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Northwest Natural Gas Company, dba NW Natural
(NYSE:NWN), posted the third highest annual earnings results in the company’s history, with earnings per share of $2.73 on net income of $72.7 million, compared to record results in 2009 of $2.83 per share on net income of $75.1 million, for a 3 percent decrease year-over-year. The decrease was due mainly to large gas cost sharing gains in 2009 that did not repeat at the same level in 2010, and start-up costs at Gill Ranch. In addition, the company’s 2010 results benefited from a property tax refund, and an increase in net operating revenues from the utility’s regulatory adjustment for income taxes paid.
"Last year was a strong year for NW Natural on a number of fronts," said Gregg Kantor, President and Chief Executive Officer. "In addition to solid earnings and the completion of our new non-utility storage facility near Fresno, Calif., we were able to lower rates to our customers, and we were ranked by J.D. Powers as the number one gas utility in the nation for customer satisfaction."
Full-Year financial and operating highlightsIncome and earnings per share
For the 12-month period ending Dec. 31, 2010, NW Natural earnings per share were $2.73 per share on net income of $72.7 million. This compared to the company’s results in 2009 of $2.83 per share on net income of $75.1 million. The decrease in earnings per share was primarily due to gas cost sharing benefits in 2009 ($15.1 million) that did not repeat at the same level in 2010 ($1.6 million), and initial start-up costs at the Gill Ranch gas storage facility in California.
In 2010, utility operations provided earnings per share of $2.49 per share on net income of $66.3 million. This compared to $2.48 per share on net income of $66.0 million in 2009. Oregon’s gas utilities are subject to an annual earnings review to determine if the utility is earning above its allowed return on equity (ROE). In NW Natural’s case, if utility earnings exceed the allowed ROE threshold, the company is required to defer 33 percent of the amount above that level for refund to customers. Based on 2010 utility results, the company expects to refund approximately $0.5 million to customers in next year’s rates.