nw natural corporate profile - strength in turbulent times · nw natural corporate profile -...

ASTORIA

SALEM

ALBANY

VANCOUVER

THE DALLES

MADRASLINCOLN CITY

EUGENE

NEWPORT LNG

COOS BAY

PALOMAR EAST

MIST STORAGE

SACRAMENTO

SAN FRANCISCO

FRESNOGILL RANCH STORAGE

MOLALLA

GASCO LNGPORTLAND

PALOMAR WEST

ASTORIA

SALEM

ALBANY

VANCOUVER

THE DALLES

MADRASLINCOLN CITY

EUGENE

NEWPORT LNG

COOS BAY

PALOMAR EAST

MIST STORAGE

SACRAMENTO

SAN FRANCISCO

FRESNOGILL RANCH STORAGE

MOLALLA

GASCO LNGPORTLAND

PALOMAR WEST

KEY

REGIONAL RESOURCE CENTER

NW NATURAL SERVICE TERRITORY

PROPOSED PALOMAR PIPELINE EAST

PROPOSED PALOMAR PIPELINE WEST

HEADQUARTERS

GILL RANCH STORAGE

UNDERGROUND STORAGE

LNG PLANT

comparison of five-year cumulative total return(based on $100 invested on 12/31/04)

Total shareholder return (annualized) over the five years ending December 31, 2009 was 9.77 percent, compared to the Standard & Poor’s (S&P) Electric & Gas Utilities Index rate of 2.2 percent and the S&P Small Cap 600 Index rate of 0.2 percent.

nwn s&p utilities index s&p small cap 600

50

75

100

125

150

175

$200

2004 20092008200720062005

nw natural corporate profile - strength in turbulent timesNW Natural (nyse: nwn) is a 151-year-old natural gas local distribution and storage company headquartered in Portland, Oregon. NW Natural serves about 668,000 customers in Oregon and Southwest Washington. In keeping with its steady growth, the company has increased dividends paid to shareholders for 54 consecutive years, a feat matched by few publicly traded companies. NW Natural operates gas storage facilities in its service territory and provides gas storage services to other companies in the Northwest. NW Natural is developing the Gill Ranch Storage facility near Fresno, California, and plans to develop a new gas transmission pipeline in Oregon called Palomar to provide enhanced gas deliverability and reliability for the region.

2009 selected financial statistics(12 months ended December 2009)

Common stock price: $45.0452-week price range: $37.71 - 46.47Annualized dividend (current): $1.66 per shareEarnings per diluted share: $2.83Book value per share: $24.88Market capitalization (current): $1.2 billion Common shares outstanding: 26.5 million sharesInstitutional ownership: 58 percentDividend payout ratio: 56.5 percentDividend yield at year-end: 3.7 percentPrice/earnings ratio: 15.9x

Service Territory & Infrastructure Projects

company strategyNW Natural has a focused business and operating strategy that is centered on three key platforms:

1) Stabilize the company’s profitability (margins) through regulation. The company was the first gas distribution company to implement constructive regulatory mechanisms that are working well for both customers and shareholders alike.

2) Manage the company’s cost structure by continuing to make improvements to keep expenses under control. Over the past several years, the company has reduced its work-force by more than 20 percent, while still maintaining high customer satisfaction rankings. Despite these changes, NW Natural routinely ranks among the top three in the nation among other utilities in the J.D. Power and Associates Gas Utility Residential Customer Satisfaction Survey.

3) Add growth through projects that utilize the company’s core competencies. This includes building a proposed natural gas pipeline in Oregon that will improve regional gas deliverability and supply options, and also by developing a 20 billion cubic foot natural gas storage facility in a prime location in central California, near Fresno.

NW Natural is a national leader in seeking progressive solutions to protect the environment while supporting the economy, including being the first local gas distribution company in the nation with a program to allow customers to voluntarily offset their carbon emissions through the company’s innovative Smart Energy program.

500520540560580600620640660680

2005 2006 2007 2008 2009

utility customers at year-end(in thousands)

We added 5,453 new customers in 2009, expanding our customer base by 0.8 percent. In the past five years, the utility has added over 71,000 new customers.

1.001.201.401.601.802.002.202.402.602.80

$3.00

2005 2006 2007 2008 2009

diluted earnings per share (in dollars)

Diluted earnings per share were $2.83 in 2009 – up 8 percent over 2008.

dividends paid per share(in dollars)

Annual dividends paid per share in 2009 increased for the 54th consecutive year, including an average annual growth rate of over 4 percent during the last 5 years.

1.221.271.321.371.421.471.521.57

$1.62

2005 2006 2007 2008 2009

220 NW Second AvenuePortland, Oregon 97209(503) 226-4211(800) 422-4012nwnatural.comNYSE: NWN

investor contactRobert S. (Bob) Hess(503) 220-2388(800) 422-4012 Ext. 2388rsh@nwnatural.com

shareholder contactKimberlee V. Anderson(503) 226-4211 Ext. 3412(800) 422-4012 Ext. 3412kva@nwnatural.com

analyst coverageB of A Merrill Lynch Research Hilliard Lyons Brean Murray, Carret & Co. Janney MontgomeryD.A. Davidsons & Co. UBS Investment ResearchEdward Jones Value Line

selected officersGregg S. KantorPresident & Chief Executive Officer

David H. AndersonSenior Vice President & Chief Financial Officer

dividend reinvestment and direct stock purchase planParticipants may make an initial investment in company stock and common share-holders of record may reinvest all or part of their dividends in additional shares under the company’s plan. Cash purchases may also be made. Participants in the plan bear the cost of fees and broker commissions for shares bought or sold under the plan. A prospectus will be sent upon request.

stock transfer agent and registrarFor common stock:American Stock Transfer & Trust Company59 Maiden Lane, Plaza LevelNew York, NY 10038(888) 777-0321web: amstock.comemail: info@amstock.comscheduled payment dates

February 15, 2010

May 14, 2010

August 13, 2010

November 15, 2010