← Back to NWN filing summaryOriginal filing text · Part I
Item 2 — Management's Discussion and Analysis
Northwest Natural Holding Company · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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The following is management’s assessment of NW Holdings' and NW Natural's financial condition, including the principal factors that affect results of operations. The discussion refers to the consolidated results for the three and six months ended June 30, 2026 and 2025 of NW Holdings, the substantial majority of which consist of the operating results of NW Natural. When significant activity exists at NW Holdings that does not exist at NW Natural, additional disclosure has been provided. References in this discussion to "Notes" are to the Notes to Unaudited Consolidated Financial Statements in this report. A significant portion of the business results are seasonal in nature, and, as such, the results of operations for the three month period are not necessarily indicative of expected fiscal year results. Therefore, this discussion should be read in conjunction with NW Holdings' and NW Natural's 2025 Annual Report on Form 10-K, as applicable (2025 Form 10-K).
NW Natural operates as one reportable business segment on a consolidated basis. Prior to the first quarter of 2026, the reportable business segment NW Natural was represented as NWN Gas Utility and excluded certain gas storage and other business activities that were included in Other. Consistent with the method in which the Chief Operating Decision Maker (CODM) reviews each business, these activities were consolidated into NWN Gas Utility and presented as the reportable business segment NW Natural beginning in the first quarter of 2026. NW Natural is primarily a regulated local gas distribution company serving customers in Oregon and southwest Washington. NW Natural also provides regulated storage services at its Mist underground storage facility. The Mist underground storage facility serves distribution and interstate storage customers, and owns the North Mist gas storage facility, which serves a local electric company. NW Natural also owns NWN Gas Reserves and NW Natural RNG Holding Company, LLC, which procures regulated renewable natural gas for distribution customers. Additionally, NW Natural encompasses interstate storage services, third-party asset management services, and appliance center retail operations.
SiEnergy, which was acquired on January 7, 2025, is a regulated natural gas distribution utility and serves residential and commercial customers in the greater metropolitan areas of Houston, Dallas, and Austin, Texas. SiEnergy also includes a natural gas transmission utility serving customers in the greater metropolitan areas of Dallas and Austin, Texas. SiEnergy activities are reported in the SiEnergy segment.
NWN Water is a regulated water and wastewater utility serving residential and commercial customers in Oregon, Washington, Idaho, Texas, and Arizona. The activities of NWN Water are reported in the NWN Water segment, which also includes non-regulated water and wastewater services businesses in Oregon, Washington and Idaho, and an equity method investment in Avion Water Company, Inc. In addition, NWN Water provides water services to communities throughout the Pacific Northwest and California.
Other activities for NW Holdings, aggregated and reported as Other, include NWN Renewables and its non-regulated renewable natural gas activities. See Note 4 for further discussion of our business segments and other, as well as our direct and indirect wholly-owned subsidiaries.
Non-GAAP Financial Measures
In addition to presenting diluted earnings per share for NW Holdings, we present diluted earnings per share for each of our segments (Segment EPS), which is a non-GAAP financial measure. We calculate Segment EPS by dividing the net income of each of our segments calculated in accordance with GAAP by the number of diluted shares outstanding for NW Holdings. We use Segment EPS to analyze our financial performance because we believe it provides useful information to our investors, analysts and creditors in evaluating our financial condition and results of operations of each of our segments. We believe investors find Segment EPS to be a useful indicator of our performance.
Segment EPS should not be considered a substitute for, or superior to, diluted earnings per share or other measures calculated in accordance with GAAP. Moreover, Segment EPS has limitations in that it does 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 Segment EPS to diluted earnings per share is provided below.
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Three Months Ended June 30, Six Months Ended June 30,
Diluted earnings per share 2026 2025 2026 2025
Diluted EPS Total(1) $ 0.01 $ (0.06) $ 2.33 $ 2.11
NW Natural(2) 0.09 0.12 2.32 2.37
SiEnergy(2) 0.05 0.03 0.27 0.16
NWN Water(2) 0.05 0.07 0.09 0.11
Other(2) (0.18) (0.28) (0.35) (0.53)
(1) Total Diluted EPS is equal to the sum of Diluted EPS for NW Natural, SiEnergy, NWN Water and Other.
(2) Non-GAAP financial measure. See Non-GAAP Financial Measures--Segment Earnings Per Share for definition, reconciliation and additional information.
EXECUTIVE SUMMARY
Key financial highlights for NW Holdings include:
Three Months Ended June 30,
2026 2025 QTD
In millions, except per share data Amount Amount Change
Consolidated:
Net income (loss) $ 0.6 $ (2.5) $ 3.1
Diluted EPS $ 0.01 $ (0.06) $ 0.07
THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025.
•Consolidated net income increased by $3.1 million or $0.07 per diluted share.
•The increase in net income was primarily driven by new NW Natural rates in Oregon, effective October 31, 2025, organic customer growth, the acquisition of Pines in June 2025, and the implementation of House Bill 4384 in July 2025. These benefits were partially offset by increases from continued investment in our utility systems that resulted in higher interest and depreciation expenses.
Six Months Ended June 30,
2026 2025 YTD
In millions, except per share data Amount Amount Change
Consolidated:
Net income $ 98.1 $ 85.4 $ 12.7
Diluted EPS $ 2.33 $ 2.11 $ 0.22
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025.
•Consolidated net income increased by $12.7 million or $0.22 per diluted share.
•The increase in net income was primarily driven by new NW Natural rates in Oregon, effective October 31, 2025, organic customer growth, the acquisition of Pines in June 2025, and the implementation of House Bill 4384 in July 2025. These benefits were partially offset by increases from continued investment in our utility systems that resulted in higher interest and depreciation expenses.
•Customer growth was 1.9%, driven by organic growth at SiEnergy and NWN Water, and the Pines and Inline acquisitions.
•Capital expenditures were $235.0 million, as we continue to invest in our utility systems to support safety and reliability.
Key financial highlights for NW Natural include:
Three Months Ended June 30,
2026 2025 QTD
In millions Amount Amount Change
Consolidated:
Net income $ 3.9 $ 4.9 $ (1.0)
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THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025.
•Consolidated net income decreased by $1.0 million.
•Net income decreased as higher margin from new rates in Oregon, which were effective October 31, 2025, were more than offset by higher operations and maintenance expenses and continued investment in the system resulting in higher interest and depreciation expenses.
•Capital expenditures were $87.0 million, due primarily to continued investments to support the safety and reliability of NW Natural.
Six Months Ended June 30,
2026 2025 YTD
In millions Amount Amount Change
Consolidated:
Net income $ 97.7 $ 96.0 $ 1.7
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025.
•Consolidated net income increased by $1.7 million and was primarily driven by new rates for Oregon customers, effective October 31, 2025. This benefit was partially offset by increases from continued investment in the system that resulted in higher interest and depreciation expenses, and higher operations and maintenance expenses.
•Capital expenditures were $166.6 million, due primarily to continued investments to support the safety and reliability of NW Natural.
RESULTS OF SEGMENTS
NW NATURAL SEGMENT RESULTS. NW Natural results were as follows:
Three Months Ended June 30, Six Months Ended June 30, QTD Change YTD Change
In thousands, except per share data 2026 2025 2026 2025
Margin(1) $ 141,139 $ 133,740 $ 411,529 $ 398,299 $ 7,399 $ 13,230
Operating expenses:
Operations and maintenance 66,515 63,039 137,045 130,805 3,476 6,240
General taxes 11,641 11,234 27,678 26,213 407 1,465
Depreciation 39,592 36,564 79,036 72,600 3,028 6,436
Other operating expenses 452 515 1,145 1,261 (63) (116)
Total operating expenses 118,200 111,352 244,904 230,879 6,848 14,025
Income from operations 22,939 22,388 166,625 167,420 551 (795)
Other income (expense), net 651 (698) 547 (3,447) 1,349 3,994
Interest expense, net 17,426 15,128 35,104 30,708 2,298 4,396
Income before income taxes 6,164 6,562 132,068 133,265 (398) (1,197)
Income tax expense (benefit) 2,231 1,638 34,386 37,302 593 (2,916)
Net income $ 3,933 $ 4,924 $ 97,682 $ 95,963 $ (991) $ 1,719
EPS(2) $ 0.09 $ 0.12 $ 2.32 $ 2.37 $ (0.03) $ (0.05)
(1) See NW Natural Margin Table below for additional detail.
(2) Non-GAAP financial measure. See Non-GAAP Financial Measures—Segment Earnings Per Share for definition, reconciliation and additional information.
THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $1.0 million decrease in NW Natural net income were as follows:
•$3.5 million increase in operations and maintenance expenses due primarily to higher contract labor costs and payroll and benefit costs;
•$3.0 million increase in depreciation expense due to additional capital investments; and
•$2.3 million increase in interest expense due primarily to higher long-term debt from first mortgage bonds issued in December 2025; partially offset by
•$7.4 million increase in margin driven by new rates on October 31, 2025 for Oregon customers. See the NW Natural margin table below for additional margin detail.
For the three months ended June 30, 2026, total NW Natural volumes sold and delivered decreased 7.7 million therms compared to the same period in 2025, primarily due to lower usage from residential and commercial sales customers.
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SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $1.7 million increase in NW Natural net income were as follows:
•$13.2 million increase in margin driven by new rates on October 31, 2025 for Oregon customers. See the NW Natural margin table below for additional margin detail; partially offset by
•$6.4 million increase in depreciation expense due to additional capital investments; and
•$6.2 million increase in operations and maintenance expenses due primarily to an increase in regulatory deferral amortization, payroll and benefit costs, and contract labor costs.
For the six months ended June 30, 2026, total NW Natural volumes sold and delivered decreased by 50.4 million therms compared to the same period in 2025 primarily due to lower usage from residential and commercial sales customers.
NW NATURAL MARGIN TABLE. The following table summarizes the composition of gas volumes, revenues, and cost of sales:
Three Months Ended June 30, Six Months Ended June 30, Favorable/ (Unfavorable)
In thousands, except degree day and customer data 2026 2025 2026 2025 QTD Change YTD Change
Volumes (therms)
Residential and commercial sales 96,154 100,424 369,231 410,607 (4,270) (41,376)
Industrial sales and transportation 102,367 105,820 221,331 230,375 (3,453) (9,044)
Total volumes sold and delivered 198,521 206,244 590,562 640,982 (7,723) (50,420)
Operating Revenues
Residential and commercial sales $ 174,042 $ 171,787 $ 571,577 $ 584,950 $ 2,255 $ (13,373)
Industrial sales and transportation 18,809 17,333 42,508 40,078 1,476 2,430
Regulated gas storage 10,081 9,251 19,687 19,035 830 652
Other revenue 1,870 2,436 4,926 5,557 (566) (631)
Total operating revenues 204,802 200,807 638,698 649,620 3,995 (10,922)
Less: Cost of gas 53,326 56,939 193,470 216,375 3,613 22,905
Less: Environmental remediation expense 2,431 2,296 8,756 8,549 (135) (207)
Less: Revenue taxes 7,906 7,832 24,943 26,397 (74) 1,454
Margin $ 141,139 $ 133,740 $ 411,529 $ 398,299 $ 7,399 $ 13,230
Margin(1)
Residential and commercial sales $ 120,019 $ 114,842 $ 367,462 $ 356,203 $ 5,177 $ 11,259
Industrial sales and transportation 9,075 7,523 20,018 16,875 1,552 3,143
Regulated gas storage 10,081 9,251 19,687 19,035 830 652
Gain (loss) from gas cost incentive sharing(2) 94 (312) (564) 629 406 (1,193)
Other margin 1,870 2,436 4,926 5,557 (566) (631)
Margin $ 141,139 $ 133,740 $ 411,529 $ 398,299 $ 7,399 $ 13,230
Cost of Gas Detail
Volumes sold (therms)(3) 117,128 121,514 416,857 459,658 (4,386) (42,801)
Average cost of gas (cents per therm) $ 0.46 $ 0.47 $ 0.46 $ 0.47 $ (0.01) $ (0.01)
Degree days(4)
Average(5) 332 297 1,667 1,623 35 44
Actual 172 130 1,368 1,406 32 % (3) %
Percent (warmer) colder than average weather (48) % (56) % (18) % (13) %
As of June 30,
Meters 2026 2025 Change Growth
Residential 740,064 736,849 3,215 0.4%
Commercial 68,824 69,353 (529) (0.8)%
Industrial 1,029 1,041 (12) (1.2)%
Total 809,917 807,243 2,674 0.3%
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(1) Amounts reported as NW Natural margin for each category of meters are operating revenues less cost of gas, environmental remediation expense and revenue taxes, subject to earnings test considerations, as applicable.
(2) For additional information regarding NW Natural's gas cost incentive sharing mechanism, see Part II, Item 7 "Results of Operations—Regulatory Matters—Rate Mechanisms—Gas Reserves" in NW Natural's 2025 Form 10-K.
(3) This calculation excludes volumes delivered to industrial transportation customers.
(4) Heating degree days are units of measure reflecting temperature-sensitive consumption of natural gas, calculated by subtracting the average of a day's high and low temperatures from 59 degrees Fahrenheit.
(5) Average weather represents the 25-year average of heating degree days. Beginning October 31, 2025, average weather is calculated over the period June 1, 1999 through May 31, 2024, as determined in NW Natural's 2025 Oregon general rate case. From November 1, 2024 through October 30, 2025, average weather was calculated over the period June 1, 1998 through May 31, 2023, as determined in NW Natural's 2024 Oregon general rate case.
SIENERGY SEGMENT RESULTS. SiEnergy results and highlights include:
Three Months Ended June 30, Six Months Ended June 30, QTD Change YTD Change
In thousands, except per share data 2026 2025(3) 2026 2025(3)
Margin(1) $ 9,787 $ 8,161 $ 28,242 $ 21,745 $ 1,626 $ 6,497
Operating expenses:
Operations and maintenance 2,818 1,912 5,632 3,594 906 2,038
General taxes 304 264 314 483 40 (169)
Depreciation 1,768 2,396 3,565 4,466 (628) (901)
Total operating expenses 4,890 4,572 9,511 8,543 318 968
Income from operations 4,897 3,589 18,731 13,202 1,308 5,529
Other income, net 331 106 667 199 225 468
Interest expense, net 2,607 2,321 5,150 4,578 286 572
Income before income taxes 2,621 1,374 14,248 8,823 1,247 5,425
Income tax expense 565 360 3,102 2,304 205 798
Net income $ 2,056 $ 1,014 $ 11,146 $ 6,519 $ 1,042 $ 4,627
EPS(2) $ 0.05 $ 0.03 $ 0.27 $ 0.16 $ 0.02 $ 0.11
(1) See SiEnergy Margin Table below for additional detail.
(2) Non-GAAP financial measure. See Non-GAAP Financial Measures—Segment Earnings Per Share for definition, reconciliation and additional information.
(3) SiEnergy was acquired by NW Holdings on January 7, 2025. Results for the period from January 7, 2025 to June 30, 2025 are presented in the table above. Prior to January 7, 2025, NW Holdings did not operate any assets that fall within its SiEnergy segment.
THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $1.0 million increase in SiEnergy net income were as follows:
•$1.6 million increase in margin driven primarily by organic customer growth and the acquisition of Pines Holdings, LLC (Pines) on June 2, 2025. See the SiEnergy margin table below for additional margin detail; and
•$0.6 million decrease in depreciation expense due to the deferral of depreciation on investments allowed by Texas House Bill 4384. Benefits to net income were partially offset by
•$0.9 million increase in operations and maintenance expenses due primarily to higher payroll and benefit costs and the acquisition of Pines.
For the three months ended June 30, 2026, total SiEnergy volumes sold and delivered decreased by 1.2 million therms compared to the same period in 2025 primarily due to lower usage from transportation customers.
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $4.6 million increase in SiEnergy net income were as follows:
•$6.5 million increase in margin driven primarily by organic customer growth and the acquisition of Pines Holdings, LLC (Pines) on June 2, 2025. See the SiEnergy margin table below for additional margin detail; and
•$0.9 million decrease in depreciation expense due to the deferral of depreciation on investments allowed by Texas House Bill 4384. Benefits to net income were partially offset by
•$2.0 million increase in operations and maintenance expenses due primarily to higher payroll and benefit costs and the acquisition of Pines.
For the six months ended June 30, 2026, total SiEnergy volumes sold and delivered increased by 2.9 million therms compared to the same period in 2025 primarily due to organic growth and the Pines acquisition.
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SIENERGY MARGIN TABLE. The following table summarizes the composition of gas volumes, revenues, and cost of sales:
Three Months Ended June 30, Six Months Ended June 30, Favorable/(Unfavorable)
In thousands, except degree day and customer data 2026 2025 2026 2025(5) QTD Change YTD Change
Volumes (therms)
Residential and commercial sales 4,559 4,582 21,725 18,246 (23) 3,479
Transportation 549 1,687 1,677 2,236 (1,138) (559)
Total volumes sold and delivered 5,108 6,269 23,402 20,482 (1,161) 2,920
Operating Revenues
Residential and commercial sales $ 12,702 $ 10,649 $ 43,593 $ 32,554 $ 2,053 $ 11,039
Transportation 194 196 399 394 (2) 5
Other distribution revenues 650 657 1,249 1,220 (7) 29
Total operating revenues 13,546 11,502 45,241 34,168 2,044 11,073
Less: Cost of gas 3,382 2,977 15,661 11,280 405 4,381
Less: Revenue taxes 377 364 1,338 1,143 13 195
Margin $ 9,787 $ 8,161 $ 28,242 $ 21,745 $ 1,626 $ 6,497
Margin(1)
Residential and commercial sales $ 8,948 $ 7,316 $ 26,606 $ 20,146 $ 1,632 $ 6,460
Transportation 189 188 387 379 1 8
Other margin 650 657 1,249 1,220 (7) 29
Margin $ 9,787 $ 8,161 $ 28,242 $ 21,745 $ 1,626 $ 6,497
Cost of Gas Detail
Volumes sold (therms)(2) 4,559 4,582 21,725 18,246 (23) 3,479
Average cost of gas (cents per therm) $ 0.74 $ 0.65 $ 0.72 $ 0.62 $ 0.09 $ 0.10
Degree days(3)
Average(4) 82 46 811 765 36 46
Actual 35 36 598 809 (1) (211)
Percent (warmer) colder than average weather(4) (57) % (22) % (26) % 6 % (35) % (32) %
As of June 30,
Meters 2026 2025 Change Growth
Residential 95,195 82,659 12,536 15.2%
Commercial 709 619 90 14.5%
Total 95,904 83,278 12,626 15.2%
(1) Amounts reported as SiEnergy margin for each category of meters are operating revenues less cost of gas and revenue taxes.
(2) This calculation excludes volumes delivered to transportation customers.
(3) Heating degree days are units of measure reflecting temperature-sensitive consumption of natural gas. SiEnergy calculates heating degree days by subtracting the average of a day's high and low temperatures from 65 degrees Fahrenheit.
(4) SiEnergy average weather represents the 10-year average of heating degree days. Beginning October 1, 2023 average weather is calculated over the period April 1, 2013 through March 31, 2023, as determined in SiEnergy's 2023 Texas general rate case.
(5) SiEnergy was acquired by NW Holdings on January 7, 2025. Results for the period from January 7, 2025 to June 30, 2025 are presented in the table above. Prior to January 7, 2025, NW Holdings did not operate any assets that fall within its SiEnergy segment.
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NWN WATER SEGMENT RESULTS. NWN Water results and highlights include:
Three Months Ended June 30, Six Months Ended June 30, QTD Change YTD Change
In thousands, except per share data 2026 2025 2026 2025
Operating Revenues $ 17,077 $ 16,294 $ 32,046 $ 30,203 $ 783 $ 1,843
Operating expenses:
Operations and maintenance 9,843 8,068 18,450 15,333 1,775 3,117
General taxes 269 558 555 1,123 (289) (568)
Revenue taxes 117 87 219 148 30 71
Depreciation 2,852 2,575 5,745 4,969 277 776
Other operating expenses 577 710 1,259 1,291 (133) (32)
Total operating expenses 13,658 11,998 26,228 22,864 1,660 3,364
Income from operations 3,419 4,296 5,818 7,339 (877) (1,521)
Other income, net 424 334 698 402 90 296
Interest expense, net 821 744 1,509 1,536 77 (27)
Income before income taxes 3,022 3,886 5,007 6,205 (864) (1,198)
Income tax expense 750 1,053 1,304 1,684 (303) (380)
Net income $ 2,272 $ 2,833 $ 3,703 $ 4,521 $ (561) $ (818)
EPS(1) $ 0.05 $ 0.07 $ 0.09 $ 0.11 $ (0.02) $ (0.02)
Connections As of June 30, 2026 As of June 30, 2025 Change Growth
Water and wastewater 81,294 78,635 2,659 3.4 %
(1) Non-GAAP financial measure. See Non-GAAP Financial Measures—Segment Earnings Per Share for definition, reconciliation and additional information.
THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $0.6 million decrease in net income were as follows:
•$1.8 million increase in operations and maintenance expenses primarily due to higher payroll and benefit costs, software and technology costs, and acquisitions; partially offset by
•$0.8 million increase in operating revenues primarily driven by regulated and unregulated rate increases.
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $0.8 million decrease in net income were as follows:
•$3.1 million increase in operations and maintenance expenses primarily due to higher payroll and benefit costs, software and technology costs, and acquisitions; partially offset by
•$1.8 million increase in operating revenues primarily driven by regulated and unregulated rate increases.
OTHER RESULTS. Other results and highlights include:
Three Months Ended June 30, Six Months Ended June 30, QTD Change YTD Change
In thousands, except per share data 2026 2025 2026 2025
Operating Revenues $ 8,127 $ 7,591 $ 17,970 $ 16,487 $ 536 $ 1,483
Operating expenses:
Cost of gas 5,045 4,587 10,771 9,839 458 932
Operations and maintenance 1,178 6,046 2,336 13,016 (4,868) (10,680)
General taxes 2 20 12 28 (18) (16)
Total operating expenses 6,225 10,653 13,119 22,883 (4,428) (9,764)
Income (loss) from operations 1,902 (3,062) 4,851 (6,396) 4,964 11,247
Other income (expense), net (1) 98 5 170 (99) (165)
Interest expense, net 12,498 12,298 24,941 23,064 200 1,877
Income (loss) before income taxes (10,597) (15,262) (20,085) (29,290) 4,665 9,205
Income tax expense (benefit) (2,936) (3,991) (5,643) (7,703) 1,055 2,060
Net loss $ (7,661) $ (11,271) $ (14,442) $ (21,587) $ 3,610 $ 7,145
EPS(1) $ (0.18) $ (0.28) $ (0.35) $ (0.53) $ 0.10 $ 0.18
(1) Non-GAAP financial measure. See Non-GAAP Financial Measures--Segment Earnings Per Share for definition, reconciliation and additional information.
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THREE MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $3.6 million decrease in net loss were as follows:
•$4.9 million decrease in operations and maintenance expenses due primarily to lower business development and transaction expenses; partially offset by
•$1.1 million decrease in income tax benefit due to lower pre-tax losses.
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. The primary factors contributing to the $7.1 million decrease in net loss were as follows:
•$10.7 million decrease in operations and maintenance expenses due primarily to lower business development and transaction expenses; partially offset by
•$2.1 million decrease in income tax benefit due to lower pre-tax losses; and
•$1.9 million increase in interest expense due primarily to higher long-term debt at NW Holdings from Junior Subordinated Debentures issued in March 2025.
CURRENT ECONOMIC AND POLITICAL CONDITIONS. Current economic and political conditions are reviewed and monitored on an ongoing basis for potential impacts to our business. This includes changes in inflation and interest rates, tariffs or trade restrictions, geopolitical conflicts and uncertainty, supply chain disruptions, and other regulatory, physical, artificial intelligence, or cyber related risks impacting our business. Further, we review U.S. federal, state and local policies, executive orders, rules, initiatives and other changes to fiscal, tax, regulation, environmental, climate and other federal policies that may impact our businesses, all of which could impact the conditions in which we operate.
We continue to evaluate the effect of additional tariffs on our businesses, specifically natural gas imports at our gas utilities. SiEnergy, located in Texas, does not import natural gas. NW Natural imported approximately 60% of our natural gas from Canada in 2025. NW Natural's third-party asset manager imports the majority of NW Natural's gas each year and is not subject to tariffs because they are a United States-Mexico-Canada Agreement (USMCA) certified importer of record. NW Natural is a USMCA certified importer. We have evaluated tariffs across our businesses and at this time, we do not anticipate the currently implemented tariffs to have a material impact on our businesses. We continue to evaluate the potential impact of efforts to impose new or modified tariffs and the legal proceedings that may impact them.
We continue to monitor the impact of the conflict in the Middle East and the resulting volatility in global natural gas prices. NW Natural and SiEnergy recover the cost of natural gas through rates. In addition, for the 2025-26 gas year, the total amount of forecasted sales volumes hedged was approximately 84% in Oregon and 33% in Washington. We expect to continue hedging for the upcoming 2026-27 gas year in the coming months, have not experienced gas price volatility in regard to the conflict in the Middle East, and will continue to assess these factors.
For all of our businesses, we continuously monitor interest rates and financing options. Our regulated utilities generally recover interest expense on their long-term debt through their authorized cost of capital.
Regulatory Matters
For additional information, see Part II, Item 7 "Results of Operations—Regulatory Matters" in the 2025 Form 10-K.
NW Natural
NW Natural's natural gas distribution business is subject to regulation by the OPUC and WUTC with respect to, among other matters, rates and terms of service, systems of accounts, and issuances of securities by NW Natural. At June 30, 2026, approximately 88% of NW Natural customers were located in Oregon, with the remaining 12% in Washington. Earnings and cash flows from natural gas distribution operations are largely determined by rates set in general rate cases and other proceedings in Oregon and Washington. They are also affected by weather, the local economies in Oregon and Washington, the pace of customer growth in the residential, commercial, and industrial markets, legislation and policy, customer preferences and NW Natural's ability to remain price competitive, control expenses, and obtain reasonable and timely regulatory recovery of its natural gas distribution-related costs, including operating expenses and investment costs in plant and other regulatory assets. NW Natural continuously evaluates the need for rate cases and other proceedings in its jurisdictions. See "Most Recent Completed Rate Cases" below.
Most Recent Completed Rate Cases
2025 OREGON RATE CASE. On October 24, 2025, the OPUC issued a final order in the Rate Case approving three prior multi-party stipulations and resolving the remaining open items in the Rate Case. New rates authorized by the OPUC were effective October 31, 2025. The final order provided for a total revenue requirement increase of $20.7 million over revenues from existing rates, which includes approximately $4.8 million related to an updated depreciation study. The revenue requirement is based on the following assumptions:
• Capital structure of 50% common equity and 50% long-term debt;
• Cost of long-term debt of 4.74%
• Return on equity of 9.5%, and
• Overall cost of capital of 7.12%
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Average rate base after final adjustments for completed capital projects was $2.27 billion or an increase of $180.1 million since the last rate case.
WASHINGTON. On July 29, 2026, the WUTC issued a final order in the Rate Case concluding NW Natural's multi-year rate case filed in August 2025 (Order). The Order provides for an annual revenue requirement across three years, beginning on August 1, 2026.
The incremental revenue requirement for each year is based off of the following assumptions:
Year 1 Year 2 Year 3
Revenue Requirement Increase $20.1 million $7.5 million $7.4 million(2)
Capital Structure •50.0% long-term debt•50.0% common equity •50.0% long-term debt•50.0% common equity •50.0% long-term debt•50.0% common equity
Return on Equity 9.5% 9.5% 9.5%
Cost of Long-Term Debt 4.806% 4.863% 4.936%
Overall Rate of Return 7.15% 7.18% 7.22%
Average Rate Base $328.0 million(1) $368.2 million $397.8 million
(1) Represents an increase of $80.7 million since the last rate case.
(2) Includes approximately $3.5 million related to an updated depreciation study.
New rates became effective on August 1, 2026.
NW Natural continuously evaluates the need for rate cases in its jurisdictions.
Rate Mechanisms
During 2026 and 2025, NW Natural's key approved rates and recovery mechanisms for each service area included:
Oregon Washington
2025 Rate Case(effective 10/31/2025) 2024 Rate Case(effective 11/1/2024) 2021 Rate Case(effective 11/1/2021) 2026 Rate Case(effective 8/1/2026)
Authorized Rate Structure:
Return on Equity 9.5% 9.4% (a) 9.5%
Rate of Return 7.1% 7.1% 6.8% (b)
Debt/Equity Ratio 50%/50% 50%/50% (a) 50%/50%
Key Regulatory Mechanisms:
Purchased Gas Adjustment (PGA) X X X X
Gas Cost Incentive Sharing X X
Decoupling X X
Weather Normalization (WARM) X X
RNG Automatic Adjustment Clause X X
Environmental Cost Recovery X X X X
Interstate Storage and Asset Management Sharing X X X X
(a) The WUTC Order does not specify the underlying inputs to the cost of capital, including capital structure and return on equity.
(b) The multi-year rate order specifies a rate of return of 7.15% (Year 1), 7.18% (Year 2), 7.22% (Year 3).
Annually, or more often if circumstances warrant, NW Natural reviews all regulatory assets for recoverability. If NW Natural should determine all or a portion of these regulatory assets no longer meet the criteria for continued application of regulatory accounting, then NW Natural would be required to write-off the net unrecoverable balances against earnings in the period such a determination was made.
PURCHASED GAS ADJUSTMENT. Rate changes are established for NW Natural each year under purchased gas adjustment (PGA) mechanisms in Oregon and Washington to reflect changes in the expected cost of natural gas commodity purchases. The PGA filings include costs for gas purchases, gas commodity derivative contracts, gas storage costs, gas reserves costs, pipeline demand costs, renewable natural gas and its environmental attributes, including renewable thermal certificates, and temporary rate adjustments, which amortize balances of deferred regulatory accounts.
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In September 2025, NW Natural filed its annual PGAs and received OPUC and WUTC approval in October. The PGA rate changes became effective on October 31, 2025, in Oregon and on November 1, 2025, in Washington. Rates vary between states due to different rate structures, rate mechanisms and hedging policies.
Each year, NW Natural hedges gas prices on a portion of NW Natural's annual sales requirement based on normal weather, including both physical and financial hedges. As of June 30, 2026, NW Natural's forecasted sales volume was hedged at approximately 79% in total for the 2025-26 gas year, including 64% in financial hedges and 15% in physical gas supplies. The total hedged was approximately 84% in Oregon and 33% in Washington.
For the subsequent two gas years, NW Natural is hedged in total between 26% and 47% for annual requirements. Hedge levels are subject to change based on actual load volumes, which depend to a certain extent on weather, economic conditions, and estimated gas reserve production. Also, gas storage inventory levels may increase or decrease with storage expansion, changes in storage contracts with third parties, variations in the heat content of the gas, and/or storage recall by NW Natural. We will continue to monitor gas prices as we fill storage and look at hedging plans for future gas years. Gas purchases and hedges entered into for the upcoming PGA year will be included in the Company’s PGA filings in Oregon and Washington.
Under the current PGA mechanism in Oregon, there is an incentive sharing provision whereby NW Natural is required to select each year an 80% deferral or a 90% deferral of higher or lower actual gas costs compared to estimated PGA prices, such that the impact on NW Natural's current earnings from the incentive sharing is either 20% or 10% of the difference between actual and estimated gas costs, respectively. For the 2024-25 and 2025-26 gas years, NW Natural selected the 90% deferral option. Under the Washington PGA mechanism, NW Natural defers 100% of the higher or lower actual gas costs, and those gas cost differences are passed on to customers through the annual PGA rate adjustment.
As of May 1, 2025, 0.2 million therms per day of deliverability and 0.3 Bcf of associated non-utility Mist gas storage capacity was recalled to serve core customers. Customer rate increases related to this recall began for Oregon customers on October 31, 2025, and November 1, 2025 for Washington customers.
CLIMATE COMMITMENT ACT. Washington has enacted the Climate Commitment Act (CCA), which establishes a comprehensive program that includes an overall limit for GHG emissions from major sources in the state that declines yearly. The program began January 1, 2023. In May 2026, the WUTC re-authorized a CCA cost recovery mechanism with a rate effective date of June 1, 2026. Under this mechanism, NW Natural recovers CCA costs and will defer any difference between forecasted and actual costs in the following year. Additionally, under the approved tariff, proceeds from the sale of allowances, which is required under the CCA, would be used to offset CCA compliance costs for low-income customers. Any remaining proceeds would benefit other customers through fixed bill credits or use in other carbon reduction programs.
Additionally in December 2023, the WUTC approved a request to modify NW Natural's CCA deferral to allow for the recovery of interest from customers based on the actual cash paid for purchases of allowances, less proceeds received from the sale of allowances.
EARNINGS TEST REVIEW. NW Natural is subject to an annual earnings review in Oregon to determine if the NW Natural business is earning above its authorized ROE threshold. If NW Natural business earnings exceed a specific ROE level, then 33% of the amount above that level is required to be deferred or refunded to customers. Under this provision, if NW Natural selects the 80% deferral gas cost option, then NW Natural retains all earnings up to 150 basis points above the currently authorized ROE before earnings sharing applies. If NW Natural selects the 90% deferral option, then it retains all earnings up to 100 basis points above the currently authorized ROE. For the 2024-25 and 2025-26 gas years, NW Natural selected the 90% deferral option. The ROE threshold is subject to adjustment annually based on movements in long-term interest rates. For calendar years 2023, 2024, and 2025, the ROE threshold was 10.40%. NW Natural filed the 2025 earnings test in April 2026, indicating no customer credit adjustment based on results, which was approved by the OPUC in June 2026. Through Q2 2026, NW Natural does not expect a customer credit adjustment for 2026 based on preliminary results of the earnings test.
DECOUPLING. In Oregon, NW Natural has a decoupling mechanism that covers residential and some commercial sales customers. Decoupling is intended to break the link between revenue and the quantity of gas consumed by customers, removing any financial incentive to discourage customers’ efforts to conserve energy. This mechanism employs a use-per-customer decoupling calculation, which adjusts margin revenues to account for the difference between actual and expected customer volumes. The margin adjustment resulting from differences between actual and expected volumes under the decoupling component is recorded to a deferral account, which is included in the annual PGA filing. The 2025 Oregon general rate case reset the Oregon decoupling baseline usage per customer.
WARM. In Oregon, NW Natural has an approved weather normalization mechanism (WARM), which is applied to residential and small commercial customer bills. This mechanism is designed to help stabilize the collection of fixed costs by adjusting residential and small commercial customer billings based on temperature variances from average weather, with rate decreases when the weather is colder than average and rate increases when the weather is warmer than average. The mechanism is applied to bills from December through mid-May of each heating season. The mechanism adjusts the margin component of customers’ rates to reflect average weather, which uses the 25-year average temperature for each day of the billing period. Daily average temperatures and 25-year average temperatures are based on a set point temperature of 59 degrees Fahrenheit for residential customers and 58 degrees Fahrenheit for commercial customers. The collections of any unbilled WARM amounts due
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to tariff caps and floors are deferred and earn a carrying charge until collected, or returned, along with the PGA the following year. Residential and small commercial customers in Oregon are allowed to opt out of the weather normalization mechanism, and as of June 30, 2026, 7% of total eligible customers had opted out. NW Natural does not have a weather normalization mechanism approved for Washington customers, which account for about 12% of total customers.
RENEWABLE NATURAL GAS AND AUTOMATIC ADJUSTMENT CLAUSE. Oregon Senate Bill 98 (SB 98) enables natural gas utilities to procure or develop RNG, including hydrogen, on behalf of their Oregon customers. The legislation and rules set voluntary goals for adding as much as 30% RNG into the state’s pipeline system by 2050; enables gas utilities to invest in and own the cleaning and conditioning equipment required to bring raw biogas and landfill gas up to pipeline quality, as well as the facilities to connect to the local gas distribution system; and allowing up to 5% of a utility’s revenue requirement to be used to cover the incremental cost or investment in RNG infrastructure.
Further, the law supports all forms of renewable natural gas including renewable hydrogen, which is made from excess wind, solar and hydro power. Renewable hydrogen can be used for the transportation system, industrial use, or blended into the natural gas pipeline system.
Investments in RNG facilities are recovered through an automatic adjustment clause that allows recovery of NW Natural's investments in RNG projects, including operating costs, to be added to rates annually on October 31, following a prudence review. The RNG recovery mechanism allows NW Natural to defer for recovery or credit the differences between the forecasted and actual costs of the RNG projects, subject to an earnings test that includes deadbands at 50 basis points below and above NW Natural's authorized ROE. NW Natural has two investments that the OPUC has approved for recovery in rates. NW Natural filed the 2025 earnings test in April 2026, indicating no customer credit adjustment based on results, which was approved by the OPUC in June 2026. Through Q2 2026, NW Natural does not expect a customer credit adjustment for 2026 based on preliminary results of the earnings test. For RNG procurement contracts, NW Natural seeks recovery of the costs along with the PGA, subject to a prudence review.
ENVIRONMENTAL COST DEFERRAL AND RECOVERY. NW Natural has authorizations in Oregon and Washington to defer costs related to remediation of properties that are owned or were previously owned by NW Natural. In Oregon, a Site Remediation and Recovery Mechanism (SRRM) is currently in place to recover prudently incurred costs allocable to Oregon customers, subject to an earnings test. Effective beginning November 1, 2019, the WUTC authorized an Environmental Cost Recovery Mechanism (ECRM) for recovery of prudently incurred costs allocable to Washington customers.
Oregon SRRM
Under the Oregon SRRM collection process there are three types of deferred environmental remediation expense:
•Pre-review - This class of costs represents remediation spend that has not yet been deemed prudent by the OPUC. Carrying costs on these remediation expenses are recorded at NW Natural's authorized cost of capital. NW Natural anticipates the prudence review for annual costs and approval of the earnings test prescribed by the OPUC to occur by the third quarter of the following year.
•Post-review - This class of costs represents remediation spend that has been deemed prudent and allowed after applying the earnings test, but is not yet included in amortization. NW Natural earns a carrying cost on these amounts at a rate equal to the five-year treasury rate plus 100 basis points.
•Amortization - This class of costs represents amounts included in current customer rates for collection and is calculated as one-fifth of the post-review deferred balance. NW Natural earns a carrying cost equal to the amortization rate determined annually by the OPUC, which approximates a short-term borrowing rate. NW Natural included $10.2 million and $8.8 million of deferred remediation expense approved by the OPUC for collection during the 2025-26 and 2024-25 PGA years, respectively.
In addition, the SRRM also provides for the annual collection of $5.0 million from Oregon customers through a tariff rider. As it collects amounts from customers, NW Natural recognizes these collections as revenue net of any earnings test adjustments and separately amortizes an equal and offsetting amount of the deferred regulatory asset balance through the environmental remediation operating expense line shown separately in the operating expenses section of the Consolidated Statements of Comprehensive Income (Loss). For additional information, see Note 17 in the 2025 Form 10-K.
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The SRRM earnings test is an annual review of adjusted NW Natural ROE compared to authorized NW Natural ROE. To apply the earnings test, NW Natural must first determine what if any costs are subject to the test through the following calculation:
Annual spend
Less: $5.0 million base rate rider
Prior year carry-over(1)
$5.0 million insurance + interest on insurance
Total deferred annual spend subject to earnings test
Less: over-earnings adjustment, if any
Add: deferred interest on annual spend(2)
Total amount transferred to post-review
(1) Prior year carry-over results when the prior year amount transferred to post-review is negative. The negative amount is carried over to offset annual spend in the following year.
(2) Deferred interest is added to annual spend to the extent the spend is recoverable.
To the extent the NW Natural business earns at or below its authorized ROE as defined in the SRRM, the total amount transferred to post-review is recoverable through the SRRM. To the extent more than authorized ROE is earned in a year, the amount transferred to post-review would be reduced by those earnings that exceed its authorized ROE. NW Natural filed the 2025 earnings test in April 2026, indicating no customer credit adjustment based on results, which was approved by the OPUC in June 2026. Through Q2 2026, NW Natural does not expect a customer credit adjustment for 2026 based on preliminary results of the earnings test.
Washington ECRM
The ECRM established by the WUTC order effective November 1, 2019 permits NW Natural’s recovery of environmental remediation expenses allocable to Washington customers. These expenses represent 3.32% of costs associated with remediation of sites that historically served both Oregon and Washington customers. The order allows for recovery of past deferred and future prudently incurred remediation costs allocable to Washington through application of insurance proceeds and collections from customers. Prudently incurred costs that were deferred from the initial deferral authorization in February 2011 through June 2019 were fully offset with insurance proceeds, with any remaining insurance proceeds to be amortized over a 10.5 year period. On an annual basis NW Natural will file for a prudence determination and a request to recover remediation expenditures in excess of insurance amortizations in the following year's customer rates. After insurance proceeds are fully amortized, if in a particular year the request to collect deferred amounts exceeds one percent of Washington normalized revenues, then the excess will be collected over three years with interest.
INTERSTATE STORAGE AND ASSET MANAGEMENT SHARING. On an annual basis, NW Natural credits amounts to Oregon and Washington customers as part of a regulatory incentive sharing mechanism related to net revenues earned from Mist gas storage for assets developed in advance of utility customer needs, and asset management revenues. In January 2026, the OPUC approved the annual 2026 bill credit for Oregon customers' share of interstate storage and asset management activities totaling approximately $23.2 million, which was credited to customers' bills in February 2026. This includes revenue generated for the November 2024 through October 2025 PGA year. Credits are given to customers in Washington as reductions in rates through the annual PGA filing in November.
MIST INTERSTATE GAS STORAGE. NW Natural's interstate storage activities at its Mist Storage facility are subject to regulation by the OPUC, WUTC, and the Federal Energy Regulatory Commission (FERC) with respect to, among other matters, rates and terms of service. The OPUC also regulates intrastate storage services at Mist, while FERC regulates interstate storage services at Mist. The FERC uses a maximum cost of service model which allows for gas storage prices to be set at or below the cost of service as approved by each agency in their last regulatory filing. The OPUC Schedule 80 rates are tied to the FERC rates, and are updated whenever NW Natural modifies FERC maximum rates. NW Natural is required under its Mist interstate storage certificate authority and rate approval orders to file every five years either a petition for rate approval or a cost and revenue study to change or justify maintaining the existing rates for its interstate storage services. NW Natural filed a rate petition with the FERC in August 2023 and the revised rates were effective beginning September 1, 2023.
Non-utility Mist storage capacity of 1.15 Bcf and 0.28 Bcf were recalled as of December 31, 2024, and 2025, respectively, to serve core utility customer needs. Customer rate impacts of this recall began on November 1, 2024, and 2025.
INTEGRATED RESOURCE PLAN (IRP). NW Natural generally files a full IRP biennially for Oregon and Washington with the OPUC and WUTC, respectively. NW Natural jointly filed its 2025 IRP for both Oregon and Washington on August 1, 2025. The 2025 IRP evaluates several scenarios based on a range of inputs and outlines the least-cost least-risk portfolio of resources required to meet future demand and environmental compliance obligations. With respect to IRPs generally, the WUTC issues letters of compliance and Oregon acknowledges the IRP Action Plan individually or in total. In April 2026, NW Natural received a letter of compliance from the WUTC and a letter of acknowledgement from the OPUC.
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OREGON ENERGY FAIRNESS AND AFFORDABILITY ACT. In 2025, the State of Oregon enacted the Oregon Energy Fairness and Affordability Act (HB 3179). HB 3179 authorizes the OPUC to consider broader economic indicators when evaluating rate proposals and limits the frequency and timing of rate increases for electric and natural gas utilities. Specifically, NW Natural and other utilities are restricted from filing a new general rate case within 18 months of the effective date of the last general rate increase until the earlier of January 2, 2027 or when the OPUC implements rules for multi-year rate plans. Utilities are permitted to seek cost deferral during this 18-month period. HB 3179 only allows utilities to increase rates from April 1 through October 31 (outside of the winter heating season) and requires utilities to, at least annually, publish forecasts of expected rate adjustments for the following 12 months. Additionally, under HB 3179 the OPUC has the authority to approve the issuance of rate recovery bonds to finance or refinance certain eligible utility capital expenditures, including a capital investment that will cause residential rates to increase by more than five percent. We expect that the new requirements may impact the timing and structure of future rate filings.
MULTI-YEAR RATEMAKING. The OPUC is currently conducting a rulemaking to establish a multi-year rate plan framework for Oregon utilities. In July 2026, the OPUC completed the first phase of the proceeding, which provides a framework to inform the rules to be developed in a second phase, including a five-year rate plan term, among other considerations. The rulemaking is currently expected to conclude by the end of 2027, with NW Natural's first rate case under any adopted multi-year rate plan framework currently anticipated to be filed in 2028, with rates effective in 2029.
ALTERNATIVE RATE MECHANISM (ARM). On November 25, 2025, NW Natural filed a request to the OPUC for an alternative rate mechanism for the recovery of costs associated with certain capital expenditures placed into service prior to October 31, 2026, including certain discrete projects over $1 million, information technology and services capital expenditures and public works projects. NW Natural’s request includes an annual revenue requirement increase of $15.6 million and a proposed effective date of October 31, 2026. The request remains subject to review by the OPUC and other stakeholders and approval by the OPUC.
On June 29, 2026, NW Natural, OPUC Staff, and the Alliance of Western Energy Consumers filed a Partial Multi-Party Stipulation resolving substantially all issues in the proceeding. The stipulation supports an annual revenue requirement increase of approximately $13.0 million, subject to completion of capital projects identified as being placed in service prior to the rate effective date. A limited number of issues remain contested, with no material impact expected to the overall revenue requirement. A Commission order is expected later this year, with new rates anticipated to take effect on October 31, 2026.
SIENERGY
Most Recently Completed Rate Case
SiEnergy's natural gas distribution business is located in Texas and primarily serves customers in the Houston, Dallas, and Austin metropolitan areas. Under Texas' regulatory paradigm, original jurisdiction over natural distribution rates is shared between the Railroad Commission of Texas (RRC) and the municipalities where the utility provides service. The RRC has exclusive original jurisdiction over natural gas utility rates in areas outside of municipalities. A municipality has original jurisdiction over the rates, operations and services provided by any gas utility distributing natural gas within city or town limits, unless it has surrendered its original jurisdiction to the RRC. However, any municipal rate decision can be appealed to the RRC, which will conduct its own review, including compiling a new evidentiary record. SiEnergy's last general rate case was settled in 2023 with new rates effective in September 2023. As part of the black box settlement, SiEnergy's annual revenue requirement increased by $5.5 million based on an approved net plant amount of approximately $151.6 million through March 31, 2023. Given the nature of the black box settlement, SiEnergy's authorized rate of return and capital structure were not specified.
Regulatory Proceeding Updates
2026 RATE CASE. On May 4, 2026, SiEnergy Gas, LLC (SiEnergy Gas), Pines Gas, Inc. and Pines Gas Development, Inc. filed a request for a general rate increase with the RRC. The filing seeks to consolidate the corporate and regulatory structures of these entities – including all of their assets and liabilities – into SiEnergy Gas as the surviving entity. The filing further requests the establishment of system-wide rates. The filing requests an overall revenue requirement increase of $12.0 million, reflecting a 16.1% increase in such entities' overall combined revenue, including gas costs. The filing also includes a request to establish baseline factors for future interim rate adjustment filings under Texas' Gas Reliability Infrastructure Program, which allows, subject to refund, recovery on and of incremental changes in invested capital between rate cases (subject to a prudence review). The request is based on the following assumptions or requests:
•Capital structure of 40% long-term debt and 60% equity;
•Return on equity of 10.75%;
•Cost of long-term debt of 5.69%; and
•Cost of capital of 8.73%.
SiEnergy's filing will be reviewed by the RRC and other stakeholders. New rates are expected to take effect in the fourth quarter of 2026.
TEXAS HOUSE BILL 4384. In June 2025, Texas House Bill 4384 was signed into law, allowing gas utilities in Texas to defer, and later recover, specific costs related to property, plant and equipment placed in service, but not yet reflected in base rates, including depreciation, ad valorem taxes, and carrying cost. SiEnergy began to apply the new provisions to property, plant and equipment placed in service but not yet reflected in rates in the third quarter of 2025.
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CUSTOMER RATE RELIEF BONDS. In February 2022, the RRC issued a Financing Order to the Texas Public Financing Authority (TPFA) authorizing the issuance of the customer rate relief bonds to securitize the aggregated extraordinary costs associated with Winter Storm Uri for all participating natural gas utilities. In March 2023, the bonds were issued by the TPFA and $18.8 million of proceeds were received by SiEnergy. The majority of the proceeds were used to pay down the related long-term debt. SiEnergy began billing and collecting customer rate relief charges from customers in October 2023. Customer rate relief charges collected by SiEnergy are owned by the TPFA and are remitted to the TPFA on a monthly basis.
WNA. SiEnergy's service areas utilize weather normalization mechanisms (WNA). These mechanisms are designed to reduce the delivery charge component of customer's bills for the additional volumes used when actual heating degree days (HDDs) exceed normalized HDDs and to increase the delivery charge component of customers' bills for the reduction in volumes used when actual HDDs are less than normal HDDs.
NWN WATER
The wholly-owned and non-wholly-owned regulated water businesses of NWN Water are subject to regulation by the utility commissions in the states in which they are located, which currently includes Oregon, Washington, Arizona, Idaho, and Texas. The wholly-owned regulated wastewater businesses of NWN Water are subject to regulation by the utility commissions in the states in which they are located, which currently includes Texas and Arizona. In addition, NWN Water includes wholly-owned unregulated wastewater businesses in Oregon, Washington, and Idaho.
Most Recently Completed Rate Cases
Entity State Regulator Revenue Requirement Increase (in millions) Rate Effective Date Equity Ratio Return on Equity Outcome
Foothills Utilities Arizona ACC Water: $0.9 Wastewater: 3.8 11/1/2024 55.00% 9.55% Settled
Sunriver Water Oregon OPUC Water: 0.4 11/1/2024 n/a n/a Settled
Avion Water(1) Oregon OPUC 1.3 2/1/2025 51.35% 9.50% Settled
Suncadia Water Washington WUTC 0.3 7/1/2025 n/a n/a Settled
Gem State Water Idaho IPUC 0.4 8/1/2025 55.00% 9.80% Litigated
Falls Water Idaho IPUC 0.6 9/1/2025 55.00% 9.80% Litigated
Cascadia Water Washington WUTC 1.1 10/21/2025 n/a n/a Litigated
South Coast Water Oregon OPUC 0.023 8/15/2025 n/a 9.50% Settled
Seavey Loop Water Oregon OPUC 0.043 10/1/2025 n/a 9.50% Settled
(1) NWN Water owns a 50.0% stake in Avion Water.
Regulatory Proceeding Updates
•Foothills Utilities implemented, effective June 24, 2025, a surcharge associated with its new wastewater reclamation facility that is designed to recover an additional $0.75 million of revenue requirement annually.
•Salmon Valley Water, Sunstone Water, Lakeshore Water, Seavey Loop Water, and South Coast Water, regulated water companies in Oregon, filed a consolidated general rate case in the fourth quarter of 2025. The filing requests an annual revenue increase of $1.5 million. On July 7, 2026, the OPUC approved a separate application to merge entities.
•On April 1, 2026, Foothills Utilities filed a request for general rate revision with the Arizona Corporation Commission (ACC) for Foothills Yuma. On April 30, 2026, Foothills Utilities filed requests for general rate revision with the ACC for Foothills Kingman West and Foothills Kingman East, respectively. The filings requested an aggregate revenue increase of $3.8 million for water and $0.7 million for wastewater. NWN Water moved to consolidate these rate cases on May 4, 2026. The ACC approved the request to consolidate the dockets on May 7, 2026.
•On March 31, 2026, Blue Topaz filed a request for a general rate revision with the Public Utility Commission of Texas. The application included increases for water service of approximately $2.1 million, and $0.6 million for wastewater service.
•On April 10, 2026, Avion filed a request for a general rate revision with the Oregon Public Utilities Commission. In the application, Avion is seeking an annual revenue increase of $1.4 million.
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Environmental Regulation and Legislation Matters
Certain of our businesses, including our natural gas businesses, are subject to or likely to be affected by current or future legislation, regulation, directed government funding, penalties for non-compliance, litigation and other forms of policies or actions seeking to regulate GHG emissions, including, but not limited to: GHG emissions limits, reporting requirements, carbon taxes, requirements to purchase carbon credits, building codes, efficiency standards, charges to fund energy efficiency activities or other regulatory actions, incentives or mandates to conserve energy or use renewable energy sources, tax advantages or other subsidies to support alternative energy sources, a reduction in rate recovery for construction costs related to the installation of new customer services or other new infrastructure investments, mandates for the use of specific fuels or technologies, bans on specific fuels or technologies, or promotion of research into new technologies to reduce the cost and increase the scalability of alternative energy sources.
Federal
Historically, federal agencies have regulated GHG emissions. For example, under the Clean Air Act, our natural gas distribution businesses have been required to report system throughput to the EPA on an annual basis. The EPA also has required additional GHG reporting regulations applicable to NW Natural, requiring the annual reporting of fugitive emissions from operations. The EPA has revoked the endangerment finding for GHG emissions, proposed rules rescinding these reporting requirements, and extended the 2025 reporting deadline until October 30, 2026. However, we remain subject to such reporting requirements until the rescinding rule is finalized and becomes effective.
Upon taking office in January 2025, President Trump has advanced federal policies to promote energy independence and revoke Biden Administration climate initiatives. We expect continued changes to climate policy under the Trump Administration, such as additional executive orders, regulations, programs and other federal actions. We are currently evaluating these developments but cannot predict the timing, form, or potential impact of future federal actions on our business.
Oregon
In November 2024, the Environmental Quality Commission of the Oregon Department of Environmental Quality (ODEQ) issued final cap and reduce rules for its Climate Protection Program (CPP), which became effective on January 1, 2025. The CPP establishes a program to reduce GHG emissions from covered entities, including natural gas utilities, by 50% by 2035 and 90% by 2050 from a 2017-2019 baseline. The first compliance period for the CPP concludes December 31, 2027. ODEQ previously promulgated CPP rules in December 2021, but the Oregon Court of Appeals invalidated these previous CPP rules in December 2023 for the agency’s failure to comply with rulemaking requirements under state law. A coalition of 29 labor organizations, businesses, trade associations, and utilities, including NW Natural, are currently challenging the CPP in the Oregon Court of Appeals.
NW Natural received an order from the OPUC authorizing deferral of costs under the prior CPP and current CPP. The first compliance period for the CPP has begun. Through 2025, NW Natural has not exceeded its limit on the GHG emissions the CPP attributes to it under the program. NW Natural is currently recovering in Oregon rates costs associated with RNG, as well as costs related to NW Natural’s transportation energy efficiency program, all of which reduce NW Natural’s compliance obligation under the CPP. NW Natural will continue to pursue recovery of costs associated with CPP compliance in rates.
On October 25, 2024, the OPUC issued its final order related to our 2024 Oregon General Rate Case, approving the parties’ Stipulations and resolving remaining open items. The OPUC also ordered the phase out of NW Natural’s line extension allowance and ordered a downward adjustment to rate base of undepreciated line extension costs. NW Natural filed an appeal with the Oregon Court of Appeals on December 23, 2024, challenging the determination and the authority of the OPUC to take these actions. This litigation remains pending.
Washington State
In 2025, Washington comprised approximately 8% of NW Natural’s revenues, as well as 2% and 13% of new meters from commercial and residential customers, respectively.
Effective February 2021, Washington state building codes (WSEC-2018) require new residential homes to meet energy efficiency standards based on carbon emissions assumptions that consider electric appliances to have lower on-site GHG emissions than comparable gas appliances. This increases the cost of constructing new homes with natural gas depending on a number of factors including home size, equipment configurations, and building envelope measures. In March 2024, rules enacted by the Washington State Building Code Council (SBCC) (WSEC-2021) took effect that modified the 2021 codes, and collectively, these rules generally have the effect of restricting or eliminating the use of gas space and water heating in new commercial and residential construction. The SBCC rules are currently subject to pending legal challenges. Additionally, the SBCC is in the process of amending its building codes. The SBCC expects to adopt a final rule amending its building codes by September 2026, and while these amendments may impact gas space and water heating, the contents of the final rule have yet to be determined.
In November 2024, Washington Ballot initiative I-2066 was passed. I-2066 was described on the ballot as prohibiting state and local governments from restricting access to natural gas, prohibiting the SBCC from discouraging or penalizing the use of natural gas in any building, requiring providers of natural gas to provide energy services regardless of the other energy sources available, and prohibiting the Washington Utilities and Transportation Commission (WUTC) from approving any multiyear rate plan requiring or incentivizing a natural gas company to terminate natural gas service or make such natural gas service cost-prohibitive. Although the SBCC has previously indicated that it will investigate any changes necessary under I-2066, the King County Washington Superior Court issued a ruling in March 2025 declaring I-2066 invalid under the Washington State
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Constitution. Washington State and the Building Industry Association of Washington have appealed that ruling to the Washington Supreme Court. We cannot currently predict the ultimate outcome of such appeal, or if there will be any further changes to the SBCC codes as a result of I-2066.
In 2022, the state of Washington enacted the Climate Commitment Act (CCA), which establishes a comprehensive program that includes an overall limit for GHG emissions from major sources in the state that declines yearly beginning January 1, 2023, resulting in an overall reduction of GHG emissions to 95% below 1990 levels by 2050. The Washington Department of Ecology has adopted rules to create a cap-and-invest program, under which entities, including natural gas and electric utilities, large manufacturing facilities, and transportation and other fuel providers, which are subject to the CCA must either reduce their emissions, purchase qualifying offsets (including RNG) or obtain allowances to cover any remaining emissions. NW Natural is subject to the CCA, has received an order authorizing deferral of CCA costs from the WUTC, and is currently recovering CCA compliance costs in rates. CCA compliance costs represent a 4.6% increase on residential bills as of January 1, 2025. Low-income customers do not participate in these compliance costs and are not impacted.
In June 2026, Washington signed a carbon market linkage agreement with California and Québec which states an intent to link the CCA carbon market with the carbon markets of the latter two jurisdictions. The Washington Department of Ecology is currently in a rulemaking process to amend CCA program and greenhouse gas reporting rules to facilitate linkage between the three jurisdictions.
Local Jurisdictions and Other Advocacy
Advocacy groups have indicated a willingness to pursue municipal ordinances and ballot measures or other local activities disincentivizing gas infrastructure. A number of cities or counties across the country have taken action, and several in our service territory are considering actions such as disincentives, limitations, or bans on the use of natural gas in new construction or otherwise. For example, the Eugene City Council continues to develop a plan to address GHG emissions, align incentives around GHG emissions and to engage in a number of actions, including identifying potential revenue sources, like a gas supplier tax. Similarly, some jurisdictions and advocates are seeking to ban the use of natural gas and certain natural gas appliances inside homes contending that there are detrimental indoor health effects associated with the use of natural gas.
NW Natural is actively engaged with federal, state and local policymakers, consumers, customers, small businesses and other business coalitions, economic development practitioners, and other advocates in our service territory and is working with these communities to communicate the role that direct use natural gas, and in the coming years, RNG and hydrogen, can play in pursuing more effective policies to reduce GHGs while supporting reliability, resiliency, energy choice, equity, and energy affordability.
NW Natural Climate Initiatives and Compliance Actions
We expect that compliance with any form of regulation of GHG emissions will require additional resources and legislative or regulatory tools and will increase costs. The evolving guidance to implement the CCA and CPP, evolving carbon credit markets, decades-long compliance timeframes, likely changes in law and policy, and technological advancements all make it difficult to accurately predict long-term tools and compliance costs for NW Natural. NW Natural has modeled pathways to compliance with the CCA and CPP in its most recent IRP. While costs associated with each possible compliance pathway differ, we are currently recovering costs associated with compliance with the CCA and CPP in rates.
Limitations on natural gas use, declining line extension allowances provided in rates to cover construction costs for new services, or carbon compliance costs included in rates reduce the competitiveness of our business and the demand for natural gas service. However, at the same time, other sources of energy are or will be subject to, GHG-related compliance requirements that are likely to affect their cost and competitiveness relative to natural gas. For example, Oregon’s HB 2021 and Washington’s SB 5116 require certain GHG emissions reductions from electric utilities. We expect compliance with these and other laws will increase the cost of energy for electric customers in our service territory. We are not able to determine at this time whether these developments will make natural gas use more or less competitive on a relative basis.
We further expect these and other trends to drive innovation of, and demand for, technological developments and innovative new products that reduce GHG emissions. Research and development are occurring across the energy sector, including in the gas sector with work being conducted on gas heat pumps, higher efficiency water and space heating appliances including hybrid systems, carbon capture utilization and storage developments, continued development of technologies related to RNG, and various forms of hydrogen for different applications, among others.
FINANCIAL CONDITION
Cash Flows
The following discussion of changes in cash flows refers to the consolidated results of NW Holdings, the substantial majority of which consist of the operating results of NW Natural. When significant activity exists at NW Holdings that does not exist at NW Natural, additional disclosure has been provided.
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Operating Activities
Changes in operating cash flows are primarily affected by net income or loss, changes in working capital requirements, and other cash and non-cash adjustments to operating results.
Six Months Ended June 30,
In thousands 2026 2025 YTD Change
NW Holdings cash provided by operating activities $ 225,848 $ 281,770 $ (55,922)
NW Natural cash provided by operating activities 204,192 277,011 (72,819)
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. Cash provided by operating activities decreased $55.9 million at NW Holdings and $72.8 million at NW Natural.
The significant factors contributing to the decrease in cash provided at NW Holdings were as follows:
•$31.2 million increase in cash used by accounts payable;
•$21.4 million increase in cash used by decoupling mechanism; and
•$13.2 million increase in cash used by deferred gas costs; partially offset by
•$17.0 million increase in cash provided by changes in regulatory accounts.
The significant factors contributing to the decrease in cash provided at NW Natural were as follows:
•$21.4 million increase in cash used by decoupling mechanism;
•$19.1 million increase in cash used by accounts payable;
•$13.9 million increase in cash used for inventory; and
•$13.2 million increase in cash used by deferred gas costs; partially offset by
•$17.7 million increase in cash provided by changes in regulatory accounts.
NW Holdings and NW Natural have lease and purchase commitments relating to their operating activities that are financed with cash flows from operations. For information on cash flow requirements related to leases and other purchase commitments, see Note 7 and Note 16 in the 2025 Form 10-K.
Investing Activities
Six Months Ended June 30,
In thousands 2026 2025 YTD Change
NW Holdings cash used by investing activities $ (234,976) $ (555,887) $ 320,911
NW Natural cash used by investing activities (165,346) (178,069) 12,723
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. Cash used by investing activities decreased $320.9 million at NW Holdings and decreased $12.7 million at NW Natural. The decrease in cash used by investing activities at NW Holdings was primarily driven by the acquisition of SiEnergy on January 7, 2025, for which $271.1 million in cash consideration was paid and the acquisition of Pines on June 2, 2025, for which $60.4 million in cash consideration was paid. NW Holdings capital expenditures increased by $12.3 million, driven primarily by increases at SiEnergy and NWN Water, and offset by a decrease in capital expenditures of $10.5 million at NW Natural.
NW Holdings capital expenditures for 2026 are expected to be in the range of $500 million to $550 million and for the five-year period from 2026 to 2030 are expected to range from $2.6 billion to $2.9 billion. NW Natural capital expenditures for 2026 are expected to be in the range of $340 million to $370 million and for the five-year period from 2026 to 2030 are expected to be approximately $1.6 billion to $1.8 billion. SiEnergy capital expenditures for 2026 are expected to be in the range of $110 million to $120 million and for the five-year period from 2026 to 2030 are expected to be in the range of $750 million to $800 million. NWN Water capital expenditures for 2026 are expected to be in the range of $50 million to $60 million and for the five-year period from 2026 to 2030 are expected to be in the range of $250 million to $300 million.
The timing and amount of the core capital expenditures and projects for 2026 and the next six years could change based on regulation, growth, and cost estimates. Additional investments in our infrastructure during and after 2026 that are not incorporated in the estimates provided above will depend largely on additional regulations, growth, and expansion opportunities. Required funds for the investments are expected to be internally generated or financed with long-term debt or equity, as appropriate.
North Mist Gas Storage Facility
The North Mist gas storage facility began operations in 2019. The North Mist facility provides long-term, no-notice underground gas storage service and is dedicated solely to Portland General Electric (PGE) under a 30-year contract with options to extend up to an additional 50 years upon mutual agreement of the parties. PGE uses the facility to fuel its gas-fired electric power generation facilities.
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North Mist includes a reservoir providing 4.1 Bcf of available storage, a compressor station with a contractual capacity of 120,000 dekatherms of gas deliverability per day, no-notice service that can be drawn on rapidly, and a 13-mile pipeline to connect to PGE's Port Westward gas plants in Clatskanie, Oregon.
The facility is included in rate base under an established tariff schedule with revenues recognized consistent with the schedule. Billing rates are updated annually to the forecasted depreciable asset level and forecasted operating expenses.
Mist Additional Expansion Potential
Mist has a number of depleted reservoirs that have not been developed into storage at this time. As a result, NW Natural has additional expansion opportunities in the Mist storage field. To explore our opportunities, we applied for an Energy Facility Siting Council (EFSC) permit and received approval in January 2025. The permit provides flexibility for potential upgrades and expansions. In February 2026, we announced a planned 4-5 Bcf expansion at our North Mist gas storage facility. This expansion is subject to certain conditions including the customers' final approval of project costs and notice to proceed. Storage expansion projects take multiple years to develop and put into service. We have not included any storage expansion costs within our planned capital expenditures outlined in “Financial Conditions – Investing Activities”. Any future expansion would be based on market demand, cost effectiveness, available financing, receipt of future permits, and other rights.
Financing Activities
Six Months Ended June 30,
In thousands 2026 2025 YTD Change
NW Holdings cash (used by) provided by financing activities $ (2,105) $ 332,799 $ (334,904)
NW Natural cash used by financing activities (52,008) (41,443) (10,565)
SIX MONTHS ENDED JUNE 30, 2026 COMPARED TO JUNE 30, 2025. Cash provided by financing activities decreased $334.9 million at NW Holdings and cash used by financing activities increased $10.6 million at NW Natural.
The decrease in cash provided by financing activities at NW Holdings was primarily driven by lower issuances of long-term debt, higher repayments of long-term debt, and higher repayments of short-term debt.
The increase in cash used by financing activities at NW Natural was primarily attributable to a decrease in cash contributions received from NW Holdings, partially offset by a decrease in short-term debt repayments.
Capital Structure
NW Holdings' long-term goal is to maintain a strong and balanced consolidated capital structure. NW Natural targets a regulatory capital structure of 50% common equity and 50% long-term debt, which is consistent with approved regulatory allocations in Oregon, which has an allocation of 50% common equity and 50% long-term debt without recognition of short-term debt.
When additional capital is required, debt or equity securities are issued depending on both the target capital structure and market conditions. These sources of capital are also used to fund long-term debt retirements and short-term commercial paper maturities. See "Liquidity and Capital Resources" below and Note 9. Achieving our target capital structure and maintaining sufficient liquidity to meet operating requirements is necessary to maintain attractive credit ratings and provide access to the capital markets at reasonable costs.
NW Holdings' consolidated capital structure, excluding short-term debt, was as follows:
June 30, December 31,
2026 2025 2025
Common equity 38.4 % 39.6 % 37.7 %
Long-term debt (including current maturities) 61.6 60.4 62.3
Total 100.0 % 100.0 % 100.0 %
NW Natural's consolidated capital structure, excluding short-term debt, was as follows:
June 30, December 31,
2026 2025 2025
Common equity 50.5 % 52.6 % 49.6 %
Long-term debt (including current maturities) 49.5 47.4 50.4
Total 100.0 % 100.0 % 100.0 %
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As of June 30, 2026 and 2025, and December 31, 2025, NW Holdings' consolidated capital structure included common equity of 37.3%, 38.0% and 36.2%; long-term debt of 56.8%, 54.2% and 55.7%; and short-term debt including current maturities of long-term debt of 5.9%, 7.8% and 8.1%, respectively. As of June 30, 2026 and 2025, and December 31, 2025, NW Natural's consolidated capital structure included common equity of 50.5%, 52.6%, and 49.4%; long-term debt of 47.1%, 46.4% and 48.5%; and short-term debt including current maturities of long-term debt of 2.4%, 1.0%, and 2.1%, respectively.
Liquidity and Capital Resources
At June 30, 2026 and 2025, NW Holdings had approximately $24.2 million and $102.6 million, and NW Natural had approximately $15.0 million and $82.9 million of cash and cash equivalents, respectively. In order to maintain sufficient liquidity during periods when capital markets are volatile, NW Holdings and NW Natural may elect to maintain higher cash balances and add short-term borrowing capacity. NW Holdings and NW Natural may also pre-fund their respective capital expenditures when long-term fixed rate environments are attractive. NW Holdings and NW Natural expect to have ample liquidity in the form of cash on hand and from operations and available credit capacity under credit facilities to support funding needs.
ATM Equity Program
In August 2024, the Finance Committee of the NW Holdings' Board of Directors authorized NW Holdings' sale of $200 million in the aggregate gross sales price under the ATM equity program. NW Holdings is under no obligation to offer and sell common stock under the ATM equity program. Any shares of common stock offered under the ATM equity program are registered on NW Holdings’ universal shelf registration statement filed with the SEC, which expires August 2027, or will be registered on a subsequent registration statement to be filed by NW Holdings.
During the three months ended June 30, 2026, NW Holdings issued and sold no shares of common stock pursuant to the ATM equity program.
During the six months ended June 30, 2026, NW Holdings issued and sold 441,034 shares of common stock pursuant to the ATM equity program resulting in cash proceeds of $22.2 million, net of fees and commissions paid to agents of $0.4 million. As of June 30, 2026, $75.2 million of equity remained available for issuance under the ATM equity program.
NW Holdings
For NW Holdings, short-term liquidity is primarily provided by cash balances, dividends from its operating subsidiaries, proceeds from the sale of commercial paper notes, as well as a multi-year credit facility, and short-term credit facilities. NW Holdings also has a universal shelf registration statement filed with the SEC for the issuance of debt and equity securities. NW Holdings long-term debt and equity issuances are primarily used to provide equity contributions to NW Holdings’ operating subsidiaries for operating and capital expenditures and other corporate purposes. NW Natural also has a universal shelf registration statement filed with the SEC for the issuance of debt securities. NW Holdings' issuance of securities is not subject to regulation by state public utility commissions, but the dividends from NW Natural to NW Holdings are subject to regulatory ring-fencing provisions. See "Long-Term Debt" below for more information regarding NWN Water debt.
As part of the ring-fencing conditions agreed upon with the OPUC and WUTC in connection with the holding company reorganization, NW Natural may not pay dividends or make distributions to NW Holdings if NW Natural’s credit ratings and common equity ratio, defined as the ratio of equity to long-term debt, fall below specified levels. If NW Natural’s long-term secured credit ratings are below A- for S&P and A3 for Moody’s, dividends may be issued so long as NW Natural’s common equity ratio is 45% or more. If NW Natural’s long-term secured credit ratings are below BBB for S&P and Baa2 for Moody’s, dividends may be issued so long as NW Natural’s common equity ratio is 46% or more. Dividends may not be issued if NW Natural’s long-term secured credit ratings are BB+ or below for S&P or Ba1 or below for Moody’s, or if NW Natural’s common equity ratio is below 44%, where the ratio is measured using common equity and long-term debt excluding imputed debt or debt-like lease obligations. In each case, common equity ratios are determined based on a preceding or projected 13-month average. In addition, there are certain OPUC notice requirements for dividends in excess of 5% of NW Natural’s retained earnings, or more than 10% of its retained earnings over a six-month period, and for special cash dividends paid in addition to regularly quarterly dividends.
Additionally, if NW Natural’s common equity (excluding goodwill and equity associated with non-regulated assets), on a preceding or projected 13-month average basis, is less than 46% of NW Natural’s capital structure, NW Natural is required to notify the OPUC, and if the common equity ratio falls below 44%, file a plan with the OPUC to restore its equity ratio to 44%. This condition is designed to ensure NW Natural continues to be adequately capitalized under the holding company structure. Under the WUTC order, the average common equity ratio must not exceed 56%.
At June 30, 2026, NW Natural satisfied the ring-fencing provisions described above.
Based on several factors, including current cash reserves, committed credit facilities, its ability to receive dividends from its operating subsidiaries, in particular NW Natural, and an expected ability to issue long-term debt and equity securities in the capital markets, NW Holdings believes its liquidity is sufficient to meet anticipated cash requirements, including all contractual obligations, investing, and financing activities as discussed in "Cash Flows" above, for at least the next 12 calendar months beginning July 1, 2026 and beyond such 12-month period based on NW Holdings' current business plans.
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NW HOLDINGS DIVIDENDS. Quarterly dividends have been paid on common stock each year since NW Holdings’ predecessor’s stock was first issued to the public in 1951. Annual common stock dividend payments per share, adjusted for stock splits, have increased each year since 1956. The declarations and amount of future dividends to shareholders will depend upon earnings, cash flows, financial condition, NW Natural’s ability to pay dividends to NW Holdings and other factors. The amount and timing of dividends payable on common stock is at the sole discretion of the NW Holdings Board of Directors.
Dividend highlights include:
Three Months Ended June 30, Six Months Ended June 30, QTD Change YTD Change
Per common share 2026 2025 2026 2025
Dividends paid $ 0.4925 $ 0.4900 $ 0.9850 $ 0.9800 $ 0.0025 $ 0.0050
In July 2026, the Board of Directors of NW Holdings declared a quarterly dividend on NW Holdings common stock of $0.4925 per share. The dividend is payable on August 14, 2026 to shareholders of record on July 31, 2026, reflecting an annual indicated dividend rate of $1.97 per share.
NW Natural
For the NW Natural business segment, short-term borrowing requirements typically peak during colder winter months when NW Natural borrows money to cover the lag between natural gas purchases and bill collections from customers. Short-term liquidity for the NW Natural business is primarily provided by cash balances, internal cash flow from operations, proceeds from the sale of commercial paper notes, as well as available cash from multi-year credit facilities, short-term credit facilities, company-owned life insurance policies, the sale of long-term debt, and equity contributions from NW Holdings. NW Natural's long-term debt and contributions from NW Holdings are primarily used to finance NW Natural capital expenditures, refinance maturing debt, and provide temporary funding for other general corporate purposes of the NW Natural business.
Based on its current debt ratings (see "Credit Ratings" below), NW Natural has been able to issue commercial paper and long-term debt at attractive rates. In the event NW Natural is not able to issue new long-term debt due to adverse market conditions or other reasons, NW Natural expects that near-term liquidity needs can be met using internal cash flows, issuing commercial paper, receiving equity contributions from NW Holdings, or drawing upon a committed credit facility. NW Natural also has a universal shelf registration statement filed with the SEC for the issuance of secured and unsecured debt securities.
In the event NW Natural senior unsecured long-term debt ratings are downgraded, or outstanding derivative positions exceed a certain credit threshold, counterparties under derivative contracts could require NW Natural to post cash, a letter of credit, or other forms of collateral, which could expose NW Natural to additional cash requirements and may trigger increases in short-term borrowings while in a net loss position. NW Natural was not required to post collateral at June 30, 2026. See "Credit Ratings" below and Note 15.
Other items that may have a significant impact on NW Natural's liquidity and capital resources include NW Natural's pension contribution requirements and environmental expenditures. For additional information, see Part II, Item 7 "Financial Condition" in the 2025 Form 10-K.
NWN Renewables Gas Purchase Agreements
NWN Renewables is an unregulated subsidiary of NW Holdings established to pursue unregulated RNG activities. In September 2021, a subsidiary of NWN Renewables, Ohio Renewables, and a subsidiary of EDL, a global producer of sustainable distributed energy, executed agreements to secure RNG supply from two production facilities that are designed to convert landfill waste gases to RNG (EDL Facilities). The first facility was completed and commenced delivery of RNG to Ohio Renewables in September 2024. Upon reaching this milestone, Ohio Renewables paid approximately $26.0 million to the EDL subsidiary. The second facility was completed and commenced delivery of RNG to Ohio Renewables in December 2024 at which point Ohio Renewables made an additional payment of $25.4 million to the EDL subsidiary.
Alongside these development agreements, Ohio Renewables and the subsidiary of EDL executed agreements for Ohio Renewables to purchase up to an annual specified amount of RNG produced by the EDL Facilities over a 20-year period at a contractually specified price. In December 2025, Ohio Renewables entered into an agreement to purchase up to an annual specified amount of RNG produced by the EDL Facilities from a separate investment-grade counterparty over an 11-year period at a contractually specified price. Purchase volumes for each agreement are variable based on production, and purchases may not exceed contracted amounts. We currently estimate the amount of RNG purchases based on prices and estimated production volumes specified in the agreements to be $31.4 million in 2027, $31.6 million in 2028, $30.8 million in 2029, $31.4 million in 2030 and $599.3 million thereafter. Year-to-date purchases through Q2 totaled $8.2 million, for total expected purchases of $20.9 million in 2026.
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NWN Renewables Gas Sale Agreements
Ohio Renewables has contracted to sell RNG produced by the EDL Facilities up to certain specified volumes in each of calendar years 2024 through 2026 to an investment-grade counterparty. We currently estimate RNG volumes to be sold pursuant to this agreement to be approximately 2,370,000 MMbtu over the life of the agreement, provided that such amounts of RNG are produced by the EDL Facilities during that period.
Ohio Renewables additionally has contracted to sell a fixed-volume amount of RNG under a long-term agreement with an investment-grade utility beginning in 2025 and extending through 2044. Amounts to be delivered under this agreement are estimated to be 375,000 MMbtu in 2026, 1,950,000 MMbtu annually in 2027 through 2030, 2,325,000 MMbtu annually in 2031 through 2034, 2,775,000 MMbtu annually in years 2035 through 2043 and 1,513,770 MMbtu in 2044. Under the current contract, if less than 75% of the contracted volumes of RNG are not delivered on an annual basis, Ohio Renewables is obligated to pay the per MMbtu price for volumes between the amount delivered and 75% of the contracted volumes on an annual basis.
Short-Term Debt
At June 30, 2026, June 30, 2025 and December 31, 2025, short-term debt consisted of the following:
June 30, 2026 June 30, 2025 December 31, 2025
In millions Balance Outstanding Weighted Average Interest Rate(1) Balance Outstanding Weighted Average Interest Rate(1) Balance Outstanding Weighted Average Interest Rate(1)
Commercial Paper Borrowings - NW Holdings(2) $ 105.3 4.1 % $ 157.4 4.8 % $ 162.0 4.1 %
Commercial Paper Borrowings - NW Natural — — % — — % 10.0 4.0 %
SiEnergy Credit Agreement Loans 16.0 4.7 % — — % — — %
Total short-term debt $ 121.3 $ 157.4 $ 172.0
(1) Weighted average interest rate on outstanding short-term debt.
(2) NW Holdings initiated a commercial paper program in March 2025.
Credit Agreements
NW Holdings
At June 30, 2026, NW Holdings had a $250 million credit agreement with a feature that allows NW Holdings to request increases to the total commitment amount up to a maximum of $350 million (subject to lender approval). The maturity date of the agreement is November 3, 2030 (or, if such day is not a business day, the immediately preceding business day), with available extensions of commitments for two additional one-year periods, subject to lender approval.
All lenders under the NW Holdings credit agreement are major financial institutions with committed balances and investment grade credit ratings as of June 30, 2026 as follows:
In millions
Lender rating, by category Loan Commitment
AA/Aa $ 194
A/A1 56
Total $ 250
NW Holdings did not have any outstanding balances drawn under the NW Holdings credit agreement at June 30, 2026, June 30, 2025 and December 31, 2025.
The NW Holdings credit agreement permits the issuance of letters of credit in an aggregate amount of up to $40 million. The principal amount of borrowings under the credit agreement is due and payable on the maturity date. The credit agreement requires NW Holdings to maintain a consolidated indebtedness to total capitalization ratio of 70% or less. Failure to comply with this covenant would entitle the lenders to terminate their lending commitments and accelerate the maturity of all amounts outstanding. NW Holdings was in compliance with this covenant at June 30, 2026 and 2025, with consolidated indebtedness to total capitalization ratios of 59.6% and 58.5%, respectively.
The NW Holdings credit agreement also requires NW Holdings to maintain debt ratings (which are defined by a formula using NW Natural's credit ratings in the event NW Holdings does not have a credit rating) with Standard & Poor's (S&P) and Moody's Investors Service, Inc. (Moody’s) and notify the lenders of any change in its senior unsecured debt ratings or senior secured debt ratings, as applicable, by such rating agencies. A change in NW Holdings' debt ratings by S&P or Moody’s is not an event of default, nor is the maintenance of a specific minimum level of debt rating a condition of drawing upon the credit agreement. Rather, interest rates on any loans outstanding under the credit agreements are tied to debt ratings and therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreements when ratings are changed. See "Credit Ratings" below.
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NW Holdings had no letters of credit issued and outstanding at June 30, 2026 and 2025.
NW Natural
At June 30, 2026, NW Natural had a $400 million credit agreement, with a feature that allows NW Natural to request increases in the total commitment amount, up to a maximum of $600 million, subject to lender approval. The maturity date of the agreement is November 3, 2030 (or, if such day is not a business day, the immediately preceding business day), with available extensions of commitments for two additional one-year periods, subject to lender approval.
All lenders under the NW Natural credit agreement are major financial institutions with committed balances and investment grade credit ratings as of June 30, 2026 as follows:
In millions
Lender rating, by category Loan Commitment
AA/Aa $ 310
A/A1 90
Total $ 400
NW Natural did not have any outstanding balances drawn under the NW Natural credit agreement at June 30, 2026, June 30, 2025 and December 31, 2025.
The NW Natural credit agreement permits the issuance of letters of credit in an aggregate amount of up to $60 million. The principal amount of borrowings under the credit agreement is due and payable on the maturity date. The credit agreement requires NW Natural to maintain a consolidated indebtedness to total capitalization ratio of 70% or less. Failure to comply with this covenant would entitle the lenders to terminate their lending commitments and accelerate the maturity of all amounts outstanding. NW Natural was in compliance with this financial covenant at June 30, 2026 and 2025, with consolidated indebtedness to total capitalization ratios of 49.5% and 47.4%, respectively.
The NW Natural credit agreement also requires NW Natural to maintain credit ratings with S&P and Moody’s and notify the lenders of any change in NW Natural's senior unsecured debt ratings or senior secured debt ratings, as applicable, by such rating agencies. A change in NW Natural's debt ratings by S&P or Moody’s is not an event of default, nor is the maintenance of a specific minimum level of debt rating a condition of drawing upon the credit agreement. Rather, interest rates on any loans outstanding under the credit agreement are tied to debt ratings and therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreement when ratings are changed. See "Credit Ratings" below.
NW Natural had no letters of credit issued and outstanding at June 30, 2026 and 2025.
SiEnergy
At June 30, 2026, SiEnergy Holding, LLC (SiEnergy Holdings) had a $75 million senior unsecured credit agreement, with a feature that allows SiEnergy Holdings to request increases in the total commitment amount, up to a maximum of $125 million, subject to lender approval. The maturity date of the SiEnergy Holdings credit agreement is November 3, 2030 (or, if such day is not a business day, the immediately preceding business day), with available extensions of commitments for two additional one-year periods, subject to lender approval. At June 30, 2026, $16 million was drawn under the SiEnergy Holdings agreement.
All lenders under the SiEnergy Holdings credit agreement are major financial institutions with committed balances and investment grade credit ratings as of June 30, 2026 as follows:
In millions
Lender rating, by category Loan Commitment
AA/Aa $ 66
A/A1 9
Total $ 75
The SiEnergy Holdings credit agreement permits the issuance of letters of credit in an aggregate amount of up to $20 million. SiEnergy had no letters of credit outstanding at June 30, 2026.
The SiEnergy Holdings credit agreement requires SiEnergy Holdings to comply, and to cause certain of its subsidiaries to comply, with various affirmative and negative covenants, including a financial covenant requiring SiEnergy Holdings to maintain a consolidated indebtedness to total capitalization ratio of 70% or less. Failure to comply with this or other applicable covenants or the occurrence of any other event of default, subject to, in certain instances, specified thresholds, cure periods and exceptions, would entitle the lenders to terminate their lending commitments and accelerate the maturity of all amounts outstanding. SiEnergy was in compliance with this covenant at June 30, 2026, with an indebtedness to total capitalization ratio of 34.1%.
The SiEnergy Holdings credit agreement also requires SiEnergy Holdings to maintain a credit rating with any one of S&P, Moody’s or certain other rating organizations with respect to SiEnergy Holdings' senior, unsecured, non-credit enhanced long-
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term credit ratings (or, if such debt is not rated, corporate credit rating) and to notify the lenders of any change in such ratings by such rating agencies. A change in SiEnergy Holdings' credit ratings is not an event of default, nor is the maintenance of a specific minimum level of credit rating a condition of drawing upon the credit agreement. Rather, interest rates on any loans outstanding and certain fee amounts under the credit agreement are determined based upon SiEnergy Holdings' credit ratings with S&P and Moody's and therefore, a change in the credit rating may increase or decrease the cost of any loans and the amounts of certain fees under the credit agreement when ratings are changed. See "Credit Ratings" below.
Letters of Credit Facilities
On January 5, 2024, NW Natural entered into an Uncommitted Letter of Credit and Reimbursement Agreement (2024 LC Reimbursement Agreement), between NW Natural, the lenders party thereto from time to time and Canadian Imperial Bank of Commerce, New York Branch as administrative agent (Administrative Agent), pursuant to which NW Natural agreed to reimburse each lender acting as an issuing bank (Issuing Bank) thereunder for disbursements in respect of letters of credit issued pursuant to the LC Reimbursement Agreement from time to time. On May 1, 2026, NW Natural entered into a Reimbursement Agreement and Continuing Indemnity Relating to Standby Letters of Credit/Letters of Guarantee (2026 LC Reimbursement Agreement, and together with the 2024 LC Reimbursement Agreement, the LC Reimbursement Agreements), between NW Natural and The Toronto-Dominion Bank, New York Branch (TD Bank), pursuant to which NW Natural agreed to reimburse TD Bank for disbursements in respect of letters of credit issued pursuant to the 2026 LC Reimbursement Agreement from time to time.
The Company expects to use letters of credit issued under the facilities created by the LC Reimbursement Agreements (each, an LC Facility) primarily to support its participation in Washington Climate Commitment Act cap-and-invest program auctions.
Under the 2024 LC Reimbursement Agreement, there is no expressly stated maximum amount of letters of credit that can be issued or outstanding under the LC Facility created thereby. The 2026 LC Reimbursement Agreement provides that the aggregate undrawn face amount of letters of credit issued thereunder may not exceed $100 million. Regulatory approval from the OPUC provides that the aggregate sum of letters of credit available to be drawn under the LC Reimbursement Agreements may not exceed $250 million at any one time. The Issuing Banks have no commitment to issue letters of credit under either LC Facility and will have the sole discretion to limit and condition the terms for the issuance of letters of credit (including maximum face amounts).
The 2024 LC Reimbursement Agreement requires NW Natural to maintain certain ratings with S&P and Moody’s. NW Natural must also notify the Administrative Agent and the lenders under the 2024 LC Reimbursement Agreement of any change in the S&P or Moody’s Ratings, although any such change is not an event of default.
The 2024 LC Reimbursement Agreement prohibits NW Natural from permitting Consolidated Indebtedness to be greater than 70% of Total Capitalization, each as defined therein and calculated as of the end of each fiscal quarter of NW Natural. Failure to comply with this financial covenant would constitute an Event of Default under the 2024 LC Reimbursement Agreement. Further, each of the LC Reimbursement Agreements is cross-defaulted to NW Natural's Amended and Restated Credit Agreement. The occurrence of these or any other Event of Default (as defined in the applicable LC reimbursement Agreement) would entitle the Administrative Agent or TD Bank, as applicable, to require cash collateral for the LC Exposure, as defined in the 2024 LC
Reimbursement Agreement, or Obligations, as defined in the 2026 LC Reimbursement Agreement, and to exercise all other rights and remedies available under the applicable LC Reimbursement Agreement and under applicable law.
There were no letter of credits issued or outstanding under the 2024 or 2026 LC Reimbursement Agreements at June 30, 2026.
Credit Ratings
NW Holdings credit ratings are a factor of liquidity, potentially affecting access to the capital markets. NW Natural, SiEnergy, and NWN Water's credit ratings also have an impact on the cost of funds.
The following table summarizes NW Holdings' current credit ratings:
S&P
Commercial paper (short-term debt) A-2
Junior subordinated debentures BBB
Issuer credit rating A-
Ratings outlook Stable
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The following table summarizes NW Natural's current credit ratings:
S&P Moody's
Commercial paper (short-term debt) A-1 P-2
Senior secured (long-term debt) AA- A2
Senior unsecured (long-term debt) n/a Baa1
Issuer credit rating A+ n/a
Ratings outlook Stable Stable
The following table summarizes SiEnergy's current credit ratings:
S&P
Issuer credit rating (SiEnergy Holding, LLC, formerly Si Investment Co., LLC) BBB+
Issuer credit rating (SiEnergy Gas, LLC, formerly SiEnergy, L.P.) BBB+
Senior secured notes (SiEnergy Gas, LLC, formerly SiEnergy, L.P.) A
Ratings outlook Stable
The following table summarizes NWN Water's current credit ratings:
S&P
Issuer credit rating A-
Senior unsecured notes A-
Ratings outlook Stable
The above credit ratings and ratings outlook are dependent upon a number of factors, both qualitative and quantitative, and are subject to change at any time. The disclosure of or reference to these credit ratings is not a recommendation to buy, sell or hold NW Holdings or NW Natural securities. Each rating should be evaluated independently of any other rating.
As part of the ring-fencing conditions agreed upon with the OPUC and WUTC in connection with the holding company reorganization, NW Holdings and NW Natural are required to maintain separate credit ratings, long-term debt ratings, and preferred stock ratings, if any.
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Long-Term Debt
At June 30, 2026, June 30, 2025 and December 31, 2025, NW Holdings' long-term debt consisted of the following:
June 30, 2026 June 30, 2025 December 31, 2025
In millions Balance Outstanding Weighted Average Interest Rate(1) Balance Outstanding Weighted Average Interest Rate(1) Balance Outstanding Weighted Average Interest Rate(2)
NW Natural first mortgage bonds $ 1,544.7 4.7 % $ 1,374.7 4.6 % $ 1,544.7 4.7 %
SiEnergy term loan(3) — — % 148.1 6.1 % — — %
SiEnergy secured senior notes 185.0 5.6 % — — % 185.0 5.6 %
NWN Water unsecured senior notes 75.0 5.4 % — — % — — %
NWN Water term loan — — % 55.0 4.7 % 55.0 4.7 %
Other water debt 3.8 4.5 4.0
NW Holdings unsecured senior bonds 335.0 5.7 % 285.0 5.7 % 285.0 5.7 %
NW Holdings term loan 50.0 4.7 % 50.0 5.3 % 50.0 5.2 %
NW Holdings junior subordinated debentures 325.0 7.0 % 325.0 7.0 % 325.0 7.0 %
Long-term debt, gross 2,518.5 2,242.3 2,448.7
Less: unamortized debt issuance costs 16.1 14.1 15.9
Less: current maturities 125.7 141.5 160.6
Total long-term debt $ 2,376.7 $ 2,086.7 $ 2,272.2
(1) Weighted average interest rate for the six months ended June 30, 2026 and June 30, 2025
(2) Weighted average interest rate for the year ended December 31, 2025
(3) On January 7, 2025, NW Holdings acquired SiEnergy. SiEnergy's subsidiary, Si Investment Co., had this existing term loan outstanding at the date of acquisition. In August 2025, the associated facilities were terminated and are no longer available for financing.
NW Natural's first mortgage bonds (FMBs) have maturity dates ranging from 2026 through 2055 and interest rates ranging from 2.82% to 7.85%. SiEnergy's secured senior notes have maturity dates ranging from 2030 through 2055 and interest rates ranging from 4.86% to 6.04%. NWN Water's unsecured senior notes have maturity dates ranging from 2031 through 2036 and interest rates ranging from 5.15% to 5.58%. NW Holdings' unsecured senior bonds have maturity dates ranging from 2028 through 2034 and interest rates ranging from 5.35% to 5.86%. NW Holdings' Junior Subordinated Debentures have an interest rate of 7.0% and a maturity date of 2055. At June 30, 2026, NW Holdings and NW Natural had long-term debt outstanding of $2,502.4 million and $1,535.3 million, respectively, which included $16.1 million and $9.4 million of unamortized debt issuance costs at NW Holdings and NW Natural, respectively. Debt of $125.7 million is scheduled to mature in the next twelve months, which consists of $75.0 million at NW Natural, $0.7 million at NWN Water, and $50.0 million at NW Holdings. See Part II, Item 7, "Financial Condition—Long-Term Debt" in the 2025 Form 10-K for long-term debt maturing over the next five years.
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Summary of Significant Debt Issuances
In millions Six months ended June 30, 2026
NW Holdings Issuance Date Maturity Date Interest Rate Amount
Series E Senior Notes (a) June 2026 June 2031 5.35 % $ 50.0
NWN Water
Series A Senior Notes (b) June 2026 June 2031 5.15 % 33.0
Series B Senior Notes (b) June 2026 June 2036 5.58 % 42.0
Total long-term debt issuance $ 125.0
(a) Proceeds were used to support working capital needs and for general corporate purposes including repayment of debt.
(b) Proceeds were used to repay the existing indebtedness under NWN Water's Credit Agreement; any remaining proceeds were used for working capital needs and for general corporate purposes.
In June 2026, NW Holdings entered into a Note Purchase Agreement between NW Holdings and the institutional investors named as purchasers therein. The Note Purchase Agreement provided for the issuance of (i) $10.0 million in aggregate principal amount of its 5.35% Senior Notes, Series F, due August 5, 2031 (the Series F Notes) and (ii) $60.0 million in aggregate principal amount of its 5.83% Senior Notes, Series G, due August 5, 2036 (the Series G Notes) in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. The Series F Notes and Series G Notes were issued and sold on August 5, 2026.
Summary of Significant Debt Extinguishments and Repayments
NWN Water
On June 10, 2026, NWN Water fully repaid the $55.0 million outstanding under the Credit Agreement dated as of June 10, 2021, among NWN Water Company, LLC, Northwest Natural Holding Company, as Guarantor, and Bank of America, N.A., upon its maturity.
NWN Water Interest Rate Swap Agreement
In January 2023, NWN Water entered into an interest rate swap agreement with a major financial institution for $55.0 million that effectively converted variable-rate debt to a fixed rate of 3.8%. Interest payments made between the effective date and expiration date are hedged by the swap agreement. The interest rate swap agreement expired in June 2026, subsequent to the repayment of the variable-rate debt in June 2026.
Bankruptcy Ring-fencing Restrictions
As part of the ring-fencing conditions agreed upon with the OPUC and WUTC, NW Natural is required to have one director who is independent from NW Natural management and from NW Holdings and to issue one share of NW Natural preferred stock to an independent third party. NW Natural was in compliance with both of these ring-fencing provisions as of June 30, 2026. NW Natural may file a voluntary petition for bankruptcy only if approved unanimously by the Board of Directors of NW Natural, including the independent director, and by the holder of the preferred share.
Contingent Liabilities
Loss contingencies are recorded as liabilities when it is probable a liability has been incurred and the amount of the loss is reasonably estimable in accordance with accounting standards for contingencies. See “Application of Critical Accounting Policies and Estimates” in the 2025 Form 10-K. At June 30, 2026, NW Natural's total estimated liability related to environmental sites is $362.3 million. See "Results of Operations—Regulatory Matters—Rate Mechanisms—Environmental Cost Deferral and Recovery" in the 2025 Form 10-K and Note 17.
APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES
In preparing financial statements in accordance with U.S. GAAP, management exercises judgment to assess the potential outcomes and related accounting impacts in the selection and application of accounting principles, including making estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses, and related disclosures in the financial statements. Management considers critical accounting policies to be those which are most important to the representation of financial condition and results of operations and which require management’s most difficult and subjective or complex judgments, including accounting estimates that could result in materially different amounts if reported under different conditions or if they used different assumptions. Our most critical estimates and judgments for both NW Holdings and NW Natural include accounting for:
•regulatory accounting;
•revenue recognition;
•derivative instruments and hedging activities;
•pensions and postretirement benefits;
•income taxes;
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•environmental contingencies; and
•impairment of long-lived assets and goodwill.
There have been no material changes to the information provided in the 2025 Form 10-K with respect to the application of critical accounting policies and estimates. See Part II, Item 7, "Application of Critical Accounting Policies and Estimates," in the 2025 Form 10-K.
Management has discussed its current estimates and judgments used in the application of critical accounting policies with the Audit Committees of the Boards of NW Holdings and NW Natural. Within the context of critical accounting policies and estimates, management is not aware of any reasonably likely events or circumstances that would result in materially different amounts being reported. For a description of recent accounting pronouncements that could have an impact on financial condition, results of operations or cash flows, see Note 2.