NW Natural Holdings Reports Solid First Quarter 2025 Results

Signed Agreement to Acquire Another Texas Gas Utility; Reaffirmed 2025 Adjusted EPS Guidance

Northwest Natural Holding Company (NYSE: NWN) (NW Natural Holdings) reported financial results and highlights, including:

• Reported earnings per share (EPS) of $2.18 and achieved adjusted EPS1 of $2.28 for the first quarter of 2025, compared to EPS of $1.69 for the same period in 2024
• Closed the acquisition of SiEnergy, a Texas high-growth gas utility, in early January 2025
• Signed agreement to purchase Hughes Gas Resources, Inc. (Hughes), adding scale to the SiEnergy gas utility platform in Texas
• Added nearly 84,000 gas and water utility connections in the last 12 months for a combined growth rate of 9.6% as of March 31, 2025, mainly driven by the acquisition of SiEnergy
• Strong first quarter organic customer growth of 2.2% (annualized) on a consolidated basis with new meter sets on track for the year and growth driven by SiEnergy
• Oregon gas customers received bill credits totaling over $15 million in early 2025 related to strong gas supply management from our storage assets and pipeline capacity optimization. Over the last 20 years, we've credited NW Natural customers' bills with cumulative savings of over $280 million, helping keep rates affordable
• Invested $102 million in our gas and water systems in the first quarter of 2025 to support growth and greater reliability and resiliency
• For the fourth year in a row, honored as one of the World's Most Ethical Companies® by Ethisphere2
• Updated 2025 GAAP EPS guidance to $2.65 to $2.85 and reaffirmed adjusted 2025 EPS1 guidance of $2.75 to $2.953
• Reaffirmed long-term EPS growth rate target of 4% to 6% from our expected 2025 adjusted EPS1,3

"We are off to a good start in 2025 with solid first quarter financial results," said Justin B. Palfreyman, President and CEO of NW Natural Holdings. "Our gas utilities operated safely and reliably over the winter heating season, serving customers well and highlighting the value of our infrastructure. Our financial results reflect the strength of our collective utilities, including the SiEnergy acquisition that was completed in early January 2025. The SiEnergy integration has gone well, and they have met their growth targets for the first quarter of 2025. I'm excited to announce an additional bolt-on acquisition that further enhances the scale and growth of our Texas utilities. We are well-positioned to deliver on our 2025 guidance and focused on creating long-term shareholder value."

Net income increased $24.1 million to $87.9 million (or $2.18 per share) for the first quarter of 2025, compared to $63.8 million (or $1.69 per share) for the same period in 2024. Adjusted net income was $91.8 million1 (or $2.28 per share1) for the first quarter of 2025 excluding transaction costs associated with the SiEnergy acquisition. The increase reflected strong results across all business segments, including new rates for our gas utility in Oregon, contributions from SiEnergy, higher net income from our NWN Water utility related to new rates at our largest utility in Arizona and the Puttman acquisition, and a full quarter of revenues from NWN Renewables. These items were partially offset by higher depreciation and interest expense.

SIGNED AGREEMENT TO PURCHASE GROWING GAS UTILITY IN TEXAS

In May 2025, SiEnergy entered into an agreement to acquire Hughes from EPCOR USA Inc. for $60 million, subject to customary purchase price adjustments. We estimate rate base of approximately $46 million at year end 2025. Upon closing the transaction, Hughes will become a wholly owned subsidiary of SiEnergy.

Hughes serves approximately 6,900 residential and commercial customers in the greater Houston metropolitan area. With a similar business model as SiEnergy, Hughes has grown organically by providing infrastructure to residential and commercial developments in high-growth areas.

This acquisition further expands our regulated gas utility business in Texas with a contracted customer backlog of approximately 11,000. The transaction is expected to close in the second quarter of 2025 and be accretive in the first full year of operations. Hughes is regulated by the Railroad Commission of Texas. No approvals are needed to close this transaction.

2025 GUIDANCE AND LONG-TERM TARGETS

NW Natural Holdings updated 2025 GAAP EPS guidance to $2.65 to $2.85 (from the previous range of $2.66 to $2.86) as a result of the expected transaction costs from the Hughes acquisition. NW Natural Holdings reaffirmed adjusted EPS guidance of $2.75 to $2.95 on a non-GAAP1 basis excluding the $5.8 million pre-tax transaction costs associated with the acquisitions of SiEnergy and Hughes (approximately $4.3 million or $0.10 per share after-tax2). This guidance assumes continued customer growth, average weather conditions, and no significant changes in prevailing regulatory policies, mechanisms, or assumed outcomes, or significant local, state or federal laws, legislation or regulations.

NW Natural Holdings reaffirmed its long-term EPS growth rate target of 4% to 6% compounded annually from the expected 2025 adjusted EPS3.

We expect NW Natural Holdings capital expenditures for 2025 to be in the range of $450 - $500 million. The timing and amount of the capital expenditures and projects for 2025 or additional investments in our infrastructure during or after 2025 could change based on customer growth, significant changes in prevailing regulatory policies or outcomes, or significant local, state or federal laws, legislation or regulations, or cost estimates. Required funds for the investments are expected to be internally generated or financed with long-term debt or equity, as appropriate.

DIVIDEND DECLARED

The board of directors of NW Natural Holdings declared a quarterly dividend of $0.49 per share on the Company’s common stock. The dividend is payable on May 15, 2025 to shareholders of record on April 30, 2025. The Company's current indicated annual dividend rate is $1.96 per share. Future dividends are subject to board of director discretion and approval.

FIRST QUARTER RESULTS

NW Natural Holdings' first quarter results are summarized by business segment in the table below:

NWN Gas Utility

NWN Gas Utility is a regulated utility principally engaged in the delivery of natural gas to customers in Oregon and southwest Washington. The segment also includes the portion of the Mist underground storage facility used to serve gas utility customers, the North Mist gas storage expansion, and renewable natural gas development and procurement for the utility.

NWN Gas Utility net income increased $21.5 million (or $0.42 per share) primarily reflecting new rates in Oregon. Margin increased $38.7 million primarily due to a $42.6 million increase from the Oregon rate case partially offset by lower deferral amortizations of $5.0 million.

Operations and maintenance expense increased $2.2 million primarily due to higher payroll and benefit expense. Depreciation and general taxes collectively increased by $4.8 million primarily due to continued investment in our system. Other expense reflected a $1.4 million increase primarily from higher pension expense. Income taxes increased $9.3 million dollars due to higher pre-tax results.

SiEnergy Gas Utility

SiEnergy Gas Utility (or SiEnergy) isa regulated natural gas distribution utility serving customers in the greater metropolitan areas of Houston, Dallas, and Austin, Texas.

SiEnergy was acquired on January 7, 2025 and subsequently provided net income of $5.5 million (or $0.14 per share) in the first quarter of 2025. Margin results met management's expectations and reflected strong customer growth.

NWN Water Utility

NWN Water Utility (or NWN Water) provides water distribution and wastewater services to communities throughout the Pacific Northwest, Texas, Arizona, and California.

NWN Water net income increased $2.4 million (or $0.06 per share) mainly reflecting a $3.2 million increase in operating revenues primarily due to new rates at its largest utility in Arizona and incremental revenues from the Puttman/Infrastructure Capital Holdings water utilities after the acquisition in September 2024. Operating expenses increased $0.6 million from higher operations and maintenance expenses primarily related to reflecting the Puttman/Infrastructure Capital Holdings activities in results after the acquisition in 2024. Interest expense decreased $0.7 million from lower long-term debt balances as $50.0 million of NWN Water debt matured in March 2024 and was not refinanced at NWN Water.

Other

Other business activities are reported through "Other" results and primarily include Interstate Storage Services and third-party asset management services for the Mist facility in Oregon; NWN Renewables, which is a renewable fuels business; and corporate financing activities, consolidation entries, and other activities.

Net income from the Company's other business activities decreased $5.3 million (or $0.13 per share) reflecting $3.9 million of transaction expenses (after-tax) related to acquiring SiEnergy. Adjusted net loss, which excludes SiEnergy transaction expenses, increased $1.4 million (or $0.03 per share) related to higher interest expense at the Holding Company, partially offset by higher revenues from the NWN Renewables business as it completed its first full quarter of operations.

CONFERENCE CALL AND WEBCAST

As previously announced, NW Natural Holdings will host a conference call and webcast today to discuss its first quarter 2025 financial and operating results.

The call will also be webcast in a listen-only format for the media and general public and can be accessed at ir.nwnaturalholdings.com. A replay of the conference call will be available on our website and by dialing 1-866-813-9403 (U.S.) and 1-929-458-6194 (international). The replay access code is 591383.

ABOUT NW NATURAL HOLDINGS

Northwest Natural Holding Company (NYSE: NWN) (NW Natural Holdings) is headquartered in Portland, Oregon and has been doing business for over 166 years. It 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 business interests.

NW Natural Holdings through its subsidiaries provides critical energy and delivers essential water and wastewater services to nearly one million meters across seven states. We have a longstanding commitment to safety, environmental stewardship, and the energy transition, and taking care of our employees and communities. NW Natural Holdings was recognized by Ethisphere® for four years running as one of the World’s Most Ethical Companies®. NW Natural consistently leads the industry with high J.D. Power & Associates customer satisfaction scores.

NWN Gas Utility is a local distribution company that currently provides natural gas service to approximately 2 million people in more than 140 communities through approximately 807,000 meters in Oregon and Southwest Washington with one of the most modern pipeline systems in the nation. NW Natural owns and operates 21.6 Bcf of underground gas storage capacity in Oregon.

SiEnergy Gas Utility is one of the fastest growing natural gas distribution utilities in the nation, serving over 73,000 meters in the greater metropolitan areas of Houston, Dallas, and Austin, Texas.

NWN Water Utility provides water distribution and wastewater services to communities throughout the Pacific Northwest, Texas, Arizona, and California. Today NW Natural Water serves an estimated 194,000 people through approximately 78,000 meters and provides operation and maintenance services to an additional 40,000 connections. Learn more about our water business at nwnaturalwater.com.

NWN Renewables is committed to leading in the energy transition by providing renewable fuels. Learn more at nwnaturalrenewables.com.

Additional information is available at nwnaturalholdings.com.

“World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of Ethisphere LLC

FORWARD-LOOKING STATEMENTS

This press release, and other presentations made by NW Holdings from time to time, may contain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipates," "assumes," “continues,” “could,” "intends," "plans," "seeks," "believes," "estimates," "expects," "forecasts," "will" and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements regarding the following: plans, objectives, assumptions, estimates, expectations, forecasts, outlooks, timing, goals, strategies, commitments, future events, financial positions, financial performance, investments, valuations, timing and amount of capital expenditures, targeted capital structure, risks, risk profile, stability, acquisitions and timing, approval, completion and integration thereof, the likelihood and success associated with any transaction, strategic fit, utility system, technology and infrastructure investments, system modernization, reliability and resiliency, global, national and local economies, economic and GDP growth, customer and business growth, continued expansion of service territories, rate base growth, customer backlog, growth opportunities, customer satisfaction ratings, weather, performance and service during weather events, customer rates or rate recovery and the timing and magnitude of potential rate changes and the potential outcome of rate cases, environmental remediation cost recoveries, environmental initiatives, decarbonization and the role of natural gas and the gas delivery system, including decarbonization goals and timelines, energy efficiency measures, use of renewable sources, renewable natural gas purchases, projects, investments and other renewable initiatives, and timing, magnitude and completion thereof, unregulated renewable natural gas strategy and initiatives, hydrogen projects or investments and timing, magnitude, approvals and completion thereof, procurement of renewable natural gas or hydrogen for customers, technology and policy innovations, strategic goals and visions, water, wastewater and water services acquisitions, personnel additions, partnerships, investment strategy, regulatory strategy, and financial effects of water, wastewater and water services acquisitions, expected growth and safety benefits of facility upgrade investments, operating plans of third parties, financial targets, financial results, including estimated income, availability and sources of liquidity, capital markets, financing transactions, expenses, positions, revenues, returns, cost of capital, timing, and earnings, earnings guidance and estimated future growth rates, credit ratings, debt and equity issuances and timing, future dividends, commodity costs and sourcing, asset management activities, regulatory environment, performance, timing, outcome, or effects of regulatory proceedings or mechanisms or approvals, rate case execution, regulatory prudence reviews, anticipated regulatory actions or filings, accounting treatment of future events, economic and political conditions, effects of legislation or changes in laws or regulations, impact of the new U.S. presidential administration and Congress, effects, extent, the imposition or announcement of tariffs or trade restrictions, inflation, geopolitical uncertainty and other statements that are other than statements of historical facts.

Forward-looking statements are based on current expectations and assumptions regarding its business, the economy, geopolitical factors, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual results may differ materially from those contemplated by the forward-looking statements. You are therefore cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future operational, economic or financial performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements are discussed by reference to the factors described in Part I, Item 1A "Risk Factors", and Part II, Item 7 and Item 7A "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosure about Market Risk" in the most recent Annual Report on Form 10-K and in Part I, Items 2 and 3 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosures About Market Risk", and Part II, Item 1A, "Risk Factors", in the quarterly reports filed thereafter, which, among others, outline legal, regulatory and legislative risks, financial, macroeconomic and geopolitical risks, growth and strategic risks, operational risks, business continuity and technology risks, environmental risks and risks related to our water and renewables businesses.

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

NON-GAAP FINANCIAL MEASURES

Management uses "adjusted net income", "adjusted earnings per share," "adjusted segment net loss," "segment earnings per share” and "adjusted segment earnings per share," each of which are non-GAAP financial measures, when evaluating NW Natural Holdings' overall performance. Management believes that these non-GAAP measures provide meaningful information to investors about NW Natural Holdings' performance because they eliminate the impacts of significant discrete items that are unusual or non-recurring and can affect the comparison of period-over-period results. In addition to presenting the results of operations and earnings amounts in total, certain financial measures are expressed in cents per share, which are non-GAAP financial measures. All references to EPS are on the basis of diluted shares.

Such non-GAAP financial measures are used to analyze our financial performance because we believe they provide useful information to our investors and creditors in evaluating our financial condition and results of operations. Our non-GAAP financial measures should not be considered a substitute for, or superior to, measures calculated in accordance with U.S. GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently than how such measures are calculated in this report, limiting the usefulness of those measures for comparative purposes. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is provided in the tables below.

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