statement with portions now recorded in both OG&A expense and Other (Expense) Income lines. To facilitate better understanding of trends in year-over-year comparisons, the non-GAAP adjustment above re-aggregates the expense in OG&A - as it was historically presented prior to the ASU 2017-07 (with no impact to net income or earnings per share). (2) Utility Margin is a non-GAAP Measure See the slide titled “Explaining Utility Margin” for additional disclosure.


 
First Quarter Utility Margin Bridge 8 $25.7 Million or 9.9% increase in Utility Margin due to items that impact Net Income. NOTE: Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure. Pre-tax Millions PCCAM Impact $0.8M expense in 2022 vs. $0.5M benefit in 2023


 
Cash Flow 9 Cash from Operating Activities increased by $18.0 million primarily due to $25.8 million increase in collection of energy supply costs from customers. Funds from Operations increased by $3.0 million over prior period. Net Under-Collected Supply Costs (in millions) Beginning (Jan. 1) Ending (March. 31) Inflow 2022 $99.1 $76.0 $23.1 2023 $115.4 $66.5 $48.9 2023 Improvement (less outflow) $25.8 During 2023, we anticipate issuing the remaining $75 million under our At-the-Market equity program. During the quarter we priced $270 million of First Mortgage Bonds at a fixed rate of 5.57% and ten year terms. We received $220M on March 30 and expect to receive the remaining $50M on May 1, 2023. We also priced an additional $30M of First Mortgage Bonds with a fixed rate of 5.42% and ten year terms on March 29, 2023 and expect to receive the proceeds on May 1, 2023. Financing plans (targeting a FFO to Debt ratio > 14%) are expected maintain our current credit ratings and are subject to change.


 
Montana Rate Review 10 The MPSC approved the recommendations of the staff for interim rates, subject to refund, effective October 1, 2022. Interim Rates Anticipated Next Steps • April 18, 2023 Hearing concluded • May – June post-hearing briefs • July commission work session and decision Settlement Reached On April 3rd, NWE and the primary intervenors reached a settlement agreement for electric and natural gas rates and several key provisions including 9.65% and 9.55% ROE for electric and natural gas respectively (with 48% equity capitalization). The settlement was filed with the MPSC for their review. Final rates, once approved, will be retroactive back to interim effective date of October 1, 2022. Requested base rate increase supports over a billion dollars invested in Montana critical infrastructure - since our last rate reviews - while keeping operating costs below the rate of inflation. (Test years: 2015 nat. gas and 2017 electric)


 
2023 earnings guidance is expected to be provided following an outcome in our pending Montana rate review Anticipate requesting general rate review in South Dakota (2022 Test Year) $510 million capital plan for 2023 (inclusive of $80 million of investment specific to Yellowstone County Generating Station) Long-term growth targets remain; 3-6% EPS and 4-5% rate base 2023 annualized dividend of $2.56 is expected to be above targeted 60-70% payout ratio. Over the longer- term, we expect to maintain a dividend payout ratio within a targeted 60-70% range Financing plans are intended to maintain current credit ratings (targeting FFO to debt ratio greater than 14%) Financial Outlook 11 Rowe Dam at Mystic Lake, Montana


 
Capital Investment 12 $2.4 billion of forecasted low-risk capital investment opportunity… • Capital investment addresses generation and transmission capacity constraints, grid modernization and renewable energy integration. This does not include any incremental opportunities related to additional supply investment. • This sustainable level of capex is expected to drive an annualized rate base growth of approximately 4%-5%. • We expect to finance this capital with a combination of cash flows from operations, first mortgage bonds and equity issuances. Over $2.1 Billion investment* over last 5 years * Historical Capital Investment includes property, plant and equipment additions, acquisitions and capital expenditures included in accounts payable. 5 Year History of Capital Investment 5 Year Forecast of Capital Investment ($millions, unless stated otherwise) Yellowstone County Generating Station


 
Supply Update 13 Electric Supply Resource Additions South Dakota: 58 megawatt Bob Glanzer Generating Station place in service in May 2022 completed under budget with a total cost of $83.1 million Montana: 175 megawatt Yellowstone County Generating Station • Construction began in April 2022 with total investment of approximately $275 million ($174.7 million invested through the first quarter 2023) • Current schedule anticipates commercial operation during 2024* Integrated Resource Plans South Dakota: Filed in September 2022, the plan identifies 43 megawatts as retire and replace candidates with potential for competitive solicitation during 2023-2024 Montana: Expect to submit an integrated resource plan to the MPSC by the end of April 2023. The recently completed 58-megawatt Bob Glanzer Generating Station in Huron, South Dakota, provides on-demand resources to support the variability of wind and solar projects coming onto our system and the grid in our region and help serve our customers during extended periods of peak demand. * On October 21, 2021, the Montana Environmental Information Center (MEIC) and the Sierra Club filed a lawsuit in Montana State Court, against the Montana Department of Environmental Quality (MDEQ) and NorthWestern, alleging that the environmental analysis conducted by MDEQ prior to issuance of the Yellowstone County Generating Station's air quality construction permit was inadequate. The Montana District Court judge held oral argument on June 20, 2022. On April 4, 2023, the Montana District Court issued an order finding MDEQ's environmental analysis was deficient in not addressing exterior lighting and greenhouse gases. The Court remanded it back to MDEQ to address the deficiencies and vacated the air quality permit pending that remand. As a result of the vacatur of the permit, we are required to stop construction and will not be able to recommence construction until the permit is reissued. On April 14, 2023, following entry of final judgment, we filed a Motion to Stay the order vacating the air quality permit pending appeal. On April 17, 2023, we filed a notice of appeal with the Montana Supreme Court. This lawsuit, as well as additional legal challenges related to the Yellowstone County Generating Station, could delay the project timing and increase costs. At this time, we still expect the plan to be operational by the end of 2024.


 
Conclusion 14 Pure Electric & Gas Utility Solid Utility Foundation Best Practices Corporate Governance Attractive Future Growth Prospects Strong Earnings & Cash Flows


 
15 Appendix


 
Regulated Utility Five-Year Capital Forecast 16 Appendix $2.4 billion of highly-executable and low-risk capital investment Electric Supply Resource Plans - Our energy resource plans identify portfolio resource requirements including potential investments. Included within our projections is approximately $120.0 million (in 2023 and 2024) of capital to complete construction of the 175 MW Yellowstone County Generating Station to be on line in 2024. Distribution and Transmission Modernization and Maintenance - The primary goals of our infrastructure investments are to reverse the trend in aging infrastructure, maintain reliability, proactively manage safety, build capacity into the system, and prepare our network for the adoption of new technologies. We are taking a proactive and pragmatic approach to replacing these assets while also evaluating the implementation of additional technologies to prepare the overall system for smart grid applications. Beginning in 2021, and continuing through 2025, we are installing automated metering infrastructure in Montana at a total cost of approximately $112.0 million, of which, $66.1 million remains and is reflected in the five year capital forecast.


 
Montana Rate Review 17 Appendix Approximately 42% of the requested total electric and natural gas revenue increase is driven by flow-through costs including market power purchases and property taxes. 49% is driven by capital investment to ensure the safety and reliability of the energy system.


 
Rate Base & Authorized Return Summary 18 Appendix (1) The revenue requirement associated with the FERC regulated portion of Montana electric transmission and ancillary services are included as revenue credits to our MPSC jurisdictional customers. Therefore, we do not separately reflect FERC authorized rate base or authorized returns. (2) The Montana gas revenue requirement includes a step down which approximates annual depletion of our natural gas production assets included in rate base. (3) For those items marked as "n/a," the respective settlement and/or order was not specific as to these terms. (4) On August 8, 2022, we filed a Montana electric and natural gas rate review filing (2021 test year) requesting an increase to our authorized rate base, return on equity, and equity level in our capital structure. We expect a final order regarding this rate review in 2023. Coal Generation Rate Base as a percentage of Total Rate Base Revenue from coal generation is not easily identifiable due to the use of bundled rates in South Dakota and other rate design and accounting considerations. However, NorthWestern is a fully regulated utility company for which rate base is the primary driver for earnings. The data to the left illustrates that NorthWestern only derives approximately 9 -14% of earnings from its jointly owned coal generation rate base.


 
NorthWestern Energy executed an agreement with Avista Corporation (Exit Agreement) for the transfer of Avista’s ownership interests in Colstrip Units 3 and 4. • Effective date of transfer: December 31, 2025 • Generating capacity: 222 MW (bringing our total ownership to 444 MW) • Transfer price: $0.00 Colstrip Transaction Overview 19 • NorthWestern will be responsible for operational and capital costs beginning January 1, 2026. • The agreement does not require approval by the Montana Public Service Commission (MPSC). We expect to work with the MPSC in a future docket for cost recovery in 2026. • NorthWestern will have the right to exercise Avista’s vote with respect to capital expenditures1 between now and 2025 with Avista responsible for its pro rata share2. • Avista will retain its existing environmental and decommissioning obligations through life of plant. • Under the Colstrip Ownership & Operating Agreement, each of the owners will have a 90-day period in which to evaluate the transaction between NorthWestern and Avista to determine whether to exercise their respective right of first refusal. • We expect to file our Montana Integrated Resource Plan during the first quarter 2023. This transaction is expected to satisfy our capacity needs in Montana for at least the next 5 years. 1. Avista retains the vote related to remediation activities. 2. Avista bears its current project share (15%) costs through 2025, other than “Enhancement Work Costs” for which it bears a time-based pro-rata share. Enhancement Work Costs are costs that are not performed on a least-costs basis or are intended to extend the life of the facility beyond 2025. See the Exit Agreement for additional detail. Appendix


 
Facility Ownership Overview 20 NorthWestern is actively working with the other owners to resolve outstanding issues, including the associated pending legal proceedings. Additionally, the owners intend to pursue a mutually beneficial reallocation (swap) of megawatts between the two units that would ideally provide NorthWestern with a controlling (> 370 megawatts) share of Unit 4. Appendix


 
Why Colstrip? 21 Reliable  Existing resource, ready to serve our Montana customers. Avoids lengthy planning, permitting and construction of a new facility that would stretch in-service beyond 2026.  Reduces reliance on imported power and volatile markets, providing increased energy independence.  In-state and on-system asset mitigating the transmission constraints we experience importing capacity.  Adds critical long-duration, 24/7 on-demand generation necessary for balancing our existing portfolio. Affordable  222 MW of capacity with no upfront capital costs and stable operating costs going forward. o Equivalent new build would cost in excess of $500 million. o Incremental operating costs are known and reasonable. Resulting variable generation costs represent a 90%+ discount to market prices incurred during December’s polar vortex.  In addition to no upfront capital, low and stably priced mine-mouth coal supply costs. Sustainable  We remain committed to our net zero goal by 2050. This additional capacity, with a remaining life of up to 20 years, helps bridge the interim gap and will likely lead to less carbon post 2040.  Yellowstone County Generating Station is potentially our last natural gas resource addition in Montana.  Partners are committed to evaluate non-carbon long-duration alternative resources for the site.  Keeps the existing plant open and retains its highly skilled jobs vital to the Colstrip community.  Protects existing ownership interests with an ultimate goal of majority ownership of Unit 4. NorthWestern Energy executed an agreement with Avista Corporation for the transfer of Avista’s ownership interests in Colstrip Units 3 & 4. • Effective date of transfer: 12/31/2025 • Generating capacity: 222 MW • Transfer price: $0.00 Appendix


 
Reduces Risk  We are in a supply capacity crisis due to lack of resource adequacy, with approx. 40% of our customers’ peak needs on the market. This transaction will reduce our need to import expensive capacity during critical times.  Establishes clarity regarding operations past 2025 Washington state legislation deadline.  Reduces PCCAM risk sharing for customers and shareholders. Bill Headroom  Stable pricing reduces impact of market volatility and high energy prices on customers. Aligned with ‘All of the Above’ energy transition in Montana  Supports our generating portfolio that is nearly 60% carbon-free today.  Provides future opportunity at the site while supporting economic development in Montana.  Agreement considers the appropriate balance of reliability, affordability and sustainability. 22 Why Colstrip?Appendix


 
December 2022 Polar Vortex 23 The chart illustrates the actual resource specific contribution of energy, the capacity deficit we faced, and the market price of power during the late December 2022 multi-day cold weather event in Montana. As a result of our capacity deficit, we were reliant upon the high and volatile power market a majority of the time to meet customer demand. Appendix


 
Our Net-Zero Vision 24 Over the past 100 years, NorthWestern Energy has maintained our commitment to provide customers with reliable and affordable electric and natural gas service while also being good stewards of the environment. We have responded to climate change, its implications and risks, by increasing our environmental sustainability efforts and our access to clean energy resources. But more must be done. We are committed to achieving net zero emissions by 2050. • Committed to achieving net-zero by 2050 for Scope 1 and 2 emissions • Must balance Affordability, Reliability and Sustainability in this transition • No new carbon emitting generation additions after 2035 • Pipeline modernization, enhanced leak detection and development of alternative fuels for natural gas business • Electrify fleet and add charging infrastructure • Carbon offsets likely needed to ultimately achieve net-zero • Please visit www.NorthWesternEnergy.com/NetZero to learn more about our Net Zero Vision. Appendix


 
Increase in utility margin due to the following factors: $ 9.8 Electric retail volumes 8.5 Montana interim rates 3.7 Natural gas retail volumes 1.3 Lower non-recoverable Montana electric supply costs 1.2 Higher transmission revenue (higher demand from market conditions) 1.2 Other $ 25.7 Change in Utility Margin Impacting Net Income 25 Utility Margin (1st Quarter) (dollars in millions) Three Months Ended March 31, 2023 2022 Variance Electric $ 217.2 $ 194.1 $ 23.1 11.9% Natural Gas 71.8 65.3 6.5 10.0% Total Utility Margin $ 289.0 $ 259.4 $ 29.6 11.4% $ 2.6 Higher property taxes recovered in revenue, offset in property tax expense 1.7 Higher production tax credits, offset in income tax expense (0.3) Lower operating expenses recovered in revenue, offset in O&M expense (0.1) Lower production taxes recovered in revenue, offset in property & other tax expense $ 3.9 Change in Utility Margin Offset Within Net Income $ 29.6 Increase in Utility Margin (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure. (1) Appendix


 
Increase in operating expenses due to the following factors: $ 4.3 Higher depreciation due to plant additions 3.4 Higher electric generation facilities expense 3.1 Higher labor and benefits (1) 0.6 Higher insurance expense 0.3 Higher uncollectible accounts expenses (0.4) Lower technology implementation and maintenance expense (0.2) Lower property and other taxes (0.4) Other miscellaneous $ 10.7 Change in Operating Expense Items Impacting Net Income Operating Expenses 26 (1st Quarter) (dollars in millions) Three Months Ended March 31, 2023 2022 Variance Operating & maintenance $ 55.9 $ 52.8 $ 3.1 5.9% Administrative & general 34.7 31.6 3.1 9.8% Property and other taxes 49.2 46.9 2.3 4.9% Depreciation and depletion 53.2 48.9 4.3 8.8% Operating Expenses $ 193.0 $ 180.2 $ 12.8 7.1% $ 2.5 Higher property and other taxes recovered in trackers, offset in revenue 0.2 Higher pension and other postretirement benefits, offset in other income (0.3) Lower non-employee directors deferred compensation, offset in other income (1) (0.3) Lower operating and maintenance expenses recovered in trackers, offset in revenue $ 2.1 Change in Operating Expense Items Offset Within Net Income $ 12.8 Increase in Operating Expenses $6.2 Appendix (1) In order to present the total change in labor and benefits, we have included the change in the non- service cost component of our pension and other postretirement benefits, which is recorded within other income on our Condensed Consolidated Statements of Income. This change is offset within this table as it does not affect our operating expenses.


 
Operating to Net Income 27 (dollars in millions) Three Months Ended March 31, 2023 2022 Variance Operating Income $ 96.0 $ 79.2 $ 16.8 21.2% Interest expense (28.0) (23.7) (4.3) (18.1%) Other income, net 4.7 4.7 0.0 0.0% Income Before Taxes 72.7 60.2 12.5 20.8% Income tax expense (10.2) (1.1) (9.1) (827.3%) Net Income $ 62.5 $ 59.1 $ 3.4 5.8% (1st Quarter) $4.3 million increase in interest expenses was primarily due to higher interest rates on borrowings under our revolving credit facilities, partly offset by higher capitalization of AFUDC. Other income, net was flat, however we did see a decrease in the value of deferred shares held in trust for non-employee directors deferred compensation (which is offset in operating expense) and this decrease was offset by a decrease in the non-service cost component of pension expense. $9.1 million increase in income tax expense was primarily due higher pre-tax income and lower flow-through benefits. Appendix


 
Tax Reconciliation 28 Appendix (1st Quarter)


 
29 Segment ResultsAppendix (1) (1) (1st Quarter) (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.


 
Weather / Hydro Conditions 30 Snow water equivalents generally in line with or above the 30-year medians. (Missouri, Madison & Clark Fork Rivers and West Rosebud Creek basins) We estimated a $3.6 million pre-tax benefit as compared to normal and a $4.1 million benefit as compared to Q1 2022. Appendix (1st Quarter) Snow Water Equivalent Percent to 30-Year Normal


 
31 Electric SegmentAppendix (1) (1st Quarter) (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.


 
32 Natural Gas SegmentAppendix (1) (1st Quarter) (1) Utility Margin is a non-GAAP Measure See appendix slide titled “Explaining Utility Margin” for additional disclosure.


 
Quarterly PCCAM Impacts 33 Appendix In 2017, the Montana legislature revised the statute regarding our recovery of electric supply costs. In response, the MPSC approved a new design for our electric tracker in 2018, effective July 1, 2017. The revised electric tracker, or PCCAM established a baseline of power supply costs and tracks the differences between the actual costs and revenues. Variances in supply costs above or below the baseline are allocated 90% to customers and 10% to shareholders, with an annual adjustment. From July 2017 to May 2019, the PCCAM also included a "deadband" which required us to absorb the variances within +/- $4.1 million from the base, with 90% of the variance above or below the deadband collected from or refunded to customers. In 2019, the Montana legislature revised the statute effective May 7, 2019, prohibiting a deadband, allowing 100% recovery of QF purchases, and maintaining the 90% / 10% sharing ratio for other purchases. Pre-tax Millions


 
Qualified Facility Earnings Adjustment 34 Appendix Our electric QF liability consists of unrecoverable costs associated with contracts covered under PURPA that are part of a 2002 stipulation with the MPSC and other parties. Risks / losses associated with these contracts are born by shareholders, not customers. Therefore, any mitigation of prior losses and / or benefits of liability reduction also accrue to shareholders.


 
Balance Sheet 35 Debt to Total Capitalization down from last year and slightly below our targeted 50% - 55% range. Appendix


 
Management believes that Utility Margin provides a useful measure for investors and other financial statement users to analyze our financial performance in that it excludes the effect on total revenues caused by volatility in energy costs and associated regulatory mechanisms. This information is intended to enhance an investor's overall understanding of results. Under our various state regulatory mechanisms, as detailed below, our supply costs are generally collected from customers. In addition, Utility Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow recovery of operating costs, as well as to analyze how changes in loads (due to weather, economic or other conditions), rates and other factors impact our results of operations. Our Utility Margin measure may not be comparable to that of other companies' presentations or more useful than the GAAP information provided elsewhere in this report. Explaining Utility Margin 36 (1) Utility Margin is a non-GAAP Measure. Appendix


 
Non-GAAP Financial Measures 37 Appendix


 
Non-GAAP Financial Measures 38 Appendix This presentation includes financial information prepared in accordance with GAAP, as well as other financial measures, such as Utility Margin, Adjusted Non-GAAP pretax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. We define Utility Margin as Operating Revenues less fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion) as presented in our Consolidated Statements of Income. This measure differs from the GAAP definition of Gross Margin due to the exclusion of Operating and maintenance, Property and other taxes, and Depreciation and depletion expenses, which are presented separately in our Consolidated Statements of Income. A reconciliation of Utility Margin to Gross Margin, the most directly comparable GAAP measure, is included in this presentation. Management believes that Utility Margin provides a useful measure for investors and other financial statement users to analyze our financial performance in that it excludes the effect on total revenues caused by volatility in energy costs and associated regulatory mechanisms. This information is intended to enhance an investor's overall understanding of results. Under our various state regulatory mechanisms, as detailed below, our supply costs are generally collected from customers. In addition, Utility Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow recovery of operating costs, as well as to analyze how changes in loads (due to weather, economic or other conditions), rates and other factors impact our results of operations. Our Utility Margin measure may not be comparable to that of other companies' presentations or more useful than the GAAP information provided elsewhere in this report. Management also believes the presentation of Adjusted Non-GAAP pre-tax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS is more representative of normal earnings than GAAP pre-tax income, net income and EPS due to the exclusion (or inclusion) of certain impacts that are not reflective of ongoing earnings. The presentation of these non-GAAP measures is intended to supplement investors' understanding of our financial performance and not to replace other GAAP measures as an indicator of actual operating performance. Our measures may not be comparable to other companies' similarly titled measures.


 
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