NorthWestern (NWE) - 2023 Q1 - Quarterly Report

Special Note Regarding Forward-Looking Statements This section provides cautionary statements about future-oriented information, highlighting inherent risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements about future financial performance, economic conditions, and customer usage, identified by words like "anticipates," "expects," and "intends." These statements involve risks and uncertainties that could cause actual results to differ materially[10][11] - Factors that may cause such differences include adverse regulatory determinations, extraordinary external events (pandemics, geopolitical events, natural disasters), cybersecurity attacks, supply chain constraints, inflation, changes in commodity prices, unscheduled generation outages, and adverse economic conditions[13] - The company undertakes no obligation to publicly update or revise any forward-looking statements[14] Part I. Financial Information This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the reporting period Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for NorthWestern Corporation, including statements of income, comprehensive income, balance sheets, cash flows, and shareholders' equity, along with accompanying notes - NorthWestern Corporation provides electricity and/or natural gas to approximately 764,200 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park[28] Condensed Consolidated Statements of Income This statement details the company's revenues, expenses, and net income for the three months ended March 31, comparing 2023 to 2022 Condensed Consolidated Statements of Income (Three Months Ended March 31, 2023 vs. 2022) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :--- | :--- | :----- | :------- | | Electric Revenues | $295,308 | $271,727 | $23,581 | 8.7% | | Gas Revenues | $159,234 | $122,755 | $36,479 | 29.7% | | Total Revenues | $454,542 | $394,482 | $60,060 | 15.2% | | Total Operating Expenses | $358,500 | $315,266 | $43,234 | 13.7% | | Operating Income | $96,042 | $79,216 | $16,826 | 21.2% | | Interest expense, net | $(28,008) | $(23,716) | $(4,292) | 18.1% | | Income before income taxes | $72,771 | $60,221 | $12,550 | 20.8% | | Income tax expense | $(10,241) | $(1,111) | $(9,130) | 821.8% | | Net Income | $62,530 | $59,110 | $3,420 | 5.8% | | Basic EPS | $1.05 | $1.09 | $(0.04) | -3.7% | | Diluted EPS | $1.05 | $1.08 | $(0.03) | -2.8% | | Dividends Declared per Common Share | $0.64 | $0.63 | $0.01 | 1.6% | Condensed Consolidated Statements of Comprehensive Income This statement presents the company's net income and other comprehensive income/loss components for the three months ended March 31 Condensed Consolidated Statements of Comprehensive Income (Three Months Ended March 31, 2023 vs. 2022) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :--- | :--- | :----- | :------- | | Net Income | $62,530 | $59,110 | $3,420 | 5.8% | | Total Other Comprehensive Loss | $(56) | $(47) | $(9) | 19.1% | | Comprehensive Income | $62,474 | $59,063 | $3,411 | 5.8% | Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and shareholders' equity as of March 31, 2023, and December 31, 2022 Condensed Consolidated Balance Sheets (March 31, 2023 vs. December 31, 2022) | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :------------- | :---------------- | :----- | :------- | | Total Current Assets | $448,336 | $538,824 | $(90,488) | -16.8% | | Property, plant, and equipment, net | $5,702,670 | $5,657,480 | $45,190 | 0.8% | | Total Assets | $7,280,994 | $7,317,783 | $(36,789) | -0.5% | | Total Current Liabilities | $680,681 | $620,845 | $59,836 | 9.6% | | Total Liabilities | $4,587,994 | $4,652,600 | $(64,606) | -1.4% | | Total Shareholders' Equity | $2,693,000 | $2,665,183 | $27,817 | 1.0% | | Total Liabilities and Shareholders' Equity | $7,280,994 | $7,317,783 | $(36,789) | -0.5% | Condensed Consolidated Statements of Cash Flows This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31 Condensed Consolidated Statements of Cash Flows (Three Months Ended March 31, 2023 vs. 2022) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :--- | :--- | :----- | :------- | | Cash Provided by Operating Activities | $213,699 | $195,666 | $18,033 | 9.2% | | Cash Used in Investing Activities | $(136,604) | $(116,069) | $(20,535) | 17.7% | | Cash Used in Financing Activities | $(72,456) | $(67,461) | $(4,995) | 7.4% | | Increase in Cash, Cash Equivalents, and Restricted Cash | $4,639 | $12,136 | $(7,497) | -61.8% | | Cash, Cash Equivalents, and Restricted Cash, end of period | $27,102 | $30,898 | $(3,796) | -12.3% | Condensed Consolidated Statements of Shareholders' Equity This statement details changes in the company's shareholders' equity, including net income and dividends, for the three months ended March 31 Condensed Consolidated Statements of Shareholders' Equity (Three Months Ended March 31, 2023 vs. 2022) | Metric | March 31, 2023 (in thousands) | March 31, 2022 (in thousands) | Change (in thousands) | % Change | | :-------------------- | :------------- | :------------- | :----- | :------- | | Total Shareholders' Equity (End of Period) | $2,693,000 | $2,366,981 | $326,019 | 13.8% | | Net income | $62,530 | $59,110 | $3,420 | 5.8% | | Dividends on common stock | $(38,041) | $(33,901) | $(4,140) | 12.2% | Notes to Condensed Consolidated Financial Statements This section provides explanatory notes that offer additional detail and context to the condensed consolidated financial statements (1) Nature of Operations and Basis of Consolidation This note outlines the company's business activities and the principles used in preparing its consolidated financial statements Reconciliation of Cash, Cash Equivalents, and Restricted Cash (in thousands) | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------------------------------------------------------- | :------------- | :---------------- | :------------- | :---------------- | | Cash and cash equivalents | $10,730 | $8,489 | $13,645 | $2,820 | | Restricted cash | $16,372 | $13,974 | $17,253 | $15,942 | | Total cash, cash equivalents, and restricted cash | $27,102 | $22,463 | $30,898 | $18,762 | (2) Regulatory Matters This note discusses significant regulatory filings, rate reviews, and approvals impacting the company's operations and revenue - The company filed a Montana electric and natural gas rate review on August 8, 2022, requesting an annual increase. Interim rates were approved effective October 1, 2022, subject to refund. A settlement agreement was filed on April 3, 2023, which is subject to MPSC approval[33] Montana Rate Review - Requested and Interim Revenue Increases (in millions) | Category | Requested (Rebuttal Testimony) (in millions) | Interim Granted (in millions) | Requested (Settlement Agreement) (in millions) | | :------------------------------------ | :----------------------------- | :-------------- | :------------------------------- | | Electric | | | | | Base Rates | $90.6 | $29.4 | $67.4 | | PCCAM | $69.7 | $61.1 | $69.7 | | Property Tax (tracker true-up) | $14.5 | $10.8 | $14.5 | | Total Electric Revenue Increase | $174.8 | $101.3 | $151.6 | | Natural Gas | | | | | Base Rates | $22.4 | $1.7 | $14.1 | | Property Tax (tracker true-up) | $4.2 | $2.9 | $4.2 | | Total Natural Gas Revenue Increase | $26.6 | $4.6 | $18.3 | - The MPSC approved the company's legal corporate restructuring plan on February 21, 2023, which aims to separate Montana utility business from South Dakota and Nebraska utility business under a holding company structure for greater transparency[39] (3) Income Taxes This note explains the company's income tax expense, effective tax rate reconciliation, and unrecognized tax benefits - The effective tax rate differs from the federal statutory rate due to regulatory impact of flowing through federal and state tax benefits from repairs deductions, accelerated tax depreciation, and production tax credits[40] Reconciliation of Effective Tax Rate to Federal Statutory Rate (Three Months Ended March 31, 2023 vs. 2022) | Metric | 2023 (in thousands) | 2023 (%) | 2022 (in thousands) | 2022 (%) | | :------------------------------------------ | :------------------ | :------- | :------------------ | :------- | | Income before income taxes | $72,771 | | $60,221 | | | Income tax calculated at federal statutory rate | $15,282 | 21.0% | $12,646 | 21.0% | | State income tax, net of federal provisions | $959 | 1.3% | $400 | 0.7% | | Flow-through repairs deductions | $(5,845) | (8.0%) | $(6,801) | (11.3%) | | Production tax credits | $(3,199) | (4.4%) | $(3,824) | (6.4%) | | Amortization of excess deferred income tax | $(799) | (1.1%) | $(411) | (0.7%) | | Reduction to previously claimed alternative minimum tax credit | $3,186 | 4.4% | — | — | | Plant and depreciation of flow-through items | $688 | 0.9% | $(255) | (0.4%) | | Share-based compensation | $388 | 0.5% | $(253) | (0.4%) | | Other, net | $(419) | (0.5%) | $(391) | (0.7%) | | Income tax expense | $10,241 | 14.1% | $1,111 | 1.8% | - Unrecognized tax benefits were approximately $29.9 million as of March 31, 2023, with $27.9 million potentially impacting the effective tax rate. The company accrued $1.7 million for interest and penalties on the balance sheet as of March 31, 2023, up from $1.4 million at December 31, 2022[42][43] (4) Comprehensive (Loss) Income This note details the components of other comprehensive income/loss and changes in accumulated other comprehensive loss Components of Other Comprehensive (Loss) Income, After-Tax (Three Months Ended March 31, 2023 vs. 2022) | Component | March 31, 2023 (Net-of-Tax) (in thousands) | March 31, 2022 (Net-of-Tax) (in thousands) | | :------------------------------------------ | :-------------------------- | :-------------------------- | | Foreign currency translation adjustment | $(2) | $(2) | | Reclassification of net income on derivative instruments | $113 | $113 | | Postretirement medical liability adjustment | $(167) | $(158) | | Total Other Comprehensive Loss | $(56) | $(47) | Accumulated Other Comprehensive Loss (AOCL) Balances (Net of Tax, in thousands) | Component | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :------------------------------------------ | :------------- | :---------------- | | Foreign currency translation | $1,433 | $1,435 | | Derivative instruments designated as cash flow hedges | $(9,712) | $(9,825) | | Postretirement medical plans | $375 | $542 | | Accumulated other comprehensive loss | $(7,904) | $(7,848) | (5) Financing Activities This note describes recent debt issuances and other financing transactions undertaken by the company - On March 30, 2023, the company issued $239.0 million in Montana First Mortgage Bonds and $31.0 million in South Dakota First Mortgage Bonds, both at 5.57% interest, maturing March 30, 2033. Proceeds of $220.0 million were received, with an additional $50.0 million expected on May 1, 2023[47] - An additional $30.0 million of South Dakota First Mortgage Bonds were priced on March 29, 2023, at 5.42% interest, expected to be issued on May 1, 2023, and mature on May 1, 2033[48] (6) Segment Information This note provides financial data disaggregated by the company's electric and natural gas business segments - The company's reportable business segments are electric and natural gas, with performance evaluated based on utility margin[49][50] Segment Financial Data (Three Months Ended March 31, 2023, in thousands) | Metric | Electric (in thousands) | Gas (in thousands) | Other (in thousands) | Total (in thousands) | | :-------------------------------------------------------------------------------- | :------- | :---- | :---- | :------ | | Operating revenues | $295,308 | $159,234 | $0 | $454,542 | | Fuel, purchased supply and direct transmission expense | $78,134 | $87,358 | $0 | $165,492 | | Utility margin | $217,174 | $71,876 | $0 | $289,050 | | Operating income (loss) | $67,644 | $28,414 | $(16) | $96,042 | | Net income (loss) | $45,822 | $26,812 | $(10,104) | $62,530 | | Total assets | $5,874,061 | $1,399,717 | $7,216 | $7,280,994 | | Capital expenditures | $120,819 | $15,785 | $0 | $136,604 | Segment Financial Data (Three Months Ended March 31, 2022, in thousands) | Metric | Electric (in thousands) | Gas (in thousands) | Other (in thousands) | Total (in thousands) | | :-------------------------------------------------------------------------------- | :------- | :---- | :---- | :------ | | Operating revenues | $271,727 | $122,755 | $0 | $394,482 | | Fuel, purchased supply and direct transmission expense | $77,623 | $57,450 | $0 | $135,073 | | Utility margin | $194,104 | $65,305 | $0 | $259,409 | | Operating income (loss) | $55,017 | $24,456 | $(257) | $79,216 | | Net income (loss) | $38,036 | $21,214 | $(140) | $59,110 | | Total assets | $5,523,726 | $1,291,946 | $6,363 | $6,822,035 | | Capital expenditures | $98,609 | $16,893 | $0 | $115,502 | (7) Revenue from Contracts with Customers This note details the company's revenue recognition policies and disaggregates revenue by major source and customer class - The company provides retail electric and natural gas services to residential, commercial, and industrial customers across Montana, South Dakota, and Nebraska. Revenue is recognized upon delivery of electricity or natural gas[53][54][55] Disaggregation of Revenue by Major Source and Customer Class (Three Months Ended March 31, in millions) | Category | Electric 2023 (in millions) | Natural Gas 2023 (in millions) | Total 2023 (in millions) | Electric 2022 (in millions) | Natural Gas 2022 (in millions) | Total 2022 (in millions) | | :------------------------------------------ | :------------ | :--------------- | :--------- | :------------ | :--------------- | :--------- | | Total Customer Revenues | $300.1 | $172.6 | $472.7 | $245.7 | $139.7 | $385.4 | | Other tariff and contract based revenues | $21.4 | $12.3 | $33.7 | $20.1 | $10.0 | $30.1 | | Regulatory amortization and other | $(26.2) | $(25.7) | $(51.9) | $5.9 | $(26.9) | $(21.0) | | Total Revenues | $295.3 | $159.2 | $454.5 | $271.7 | $122.8 | $394.5 | (8) Earnings Per Share This note presents the calculation of basic and diluted earnings per share, including the shares used in computation Average Shares Used in Computing Basic and Diluted EPS (Three Months Ended March 31) | Metric | March 31, 2023 | March 31, 2022 | | :------------------------------------------ | :------------- | :------------- | | Basic computation | 59,776,195 | 54,096,768 | | Dilutive effect of: Performance share awards | 13,009 | 11,244 | | Dilutive effect of: Forward equity sale | — | 711,383 | | Diluted computation | 59,789,204 | 54,819,395 | - As of March 31, 2023, 69,853 shares from performance and restricted share awards were antidilutive and excluded from EPS calculations, compared to 100,671 shares as of March 31, 2022[59] (9) Employee Benefit Plans This note provides information on the net periodic benefit cost for the company's pension and other postretirement plans Net Periodic Benefit Cost (Credit) for Pension and Other Postretirement Plans (Three Months Ended March 31, in thousands) | Component | Pension Benefits 2023 (in thousands) | Pension Benefits 2022 (in thousands) | Other Postretirement Benefits 2023 (in thousands) | Other Postretirement Benefits 2022 (in thousands) | | :------------------------------------------ | :-------------------- | :-------------------- | :--------------------------------- | :--------------------------------- | | Service cost | $1,494 | $2,884 | $87 | $91 | | Interest cost | $6,565 | $4,668 | $176 | $91 | | Expected return on plan assets | $(6,686) | $(6,052) | $(275) | $(262) | | Amortization of prior service credit | — | — | $29 | $(473) | | Recognized actuarial loss (gain) | $140 | — | $31 | $(14) | | Net periodic benefit cost (credit) | $1,513 | $1,500 | $(567) | $48 | - The company has not contributed to its pension plans during the three months ended March 31, 2023, but expects to contribute $11.2 million during the remainder of 2023[60] (10) Commitments and Contingencies This note discloses the company's environmental reserves, legal proceedings, and other significant commitments and contingent liabilities - The company's environmental reserve, primarily for former manufactured gas plant sites, is estimated to range from $21.3 million to $32.4 million, with a reserve of approximately $26.1 million as of March 31, 2023[65] - The State of Montana is suing for riverbed rents for 10 hydroelectric facilities. If the court finds riverbeds navigable and awards damages, annual rents could be approximately $3.8 million starting November 2014, which the company anticipates would be recoverable in rates[72][74] - A Montana District Court vacated the air quality permit for the Yellowstone County Generating Station due to deficient environmental analysis regarding exterior lighting and greenhouse gases, halting construction. The company has appealed and expects the plant to be operational by the end of 2024[82] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides a detailed discussion and analysis of the company's financial condition and results of operations, including business strategy, performance, and regulatory updates How We Performed Against Our First Quarter 2022 Results This section analyzes the key drivers behind the company's financial performance in Q1 2023 compared to Q1 2022, focusing on net income variance Net Income Variance (Three Months Ended March 31, 2023 vs. 2022, in millions) | Metric | Q1 2022 (in millions) | Variance Impacting Net Income (in millions) | Q1 2023 (in millions) | Change in Net Income (in millions) | | :-------------------------------------------------------------------------------- | :------ | :---------------------------- | :------ | :------------------- | | Income Before Income Taxes | $60.2 | $12.5 | $72.7 | | | Income Tax (Expense) Benefit | $(1.1) | $(9.1) | $(10.2) | | | Net Income | $59.1 | $3.4 | $62.5 | $3.4 | | Key Drivers of Variance: | | | | | | Higher electric retail volumes | | $7.3 | | | | Montana interim rates (subject to refund) | | $6.3 | | | | Higher natural gas retail volumes | | $2.8 | | | | Lower non-recoverable Montana electric supply costs | | $1.0 | | | | Higher electric transmission revenue | | $0.9 | | | | Higher operating, maintenance, and administrative expenses | | $(4.9) | | | | Higher interest expense | | $(3.2) | | | | Higher depreciation expense | | $(3.2) | | | | Reduction to previously claimed alternative minimum tax credit | | $(3.2) | | | - Consolidated net income increased by $3.4 million to $62.5 million for Q1 2023, primarily driven by higher electric and natural gas retail volumes, Montana interim rates, lower non-recoverable electric supply costs, and higher transmission revenues. These gains were partly offset by increased operating, maintenance, administrative, depreciation, interest, and income tax expenses[91] Significant Trends and Regulation This section highlights anticipated rate filings, corporate restructuring, and project delays impacting the company's operations and future outlook - The company anticipates making a South Dakota electric general rate filing in mid-2023[100] - The Montana Public Service Commission (MPSC) approved the company's legal corporate restructuring plan on February 21, 2023, which will legally separate the Montana utility business from the South Dakota and Nebraska utility business under a holding company[102] - The Yellowstone County Generating Station project faces delays and potential cost increases after its air quality permit was vacated by a Montana District Court due to deficiencies in environmental analysis. Construction is halted, but the plant is still expected to be operational by the end of 2024, with total costs incurred of $174.7 million out of an expected $275.0 million[106] Results of Operations This section provides a detailed analysis of the company's consolidated and segment-specific operating results, including revenues, expenses, and utility margin - Revenues fluctuate with supply costs, which are generally recovered from customers, and are also impacted by customer growth, usage (affected by weather and energy efficiency), and regulatory approvals[112][113] - Fuel, purchased supply, and direct transmission expenses are directly tied to energy generation/procurement and are generally recovered in rates. Operating and maintenance expenses are relatively stable and do not significantly fluctuate with short-term volume changes[114][115] Overall Consolidated Results This section presents the company's overall consolidated financial performance, focusing on gross margin, utility margin, and operating expenses Consolidated Gross Margin and Utility Margin (Three Months Ended March 31, in millions) | Metric | 2023 (in millions) | 2022 (in millions) | Change (in millions) | % Change | | :------------------------------------------ | :--- | :--- | :----- | :------- | | Gross Margin | $130.7 | $110.8 | $19.9 | 18.0% | | Utility Margin | $289.0 | $259.4 | $29.6 | 11.4% | | Electric Utility Margin | $217.2 | $194.1 | $23.1 | 11.9% | | Natural Gas Utility Margin | $71.8 | $65.3 | $6.5 | 10.0% | - The increase in consolidated utility margin was primarily driven by higher electric retail volumes ($9.8 million), Montana interim rates ($8.5 million), higher natural gas retail volumes ($3.7 million), and lower non-recoverable Montana electric supply costs ($1.3 million)[124][125] Consolidated Operating Expenses (Excluding Fuel, Purchased Supply and Direct Transmission Expense) (Three Months Ended March 31, in millions) | Metric | 2023 (in millions) | 2022 (in millions) | Change (in millions) | % Change | | :------------------------------------------ | :--- | :--- | :----- | :------- | | Operating and maintenance | $55.9 | $52.8 | $3.1 | 5.9% | | Administrative and general | $34.7 | $31.6 | $3.1 | 9.8% | | Property and other taxes | $49.2 | $46.9 | $2.3 | 4.9% | | Depreciation and depletion | $53.2 | $48.9 | $4.3 | 8.8% | | Total Operating Expenses (excluding fuel, purchased supply and direct transmission expense) | $193.0 | $180.2 | $12.8 | 7.1% | Electric Segment This section analyzes the financial performance of the electric segment, detailing revenues, utility margin, and key drivers of change Electric Segment Revenues and Utility Margin (Three Months Ended March 31, in thousands) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------ | :--- | :--- | :----- | :------- | | Total Retail Electric Revenues | $300,069 | $245,676 | $54,393 | 22.1% | | Total Electric Revenues | $295,308 | $271,727 | $23,581 | 8.7% | | Fuel, purchased supply and direct transmission expense | $78,134 | $77,623 | $511 | 0.7% | | Electric Utility Margin | $217,174 | $194,104 | $23,070 | 11.9% | - Electric retail volumes increased due to 9% colder winter weather in Montana and 6% colder in South Dakota, along with customer growth[140][143] - Key drivers for the $23.1 million increase in electric utility margin include higher retail volumes ($9.8 million), Montana interim rates ($8.4 million), lower non-recoverable Montana electric supply costs ($1.3 million), and higher transmission revenue ($1.2 million)[143] Natural Gas Segment This section analyzes the financial performance of the natural gas segment, detailing revenues, utility margin, and key drivers of change Natural Gas Segment Revenues and Utility Margin (Three Months Ended March 31, in thousands) | Metric | 2023 (in thousands) | 2022 (in thousands) | Change (in thousands) | % Change | | :------------------------------------------ | :--- | :--- | :----- | :------- | | Total Retail Gas Revenues | $172,643 | $139,700 | $32,943 | 23.6% | | Total Natural Gas Revenues | $159,234 | $122,755 | $36,479 | 29.7% | | Fuel, purchased supply and direct transmission expense | $87,358 | $57,450 | $29,908 | 52.1% | | Natural Gas Utility Margin | $71,876 | $65,305 | $6,571 | 10.1% | - Natural gas retail volumes increased due to colder winter weather in all jurisdictions (Montana 9% colder, South Dakota 6% colder, Nebraska 9% colder) and customer growth[150][154] - The $6.5 million increase in natural gas utility margin was primarily driven by higher retail volumes ($3.7 million) and Montana interim rates ($0.1 million)[153] Liquidity and Capital Resources This section discusses the company's liquidity needs, capital structure targets, and cash flow activities from operations, investing, and financing - The company's liquidity needs include working capital, capital expenditures, investments, and debt repayment. It expects cash flows from operations, borrowing capacity, debt/equity issuances, and future rate increases to be sufficient[157] - The company targets a 50-55% debt to total capital ratio (excluding finance leases) and a long-term dividend payout ratio of 60-70% of EPS[157] Consolidated Cash Flows (Three Months Ended March 31, in millions) | Metric | 2023 (in millions) | 2022 (in millions) | Change (in millions) | % Change | | :------------------------------------------ | :--- | :--- | :----- | :------- | | Cash Provided by Operating Activities | $213.7 | $195.7 | $18.0 | 9.2% | | Cash Used in Investing Activities | $(136.6) | $(116.1) | $(20.5) | 17.7% | | Cash Used in Financing Activities | $(72.5) | $(67.5) | $(5.0) | 7.4% | | Increase in Cash, Cash Equivalents, and Restricted Cash | $4.6 | $12.1 | $(7.5) | -61.8% | Critical Accounting Policies and Estimates This section outlines the significant accounting policies and estimates that require management judgment in preparing the financial statements - The preparation of financial statements requires estimates and assumptions, which are continually evaluated. Critical estimates include regulatory assets and liabilities, pension and postretirement benefit plans, income taxes, and qualifying facilities liability[187][188] - There have been no material changes in these critical accounting policies since the Annual Report on Form 10-K for the year ended December 31, 2022[188] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section describes the company's exposure to market risks, including interest rates, commodity prices, and counterparty credit, and its risk management approach - The company is exposed to market risks including interest rates, energy commodity price volatility, and counterparty credit exposure[190] - There have been no material changes in market risks as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[190] Item 4. Controls and Procedures This section reports on the effectiveness of the company's disclosure controls and procedures and internal control over financial reporting - Disclosure controls and procedures were evaluated and concluded to be effective as of March 31, 2023[191][192] - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[193] Part II. Other Information This section provides additional disclosures including legal proceedings, risk factors, and a list of exhibits filed with the report Item 1. Legal Proceedings This section refers to the detailed information on legal proceedings, including lawsuits and regulatory actions, found in the notes to the financial statements - Information regarding legal proceedings is detailed in Note 10 - Commitments and Contingencies of the Financial Statements[196] Item 1A. Risk Factors This section refers to the comprehensive disclosure of risk factors that could impact the business, as detailed in the annual report - Risk factors are disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022[197] - No material changes to the risk factors have occurred since the previous disclosure[197] Item 6. Exhibits This section lists various agreements, certifications, and XBRL documents filed as exhibits to the report - The exhibits include various agreements (e.g., Colstrip abandonment, supplemental indentures), award agreements (performance unit, restricted unit), and certifications (CEO, CFO under Sarbanes-Oxley Act)[198][199][200][201][202][203] - XBRL (eXtensible Business Reporting Language) documents are also included as exhibits for interactive data filing[204] Signatures This section contains the official certification and signature of the authorized financial officer for the report - The report was signed on April 28, 2023, by Crystal Lail, Vice President and Chief Financial Officer, as the duly authorized officer and principal financial officer[208]