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NW Natural Reports Results for the Three & Six Months Ended June 30, 2013

PORTLAND, OR--(Marketwired - Aug 7, 2013) -  Northwest Natural Gas Company ( NYSE : NWN )

  • Consolidated earnings for the second quarter of 2013 were 8 cents per share on net income of $2.1 million, compared to 5 cents per share on income of $1.2 million for the second quarter of 2012.
  • Utility margin in the second quarter of 2013 increased $3.4 million or 5% over the same period last year.
  • Utility customer growth rate was 1.0% for the 12-month period ended June 30, 2013, compared to 0.9% for the 12-month period ended June 30, 2012.
  • Stipulated settlement agreements were filed with the Public Utility Commission of Oregon (OPUC) on July 11, 2013 related to the Company's new environmental cost recovery mechanism and its working gas inventory carrying cost recovery.
  • Dividend of 45.5 cents per share was declared on the Company's common stock. Currently, the Company's indicated annual dividend rate is $1.82 per share.

Northwest Natural Gas Company, dba NW Natural ( NYSE : NWN ), reported earnings of 8 cents per share on net income of $2.1 million for the second quarter of 2013, compared to earnings of 5 cents per share on net income of $1.2 million for the same period in 2012. The Company reports lower earnings during the second and third quarters due to lower customer usage in the spring and summer months. Earnings per share for the first six months of 2013 were $1.47 on net income of $39.8 million, compared to $1.54 per share on net income of $41.5 million for the first six months of 2012.

"The Company performed as expected in the quarter, with margins up over last year as we saw the timing differences created by the recent rate case turning around," said Gregg Kantor, President and Chief Executive Officer. "In addition, filing the settlements on two key policy issues marked significant progress toward resolution of our open regulatory dockets. We are pleased with the outcome of the settlements and believe the process resulted in a fair decision for all parties involved."

Financial and operating results

Consolidated income and earnings per share
For the quarter, consolidated earnings were 8 cents per share on net income of $2.1 million. This compared to the Company's 2012 results of 5 cents per share on net income of $1.2 million. The growth in net income was primarily due to utility margin increases from the timing impacts of higher fixed monthly charges and the new decoupling baseline established in the 2012 Oregon rate case. In addition, the earnings increase was tied to utility margin gains from the utility's customer growth and gas reserve investments, as well as higher net income from gas storage operations.

For the six months ended June 30, 2013, NW Natural consolidated earnings were $1.47 on net income of $39.8 million. This compared to $1.54 per share on net income of $41.5 million for the first six months of 2012. The decrease in net income was primarily due to the negative first quarter impacts from revenue timing changes in fixed monthly charges and the new decoupling baseline. Partly offsetting these decreases were utility margin gains from the utility's customer growth and gas reserve investments, as well as higher net income from gas storage operations.

Results of utility operations
Utility net income
For the second quarter of 2013, utility operations provided net income of $0.7 million, compared to $0.1 million for the same quarter last year. Utility net income was positively affected by a $3.4 million increase in utility margin, which was primarily attributable to timing differences resulting in a gain of $1.7 million from the higher fixed monthly charges and $1.3 million from the new decoupling baseline. In addition, margin increased approximately $1.4 million from revenues related to the utility's customer growth and rate-base return on our gas reserve investment. Partly offsetting these benefits was a $1.6 million increase in operations and maintenance expense, as well as an $0.8 million increase in depreciation expense.

For the six months ended June 30, 2013, utility operations provided earnings of $1.36 per share on net income of $36.7 million, compared to $39.6 million or $1.47 per share for the same period last year. Net income was negatively affected by a $2.5 million decrease in utility margin, which was primarily attributable to timing differences that resulted in losses of $1.1 million from changes in fixed monthly charges and $1.1 million from the new decoupling baseline. In addition, margin decreased $1.1 million related to the overall revenue requirement decrease from the Oregon rate case and by $3.0 million from lower gas cost incentive sharing gains. Partly offsetting these margin decreases was a $3.2 million increase in margin related to customer growth and the return on our gas reserve investment. Also contributing to the period's decrease in net income was a $1.7 million increase in depreciation expense.

Utility volume and margin results
For the second quarter of 2013, total utility gas sales and transportation deliveries, excluding deliveries of gas stored for others, were 212 million therms, compared to 219 million therms for 2012, while utility margin increased 5% or $3.4 million compared to last year as outlined above. The 3% decrease in volumes was mainly due to the effects of warmer weather in the period compared to last year and average weather.

For the six month period, total utility gas sales and transportation deliveries were 612 million therms, down 2% from 627 million therms in 2012. Utility margin for the first six months of 2013 decreased 1% or $2.5 million compared to last year. The year-to-date decrease in usage was mainly due to weather that was 6% warmer than a year ago and 2% warmer than average. 

Residential and Commercial Sales. Volumes sold to residential and commercial customers for the second quarter of 2013 were 103 million therms, down 4% compared to 108 million therms for the second quarter last year. The decreased usage was primarily due to warmer weather. Utility margins from residential and commercial customers for the quarter totaled $57.3 million, compared to $52.7 million for the second quarter of 2012 in part due to the timing differences mentioned above. Also affecting the period was the extension of the weather normalization mechanism to the end of May instead of May 15th, which further reduced the effect of weather on earnings during the quarter.

Volumes sold to residential and commercial customers for the first six months of 2013 were 372 million therms, down 3% from 384 million therms for the first six months of 2012. The decreased usage was primarily due to 6% warmer weather than a year ago. Utility margin from residential and commercial customers for the first six months totaled $174.7 million, including weather normalization and decoupling adjustments, compared to $174.1 million for the same period last year.

NW Natural's weather normalization mechanism in Oregon adjusted utility margin down by $4.0 million for the first six months of 2013 while the decoupling mechanism adjusted utility margin up by $3.9 million for the same period of 2013. As a result of changes to the weather normalization and decoupling mechanisms in the 2012 Oregon general rate case, the mechanisms' results for 2013 will not be comparable to prior periods, although the overall impact on revenues will generally be the same on an annualized basis.

Industrial Sales. Gas deliveries to industrial customers for the second quarter of 2013 were 109 million therms with margin of $6.5 million, compared to 111 million therms and $6.8 million in margin for the same period in 2012. These decreases were primarily due to lower usage by certain customers in the pulp and paper segment, partially offset by contributions from new customers.

Gas deliveries to industrial customers for the first six months of 2013 were 240 million therms with margin of $14.2 million, compared to 243 million therms and $14.4 million of margin for 2012. These decreases were also primarily due to lower usage by the customer segment mentioned above.

Gas Cost Sharing Mechanism. The company's gas cost incentive sharing mechanism in Oregon provided a margin contribution of $0.1 million for the first six months of 2013, compared to a margin contribution of $3.1 million for the first six months of 2012. This year's gas costs were stable and essentially equivalent to estimated PGA prices, while last year's actual gas costs were lower than estimated PGA prices.

Utility customer growth
NW Natural's customer growth rate for the trailing 12-month period ended June 30, 2013 was 1.0%, with NW Natural serving approximately 688,000 customers, compared to a growth rate of 0.9% for the 12-month period ended June 30, 2012. The Company added about 7,100 new customers during the last 12 months, compared to 5,900 customers added a year ago.

Gas reserves investment
The Company's gas reserve investment provides long-term gas price stability for our utility customers, and a rate-based return on investment for the Company. NW Natural has continued to invest in gas reserves, with $34.4 million invested for the first six months of 2013. As of June 30, 2013, our cumulative net investment balance in gas reserves was $89.1 million. This gas reserve investment acted to hedge approximately 6% of the Company's utility gas supply requirements for the first six months of 2013 compared to 3% a year ago.

Regulatory settlements and update
In July 2013, NW Natural filed stipulated settlement agreements in two dockets that addressed certain decisions deferred by the OPUC from the Company's 2012 general rate case. One settlement addresses implementation issues related to the new environmental cost recovery mechanism (also referred to as the SRRM), and the second settlement relates to recovery of carrying costs on working gas inventory. The settlements are subject to OPUC review and approval. The Company anticipates this review during the third quarter.

Under the settlement, approximately $97.6 million of environmental remediation expenses and associated carrying costs incurred by NW Natural through Dec. 31, 2012 were deemed prudently incurred, and insurance settlements finalized through 2012 (approximately $40.7 million) were deemed prudently executed. The insurance recoveries are applied against deferred expenses to reduce amounts to be amortized and collected from customers under the SRRM. As part of the settlement, NW Natural has agreed not to seek recovery of $7.0 million of its $97.6 million in deferred expenses and associated carrying costs incurred through Dec. 31, 2012. Upon OPUC approval, this amount and other related adjustments will result in a one-time, net after-tax charge of $3.4 million (equivalent to 13 cents per share).

With respect to the recovery of working gas inventory carrying costs, the parties agreed the Company would include $39.5 million in rate base, which approximates its average gas inventory account balance on an annual basis.

If the two settlements noted above are approved, only two items deferred for decision by the OPUC will remain open from the 2012 Oregon rate case: rate treatment for the Company's prepaid pension asset balance and regulatory incentive sharing percentages for interstate storage activities. We expect decisions on these remaining open dockets during 2013 or 2014.

Results of gas storage operations
For the second quarter of 2013, the gas storage segment contributed 5 cents per share on net income of $1.5 million, compared to 4 cents per share on net income of $1.1 million for the second quarter of 2012. Results reflected lower power costs and property tax expense at Gill Ranch, as well as higher revenues from third-party asset management services.

For the first six months, the gas storage segment contributed 11 cents per share on net income of $3.1 million, compared to 7 cents per share on net income of $1.9 million for the same period of 2012. The increase was due to higher revenues at Gill Ranch from additional contracted capacity in the first quarter of 2013 compared to a year earlier, and higher revenues from third-party asset management services.

Consolidated operations and maintenance expenses
For the second quarter of 2013, operations and maintenance expenses were $1.1 million or 3% higher compared to 2012. This increase was primarily due to higher utility payroll costs, as well as higher system maintenance and safety costs. Partially offsetting these increases was a decrease in gas storage expenses related to power expense management.

For the first six months of 2013, operations and maintenance expenses were $0.4 million or 1% higher compared to the same period for 2012. The slight increase was also primarily due to higher utility payroll costs, as well as higher system maintenance and safety costs. Partially offsetting these increases was a reduction in gas storage operating expenses and a decrease in utility bad debt expense. Utility bad debt expense as a percent of revenues remained well below 0.5% for the 12 months ended June 30, 2013.

Cash flows
Cash provided by operations for the first six months of 2013 was $160.1 million, compared to $175.4 million for the same period in 2012. The variance reflected net changes in working capital including accounts receivable and payable and deferred gas costs, plus lower contributions to qualified defined benefit pension plans.

Capital structure
NW Natural's capitalization at June 30, 2013 reflected 47.5% common equity, 43.9% long-term debt, and 8.6% short-term debt. This compared to 49.3% common equity, 43.1% long-term debt, and 7.6% short-term debt and current maturities of long-term debt at June 30, 2012.

Earnings guidance for 2013
As previously indicated in July, due to the one-time, net after-tax charge of $3.4 million (13 cents per share) for the expected 2013 regulatory settlement on environmental costs discussed above, the Company's previously stated earnings guidance of $2.15 to $2.35 per share has been revised down by 13 cents per share to $2.02 to $2.22 per share for 2013. The Company's 2013 earnings guidance assumes a continued slow economic recovery and customer growth, normal weather conditions, and no significant changes in prevailing legislative and regulatory policies or outcomes.

Dividend declaration
The board of directors of NW Natural declared a quarterly dividend of 45.5 cents a share on the Company's common stock. The dividends will be payable on Aug. 15, 2013 to shareholders of record on July 31, 2013. Currently, the Company's indicated annual dividend rate is $1.82 per share.

Presentation of results
In addition to presenting results of operations and earnings amounts in accordance with generally accepted accounting principles (GAAP), NW Natural has expressed certain measures in this press release on an equivalent cents-per-share basis, which are non-GAAP financial measures. These amounts reflect factors that directly impact the Company's earnings. In calculating these financial disclosures, we allocate income tax expense based on the effective tax rate, where applicable. These non-GAAP financial measures should not be used to the exclusion of GAAP financial measures. NW Natural believes that these non-GAAP financial measures provide useful information to the reader by removing the effects of variances in GAAP reported results of operations that we believe are not indicative of fundamental changes in our financial condition or results of operations.

Conference call arrangements
As previously reported, NW Natural will conduct a conference call and webcast starting at 8 a.m. Pacific Time (11 a.m. Eastern Time) on Aug. 7, 2013 to review the Company's financial and operating results for the three and six months ended June 30, 2013.

To hear the conference call live, please dial 1-888-317-6016 within the United States and 1-855-669-9657 from Canada. International callers can dial 1-412-317-6016. To access the conference replay, please call 1-877-344-7529 and enter the conference identification pass code (10030559). To hear the replay from international locations, please dial 1-412-317-0088.

To hear the conference by webcast, log on to NW Natural's corporate website at www.nwnatural.com.

Forward-looking statements
This report, and other presentations made by NW Natural from time to time, may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects" and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements regarding the following: plans, objectives, goals, strategies, future events, investments, hedge efficacy, gas reserves and their financial value and benefit, customer growth, weather, commodity and other costs, customer rates or rate recovery, financial positions, revenues and earnings, dividends, performance, timing or effects of future regulatory proceedings or future regulatory approvals, effects of regulatory mechanisms, including, but not limited to, SRRM, and other statements that are other than statements of historical facts.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed by reference to the factors described in Part I, Item 1A "Risk Factors", and Part II, Item 7 and Item 7A "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosure about Market Risk" in the Company's most recent Annual Report on Form 10-K and in Part I, Items 2 and 3 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosures About Market Risk", and Part II, Item 1A, "Risk Factors", in the Company's quarterly reports filed thereafter.

All forward-looking statements made in this report and all subsequent forward-looking statements, whether written or oral and whether made by or on behalf of the Company, are expressly qualified by these cautionary statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. New factors emerge from time to time and it is not possible for the Company to predict all such factors, nor can it assess the impact of each such factor or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements.

About NW Natural
NW Natural ( NYSE : NWN ) is headquartered in Portland, Ore., and provides natural gas service to about 688,000 residential, commercial, and industrial customers through 14,000 miles of mains and service lines in western Oregon and southwestern Washington. It is the largest independent natural gas utility in the Pacific Northwest with $2.8 billion in total assets. NW Natural and its subsidiaries currently own and operate underground gas storage facilities with storage capacity of approximately 31 Bcf in Oregon and California. Additional information is available at www.nwnatural.com.

   
   
NORTHWEST NATURAL GAS COMPANY  
Comparative Income Statement  
(Consolidated - Unaudited)  
                         
                         
    Three Months Ended  
In thousands, except per share amounts 06/30/13   06/30/12   Change     % Change  
Income from operations $ 13,083   $ 11,839   $ 1,244     11 %
Net income   2,126     1,227     899     73  
                         
Diluted average shares of common stock outstanding   26,999     26,896     103     --  
Basic earnings per share of common stock $ 0.08   $ 0.05   $ 0.03     60  
Diluted earnings per share of common stock   0.08     0.05     0.03     60  
                         
    Six Months Ended  
In thousands, except per share amounts 06/30/13   06/30/12   Change     % Change  
Income from operations $ 87,289   $ 90,505   $ (3,216 )   (4 )%
Net income   39,765     41,511     (1,746 )   (4 )
                         
Diluted average shares of common stock outstanding   26,991     26,879     112     --  
Basic earnings per share of common stock $ 1.48   $ 1.55   $ (0.07 )   (5 )
Diluted earnings per share of common stock   1.47     1.54     (0.07 )   (5 )
                         
    Twelve Months Ended  
In thousands, except per share amounts 06/30/13   06/30/12   Change     % Change  
Income from operations $ 138,964   $ 144,835   $ (5,871 )   (4 )%
Net income   57,033     61,750     (4,717 )   (8 )
                         
Diluted average shares of common stock outstanding   26,948     26,804     144     1  
Basic earnings per share of common stock $ 2.12   $ 2.31   $ (0.19 )   (8 )
Diluted earnings per share of common stock   2.12     2.30     (0.18 )   (8 )
                         

As reported in the first quarter of 2013, prior period amounts have been revised in the financial statements presented here to correct the error related to the rate used to calculate interest on regulatory assets. This error was not material to any annual or interim period. See Note 14 in the Form 10-Q for the period ended June 30, 2013, which we expect to file on or about Aug. 7, 2013 for more information.

               
               
NORTHWEST NATURAL GAS COMPANY              
Consolidated Balance Sheets (unaudited)   June 30,       June 30,  
In thousands   2013       2012  
Assets:              
Current assets:              
  Cash and cash equivalents $ 12,214     $ 4,002  
  Accounts receivable   39,061       13,459  
  Accrued unbilled revenue   14,692       12,921  
  Allowance for uncollectible accounts   (1,189 )     (2,653 )
  Regulatory assets   25,952       65,297  
  Derivative instruments   623       2,142  
  Inventories   62,412       68,868  
  Gas Reserves   15,324       11,021  
  Income taxes receivable   1,297       3,119  
  Other current taxes   8,781       8,606  
    Total current assets   179,167       186,782  
Non-current assets:              
  Property, plant and equipment   2,833,083       2,720,037  
  Less: Accumulated depreciation   833,851       791,021  
    Total property, plant and equipment, net   1,999,232       1,929,016  
  Gas reserves   113,762       65,026  
  Regulatory assets   393,652       362,290  
  Derivative instruments   1,054       1,170  
  Other investments   67,410       68,230  
  Restricted cash   4,000       4,000  
  Other non-current assets   14,312       13,936  
    Total non-current assets   2,593,422       2,443,668  
    Total assets $ 2,772,589     $ 2,630,450  
Liabilities and equity:              
Current liabilities:              
  Short-term debt $ 136,000     $ 113,200  
  Accounts payable   63,466       48,361  
  Taxes accrued   6,798       5,205  
  Interest accrued   6,404       5,607  
  Regulatory liabilities   16,644       20,748  
  Derivative instruments   9,392       29,407  
  Other current liabilities   34,446       42,336  
    Total current liabilities   273,150       264,864  
Long-term debt   691,700       641,700  
Deferred credits and other non-current liabilities:              
  Deferred tax liabilities   469,964       438,217  
  Regulatory liabilities   294,202       280,295  
  Pension and other postretirement benefit liabilities   214,125       185,844  
  Derivative instruments   1,754       2,130  
  Other non-current liabilities   79,145       82,665  
    Total deferred credits and other non-current liabilities   1,059,190       989,151  
Equity:              
  Common stock   359,772       352,955  
  Retained earnings   397,603       389,247  
  Accumulated other comprehensive loss   (8,826 )     (7,467 )
    Total equity   748,549       734,735  
    Total liabilities and equity $ 2,772,589     $ 2,630,450  
               
               
               
NORTHWEST NATURAL GAS COMPANY   Six Months Ended  
Consolidated Statements of Cash Flows (unaudited)   June 30,  
In Thousands   2013       2012  
Operating activities:              
  Net income $ 39,765     $ 41,511  
  Adjustments to reconcile net income to cash provided by operations:              
    Depreciation and amortization   37,737       36,049  
    Deferred tax liabilities   28,401       28,346  
    Non-cash expenses related to qualified defined benefit pension plans   2,773       4,109  
    Contributions to qualified defined benefit pension plans   (4,200 )     (18,400 )
    Deferred environmental expenditures - net of recoveries   (2,989 )     (3,925 )
    Other   3,403       1,459  
    Changes in assets and liabilities:              
      Receivables   63,102       114,117  
      Inventories   5,190       5,495  
      Taxes accrued   (1,535 )     (1,616 )
      Accounts payable   (22,155 )     (37,854 )
      Interest accrued   451       (250 )
      Deferred gas costs   (648 )     (11,830 )
      Other, net   10,847       18,171  
    Cash provided by operating activities   160,142       175,382  
Investing activities:              
  Capital expenditures   (55,055 )     (61,552 )
  Utility gas reserves   (34,397 )     (27,060 )
  Proceeds from sale of assets   6,580       --  
  Other   1,743       61  
    Cash used in investing activities   (81,129 )     (88,551 )
Financing activities:              
  Common stock issued, net   2,355       2,910  
  Long-term debt retired   --       (40,000 )
  Change in short-term debt   (54,250 )     (28,400 )
  Cash dividend payments on common stock   (24,509 )     (23,839 )
  Other   682       667  
    Cash used in financing activities   (75,722 )     (88,662 )
Increase (decrease) in cash and cash equivalents   3,291       (1,831 )
Cash and cash equivalents, beginning of period   8,923       5,833  
Cash and cash equivalents, end of period $ 12,214     $ 4,002  
               
Supplemental disclosure of cash flow information:              
  Interest paid $ 21,746     $ 21,652  
  Income taxes paid   --       2,648  
               
               
               
NORTHWEST NATURAL GAS COMPANY
Financial Highlights (Unaudited)
Second Quarter - 2013
 
                                               
In thousands, except per share amounts, customer, and degree day data Three Months Ended
June 30,
      Six Months Ended
June 30,
      Twelve Months Ended
June 30,
   
2013   2012    Change   2013   2012    Change   2013   2012    Change
Operating revenues $ 131,714   $ 103,991   27%   $ 409,575   $ 413,630    (1)%   $ 726,552   $ 769,198   (6)%
                                               
Operating expenses:                                              
  Cost of gas   59,142     34,498   71     201,501     204,253   (1)     352,583     392,128   (10)
  Operations and maintenance   33,217     32,138   3     66,974     66,570   1     129,881     130,327   --
  General taxes   7,342     7,417   (1)     16,074     16,253   (1)     30,419     30,710   (1)
  Depreciation and amortization   18,930     18,099   5     37,737     36,049   5     74,705     71,198   5
  Total operating expenses   118,631     92,152   29     322,286     323,125   --     587,588     624,363   (6)
Income from operations   13,083     11,839   11     87,289     90,505   (4)     138,964     144,835   (4)
Other income and expense, net   1,450     620   134     1,970     1,092   80     4,037     2,134   89
Interest expense, net   11,069     10,464   6     22,196     21,655   2     43,698     43,028   2
Income before income taxes   3,464     1,995   74     67,063     69,942   (4)     99,303     103,941   (4)
Income tax expense   1,338     768   74     27,298     28,431   (4)     42,270     42,191   --
Net income $ 2,126   $ 1,227   73   $ 39,765   $ 41,511   (4)   $ 57,033   $ 61,750   (8)
Common shares outstanding:                                              
  Average for period, basic   26,958     26,812         26,943     26,797         26,905     26,750    
  Average for period, diluted   26,999     26,896         26,991     26,879         26,948     26,804    
  End of period   26,972     26,827         26,972     26,827         26,972     26,827    
Earnings per share:                                              
  Basic $ 0.08   $ 0.05   60%   $ 1.48   $ 1.55   (5)%   $ 2.12   $ 2.31   (8)%
  Diluted   0.08     0.05         1.47     1.54         2.12     2.30    
Dividends declared per share of common stock   0.455     0.445         0.910     0.890         1.79     1.77    
Book value per share, end of period   27.75     27.39         27.75     27.39         27.75     27.39    
Market closing price, end of period   42.48     47.60         42.48     47.60         42.48     47.60    
Balance sheet data, end of period:                                              
  Total assets $ 2,772,589   $ 2,630,450       $ 2,772,589   $ 2,630,450       $ 2,772,589   $ 2,630,450    
  Total equity   748,549     734,735         748,549     734,735         748,549     734,735    
  Long-term debt   691,700     641,700         691,700     641,700         691,700     641,700    
  (including amounts due in one year)                                              
Utility operating statistics:                                              
Customers, end of period   688,067     680,936   1.0%     688,067     680,936   1.0%     688,067     680,936   1.0%
Utility volumes, therms:                                              
  Residential and commercial sales   103,313     107,771         371,977     383,930         625,932     662,089    
  Industrial firm   7,586     7,593         17,066     18,212         33,786     36,444    
  Industrial interruptible   13,443     14,190         30,512     31,920         58,152     59,496    
  Transportation   87,755     89,463         192,732     193,114         379,010     377,335    
Total utility volumes sold and delivered   212,097     219,017         612,287     627,176         1,096,880     1,135,364    
Utility operating revenues:                                              
  Residential and commercial sales $ 110,155   $ 83,706       $ 366,521   $ 370,720       $ 638,138   $ 681,361    
  Industrial firm   5,532     4,477         12,314     12,786         25,032     27,648    
  Industrial interruptible   6,397     4,955         14,522     15,003         28,457     31,087    
  Transportation   3,794     3,800         7,912     7,754         15,736     15,688    
  Regulatory adjustment for income taxes paid   --     --         --     --         --     3    
  Other revenues   1,242     1,578         2,771     3,013         5,693     4,036    
  Less: Revenue taxes   3,177     2,578         10,438     10,433         18,435     19,376    
Total utility operating revenues   123,943     95,938         393,602     398,843         694,621     740,447    
  Less: Cost of gas   59,142     34,498         201,501     204,253         352,583     392,097    
Utility margin $ 64,801   $ 61,440       $ 192,101   $ 194,590       $ 342,038   $ 348,350    
Degree days:                                              
  Average (25-year average)   691     683         2,546     2,569         4,256     4,285     
  Actual   591     705         2,495     2,659         3,988     4,393     
Percent colder (warmer) than average weather   -14%     3%         -2%     4%         -6%     3%