BUTTE, Mont. and SIOUX FALLS, S.D., Feb. 14, 2024 (GLOBE NEWSWIRE) — NorthWestern Energy Group, Inc. d/b/a NorthWestern Energy (Nasdaq: NWE) reported financial results for the year ended December 31, 2023. Net income for the period was $194.1 million, or $3.22 per diluted share, as compared with net income of $183.0 million, or $3.25 per diluted share, for the same period in 2022. This increase of $11.1 million in net income was primarily due to new base rates resulting from the Montana rate review, lower non-recoverable Montana electric supply costs and lower property and other taxes. These favorable impacts were partly offset by lower electric and natural gas retail volumes, higher depreciation and depletion expense, higher interest expense, higher operating, maintenance, and administrative expenses, and higher income tax expense. The $0.03 decline in per-share earnings in 2023 was primarily due to $0.23 of equity dilution from higher average shares outstanding largely offset by $0.20 higher per share net income.
“In 2023 we also made a strategic realignment to effectuate a holding company with the final phase completed on January 1st, 2024.We are affirming 2024 diluted earnings guidance of $3.42 – $3.62 per diluted share and our $500 million capital plan. This guidance is based upon, but not limited to, the following major assumptions:On June 15, 2023, we filed a South Dakota electric rate review filing (2022 test year) for an annual increase to electric rates totaling approximately $30.9 million. Our request was based on a 7.54% rate of return, a capital structure including 50.5 percent equity, and rate base of $787.3 million. On January 10, 2024, the South Dakota Public Utilities Commission (SDPUC) issued a final order approving the settlement agreement between NorthWestern and SDPUC Staff for an annual increase in base rates of approximately $21.5 million and an authorized rate of return of 6.81%. The approved settlement is based on a capital structure of 50.5 percent equity and a rate base of $791.8 million. Final rates were effective January 10, 2024. In addition, the SDPUC approved a phase in rate plan rider that allows for the recovery of capital investments not yet included in base rates.NorthWestern Energy Group’s Board of Directors declared a quarterly common dividend of $0.65 per share (a 1.6% increase over the prior quarter’s dividend) payable March 29, 2024 to common shareholders of record as of March 15, 2024. Over the longer-term, we expect to maintain a dividend payout ratio within a targeted 60-70% range.See Reconciliation of Gross Margin to Utility Margin and Non-GAAP Financial Measure sections that follow.IncomeBenefit (Expense)Income2023 vs. 2022Consolidated operating income in 2023 was $300.5 million as compared with $263.1 million in 2022. This increase was primarily due to new base rates resulting from the Montana rate review, lower non-recoverable Montana electric supply costs, higher Montana property tax tracker collections, and lower property and other taxes not recoverable within trackers, partly offset by lower electric and natural gas retail volumes, higher depreciation and depletion expense, and higher operating, maintenance, and administrative expense.Consolidated interest expense in 2023 was $114.6 million, as compared with $100.1 million in 2022. This increase was due to higher borrowings and interest rates, partly offset by higher capitalization of Allowance for Funds Used During Construction (AFUDC).Consolidated other income in 2023 was $15.8 million, as compared with $19.4 million in 2022. This decrease was primarily due to an increase in the non-service cost component of pension expense, partly offset by the prior year Community Renewable Energy Project (CREP) penalty and higher capitalization of AFUDC.Consolidated income tax expense in 2023 was $7.5 million, as compared to an income tax benefit of $0.6 million in 2022. Our effective tax rate for the twelve months ended December 31, 2023 was 3.7 percent as compared with (0.3) percent for the same period of 2022. Income tax expense for the twelve months ended December 31, 2023, includes a one-time $3.2 million expense for the reduction of previously claimed alternative minimum tax credits as well as a $3.2 million benefit related to a reduction in our unrecognized tax benefits. We currently estimate our effective tax rate will range between 12.0 percent to 14.0 percent in 2024. Based on the significant NOL we generated during the year ended December 31, 2023, we anticipate paying minimal cash for income taxes into 2028.Consolidated net income in 2023 was $194.1 million as compared with $183.0 million in 2022, an increase of $11.1 million. This increase was primarily due to new base rates resulting from the Montana rate review, lower non-recoverable Montana electric supply costs, and lower property and other taxes, partly offset by lower electric and natural gas retail volumes, higher depreciation and depletion expense, and higher operating, interest and income tax expense.As of December 31, 2023, our total consolidated net liquidity was approximately $241.2 million, including $9.2 million of cash and $232.0 million of revolving credit facility availability with no letters of credit outstanding. This compares to total net liquidity one year ago at December 31, 2022 of $108.5 million.IncomeIncomeEPSIncomeIncomeEPSIncomeIncomeEPSIncomeIncomeEPSIncomeIncomeEPSIncomeIncomeEPS
(GlobeNewsWire)