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Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-02-23 · 387 added, 216 removed, 2072 unchanged (23% of the section changed)

33 unchanged sentences

Chief Executive Officer

Chief Financial Officer, Chief Accounting Officer, Vice President, Treasurer

/s/ Raymond Kaszuba III

Raymond Kaszuba III

Senior Vice President and Chief Financial Officer

February 28, 2025

13 unchanged sentences

Chief Executive Officer

Chief Financial Officer, Chief Accounting Officer, Vice President, Treasurer

/s/ Raymond Kaszuba III

Raymond Kaszuba III

Senior Vice President and Chief Financial Officer

February 28, 2025

56 unchanged sentences

We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

12 unchanged sentences

the accounting records and practices of the regulated businesses conform to the requirements and uniform system of accounts prescribed by regulatory authorities.

Customer rates are regulated and have approved cost-based rates which are intended to allow the Company to earn a return on invested capital.As disclosed by management, regulatory accounting requires management to account for deferred expenses (or deferred revenues) as regulatory assets (or regulatory liabilities) on the balance sheet.

Customer rates are regulated and have approved cost-based rates which are intended to allow the Company to earn a return on invested capital.

As disclosed by management, regulatory accounting requires management to account for deferred expenses (or deferred revenues) as regulatory assets (or regulatory liabilities) on the balance sheet.

When the recovery of these regulatory assets from, or refund of regulatory liabilities to, customers is approved, management recognizes the expense or revenue on the income statement at the same time the adjustment to amounts is included in rates charged to customers.

32 unchanged sentences

Amortization of non-qualified employee benefit plan liability, net of taxes of $( 210 ) for 2024, $( 148 ) for 2023, and $( 286 ) for 2022

Unrealized gain on interest rate swaps, net of taxes of $( 21 ) for 2023 and $( 47 ) for 2022

Unrealized (loss) gain on interest rate swaps, net of taxes of $ 13 for 2024, $( 21 ) for 2023, and $( 47 ) for 2022

( 36 ) 59 129

Comprehensive income $ 79,020 $ 93,104 $ 91,422

84 unchanged sentences

Stock-based compensation 3,598 — — 3,598

Shares issued in connection with business combinations 12,884 — — 12,884

Shares issued pursuant to equity based plans 2,328 — — 2,328

18 unchanged sentences

Depreciation 137,898 125,581 116,707

Regulatory amortization of gas reserves 3,217 5,589 13,897

Amortization 20,162 17,641 15,873

Deferred income taxes 11,366 8,966 17,410

Qualified defined benefit pension plan (benefit) expense ( 2,430 ) 5,351 16,556

Qualified defined benefit pension plan expense (benefit) 4,062 ( 2,430 ) 5,351

Contributions to qualified defined benefit pension plans ( 20,460 ) — —

2 unchanged sentences

Asset optimization revenue sharing bill credits ( 28,874 ) ( 10,471 ) ( 41,102 )

Regulatory disallowance of line extension allowances 13,700 — —

Other 10,799 8,548 11,274

8 unchanged sentences

Cloud-based software ( 22,393 ) ( 16,307 ) ( 23,908 )

Regulatory accounts 12,292 4,617 ( 5,784 )

RNG facility prepayment ( 51,427 ) — —

Other, net 17,070 13,828 ( 6,567 )

4 unchanged sentences

Purchase of equity method investment ( 1,000 ) ( 1,000 ) ( 1,000 )

Proceeds from sale of equity method investment — — 7,000

Other ( 3,770 ) 383 ( 1,579 )

6 unchanged sentences

Long-term debt retired ( 150,000 ) ( 90,000 ) —

Proceeds from term loan due within one year — — 100,000

Repayment of term loan — — ( 100,000 )

Repayments of commercial paper, maturities greater than three months — — ( 195,025 )

Changes in other short-term debt, net 80,330 ( 168,540 ) ( 131,300 )

1 unchanged sentence

Payment of financing fees ( 3,290 ) ( 2,200 ) ( 912 )

Shares withheld for tax purposes ( 1,319 ) ( 1,313 ) ( 1,141 )

Other ( 1,181 ) ( 2,894 ) ( 805 )

Cash provided by financing activities 227,062 64,208 301,632

Increase (decrease) in cash, cash equivalents and restricted cash 8,660 13,844 ( 8,334 )

(Decrease) increase in cash, cash equivalents and restricted cash ( 1,642 ) 8,660 13,844

Cash, cash equivalents and restricted cash, beginning of period 49,624 40,964 27,120

119 unchanged sentences

Depreciation 129,602 119,514 112,957

Regulatory amortization of gas reserves 3,217 5,589 13,897

Amortization 19,692 17,282 15,678

Deferred income taxes 7,544 2,855 16,288

Qualified defined benefit pension plan (benefit) expense ( 2,430 ) 5,351 16,556

Qualified defined benefit pension plan expense (benefit) 4,062 ( 2,430 ) 5,351

Contributions to qualified defined benefit pension plans ( 20,460 ) — —

2 unchanged sentences

Asset optimization revenue sharing bill credits ( 28,874 ) ( 10,471 ) ( 41,102 )

Regulatory disallowance of line extension allowances 13,700 — —

Other 9,823 8,276 10,359

8 unchanged sentences

Cloud-based software ( 22,392 ) ( 16,307 ) ( 23,908 )

Regulatory accounts 12,921 4,645 ( 5,796 )

Other, net 15,109 15,227 ( 6,659 )

7 unchanged sentences

Long-term debt retired — ( 90,000 ) —

Proceeds from term loan due within one year — — 100,000

Repayment of term loan — — ( 100,000 )

Repayment of commercial paper, maturities greater than three months — — ( 195,025 )

Changes in other short-term debt, net 119,730 ( 153,420 ) ( 75,300 )

2 unchanged sentences

Payment of financing fees ( 311 ) ( 2,080 ) ( 843 )

Shares withheld for tax purposes ( 1,319 ) ( 1,313 ) ( 1,141 )

Other ( 529 ) ( 369 ) ( 524 )

Cash provided by financing activities 119,798 20,442 178,913

Increase in cash, cash equivalents and restricted cash 11,849 3,839 5,093

(Decrease) increase in cash, cash equivalents and restricted cash ( 7,092 ) 11,849 3,839

Cash, cash equivalents and restricted cash, beginning of period 36,520 24,671 20,832

14 unchanged sentences

Investments in corporate joint ventures and partnerships that NW Holdings does not directly or indirectly control, and for which it is not the primary beneficiary, include NNG Financial's investment in Kelso-Beaver Pipeline and NWN Water's investment in Avion Water Company, Inc., which are accounted for under the equity method.

NW Natural RNG Holding Company, LLC holds investments in Lexington Renewable Energy, LLC and Dakota City Renewable Energy LLC, which are also accounted for under the equity method.

See Note 13 for activity related to equity method investments.

See Note 13 for activity related to investments.

NW Holdings and its direct and indirect subsidiaries are collectively referred to herein as NW Holdings, and NW Natural and its direct and indirect subsidiaries are collectively referred to herein as NW Natural.

The consolidated financial statements of NW Holdings and NW Natural are presented after elimination of all intercompany balances and transactions.

Notes to the consolidated financial statements reflect the activity of continuing operations for both NW Holdings and NW Natural for all periods presented, unless otherwise noted.

Notes to the consolidated financial statements reflect the activity for both NW Holdings and NW Natural for all periods presented, unless otherwise noted.

Certain reclassifications have been made to conform prior period information to the current presentation.

27 unchanged sentences

COVID-19 deferrals and expenses, net 778 9,685

18,509 10,020

Total current $ 178,270 $ 117,491

Security and systems improvements 2,711 3,267

Industrial demand side management (5)

Total current - NW Natural 130,091 178,270

Other (NW Holdings) 25 —

Total current - NW Holdings $ 130,116 $ 178,270

Unrealized loss on derivatives (1)

8 unchanged sentences

Decoupling (3)

Washington Climate Commitment Act compliance 22,136 —

COVID-19 deferrals and expenses, net 927 1,080

Security and systems improvements 8,531 9,734

Industrial demand side management (5)

18,386 15,241

Total non-current 333,418 340,407

Total non-current - NW Natural 381,682 333,418

Other (NW Holdings) 817 25

4 unchanged sentences

Unrealized gain on derivatives (1)

11,184 194,236

Decoupling (3)

22 unchanged sentences

(4) Balance represents deferred net periodic benefit costs as approved by the OPUC.

(5) Energy efficiency program for industrial sales customers in Oregon to provide assistance with reducing their gas usage.

(6) Balances consist of deferrals and amortizations under approved regulatory mechanisms and typically earn a rate of return or carrying charge.

22 unchanged sentences

In November 2023, the FASB issued ASU 2023-07, which requires additional disclosures about significant segment expenses.

The disclosures are required beginning with our annual report for the year ending December 31, 2024.

The adoption of this standard is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

The disclosures were required beginning with this annual report for the year ending December 31, 2024.

The adoption of this standard did not have an impact on our results of operations, liquidity or capital resources.

IMPROVEMENTS TO INCOME TAX DISCLOSURES.

1 unchanged sentence

The disclosures are required beginning with our annual report for the year ending December 31, 2025.

The adoption of this standard is not anticipated to have a material impact on our results of operations, liquidity or capital resources.

The adoption of this standard is not anticipated to have an impact on our results of operations, liquidity or capital resources.

DISAGGREGATION OF EXPENSE DISCLOSURES.

In November 2024, the FASB issued ASU 2024-03, which requires additional disclosures of disaggregated income statement expenses.

The disclosures are required beginning with our annual report for the year ending December 31, 2027.

The adoption of this standard is not anticipated to have an impact on our results of operations, liquidity, or capital resources.

Recent Securities and Exchange Commission (SEC) Final Rules

RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.

In October 2022, the SEC adopted the final rule under SEC Release No.

33-11126, Listing Standards for Recovery of Erroneously Awarded Compensation, which directs the national securities exchanges and associations that list securities to establish listing standards requiring each issuer to develop and implement a clawback policy to recoup incentive-based compensation erroneously awarded to executive officers.

The policy is included as an exhibit to our annual report for the year ending December 31, 2023.

INSIDER TRADING ARRANGEMENTS.

1 unchanged sentence

33-11138, Insider Trading Arrangements and Related Disclosures, which requires new disclosures regarding insider trading policies and procedures, the use of certain insider trading plans and director and executive compensation regarding equity compensation awards made close in time to disclosure of material nonpublic information.

The policy will be included as an exhibit to our annual report for the year ending December 31, 2024.

CYBERSECURITY DISCLOSURES.

In July 2023, the SEC issued a final rule under SEC Release No.

33-11216, Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure, which requires new disclosures regarding material cybersecurity incidents and require periodic disclosures about registrant's processes to assess, identify, and manage material cybersecurity risks, management's role in assessing and managing material cybersecurity risks, and the board of directors' oversight of cybersecurity risks.

The disclosures were required beginning with our annual report for the year ending December 31, 2023.

The policy was included as an exhibit to our annual report for the year ending December 31, 2024.

CLIMATE CHANGE.

In March 2024, the SEC issued a final rule under SEC Release Nos.

33-11275 and 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors, which requires registrants to provide climate disclosures in their annual reports.

Under the final rule, disclosures are required beginning with our annual report for the year ending December 31, 2025.

In April 2024, the SEC voluntarily stayed implementation of the climate rule pending completion of judicial review of challenges to the rules consolidated in the Eighth Circuit Court of Appeals.

We are currently evaluating the impact of this final rule on our disclosures.

Accounting Policies

16 unchanged sentences

The provision for depreciation of NGD property, plant, and equipment is recorded under the group method on a straight-line basis with rates computed in accordance with depreciation studies approved by regulatory authorities.

The weighted-average depreciation rate for NGD assets in service was approximately 3.0 % for 2023, 2022 and 2021, reflecting the approximate weighted-average economic life of the property.

This includes 2023 weighted-average depreciation rates for the following asset categories:

The weighted-average depreciation rate for NGD assets in service was approximately 2.9 % for 2024, and 3.0 % for 2023 and 2022, reflecting the approximate weighted-average economic life of the property.

This includes 2024 weighted-average depreciation rates for the

following asset categories:

2.5 % for transmission and distribution plant, 2.3 % for gas storage facilities, 4.7 % for general plant, and 6.1 % for intangible and other fixed assets.

Certain additions to NGD plant include AFUDC, which represents the net cost of debt and equity funds used during construction.

Certain additions to NGD and water plant include AFUDC, which represents the net cost of debt and equity funds used during construction.

AFUDC is calculated using actual interest rates for debt and authorized rates for ROE, if applicable.

If short-term debt balances are less than the total balance of construction work in progress, then a composite AFUDC rate is used to represent interest on all debt funds, shown as a reduction to interest charges, and on ROE funds, shown as other income.

While cash is not immediately recognized from recording AFUDC, it is realized in future years through rate recovery resulting from the higher NGD cost of service.

Our composite AFUDC rate was 7.5 % in 2023, 2.8 % in 2022, and 0.7 % in 2021.

While cash is not immediately recognized from recording AFUDC, it is realized in future years through rate recovery resulting from the higher cost of service.

Our NGD composite AFUDC rate was 6.4 % in 2024, 7.5 % in 2023, and 2.8 % in 2022.

IMPAIRMENT OF LONG-LIVED ASSETS.

8 unchanged sentences

These investments are readily convertible to cash with fair value approximating cost.

At December 31, 2023, NW Holdings had outstanding checks of $ 7.5 million, substantially all of which is recorded at NW Natural, and at December 31, 2022, NW Holdings had $ 5.8 million outstanding checks.

At December 31, 2024, NW Holdings had outstanding checks of $ 3.9 million, substantially all of which is recorded at NW Natural, and at December 31, 2023, NW Holdings had $ 7.5 million of outstanding checks.

These balances are included in accounts payable in the NW Holdings and NW Natural balance sheets.

2 unchanged sentences

These balances are included in other current assets in the NW Holdings and NW Natural balance sheets.

There were no transfers between restricted cash and cash and cash equivalents during the years ended December 31, 2023 and 2022.

The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances at NW Holdings as of December 31, 2024 and 2023:

58 unchanged sentences

Therefore, we expect the risk of loss due to the credit of this lessee to be remote.

As such, no allowance for uncollectibility was recorded for our sales-type lease receivables.

As such, no allowance for uncollectibility was recorded for our

sales-type lease receivables.

NW Natural will continue monitoring the credit health of the lessees and the overall economic environment, including the economic factors closely tied to the financial health of our current and future lessees.

12 unchanged sentences

Greenhouse Gas Allowances

NW Natural is subject to greenhouse gas (GHG) emission reduction requirements under the Washington Climate Commitment Act (CCA) regulations and is likely to be subject to GHG emission reductions under a separate program in Oregon upon conclusion of the new ODEQ rulemaking.

The new rulemaking was commenced upon the judicial invalidation of the prior rules promulgated by the ODEQ and is expected to take approximately 12 months.

NW Natural is subject to greenhouse gas (GHG) emission reduction requirements under the Washington Climate Commitment Act (CCA) regulations.

Under Washington's CCA, emission reduction compliance mechanisms include:

2 unchanged sentences

Any compliance instruments or allowances that are acquired through government allocations at no cost will be accounted for as inventory at no cost.

As of December 31, 2023, NW Natural had $ 39.3 million of emissions allowances for compliance in Washington recorded as inventory.

As of December 31, 2024 and 2023, NW Natural had $ 43.9 million and $ 39.3 million of emissions allowances for compliance in Washington recorded as inventory, respectively.

The CCA allows for the sale of compliance instruments or allowances, and as a result, should NW Natural sell these it will recognize revenue when title to the instrument or allowance is transferred to a counterparty, and NW Natural will recognize expense at the time of recognition of the related sale.

In September and December 2023, NW Natural consigned no-cost allowances to Washington auctions and received $ 10.0 million and $ 7.1 million, respectively, in cash, which proceeds were recorded as a regulatory liability for the benefit of customers.

During the years ended December 31, 2024 and 2023 NW Natural consigned no-cost allowances to Washington auctions and received $ 8.5 million and $ 17.1 million, respectively, in cash, which proceeds were recorded as a regulatory liability for the benefit of customers.

We measure the compliance obligation, which is based on emissions, at the carrying value of inventory held plus the fair value of any additional emission allowances NW Natural would need to purchase to satisfy the obligations.

Under the Washington program, NW Natural has recognized a $ 19.9 million liability as of December 31, 2023.

We expect that the costs to comply with the Washington program will be recovered from utility customers through rates.

As a result, NW Natural recognized $ 20.5 million of deferred costs as of December 31, 2023.

Under the Washington program, NW Natural recognized a liability of $ 29.9 million and $ 19.9 million as of December 31, 2024 and 2023, respectively.

A portion of the costs to comply with the Washington program are currently being recovered from utility customers through rates beginning January 1, 2024.

NW Natural recognized $ 29.9 million and $ 20.5 million of deferred costs as of December 31, 2024 and 2023, respectively.

In November 2024, the Environmental Quality Commission adopted the Climate Protection Program (CPP).

The CPP sets enforceable and declining limits, or caps, on GHG emissions from fossil fuels used throughout Oregon.

The first compliance period starts January 1, 2025 and covers emissions through the end of 2027.

Gas reserves are payments to acquire and produce natural gas reserves.

5 unchanged sentences

Changes in the fair value of the derivatives are recognized in earnings unless specific regulatory or hedge accounting criteria are met.

Accounting for derivatives and hedges provides an exception for contracts intended for normal purchases and normal sales for which physical delivery is probable.

Accounting for derivatives and hedges provides an exception for contracts intended for normal purchases and normal sales for

which physical delivery is probable.

In addition, certain derivative contracts are approved by regulatory authorities for recovery or refund through customer rates.

1 unchanged sentence

NW Natural's financial derivatives generally qualify for deferral under regulatory accounting.

NW Natural's index-priced physical derivative contracts also qualify for regulatory deferral accounting treatment.

Derivative contracts entered into for NGD requirements after the annual PGA rate has been set and maturing during the PGA year are subject to the PGA incentive sharing mechanism.

Derivative contracts entered into for NGD requirements after the annual PGA rate has been set and transacted during the PGA year are subject to the PGA incentive sharing mechanism.

In Oregon, NW Natural participates in a PGA sharing mechanism under which it is required to select either an 80 % or 90 % deferral of higher or lower gas costs such that the impact on current earnings from the gas cost sharing is either 20 % or 10 % of gas cost differences compared to PGA prices, respectively.

2 unchanged sentences

NW Holdings and NW Natural have financial derivative policies that set forth guidelines for using selected derivative products to support prudent risk management strategies within designated parameters.

NW Natural's objective for using derivatives is to decrease the volatility of gas prices, interest rates, and cash flows without speculative risk.

NW Natural's objective for using derivatives is to decrease the volatility of gas prices, interest rates, foreign currency, and cash flows without speculative risk.

The use of derivatives is permitted only after the risk exposures have been identified, are determined to exceed acceptable tolerance levels, and are determined necessary to support normal business activities.

NW Natural does not enter into derivative instruments for trading purposes.

All commodity and foreign exchange derivatives are currently held at NW Natural, and interest rate swaps are held at NW Holdings and NWN Water.

All commodity and foreign exchange derivatives are currently held at NW Natural, and an interest rate swap is held at NWN Water.

In accordance with fair value accounting, we use the following fair value hierarchy for determining inputs for our debt, pension plan assets, and derivative fair value measurements:

4 unchanged sentences

In addition, the fair value for certain pension trust investments is determined using Net Asset Value per share (NAV) as a practical expedient, and therefore they are not classified within the fair value hierarchy.

These investments primarily consist of institutional investment products.

These investments primarily consist of institutional commingled funds.

When developing fair value measurements, it is our policy to use quoted market prices whenever available or to maximize the use of observable inputs and minimize the use of unobservable inputs when quoted market prices are not available.

24 unchanged sentences

Acquisition-related costs are expensed as incurred.

When NW Natural acquires a business, it assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as of the acquisition date.

When NW Natural acquires a business, it assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual

terms, economic circumstances and pertinent conditions as of the acquisition date.

When there is substantial judgment or uncertainty around the fair value of acquired assets, we may engage a third party expert to assist in determining the fair values of certain assets or liabilities.

20 unchanged sentences

Unconsolidated Affiliates

NW Holdings, NW Natural and NWN Water have equity interests in businesses which we account for under the equity method as we do not exercise control of the major operating and financial policies.

The business transactions with our equity method investments are not significant.

We regularly assess the profitability and valuation of our investments for any potential impairment.

NWN Water has an equity interest in a business which we account for under the equity method as we do not exercise control of the major operating and financial policies.

The business transactions with our equity method investment are not significant.

We regularly assess the profitability and valuation of our investment for any potential impairment.

See Note 13 .

48 unchanged sentences

Earnings from the Mist facility also include revenue, net of amounts shared with NGD customers, from management of NGD assets at Mist and upstream pipeline capacity when not needed to serve NGD customers.

Under the Oregon sharing mechanism, NW Natural retains 80 % of the pre-tax income from these services when the costs of the capacity were not included in NGD rates, or 10 % of the pre-tax income when the costs have been included in these rates.

Under the Oregon sharing mechanism, NW Natural retains 80 % of the pre-tax income from these services when the costs of the capacity were not included in NGD rates, or 10 % of

the pre-tax income when the costs have been included in these rates.

The remaining 20 % and 90 %, respectively, are recorded to a deferred regulatory account for crediting back to NGD customers.

7 unchanged sentences

Inter-segment transactions were immaterial for the periods presented.

Total assets by segment is not regularly provided to the CODM and is therefore omitted.

The following table presents summary financial information concerning the reportable segment and other operations.

5 unchanged sentences

Income (loss) from operations (1)

Net income (loss) 94,042 10,695 104,737 ( 10,869 ) 93,868

173,222 16,505 189,727 1,415 191,142

Interest expense, net 62,868 405 63,273 16,819 80,092

Income tax expense (benefit) 30,195 4,423 34,618 ( 3,547 ) 31,071

Capital expenditures 348,913 4,993 353,906 40,494 394,400

Total assets at December 31, 2023 4,458,117 53,260 4,511,377 355,715 4,867,092

Operating revenues $ 1,136,400 $ 22,223 $ 1,158,623 $ 38,852 $ 1,197,475

1 unchanged sentence

Income (loss) from operations (1)

Net income (loss) 79,690 11,874 91,564 ( 5,261 ) 86,303

170,591 15,054 185,645 ( 704 ) 184,941

Interest expense, net 60,020 574 60,594 15,972 76,566

Income tax expense (benefit) 31,688 3,984 35,672 ( 3,310 ) 32,362

Capital expenditures 285,998 4,847 290,845 36,502 327,347

Total assets at December 31, 2022 4,392,699 60,019 4,452,718 295,608 4,748,326

Operating revenues $ 989,752 $ 24,587 $ 1,014,339 $ 23,014 $ 1,037,353

1 unchanged sentence

Income (loss) from operations (1)

Net income (loss) 68,988 12,184 81,172 ( 2,506 ) 78,666

152,839 16,535 169,374 ( 1,897 ) 167,477

Interest expense, net 45,685 653 46,338 6,909 53,247

Income tax expense (benefit) 26,807 4,229 31,036 ( 1,906 ) 29,130

Capital expenditures 315,979 2,707 318,686 19,916 338,602

Total assets at December 31, 2021 3,846,112 52,260 3,898,372 166,232 4,064,604

(1) Income (loss) from operations is not a financial measure used by the CODM, but is included in the table above to enable the reconciliation of NGD margin to consolidated income before taxes in accordance with ASU 2023-07.

Natural Gas Distribution Margin

6 unchanged sentences

By subtracting cost of gas, environmental remediation expense, and revenue taxes from NGD operating revenues, NGD margin provides a key metric used by the CODM in assessing the performance of the NGD segment.

NW Holdings and NW Natural's CODM is the chief executive officer.

The CODM uses NGD margin to allocate resources predominantly in the annual budget and forecasting process.

The CODM considers budget-to-actual variances on a monthly basis when making decisions about allocating capital and personnel.

The CODM also uses NGD margin to assess the performance of NGD.

The following table presents additional segment information concerning NGD margin:

8 unchanged sentences

NGD margin 601,278 575,008 505,875

Operations and maintenance 253,297 241,721 201,701

General taxes 46,235 44,279 39,464

Depreciation 128,524 118,417 111,871

NGD income from operations $ 173,222 $ 170,591 $ 152,839

As of December 31, 2024 and 2023, NW Holdings had 100 million shares of common stock authorized.

1 unchanged sentence

At NW Holdings' election, shares sold through the DRPP may be purchased in the open market or through original issuance of shares reserved for issuance under the DRPP.

In August 2021, NW Holdings initiated an at-the-market (ATM) equity program by entering into an equity distribution agreement under which NW Holdings may issue and sell from time to time shares of common stock, no par value, having an aggregate gross sales price of up to $ 200 million.

NW Holdings is under no obligation to offer and sell common stock under the ATM equity program, which expires in August 2024.

Any shares of common stock offered under the ATM equity program are registered on

NW Holdings’ universal shelf registration statement filed with the SEC.

In August 2021, NW Holdings initiated an at-the-market (ATM) equity program by entering into an equity distribution agreement under which NW Holdings issued and sold from time to time shares of common stock, no par value, having an aggregate gross sales price of up to $ 200 million.

In August 2024, the Finance Committee of the NW Holdings' Board of Directors authorized NW Holdings' sale of an additional $ 200 million in the aggregate gross sales price under the ATM equity program, with the result that a total of $ 400 million in the aggregate gross sales price has been authorized for issuance and sale under the ATM equity program.

NW Holdings is under no obligation to offer and sell common stock under the ATM equity program, which the Finance Committee of the NW Holdings' Board of Directors has authorized through August 2027.

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 in August 2027, or will be registered on a subsequent registration statement to be filed by NW Holdings.

During the year ended December 31, 2024, NW Holdings issued and sold 2,382,750 shares of common stock pursuant to the ATM equity program resulting in cash proceeds of $ 90.3 million, net of fees and commissions paid to agents of $ 1.6 million.

3 unchanged sentences

Stock Repurchase Program

NW Holdings has a share repurchase program under which it may purchase its common shares on the open market or through privately negotiated transactions.

NW Holdings currently has Board authorization to repurchase up to an aggregate of the greater of 2.8 million shares or $ 100 million.

No shares of common stock were repurchased pursuant to this program during the year ended December 31, 2023.

Since the plan’s inception in 2000 under NW Natural, a total of 2.1 million shares have been repurchased at a total cost of $ 83.3 million.

Effective May 23, 2024, NW Holdings’ Board authorized a new share repurchase program under which NW Holdings may repurchase in open market or privately negotiated transactions up to an aggregate of 5.0 million shares or an amount not to exceed $ 150 million.

The new share repurchase program is authorized to continue until the program is used, terminated or replaced.

The repurchase program replaces the Company’s previously authorized share repurchase program, which commenced in 2000 and authorized the repurchase of up to 2.8 million shares, or an amount not to exceed $ 100 million, in the aggregate.

No shares of common stock were repurchased pursuant to our new program or prior program during the year ended December 31, 2024.

Since the previous plan’s inception in 2000 under NW Natural, a total of 2.1 million shares have been repurchased at a total cost of $ 83.3 million.

The following table summarizes the changes in the number of shares of NW Holdings' common stock issued and outstanding:

10 unchanged sentences

Sales to shareholders under DRPP 69

Shares issued in connection with business combinations 327

Balance, December 31, 2023 37,631

14 unchanged sentences

Appliance retail center revenue — 5,089 5,089 — 5,089

Renewable natural gas sales — — — 428 428

Other revenue 3,111 — 3,111 52,036 55,147

43 unchanged sentences

NGD revenue is generally recognized over time upon delivery of the gas commodity or service to the customer, and the amount of consideration received and recognized as revenue is dependent on the Oregon and Washington tariffs.

Customer accounts are to be paid in full each month, and there is no right of return or warranty for services provided.

There is no right of return or warranty for services provided.

Revenues include firm and interruptible sales and transportation services, franchise taxes recovered from the customer, late payment fees, service fees, and accruals for gas delivered but not yet billed (accrued unbilled revenue).

The accrued unbilled revenue balance is based on estimates of deliveries during the period from the last meter reading and management judgment is required for a number of factors used in this calculation, including customer use and weather factors.

We applied the significant financing practical expedient and have not adjusted the consideration NW Natural expects to receive from NGD customers for the effects of a significant financing component as all payment arrangements are settled annually.

Customer accounts are to be paid in full each month and as such, there is no significant financing component for this source of revenue.

Due to the election of the right to invoice practical expedient, we do not disclose the value of unsatisfied performance obligations.

19 unchanged sentences

Asset Management Revenue

Revenues include the optimization of storage assets and pipeline capacity and are provided net of the profit sharing amount refunded to NGD customers.

Revenues include the optimization of storage assets and pipeline capacity by a third party and are provided net of the profit sharing amount refunded to NGD customers.

Certain asset management revenues received are recognized over time using a straight-line approach over the term of each contract, and the amount of consideration received and recognized as revenue is dependent on a variable pricing model.

3 unchanged sentences

As of December 31, 2024, unrecognized revenue for the fixed component of the transaction price related to gas storage and asset management revenue was approximately $ 113.4 million.

Of this amount, approximately $ 19.9 million will be recognized in 2024, $ 19.0 million in 2025, $ 14.9 million in 2026, $ 7.4 million in 2027, and $ 16.9 million thereafter.

Of this amount, approximately $ 22.6 million will be recognized in 2025, $ 16.1 million in 2026, $ 15.3 million in 2027, $ 13.9 million in 2028, $ 13.9 million in 2029 and $ 31.6 million thereafter.

The amounts presented here are calculated using current contracted rates.

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NW Holdings Other

NW Holdings' primary source of other revenue is providing water and wastewater services to customers.

Water and wastewater service revenue is generally recognized over time upon delivery of the water commodity or service to the customer, and the amount of consideration received and recognized as revenue is dependent on the tariffs established in the state we operate.

Customer accounts are to be paid in full each month, and there is no right of return or warranty for services provided.

We applied the significant financing practical expedient and have not adjusted the consideration we expect to receive from water distribution and wastewater collection customers for the effects of a significant financing component as all payment arrangements are settled annually.

Water and Wastewater Services

NW Natural Water provides water and wastewater services to customers.

There is no right of return or warranty for services provided.

Customer accounts are to be paid in full each month, bi-monthly, or quarterly and as such, there is no significant financing component for this source of revenue.

Due to the election of the right to invoice practical expedient, we do not disclose the value of unsatisfied performance obligations.

Renewable Natural Gas Sales

NW Natural Renewables is an unregulated subsidiary of NW Holdings established to pursue investments in renewable natural gas (RNG) activities.

NW Natural Renewables' primary source of revenue is from the sale of RNG under long-term contracts.

RNG revenue is generally recognized over time upon delivery of the gas commodity to the customer at the designated delivery point and the amount of consideration received and recognized as revenue is dependent on a variable pricing model defined per the contract.

Customer accounts are to be paid in full each month and as such, there is no significant financing component for this source of revenue.

Due to the election of the right to invoice practical expedient, we do not disclose the value of unsatisfied performance obligations.

Lease Revenue

5 unchanged sentences

There are no variable payments or residual value guarantees.

The lease does not contain an option to purchase the underlying assets.

The lease does not contain an option to purchase the underlying

NW Natural also maintains a sales-type lease for specialized compressor facilities to provide high pressure compressed natural gas (CNG) services.

11 unchanged sentences

Total lease revenue $ 16,492 $ 16,050 $ 17,193

Additionally, lease revenue of $ 0.6 million, $ 0.6 million and $ 0.5 million was recognized for each of the years ended December 31, 2023, 2022, and 2021, respectively, related to operating leases associated with non-utility property rentals.

Additionally, lease revenue of $ 0.6 million was recognized for each of the years ended December 31, 2024, 2023, and 2022, respectively, related to operating leases associated with non-utility property rentals.

Lease revenue related to these leases was presented in other income (expense), net on the consolidated statements of comprehensive income as it is non-operating income.

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The total amount of unguaranteed residual assets was $ 6.0 million and $ 5.5 million at December 31, 2024 and 2023, respectively, and is included in assets under sales-type leases on the consolidated balance sheets.

Additionally, under regulatory accounting, the revenues and expenses associated with these agreements are presented on the consolidated statements of comprehensive income such that their presentation aligns with similar regulated activities at NW Natural.

Additionally, under regulatory accounting, the revenues and

expenses associated with these agreements are presented on the consolidated statements of comprehensive income such that their presentation aligns with similar regulated activities at NW Natural.

Lease Expense

2 unchanged sentences

Our primary lease is for NW Natural's headquarters and operations center.

Our leases have remaining lease terms of nine months to 16 years.

Our leases have remaining lease terms of three months to 15 years.

Many of our lease agreements include options to extend the lease, which we do not include in our minimum lease terms unless they are reasonably certain to be exercised.

134 unchanged sentences

The weighted-average grant date fair value of non-vested shares associated with the 2022-2024 awards was $ 39.70 per share at December 31, 2024.

weighted-average grant date fair value of shares vested during the year was $ 49.17 per share and there were no performance shares granted during the year and no unrecognized compensation expense for accounting purposes as of December 31, 2023.

The weighted-average grant date fair value of shares vested during the year was $ 39.70 per share and there was no unrecognized compensation expense for accounting purposes as of December 31, 2024.

Restricted Stock Units

54 unchanged sentences

In November 2021, NW Holdings entered into an amended and restated $ 200 million credit agreement, with a feature that allows NW Holdings to request increases in the total commitment amount, up to a maximum of $ 300 million.

The maturity date of the agreement is November 3, 2026, with an available extension of commitments for two additional one -year periods, subject to lender approval.

Interest charges on the NW Holdings credit agreement were indexed to the London Interbank Offered Rate (LIBOR) through January 31, 2023.

The agreement was amended to replace LIBOR with the secured overnight financing rate (SOFR) beginning February 2023.

In December 2024, the maturity date of the agreement was extended to November 2, 2027, with an available extension of commitments for one additional one -year period, subject to lender approval.

Interest charges on the NW Holdings credit agreement are indexed the secured overnight financing rate (SOFR) beginning February 2023.

The SOFR is subject to a 10 basis point spread adjustment.

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In November 2021, NW Natural entered into an amended and restated credit agreement for unsecured revolving loans totaling $ 400 million, with a feature that allows NW Natural to request increases in the total commitment amount, up to a maximum of $ 600 million.

The maturity date of the agreement is November 3, 2026 with an available extension of commitments for two additional one -year periods, subject to lender approval.

The credit agreement permits the issuance of letters of credit in an

aggregate amount of up to $ 60.0 million.

The principal amount of borrowings under the credit agreement is due and payable on the maturity date.

Interest charges on the NW Natural credit agreement were indexed to the LIBOR through January 31, 2023.

The agreement was amended to replace LIBOR with the SOFR beginning February 2023.

In December 2024, the maturity date of the agreement was extended to November 3, 2027 with an available extension of commitments for one additional one -year period, subject to lender approval.

The 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.

Interest charges on the NW Natural credit agreement are indexed to the SOFR beginning February 2023.

The SOFR is subject to a 10 basis point spread adjustment.

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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.

There was one letter of credit outstanding at December 31, 2023 under NW Natural's credit agreement and no letters of credit outstanding at December 31, 2022.

There were no letters of credit outstanding at December 31, 2024 under NW Natural's credit agreement and one letter of credit outstanding at December 31, 2023.

In December 2023, NW Natural issued a $ 15 million letter of credit through its existing credit agreement, which expired January 5, 2024.

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The occurrence of this or any other Event of Default would entitle the Administrative Agent to require cash collateral for the LC Exposure, as defined in the LC Reimbursement Agreement, and to exercise all other rights and remedies available to it and the Lenders under the Credit Documents, as defined in the LC Reimbursement Agreement, and under applicable law.

There were no letters of credit issued or outstanding under the LC Reimbursement Agreement at December 31, 2024.

Long-Term Debt

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NW Natural first mortgage bonds $ 1,374.7 4.6 % $ 1,374.7 4.7 %

NW Holdings unsecured senior bonds 285.0 5.7 % — — %

NW Holdings credit agreement — — % 100.0 5.5 %

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The Mortgage constitutes a first mortgage lien on certain gas properties owned from time to time by NW Natural, including substantially all of NW Natural's NGD property.

In August 2023, NW Natural issued and sold $ 80.0 million aggregate principal amount of its FMBs, 5.18 % Series and $ 50.0 million aggregate principal amount of its FMBs, 5.23 % Series.

The 5.18 % Bonds bear interest at the rate of 5.18 % per annum, payable semi-annually on February 4 and August 4 of each year, commencing February 4, 2024, and will mature on August 4, 2034.

The 5.23 % Bonds bear interest at the rate of 5.23 % per annum, payable semi-annually on February 4 and August 4 of each year, commencing February 4, 2024, and will mature on August 4, 2038.

In March 2023, NW Natural issued and sold $ 100.0 million aggregate principal amount of 5.75 % Secured Medium-Term Notes, Series B due 2033 (the Notes).

The Notes bear interest at the rate of 5.75 % per annum, payable semi-annually on March 15 and September 15 of each year.

In January 2023, NW Natural issued and sold $ 100.0 million aggregate principal amount of its FMBs, 5.43 % Series due January 2053.

The 5.43 % Bonds bear interest at the rate of 5.43 % per annum, payable semi-annually on January 6 and July 6 of each year, commencing July 6, 2023, and will mature on January 6, 2053.

NW Holdings Note Purchase Agreement

Issuance of Long-Term Debt

In December 2023, NW Holdings entered into a Note Purchase Agreement between NW Holdings and the institutional investors named as purchasers therein.

The Note Purchase Agreement provides for the issuance of (i) $ 100.0 million aggregate principal amount of NW Holdings’ 5.78 % Senior Notes, Series A, due March 7, 2028 ( 5.78 % Notes) and (ii) $ 50.0 million aggregate principal amount of NW Holdings’ 5.84 % Senior Notes, Series B, due March 7, 2029 ( 5.84 % Notes) in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

The 5.78 % Notes and the 5.84 % Notes are expected to be issued on or about March 7, 2024, pursuant to the Note Purchase Agreement.

The proceeds from the Note Purchase Agreement are expected to be used to refinance $ 150.0 million of existing term loans at NW Holdings and NWN Water.

The 5.78 % Notes will bear interest at the rate of 5.78 % per annum, payable semi-annually on March 7 and September 7 of each year, commencing September 9, 2024, and will mature on March 7, 2028.

NW Holdings may, at its option, prepay at any time all, or from time to time any part of, the outstanding 5.78 % Notes at a price equal to 100 % of the principal amount thereof, plus a “make-whole” premium and accrued and unpaid interest thereon to the date of prepayment;

provided, however, in the case of a partial prepayment, NW Holdings must prepay at least 5 % of the aggregate principal amount of the 5.78 % Notes outstanding.

At any time on or after February 7, 2028, NW Holdings may, at its option, prepay all or any part of the 5.78 % Notes at 100 % of the principal amount thereof, plus accrued and unpaid interest thereon to the date of prepayment, but without the payment of a “make-whole” premium, so long as there is no Default or Event of Default under the Note Purchase Agreement.

The 5.84 % Bonds will bear interest at the rate of 5.84 % per annum, payable semi-annually on March 7 and September 7 of each year, commencing September 9, 2024, and will mature on March 7, 2029.

NW Holdings may, at its option, prepay at any time all, or from time to time any part of, the outstanding 5.84 % Notes at a price equal to 100 % of the principal amount thereof, plus a “make-whole” premium and accrued and unpaid interest thereon to the date of prepayment;

provided, however, in the case of a partial prepayment, NW Holdings must prepay at least 5 % of the aggregate principal amount of the 5.84 % Notes outstanding.

At any time on or after February 7, 2029, NW Holdings may, at its option, prepay all or any part of the 5.84 % Notes at 100 % of the principal amount thereof, plus accrued and unpaid interest thereon to the date of prepayment, but without the payment of a “make-whole” premium, so long as there is no Default or Event of Default under the Note Purchase Agreement.

Interest Rate Swap Agreements

NW Holdings and NWN Water entered into interest rate swap agreements with major financial institutions that effectively convert variable-rate debt to a fixed rate.

Interest payments made between the effective date and expiration date are hedged by the swap agreements.

The notional amount, effective date, expiration date and benchmark rate of the swap agreements are shown in the table below:

In millions Notional Amount Effective Date Expiration Date Fixed Rate

NW Holdings $ 100.0 1/17/2023 3/15/2024 4.7 %

NWN Water $ 55.0 1/19/2023 6/10/2026 3.8 %

The 5.78 % Notes and the 5.84 % Notes were issued in March 2024, pursuant to the Note Purchase Agreement.

The proceeds from the Note Purchase Agreement were used to settle an existing term loan at NW Holdings for $ 100.0 million and make an equity contribution to NWN Water, which was used to settle an existing term loan for $ 50.0 million.

In December 2024, NW Holdings issued and sold (i) $ 90.0 million in aggregate principal amount of its 5.52 % Senior Notes, Series C, due December 19, 2029 (the 5.52 % Notes), and (ii)$ 45.0 million in aggregate principal amount of its 5.86 % Senior Notes, Series D, due December 19, 2034 (the 5.86 % Notes, together with the 5.52 % Notes, the Notes), to certain institutional investors pursuant to a Note Purchase Agreement dated December 19, 2024 (the Note Purchase Agreement), in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

The 5.52 % Notes and the 5.86 % Notes bear interest at the rate of 5.52 % and 5.86 %, respectively, per annum, payable semi-annually on June 19 and December 19 of each year, commencing June 19, 2025, and will mature on December 19, 2029, and December 19, 2034, respectively.

The 5.52 % Notes and the 5.86 % Notes will be subject to prepayment at the option of NW Holdings, in whole or in part, (i) at any time at a price equal to 100 % of the principal amount thereof, plus the applicable “make-whole” premium and accrued and unpaid interest thereon to the date of prepayment, and (ii) at any time on or after November 19, 2029 and September 19, 2034, respectively, at 100 % of the principal amount thereof, plus accrued and unpaid interest thereon to the date of prepayment, but without the payment of a “make-whole” premium, in each case, so long as there is no Default or Event of Default under the Note Purchase Agreement.

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 3.80 %.

Interest payments made between the effective date and expiration date are hedged by the swap agreement.

The interest rate swap agreement expires in June 2026, along with the variable-rate debt.

Maturities and Outstanding Long-Term Debt

12 unchanged sentences

7.720 % Series due 2025

5.620 % Series due 2023

7.720 % Series due 2025

$ 20,000 $ 20,000

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5.750 % Series due 2033

100,000 100,000

5.180 % Series due 2034

80,000 80,000

5.250 % Series due 2035

1 unchanged sentence

5.230 % Series due 2038

50,000 50,000

4.000 % Series due 2042

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5.430 % Series due 2053

100,000 100,000

Long-term debt, gross 1,374,700 1,374,700

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Interest cost 21,466 21,019 1,035 1,067

Net actuarial gain (loss) 15,066 ( 122,168 ) 2,208 ( 6,234 )

Net actuarial (loss) gain ( 18,215 ) 15,066 1,421 2,208

Benefits paid ( 26,986 ) ( 27,970 ) ( 1,982 ) ( 1,793 )

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Funded status at December 31 $ ( 121,404 ) $ ( 142,006 ) $ ( 22,031 ) $ ( 21,467 )

At December 31, 2023, the net liability (benefit obligations less market value of plan assets) for the Pension Plan increased $ 7.9 million compared to 2022.

The increase in the net pension liability is primarily due to the $ 11.0 million increase to the pension benefit obligation, partially offset by the $ 3.1 million increase in plan assets.

The liability for non-qualified plans increased $ 1.0 million, and the liability for other postretirement benefits increased $ 1.6 million in 2023.

At December 31, 2024, the net liability (benefit obligations less market value of plan assets) for the Pension Plan d ecreased $ 20.5 million compared to 2023.

The d ecrease in the net pension liability is primarily due to the $ 19.8 million decrease to the pension benefit obligation and the $ 0.7 million increase in plan assets.

The liability for non-qualified plans decreased $ 0.1 million, and the liability for other postretirement benefits increased $ 0.6 million in 2024.

NW Natural's Pension Plan had a projected benefit obligation of $ 372.8 million and $ 392.6 million at December 31, 2024 and 2023, respectively, and fair values of plan assets of $ 284.1 million and $ 283.4 million, respectively.

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Total reclassifications before tax 355 ( 1,118 )

Tax benefit (expense) 295 ( 1,797 )

Tax (expense) benefit ( 170 ) 295

Total reclassifications for the period 185 ( 823 )

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Plan assets may be invested in separately managed accounts or in commingled or mutual funds.

Investment re-balancing takes place periodically as needed, or when significant cash flows occur, in order to maintain the allocation of assets

within the stated target ranges.

Investment re-balancing takes place periodically as needed, or when significant cash flows occur, in order to maintain the allocation of assets within the stated target ranges.

The retirement trust fund for the Pension Plan is not currently invested in NW Holdings or NW Natural securities.

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large cap equity 21

Absolute return strategies 12

small/mid cap equity 10

Real estate funds 7

Global equity 15

Developed non-U.S.

Emerging market equity 5

High yield bonds 4

Emerging markets equity 5

Real estate investment trusts 2

Emerging market debt 2

Non-qualified supplemental defined benefit plan obligations were $ 32.7 million and $ 32.8 million at December 31, 2024 and 2023, respectively.

These plans are not subject to regulatory deferral, and the changes in actuarial gains and losses, prior service costs, and transition assets or obligations are recognized in AOCL, net of tax until they are amortized as a component of net periodic benefit cost.

These plans are not subject to regulatory deferral, and the changes in actuarial gains and losses, prior

service costs, and transition assets or obligations are recognized in AOCL, net of tax until they are amortized as a component of net periodic benefit cost.

These are unfunded, non-qualified plans with no plan assets;

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Amortization of net actuarial loss 5,894 713 12,612 8 — 426

Net periodic (benefit) cost ( 70 ) 7,440 18,672 1,172 1,010 1,099

Net periodic cost (benefit) 7,448 ( 70 ) 7,440 1,133 1,172 1,010

Amount allocated to construction ( 1,874 ) ( 1,684 ) ( 2,621 ) ( 36 ) ( 36 ) ( 76 )

Net periodic (benefit) cost charged to expense ( 1,754 ) 4,819 15,657 1,136 934 1,006

Net periodic cost (benefit) charged to expense 5,574 ( 1,754 ) 4,819 1,097 1,136 934

Amortization of regulatory balancing account 7,131 7,131 7,131 — — —

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Rate of increase in compensation 4.00 %- 6.00 %

4.00 %- 5.00 %

3.50 % n/a n/a n/a

5 unchanged sentences

4.00 %- 4.73 %

3.50 % n/a n/a n/a

4.00 %- 6.00 %

Expected long-term rate of return 7.50 % 7.50 % 7.50 % n/a n/a n/a

(1) Rate assumption ranges fr om 3.2 % to 4.6 % in 2024, 4.7 % to 5.8 % in 2025 and 4.0 % to 4.7 % thereafter.

(1) Rate assumption ranges fr om 4.8 % to 5.1 % in 2025 and thereafter.

The assumed annual increase in health care cost trend rates used in measuring other postretirement benefits as of December 31, 2024 was 6.00 % .

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The American Rescue Plan, which was signed into law on March 11, 2021, includes a provision for pension relief that extends the amortization period for required contributions from 7 to 15 years and provides for the stabilization of interest rates used to calculate future required contributions.

As a result, NW Natural made no cash contributions to its Pension Plan for 2023.

NW Natural made $ 20.5 million of cash contributions to its Pension Plan for 2024.

The Pension Plan was underfunded by $ 88.7 million at December 31, 2024.

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Effective December 22, 2013, NW Natural withdrew from the plan, which was a noncash transaction.

Vested participants will receive all benefits accrued

through the date of withdrawal.

Vested participants will receive all benefits accrued through the date of withdrawal.

As the plan was underfunded at the time of withdrawal, NW Natural was assessed a withdrawal liability of $ 8.3 million, plus interest, which requires NW Natural to pay $ 0.6 million each year to the plan for 20 years beginning in July 2014.

1 unchanged sentence

Payments were $ 0.6 million for 2024, and as of December 31, 2024, the liability balance was $ 4.7 million.

For 2022 and 2021, contributions to the plan were $ 0.6 million and $ 0.4 million, respectively, which was approximately 1 % to 4 % of the total contributions to the plan by all employer participants in those years.

For 2023 and 2022, contributions to the plan were $ 0.6 million each year, which was approximately 17 % to 1 % of the total contributions to the plan by all employer participants in those years.

Defined Contribution Plan

55 unchanged sentences

Accrued interest and dividend income $ 2 $ 10,698

Due from broker for securities sold 7,033 —

Total receivables 7,035 10,698

13 unchanged sentences

Effective tax rate 28.3 % 25.6 % 25.2 % 28.0 % 25.4 % 25.3 %

The NW Holdings and NW Natural effective income tax rates for 2024 compared to 2023 changed primarily as a result of pre-tax income and a regulatory tax benefit that was fully amortized in customer rates in 2023.

The NW Holdings and NW Natural effective income tax rates for 2023 compared to 2022 changed primarily as a result of pre-tax income.

The NW Holdings and NW Natural effective income tax rates for 2022 compared to 2021 changed primarily due to lower income tax amortization in 2022 of the 2020 Oregon Corporate Activity Tax (CAT), which was subject to regulatory deferral when it became effective on January 1, 2020 and then amortized in income tax expense as recovery began in late 2020, 2021, and 2022.

The provision for current and deferred income taxes consists of the following at December 31:

17 unchanged sentences

Lease right of use assets 20,542 21,002 20,407 20,849

Other Intangibles 528 — — —

Other intangible assets 3,388 528 — —

Other — 4,432 — 4,620

3 unchanged sentences

Lease liabilities 20,585 21,047 20,449 20,884

Other intangible assets — 1,947 — —

Net operating losses and credits carried forward 105 76 44 44

Other 5,457 — 4,716 —

Total deferred income tax assets 71,717 67,495 70,529 67,048

Deferred investment tax credits 2,503 — 2,503 —

Total net deferred income tax liabilities $ 397,149 $ 382,673 $ 382,686 $ 371,867

8 unchanged sentences

The Company estimates it has net operating loss (NOL) carryforwards of $ 138 thousand for federal taxes and $ 147 thousand for state taxes at December 31, 2024.

The federal NOLs do not expire and we anticipate fully utilizing the state NOL carryforward balances before they begin to expire in 2040.

The federal NOLs do not expire and we anticipate fully utilizing the state NOL carryforward

balances before they begin to expire in 2036.

California alternative minimum tax (AMT) credits of $ 56 thousand are also available.

10 unchanged sentences

As of December 31, 2024, income tax years 2020 through 2023 remain open for examination by the states of California and Texas.

Income tax years 2020 through 2022 are open for examination by the States of Arizona, Idaho, Nebraska, and Oregon .

Income tax years 2021 through 2023 are open for examination by the states of Idaho, Nebraska, and Oregon .

Income tax years 2022 through 2023 are open for examination by the state of Arizona.

PROPERTY, PLANT, AND EQUIPMENT

18 unchanged sentences

Capital expenditures in accrued liabilities $ 26,610 $ 27,879

NGD balances primarily consist of transmission and distribution plant, gas storage facilities, general plant and other fixed assets.

In October 2024, the OPUC issued an order concluding the NW Natural 2024 Oregon rate case.

The OPUC ordered a regulatory disallowance related to $ 13.7 million of undepreciated line extension costs, which resulted in a reduction of NGD plant in service and a non-cash, pre-tax charge that was recorded as operations and maintenance expense in the consolidated statements of comprehensive income in the fourth quarter of 2024.

Other plant balances include non-utility gas storage assets at the Mist facility and other long-lived assets not related to NGD.

The weighted average depreciation rate for NGD assets was 2.9 % in 2024, 3.0 % in 2023, and 3.0 % 2022.

The weighted average depreciation rate for assets not related to NGD was 1.7 % in 2024, 1.7 % in 2023 and 1.8 % in 2022.

Accumulated depreciation does not include the accumulated provision for asset removal costs of $ 526.5 million and $ 496.2 million at December 31, 2024 and 2023, respectively.

1 unchanged sentence

Other plant balances include long-lived assets associated with water and wastewater operations and non-regulated activities not held by NW Natural or its subsidiaries.

Other plant balances include non-utility gas storage assets at the Mist facility and other long-lived assets not related to NGD.

The weighted average depreciation rate for NGD assets was 3.0 % in 2023, 2022, and 2021.

The weighted average depreciation rate for assets not related to NGD was 1.7 % in 2023 and 1.8 % in 2022 and 2021.

Investments include gas reserves, financial investments in life insurance policies, and equity method investments.

18 unchanged sentences

(Avion Water), an investor-owned water utility for $ 14.5 million.

In July 2022 and June 2023, NWN Water increased its ownership stake in Avion Water to 43.1 % for an additional $ 1.0 million in each period.

In January 2024, NWN Water increased its ownership stake in Avion Water to 45.6 % for an additional $ 1.0 million.

NWN Water subsequently increased its ownership stake in Avion Water as follows:

In millions Amount Ownership %

July 2022 $ 1.0 40.3 %

June 2023 $ 1.0 43.1 %

January 2024 $ 1.0 45.6 %

February 2025 $ 1.0 47.9 %

Avion Water operates in Bend, Oregon and the surrounding communities, serving approximately 16,000 customer connections and employing 38 people.

The carrying value of the equity method investment is $ 9.8 million higher than the underlying equity in the net assets of the investee at December 31, 2024 due to equity method goodwill.

Equity in earnings (loss) of Avion Water is included in other income (expense), net.

In 2020, NW Natural began a partnership with BioCarbN to invest in up to four separate renewable natural gas (RNG) development projects that are designed to access biogas derived from water treatment at Tyson Foods’ processing plants, subject to approval by all parties.

During the construction phase of the projects, NW Natural determined it is the primary beneficiary and fully consolidates each entity.

In January 2022, commissioning of the first project, Lexington Renewable Energy LLC (Lexington), was completed.

NW Natural determined it was no longer the primary beneficiary, deconsolidated the variable interest entity and recorded the investment in Lexington as an equity method investment.

As of December 31, 2023, NW Natural had an investment balance in Lexington of $ 7.6 million.

NW Natural's share in the earnings (loss) of Lexington is included in cost of gas.

In April 2023, commissioning of the second project, Dakota City Renewable Energy LLC (Dakota City), was completed.

NW Natural determined it was no longer the primary beneficiary of Dakota City once the project was commissioned.

The investment in the variable interest entity was deconsolidated and recorded as an equity method investment.

NW Natural accounts for its interest in Dakota City using the equity method of accounting because NW Natural does not control but has the ability to exercise significant influence over Dakota City's operations after commissioning.

There was no gain or loss recognized upon deconsolidation.

NW Natural determined the fair value of the investment approximated the carrying value which was primarily comprised of cash and property, plant and equipment.

As of December 31, 2023, NW Natural had an investment balance in Dakota City of $ 11.9 million.

NW Natural's share in the earnings (loss) of Dakota City is included in cost of gas.

In January 2024, NW Natural replaced BioCarbN as manager of the Lexington and Dakota City projects.

NWN Water's share in the earnings (loss) of Avion Water is included in other income (expense), net.

In 2020, NW Natural began a partnership with BioCarbN to invest in renewable natural gas (RNG) development facilities that are designed to access biogas derived from water treatment at Tyson Foods’ processing plants, subject to approval by all parties.

In January 2022, commissioning of the first facility, Lexington Renewable Energy LLC (Lexington), was completed.

In April 2023, commissioning of the second facility, Dakota City Renewable Energy LLC (Dakota City), was completed.

NW Natural recorded the investment as an equity method investment.

As of December 31, 2023, NW Natural had an investment balance in Lexington and Dakota City of $ 19.5 million.

In January 2024, NW Natural replaced BioCarbN as manager of the Lexington and Dakota City companies.

As a result, NW Natural determined that these investments no longer qualified as an equity method investment and were fully consolidated for the year ended December 31, 2024.

BUSINESS COMBINATIONS

2024 Business Combinations

During the year ended December 31, 2024, NWN Water completed the acquisition of Infrastructure Capital Holdings (ICH), which includes 100 % of the membership interests of the following entities:

• Avimor Water Reclamation Company, LLC

• Bents Court Water Company, LLC

• Emerald Valley Wastewater Company, LLC

• OMSID Infrastructure Holdings Company, LLC

• Quigley Recycled Water Company, LLC

• Mines Park Infrastructure Holdings Company, LLC

• Puttman Infrastructure Services Company, LLC

• Lakeshore Water Company, LLC

• Seavey Loop Water Company, LLC

• South Coast Water Company, LLC

The acquisition added wastewater and recycled water customers across Oregon, Idaho and California.

The acquisition-date fair value of the total consideration transferred was approximately $ 29.9 million.

The ICH acquisition met the criteria of a business combination, and as such a preliminary allocation of the consideration to the acquired net assets based on their estimated fair value as of the acquisition date was performed.

In accordance with U.S.

GAAP, the fair value determination involves management judgment in determining the significant estimates and assumptions used for net assets associated with ICH.

This allocation is considered preliminary as of December 31, 2024, as facts and circumstances that existed as of the acquisition date may be discovered as we continue to integrate ICH.

As a result, subsequent adjustments to the preliminary valuation of tangible assets, contract assets and liabilities, tax positions, and goodwill may be required.

Subsequent adjustments are not expected to be significant, and any such adjustments are expected to be completed within the one-year measurement period.

The acquisition costs were not material and expensed as incurred.

Preliminary goodwill of $ 18.4 million was recognized from this acquisition.

The goodwill recognized is attributable to ICH's water utility service territory, experienced workforce, and the strategic benefits for both the water utility and wastewater services expected from growth in its service territory.

No intangible assets aside from goodwill were recognized.

The amount of goodwill that is expected to be deductible for income tax purposes is approximately $ 18.4 million.

The preliminary purchase price for the acquisition has been allocated to the net assets acquired as of the acquisition date and is as follows:

Current assets $ 560

Property, plant and equipment 11,757

Goodwill 18,357

Non-current assets 113

Current liabilities ( 821 )

Non-current liabilities ( 64 )

Total net assets acquired $ 29,902

The amount of ICH revenues included in NW Holdings' consolidated statements of comprehensive income is $ 1.9 million for the year ended December 31, 2024.

Earnings from ICH activities for the year ended December 31, 2024 were not material to the results of NW Holdings.

2023 Business Combinations

During the year ended December 31, 2023, NWN Water and its subsidiaries acquired the assets of five businesses qualifying as business combinations.

The aggregate fair value of the preliminary total consideration transferred for these acquisitions was $ 22.8 million, most of which was preliminarily allocated to property, plant, and equipment, and goodwill.

The aggregate fair value of the total consideration transferred for these acquisitions was $ 22.8 million, most of which was preliminarily allocated to property, plant, and equipment, and goodwill.

These transactions align with NW Holdings' water and wastewater sector strategy as it continues to expand its water and wastewater service territories and included:

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In connection with the acquisition of King Water Corporation, NWN Water recorded long-term customer relationship intangible assets totaling $ 2.6 million, which will be amortized over 24 years.

There was no amortization expense recognized in 2023.

There was $ 0.2 million of amortization expense recognized in 2024 and no amortization expense recognized in 2023.

Projected amortization expense at NW Holdings for customer relationship intangible assets for each of the next five years is $ 0.1 million in each period.

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The purchase price for the acquisition has been allocated to the net assets acquired as of the acquisition date and is as follows:

In thousands December 31, 2023

Current assets $ 1,569

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and Rural Water Co.

2021 Business Combinations

During the year ended December 31, 2021, NWN Water and its subsidiaries completed four acquisitions qualifying as business combinations.

The aggregate fair value of the consideration transferred for these acquisitions were not material and are not significant to NW Holdings' results of operations.

NW Holdings allocates goodwill to reporting units based on the expected benefit from the business combination.

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DERIVATIVE INSTRUMENTS

NW Natural enters into financial derivative contracts to hedge a portion of the NGD segment’s natural gas sales requirements.

NW Natural enters into financial derivative contracts primarily to hedge a portion of the NGD segment’s natural gas sales requirements.

These contracts include swaps, options, and option combinations.

These derivative financial instruments are primarily used to manage commodity price variability.

A small portion of NW Natural's derivative hedging strategy involves foreign currency forward contracts.

A small portion of NW Natural's derivative hedging strategy involves hedging interest rates and foreign currency forward contracts.

NW Natural enters into these financial derivatives, up to prescribed limits, primarily to hedge price variability related to term physical gas supply contracts.

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Under the PGA mechanism in Oregon, derivatives entered into by NW Natural for the procurement or hedging of natural gas for future gas years generally receive regulatory deferral accounting treatment.

In general, commodity hedging for the current gas year is completed prior to the start of the gas year, and hedge prices are reflected in the weighted-average cost of gas in the PGA filing.

Hedge contracts entered into after the start of the PGA period are subject to the PGA incentive sharing mechanism in Oregon.

In general, commodity hedging for the current gas year is completed prior to the start of the gas year, and hedge prices are fully recovered and reflected in the weighted-average cost of gas in the PGA filing.

Hedge contracts entered into after the start of the PGA period for the current PGA year are subject to the PGA incentive sharing mechanism in Oregon.

Under the PGA mechanism in Washington, NW Natural incorporates a risk-responsive hedging strategy, and receives regulatory deferral accounting treatment for its Washington gas supplies.

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Benefit (expense) to cost of gas $ 4,431 $ ( 524 ) $ ( 131,833 ) $ 168

Operating revenues (expense) — — — —

Amounts deferred to regulatory accounts on balance sheet ( 4,431 ) 524 131,833 ( 168 )

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Realized Gain/Loss

NW Natural realized a net gain of $ 125.5 million and $ 107.8 million for the years ended December 31, 2023 and 2022, respectively, from the settlement of natural gas financial derivative contracts.

NW Natural realized a net loss of $ 119.2 million and a net gain of $ 125.5 million for the years ended December 31, 2024 and 2023, respectively, from the settlement of natural gas financial derivative contracts.

Realized gains and losses offset the higher or lower cost of gas purchased, resulting in no incremental amounts to collect or refund to customers.

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NW Natural attempts to minimize the potential exposure to collateral calls by diversifying counterparties and using credit limits to manage liquidity risk.

Counterparties generally allow a certain credit limit threshold before requiring NW Natural to post collateral against unrealized loss positions.

Counterparties generally allow a certain credit limit threshold based on our credit rating before requiring NW Natural to post collateral against unrealized loss positions.

Given NW Natural's credit ratings, counterparty credit limits and portfolio diversification, it was not subject to collateral calls in 2024 or 2023.

The collateral call exposure is set forth under credit support agreements, which generally contain credit limits.

NW Natural could also be subject to collateral call exposure where it has agreed to provide adequate assurance, which is not specific as to the amount of credit limit allowed, but could potentially require additional collateral posting by NW Natural in the event of a material adverse change.

NW Natural's financial derivative instruments are subject to master netting arrangements;

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Such circumstances may include a defaulting party, a credit change due to a merger affecting either party, or any other termination event.

If netted by counterparty, NW Natural's physical and financial derivative position would result in an asset of $ 9.0 million and a liability of $ 124.2 million as of December 31, 2023, and an asset of $ 153.3 million and a liability of $ 3.6 million as of December 31, 2022.

If netted by its counterparties, NW Natural's physical and financial derivative position would result in an asset of $ 4.4 million and a liability of $ 86.0 million as of December 31, 2024, and an asset of $ 9.0 million and a liability of $ 124.2 million as of December 31, 2023.

NW Natural is exposed to derivative credit and liquidity risk primarily through securing fixed-price natural gas commodity swaps and interest rate swaps with financial counterparties.

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The ongoing assessment of counterparty credit risk includes consideration of credit ratings, credit default swap spreads, bond market credit spreads, financial conditions, government actions, and market news.

A Monte Carlo simulation model is used to estimate the

change in credit and liquidity risk from the volatility of natural gas prices.

A Monte Carlo simulation model is used to estimate the change in credit and liquidity risk from the volatility of natural gas prices.

The results of the model are used to establish trading limits.

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The impact of the credit risk adjustments for all financial derivatives outstanding to the fair value calculation was $ 0.3 million at December 31, 2024.

As of December 31, 2023 and 2022, the net fair value was a liability of $ 115.2 million and an asset of $ 149.7 million, respectively, using significant other observable, or Level 2, inputs.

As of December 31, 2024 and 2023, the net fair value was a liability of $ 81.6 million and a liability of $ 115.2 million, respectively, using

significant other observable, or Level 2, inputs.

No Level 3 inputs were used in our derivative valuations during the years ended December 31, 2024 and 2023.

NW Holdings and NWN Water entered into interest rate swap agreements with major financial institutions that effectively converted variable-rate debt to a fixed rate.

Interest payments made between the effective date and expiration date are hedged by the swap agreements.

The notional amount, effective date, expiration date and benchmark rate of the swap agreements are shown in the table below:

In millions Notional Amount Effective Date Expiration Date Fixed Rate

NW Holdings $ 100.0 1/17/2023 3/15/2024 4.7 %

NWN Water $ 55.0 1/19/2023 6/10/2026 3.8 %

Unrealized gains and losses related to these interest rate swap agreements are recorded in AOCI on the consolidated balance sheet and totaled $ 0.2 million and $ 0.1 million, net of tax, as of December 31, 2023 and 2022, respectively.

There were no amounts reclassified from AOCI to net income during the year ended December 31, 2023 and 2022.

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 3.80 %.

Interest payments made between the effective date and expiration date are hedged by the swap agreement.

The interest rate swap agreement expires in June 2026, along with the variable-rate debt.

Unrealized gains related to the interest rate swap agreement are recorded in AOCI on the consolidated balance sheet and totaled $ 0.2 million and $ 0.2 million, net of tax, as of December 31, 2024 and 2023, respectively.

Realized gains or losses occur as a result of monthly swap settlements.

Gains of $ 0.9 million were reclassified from AOCI to net income during each of the years ended December 31, 2024 and 2023.

The estimated amount of gains recorded in AOCI as of December 31, 2024 that are expected to be reclassified to net income within the next twelve months is $ 0.1 million.

COMMITMENTS AND CONTINGENCIES

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In certain take-or-pay purchase commitments, annual deficiencies may be offset by prepayments subject to recovery over a longer term if future purchases exceed the minimum annual requirements.

RNG Purchase Agreements

NW Natural Renewables is an unregulated subsidiary of NW Holdings established to pursue investments in RNG activities.

NW Natural Renewables, through its subsidiary Ohio Renewables, executed agreements with a subsidiary of EDL, a global producer of sustainable distributed energy, to secure RNG supply from two production facilities that are designed to convert landfill waste gases to RNG.

This arrangement consists of a development agreement, an exclusive use agreement, a purchase agreement, and various guarantees.

Under the development agreement, the EDL subsidiary is responsible for the development and construction of the facilities and Ohio Renewables is committed to make payments of approximately $ 25 million per facility to the EDL subsidiary upon satisfaction of certain conditions.

The first facility was completed and commenced delivery of RNG to Ohio Renewables in September 2024.

Upon reaching this milestone, Ohio Renewables paid $ 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.

The payments were recorded as long-term prepaid assets and will be amortized based on the volumes delivered over the life of the agreement.

Under the purchase agreement, 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.

We currently estimate the amount of RNG purchases (not included in the table above) from both facilities based on prices and quantities specified in the agreements to be as follows:

approximately $ 18.9 million in 2025, $ 18.9 million in 2026, $ 22.8 million in 2027, $ 22.8 million in 2028, $ 24.1 million in 2029 and $ 532.6 million thereafter.

NW Holdings entered into a guarantee on behalf of Ohio Renewables with EDL.

Per the guarantee, NW Holdings unconditionally and irrevocably guarantees the timely payment and performance when due of all obligations of Ohio Renewables.

NW Holdings has not recognized a liability for its obligations under the guarantee in accordance with ASC 460, Guarantees .

RNG 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.

Upon each delivery of RNG, Ohio Renewables will purchase an equal quantity of natural gas without renewable attributes at the same delivery point.

Ohio Renewables has separately contracted to sell the natural gas purchased from EDL to another counterparty also at the same delivery point upon receipt.

Alongside these agreements, NW Holdings entered into a guarantee on behalf of Ohio Renewables.

Per the guarantee, NW Holdings unconditionally and irrevocably guarantees the prompt payment of all present and future obligations of Ohio Renewables.

NW Holdings has not recognized a liability for its obligations under the guarantee in accordance with ASC 460, Guarantees .

The guarantee specifies annual cap amounts on the aggregate liability covered by the Guarantee as follows:

In thousands 2024 2025 2026

Cap Amount $ 56,168 $ 44,226 $ 21,113

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 2042.

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.

NW Holdings entered into a guarantee on behalf of Ohio Renewables.

Per the guarantee, NW Holdings unconditionally and irrevocably guarantees the prompt payment of all present and future obligations of Ohio Renewables.

The total liability under this guarantee cannot exceed $ 2.0 million.

NW Holdings has not recognized a liability for its obligations under the guarantee in accordance with ASC 460, Guarantees .

Refer to Note 7 for a discussion of lease commitments and contingencies.

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Next, a feasibility study (FS) or an engineering evaluation/cost analysis (EE/CA) evaluates various remedial alternatives.

It is at this point in the process when NW Natural is able to estimate a range of remediation costs and record a reasonable potential remediation liability, or make an adjustment to the existing liability.

It is at this point in the process when NW Natural is able to estimate a range of remediation costs

and record a reasonable potential remediation liability, or make an adjustment to the existing liability.

From this study, the regulatory agency selects a remedy and issues a Record of Decision (ROD).

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It is likely changes in these estimates and ranges will occur throughout the remediation process for each of these sites due to the continued evaluation and clarification concerning responsibility, the complexity of environmental laws and regulations and the determination by regulators of remediation alternatives.

In addition to remediation costs, NW Natural could also be subject to

Natural Resource Damages (NRD) claims.

In addition to remediation costs, NW Natural could also be subject to Natural Resource Damages (NRD) claims.

NW Natural will assess the likelihood and probability of each claim and recognize a liability if deemed appropriate.

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Other Portland Harbor 3,308 3,035 12,270 11,270

Gasco/Siltronic Upland site 16,304 16,067 34,235 35,457

Gasco/Siltronic Uplands site 23,400 16,304 64,522 34,235

Front Street site 841 687 279 939

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In 2009, NW Natural and Siltronic Corporation entered into a separate Administrative Order on Consent with the EPA to evaluate and design specific remedies for sediments adjacent to the Gasco uplands and Siltronic uplands sites.

NW Natural submitted a draft EE/CA to the EPA in May 2012 to provide the estimated cost of potential remedial alternatives for this site.

NW Natural submitted a draft EE/CA to the EPA in May 2012 and the EE/CA estimated the cost of potential remedial alternatives for this site.

In March 2020, NW Natural and the EPA amended the Administrative Order on Consent to include additional remedial design activities downstream of the Gasco sediments site and in the navigation channel.

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One member of this Trustee council, the Yakama Nation, withdrew from the council in 2009, and in 2017, filed suit against NW Natural and 29 other parties seeking remedial costs and NRD assessment costs associated with the Portland Harbor site, set forth in the complaint.

The complaint seeks recovery of alleged costs totaling $ 0.3 million in connection with the selection of a

remedial action for the Portland Harbor site as well as declaratory judgment for unspecified future remedial action costs and for costs to assess the injury, loss or destruction of natural resources resulting from the release of hazardous substances at and from the Portland Harbor site.

The complaint seeks recovery of alleged costs totaling $ 0.3 million in connection with the selection of a remedial action for the Portland Harbor site as well as declaratory judgment for unspecified future remedial action costs and for costs to assess the injury, loss or destruction of natural resources resulting from the release of hazardous substances at and from the Portland Harbor site.

The Yakama Nation has filed two amended complaints addressing certain pleading defects and dismissing the State of Oregon.

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NW Natural cannot estimate the high end of the range at this time due to the uncertainty associated with the duration of running the water treatment station, which is highly dependent on the remedy determined for both the upland portion as well as the final remedy for the Gasco sediments site.

In December 2024, NW Natural submitted the Gasco uplands FS to ODEQ.

The FS presents a set of remedial action alternatives and provides the basis for range of potential remedial costs for the site.

The estimated costs for the alternative remedies range from $ 45.6 million to $ 358 million.

NW Natural has recorded a liability of $ 45.6 million, which reflects the low end of the range.

Additionally, the EPA's Gasco sediments Administrative Order requires the integration of upland source controls with the sediment remedy.

The selected sediment remedy is currently under separate design for the EPA.

To comply with the source control integration requirement, some Gasco uplands work must be expedited.

An Interim Remedial Action Measure (IRAM) for the Gasco uplands is the regulatory mechanism ODEQ has selected to accomplish that goal.

As a result, the Gasco uplands FS also includes a separate cost range for the IRAM.

The estimated costs for the IRAM range from $ 9.1 million to $ 78 million.

NW Natural has recorded a liability of $ 9.1 million, which reflects the low end of the range.

In addition to those sites above, NW Natural has environmental exposures at three other sites:

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NW Natural may have exposure at other sites that have not been identified at this time.

Due to the uncertainty of the design of remediation, regulation, timing of the remediation and in the case of the Oregon Steel Mills site, pending litigation, liabilities for each of these sites have been recognized at their respective low end of the range of potential liability;

uncertainty of the design of remediation, regulation, timing of the remediation and in the case of the Oregon Steel Mills site, pending litigation, liabilities for each of these sites have been recognized at their respective low end of the range of potential liability;

the high end of the range could not be reasonably estimated at this time.

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Construction of the remedy began in July 2020 and was completed in October 2020.

The first year of post-construction monitoring was completed in 2021 and demonstrated that the cap was intact and performing as designed.

NW Natural has recognized an additional liability of $ 1.6 million for costs associated with the discovery during construction of World War II-era munitions, design costs, regulatory and permitting issues, and post-construction work.

The second year of post-construction monitoring was completed in 2022 and demonstrated that the cap was intact and performing as designed.

NW Natural has recognized an additional liability of $ 1.1 million associated with long-term monitoring and post-construction work.

OREGON STEEL MILLS SITE.

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In addition to the collection amount noted above, an order issued by the OPUC provides for the annual collection of $ 5.0 million from Oregon customers through a tariff rider.

As NW Natural collects amounts from customers, it recognizes these collections as revenue and separately amortizes an equal and offsetting amount of its deferred regulatory asset balance through the environmental remediation operating expense line shown separately in the operating expense section of the income statement.

As NW Natural collects amounts from customers, it recognizes these collections as

revenue and separately amortizes an equal and offsetting amount of its deferred regulatory asset balance through the environmental remediation operating expense line shown separately in the operating expense section of the income statement.

NW Natural received total environmental insurance proceeds of approximately $ 150 million as a result of settlements from litigation that was dismissed in July 2014.

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Legal Proceedings

NW Holdings is not currently party to any direct claims or litigation, though in the future it may be subject to claims and litigation arising in the ordinary course of business.

NW Natural is subject to claims and litigation arising in the ordinary course of business, including the matters discussed above.

On October 11, 2024, NW Natural was added as a defendant to an ongoing lawsuit brought by Multnomah County in the Circuit Court for Multnomah Count, Oregon (County of Multnomah v.

Exxon Mobil Corp., et.

al., No.23-cv-25164) against more than a dozen oil and gas producers seeking damages relating to climate change impacts.

The County asserts various causes of action, including negligence, fraud, trespass and public nuisance under Oregon law related to the refining, producing and/or marketing of fossil fuels.

NW Natural is diligently defending against the claims.

On October 14, 2024, NW Natural and NW Holdings were named the defendants in a lawsuit filed in the Circuit Court for Multnomah County, Oregon (Blumm et.

Northwest Natural Gas Company , 24-cv-48490), that is seeking class certification on behalf of all Oregon NW Natural Smart Energy-enrolled customers during the past approximately six years.

The lawsuit alleges claims under Oregon's Unlawful Trade Practices Act and for breach of contract, with respect to NW Natural's Smart Energy program.

The plaintiffs seek injunctive and equitable relief and damages.

We are diligently defending against the claims.

NW Natural and NW Holdings are subject to claims and litigation arising in the ordinary course of business, including the matters discussed above.

Although the final outcome of any of these legal proceedings cannot be predicted with certainty, including the matter relating to the Oregon Steel Mills site referenced below, NW Natural and NW Holdings do not expect that the ultimate disposition of any of these matters will have a material effect on their financial condition, results of operations, or cash flows.

See also Part II, Item 1, “Legal Proceedings".

See also Part I, Item 3, “Legal Proceedings".

Oregon Steel Mills Site

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Although the final outcome of this proceeding cannot be predicted with certainty, NW Natural and NW Holdings do not expect the ultimate disposition of this matter will have a material effect on NW Natural's or NW Holdings' financial condition, results of operations, or cash flows.

SUBSEQUENT EVENTS

On January 6, 2025 , NW Holdings entered into a Term Loan Credit Agreement (the Term Loan Agreement), among NW Holdings, as borrower, certain lenders parties thereto, and U.S.

Bank National Association, as Administrative Agent, pursuant to which NW Holdings borrowed a $ 50.0 million senior unsecured term loan (the Term Loan), the proceeds of which will be used for working capital needs and for general corporate purposes.

The Term Loan is due and payable on April 6, 2026 .

NW Holdings may prepay the Term Loan without premium or penalty (other than customary breakage costs, if applicable).

Amounts prepaid may not be reborrowed.

The Term Loan Agreement requires NW Holdings to cause its wholly owned subsidiary, NW Natural, to maintain credit ratings with S&P and Moody’s.

NW Holdings must also notify the Administrative Agent and Lenders of any change in either NW Holdings' or NW Natural's S&P or Moody’s ratings.

NW Holdings currently maintains ratings with S&P but not Moody's.

NW Natural is not a party to and does not guarantee the Term Loan Credit Agreement.

The Term Loan bears interest at a per annum rate equal to the sum of (x) either (i) term SOFR with a one-, three- or six-month tenor, plus an adjustment of 0.10 %, or (ii) the Alternate Base Rate, as defined in the 364-Day Credit Agreement, plus (y) the Applicable Margin, as defined in the Term Loan Agreement.

The Applicable Margin is 0.90 % per annum, for term SOFR loans, and 0.00 % per annum, for Alternate Base Rate loans.

The Term Loan Agreement prohibits NW Holdings 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 Holdings.

Failure to comply with this financial covenant would entitle the lenders to accelerate the maturity of the Term Loan and all other amounts outstanding under the Term Loan Agreement.

NW Holdings is in compliance with this covenant as of the date of this filing.

SiEnergy Acquisition

On January 7, 2025 , NW Holdings acquired 100 % of the issued and outstanding limited liability company interests of SiEnergy Operating, LLC (SiEnergy) from SiEnergy Capital Partners, LLC, from SiEnergy Capital Partners, LLC, an affiliate of Ridgewood Infrastructure, for approximately $ 271.1 million in cash and an assumption of $ 156.1 million of debt, subject to customary purchase price adjustments.

SiEnergy serves approximately 70,000 residential and commercial customers in the greater metropolitan areas of Houston, Dallas, and Austin.

Acquisition costs totaling $ 2.3 million in 2024 and $ 5.3 million in 2025 were expensed as incurred.

The initial accounting for the business combination is incomplete due to the timing of the acquisition compared to when the financial statements were issued.

SiEnergy Credit Agreement

SiEnergy and its subsidiaries Si Investment Co, LLC (Si Investment Co), SiEnergy, L.P., Terra Transmission, LLC, SiEnergy Power Solutions, LLC, and SiEnergy GP, L.L.C.

(collectively, the Loan Parties) are party to a Credit Agreement dated as of December 22, 2020 (the Original Credit Agreement) with ING Capital LLC, as administrative agent and L/C Issuer (as defined therein), and the lenders party thereto, as amended by Amendment No.

1 to Credit Agreement dated as of March 23, 2021 (the First Credit Agreement Amendment), Amendment No.

2 to Credit Agreement dated as of July 13, 2021 (the Second Credit Agreement Amendment), Amendment No.

3 to Credit Agreement dated as of July 11, 2022 (the Third Credit Agreement Amendment), and Amendment No.

4 to Credit Agreement dated as of December 22, 2023 (the Fourth Credit Agreement Amendment, and collectively with the First Credit Agreement Amendment, the Second Credit Agreement Amendment, the Third Credit Agreement Amendment, the Credit Agreement Amendments;

and the Original Credit Agreement as amended by the Credit Agreement Amendments, the Amended Credit Agreement).

Amounts under the Amended Credit Agreement are expected to be drawn on from time to time and used for general corporate purposes for the Loan Parties.

The Amended Credit Agreement provides Si Investment Co, as borrower, with access to the following credit facilities (collectively, the Facilities):

(a) a term loan credit facility (the Delayed Draw Term Loan Facility), on a delayed draw basis, which had initial aggregate commitments, as amended, of $ 200,000,000 , of which $ 33,300,000 remain in effect as of January 7, 2025 ;

(b) a revolving credit facility (the Revolving Facility), in aggregate commitments (the Revolving Loan Commitments) as of January 7, 2025 of $ 5,000,000 including a letter of credit sublimit of $ 1,000,000 ;

and (c) a term loan facility (the 2021 Term Loan Facility) with initial aggregate commitments of $ 17,900,000 , none of which remains available as of January 7, 2025 .

As of January 7, 2025 , the outstanding principal balance of the Delayed Draw Term Loan Facility is $ 151,116,760 , the outstanding principal balance of the Revolving Facility is $ 5,000,000 and the outstanding principal balance of the 2021 Term Loan Facility is $ 0 .

Under the Amended Credit Agreement, Si Investment Co is required to pay upfront fees, structuring fees, annual administrative fees, commitment fees, letter of credit fees and certain other fees.

Loans extended under the Facilities bear interest at a per annum rate equal to the sum of (a) either (i) the Base Rate, as defined in the Amended Credit Agreement (the Base Rate), or (ii) term SOFR with a one-, three- or six-month tenor;

plus (b) the Applicable Margin.

The Applicable Margin is 0.750 % with respect to Base Rate loans and 1.750 % with respect to SOFR loans.

Loans borrowed under the Delayed Draw Term Loan Facility from time to time become funded term loans (Funded Term Loans), which are subject to required amortization, once per year.

Si Investment Co.

is required to make principal payments with respect

to Funded Term Loans in equal quarterly installments in an amount sufficient to amortize such loans over a period of 25 years.

In addition, the Facilities are subject to certain mandatory prepayments, including in connection with certain asset sales or casualty or that result in Loan Parties’ receipt of certain insurance or condemnation proceeds.

The Facilities mature on December 22, 2026 .

Acquisition Bridge Facility

On January 7, 2025 , NW Holdings entered into a 364-Day Term Loan Credit Agreement (the Acquisition Bridge Facility) among NW Holdings, as borrower, certain lenders parties thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent, pursuant to which NW Holdings borrowed a $ 273.0 million senior unsecured term loan (the Bridge Loan), the proceeds of which were used to finance the SiEnergy acquisition, with any remaining proceeds to be used for working capital needs and for general corporate purposes.

The Bridge Loan is due and payable on January 6, 2026 .

Some or all of the Bridge Loan is subject to mandatory prepayment in the event of specified asset dispositions, casualty or condemnation events or the issuance by NW Holdings of certain public or private offerings of debt securities or equity interests, subject to certain exceptions, thresholds and reinvestment rights.

NW Holdings may prepay the Bridge Loan without premium or penalty (other than customary breakage costs, if applicable).

Amounts prepaid may not be reborrowed.

The Acquisition Bridge Facility requires NW Holdings to cause NW Natural, a wholly-owned subsidiary of NW Holdings, to maintain credit ratings with S&P and Moody’s.

NW Holdings must also notify the Administrative Agent and Lenders of any change in the S&P or Moody’s ratings.

NW Holdings currently maintains ratings with S&P but not Moody's.

NW Natural is not a party to and does not guarantee the Acquisition Bridge Facility.

The Bridge Loan bears interest at a per annum rate equal to the sum of (x) either (i) term SOFR with a one-, three- or six-month tenor, plus an adjustment of 0.10 %, or (ii) the Alternate Base Rate, as defined in the Acquisition Bridge Facility, plus (y) an Applicable Margin, as defined in the Acquisition Bridge Facility.

The Applicable Margin is determined according to the Debt Rating, as defined in the Acquisition Bridge Facility, and ranges from 1.00 % per annum to 1.50 % per annum, for term SOFR loans, and 0.00 % per annum to 0.50 % per annum, for Alternate Base Rate loans.

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF NORTHWEST NATURAL HOLDING COMPANY

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Other comprehensive income (loss) from subsidiaries, net of tax 264 ( 868 ) 5,108

Unrealized gain on interest rate swap, net of tax 104 11 —

Unrealized (loss) gain on interest rate swap, net of tax ( 115 ) 104 11

Comprehensive income $ 79,020 $ 93,104 $ 91,422

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Long-term debt issued 285,000 — 100,000

Long-term debt retired ( 100,000 ) — —

Changes in other short-term debt, net ( 39,400 ) ( 15,000 ) ( 56,000 )

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Other 2,535 2,510 4,615

Cash (used in) provided by financing activities ( 13,335 ) 194,405 36,902

Cash provided by (used in) financing activities 165,657 ( 13,335 ) 194,405

(Decrease) increase in cash and cash equivalents ( 527 ) ( 6,269 ) 7,015

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Equity earnings of subsidiaries including earnings from NW Natural were $ 93.1 million, $ 106.3 million, and $ 92.7 million for the years ended December 31, 2024, 2023, and 2022 respectively.

There were $ 95.7 million , $ 62.7 million and $ 82.1 million of cash dividends paid to NW Holdings from wholly-owned subsidiaries for the years ended December 31, 2023, 2022 and 2021, respectively.

There was $ 72.8 million, $ 95.7 million and $ 62.7 million of cash paid to NW Holdings from wholly-owned subsidiaries for the years ended December 31, 2024, 2023 and 2022, respectively.

For information concerning NW Holdings' debt obligations, see Note 9 to the consolidated financial statements included in Item 8 of this report.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data