NorthWestern Corporation (NWE) Bundle
A Brief History of NorthWestern Corporation (NWE)
NorthWestern Corporation, operating as NorthWestern Energy, is a key player in the utility sector, providing electricity and natural gas services primarily in Montana, South Dakota, and Nebraska. The company has a rich history dating back to its inception in 1923, when it began generating and distributing electricity in South Dakota. Over the years, NorthWestern expanded its operations, entering the Montana market in 2002 by distributing electricity and natural gas.
Corporate Structure and Operations
As of 2024, NorthWestern Energy serves approximately 775,300 customers through its subsidiaries, which include NorthWestern Corporation and NorthWestern Energy Public Service Corporation. The company’s operations are segmented into electric and natural gas services, and it has maintained a focus on regulatory compliance and environmental sustainability.
Financial Performance
In the financial year 2024, NorthWestern Corporation reported substantial growth across its operations, reflecting strong demand for energy services. The total operating revenues for the nine months ended September 30, 2024, reached $1.140 billion, compared to $1.066 billion for the same period in 2023, marking an increase of approximately 13.1%.
| Financial Metrics | 2024 (9 Months) | 2023 (9 Months) | Change (%) |
|---|---|---|---|
| Operating Revenues | $1.140 billion | $1.066 billion | 13.1% |
| Net Income | $143.6 million | $111.0 million | 29.4% |
| Total Assets | $7.854 billion | $7.600 billion | 3.3% |
| Total Shareholders' Equity | $2.816 billion | $2.785 billion | 1.1% |
Key Developments
In 2024, NorthWestern Corporation undertook significant financing activities, including the issuance of $175 million in Montana First Mortgage Bonds at a fixed interest rate of 5.56%, maturing in 2031. These funds were utilized to redeem existing bonds and support general utility operations. Additionally, the company filed for a natural gas rate review in Nebraska, seeking a revenue increase of $3.6 million, which reflects ongoing investment in infrastructure and compliance with regulatory requirements.
Environmental Compliance and Future Outlook
The company is also adapting to new environmental regulations, such as the EPA's GHG Rules, which will necessitate substantial upgrades to existing facilities. Compliance with these regulations is anticipated to impact operational costs significantly. NorthWestern's commitment to sustainability is evident through its ongoing investments in renewable energy and energy efficiency programs.
Customer Base and Market Trends
NorthWestern has experienced fluctuations in its customer base, with an increase in customer counts in South Dakota and Nebraska. The total average customer counts for the nine months ended September 30, 2024, were 474,453, compared to 466,849 for the same period in 2023, reflecting a growth trend in its service areas.
| Customer Metrics | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Average Customer Counts | 474,453 | 466,849 | 1.6% |
| Residential Customers | 265,813 | 263,298 | 1.0% |
| Commercial Customers | 88,782 | 87,266 | 1.7% |
| Industrial Customers | 80 | 79 | 1.3% |
Overall, NorthWestern Corporation is well-positioned in the utility market, leveraging its operational strengths and adapting to regulatory changes while pursuing growth opportunities in renewable energy and customer service enhancements.
A Who Owns NorthWestern Corporation (NWE)
Major Shareholders
As of 2024, NorthWestern Corporation (NWE) has a diverse ownership structure, comprising institutional investors, mutual funds, and individual shareholders. The top five institutional shareholders are:
| Shareholder | Ownership (%) | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 11.5% | 7,458,000 |
| BlackRock, Inc. | 10.8% | 7,063,000 |
| State Street Corporation | 9.2% | 6,058,000 |
| Wellington Management Group, LLP | 5.7% | 3,753,000 |
| Invesco Ltd. | 5.1% | 3,350,000 |
Insider Ownership
Insider ownership plays a crucial role in corporate governance. As of 2024, the estimated insider ownership percentage is approximately 1.2%, indicating that executives and board members hold a small portion of the company's shares. The key insiders include:
| Name | Position | Shares Owned |
|---|---|---|
| Robert C. Rowe | President & CEO | 150,000 |
| John M. W. Dyer | CFO | 85,000 |
| Kathy A. B. Smith | Director | 50,000 |
Stock Performance and Market Capitalization
As of the end of 2024, NorthWestern Corporation's stock is trading at approximately $60.25 per share, with a market capitalization of around $3.9 billion. The stock has shown a year-to-date performance increase of 12%, reflecting positive investor sentiment and strong financial results.
Dividend Information
NWE has a consistent dividend policy. In 2024, the company declared a quarterly dividend of $0.650 per share, which equates to an annual dividend yield of approximately 4.3% based on the current stock price.
Recent Developments
- The company recently completed the acquisition of Energy West Montana for approximately $39 million, enhancing its service capabilities in the region.
- NWE has filed for a base rate increase with the Montana Public Service Commission, seeking an annual revenue increase of $156.5 million to support ongoing operational costs and investments.
- In 2024, NWE issued $175 million in Montana First Mortgage Bonds at a fixed interest rate of 5.56%, aimed at refinancing existing debt and funding general utility purposes.
Financial Overview
For the nine months ended September 30, 2024, NorthWestern Corporation reported:
| Financial Metric | Amount (in millions) |
|---|---|
| Total Revenue | $1,140.4 |
| Net Income | $143.6 |
| Operating Income | $197.3 |
| Utility Margin | $801.3 |
| Total Assets | $7,429.5 |
The company has indicated robust growth in utility margins driven by favorable market conditions and increased customer demand across its service areas, particularly in Montana and South Dakota.
NorthWestern Corporation (NWE) Mission Statement
Mission Statement Overview
NorthWestern Corporation aims to provide reliable and affordable energy solutions while being committed to environmental stewardship. The company emphasizes its dedication to the communities it serves, focusing on safety, sustainability, and innovation in energy delivery.
Key Financial Metrics
The financial health of NorthWestern Corporation is reflected in its recent performance metrics as of September 30, 2024:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Consolidated Net Income | $46.8 million | $29.3 million | +$17.5 million |
| Total Assets | $7.854 billion | $7.601 billion | +$253 million |
| Total Shareholders' Equity | $2.816 billion | $2.785 billion | +$31 million |
| Operating Revenues | $345.2 million | $321.1 million | +$24.1 million |
| Capital Expenditures | $420.5 million | — | — |
Revenue Breakdown
The following table illustrates the revenue breakdown by segment for the three months ended September 30, 2024:
| Segment | Electric Revenue | Natural Gas Revenue | Total Revenue |
|---|---|---|---|
| Montana | $100.7 million | $8.4 million | $109.1 million |
| South Dakota | $19.1 million | $1.7 million | $20.8 million |
| Nebraska | $0 | $1.8 million | $1.8 million |
| Total | $119.8 million | $11.9 million | $131.7 million |
Customer Base
NorthWestern Corporation serves approximately 775,300 customers across its service areas in Montana, South Dakota, and Nebraska, providing essential electricity and natural gas services.
Regulatory and Rate Review Activity
As of July 2024, NorthWestern Corporation filed a rate review in Montana requesting a base rate annual revenue increase of $156.5 million for electric services and $28.6 million for natural gas services. This request is based on a return on equity of 10.80 percent.
Sustainability Goals
NorthWestern Corporation is committed to achieving net-zero carbon emissions by 2050, reflecting its dedication to environmental stewardship and sustainability in energy production and delivery.
Recent Developments
The Yellowstone County 175 MW plant was substantially completed and placed into service in October 2024, with total costs incurred estimated at approximately $305.6 million against an expected total of $310.0 million to $320.0 million.
How NorthWestern Corporation (NWE) Works
Overview of Operations
NorthWestern Corporation, operating under the brand NorthWestern Energy, provides electricity and natural gas to approximately 775,300 customers across Montana, South Dakota, Nebraska, and Yellowstone National Park. The company engages primarily in the regulated electric utility and natural gas utility businesses, focusing on generation, transmission, and distribution services.
Financial Performance
For the nine months ended September 30, 2024, NorthWestern Corporation reported the following financial metrics:
| Metric | 2024 | 2023 | Change ($) | % Change |
|---|---|---|---|---|
| Operating Revenues (in millions) | $1,140.4 | $1,066.1 | $74.3 | 7.0% |
| Utility Margin (in millions) | $801.3 | $744.1 | $57.2 | 7.7% |
| Net Income (in millions) | $143.6 | $110.9 | $32.7 | 29.4% |
| Capital Expenditures (in millions) | $400.5 | $407.2 | ($6.7) | (1.6%) |
Utility Margin Analysis
The utility margin for the nine months ended September 30, 2024, was driven by several factors:
- Base Rates: Increased by $53.4 million.
- Transmission Revenue: Increased by $13.5 million due to favorable market conditions.
- Montana Property Tax Tracker Collections: Increased by $4.9 million.
- Retail Volumes: Decreased by $2.7 million.
Segment Performance
The company's operations can be segmented into electric and natural gas services. Below is a breakdown of utility margins by segment for the nine months ended September 30, 2024:
| Segment | Utility Margin (in millions) | 2024 | 2023 | Change ($) | % Change |
|---|---|---|---|---|---|
| Electric | $652.8 | $606.1 | $46.7 | 7.7% | |
| Natural Gas | $148.5 | $138.0 | $10.5 | 7.6% |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, NorthWestern Corporation reported the following cash flow metrics:
| Cash Flow Activity | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Cash Provided by Operating Activities | $343.9 | $427.0 |
| Cash Used in Investing Activities | ($405.1) | ($411.0) |
| Cash Provided by Financing Activities | $63.9 | ($16.8) |
Regulatory Environment
NorthWestern Corporation operates under a regulatory framework that requires regular rate reviews to recover costs associated with providing reliable service. The company has recently engaged in rate reviews across its service areas to align its rates with operational costs.
Recent Developments
As of September 30, 2024, NorthWestern Corporation completed construction of the Yellowstone County generation facility, which has incurred total costs of approximately $305.6 million, with expected total costs ranging between $310.0 million and $320.0 million.
Debt and Financing Activities
In March 2024, NorthWestern Corporation issued $175.0 million in Montana First Mortgage Bonds at a fixed interest rate of 5.56% maturing in 2031. Additionally, the company issued $33.0 million in South Dakota First Mortgage Bonds at a fixed rate of 5.55% and $7.0 million at 5.75%, with proceeds allocated for general utility purposes.
Key Financial Ratios
As of September 30, 2024, NorthWestern Corporation's financial ratios reflect its operational efficiency:
| Ratio | Value |
|---|---|
| Debt to Total Capital Ratio | 50-55% |
| Dividend Payout Ratio | 60-70% |
How NorthWestern Corporation (NWE) Makes Money
Revenue Sources
NorthWestern Corporation generates revenue primarily through the provision of regulated electric and natural gas utility services. The company serves residential, commercial, and industrial customers across Montana, South Dakota, and Nebraska.
Electric Segment
The electric utility segment provides generation, transmission, and distribution services. Revenue is recognized upon delivery of electricity, with customers typically billed within 30 days. The following table summarizes the electric revenue for the three months ended September 30, 2024, compared to the same period in 2023:
| Customer Class | Montana (2024) | Montana (2023) | South Dakota (2024) | South Dakota (2023) | Nebraska (2024) | Nebraska (2023) |
|---|---|---|---|---|---|---|
| Residential | $109.6M | $110.1M | $30.1M | $27.5M | $0.0M | $0.0M |
| Commercial | $139.7M | $137.6M | $19.1M | $18.0M | $0.0M | $0.0M |
| Total Electric Revenue | $306.5M | $280.0M | $38.7M | $41.1M | $0.0M | $0.0M |
Natural Gas Segment
The natural gas utility segment includes production, storage, transmission, and distribution services. Revenue is similarly recognized upon delivery of natural gas. The following table details the natural gas revenue for the three months ended September 30, 2024, compared to the same period in 2023:
| Customer Class | Montana (2024) | Montana (2023) | South Dakota (2024) | South Dakota (2023) | Nebraska (2024) | Nebraska (2023) |
|---|---|---|---|---|---|---|
| Residential | $6.2M | $6.1M | $1.3M | $1.5M | $0.8M | $1.3M |
| Commercial | $8.3M | $8.9M | $1.7M | $2.0M | $1.8M | $2.2M |
| Total Gas Revenue | $38.7M | $41.1M | $7.1M | $10.9M | $0.0M | $0.0M |
Operating Income and Expenses
For the nine months ended September 30, 2024, NorthWestern Corporation reported consolidated operating income of $231.6 million, an increase from $197.3 million in the same period of 2023. The increase was attributed to higher base rates and electric transmission revenues. The breakdown of operating expenses for the same period is as follows:
| Expense Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Fuel, Purchased Supply and Direct Transmission | $339.1M | $322.0M |
| Operating and Maintenance | $167.4M | $163.9M |
| Property and Other Taxes | $125.0M | $132.6M |
| Depreciation and Depletion | $170.6M | $157.8M |
Net Income and Financial Performance
For the three months ended September 30, 2024, NorthWestern Corporation reported a net income of $46.8 million, compared to $29.3 million in the prior year. The increase was mainly driven by new base rates, electric transmission revenues, and lower non-recoverable electric supply costs.
Utility Margin Analysis
The utility margin for the nine months ended September 30, 2024, was reported at $801.3 million, up from $744.1 million in the same period in 2023. The following table outlines the utility margin by segment:
| Segment | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Electric | $652.8M | $606.1M |
| Natural Gas | $148.5M | $138.0M |
Capital Expenditures
NorthWestern Corporation's capital expenditures for the nine months ended September 30, 2024, totaled $400.5 million, compared to $411.0 million in the same period of 2023. The breakdown of capital expenditures is as follows:
| Capital Expenditure Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Maintenance Additions | $216.5M | $235.0M |
| Capacity Related Capital Expenditures | $184.0M | $172.2M |
Debt and Interest Expenses
Consolidated interest expense for the nine months ended September 30, 2024, was $96.3 million, compared to $85.1 million in 2023. This increase is attributed to higher borrowings and interest rates.
Customer Base and Market Trends
As of September 30, 2024, NorthWestern Corporation served approximately 775,300 customers. The utility's performance is influenced by factors such as weather patterns, regulatory changes, and customer growth.
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Article updated on 8 Nov 2024
Resources:
- NorthWestern Corporation (NWE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of NorthWestern Corporation (NWE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View NorthWestern Corporation (NWE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.