Core Insights - During market turbulence, investors often seek dividend-yielding stocks, which typically have high free cash flows and offer substantial dividends [1] Group 1: Analyst Ratings and Stock Performance - Edison International (EIX) has a dividend yield of 6.02%. Barclays analyst Nicholas Campanella maintained an Overweight rating and raised the price target from $64 to $65 on August 4, 2025, with an accuracy rate of 68%. Morgan Stanley analyst David Arcaro maintained an Underweight rating and reduced the price target from $52 to $51 on June 18, 2025, with an accuracy rate of 71%. Recent news indicated that Edison International posted disappointing second-quarter earnings [7] - Northwest Natural Holding Company (NWN) has a dividend yield of 4.89%. Stifel analyst Selman Akyol maintained a Buy rating and increased the price target from $45 to $49 on June 13, 2025, with an accuracy rate of 71%. Wells Fargo analyst Sarak Akers maintained an Equal-Weight rating and raised the price target from $45 to $47 on May 7, 2025, with an accuracy rate of 69%. Recent news showed mixed quarterly results for Northwest Natural [7] - NorthWestern Energy Group, Inc. (NWE) has a dividend yield of 4.77%. Ladenburg Thalmann analyst Paul Fremont downgraded the stock from Buy to Neutral and cut the price target from $57.5 to $56 on June 2, 2025, with an accuracy rate of 61%. Barclays analyst Eric Beaumont maintained an Overweight rating and raised the price target from $56 to $59 on April 22, 2025, with an accuracy rate of 69%. Recent news indicated that NorthWestern posted better-than-expected quarterly results [7]

PART I. FINANCIAL INFORMATION [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) Cautionary statements outline factors that could cause actual results to differ from expectations, emphasizing inherent uncertainties and risks - Forward-looking statements are identified by words such as 'anticipates,' 'assumes,' 'intends,' 'expects,' and similar references to future periods[8](index=8&type=chunk) - Key areas covered by forward-looking statements include plans, projections, objectives, economic conditions (inflation, interest rates, recession), earnings and dividends, capital expenditures, climate change initiatives, renewable natural gas, growth, customer rates, and regulatory outcomes[8](index=8&type=chunk)[11](index=11&type=chunk) - Actual results may differ materially due to inherent uncertainties, risks, and changes in circumstances, as discussed in the 2024 Annual Report on Form 10-K and this report[9](index=9&type=chunk) [Item 1. Unaudited Financial Statements](index=5&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) Unaudited consolidated financial statements for NW Holdings and NW Natural are presented, covering comprehensive income, balance sheets, shareholders' equity, and cash flows [Consolidated Statements of Comprehensive Income (NW Holdings)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20of%20Northwest%20Natural%20Holding%20Company) This section presents NW Holdings' unaudited consolidated statements of comprehensive income for the three and six months ended June 30 | In thousands, except per share data | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating revenues | $236,194 | $211,714 | $730,478 | $645,184 | | Total operating expenses | $208,983 | $196,008 | $548,913 | $519,651 | | Income from operations | $27,211 | $15,706 | $181,565 | $125,533 | | Net income (loss) | $(2,500) | $(2,787) | $85,416 | $61,036 | | Comprehensive income (loss) | $(2,327) | $(2,462) | $85,634 | $61,585 | | Basic EPS | $(0.06) | $(0.07) | $2.12 | $1.61 | | Diluted EPS | $(0.06) | $(0.07) | $2.11 | $1.60 | - NW Holdings' operating revenues increased by **$24.48 million (11.56%)** for the three months ended June 30, 2025, and by **$85.29 million (13.22%)** for the six months ended June 30, 2025, compared to the same periods in 2024[12](index=12&type=chunk) - Net loss for NW Holdings decreased from **$(2.787) million** in Q2 2024 to **$(2.500) million** in Q2 2025, while net income for the six months ended June 30, 2025, increased by **$24.38 million (39.94%)** to **$85.416 million**[12](index=12&type=chunk) [Consolidated Balance Sheets (NW Holdings)](index=6&type=section&id=Consolidated%20Balance%20Sheets%20of%20Northwest%20Natural%20Holding%20Company) This section presents NW Holdings' unaudited consolidated balance sheets as of June 30, 2025, June 30, 2024, and December 31, 2024 | In thousands | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :---------------------------- | :------------ | :------------ | :---------------- | | Total current assets | $466,116 | $423,120 | $557,774 | | Total non-current assets | $5,320,447 | $4,399,246 | $4,676,542 | | Total assets | $5,786,563 | $4,822,366 | $5,234,316 | | Total current liabilities | $683,867 | $435,540 | $649,017 | | Long-term debt | $2,086,650 | $1,574,751 | $1,679,355 | | Total deferred credits and other non-current liabilities | $1,556,808 | $1,465,359 | $1,520,573 | | Total equity | $1,459,238 | $1,346,716 | $1,385,371 | | Total liabilities and equity | $5,786,563 | $4,822,366 | $5,234,316 | - NW Holdings' total assets increased by **$964.197 million (19.99%)** from June 30, 2024, to June 30, 2025, primarily driven by increases in property, plant, and equipment, and goodwill[14](index=14&type=chunk) - Total liabilities for NW Holdings increased by **$851.155 million (25.99%)** from June 30, 2024, to June 30, 2025, largely due to higher long-term debt and current liabilities[16](index=16&type=chunk) [Consolidated Statements of Shareholders' Equity (NW Holdings)](index=8&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity%20of%20Northwest%20Natural%20Holding%20Company) This section presents NW Holdings' unaudited consolidated statements of shareholders' equity for the three and six months ended June 30 | In thousands, except per share amounts | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total shareholders' equity, beginning balances | $1,456,218 | $1,343,386 | $1,385,371 | $1,283,838 | | Net income (loss) | $(2,500) | $(2,787) | $85,416 | $61,036 | | Dividends on common stock | $(19,778) | $(18,553) | $(39,824) | $(37,229) | | Total shareholders' equity, ending balances | $1,459,238 | $1,346,716 | $1,459,238 | $1,346,716 | | Dividends per share of common stock | $0.4900 | $0.4875 | $0.9800 | $0.9750 | - NW Holdings' total shareholders' equity increased by **$112.522 million (8.36%)** from June 30, 2024, to June 30, 2025[17](index=17&type=chunk) - Dividends per share of common stock increased from **$0.4875** in Q2 2024 to **$0.4900** in Q2 2025, and from **$0.9750** to **$0.9800** for the six months ended June 30, 2025[17](index=17&type=chunk) [Consolidated Statements of Cash Flows (NW Holdings)](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20of%20Northwest%20Natural%20Holding%20Company) This section presents NW Holdings' unaudited consolidated statements of cash flows for the six months ended June 30 | In thousands | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :----------------------------- | :----------------------------- | | Cash provided by operating activities | $281,770 | $246,076 | | Cash used in investing activities | $(555,887) | $(200,441) | | Cash provided (used) by financing activities | $332,799 | $(14,220) | | Increase in cash, cash equivalents and restricted cash | $58,682 | $31,415 | | Cash, cash equivalents and restricted cash, end of period | $106,664 | $81,039 | - Cash provided by operating activities for NW Holdings increased by **$35.694 million (14.50%)** for the six months ended June 30, 2025, compared to the same period in 2024[18](index=18&type=chunk) - Cash used in investing activities significantly increased by **$355.446 million (177.33%)** for the six months ended June 30, 2025, primarily due to acquisitions[18](index=18&type=chunk) - Cash provided by financing activities saw a substantial increase of **$347.019 million**, shifting from a net use of cash in 2024 to a net provision of cash in 2025, driven by long-term debt issuances[18](index=18&type=chunk) [Consolidated Statements of Comprehensive Income (NW Natural)](index=10&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20of%20Northwest%20Natural%20Gas%20Company) This section presents NW Natural's unaudited consolidated statements of comprehensive income for the three and six months ended June 30 | In thousands | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating revenues | $200,807 | $200,188 | $649,620 | $622,963 | | Total operating expenses | $178,419 | $184,802 | $482,200 | $496,946 | | Income from operations | $22,388 | $15,386 | $167,420 | $126,017 | | Net income (loss) | $4,924 | $(424) | $95,963 | $67,134 | | Comprehensive income (loss) | $5,098 | $(157) | $96,312 | $67,279 | - NW Natural's operating revenues increased slightly by **$0.619 million (0.31%)** in Q2 2025 and by **$26.657 million (4.28%)** for the six months ended June 30, 2025, compared to the same periods in 2024[19](index=19&type=chunk) - NW Natural reported a net income of **$4.924 million** in Q2 2025, a significant improvement from a net loss of **$(0.424) million** in Q2 2024. For the six months ended June 30, 2025, net income increased by **$28.829 million (42.94%)** to **$95.963 million**[19](index=19&type=chunk) [Consolidated Balance Sheets (NW Natural)](index=11&type=section&id=Consolidated%20Balance%20Sheets%20of%20Northwest%20Natural%20Gas%20Company) This section presents NW Natural's unaudited consolidated balance sheets as of June 30, 2025, June 30, 2024, and December 31, 2024 | In thousands | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :---------------------------- | :------------ | :------------ | :---------------- | | Total current assets | $407,248 | $367,891 | $524,714 | | Total non-current assets | $4,350,433 | $4,050,822 | $4,231,581 | | Total assets | $4,757,681 | $4,418,713 | $4,756,295 | | Total current liabilities | $380,097 | $347,807 | $604,820 | | Long-term debt | $1,335,736 | $1,365,066 | $1,335,407 | | Total deferred credits and other non-current liabilities | $1,524,646 | $1,441,506 | $1,492,018 | | Total equity | $1,517,202 | $1,264,334 | $1,324,050 | | Total liabilities and equity | $4,757,681 | $4,418,713 | $4,756,295 | - NW Natural's total assets increased by **$338.968 million (7.67%)** from June 30, 2024, to June 30, 2025, primarily due to growth in property, plant, and equipment[21](index=21&type=chunk) - Total liabilities for NW Natural increased by **$86.134 million (3.01%)** from June 30, 2024, to June 30, 2025, with current liabilities increasing while long-term debt slightly decreased[23](index=23&type=chunk) [Consolidated Statements of Shareholder's Equity (NW Natural)](index=13&type=section&id=Consolidated%20Statements%20of%20Shareholder%27s%20Equity%20of%20Northwest%20Natural%20Gas%20Company) This section presents NW Natural's unaudited consolidated statements of shareholder's equity for the three and six months ended June 30 | In thousands | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total shareholder's equity, beginning balances | $1,516,205 | $1,282,362 | $1,324,050 | $1,232,620 | | Net income (loss) | $4,924 | $(424) | $95,963 | $67,134 | | Dividends on common stock | $(19,101) | $(17,871) | $(38,160) | $(35,565) | | Total shareholder's equity, ending balances | $1,517,202 | $1,264,334 | $1,517,202 | $1,264,334 | - NW Natural's total shareholder's equity increased by **$252.868 million (20.00%)** from June 30, 2024, to June 30, 2025[24](index=24&type=chunk) - Capital contributions from parent company significantly increased NW Natural's common stock by **$135.0 million** for the six months ended June 30, 2025[24](index=24&type=chunk) [Consolidated Statements of Cash Flows (NW Natural)](index=14&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20of%20Northwest%20Natural%20Gas%20Company) This section presents NW Natural's unaudited consolidated statements of cash flows for the six months ended June 30 | In thousands | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------- | :----------------------------- | :----------------------------- | | Cash provided by operating activities | $277,011 | $232,199 | | Cash used in investing activities | $(178,069) | $(179,772) | | Cash used by financing activities | $(41,443) | $(53,936) | | Increase in cash, cash equivalents and restricted cash | $57,499 | $(1,509) | | Cash, cash equivalents and restricted cash, end of period | $86,927 | $35,011 | - Cash provided by operating activities for NW Natural increased by **$44.812 million (19.30%)** for the six months ended June 30, 2025, compared to the same period in 2024[25](index=25&type=chunk) - Cash used in investing activities slightly decreased by **$1.703 million (0.95%)** for the six months ended June 30, 2025[25](index=25&type=chunk) - Cash used by financing activities decreased by **$12.493 million (23.16%)** for the six months ended June 30, 2025, primarily due to cash contributions from the parent company[25](index=25&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the accounting policies, segment information, and other financial disclosures for the unaudited consolidated statements [1. Organization and Principles of Consolidation](index=15&type=section&id=1.%20ORGANIZATION%20AND%20PRINCIPLES%20OF%20CONSOLIDATION) This note details the organizational structure, consolidated financial reporting, reportable segments, and principles of consolidation for NW Holdings and NW Natural - NW Holdings and NW Natural consolidate all entities where they have a controlling financial interest[28](index=28&type=chunk) - SiEnergy Operating, LLC (SiEnergy Gas Utility), a regulated natural gas distribution utility in Texas, was acquired on January 7, 2025, and its activities are reported in the new SiEnergy Gas Utility segment[27](index=27&type=chunk) - NWN Gas Utility segment was previously known as the natural gas distribution (NGD) segment prior to 2025[27](index=27&type=chunk) - The business is seasonal, meaning interim results are not necessarily indicative of full-year results[29](index=29&type=chunk) [2. Significant Accounting Policies](index=16&type=section&id=2.%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note updates significant accounting policies, including industry regulation, cash flow, accounts receivable, greenhouse gas allowances, and recent accounting pronouncements - NW Holdings' principal business is a holding company for regulated natural gas and water/wastewater utilities, subject to various state and federal regulatory commissions[32](index=32&type=chunk) Regulatory Assets (NW Holdings) | In thousands | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :----------- | :------------ | :------------ | :---------------- | | Total current regulatory assets | $103,914 | $124,102 | $130,116 | | Total non-current regulatory assets | $372,668 | $308,521 | $382,499 | Regulatory Liabilities (NW Holdings) | In thousands | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :----------- | :------------ | :------------ | :---------------- | | Total current regulatory liabilities | $130,944 | $99,663 | $116,180 | | Total non-current regulatory liabilities | $737,194 | $705,929 | $730,117 | - NW Natural's emissions allowances for Washington CCA compliance were **$54.5 million** as of June 30, 2025, up from **$39.8 million** in 2024[45](index=45&type=chunk) - The SEC's climate-related disclosure rule (March 2024) was voluntarily stayed in April 2024 and the SEC announced it would not defend the rule in March 2025[55](index=55&type=chunk) [3. Earnings Per Share](index=21&type=section&id=3.%20EARNINGS%20PER%20SHARE) This note details the calculation of basic and diluted earnings per share for NW Holdings, including the impact of stock options and anti-dilutive shares NW Holdings Diluted Earnings Per Share Calculation | In thousands, except per share data | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(2,500) | $(2,787) | $85,416 | $61,036 | | Average common shares outstanding - basic | 40,482 | 38,260 | 40,364 | 38,013 | | Average common shares outstanding - diluted | 40,482 | 38,260 | 40,429 | 38,059 | | Basic EPS | $(0.06) | $(0.07) | $2.12 | $1.61 | | Diluted EPS | $(0.06) | $(0.07) | $2.11 | $1.60 | | Anti-dilutive shares | 55 | 36 | 3 | 9 | - Diluted EPS for NW Holdings improved from **$(0.07)** in Q2 2024 to **$(0.06)** in Q2 2025, and increased from **$1.60** to **$2.11** for the six months ended June 30, 2025[57](index=57&type=chunk) [4. Segment Information](index=21&type=section&id=4.%20SEGMENT%20INFORMATION) This note details the re-evaluated reportable business segments for NW Holdings and NW Natural, providing summary financial information and key performance measures - NW Holdings now operates in three reportable segments: NWN Gas Utility, SiEnergy Gas Utility (acquired January 7, 2025), and NWN Water Utility[60](index=60&type=chunk) - NWN Gas Utility margin is a key financial measure, calculated as operating revenues less cost of gas, environmental remediation expense, and revenue taxes[68](index=68&type=chunk) NW Holdings Segment Financial Information (Three Months Ended June 30) | In thousands | NWN Gas Utility 2025 | SiEnergy Gas Utility 2025 | NWN Water Utility 2025 | NW Holdings Other 2025 | NW Holdings Total 2025 | | :----------------------- | :------------------- | :------------------------ | :--------------------- | :--------------------- | :--------------------- | | Operating revenues | $194,289 | $11,502 | $16,294 | $14,109 | $236,194 | | Depreciation | $36,252 | $2,396 | $2,575 | $312 | $41,535 | | Income from operations | $17,667 | $3,589 | $4,296 | $1,659 | $27,211 | | Interest expense, net | $15,009 | $2,321 | $744 | $12,417 | $30,491 | | Income tax expense (benefit) | $385 | $360 | $1,053 | $(2,738) | $(940) | | Capital expenditures | $92,826 | $15,920 | $10,939 | $795 | $120,480 | | In thousands | NWN Gas Utility 2024 | SiEnergy Gas Utility 2024 | NWN Water Utility 2024 | NW Holdings Other 2024 | NW Holdings Total 2024 | | :----------------------- | :------------------- | :------------------------ | :--------------------- | :--------------------- | :--------------------- | | Operating revenues | $194,862 | $0 | $11,526 | $5,326 | $211,714 | | Depreciation | $31,418 | $0 | $2,104 | $240 | $33,762 | | Income from operations | $11,788 | $0 | $1,798 | $2,120 | $15,706 | | Interest expense, net | $15,252 | $0 | $755 | $3,304 | $19,311 | | Income tax expense (benefit) | $(929) | $0 | $379 | $(262) | $(812) | | Capital expenditures | $107,473 | $0 | $9,683 | $(444) | $116,712 | NW Holdings Segment Financial Information (Six Months Ended June 30) | In thousands | NWN Gas Utility 2025 | SiEnergy Gas Utility 2025 | NWN Water Utility 2025 | NW Holdings Other 2025 | NW Holdings Total 2025 | | :----------------------- | :------------------- | :------------------------ | :--------------------- | :--------------------- | :--------------------- | | Operating revenues | $635,365 | $34,168 | $30,203 | $30,742 | $730,478 | | Depreciation | $71,975 | $4,466 | $4,969 | $625 | $82,035 | | Income from operations | $157,299 | $13,202 | $7,339 | $3,725 | $181,565 | | Interest expense, net | $30,486 | $4,578 | $1,536 | $23,286 | $59,886 | | Income tax expense (benefit) | $34,569 | $2,304 | $1,684 | $(4,970) | $33,587 | | Capital expenditures | $171,622 | $26,445 | $18,990 | $5,607 | $222,664 | | In thousands | NWN Gas Utility 2024 | SiEnergy Gas Utility 2024 | NWN Water Utility 2024 | NW Holdings Other 2024 | NW Holdings Total 2024 | | :----------------------- | :------------------- | :------------------------ | :--------------------- | :--------------------- | :--------------------- | | Operating revenues | $612,726 | $0 | $22,221 | $10,237 | $645,184 | | Depreciation | $62,248 | $0 | $4,095 | $517 | $66,860 | | Income from operations | $119,761 | $0 | $2,252 | $3,520 | $125,533 | | Interest expense, net | $31,220 | $0 | $2,235 | $6,387 | $39,842 | | Income tax expense (benefit) | $23,991 | $0 | $120 | $(584) | $23,527 | | Capital expenditures | $178,967 | $0 | $19,770 | $192 | $198,929 | [5. Common Stock](index=25&type=section&id=5.%20COMMON%20STOCK) This note details NW Holdings' At-The-Market (ATM) equity program, including authorized amount, shares issued, cash proceeds, and remaining equity available - NW Holdings' ATM equity program was authorized for a total of **$400 million** in aggregate gross sales price, extended through August 2027[74](index=74&type=chunk) ATM Equity Program Issuance (2025) | Period | Shares Issued | Cash Proceeds (net of fees) in millions | | :------------------------- | :------------ | :-------------------------------------- | | Three months ended June 30, 2025 | 580,670 | $23.1 | | Six months ended June 30, 2025 | 603,624 | $24.1 | - As of June 30, 2025, NW Holdings had **$126.8 million** of equity available for issuance under the ATM equity program[75](index=75&type=chunk) [6. Revenues](index=25&type=section&id=6.%20REVENUES) This note provides disaggregated revenue information for NW Holdings and NW Natural across segments, detailing sources and revenue recognition accounting policies NW Holdings Disaggregated Revenue (Three Months Ended June 30) | In thousands | NWN Gas Utility 2025 | SiEnergy Gas Utility 2025 | NWN Water Utility 2025 | NW Holdings Other 2025 | NW Holdings Total 2025 | | :------------------------ | :------------------- | :------------------------ | :--------------------- | :--------------------- | :--------------------- | | Natural gas sales | $166,923 | $11,502 | $0 | $701 | $179,126 | | Water and wastewater revenue | $0 | $0 | $16,294 | $0 | $16,294 | | Renewable natural gas sales | $0 | $0 | $0 | $6,890 | $6,890 | | Total operating revenues | $194,289 | $11,502 | $16,294 | $14,109 | $236,194 | | In thousands | NWN Gas Utility 2024 | SiEnergy Gas Utility 2024 | NWN Water Utility 2024 | NW Holdings Other 2024 | NW Holdings Total 2024 | | :------------------------ | :------------------- | :------------------------ | :--------------------- | :--------------------- | :--------------------- | | Natural gas sales | $183,876 | $0 | $0 | $0 | $183,876 | | Water and wastewater revenue | $0 | $0 | $11,526 | $0 | $11,526 | | Renewable natural gas sales | $0 | $0 | $0 | $0 | $0 | | Total operating revenues | $194,861 | $0 | $11,526 | $5,327 | $211,714 | NW Holdings Disaggregated Revenue (Six Months Ended June 30) | In thousands | NWN Gas Utility 2025 | SiEnergy Gas Utility 2025 | NWN Water Utility 2025 | NW Holdings Other 2025 | NW Holdings Total 2025 | | :------------------------ | :------------------- | :------------------------ | :--------------------- | :--------------------- | :--------------------- | | Natural gas sales | $597,172 | $34,168 | $0 | $1,871 | $633,211 | | Water and wastewater revenue | $0 | $0 | $30,203 | $0 | $30,203 | | Renewable natural gas sales | $0 | $0 | $0 | $14,616 | $14,616 | | Total operating revenues | $635,365 | $34,168 | $30,203 | $30,742 | $730,478 | | In thousands | NWN Gas Utility 2024 | SiEnergy Gas Utility 2024 | NWN Water Utility 2024 | NW Holdings Other 2024 | NW Holdings Total 2024 | | :------------------------ | :------------------- | :------------------------ | :--------------------- | :--------------------- | :--------------------- | | Natural gas sales | $594,715 | $0 | $0 | $0 | $594,715 | | Water and wastewater revenue | $0 | $0 | $22,221 | $0 | $22,221 | | Renewable natural gas sales | $0 | $0 | $0 | $0 | $0 | | Total operating revenues | $612,725 | $0 | $22,221 | $10,238 | $645,184 | - NW Holdings' renewable natural gas sales generated **$6.890 million** in Q2 2025 and **$14.616 million** for the six months ended June 30, 2025, with no comparable revenue in 2024[76](index=76&type=chunk)[77](index=77&type=chunk) - Unrecognized revenue for fixed components of gas storage and asset management was approximately **$126.9 million** as of June 30, 2025, with **$13.7 million** expected to be recognized in the remainder of 2025[95](index=95&type=chunk) [7. Leases](index=31&type=section&id=7.%20LEASES) This note details NW Holdings' and NW Natural's lease activities, including lease revenue, lease expense, future minimum lease payments, and related cash flow information - Leasing revenue primarily comes from NW Natural's North Mist Storage contract with PGE, classified as a sales-type lease with regulatory accounting deferral[98](index=98&type=chunk) Total Lease Revenue (NW Natural) | In thousands | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating leases | $21 | $20 | $42 | $42 | | Sales-type leases | $4,282 | $4,103 | $8,567 | $8,207 | | Total lease revenue | $4,303 | $4,123 | $8,609 | $8,249 | Future Minimum Lease Payments (NW Holdings) as of June 30, 2025 | In thousands | Operating | Sales-Type | Total | | :------------------ | :-------- | :--------- | :------ | | Remainder of 2025 | $243 | $7,605 | $7,848 | | 2026 | $99 | $14,901 | $15,000 | | 2027 | $84 | $14,500 | $14,584 | | 2028 | $58 | $14,004 | $14,062 | | 2029 | $59 | $13,594 | $13,653 | | Thereafter | $741 | $194,722 | $195,463| | Total minimum lease payments | $1,284 | $259,326 | $260,610| - NW Holdings assumed eight operating leases with the SiEnergy acquisition, increasing operating lease right-of-use assets and liabilities by **$2.3 million**[105](index=105&type=chunk) [8. Stock-Based Compensation](index=34&type=section&id=8.%20STOCK-BASED%20COMPENSATION) This note describes NW Holdings' stock-based compensation plans, including LTIP and ESPP, detailing performance share awards, RSUs, and unrecognized compensation costs - For the 2023-2025 LTIP, **43,978 performance-based shares** were granted, and compensation expense recognition began[112](index=112&type=chunk)[113](index=113&type=chunk) - No expense was recognized for the 2024-2026 and 2025-2027 LTIP awards as of June 30, 2025, due to variable performance factors not yet approved[114](index=114&type=chunk)[115](index=115&type=chunk) - **67,149 RSUs** were granted during the six months ended June 30, 2025, with a weighted-average grant date fair value of **$41.63 per share**[119](index=119&type=chunk) - As of June 30, 2025, there was **$0.5 million** of unrecognized compensation for performance shares (expected through 2027) and **$4.7 million** for RSUs (expected through 2028)[118](index=118&type=chunk)[120](index=120&type=chunk) [9. Debt](index=35&type=section&id=9.%20DEBT) This note provides a comprehensive overview of NW Holdings' and NW Natural's short-term and long-term debt, including recent issuances, credit facilities, and fair value estimates Short-Term Debt Outstanding (in millions) | In millions | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :-------------------------- | :------------ | :------------ | :---------------- | | NW Holdings commercial paper | $157.4 | $0 | $0 | | NW Holdings credit agreement | $0 | $79.0 | $33.6 | | NW Natural commercial paper | $0 | $0 | $136.5 | | Total short-term debt | $157.4 | $79.0 | $170.1 | - NW Holdings initiated a commercial paper program on March 21, 2025, with **$157.4 million** outstanding at June 30, 2025[122](index=122&type=chunk) - The **$273.0 million** Acquisition Bridge Facility, used to finance the SiEnergy acquisition, was repaid in full in March 2025[124](index=124&type=chunk) Long-Term Debt Outstanding (in millions) | In millions | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :-------------------------- | :------------ | :------------ | :---------------- | | NW Natural first mortgage bonds | $1,374.7 | $1,374.7 | $1,374.7 | | SiEnergy term loan | $148.1 | $0 | $0 | | NW Holdings unsecured senior bonds | $285.0 | $150.0 | $285.0 | | NW Holdings junior subordinated debentures | $325.0 | $0 | $0 | | Total long-term debt (gross) | $2,242.3 | $1,586.0 | $1,720.8 | - NW Holdings issued **$325.0 million** in Junior Subordinated Debentures in March 2025, due September 15, 2055, with an initial annual interest rate of **7.0%**[132](index=132&type=chunk) [10. Pension and Other Postretirement Benefit Costs](index=38&type=section&id=10.%20PENSION%20AND%20OTHER%20POSTRETIREMENT%20BENEFIT%20COSTS) This note details NW Natural's net periodic benefit cost for pension and postretirement plans, including components, AOCL changes, and employer contributions Net Periodic Benefit Cost (Credit) for Pension and Other Postretirement Benefit Plans (in thousands) | In thousands | Three Months Ended June 30, 2025 (Pension) | Three Months Ended June 30, 2024 (Pension) | Three Months Ended June 30, 2025 (Other Postretirement) | Three Months Ended June 30, 2024 (Other Postretirement) | | :------------------------ | :--------------------------------------- | :--------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Service cost | $886 | $979 | $28 | $24 | | Interest cost | $5,410 | $5,159 | $289 | $247 | | Expected return on plan assets | $(5,433) | $(5,936) | $0 | $0 | | Amortization of net actuarial loss | $2,445 | $1,496 | $21 | $0 | | Net periodic benefit cost (credit) | $3,308 | $1,698 | $338 | $271 | | In thousands | Six Months Ended June 30, 2025 (Pension) | Six Months Ended June 30, 2024 (Pension) | Six Months Ended June 30, 2025 (Other Postretirement) | Six Months Ended June 30, 2024 (Other Postretirement) | | :------------------------ | :--------------------------------------- | :--------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Service cost | $1,771 | $1,959 | $55 | $49 | | Interest cost | $10,820 | $10,319 | $577 | $495 | | Expected return on plan assets | $(10,866) | $(11,871) | $0 | $0 | | Amortization of net actuarial loss | $4,889 | $2,991 | $41 | $0 | | Net periodic benefit cost (credit) | $6,614 | $3,398 | $673 | $544 | - NW Natural made **$5.5 million** in cash contributions to its qualified defined benefit pension plans during the six months ended June 30, 2025, and expects to make an additional **$5.8 million** in 2025[140](index=140&type=chunk) - Contributions to NW Natural's Retirement K Savings Plan (defined contribution) totaled **$6.9 million** for the six months ended June 30, 2025, up from **$5.8 million** in the prior year[141](index=141&type=chunk) [11. Income Tax](index=39&type=section&id=11.%20INCOME%20TAX) This note explains interim income tax expense calculation, variations from the federal statutory rate, and confirms the completion of the 2023 IRS CAP examination Effective Income Tax Rate Reconciliation (Three Months Ended June 30) | In thousands | NW Holdings 2025 | NW Holdings 2024 | NW Natural 2025 | NW Natural 2024 | | :---------------------------- | :--------------- | :--------------- | :-------------- | :-------------- | | Income tax at statutory rate (federal) | $(722) | $(756) | $1,378 | $(80) | | State income tax | $(210) | $(345) | $306 | $(167) | | Differences required to be flowed-through by regulatory commissions | $8 | $107 | $9 | $108 | | Other, net | $(16) | $182 | $(55) | $183 | | Total (benefit) expense for income taxes | $(940) | $(812) | $1,638 | $44 | | Effective income tax rate | 27.3% | 22.6% | 25.0% | (11.6)% | Effective Income Tax Rate Reconciliation (Six Months Ended June 30) | In thousands | NW Holdings 2025 | NW Holdings 2024 | NW Natural 2025 | NW Natural 2024 | | :---------------------------- | :--------------- | :--------------- | :-------------- | :-------------- | | Income tax at statutory rate (federal) | $24,991 | $17,758 | $27,986 | $19,499 | | State income tax | $9,770 | $7,232 | $10,508 | $7,682 | | Differences required to be flowed-through by regulatory commissions | $(1,660) | $(1,472) | $(1,659) | $(1,472) | | Other, net | $486 | $9 | $467 | $8 | | Total provision for income taxes | $33,587 | $23,527 | $37,302 | $25,717 | | Effective income tax rate | 28.2% | 27.8% | 28.0% | 27.7% | - The IRS CAP examination for the 2023 tax year was completed in Q1 2025 with no material changes, and the 2024 and 2025 tax years are currently subject to examination[146](index=146&type=chunk) [12. Property, Plant, and Equipment](index=40&type=section&id=12.%20PROPERTY%2C%20PLANT%2C%20AND%20EQUIPMENT) This note presents major classifications of property, plant, and equipment (PP&E) and accumulated depreciation for both NW Holdings and NW Natural Property, Plant, and Equipment (NW Holdings, in thousands) | In thousands | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :-------------------------------- | :------------ | :------------ | :---------------- | | Plant in service | $5,204,265 | $4,568,912 | $4,769,565 | | Construction work in progress | $211,432 | $195,681 | $149,354 | | Less: Accumulated depreciation | $1,269,274 | $1,234,148 | $1,246,592 | | Total property, plant, and equipment, net | $4,146,423 | $3,530,445 | $3,672,327 | | Capital expenditures in accrued liabilities | $40,588 | $28,370 | $26,610 | Property, Plant, and Equipment (NW Natural, in thousands) | In thousands | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :-------------------------------- | :------------ | :------------ | :---------------- | | Plant in service | $4,677,407 | $4,399,127 | $4,577,955 | | Construction work in progress | $183,257 | $181,876 | $128,764 | | Less: Accumulated depreciation | $1,236,148 | $1,213,169 | $1,222,413 | | Total property, plant, and equipment, net | $3,624,516 | $3,367,834 | $3,484,306 | | Capital expenditures in accrued liabilities | $28,586 | $24,586 | $24,625 | [13. Investments](index=41&type=section&id=13.%20INVESTMENTS) This note summarizes NW Holdings' and NW Natural's investments, including life insurance policies, gas reserves, and equity method investments in affiliates Other Investments (NW Holdings, in thousands) | In thousands | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :---------------------------- | :------------ | :------------ | :---------------- | | Investments in life insurance policies | $46,221 | $46,295 | $45,772 | | Investments in gas reserves, non-current | $16,803 | $19,570 | $18,166 | | Investment in unconsolidated affiliates | $19,199 | $17,930 | $18,298 | | Total other investments | $82,223 | $83,795 | $82,236 | - NW Natural has invested **$188 million** in the Jonah Field gas reserves program as of June 30, 2025[150](index=150&type=chunk) - NWN Water increased its ownership stake in Avion Water Company, Inc. to **47.9%** as of February 2025, with a carrying value of the equity method investment **$10.1 million** higher than the underlying equity in net assets[151](index=151&type=chunk) [14. Business Combinations](index=41&type=section&id=14.%20BUSINESS%20COMBINATIONS) This note details NW Holdings' business combinations in 2025 and 2024, including acquisitions of SiEnergy and Pines Holdings, recognized goodwill, and pro forma financial results - On January 7, 2025, NW Holdings acquired SiEnergy Operating, LLC for **$271.1 million** in cash and assumed **$156.1 million** in debt, recognizing **$171.0 million** in preliminary goodwill[152](index=152&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - On June 2, 2025, SiEnergy acquired Hughes Gas Resources, Inc. (Pines Holdings, Inc.) for **$60.8 million** in cash, recognizing **$16.2 million** in preliminary goodwill[156](index=156&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) - Unaudited pro forma operating revenues for NW Holdings, as if SiEnergy and Pines acquisitions occurred on January 1, 2024, would have been **$222.308 million** for Q2 2024 and **$677.609 million** for YTD June 30, 2024[159](index=159&type=chunk) - Total goodwill from all acquisitions amounted to **$370.9 million** as of June 30, 2025, allocated to gas utility (**$187.2 million** for SiEnergy) and water/wastewater (**$183.7 million** for NWN Water) segments[169](index=169&type=chunk) [15. Derivative Instruments](index=45&type=section&id=15.%20DERIVATIVE%20INSTRUMENTS) This note details NW Natural's use of financial derivative contracts to hedge natural gas, interest rates, and foreign currency, including notional amounts, gains/losses, and credit risk management - NW Natural uses financial derivatives (swaps and forward contracts) to manage price variability of natural gas, interest rates, and foreign currency[171](index=171&type=chunk) Notional Amounts of Open Derivative Positions (NW Natural, in thousands) | In thousands | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Natural gas (therms) - Financial | 807,000 | 771,110 | | Natural gas (therms) - Physical | 811,360 | 560,900 | | Foreign exchange (dollars) | $10,155 | $10,332 | - NW Natural realized net losses of **$11.6 million** in Q2 2025 and **$57.8 million** for the six months ended June 30, 2025, from natural gas financial derivative settlements[178](index=178&type=chunk) - NWN Water's interest rate swap agreement effectively converted **$55.0 million** of variable-rate debt to a fixed rate of **3.8%**, expiring in June 2026[184](index=184&type=chunk) [16. Commitments and Contingencies](index=48&type=section&id=16.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines NWN Renewables' commitments for renewable natural gas (RNG) supply agreements with EDL, including payment milestones, purchase estimates, and NW Holdings' guarantees - Ohio Renewables (a subsidiary of NWN Renewables) secured RNG supply from two EDL production facilities, with payments of **$26.0 million** and **$25.4 million** made upon facility completion in September and December 2024, respectively[186](index=186&type=chunk)[187](index=187&type=chunk) - Estimated RNG purchases from EDL facilities are approximately **$18.9 million** in 2025 and 2026, increasing to **$532.6 million** thereafter over a 20-year period[188](index=188&type=chunk) - NW Holdings unconditionally guarantees Ohio Renewables' obligations under purchase and sale agreements, with a cap of **$44.226 million** for 2025 and **$21.113 million** for 2026 for certain sale agreements[189](index=189&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) [17. Environmental Matters](index=48&type=section&id=17.%20ENVIRONMENTAL%20MATTERS) This note details NW Natural's environmental remediation liabilities for various sites, recovery mechanisms, and updates on related legal proceedings - NW Natural has recovery mechanisms in Oregon (SRRM) and Washington (ECRM) to collect **96.7%** and **3.3%** respectively of prudently incurred environmental remediation costs[193](index=193&type=chunk) Environmental Site Liabilities (NW Natural, in thousands) | In thousands | Current Liabilities June 30, 2025 | Non-Current Liabilities June 30, 2025 | | :------------------------ | :-------------------------------- | :------------------------------------ | | Portland Harbor site: | | | | Gasco/Siltronic Sediments | $10,034 | $43,776 | | Other Portland Harbor | $3,327 | $11,043 | | Gasco/Siltronic Upland site | $18,390 | $62,666 | | Front Street site | $831 | $279 | | Oregon Steel Mills | $0 | $179 | | Total | $32,582 | $117,943 | - NW Natural has recorded a liability of **$53.8 million** for the Gasco sediment clean-up, representing the low end of the estimated range of **$53.8 million** to **$350 million**[204](index=204&type=chunk) - NW Natural is a defendant in a climate change lawsuit filed by Multnomah County (October 2024) and a class-action lawsuit regarding its Smart Energy program (October 2024)[221](index=221&type=chunk)[222](index=222&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=53&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management assesses NW Holdings' and NW Natural's financial condition and results, covering key highlights, segment performance, economic impacts, regulatory matters, cash flows, capital structure, and liquidity NW Holdings Key Financial Highlights (QTD and YTD June 30) | In thousands, except per share data | QTD 2025 Amount | QTD 2024 Amount | QTD Change | YTD 2025 Amount | YTD 2024 Amount | YTD Change | | :---------------------------------- | :-------------- | :-------------- | :--------- | :-------------- | :-------------- | :--------- | | Operating income | $27,211 | $15,706 | $11,505 | $181,565 | $125,533 | $56,032 | | Net income (loss) | $(2,500) | $(2,787) | $287 | $85,416 | $61,036 | $24,380 | | Diluted EPS | $(0.06) | $(0.07) | $0.01 | $2.11 | $1.60 | $0.51 | - NW Holdings' QTD operating income increased by **$11.5 million**, and net loss decreased by **$0.3 million**, primarily due to a **$16.9 million** increase in NWN Gas Utility margin and an **$8.2 million** increase from SiEnergy acquisition, partially offset by higher O&M, interest, and depreciation expenses[235](index=235&type=chunk)[237](index=237&type=chunk) - NW Holdings' YTD operating income increased by **$56.0 million**, and net income increased by **$24.4 million**, driven by a **$55.6 million** increase in NWN Gas Utility margin and a **$21.7 million** increase from SiEnergy, partially offset by higher O&M, interest, and depreciation expenses[237](index=237&type=chunk)[238](index=238&type=chunk) NWN Gas Utility Segment Results (QTD and YTD June 30) | In thousands, except per share data | QTD 2025 | QTD 2024 | QTD Change | YTD 2025 | YTD 2024 | YTD Change | | :---------------------------------- | :------- | :------- | :--------- | :------- | :------- | :--------- | | Margin | $127,222 | $110,309 | $16,913 | $384,044 | $328,459 | $55,585 | | Net income (loss) | $1,529 | $(2,987) | $4,516 | $88,695 | $62,728 | $25,967 | | EPS | $0.04 | $(0.08) | $0.12 | $2.19 | $1.65 | $0.54 | - SiEnergy Gas Utility, acquired January 7, 2025, generated **$8.161 million** in margin and **$1.014 million** in net income for Q2 2025, and **$21.745 million** in margin and **$6.519 million** in net income for YTD June 30, 2025[244](index=244&type=chunk) - NWN Water Utility's QTD operating revenues increased by **$4.8 million**, and net income increased by **$1.8 million**, driven by new rates in Arizona, acquisitions, and organic customer growth[247](index=247&type=chunk)[248](index=248&type=chunk) - NW Holdings Other segment reported a net loss of **$(7.876) million** in Q2 2025, an increase of **$7.0 million** from Q2 2024, primarily due to higher interest expense from new debt issuances and increased cost of gas from RNG purchases[249](index=249&type=chunk)[252](index=252&type=chunk) - The 2025 Oregon Rate Case filing requested a **$59.4 million** annual revenue requirement increase, with a stipulation providing for a **$21.3 million** increase based on a **9.5% ROE** and **7.12% cost of capital**, expected to be effective October 31, 2025[264](index=264&type=chunk)[266](index=266&type=chunk)[267](index=267&type=chunk)[271](index=271&type=chunk) - Washington's I-2066 ballot initiative, prohibiting restrictions on natural gas access, was passed but recently declared invalid by a King County court, with an appeal pending[305](index=305&type=chunk) - NW Holdings' consolidated capital structure (excluding short-term debt) as of June 30, 2025, was **39.6% common equity** and **60.4% long-term debt**, compared to **46.1%** and **53.9%** respectively at June 30, 2024[330](index=330&type=chunk) - NW Holdings believes its liquidity is sufficient for at least the next 12 months, supported by cash reserves, dividends from subsidiaries, credit facilities, and access to capital markets[339](index=339&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) NW Holdings and NW Natural are exposed to various market risks, including commodity, interest rate, foreign currency, credit, and weather risks, with no material changes reported - NW Holdings and NW Natural are exposed to commodity supply risk, commodity price risk, interest rate risk, foreign currency risk, credit risk, and weather risk[392](index=392&type=chunk) - No material changes have occurred related to disclosures about market risk for the six months ended June 30, 2025[392](index=392&type=chunk) [Item 4. Controls and Procedures](index=82&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with SiEnergy's integration potentially leading to control changes and its exclusion from the 2025 annual assessment - Disclosure controls and procedures were effective as of June 30, 2025[393](index=393&type=chunk) - The acquisition of SiEnergy on January 7, 2025, is in the process of integrating internal controls, which may result in additions or changes[396](index=396&type=chunk) - SiEnergy's operations will be excluded from the scope of the annual assessment of internal control over financial reporting for the year ended December 31, 2025[397](index=397&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=82&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings are primarily disclosed in Note 17 and the 2024 Form 10-K, with other litigation deemed nonmaterial or ordinary course - Legal proceedings are primarily disclosed in Note 17 to the financial statements and Part I, Item 3 of the 2024 Form 10-K[399](index=399&type=chunk) - Other litigation is considered nonmaterial or occurs in the ordinary course of business[399](index=399&type=chunk) [Item 1A. Risk Factors](index=82&type=section&id=Item%201A.%20Risk%20Factors) Readers are directed to the 2024 Form 10-K for a comprehensive discussion of risk factors that could materially affect the company's business and financial results - Readers should refer to Part I, Item 1A, 'Risk Factors' in the 2024 Form 10-K for a detailed discussion of factors that could materially affect the business[400](index=400&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on issuer purchases of NW Holdings' equity securities, noting no open market purchases in Q2 2025 and a new share repurchase program authorization Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share in dollars | | :---------------- | :------------------------------- | :-------------------------------------- | | 04/01/25-04/30/25 | — | — | | 05/01/25-05/31/25 | — | — | | 06/01/25-06/30/25 | — | — | | Total | — | — | - No shares of common stock were purchased on the open market during Q2 2025 for the Dividend Reinvestment and Direct Stock Purchase Plan or share-based compensation programs[403](index=403&type=chunk) - A new share repurchase program was authorized on May 23, 2024, allowing for the repurchase of up to **5 million shares** or an amount not to exceed **$150 million**[403](index=403&type=chunk) [Item 5. Other Information](index=83&type=section&id=Item%205.%20Other%20Information) No officers or directors of NW Holdings adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - No officers or directors adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[404](index=404&type=chunk) [Item 6. Exhibits](index=83&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed with the Quarterly Report on Form 10-Q, including bylaws, compensation plans, certifications, and Inline XBRL financial data - The exhibit index includes Amended and Restated Bylaws for both Northwest Natural Holding Company and Northwest Natural Gas Company[407](index=407&type=chunk) - Certifications from Principal Executive and Financial Officers pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 are included[407](index=407&type=chunk) - Financial statements and related notes are provided in Inline Extensible Business Reporting Language (Inline XBRL) format[407](index=407&type=chunk) [Signatures](index=85&type=section&id=Signatures) This section contains the official signatures of the Principal Accounting Officer for NW Natural Gas Company and NW Natural Holding Company, certifying the report filing - The report is signed by Brody J. Wilson, Principal Accounting Officer, Vice President, Treasurer, Chief Accounting Officer and Controller for both Northwest Natural Gas Company and Northwest Natural Holding Company[411](index=411&type=chunk) - The filing date for the report is August 5, 2025[411](index=411&type=chunk)

Financial Data and Key Metrics Changes - The company reported adjusted net income of $2.28 per share for the first six months of 2025, compared to $1.6 per share for the same period last year [7] - Adjusted net income for Q2 2025 was $315,000 or $0.01 per share, an improvement from a loss of $2.8 million or $0.07 per share in Q2 2024 [17] - Year-to-date adjusted net income was $92.1 million or $2.28 per share for 2025, up from $61 million or $1.6 per share for the same period in 2024 [21] Business Line Data and Key Metrics Changes - The Northwest Natural Gas segment saw net income increase by $4.5 million or $0.12 per share, with margin increasing by $16.9 million due to new rates in Oregon [18] - Sea Energy provided net income of $1 million or $0.03 per share, with strong margin and net income trends aligning with expectations [18] - The Water segment's net income increased by $1.8 million or $0.04 per share, driven by new rates at the largest water utility in Arizona and additional revenues from acquired utilities [19] Market Data and Key Metrics Changes - The combined utility customer growth rate was 10.6% for the twelve months ended June 30, 2025, primarily driven by gas utilities in Texas [8] - Northwest Natural Water's customer base grew by 5.8% over the last twelve months, including three acquisitions [13] Company Strategy and Development Direction - The company reaffirmed its annual 2025 adjusted earnings guidance, expecting a range of $2.75 to $2.95 per share [22] - The capital expenditure plan for 2025 is projected to be between $450 million and $500 million, focusing on modernizing infrastructure and system upgrades [23] - The company aims for a long-term earnings per share growth rate of 4% to 6% compounded annually from 2025 adjusted EPS [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial targets for the full year, citing strong performance across all business segments [24] - The company noted that while there are signs of housing market slowdown in Texas, overall growth remains strong with significant meter additions [29] Other Important Information - The company filed a general rate case in Oregon to recover investments in gas infrastructure, expecting a modest 2.5% rate increase effective October 31 [11] - The liquidity position at June 30, 2025, was approximately $550 million, with no material debt maturities expected in 2025 [24] Q&A Session Summary Question: Update on Sea Energy's growth and backlog - Management indicated that Sea Energy is performing as expected, with strong growth and a significant backlog exceeding annual goals by midyear [28][29] Question: Scale of upcoming water rate cases - Management noted that individual water rate cases are generally small, often less than $1 million in revenue requirement, leading to multiple rate cases executed annually [30]

Financial Performance - Adjusted EPS for YTD Q2 2025 was $2.28, compared to $1.60 in the prior year[15] - NWN Gas Utility's net income increased by $4.5 million in Q2 2025, primarily due to new rates in Oregon effective November 1, 2024[21] - SiEnergy Gas Utility reported a net income increase of $1.0 million in Q2 2025, reflecting its first year of results after acquisitions[21] - NWN Water Utility's net income increased by $1.8 million in Q2 2025, mainly due to new rates at Foothills and incremental earnings from ICH utilities[21] - NW Natural Holdings reaffirms its 2025 adjusted EPS guidance of $2.75 - $2.95[15,30] Growth and Expansion - The company added over 92,000 gas and water utility connections in the last 12 months, representing a combined growth rate of 10.6% as of June 30, 2025, largely driven by Texas acquisitions[15] - Strong first half 2025 organic customer growth of 1.9% (annualized) on a consolidated basis[15] - SiEnergy's combined customer backlog has grown to more than 217,000[16] - Consolidated customer growth of 2.0% – 2.5% is expected in 2025[30] Strategic Initiatives - NW Natural Holdings expects to issue $65 – $75 million in equity for the full year 2025[31] - The company completed the acquisition of Pines gas utility (formerly Hughes), adding scale to SiEnergy[15] - A settlement was reached in NW Natural's Oregon general rate case, providing a $21.3 million revenue requirement increase and a 9.5% ROE[16]

Company Performance - Northwest Natural (NWN) reported quarterly earnings of $0.01 per share, surpassing the Zacks Consensus Estimate of a loss of $0.07 per share, compared to a loss of $0.07 per share a year ago, resulting in an earnings surprise of +114.29% [1] - The company posted revenues of $236.19 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 2.76%, while year-ago revenues were $211.71 million [2] - Over the last four quarters, Northwest Natural has exceeded consensus EPS estimates three times, but has only topped consensus revenue estimates once [2] Stock Outlook - The immediate price movement of Northwest Natural's stock will largely depend on management's commentary during the earnings call and future earnings expectations [3] - The stock has gained approximately 1.6% since the beginning of the year, underperforming the S&P 500's gain of 7.6% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.85 on revenues of $157.3 million, and for the current fiscal year, it is $2.88 on revenues of $1.3 billion [7] Industry Context - The Utility - Gas Distribution industry, to which Northwest Natural belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Northwest Natural's stock performance [5] - UGI (UGI), another company in the same industry, is expected to report a quarterly loss of $0.12 per share, representing a year-over-year change of -300%, with revenues projected at $1.44 billion, up 4.6% from the previous year [9]

[NW Natural Holdings Reports Second Quarter 2025 Results](index=1&type=section&id=NW%20Natural%20Holdings%20Reports%20Second%20Quarter%202025%20Results) [Financial Highlights (Q2 and YTD Consolidated)](index=1&type=section&id=1.1.%20Financial%20Highlights%20(Q2%20and%20YTD%20Consolidated)) The company reported a narrowed net loss and positive adjusted net income for Q2 2025, with significant year-to-date growth driven by all business segments | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Loss | $(2.5) million | $(2.8) million | Increase $0.3 million | | Net Loss Per Share | $(0.06) | $(0.07) | Increase $0.01 | | Adjusted Net Income | $0.3 million | $(2.8) million | Increase $3.1 million | | Adjusted Net Income Per Share | $0.01 | $(0.07) | Increase $0.08 | | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $85.4 million | $61.0 million | Increase $24.4 million | | Net Income Per Share | $2.11 | $1.60 | Increase $0.51 | | Adjusted Net Income | $92.1 million | $61.0 million | Increase $31.1 million | | Adjusted Net Income Per Share | $2.28 | $1.60 | Increase $0.68 | - Net income growth was primarily driven by new rates for the Oregon gas utility, contributions from SiEnergy, new rates and acquisitions for the NWN water utility, and earnings from NWN Renewables, partially offset by higher operating, depreciation, and interest expenses[1](index=1&type=chunk) [Key Events and Business Developments](index=1&type=section&id=1.2.%20Key%20Events%20and%20Business%20Developments) The company achieved key milestones in Q2 2025, including a rate case settlement in Oregon, the acquisition of Pines Holdings, and significant customer connection growth - Reached a multi-party settlement in the Oregon gas utility rate case, expected to generate **$21.3 million in annual revenue growth**[3](index=3&type=chunk) - Acquired Hughes Gas Resources, Inc (renamed Pines Holdings) for **$60.8 million**, expanding SiEnergy's regulated gas utility operations in Texas with approximately **7,000 connections** and a backlog of over **12,000 contracted customers**[3](index=3&type=chunk)[6](index=6&type=chunk) - Added over **92,000 gas and water utility connections** in the last 12 months ending June 30, 2025, representing a consolidated growth rate of **10.6%**, primarily driven by the SiEnergy and Pines acquisitions[3](index=3&type=chunk) - Achieved strong organic customer growth of **1.9% (annualized)** on a consolidated basis in the first half of 2025[3](index=3&type=chunk) [Oregon General Rate Case Settlements](index=1&type=section&id=1.2.1.%20Oregon%20General%20Rate%20Case%20Settlements) - NW Natural filed an annual revenue requirement increase request of **$59.4 million** on December 30, 2024, which included approximately **$10 million** for a depreciation study increase[2](index=2&type=chunk) - On June 23, 2025, NW Natural reached a settlement with other parties, agreeing to a revenue requirement increase of **$21.3 million (or 2.5%)**, including **$4.8 million** for the depreciation study increase[3](index=3&type=chunk) | Metric | Details | | :--- | :--- | | Capital Structure | 50% common equity, 50% long-term debt | | Return on Equity (ROE) | 9.5% | | Overall Cost of Capital | 7.12% | | Projected Rate Base | Approx $2.2 billion (an increase of $144 million from the last rate case) | - New rates are expected to take effect on October 31, 2025, subject to OPUC review and approval, and completion of identified capital projects[5](index=5&type=chunk) [Pines Holdings Acquisition](index=3&type=section&id=1.2.2.%20Pines%20Holdings%20Acquisition) - SiEnergy acquired Pines Holdings in June 2025 for **$60.8 million**, which serves approximately **7,000 connections** across 12 communities northeast of Houston[6](index=6&type=chunk) - Pines Holdings is projected to have a rate base of approximately **$47 million** by the end of 2025 and has a backlog of over **12,000 contracted customers**, further expanding SiEnergy's regulated gas utility operations in Texas[6](index=6&type=chunk) [2025 Guidance and Long-Term Targets](index=3&type=section&id=1.3.%202025%20Guidance%20and%20Long-Term%20Targets) NW Natural Holdings updated its 2025 GAAP EPS guidance, reaffirmed its adjusted EPS guidance and long-term EPS growth target, and announced its capital expenditure forecast for 2025 | Metric | 2025 Guidance | | :--- | :--- | | GAAP EPS | $2.60 to $2.80 | | Adjusted EPS | $2.75 to $2.95 | - The adjusted EPS guidance excludes **$8.6 million in pre-tax transaction and business development costs** (approximately $6.3 million after-tax or $0.15 per share) related to the SiEnergy and Pines acquisitions[7](index=7&type=chunk) - Reaffirmed long-term EPS growth target of **4% to 6%** (compounded annually from a 2025 adjusted EPS baseline)[3](index=3&type=chunk)[7](index=7&type=chunk) - Capital expenditures for 2025 are projected to be between **$450 million and $500 million**, expected to be financed through internal generation or long-term debt or equity financing[7](index=7&type=chunk) [Dividend Declared](index=3&type=section&id=1.4.%20Dividend%20Declared) The NW Natural Holdings Board of Directors declared a quarterly dividend, maintaining the company's ongoing shareholder returns | Metric | Amount | | :--- | :--- | | Quarterly Dividend | $0.49 per share | | Annualized Dividend Rate | $1.96 per share | | Payment Date | August 15, 2025 | | Record Date | July 31, 2025 | [Detailed Segment Results](index=4&type=section&id=Detailed%20Segment%20Results) [Second Quarter Results by Segment](index=4&type=section&id=2.1.%20Second%20Quarter%20Results%20by%20Segment) In Q2 2025, NW Natural Holdings' consolidated net loss narrowed year-over-year, with adjusted net income turning positive, driven by significant net income growth in both the NWN Gas and NWN Water utility segments and new contributions from the SiEnergy Gas Utility acquisition | Segment | Q2 2025 Net Income ($ thousands) | Q2 2024 Net Income ($ thousands) | Change ($ thousands) | | :--- | :--- | :--- | :--- | | NWN Gas Utility | $1,529 | $(2,987) | $4,516 | | SiEnergy Gas Utility | $1,014 | — | $1,014 | | NWN Water Utility | $2,833 | $1,071 | $1,762 | | Other | $(7,876) | $(871) | $(7,005) | | Consolidated | $(2,500) | $(2,787) | $287 | | Adjusted Consolidated | $315 | $(2,787) | $3,102 | | Segment | Q2 2025 EPS | Q2 2024 EPS | Change | | :--- | :--- | :--- | :--- | | NWN Gas Utility | $0.04 | $(0.08) | $0.12 | | SiEnergy Gas Utility | $0.03 | — | $0.03 | | NWN Water Utility | $0.07 | $0.03 | $0.04 | | Other | $(0.20) | $(0.02) | $(0.18) | | Consolidated | $(0.06) | $(0.07) | $0.01 | | Adjusted Consolidated | $0.01 | $(0.07) | $0.08 | [Year-to-Date Results by Segment](index=4&type=section&id=2.2.%20Year-to-Date%20Results%20by%20Segment) For the first half of 2025, NW Natural Holdings achieved substantial growth in both consolidated net income and adjusted net income, with positive contributions from all major business segments including NWN Gas, SiEnergy Gas, and NWN Water | Segment | H1 2025 Net Income ($ thousands) | H1 2024 Net Income ($ thousands) | Change ($ thousands) | | :--- | :--- | :--- | :--- | | NWN Gas Utility | $88,695 | $62,728 | $25,967 | | SiEnergy Gas Utility | $6,519 | — | $6,519 | | NWN Water Utility | $4,521 | $325 | $4,196 | | Other | $(14,319) | $(2,017) | $(12,302) | | Consolidated | $85,416 | $61,036 | $24,380 | | Adjusted Consolidated | $92,118 | $61,036 | $31,082 | | Segment | H1 2025 EPS | H1 2024 EPS | Change | | :--- | :--- | :--- | :--- | | NWN Gas Utility | $2.19 | $1.65 | $0.54 | | SiEnergy Gas Utility | $0.16 | — | $0.16 | | NWN Water Utility | $0.11 | $0.01 | $0.10 | | Other | $(0.35) | $(0.06) | $(0.29) | | Consolidated | $2.11 | $1.60 | $0.51 | | Adjusted Consolidated | $2.28 | $1.60 | $0.68 | [NWN Gas Utility Performance](index=5&type=section&id=2.3.%20NWN%20Gas%20Utility%20Performance) The NWN Gas Utility segment achieved significant growth in net income and gross margin for both the second quarter and first half of 2025, primarily due to the implementation of new rates in Oregon and continued system investments | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Margin | $127,222 thousand | $110,309 thousand | Increase $16,913 thousand | | Net Income | $1,529 thousand | $(2,987) thousand | Increase $4,516 thousand | | EPS | $0.04 | $(0.08) | Increase $0.12 | | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Margin | $384,044 thousand | $328,459 thousand | Increase $55,585 thousand | | Net Income | $88,695 thousand | $62,728 thousand | Increase $25,967 thousand | | EPS | $2.19 | $1.65 | Increase $0.54 | - The second-quarter net income increase primarily reflects the implementation of new rates in Oregon, which contributed to a **$16.9 million increase in gross margin**[13](index=13&type=chunk) - The first-half net income growth was mainly driven by new rates in Oregon, resulting in a **$55.6 million increase in gross margin**[14](index=14&type=chunk) [SiEnergy Gas Utility Performance](index=5&type=section&id=2.4.%20SiEnergy%20Gas%20Utility%20Performance) The SiEnergy Gas Utility segment contributed net income and gross margin for the first time in the second quarter and first half of 2025 following its acquisition, with performance meeting management expectations and benefiting from strong customer growth | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Margin | $8,161 thousand | — | $8,161 thousand | | Net Income | $1,014 thousand | — | $1,014 thousand | | EPS | $0.03 | — | $0.03 | | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Margin | $21,745 thousand | — | $21,745 thousand | | Net Income | $6,519 thousand | — | $6,519 thousand | | EPS | $0.16 | — | $0.16 | - SiEnergy was acquired on January 7, 2025, and Pines on June 2, 2025; since their acquisitions, these entities contributed **$1.0 million in net income ($0.03 per share)** in the second quarter and **$6.5 million in net income ($0.16 per share)** in the first half[16](index=16&type=chunk) - Gross margin performance was in line with management expectations, reflecting strong customer growth in both the second quarter and first half[16](index=16&type=chunk) [NWN Water Utility Performance](index=5&type=section&id=2.5.%20NWN%20Water%20Utility%20Performance) The NWN Water Utility segment delivered strong net income growth in the second quarter and first half of 2025, driven by the implementation of new rates in Arizona and contributions from the acquisition of Infrastructure Capital Holdings/Puttman (ICH) water utilities | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Operating Income | $4,296 thousand | $1,798 thousand | Increase $2,498 thousand | | Net Income | $2,833 thousand | $1,071 thousand | Increase $1,762 thousand | | EPS | $0.07 | $0.03 | Increase $0.04 | | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Operating Income | $7,339 thousand | $2,252 thousand | Increase $5,087 thousand | | Net Income | $4,521 thousand | $325 thousand | Increase $4,196 thousand | | EPS | $0.11 | $0.01 | Increase $0.10 | - The second-quarter net income increase of **$1.8 million** primarily reflects a **$4.8 million increase in operating income**, driven by new rates for the largest utility in Arizona and incremental revenues from the ICH water utilities acquired in September 2024[20](index=20&type=chunk) - The first-half net income increase of **$4.2 million** was mainly due to an **$8.0 million increase in operating income**, driven by new rates for Arizona utilities and incremental revenues from the ICH water utility acquisition[21](index=21&type=chunk) [Other Business Activities Performance](index=7&type=section&id=2.6.%20Other%20Business%20Activities%20Performance) The "Other" business segment reported increased net loss and adjusted net loss for both the second quarter and first half of 2025, primarily due to a significant rise in interest expense related to incremental financing activities in December 2024 and March 2025 | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Loss | $(7,876) thousand | $(871) thousand | Increase $(7,005) thousand | | Adjusted Net Loss | $(5,061) thousand | $(871) thousand | Increase $(4,190) thousand | | Loss Per Share | $(0.20) | $(0.02) | Increase $(0.18) | | Adjusted Loss Per Share | $(0.13) | $(0.02) | Increase $(0.11) | | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Loss | $(14,319) thousand | $(2,017) thousand | Increase $(12,302) thousand | | Adjusted Net Loss | $(7,617) thousand | $(2,017) thousand | Increase $(5,600) thousand | | Loss Per Share | $(0.35) | $(0.06) | Increase $(0.29) | | Adjusted Loss Per Share | $(0.18) | $(0.06) | Increase $(0.12) | - The second-quarter adjusted net loss increased by **$4.2 million**, primarily due to a **$9.1 million increase in interest expense** from the issuance of subordinated notes in March 2025[24](index=24&type=chunk) - The first-half adjusted net loss increased by **$5.6 million**, mainly related to higher interest expense from incremental financing at NW Natural Holdings in December 2024 and March 2025[25](index=25&type=chunk) [Company Overview and Investor Information](index=7&type=section&id=Company%20Overview%20and%20Investor%20Information) [About NW Natural Holdings](index=9&type=section&id=3.1.%20About%20NW%20Natural%20Holdings) NW Natural Holdings is a utility holding company with over 166 years of history, headquartered in Portland, Oregon, providing essential energy, water, and wastewater services to over one million customers across seven states through its subsidiaries, with a commitment to safety, environmental stewardship, and community service - The company owns Northwest Natural Gas Company (NW Natural), SiEnergy Operating (SiEnergy Gas Utility), NW Natural Water Company (NWN Water Utility), NW Natural Renewables Holdings (NWN Renewables), and other businesses[29](index=29&type=chunk) - Serves over **one million customers** across seven states with natural gas, water, and wastewater services through its subsidiaries[30](index=30&type=chunk) - Recognized by Ethisphere® as one of the **World's Most Ethical Companies®** for four consecutive years and consistently leads the industry in J.D. Power & Associates customer satisfaction surveys[30](index=30&type=chunk) - NWN Gas Utility serves approximately **2 million people** in Oregon and Southwest Washington with about **807,000 meters** and **21.6 Bcf** of underground gas storage capacity[31](index=31&type=chunk) - SiEnergy Gas Utility is one of the fastest-growing natural gas distribution utilities in the U.S, serving over **83,000 meters** in the Houston, Dallas, and Austin metropolitan areas[32](index=32&type=chunk) - NWN Water Utility provides water and wastewater services to approximately **195,000 people** in the Pacific Northwest, Texas, Arizona, and California, with about **78,600 meters**[33](index=33&type=chunk) [Conference Call and Webcast Details](index=7&type=section&id=3.2.%20Conference%20Call%20and%20Webcast%20Details) NW Natural Holdings will host a conference call and webcast to discuss its second-quarter 2025 financial and operating results, with replay information available | Event | Details | | :--- | :--- | | Date and Time | Tuesday, August 5, 2025, at 8 a.m. PT (11 a.m. ET) | | U.S. Phone Number | 1-833-470-1428 | | International Phone Number | 1-404-975-4839 | | Passcode | 546522 | | Webcast | ir.nwnaturalholdings.com | | Replay Phone (U.S.) | 1-866-813-9403 | | Replay Phone (International) | 1-929-458-6194 | | Replay Access Code | 198960 | [Financial Statements](index=12&type=section&id=Financial%20Statements) [Consolidated Income Statement and Financial Highlights](index=12&type=section&id=4.1.%20Consolidated%20Income%20Statement%20and%20Financial%20Highlights) This section provides the unaudited consolidated statements of income and financial highlights for NW Natural Holdings, covering key financial data such as operating revenues, expenses, net income, and earnings per share for the second quarter and first half of 2025 and 2024 | Metric ($ thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenues | $236,194 | $211,714 | $730,478 | $645,184 | | Total Operating Expenses | $208,983 | $196,008 | $548,913 | $519,651 | | Operating Income | $27,211 | $15,706 | $181,565 | $125,533 | | Net Income (Loss) | $(2,500) | $(2,787) | $85,416 | $61,036 | | Diluted EPS | $(0.06) | $(0.07) | $2.11 | $1.60 | | Dividends Declared Per Share | $0.4900 | $0.4875 | $0.9800 | $0.9750 | | Capital Structure (at period end) | 2025 | 2024 | | :--- | :--- | :--- | | Common Equity | 38.0 % | 44.8 % | | Long-Term Debt | 54.2 % | 52.5 % | | Short-Term Debt | 7.8 % | 2.7 % | | Total | 100.0 % | 100.0 % | | Operating Statistics (meters at period end) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | NWN Gas Utility | 807,243 | 801,943 | | SiEnergy Gas Utility | 83,278 | — | | NWN Water Utility | 78,635 | 74,337 | | Total Meters | 969,156 | 876,280 | [Consolidated Balance Sheets](index=14&type=section&id=4.2.%20Consolidated%20Balance%20Sheets) This section presents the unaudited consolidated balance sheets of NW Natural Holdings, detailing the assets, liabilities, and equity as of June 30, 2025, and June 30, 2024, reflecting changes in the company's financial position | Metric ($ thousands) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total Current Assets | $466,116 | $423,120 | | Net Property, Plant and Equipment | $4,146,423 | $3,530,445 | | Goodwill | $370,889 | $163,166 | | Total Non-Current Assets | $5,320,447 | $4,399,246 | | **Total Assets** | **$5,786,563** | **$4,822,366** | | **Liabilities and Equity** | | | | Total Current Liabilities | $683,867 | $435,540 | | Long-Term Debt | $2,086,650 | $1,574,751 | | Total Deferred Credits and Other Non-Current Liabilities | $1,556,808 | $1,465,359 | | Total Equity | $1,459,238 | $1,346,716 | | **Total Liabilities and Equity** | **$5,786,563** | **$4,822,366** | - As of June 30, 2025, **total assets increased by approximately $964 million** compared to the same period in 2024, primarily driven by increases in net property, plant, and equipment and goodwill - Both current liabilities and long-term debt saw significant increases, reflecting the company's financing needs for operational and investment activities [Consolidated Statements of Cash Flows](index=16&type=section&id=4.3.%20Consolidated%20Statements%20of%20Cash%20Flows) This section provides the unaudited consolidated statements of cash flows for NW Natural Holdings, detailing cash flows from operating, investing, and financing activities for the first half of 2025 and 2024, reflecting the sources and uses of the company's cash | Metric ($ thousands) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cash Provided by Operating Activities | $281,770 | $246,076 | | Cash Used in Investing Activities | $(555,887) | $(200,441) | | Cash Provided by (Used in) Financing Activities | $332,799 | $(14,220) | | Increase in Cash, Cash Equivalents, and Restricted Cash | $58,682 | $31,415 | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $106,664 | $81,039 | - In the first half of 2025, cash outflow from investing activities increased significantly, primarily due to **capital expenditures and acquisition activities (net $331,329 thousand)** - Financing activities shifted from a cash use in H1 2024 to a cash source in H1 2025, mainly driven by the **issuance of long-term debt ($375,000 thousand)** [Non-GAAP Measures and Forward-Looking Statements](index=10&type=section&id=Non-GAAP%20Measures%20and%20Forward-Looking%20Statements) [Non-GAAP Financial Measures](index=11&type=section&id=5.1.%20Non-GAAP%20Financial%20Measures) This section defines and explains the non-GAAP financial measures used by NW Natural Holdings, such as "Adjusted Net Income" and "Adjusted EPS," emphasizing their use in evaluating the company's overall performance by excluding certain charges and expenses that may not be indicative of core business operations - Management uses non-GAAP financial measures such as "Adjusted Net Income," "Adjusted EPS," "Adjusted Segment Net Loss," "Segment EPS," and "Adjusted Segment EPS" to evaluate the company's overall performance[40](index=40&type=chunk) - These non-GAAP measures provide meaningful supplemental information by excluding transaction and business development costs, which primarily include professional fees related to business combinations and development activities[40](index=40&type=chunk) - Non-GAAP financial measures should not be considered a substitute for or superior to GAAP measures and may be calculated differently by other companies, limiting their comparative use[41](index=41&type=chunk) [2025 Guidance Reconciliation to GAAP](index=18&type=section&id=5.2.%202025%20Guidance%20Reconciliation%20to%20GAAP) This section provides a reconciliation of NW Natural Holdings' 2025 GAAP EPS guidance to its adjusted EPS guidance, clarifying the adjustments and their impact on earnings per share | Metric | 2025 | | :--- | :--- | | GAAP EPS Guidance | $2.60 to $2.80 | | Transaction and Business Development Costs | $0.15 | | Adjusted EPS Guidance | $2.75 to $2.95 | - Transaction and business development costs (including impacts from SiEnergy and Pines) are estimated at **$6.3 million after-tax for 2025**, or **$0.15 per share**, assuming 41.1 million average diluted shares and a 26.5% income tax rate[47](index=47&type=chunk) [Q2 and YTD 2025 Reconciliation to GAAP](index=18&type=section&id=5.3.%20Q2%20and%20YTD%202025%20Reconciliation%20to%20GAAP) This section provides a detailed reconciliation of GAAP net income (loss) to adjusted net income (loss) for NW Natural Holdings' consolidated and "Other" segments for the second quarter and first half of 2025, specifying transaction and business development costs and their income tax effects | Metric ($ thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Consolidated** | | | | GAAP Net Income (Loss) | $(2,500) | $(2,787) | | Transaction and Business Development Costs | $3,831 | — | | Income Tax Effect | $(1,016) | — | | Adjusted Net Income (Loss) | $315 | $(2,787) | | **Other** | | | | GAAP Net Income (Loss) | $(7,876) | $(871) | | Transaction and Business Development Costs | $3,831 | — | | Income Tax Effect | $(1,016) | — | | Adjusted Net Income (Loss) | $(5,061) | $(871) | | Metric ($ thousands) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Consolidated** | | | | GAAP Net Income | $85,416 | $61,036 | | Transaction and Business Development Costs | $9,118 | — | | Income Tax Effect | $(2,416) | — | | Adjusted Net Income | $92,118 | $61,036 | | **Other** | | | | GAAP Net Income (Loss) | $(14,319) | $(2,017) | | Transaction and Business Development Costs | $9,118 | — | | Income Tax Effect | $(2,416) | — | | Adjusted Net Income (Loss) | $(7,617) | $(2,017) | - SiEnergy transaction costs were recognized in Q1 2025, while business development costs and Pines transaction costs were recognized in Q2 2025; the tax effect of adjustments is calculated at a combined federal and statutory tax rate of 26.5%[48](index=48&type=chunk) [Forward-Looking Statements](index=10&type=section&id=5.4.%20Forward-Looking%20Statements) This section contains forward-looking statements about future events and financial performance, emphasizing that these statements are based on current expectations and assumptions and are subject to inherent uncertainties, risks, and changes in circumstances that could cause actual results to differ materially from expectations; the company undertakes no obligation to publicly update any forward-looking statement, except as required by law - Forward-looking statements involve plans, objectives, assumptions, estimates, expectations, forecasts, outlook, timing, goals, strategies, commitments, future events, financial condition, financial performance, investments, and valuations for future periods[37](index=37&type=chunk) - These statements are based on current expectations and assumptions about the business, economy, geopolitical factors, and other future conditions but are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict[38](index=38&type=chunk) - Actual results may differ materially from those projected in forward-looking statements, and investors should use caution when relying on them[38](index=38&type=chunk) - The company undertakes no obligation to publicly update any forward-looking statement, except as required by law[39](index=39&type=chunk)

Market Overview - Wall Street has experienced a rally, with the S&P 500 and Nasdaq reaching multiple record highs due to positive trade negotiations and a strong earnings season [1] - Despite the rally, concerns about the economy persist, particularly regarding high inflation and the Federal Reserve's stance on interest rates [2][8] Federal Reserve Insights - The Federal Reserve is expected to maintain interest rates in the range of 4.25-4.5% during the upcoming FOMC meeting, with no cuts anticipated [5][8] - Retail sales increased by 0.6% in June, indicating resilient consumer spending despite inflationary pressures [5] - The Consumer Price Index (CPI) rose by 0.3% in June, influenced by higher consumer goods prices due to tariffs [6] Investment Recommendations - It is advisable to invest in low-beta defensive stocks from the utility and consumer staples sectors, which include Entergy Corporation, Fortis, Inc., Northwest Natural Holding Company, and Ingredion Incorporated [3][4] - These stocks are characterized by high dividend yields and favorable Zacks Ranks, making them appealing amid inflation and interest rate uncertainties [11] Company Profiles Entergy Corporation - Engaged in electric power production and retail distribution, with a generating capacity of 30,000 MW, including over 8,000 MW of nuclear capacity [9] - Expected earnings growth rate of 6.6% for the current year, with a Zacks Rank of 2 and a dividend yield of 2.72% [10] Fortis, Inc. - Operates in the electric and gas utility sector, primarily in Canada and the Caribbean [12] - Expected earnings growth rate of 4.2% for the current year, with a Zacks Rank of 2 and a dividend yield of 3.63% [12] Northwest Natural Holding Company - Focuses on natural gas distribution systems and pipeline projects, serving residential, commercial, and industrial customers [13] - Expected earnings growth rate of 23.6% for the current year, with a Zacks Rank of 2 and a dividend yield of 4.80% [14] Ingredion Incorporated - Provides ingredient solutions, specializing in nature-based sweeteners and starches for various industries [15] - Expected earnings growth rate of 6.8% for the current year, with a Zacks Rank of 2 and a dividend yield of 2.40% [16]

Core Viewpoint - Northwest Natural (NWN) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in stock price movements [4]. Company Performance and Outlook - The upgrade for Northwest Natural reflects an improvement in the company's underlying business, suggesting that investor sentiment may drive the stock price higher [5]. - For the fiscal year ending December 2025, Northwest Natural is expected to earn $2.88 per share, with a 1.8% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions and potential for market-beating returns [9][10].

Core Viewpoint - Northwest Natural Holding Company (NWN) is positioned as a strong investment option in the utility sector due to its infrastructure upgrades and consistent customer base expansion [1] Growth Projections & Surprise History - The Zacks Consensus Estimate for 2025 earnings per share (EPS) has increased by 1.8% to $2.88 over the past 60 days [2] - The 2025 sales estimate stands at $1.30 billion, reflecting a year-over-year growth of 13.1% [2] - NWN has achieved an average earnings surprise of 15.1% over the last four quarters [2] Solvency - The time-to-interest earned ratio was 2.6 at the end of Q1 2025, indicating the company's strong ability to meet future interest obligations [3] Liquidity - NWN's current ratio is 1.05, surpassing the industry average of 0.63, demonstrating sufficient short-term assets to cover liabilities [4] Dividend History - The company has a 69-year history of increasing dividends, currently paying a quarterly dividend of 49 cents per share, which translates to an annualized dividend of $1.96 and a yield of 4.77% [5] Focus on Strategic Investments - NWN plans to invest $2.5-$2.7 billion in consolidated capital expenditures from 2025 to 2030, marking a 37% increase from previous projections [6] Customer Growth - The company reported a 2.2% organic customer growth rate in Q1 2025, driven by new meter sets and growth from SiEnergy [7] Stock Price Performance - Over the past six months, NWN's shares have increased by 5%, outperforming the industry's growth of 0.3% [9]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying the right ones can be challenging due to associated risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score system aids in identifying promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Northwest Natural (NWN) is highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth being particularly desirable [4] - Northwest Natural's projected EPS growth for this year is 23.4%, significantly higher than the industry average of 9.3% [5] Group 3: Cash Flow Growth - Higher-than-average cash flow growth is essential for growth-oriented companies, allowing them to expand without relying on external funding [6] - Northwest Natural's year-over-year cash flow growth is 4.9%, outperforming the industry average of -0.1% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 7.2%, compared to the industry average of 7% [7] Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions are correlated with stock price movements [8] - Northwest Natural has seen a 1.4% increase in current-year earnings estimates over the past month [8] Group 5: Overall Positioning - Northwest Natural has achieved a Growth Score of B and a Zacks Rank of 2 due to positive earnings estimate revisions, positioning it well for potential outperformance [10]