SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition period from to
Commission File No. 0-994
NORTHWEST NATURAL GAS COMPANY
(Exact name of registrant as specified in its charter)
| Oregon | 93-0256722 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
220 N.W. Second Avenue, Portland, Oregon 97209
(Address of principal executive offices) (Zip Code)
Registrant’s Telephone Number, including area code: (503) 226-4211
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
At May 5, 2004, 27,297,974 shares of the registrant’s Common Stock, $3 1/6 par value (the only class of Common Stock) were outstanding.
For the Quarterly Period Ended March 31, 2004
| Page Number | ||||
| PART I. FINANCIAL INFORMATION | ||||
| Item 1. |
Consolidated Financial Statements |
|||
| Consolidated Statements of Income for the three-month periods ended March 31, 2004 and 2003 |
3 | |||
| 4 | ||||
| Consolidated Balance Sheets at March 31, 2004 and 2003 and Dec. 31, 2003 |
5 | |||
| Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2004 and 2003 |
7 | |||
| Consolidated Statements of Capitalization at March 31, 2004 and 2003 and Dec. 31, 2003 |
8 | |||
| 9 | ||||
| Item 2. |
Management’s Discussion and Analysis of Results of Operations and Financial Condition |
15 | ||
| Item 3. |
28 | |||
| Item 4. |
28 | |||
| PART II. OTHER INFORMATION | ||||
| Item 1. |
28 | |||
| Item 2. |
Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
29 | ||
| Item 5. |
29 | |||
| Item 6. |
30 | |||
| 30 | ||||
2
PART I. FINANCIAL INFORMATION
Consolidated Statements of Income
(Unaudited)
| Three Months Ended March 31, |
|||||||
| Thousands, except per share amounts |
2004 |
2003 |
|||||
| Operating revenues: |
|||||||
| Gross operating revenues |
$ | 254,450 | $ | 206,539 | |||
| Cost of sales |
142,416 | 107,951 | |||||
| Net operating revenues |
112,034 | 98,588 | |||||
| Operating expenses: |
|||||||
| Operations and maintenance |
25,510 | 24,071 | |||||
| Taxes other than income taxes |
12,453 | 10,817 | |||||
| Depreciation and amortization |
13,906 | 13,166 | |||||
| Total operating expenses |
51,869 | 48,054 | |||||
| Income from operations |
60,165 | 50,534 | |||||
| Other income (expense) |
23 | (584 | ) | ||||
| Interest charges - net of amounts capitalized |
8,944 | 8,946 | |||||
| Income before income taxes |
51,244 | 41,004 | |||||
| Income taxes |
18,632 | 14,600 | |||||
| Net income |
32,612 | 26,404 | |||||
| Redeemable preferred stock dividend requirements |
— | 147 | |||||
| Earnings applicable to common stock |
$ | 32,612 | $ | 26,257 | |||
| Average common shares outstanding: |
|||||||
| Basic |
25,972 | 25,617 | |||||
| Diluted |
26,314 | 25,975 | |||||
| Earnings per share of common stock: |
|||||||
| Basic |
$ | 1.26 | $ | 1.03 | |||
| Diluted |
$ | 1.24 | $ | 1.01 | |||
See Notes to Consolidated Financial Statements
3
PART I. FINANCIAL INFORMATION
Consolidated Statements of Earnings Invested in the Business and
Comprehensive Income
(Unaudited)
| Three Months Ended March 31, | ||||||||||||||
| Thousands |
2004 |
2003 | ||||||||||||
| Earnings invested in the business: |
||||||||||||||
| Balance at beginning of period |
$ | 170,053 | $ | 157,136 | ||||||||||
| Net income |
32,612 | $ | 32,612 | 26,404 | $ | 26,404 | ||||||||
| Cash dividends paid: |
||||||||||||||
| Redeemable preferred stock |
— | (147 | ) | |||||||||||
| Common stock |
(8,434 | ) | (8,063 | ) | ||||||||||
| Balance at end of period |
$ | 194,231 | $ | 175,330 | ||||||||||
| Accumulated other comprehensive income (loss): |
||||||||||||||
| Balance at beginning of period |
$ | (1,016 | ) | — | $ | (3,084 | ) | — | ||||||
| Comprehensive income |
$ | 32,612 | $ | 26,404 | ||||||||||
| Balance at end of period |
$ | (1,016 | ) | $ | (3,084 | ) | ||||||||
See Notes to Consolidated Financial Statements
4
PART I. FINANCIAL INFORMATION
Consolidated Balance Sheets
| Thousands |
March 31, 2004 (Unaudited) |
March 31, 2003 (Unaudited) |
Dec. 31, 2003 |
|||||||||
| Assets: |
||||||||||||
| Plant and property: |
||||||||||||
| Utility plant |
$ | 1,679,267 | $ | 1,563,162 | $ | 1,659,089 | ||||||
| Less accumulated depreciation |
481,829 | 445,316 | 471,716 | |||||||||
| Utility plant - net |
1,197,438 | 1,117,846 | 1,187,373 | |||||||||
| Non-utility property |
23,861 | 22,176 | 23,395 | |||||||||
| Less accumulated depreciation and amortization |
4,969 | 4,518 | 4,855 | |||||||||
| Non-utility property - net |
18,892 | 17,658 | 18,540 | |||||||||
| Total plant and property |
1,216,330 | 1,135,504 | 1,205,913 | |||||||||
| Other investments |
13,801 | 12,462 | 12,635 | |||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
2,788 | 44,323 | 4,706 | |||||||||
| Accounts receivable |
70,330 | 61,541 | 53,976 | |||||||||
| Allowance for uncollectible accounts |
(2,638 | ) | (2,709 | ) | (1,763 | ) | ||||||
| Accrued unbilled revenue |
31,788 | 30,548 | 59,109 | |||||||||
| Inventories of gas, materials and supplies |
38,006 | 32,873 | 50,859 | |||||||||
| Prepayments and other current assets |
19,705 | 23,735 | 32,661 | |||||||||
| Total current assets |
159,979 | 190,311 | 199,548 | |||||||||
| Regulatory assets: |
||||||||||||
| Income tax asset |
64,475 | 47,975 | 63,449 | |||||||||
| Deferred gas costs receivable |
9,544 | — | — | |||||||||
| Unamortized costs on debt redemptions |
7,685 | 6,392 | 7,803 | |||||||||
| Other |
3,917 | 4,665 | 6,020 | |||||||||
| Total regulatory assets |
85,621 | 59,032 | 77,272 | |||||||||
| Other assets: |
||||||||||||
| Investment in life insurance |
60,531 | 55,264 | 59,710 | |||||||||
| Fair value of non-trading derivatives |
36,069 | 22,264 | 23,885 | |||||||||
| Other |
12,903 | 12,381 | 12,369 | |||||||||
| Total other assets |
109,503 | 89,909 | 95,964 | |||||||||
| Total assets |
$ | 1,585,234 | $ | 1,487,218 | $ | 1,591,332 | ||||||
See Notes To Consolidated Financial Statements
5
NORTHWEST NATURAL GAS COMPANY
PART I. FINANCIAL INFORMATION
Consolidated Balance Sheets
| Thousands |
March 31, (Unaudited) |
March 31, (Unaudited) |
Dec. 31, 2003 |
|||||||||
| Capitalization and liabilities: |
||||||||||||
| Capitalization |
||||||||||||
| Common stock |
$ | 82,342 | $ | 81,214 | $ | 82,137 | ||||||
| Premium on common stock |
258,033 | 249,340 | 255,871 | |||||||||
| Earnings invested in the business |
194,231 | 175,330 | 170,053 | |||||||||
| Unearned stock compensation |
(852 | ) | (875 | ) | (729 | ) | ||||||
| Accumulated other comprehensive income (loss) |
(1,016 | ) | (3,084 | ) | (1,016 | ) | ||||||
| Total common stock equity |
532,738 | 501,925 | 506,316 | |||||||||
| Redeemable preferred stock |
— | 8,250 | — | |||||||||
| Long-term debt |
500,130 | 485,926 | 500,319 | |||||||||
| Total capitalization |
1,032,868 | 996,101 | 1,006,635 | |||||||||
| Current liabilities: |
||||||||||||
| Notes payable |
22,900 | — | 85,200 | |||||||||
| Accounts payable |
78,669 | 77,250 | 86,029 | |||||||||
| Long-term debt due within one year |
— | 20,000 | — | |||||||||
| Taxes accrued |
8,186 | |||||||||||