NWN Reports Results for Quarter Ended March 31, 2002.Business Editors PORTLAND Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. , Ore.--(BUSINESS WIRE)--April 24, 2002 Northwest For names and places containing the slightly longer word 'northwestern' (or variants), see . Northwest or north west is the ordinal direction halfway between north and west on a compass. It is the opposite of southeast. Natural Gas Company (NYSE NYSE See: New York Stock Exchange :NWN NWN Neverwinter Nights (computer game) NWN Northwest Nissans NWN Nowhere Near ), dba NW Natural, reported consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: earnings applicable to common stock of $33.9 million, equivalent to $1.32 a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the three months ended March 31, 2002, Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a G. Reiten, chairman and chief executive officer, said Wednesday Wednesday: see week. . These results compare to earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $25.3 million, or $0.99 a diluted share, in the first quarter of 2001. "Our 2002 fiscal year is off to a fine start," Reiten said, "primarily due to cooler-than-average weather, services to electric generation customers and advantageous gas purchasing." First-Quarter Detail Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: (gross revenues minus cost of sales) in the first quarter was $111 million, up $19 million, or 21 percent, from last year. Residential and commercial margin was up 12 percent, while margin from industrial and electric generation customers was up 25 percent. Total gas deliveries were 393 million therms, up 2 percent. Sales to residential and commercial customers were 244 million therms, up 4 percent from 2001, while sales and transportation deliveries to industrial customers were 149 million therms, about the same as last year. In the residential and commercial markets, the higher sales and operating margin in the first quarter of 2002 was primarily due to customer growth and colder weather, which more than offset lower consumption patterns in these temperature-sensitive temperature-sensitive living organisms that are sensitive to air temperatures outside of a narrow range, e.g. virus vaccine that does not replicate at deep body temperature, but does replicate in the respiratory tract. market segments. NW Natural had 546,806 customers as of March 31, 2002, up 3.6 percent from a year earlier. Weather in NW Natural's service area in Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. and Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. was 5 percent colder than the 20-year average for the period and 2 percent colder than last year's first quarter. Residential and commercial customers' consumptions per heating degree day Heating degree day (HDD) and cooling degree day (CDD) are quantitative indices demonstrated to reflect demand for energy to heat or cool houses and businesses. These indices are derived from daily temperature observations and power demand. were about 8 percent and 12 percent lower, respectively, during the first quarter of 2002 than they averaged in the first quarters of 1996-99. The prior years, before the significant increases in gas commodity prices that have had the effect of depressing gas consumption patterns in the past two years, are the period on which NW Natural's general rate levels are based. The Company estimates that the lower consumptions per degree day reduced residential and commercial sales in the first quarter by about 21 million therms and margin revenues by about $6.0 million, equivalent to 14 cents a share. In the industrial and electric generation markets, the higher margin was mostly due to services to electric generation customers. Margin from the electric generation market was $2.3 million in the first quarter of 2002, compared to $0.4 million in the first quarter of 2001, an improvement equivalent to about 5 cents a share of earnings. Contracts for service to two new customers in this market went into effect in the second half of 2001 and continue in place at least through the end of the second quarter of 2002. Margin from the industrial market was $12.4 million in the first quarter of 2002, up 6 percent from $11.7 million in the first quarter of 2001. NW Natural has a Purchased Gas Adjustment (PGA (1) (Professional Graphics Adapter) An early IBM PC display standard for 3D processing with 640x480x256 resolution. It was not widely used. (2) (Programmable Gate Array) See gate array and FPGA. ) tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic in Oregon under which it absorbs 33 percent of any excess cost of gas, or retains 33 percent of any savings, both as compared to the gas commodity prices built into rates. NW Natural's share of the savings realized from its gas commodity purchases in the first quarter of 2002 contributed $8.7 million of margin, equivalent to 21 cents a share of earnings. The equivalent result in the first quarter of 2001 was an absorption of $1.4 million of excess gas costs, generating 3 cents a share of losses. The Company credited the remaining portion of its purchased gas cost savings for the quarter as defined under the Oregon PGA, about $17.4 million, to a deferred account for distribution to Oregon customers, with interest. NW Natural is consulting with the Oregon Public Utility Commission about the timing and manner of distributing the cost savings to customers. Updated Outlook for 2002 NW Natural estimates that its earnings for the quarter ending June June: see month. 30, 2002, will be in the range of 10 to 20 cents a share, and now estimates that its stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." earnings for 2002 will be in the range of $1.90 to $2.05 a share. The new estimate for the full year includes the impact of costs the Company expects to be higher than previously projected, by amounts totaling about 8 cents a share, in the categories of interest expense on deferred regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. accounts, pension expense, bad debt expense and postage POSTAGE. The money charged by law for carrying letters, packets and documents by mail. By act of congress of March 3, 1851, Minot's Statute at Large, U. S. 587, it is enacted as follows: 2.-Sec. 1. expense. Consistent with prior earnings guidance for the year, the new estimate assumes average weather conditions for the balance of the year and the approval of a mechanism pending before the Oregon Public Utility Commission that would stabilize stabilize See peg. margin revenues at levels close to those reflected in NW Natural's most recent general rate case. If customers' gas consumption patterns as experienced in 2001 and early 2002 were to continue for the full year but a margin stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders mechanism were not approved, it could reduce margin revenues for the balance of the year by the equivalent of 13-18 cents a share of earnings. The new estimate does not reflect any effects of the proposed acquisition of Portland General Electric This article is not to be confused with PG&E, a San Francisco, California-based utility company Portland General Electric (PGE) (NYSE: POR) is an electrical utility, formerly owned by the Houston-based Enron Corporation (but now independent), that distributes electricity to Company (PGE PGE Pacific Gas and Electric Company PGE Portland General Electric PGE Prostaglandin E PGE Platinum Group Elements PGE Pacific Great Eastern (Railroad) PGE Phenyl Glycidyl Ether PGE Perfect Girl Evolution ). Through March 31, 2002, NW Natural has recorded approximately $11.9 million of costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the acquisition as deferred costs for the purchase of PGE. If the acquisition is not completed, NW Natural would recognize these costs incurred as current expense. Dividends Declared The Board of Directors of NW Natural has declared a quarterly dividend of 31.5 cents a share on the Company's common stock, as well as regular quarterly dividends on its preferred and preference stock. The dividends will be paid on May 15, 2002, to shareholders of record on April 30, 2002. Note: This report contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . The Company's future operating results will be affected by various uncertainties and risk factors, many of which are beyond the Company's control, including governmental policy and regulatory action, the competitive environment and economic factors, as well as weather conditions. For a more complete description of these uncertainties and risk factors, see the Company's filing with the Securities and Exchange Commission on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended Dec. 31, 2001.
NORTHWEST NATURAL GAS COMPANY
Comparative Income Statement
(Consolidated -- Unaudited)
Three Months Ended
3/31/02 3/31/01 Increase
------- ------- --------
1.Gross Operating Revenues $278,563,000 $217,341,000 $ 61,222,000
2.Net Income $ 34,447,000 $ 25,907,000 $ 8,540,000
a/3.Earnings Applicable to
Common Stock $ 33,852,000 $ 25,299,000 $ 8,553,000
4.Average Shares of
Common Stock
Outstanding 25,266,000 25,207,000 59,000
a/5.Basic Earnings Per Share
of Common Stock $ 1.34 $ 1.00 $ 0.34
a/6.Diluted Earnings Per Share
of Common Stock $ 1.32 $ 0.99 $ 0.33
Twelve Months Ended Increase
3/31/02 3/31/01 (Decrease)
------- ------- ----------
1.Gross Operating Revenues $711,474,000 $562,802,000 $148,672,000
2.Net Income $ 58,727,000 $ 44,469,000 $ 14,258,000
a/3.Earnings Applicable to
Common Stock $ 56,339,000 $ 42,027,000 $ 14,312,000
4.Average Shares of
Common Stock
Outstanding 25,174,000 25,203,000 (29,000)
a/5.Basic Earnings Per Share
of Common Stock $ 2.24 $ 1.67 $ 0.57
a/6.Diluted Earnings Per Share
of Common Stock $ 2.21 $ 1.65 $ 0.56
a/After allowance for preferred and preference stock dividend
requirements.
NORTHWEST NATURAL GAS COMPANY
Financial Highlights
(Thousands, except per-share amounts)
First Quarter -- 2002
3 Months Ended 12 Months Ended
March 31 March 31
2002 2001 2002 2001
------------------- -------------------
------------------- -------------------
Gross Operating Revenues $ 278,563 $ 217,341 $ 711,474 $ 562,802
Cost of Sales 167,897 125,688 416,450 306,287
------------------- -------------------
Operating Margin 110,666 91,653 295,024 256,515
Operating Expense:
O&M 22,169 21,043 85,046 79,854
Other Taxes 12,002 9,694 34,548 29,381
DD&A 12,814 12,128 50,326 48,129
------------------- -------------------
Total Operating Expenses 46,985 42,865 169,920 157,364
------------------- -------------------
Operating Income 63,681 48,788 125,104 99,151
Other Income (Expense) (870) 606 (142) 3,777
Interest Charges -- Net 8,149 8,260 33,694 33,256
Income Tax Expense 20,215 15,227 32,541 25,145
------------------- -------------------
Net Income from Continuing
Operations 34,447 25,907 58,727 44,527
Loss on sale of discontinued
segment -- net of tax - - - (58)
------------------- -------------------
Net Income 34,447 25,907 58,727 44,469
Preferred and Preference
Dividends 595 608 2,388 2,442
------------------- -------------------
Earnings Applicable to Common
Stock $ 33,852 $ 25,299 $ 56,339 $ 42,027
=================== ===================
Common Shares Outstanding:
Average for Period 25,266 25,207 25,174 25,203
End of period 25,308 25,135 25,308 25,135
Earnings per Share:
Basic $ 1.34 $ 1.00 $ 2.24 $ 1.67
Diluted $ 1.32 $ 0.99 $ 2.21 $ 1.65
Dividends Paid Per Share $ 0.315 $ 0.31 $ 1.25 $ 1.24
Common Stock Equity $ 496,280 $ 467,440 $ 496,280 $ 467,440
Book Value Per Share --
end of period $ 19.61 $ 18.60 $ 19.61 $ 18.60
Market Closing Price --
end of period $ 28.01 $ 24.00 $ 28.01 $ 24.00
Total Customers -- end of
period 546,806 528,008 546,806 528,008
Gas Deliveries (therms)
Res. & Comm. Customers 244,315 234,650 603,794 601,366
Industrial Firm 23,755 23,464 80,069 75,957
Industrial Interruptible 14,375 13,798 64,174 54,860
Transportation 110,732 112,473 384,042 415,778
------------------- -------------------
Total 393,177 384,385 1,132,079 1,147,961
Gas Revenues
Res. & Comm. Customers $ 241,596 $ 192,542 $ 582,969 $ 479,802
Industrial Firm 17,865 13,658 53,869 40,078
Industrial Interruptible 9,896 7,225 36,954 24,875
Transportation 6,452 4,419 22,669 19,924
Other revenues 173 (1,782) (370) (3,790)
------------------- -------------------
Total $ 275,982 $ 216,062 $ 696,091 $ 560,889
Degree Days
Normal (20-year average) 1,836 1,827 4,211 4,189
Actual 1,920 1,890 4,355 4,329
Colder (warmer) than normal 5% 3% 3% 3%
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