What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-02-28 · 692 added, 489 removed, 1970 unchanged (37% of the section changed)

28 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

NW Holdings management assessed the effectiveness of NW Holdings' internal control over financial reporting as of December 31, 2024.

Management has excluded SiEnergy Operating, LLC (SiEnergy) from its assessment of internal control over financial reporting as of December 31, 2025 as it was acquired by the Company in a purchase business combination during 2025.

Total assets and total net sales of SiEnergy excluded from management's assessment of internal control over financial reporting represent approximately 9.6% and 5.1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025.

This exclusion is in accordance with the guidelines established by the Securities and Exchange Commission.

Except as noted above, NW Holdings management assessed the effectiveness of NW Holdings' internal control over financial reporting as of December 31, 2025.

In making this assessment, NW Holdings management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).

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The effectiveness of internal control over financial reporting as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in this annual report.

/s/ Justin B.

Chief Executive Officer

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Based on NW Natural management's assessment and those criteria, NW Natural management has concluded that it maintained effective internal control over financial reporting as of December 31, 2025.

/s/ Justin B.

Chief Executive Officer

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We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded SiEnergy Operating, LLC from its assessment of internal control over financial reporting as of December 31, 2025, because it was acquired by the Company in a purchase business combination during 2025.

We have also excluded SiEnergy Operating, LLC from our audit of internal control over financial reporting.

SiEnergy Operating, LLC is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 9.6% and 5.1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025.

Definition and Limitations of Internal Control over Financial Reporting

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As described in Note 2 to the consolidated financial statements, there were $567.9 million of regulatory assets and $896.4 million of regulatory liabilities as of December 31, 2025.

The Company’s principal business is to operate as a holding company for Northwest Natural Gas Company (“NW Natural”) and its other subsidiaries.

NW Natural's principal business is the distribution of natural gas, which is regulated;

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.

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.

The principal considerations for our determination that performing procedures relating to the Company’s accounting for the effects of regulatory matters is a critical audit matter are the high degree of auditor effort in performing procedures and evaluating audit evidence related to the recovery of regulatory assets and the settlement of regulatory liabilities.

The Company’s principal business is to operate as a holding company for Northwest Natural Gas Company (“NW Natural”), SiEnergy, NWN Water, and its other subsidiaries.

NW Natural's and SiEnergy’s principal businesses are the distribution of natural gas, and NWN Water’s principal business is water and wastewater utility services, the majority of which are regulated.

As disclosed by management, regulatory accounting requires management to account for deferred expenses as regulatory assets and deferred revenues as 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 in the income statement at the same time the amounts are included in rates charged to customers.

The principal considerations for our determination that performing procedures relating to the accounting for the effects of regulatory matters is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to the probability of recovery of regulatory assets and refund of regulatory liabilities.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s assessment of rates cases and other proceedings, including the probability of recovery of regulatory assets and the settlement of regulatory liabilities and related accounting and disclosure impacts.

These procedures also included, among others (i) evaluating the reasonableness of management’s assessment regarding the probability of recovery of regulatory assets and settlement of regulatory liabilities, (ii) evaluating the sufficiency of the disclosures in the consolidated financial statements, and (iii) testing, on a sample basis, the regulatory assets and liabilities, including those subject to rate cases and other proceedings, by considering the provisions and formulas outlined in rate orders, other regulatory correspondence, and the application of relevant regulatory precedents.

These procedures included testing the effectiveness of controls relating to management’s assessment of regulatory proceedings, including controls over the probability of recovery of regulatory assets and refund of regulatory liabilities, and the related accounting and disclosure impacts.

These procedures also included, among others (i) evaluating the reasonableness of management’s assessment regarding the probability of recovery of regulatory assets and refund of regulatory liabilities and (ii) testing, on a sample basis, regulatory assets and regulatory liabilities by considering (a) the provisions and formulas outlined in rate orders;

(b) other regulatory proceedings and correspondence;

and (c) the application of relevant regulatory precedents.

/s/ PricewaterhouseCoopers LLP

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February 27, 2026

We have served as the Company’s auditor since 1997.

We have served as the Company’s aud itor since 1997.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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The Company’s principal business is the distribution of natural gas, which is regulated.

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.

The principal considerations for our determination that performing procedures relating to the Company’s accounting for the effects of regulatory matters is a critical audit matter are the high degree of auditor effort in performing audit procedures and evaluating audit evidence obtained related to the recovery of regulatory assets and the settlement of regulatory liabilities.

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

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

and (iii) testing, on a sample basis, the regulatory assets and liabilities, including those subject to rate cases and other proceedings, by considering the provisions and formulas outlined in rate orders, other regulatory correspondence, and the application of relevant regulatory precedents.

(b) other regulatory proceedings and correspondence;

and (c) the application of relevant regulatory precedents.

/s/ PricewaterhouseCoopers LLP

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Amortization of non-qualified employee benefit plan liability, net of taxes of $( 526 ) for 2025, $( 210 ) for 2024, and $( 148 ) for 2023

1,677 584 410

Unrealized (loss) gain on interest rate swaps, net of taxes of $ 65 for 2025, $ 13 for 2024, and $( 21 ) for 2023

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

Shares issued pursuant to equity based plans 2,978 — — 2,978

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

Shares issued pursuant to equity based plans, net of shares withheld for taxes 2,328 — — 2,328

Issuance of common stock, net of issuance costs 66,913 — — 66,913

Balance at December 31, 2023 890,976 399,911 ( 7,049 ) 1,283,838

Comprehensive income (loss) — 93,868 ( 764 ) 93,104

Comprehensive income — 78,871 149 79,020

Dividends on common stock, $ 1.95 per share

— ( 75,857 ) — ( 75,857 )

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

Shares issued in connection with business combinations 1,429 — — 1,429

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

Stock-based compensation 3,231 — — 3,231

Shares issued pursuant to equity based plans, net of shares withheld for taxes 3,156 — — 3,156

Issuance of common stock, net of issuance costs 90,554 — — 90,554

Balance at December 31, 2024 989,346 402,925 ( 6,900 ) 1,385,371

Comprehensive income (loss) — 78,871 149 79,020

Comprehensive income — 113,319 2,153 115,472

Dividends on common stock, $ 1.96 per share

— ( 80,421 ) — ( 80,421 )

Shares issued in connection with business combinations 1,429 — — 1,429

Stock-based compensation 4,122 — — 4,122

Shares issued pursuant to equity based plans 3,156 — — 3,156

Shares issued pursuant to equity based plans, net of shares withheld for taxes 2,730 — — 2,730

Issuance of common stock, net of issuance costs 47,802 — — 47,802

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Income taxes paid, net of refunds:

federal taxes $ 5,599 $ 10,055 $ 14,300

State and local taxes

Oregon 5,500 9,000 9,800

Other states 311 339 163

Income taxes paid, net of refunds $ 11,410 $ 19,394 $ 24,263

Non-cash activities:

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Amortization of non-qualified employee benefit plan liability, net of taxes of $( 526 ) for 2025, $( 210 ) for 2024, and $( 148 ) for 2023

1,677 584 410

Comprehensive income $ 126,569 $ 89,203 $ 103,914

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Balance at December 31, 2023 644,903 594,954 ( 7,237 ) 1,232,620

Comprehensive income (loss) — 104,737 ( 823 ) 103,914

Comprehensive income — 89,018 185 89,203

Dividends on common stock — ( 72,773 ) — ( 72,773 )

1 unchanged sentence

Balance at December 31, 2024 719,903 611,199 ( 7,052 ) 1,324,050

Comprehensive income (loss) — 89,018 185 89,203

Comprehensive income — 124,222 2,347 126,569

Dividends on common stock — ( 77,375 ) — ( 77,375 )

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Income taxes paid, net of refunds:

federal taxes $ 3,992 $ 22,564 $ 16,846

State and local taxes

Oregon 6,826 15,005 10,899

Other states 262 1,151 —

Income taxes paid, net of refunds $ 11,080 $ 38,720 $ 27,745

See Notes to Consolidated Financial Statements

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ORGANIZATION AND PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements represent the respective, consolidated financial results of NW Holdings and NW Natural and all respective companies that each registrant directly or indirectly controls, either through majority ownership or otherwise.

The accompanying consolidated financial statements represent the respective, consolidated financial results of Northwest Natural Holding Company (NW Holdings) and Northwest Natural Gas Company (NW Natural) and all respective companies that each registrant directly or indirectly controls, either through majority ownership or otherwise.

This is a combined report of NW Holdings and NW Natural, which includes separate consolidated financial statements for each registrant.

NW Natural's regulated natural gas distribution activities are reported in the natural gas distribution (NGD) segment.

The NGD segment is NW Natural's core operating business and serves residential, commercial, and industrial customers in Oregon and southwest Washington.

The NGD segment is the only reportable segment for NW Holdings and NW Natural.

All other activities, water, wastewater and water services businesses, and other investments are aggregated and reported as other at their respective registrant.

NW Natural's regulated natural gas distribution activities are reported in the NWN Gas Utility reportable segment, which was previously referred to as the natural gas distribution (NGD) segment prior to 2025.

The NWN Gas Utility segment serves residential, commercial, and industrial customers in Oregon and southwest Washington.

SiEnergy Operating, LLC (SiEnergy Gas Utility or SiEnergy), which was acquired January 7, 2025, owns SiEnergy Gas, LLC, which is a regulated natural gas distribution utility and serves residential and commercial customers in the greater metropolitan areas of Houston, Dallas, and Austin, Texas.

SiEnergy also serves several transmission customers in Dallas and Austin, Texas.

SiEnergy activities are reported in the SiEnergy Gas Utility reportable segment.

NW Natural Water Company, LLC (NWN Water Utility or NWN Water) activities are reported in the NWN Water Utility reportable segment, which provides water distribution and wastewater services to communities throughout the Pacific Northwest, Texas, Arizona, and California.

NW Holdings and NW Natural also have investments and business activities not specifically related to the NWN Gas Utility, SiEnergy Gas Utility and NWN Water Utility segments, which are aggregated and reported as NW Holdings Other and NW Natural Other.

NW Holdings and NW Natural consolidate all entities in which they have a controlling financial interest.

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.

See Note 13 for activity related to investments.

See Note 13 for activity related to equity method 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.

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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.

The reclassifications did not have a material effect on our consolidated financial statements.

NW Holdings and NW Natural historical segment reporting has been recast to reflect their current organizational structure.

The recasting did not have a material effect on the consolidated financial statements of NW Holdings or NW Natural.

SIGNIFICANT ACCOUNTING POLICIES

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Industry Regulation

NW Holdings' principal business is to operate as a holding company for NW Natural and its other subsidiaries.

NW Holdings' principal business is to operate as a holding company for NW Natural, SiEnergy, NWN Water and its other subsidiaries.

NW Natural's principal business is the distribution of natural gas, which is regulated by the OPUC and WUTC.

NW Natural also has natural gas storage services, which are regulated by the FERC, and to a certain extent by the OPUC and WUTC.

Additionally, certain of NW Holdings' subsidiaries own water businesses, which are regulated by the public utility commission in the state in which the water utility is located, which is currently Oregon, Washington, Idaho, Texas and Arizona.

SiEnergy's principal business is the distribution of natural gas in Texas;

primarily in the Houston, Dallas and Austin metropolitan areas.

SiEnergy also includes a natural gas transmission utility serving customers in the greater metropolitan areas of Dallas and Austin, Texas.

SiEnergy's natural gas utilities are subject to regulation by the Railroad Commission of Texas and the cities in which it provides service.

NWN Water's principal business is water and wastewater utility services.

NWN Water's subsidiaries own water businesses, which are regulated by the public utility commission in the state in which the water utility is located, which is currently Oregon, Washington, Idaho, Texas and Arizona.

Wastewater businesses, to the extent they are regulated, are generally regulated by the public utility commissions in the state in which the wastewater utility is located, which is currently Texas and Arizona.

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In applying regulatory accounting principles, NW Holdings and NW Natural capitalize or defer certain costs and revenues as regulatory assets and liabilities pursuant to orders of the applicable state public utility commission, which provide for the recovery of revenues or expenses from, or refunds to, utility customers in future periods, including a return or a carrying charge in certain cases.

Amounts NW Natural deferred as regulatory assets and liabilities were as follows:

Amounts deferred as regulatory assets and liabilities for NW Holdings and NW Natural were as follows:

Regulatory Assets

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Environmental costs (2)

12,148 10,746

Decoupling (3)

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Washington Climate Commitment Act compliance 7,482 7,778

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

Security and systems improvements 1,771 2,711

Industrial demand side management (5)

20,363 10,354

Total current - NW Natural 143,135 130,091

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Washington Climate Commitment Act compliance 33,085 22,136

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

Security and systems improvements 8,234 8,531

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(1) Unrealized gains or losses on derivatives are non-cash items and therefore do not earn a rate of return or a carrying charge.

These amounts are recoverable through natural gas distribution rates as part of the annual Purchased Gas Adjustment (PGA) mechanism when realized at settlement.

These amounts are recoverable through NWN Gas Utility rates as part of the annual Purchased Gas Adjustment (PGA) mechanism when realized at settlement.

(2) Refer to the Environmental Cost Deferral and Recovery table in Note 17 for a description of environmental costs.

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See "Accounting Policies— Plant, Property, and Accrued Asset Removal Costs " below.

The amortization period for NW Natural's regulatory assets and liabilities ranges from less than one year to an indeterminable period.

The amortization period for NW Natural and NW Holdings' regulatory assets and liabilities ranges from less than one year to an indeterminable period.

Regulatory deferrals for gas costs payable are generally amortized over 12 months beginning each November 1 following the gas contract year during which the deferred gas costs are recorded.

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New Accounting Standards

NW Natural and NW Holdings consider the applicability and impact of all accounting standards updates (ASUs) issued by the Financial Accounting Standards Board (FASB).

NW Holdings and NW Natural consider the applicability and impact of all accounting standards updates (ASUs) issued by the Financial Accounting Standards Board (FASB).

ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on consolidated financial position or results of operations.

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In August 2023, the FASB issued ASU 2023-05, which requires a joint venture to initially measure all contributions received upon its formation at fair value.

The standard is effective for all joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted.

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

We adopted the standard in January 2025.

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

SEGMENT REPORTING.

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

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

The disclosures were required beginning with the 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.

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In December 2023, the FASB issued ASU 2023-09, which requires additional disclosures about income taxes.

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 an impact on our results of operations, liquidity or capital resources.

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

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

DISAGGREGATION OF EXPENSE DISCLOSURES.

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

The FASB issued ASU 2025-01 on January 6, 2025, to amend the effective date language of ASU 2024-03 clarifying that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

ASU 2025-01 did not impact the effective date of ASU 2024-03 for NW Holdings and NW Natural.

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

INSIDER TRADING ARRANGEMENTS.

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

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 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.

FINANCIAL INSTRUMENTS-CREDIT LOSSES.

In July 2025, the FASB issued ASU 2025-05, which simplifies how entities estimate credit losses on current accounts receivable and current contract assets arising from revenue transactions under ASC 606.

It introduces a practical expedient that allows all entities to assume that economic conditions at the balance sheet date remain unchanged for the life of the asset, eliminating the need for forward-looking forecasts.

This ASU is applicable only to current receivables and contract assets (typically due within one year) and is effective for fiscal years beginning after December 15, 2025.

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

IMPROVEMENTS TO INTANGIBLE ASSET ACCOUNTING AND DISCLOSURES .

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

This ASU modernizes the accounting for software costs to adapt to an incremental and iterative software development method.

ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and may be applied using a prospective, modified prospective or retrospective transition approach.

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

INTERIM REPORTING.

In December 2025, the FASB issued ASU 2025-11, which improves the guidance in Topic 270, Interim Reporting, by clarifying the current disclosure requirements for interim periods.

The ASU adds to Topic 270 a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

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

CODIFICATION IMPROVEMENTS .

In December 2025, the FASB issued ASU 2025-12, which makes changes to the Codification that clarify, correct errors, or make minor improvements.

The amendments make the Codification easier to understand and apply.

The amendments in this Update are varied in nature and may affect the application of guidance in cases in which the original guidance may have been unclear.

ASU 2025-12 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods.

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

Accounting Policies

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Therefore, we have included these costs as non-current regulatory liabilities rather than as accumulated depreciation on our consolidated balance sheets.

In the rate setting process, the liability for removal costs is treated as a reduction to the net rate base on which the NGD business has the opportunity to earn its allowed rate of return.

The costs of NGD plant retired or otherwise disposed of are removed from NGD plant and charged to accumulated depreciation for recovery or refund through future rates.

In the rate setting process, the liability for removal costs is treated as a reduction to the net rate base on which our regulated segments have the opportunity to earn its allowed rate of return.

The costs of NWN Gas Utility, SiEnergy Gas Utility, or regulated NWN Water plant retired or otherwise disposed of are removed from plant and charged to accumulated depreciation for recovery or refund through future rates.

Gains from the sale of regulated assets are generally deferred and refunded to customers.

For assets not related to NGD, we record a gain or loss upon the disposal of the property, and the gain or loss is recorded in operating income or loss in the consolidated statements of comprehensive income.

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 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:

For assets not related to our regulated operations, we record a gain or loss upon the disposal of the property, and the gain or loss is recorded in operating income or loss in the consolidated statements of comprehensive income.

The provision for depreciation of NWN Gas Utility 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 NWN Gas Utility assets in service was approximately 3.1 % for 2025, and 2.9 % for 2024 and 3.0 for 2023, reflecting the approximate weighted-average economic life of the property.

This includes 2025 weighted-average depreciation rates for the following asset categories:

2.7 % for transmission and distribution plant, 2.5 % for gas storage facilities, 4.5 % for general plant, and 7.1 % for intangible and other fixed assets.

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

Certain additions to NWN Gas Utility, SiEnergy and NWN 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.

If the average short-term debt balances are less than the average 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 cost of service.

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

Our NWN Gas Utility composite AFUDC rate was 6.8 % in 2025, 6.4 % in 2024, and 7.5 % in 2023.

IMPAIRMENT OF LONG-LIVED ASSETS.

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Accrued unbilled revenue is reversed the following month when actual billings occur.

NW Holdings' accrued unbilled revenue at December 31, 2024 and 2023 was $ 94.4 million and $ 83.1 million, respectively, substantially all of which is accrued unbilled revenue at NW Natural.

Revenues not related to NGD are derived primarily from Interstate Storage Services, asset management activities at the Mist gas storage facility, and other investments and business activities.

NW Holdings' accrued unbilled revenue at December 31, 2025 and 2024 was $ 97.2 million and $ 94.4 million, respectively, which is primarily accrued unbilled revenue at NW Natural.

Revenues not related to NWN Gas Utility, SiEnergy Gas Utility, and NWN Water Utility are derived primarily from Interstate Storage Services, asset management activities at the Mist gas storage facility, and other investments and business activities.

At the Mist underground storage facility, revenues are primarily firm service revenues in the form of fixed monthly reservation charges.

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Revenue taxes are included in operating expenses in the statements of comprehensive income for NW Holdings and NW Natural.

Revenue taxes at NW Holdings were $ 48.3 million, $ 48.7 million, and $ 41.8 million for 2024, 2023, and 2022, respectively.

Revenue taxes at NW Holdings were $ 48.2 million, $ 48.3 million, and $ 48.7 million for 2025, 2024, and 2023, respectively, and are primarily from NW Natural.

Accounts Receivable and Allowance for Uncollectible Accounts

Accounts receivable consist primarily of amounts due for natural gas sales and transportation services to NGD customers, plus amounts due for gas storage services.

NW Holdings and NW Natural establish allowances for uncollectible accounts (allowance) for trade receivables, including accrued unbilled revenue, based on the aging of receivables, collection experience of past due account balances including payment plans, and historical trends of write-offs as a percent of revenues.

A specific allowance is established and recorded for large individual customer receivables when amounts are identified as unlikely to be partially or fully recovered.

Inactive accounts are written-off against the allowance after they are 120 days past due or when deemed uncollectible.

NW Holdings receivable balances primarily consist of trade receivables for the sale of natural gas and natural gas transportation services from NW Natural and SiEnergy and water sales and wastewater services from NWN Water.

These businesses establish

an allowance for uncollectible accounts for trade receivables (allowance), including accrued unbilled revenue, based on the age of receivable balances, collection experience of past due account balances and payment plans, and historical trends of write-offs.

Differences between the estimated allowance and actual write-offs will occur based on a number of factors, including changes in economic conditions, customer creditworthiness, and natural gas prices.

The allowance for uncollectible accounts is adjusted quarterly, as necessary, based on information currently available.

The allowance is adjusted quarterly, as necessary, based on information currently available.

NW Natural's allowance for residential and commercial trade receivables utilizes a method of assessing historical write-off trends and current information on delinquent accounts.

For industrial accounts, we continue to assess the provision on an account-by-account basis with specific reserves taken as necessary.

NW Natural will continue to closely monitor and evaluate our accounts receivable and the provision for uncollectible accounts.

NWN Water and SiEnergy follow methodologies that also review for historical write-off trends, the aging of the receivable balances, and collection experience.

These businesses also monitor for impacts of economic conditions including the price of natural gas or water as appropriate, the economy and the impact on customers ability to pay.

ALLOWANCE FOR TRADE RECEIVABLES.

The payment term of our NGD receivables is generally 15 days.

The payment term of our NWN Gas Utility receivables is generally 15 days.

For these short-term receivables, it is not expected that forecasted economic conditions would significantly affect the loss estimates under stable economic conditions.

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This included enhanced protections for low-income customers, a return to pre-pandemic time payment arrangements terms, revised disconnection rules during the heating season, and other items.

As a result of these Oregon rule changes and our recent collection process experience, we augmented our provision review for accounts in the following categories:

closed or inactive accounts aged less than 120 days, accounts on payment plans, and all other open accounts not on payment plans.

For industrial accounts, we continue to assess the provision on an account-by-account basis with specific reserves taken as necessary.

NW Natural will continue to closely monitor and evaluate our accounts receivable and the provision for uncollectible accounts.

The following table presents the activity related to the NW Holdings provision for uncollectible accounts by pool, substantially all of which is related to NW Natural's accounts receivable:

The following table presents the activity related to the NW Holdings provision for uncollectible accounts by pool:

As of December 31, 2024 As of December 31, 2025

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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.

NGD gas inventories, which consist of natural gas in storage for NGD customers, are stated at the lower of weighted-average cost or net realizable value.

NWN Gas Utility gas inventories, which consist of natural gas in storage for NWN Gas Utility customers, are stated at the lower of weighted-average cost or net realizable value.

The regulatory treatment of these inventories provides for cost recovery in customer rates.

NGD gas inventories injected into storage are priced in inventory based on actual purchase costs, and those withdrawn from storage are charged to cost of gas during the period they are withdrawn at the weighted-average inventory cost.

NWN Gas Utility gas inventories injected into storage are priced in inventory based on actual purchase costs, and those withdrawn from storage are charged to cost of gas during the period they are withdrawn at the weighted-average inventory cost.

Gas storage inventories mainly consist of natural gas received as fuel-in-kind from storage customers.

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Cushion gas is not included in inventory balances, is recorded at original cost, and is classified as a long-term plant asset.

Materials and supplies inventories consist of inventories both related to and unrelated to NGD and are stated at the lower of average cost or net realizable value.

NW Natural's NGD and gas storage inventories totaled $ 37.9 million and $ 47.2 million at December 31, 2024 and 2023, respectively.

Materials and supplies inventories consist of inventories at NWN Gas, SiEnergy, and NWN Water and are stated at the lower of average cost or net realizable value.

NW Holdings' gas storage inventories totaled $ 33.9 million and $ 37.9 million at December 31, 2025 and 2024, respectively, the majority of which is NW Natural.

At December 31, 2025 and 2024, NW Holdings' materials and supplies inventories, which are comprised primarily of NW Natural's materials and supplies, totaled $ 29.7 million and $ 24.8 million, respectively.

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1) allowances distributed at no cost by the state, 2) purchasing allowances at state-run auctions or secondary markets, 3) purchasing carbon offsets, and 4) supplying alternative gaseous fuels, such as renewable natural gas and hydrogen.

NW Natural will account for all purchased Washington allowances as inventory at the lower of cost or market.

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

NW Natural accounts for all purchased Washington allowances as inventory at the lower of cost or market.

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

As of December 31, 2025 and 2024, NW Natural had $ 63.3 million and $ 43.9 million of emissions allowances for compliance in Washington recorded as inventory, respectively.

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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.

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

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

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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.

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

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.

Derivative contracts entered into for NWN Gas Utility 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.

For each of the PGA years in Oregon beginning November 1, 2024, 2023, and 2022, NW Natural selected the 90 % deferral of gas cost differences.

For each of the PGA years in Oregon beginning October 31, 2025, and November 1, 2024, and 2023, NW Natural selected the 90 % deferral of gas cost differences.

In Washington, 100 % of the differences between the PGA prices and actual gas costs are deferred.

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

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

All commodity and foreign exchange derivatives are currently held at NW Natural, and an interest rate swap was 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:

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(d) volatility factors;

(e) current market and contractual prices for underlying instruments;

(e) current market and contractual prices for

underlying instruments;

(f) market interest rates and yield curves;

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NW Natural considers liquid points for natural gas hedging to be those points for which there are regularly published prices in a nationally recognized publication or where the instruments are traded on an exchange.

Other Current Assets

Other current assets consist of various items that are expected to be realized within the next twelve months and are not classified elsewhere on the balance sheet.

Other current assets are comprised primarily of prepaid assets, restricted cash and gas reserves.

As of December 31, 2025, NW Holdings and NW Natural had $ 57.9 million and $ 43.1 million of prepaid assets, respectively, and $ 2.6 million of gas reserves.

As of December 31, 2024.

NW Holdings and NW Natural had $ 43.4 million and $ 37.0 million of prepaid assets, respectively, and $ 2.7 million of gas reserves.

See the Restricted Cash and Gas Reserves sections above for additional detail.

Goodwill and Business Combinations

NW Holdings, through its wholly-owned subsidiary NWN Water and NWN Water's wholly-owned subsidiaries, has completed various acquisitions that resulted in the recognition of goodwill.

NW Holdings, through its wholly-owned subsidiaries NWN Water and SiEnergy and their wholly-owned subsidiaries, has completed various acquisitions that resulted in the recognition of goodwill.

Goodwill is measured as the excess of the acquisition-date fair value of the consideration transferred over the acquisition-date fair value of the net identifiable assets assumed.

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Reporting units are evaluated periodically for changes in the corporate environment.

As of December 31, 2024 and 2023, NW Holdings had goodwill of $ 183.8 million and $ 163.3 million, respectively.

All of NW Holdings' goodwill was acquired through the business combinations completed by NWN Water and its wholly-owned subsidiaries.

No impairment charges were recorded as a result of the fourth quarter goodwill impairment assessment.

Business combinations are accounted for using the acquisition method.

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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 Holdings 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.

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Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the enactment date period unless, for NW Natural, a regulatory order specifies deferral of the effect of the change in tax rates over a longer period of time.

For NW Natural, deferred income tax assets and liabilities are also recognized for temporary differences where the deferred income tax benefits or expenses have previously been flowed through in the ratemaking process of the NGD business.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the enactment date period unless, for our regulated operations at NW Natural, SiEnergy, and NWN Water, a regulatory order specifies deferral of the effect of the change in tax rates over a longer period of time.

For our regulated operations, deferred income tax assets and liabilities are also recognized for temporary differences where the deferred income tax benefits or expenses have previously been flowed through in the ratemaking process of the regulated businesses.

Regulatory tax assets and liabilities are recorded on these deferred tax assets and liabilities to the extent it is believed they will be recoverable from or refunded to customers in future rates.

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Cloud Computing Arrangements

Implementation costs associated with its cloud computing arrangements are capitalized consistent with costs capitalized for internal-use software.

For GAAP accounting purposes, implementation costs associated with its cloud computing arrangements are capitalized consistent with costs capitalized for internal-use software.

Capitalized implementation costs are included in other assets in the consolidated balance sheets.

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The implementation costs are included within operating activities in the consolidated statements of cash flows.

For regulatory accounting purposes, cloud-based software is reflected in rate base as property, plant and equipment and amortized over the expected useful life through depreciation expense.

NW Natural is allowed recovery of and a return on cloud computing arrangements like other property, plant and equipment in rate base.

The amount of cloud-based software capital expenditures for 2025 and 2024 was $ 8.5 million and $ 17.2 million, respectively.

The amount of cloud computing amortization for 2025 and 2024 was $ 12.7 million and $ 10.7 million, respectively.

Subsequent Events

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SEGMENT INFORMATION

We primarily operate in one reportable business segment, which is NW Natural's local gas distribution business and is referred to as the NGD segment.

NW Natural and NW Holdings also have investments and business activities not specifically related to the NGD segment, which are aggregated and reported as other and described below for each entity.

Prior to the first quarter of 2025, NW Holdings and NW Natural primarily operated in one reportable business segment, which was NW Natural's local gas distribution business, referred to as the NGD segment.

NW Holdings and NW Natural also had investments and business activities not specifically related to the NGD segment, which were aggregated and reported as other.

During the first quarter of 2025, we evaluated the reportable business segments of NW Holdings and concluded that SiEnergy and NWN Water were also reportable business segments.

In addition, the NGD segment was renamed to NWN Gas Utility.

Holdings and NW Natural also have investments and business activities not specifically related to the NWN Gas Utility, SiEnergy, and NWN Water segments, which are aggregated and reported as NW Holdings Other.

NW Holdings and NW Natural historical segment reporting has been recast to reflect their current organizational structure.

NW Holdings primarily operates in three reportable business segments, which are NWN Gas Utility, SiEnergy, and NWN Water.

NW Natural primarily operates in one reportable business segment, which is NWN Gas Utility.

NW Holdings and NW Natural also have investments and business activities not specifically related to the reportable business segments, which are aggregated and reported as other and described below for each entity.

No individual customer accounts for over 10 % of NW Holdings' or NW Natural's operating revenues.

Natural Gas Distribution

NW Natural's local gas distribution segment (NGD) is a regulated utility principally engaged in the purchase, sale, and delivery of natural gas and related services to customers in Oregon and southwest Washington.

The NGD business is responsible for building and maintaining a safe and reliable pipeline distribution system, purchasing sufficient gas supplies from producers and marketers, contracting for firm and interruptible transportation of gas over interstate pipelines to bring gas from the supply basins into its service territory, and re-selling the gas to customers subject to rates, terms, and conditions approved by the OPUC or WUTC.

NGD also includes taking customer-owned gas and transporting it from interstate pipeline connections, or city gates, to the customers’ end-use facilities for a fee, which is approved by the OPUC or WUTC.

Approximately 88 % of NGD customers are located in Oregon and 12 % in Washington.

On an annual basis, residential and commercial customers typically account for around 60 % of total NGD volumes delivered and around 90 % of NGD margin.

Industrial customers largely account for the remaining volumes and NGD margin.

A small amount of the margin is also derived from miscellaneous services, gains or losses from an incentive gas cost sharing mechanism, and other service fees.

Industrial sectors served by the NGD business include:

pulp, paper, and other forest products;

the manufacture of electronic, electrochemical and electrometallurgical products;

the processing of farm and food products;

the production of various mineral products;

metal fabrication and casting;

the production of machine tools, machinery, and textiles;

the manufacture of asphalt, concrete, and rubber;

printing and publishing;

and government and educational institutions.

In addition to NW Natural's local gas distribution business, the NGD segment also includes the portion of the Mist underground storage facility used to serve NGD customers, North Mist gas storage, NWN Gas Reserves, which is a wholly-owned subsidiary of Energy Corp, and NW Natural RNG Holding Company, LLC, a holding company established to invest in the development and procurement of regulated renewable natural gas for NW Natural.

NW Natural's activities in Other include Interstate Storage Services and third-party asset management services for the Mist facility in Oregon, appliance retail center operations, and corporate operating and non-operating revenues and expenses that cannot be allocated to NGD operations.

Earnings from Interstate Storage Services assets are primarily related to firm storage capacity revenues.

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.

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

NW Holdings' activities in Other include all remaining activities not associated with NW Natural, specifically NWN Water, which consolidates the water and wastewater utility operations and water services businesses;

NWN Water's equity investment in Avion Water Company, Inc.;

NWN Gas Storage, a wholly-owned subsidiary of NWN Energy;

other pipeline assets in NNG Financial;

and NW Natural Renewables Holdings, LLC and its non-regulated renewable natural gas activities.

NWN Gas Utility

NW Natural's local gas distribution segment is a regulated utility servicing customers in Oregon and southwest Washington.

In addition to NW Natural's local gas distribution business, the NWN Gas Utility segment also includes the portion of the Mist underground storage facility used to serve its customers, the North Mist gas storage operations in Oregon, NWN Gas Reserves, which is a wholly-owned subsidiary of Energy Corp, and NW Natural RNG Holding Company, LLC, a holding company established to invest in the development and procurement of regulated renewable natural gas for NW Natural.

NWN Gas Utility segment does not include Interstate Storage Services and third-party asset management services, and appliance retail center operations which are reported in NW Natural Other and included in NW Holdings Other.

SiEnergy Gas Utility

SiEnergy Gas Utility owns a regulated natural gas distribution utility, serving customers in the greater metropolitan areas of Houston, Dallas, and Austin, Texas.

SiEnergy also includes a regulated natural gas transmission utility serving customers in the greater metropolitan areas of Dallas and Austin, Texas.

NWN Water Utility

NWN Water Utility is a regulated water and wastewater utility serving residential and commercial customers in Oregon, Washington, Idaho, Texas, and Arizona.

NWN Water also includes non-regulated wastewater utilities and water services businesses in Oregon, Washington and Idaho, and an equity method investment in Avion Water Company, Inc.

(a regulated entity).

In addition, NWN Water provides water services to communities throughout the Pacific Northwest and California.

NW Holdings Other

NW Holdings' activities in Other includes activities of NW Natural Renewables Holdings, LLC (NWN Renewables), which is engaged in non-regulated renewable natural gas activities;

NNG Financial and its pipeline assets;

and NWN Energy including its wholly-owned subsidiary NW Natural Gas Storage, LLC (NWN Gas Storage), which was formerly involved in a gas storage business.

Other also includes corporate revenues and expenses that cannot be allocated to other operations, including certain business development activities.

NW Holdings Other also includes NW Natural Other activities which includes activities in Interstate Storage Services and third-party asset management services, appliance retail center operations, and corporate operating and non-operating revenues and expenses that cannot be allocated to NWN Gas Utility operations.

Segment Information Summary

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.

In thousands NGD Other

(NW Natural) NW Natural Other

(NW Holdings) NW Holdings

Total assets by segment is not regularly provided to the Chief Operating Decision Maker (CODM) and is therefore omitted.

The following tables presents summary financial information concerning the reportable segments and other:

In thousands NWN Gas Utility SiEnergy Gas Utility (1)

NWN Water Utility NW Holdings Other NW Holdings

Operating revenues $ 1,096,785 $ 65,984 $ 65,646 $ 60,948 $ 1,289,363

Depreciation 147,882 7,873 8,514 1,237 165,506

Income (loss) from operations (1)

Income from operations (2)

219,949 26,558 18,906 15,478 280,891

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Depreciation 128,524 — 8,296 1,078 137,898

Income (loss) from operations (1)

Income from operations (2)

173,222 — 9,935 7,985 191,142

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Depreciation 118,417 — 6,067 1,097 125,581

Income (loss) from operations (1)

Income from operations (2)

170,591 — 6,569 7,781 184,941

Interest expense, net 60,020 — 5,965 10,581 76,566

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

Income tax expense 31,688 — 450 224 32,362

Capital expenditures 285,998 — 36,686 4,663 327,347

(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

NGD margin is the primary financial measure used by the CODM, consisting of NGD operating revenues, reduced by the associated cost of gas, environmental remediation expense, and revenue taxes.

The cost of gas purchased for NGD customers is generally a pass-through cost in the amount of revenues billed to regulated NGD customers.

(1) Prior year comparatives are not provided for SiEnergy as it was acquired by NW Holdings on January 7, 2025.

(2) Income (loss) from operations is not a financial measure used by the CODM for NWN Gas Utility or SiEnergy Gas Utility, but is included in the table above to enable the reconciliation of NWN Gas Utility and SiEnergy Gas Utility margin to consolidated income before taxes in accordance with ASU 2023-07.

In thousands NWN Gas Utility NW Natural Other NW Natural

Operating revenues $ 1,096,785 $ 28,328 $ 1,125,113

Depreciation 147,882 1,237 149,119

Income from operations (1)

219,949 19,834 239,783

Interest expense, net 61,440 458 61,898

Income tax expense 41,952 5,370 47,322

Capital expenditures 339,948 15,118 355,066

Operating revenues $ 1,075,688 $ 24,809 $ 1,100,497

Depreciation 128,524 1,078 129,602

Income from operations (1)

173,222 16,505 189,727

Interest expense, net 62,868 405 63,273

Income tax expense 30,195 4,423 34,618

Capital expenditures 348,913 4,993 353,906

Operating revenues $ 1,136,400 $ 22,223 $ 1,158,623

Depreciation 118,417 1,097 119,514

Income from operations (1)

170,591 15,054 185,645

Interest expense, net 60,020 574 60,594

Income tax expense 31,688 3,984 35,672

Capital expenditures 285,998 4,847 290,845

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

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

The CODM uses NWN Gas Utility margin, SiEnergy margin and NWN Water income from operations 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 NWN Gas Utility margin, SiEnergy margin and NWN Water income from operations to assess the performance of NWN Gas Utility, SiEnergy and NWN Water, respectively.

NWN Gas Utility Margin

NWN Gas Utility margin is the primary financial measure used by the CODM , consisting of NWN Gas Utility operating revenues, reduced by the associated cost of gas, environmental remediation expense, and revenue taxes.

The cost of gas purchased for NWN Gas Utility customers is generally a pass-through cost in the amount of revenues billed to regulated NWN Gas Utility customers.

Environmental remediation expense represents collections received from customers through environmental recovery mechanisms in Oregon and Washington as well as adjustments for the Oregon environmental earnings test when applicable.

This is offset by environmental remediation expense presented in operating expenses.

Revenue taxes are collected from NGD customers and remitted to taxing authorities.

Revenue taxes are collected from customers and remitted to taxing authorities.

The collections from customers are offset by the expense recognition of the obligation to the taxing authority.

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:

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

The following table presents additional segment information concerning NWN Gas Utility margin:

In thousands 2025 2024 2023

NGD margin calculation:

NGD operating revenues $ 1,056,171 $ 1,117,498 $ 970,124

NWN Gas Utility margin calculation:

Distribution revenues $ 1,076,111 $ 1,056,171 $ 1,117,498

Other regulated services 20,674 19,517 18,902

Total NGD operating revenues 1,075,688 1,136,400 989,752

NGD cost of gas 412,320 500,061 429,861

Environmental remediation expense 14,053 12,899 12,389

Total operating revenues 1,096,785 1,075,688 1,136,400

Cost of gas 356,126 412,320 500,061

Environmental remediation 14,623 14,053 12,899

Revenue taxes 45,887 48,037 48,432

NGD margin 601,278 575,008 505,875

Margin 680,149 601,278 575,008

Operations and maintenance 264,273 253,297 241,721

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Depreciation 147,882 128,524 118,417

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

NWN Gas Utility income from operations $ 219,949 $ 173,222 $ 170,591

SiEnergy Gas Utility Margin

SiEnergy Gas Utility margin is the primary financial measure used by the CODM, consisting of SiEnergy operating revenues, reduced by the associated cost of gas and revenue taxes.

The cost of gas purchased for SiEnergy customers is generally a pass-through cost in the amount of revenues billed to regulated SiEnergy customers.

Revenue taxes are collected from customers and remitted to taxing authorities.

The collections from customers are offset by the expense recognition of the obligation to the taxing authority.

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

The following table presents additional segment information concerning SiEnergy margin:

In thousands 2025

SiEnergy Gas Utility margin calculation:

Distribution revenues $ 65,984

Total operating revenues 65,984

Cost of gas 19,892

Revenue taxes 1,876

Margin 44,216

Operations and maintenance 8,642

General taxes 1,143

Depreciation 7,873

SiEnergy Gas Utility income from operations $ 26,558

(1) Prior year comparatives are not provided for SiEnergy as it was acquired by NW Holdings January 7, 2025.

Significant Segment Expenses

Public entities are required to disclose significant segment expenses for each reportable segment if they are regularly provided to the CODM and included in the reported measure of segment profit/loss.

This requirement does not necessitate additional disclosure for the NWN Gas Utility and SiEnergy segments, as all expense categories are presented above in the NWN Gas Utility margin table and SiEnergy margin table, respectively.

Significant segment expenses for NWN Water are presented below.

In thousands 2025 2024 2023

Operating revenues $ 65,646 $ 52,036 $ 38,852

Operating expenses:

Operations and maintenance 33,139 28,760 21,604

Depreciation 8,514 8,296 6,067

Other operating expenses (1)

5,087 5,045 4,612

Income from operations $ 18,906 $ 9,935 $ 6,569

(1) Other operating expenses include general and revenue taxes, cost of water purchases, and other expenses.

As of December 31, 2025 and 2024, NW Holdings had 100 million shares of common stock authorized.

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As of December 31, 2025, NW Holdings had $ 103.4 million of equity available for issuance under the program.

The ATM equity program was initiated to raise funds for general corporate purposes, including equity contributions to NW Holdings’ subsidiaries, NW Natural and NW Natural Water.

Contributions to NW Natural and NW Natural Water will be used for general corporate purposes.

Stock Repurchase Program

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Sales to shareholders under DRPP 69

Shares issued in connection with business combinations 327

Balance, December 31, 2023 37,631

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Sales to shareholders under DRPP 66

Shares issued in connection with business combinations 36

Balance, December 31, 2025 41,564

The following table presents disaggregated revenue from continuing operations:

Year ended December 31, 2024

In thousands NGD Other

(NW Natural) NW Natural Other

(NW Holdings) NW Holdings

In thousands NWN Gas Utility SiEnergy Gas Utility (1)

NWN Water Utility NW Holdings Other NW Holdings

Natural gas sales $ 1,014,807 $ 64,740 $ — $ 3,463 $ 1,083,010

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Asset management revenue, net — — — 6,816 6,816

Water and wastewater revenue — — 65,646 — 65,646

Appliance retail center revenue — — — 4,738 4,738

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Total operating revenues $ 1,096,785 $ 65,984 $ 65,646 $ 60,948 $ 1,289,363

Year ended December 31, 2023

In thousands NGD Other

(NW Natural) NW Natural Other

(NW Holdings) NW Holdings

Natural gas sales $ 1,035,839 $ — $ — $ 33 $ 1,035,872

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Asset management revenue, net — — — 4,601 4,601

Water and wastewater revenue — — 52,036 — 52,036

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

Renewable natural gas sales — — — 428 428

Other revenue 3,111 — — — 3,111

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Total operating revenues $ 1,075,688 $ — $ 52,036 $ 25,270 $ 1,152,994

Year ended December 31, 2022

In thousands NGD Other

(NW Natural) NW Natural Other

(NW Holdings) NW Holdings

Natural gas sales $ 1,109,223 $ — $ — $ — $ 1,109,223

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Asset management revenue, net — — — 5,942 5,942

Water and wastewater revenue — — 38,852 — 38,852

Appliance retail center revenue — — — 4,240 4,240

Renewable natural gas sales — — — — —

Other revenue 2,929 — — — 2,929

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Total operating revenues $ 1,136,400 $ — $ 38,852 $ 22,223 $ 1,197,475

NW Natural's revenue represents substantially all of NW Holdings' revenue and is recognized for both registrants when the obligation to customers is satisfied and in the amount expected to be received in exchange for transferring goods or providing services.

Revenue from contracts with customers contains one performance obligation that is generally satisfied over time, using the output method based on time elapsed, due to the continuous nature of the service provided.

(1) Prior year comparatives are not provided for SiEnergy as it was acquired by NW Holdings January 7, 2025.

The following table present disaggregated revenue of NW Natural:

In thousands NWN Gas Utility NW Natural Other NW Natural

Natural gas sales $ 1,014,807 $ — $ 1,014,807

Gas storage revenue, net — 16,774 16,774

Asset management revenue, net — 6,816 6,816

Appliance retail center revenue — 4,738 4,738

Other revenue 3,850 — 3,850

Revenue from contracts with customers 1,018,657 28,328 1,046,985

Alternative revenue 60,919 — 60,919

Leasing revenue 17,209 — 17,209

Total operating revenues $ 1,096,785 $ 28,328 $ 1,125,113

Natural gas sales $ 1,035,839 $ — $ 1,035,839

Gas storage revenue, net — 15,119 15,119

Asset management revenue, net — 4,601 4,601

Appliance retail center revenue — 5,089 5,089

Other revenue 3,111 — 3,111

Revenue from contracts with customers 1,038,950 24,809 1,063,759

Alternative revenue 20,246 — 20,246

Leasing revenue 16,492 — 16,492

Total operating revenues $ 1,075,688 $ 24,809 $ 1,100,497

Natural gas sales $ 1,109,223 $ — $ 1,109,223

Gas storage revenue, net — 12,041 12,041

Asset management revenue, net — 5,942 5,942

Appliance retail center revenue — 4,240 4,240

Other revenue 2,929 — 2,929

Revenue from contracts with customers 1,112,152 22,223 1,134,375

Alternative revenue 8,198 — 8,198

Leasing revenue 16,050 — 16,050

Total operating revenues $ 1,136,400 $ 22,223 $ 1,158,623

NW Natural's revenue represents the majority of NW Holdings' revenue and is recognized when the obligation to customers is satisfied and in the amount expected to be received in exchange for transferring goods or providing services.

Revenue from contracts with customers contain one performance obligation that is generally satisfied over time as the customer receives the natural gas.

The transaction price is determined by a set price agreed upon in the contract or dependent on regulatory tariffs.

Customer accounts are settled on a monthly basis or paid at time of sale and based on historical experience.

It is probable that we will collect substantially all of the consideration to which we are entitled.

Customer accounts are settled on a monthly basis or paid at time of sale.

Based on historical experience, it is probable that we will collect substantially all of the consideration to which we are entitled.

We evaluated the probability of collection in accordance with the current expected credit losses standard.

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Revenue taxes are included in operating revenues with an equal and offsetting expense recognized in operating expenses in the consolidated statements of comprehensive income.

Revenue-based taxes are primarily franchise taxes, which are collected from NGD customers and remitted to taxing authorities.

Natural Gas Distribution

Revenue-based taxes are primarily franchise taxes, which are collected from NWN Gas Utility customers and remitted to taxing authorities.

Components of Revenue

The components of NW Holdings' revenue, by reportable business segment, are explained below.

NWN Gas Utility

Natural Gas Sales

NW Natural's primary source of revenue is providing natural gas to customers in the NGD service territory, which includes residential, commercial, industrial and transportation customers.

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.

NW Natural's primary source of revenue is providing natural gas to customers in the NWN Gas Utility service territory, which includes residential, commercial, industrial and transportation customers.

NWN Gas Utility 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.

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

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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.

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

Customer accounts are to be paid in full each month and 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.

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Leasing Revenue

Leasing revenue primarily consists of revenues from NW Natural's North Mist Storage contract with Portland General Electric (PGE) in support of PGE's gas-fired electric power generation facilities under an initial 30 -year contract with options to extend, totaling up to an additional 50 years upon mutual agreement of the parties.

Leasing revenue primarily consists of revenues from NW Natural's North Mist Storage contract with PGE in support of PGE's gas-fired electric power generation facilities under an initial 30 -year contract with options to extend, totaling up to an additional 50 years upon mutual agreement of the parties.

The facility is accounted for as a sales-type lease with regulatory accounting deferral treatment.

The investment is included in rate base under an established cost-of-service tariff schedule, with revenues recognized according to the tariff schedule and as such, profit upon commencement was deferred and will be amortized over the lease term.

The investment is included in rate base under an established cost-of-service tariff schedule, with revenues recognized according to the tariff schedule and profit upon commencement was deferred and will be amortized over the lease term.

Leasing revenue also contains rental revenue from small leases of property owned by NW Natural to third parties.

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See Note 7 for additional information.

NW Natural Other

Gas Storage Revenue

SiEnergy Gas Utility

SiEnergy Gas Utility's primary source of revenue is providing natural gas to customers in the SiEnergy service territory, which includes residential and commercial customers.

SiEnergy 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 Texas tariff.

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

Customer accounts are to be paid in full each month and 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.

Alternative Revenue

Weather normalization (WNA) is considered to be an alternative revenue program.

An alternative revenue program is considered to be a contract between SiEnergy and its regulators and are excluded from revenue from contracts with customers.

NWN Water Utility

NWN Water Utility provides 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 states we operate.

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.

NW Holdings Other

Renewable Natural Gas Sales

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

NWN 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.

NW Natural Gas Storage Revenue

NW Natural's other revenue includes gas storage activity, which includes Interstate Storage Services used to store natural gas for customers.

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

Revenues include firm and interruptible storage services, net of the profit sharing amount refunded to NGD customers.

Asset Management Revenue

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.

Revenues include firm and interruptible storage services, net of the profit sharing amount refunded to NWN Gas Utility customers.

NW Natural Asset Management Revenue

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 NWN Gas Utility 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.

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The amounts presented here are calculated using current contracted rates.

Appliance Retail Center Revenue

NW Natural Appliance Retail Center Revenue

NW Natural owns and operates an appliance store that is open to the public, where customers can purchase natural gas home appliances.

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The amount of consideration received and recognized as revenue varies with changes in marketing incentives and discounts offered to customers.

NW Holdings Other

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.

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.

The components of NW Natural's revenue are described above in NWN Gas Utility and NW Holdings Other.

Lease Revenue

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There are no variable payments or residual value guarantees.

The lease does not contain an option to purchase the underlying

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

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

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Total leases receivable $ 119,548

The total leases receivable above is reported under the NGD segment and the short- and long-term portions are included within other current assets and assets under sales-type leases on the consolidated balance sheets, respectively.

The total leases receivable above is reported under the NWN Gas Utility segment and the short- and long-term portions are included within other current assets and assets under sales-type leases on the consolidated balance sheets, respectively.

The total amount of unguaranteed residual assets was $ 6.5 million and $ 6.0 million at December 31, 2025 and 2024, 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

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

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

Our leases have remaining lease terms of five months to 14 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.

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As most of our leases do not provide an implicit rate and are entered into by NW Natural, we use an estimated discount rate representing the rate we would have incurred to finance the funds necessary to purchase the leased asset and is based on information available at the lease commencement date in determining the present value of lease payments.

NW Holdings assumed operating leases in connection with the SiEnergy acquisition.

The leases primarily relate to office space, warehouse facilities, and land use agreements supporting the operations of SiEnergy.

The assumed leases resulted in an increase of $ 2.3 million to both the operating lease right of use asset and operating lease liabilities recognized by NW Holdings.

No finance type leases were assumed as part of the acquisition.

The assumed lease balances are reflected in the disclosures and financial statements of NW Holdings as of December 31, 2025.

Refer to Note 14 for additional information.

The components of lease expense, a portion of which is capitalized, were as follows:

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Weighted-average discount rate 7.3 % 7.3 %

SiEnergy had operating leases with a weighted-average remaining lease term of 4.1 years and a weighted-average discount rate of 6.0 % as of December 31, 2025.

Headquarters and Operations Center Lease

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Long-term lease obligations $ 73,097 $ 1,889 $ 74,986

As of December 31, 2024, there were no finance lease liabilities at NW Natural.

As of December 31, 2025, there were no finance lease liabilities at NW Natural and NW Holdings.

Cash Flow Information

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Operating cash flows from operating leases (1)

$ 7,709 $ 733 $ 8,442

Finance cash flows from finance leases 340 — 340

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Finance leases 340 — 340

(1) Includes approximately $ 2.3 million of non-cash operating lease right of use asset and operating lease liabilities recognized as part of the SiEnergy acquisition.

Year ended December 31, 2024

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57,437 $ 1,825 $ 1,825

2025-2027 grant (4)

5,097 $ 70 $ 70

Actual award:

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For the 2021-2023, 2022-2024 and 2023-2025 grants, mutual understanding of the award's key terms was established in the third year of the vesting period, triggering full expense recognition in 2023, 2024, and 2025, respectively.

For certain shares of the 2025-2027 grant, mutual understanding of the award's key terms was established in the first year of the vesting period, triggering expense recognition in 2025.

(3) This represents the estimated number of shares to be awarded as of December 31, 2025 as certain performance share measures have been achieved.

Amounts are subject to change with final payout amounts authorized by the Board of Directors in February 2026.

(4) This represents the estimated number of shares to be awarded as of December 31, 2025 as certain performance share measures have been achieved.

Amounts are subject to change with final payout amounts authorized by the Board of Directors in February 2028.

The aggregate number of performance shares granted and outstanding at the target and maximum levels were as follows:

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Total 47,813 95,626 $ 1,895

Performance share awards are based on the achievement of a three -year ROIC threshold that must be met and a cumulative EPS factor, which can be modified by a TSR factor relative to a specified peer group (2022-2024, 2023-2025, and 2024-2026 performance share awards) over the three -year performance period.

The performance period allows for one of the performance factors to remain variable until the first quarter of the third year of the award period.

As the performance factor will not be approved until the first quarter of 2025 and 2026, there is not a mutual understanding of the awards' key terms and conditions between NW Natural and the participants as of December 31, 2024, and therefore, no expense was recognized for the 2023-2025 and 2024-2026 performance period.

Performance share awards are based on the achievement of a three -year ROIC threshold that must be met and a cumulative EPS or EBITDA factor, which can be modified by a TSR factor relative to a specified peer group (2023-2025, 2024-2026, 2025-2027 performance share awards) over the three -year performance period.

For the 2023-2025, 2024-2026 and certain 2025-2027 performance share awards, the performance period allows for one of the performance factors to remain variable until the first quarter of the third year of the award period.

In the instances where the performance factor will not be approved until the first quarter of 2026 or 2027, there is not a mutual understanding of the awards' key terms and conditions between NW Natural and the participants as of December 31, 2025, and therefore, no expense was recognized for the 2024-2026 performance share awards and the majority of the 2025-2027 performance share awards as of December 31, 2025.

NW Natural will calculate the grant date fair value and recognize expense once the final performance factor has been approved.

If the target is achieved for the 2023-2025 and 2024-2026 awards, NW Holdings would grant for accounting purposes 50,542 and 73,150 shares in the first quarter of 2025 and 2026, respectively.

If the target is achieved for those 2024-2026 and remaining 2025-2027 awards, NW Holdings would grant for accounting purposes 52,178 and 73,640 shares in the first quarter of 2026 and 2027, respectively.

Compensation expense is recognized in accordance with accounting standards for stock-based compensation and calculated based on performance levels achieved and an estimated fair value using the Monte-Carlo method.

Due to there not being a mutual understanding of the 2023-2025 and 2024-2026 awards' key terms and conditions as noted above, the grant date fair value has not yet been determined and no non-vested shares existed at December 31, 2024.

Due to there not being a mutual understanding of the 2024-2026 and certain 2025-2027 awards' key terms and conditions as noted above, the grant date fair value has not yet been determined and no non-vested shares existed at December 31, 2025.

The weighted-average grant date fair value of non-vested shares associated with the 2023-2025 awards was $ 36.60 per share at December 31, 2025.

The weighted-average grant date fair value of shares vested during the year was $ 36.60 per share and there was no unrecognized compensation expense for accounting purposes as of December 31, 2025.

The weighted-average grant date fair value of non-vested shares associated with certain shares that met mutual understanding of the 2025-2027 awards was $ 47.15 per share at December 31, 2025.

The weighted-average grant date fair value of shares vested during the year was $ 47.15 per share and there was $ 0.1 million of unrecognized compensation expense as of December 31, 2025, which is expected to be recognized over a period through 2028.

Restricted Stock Units

In 2012, RSUs began being granted under the LTIP instead of stock options under the Restated SOP.

Generally, the RSUs awarded are forfeitable and include a performance-based threshold as well as a vesting period of four years from the grant date.

The RSUs awarded are generally forfeitable and include a performance-based threshold as well as a vesting period of three or four years from the grant date.

The majority of our RSU grants obligate NW Holdings, upon vesting, to issue the RSU holder one share of common stock.

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The fair value of an RSU is equal to the closing market price of NW Holdings' common stock on the grant date.

During 2024, total RSU expense was $ 1.9 million compared to $ 1.9 million in 2023 and $ 2.1 million in 2022.

During 2025, total RSU expense was $ 2.3 million compared to $ 1.9 million in 2024 and 2023.

As of December 31, 2025, there was $ 3.8 million of unrecognized compensation cost from grants of RSUs, which is expected to be recognized over a period extending through 2028 .

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Short-Term Debt

The primary source of short-term liquidity for NW Holdings is cash balances, dividends from its operating subsidiaries, in particular NW Natural, available cash from a multi-year credit facility, and short-term credit facilities it may enter into from time to time.

The primary source of short-term liquidity for NW Holdings is cash balances, dividends from its operating subsidiaries, in particular NW Natural, proceeds from the sale of commercial paper notes, available cash from a multi-year credit facility, and short-term credit facilities it may enter into from time to time.

The primary source of short-term liquidity for NW Natural is from the sale of commercial paper, available cash from a multi-year credit facility, and short-term credit facilities it may enter into from time to time.

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See “ Credit Agreements ” below.

At December 31, 2024 and 2023, NW Natural's short-term debt consisted of the following:

At December 31, 2025 and 2024, NW Holdings' short-term debt consisted of the following:

December 31, 2025 December 31, 2024

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Balance Outstanding Weighted Average Interest Rate (1)

Commercial paper $ 136.5 4.8 % $ 16.8 5.5 %

Other (NW Holdings):

Credit agreement 33.6 5.5 % 73.0 6.4 %

NW Holdings $ 170.1 $ 89.8

Commercial Paper Borrowings - NW Holdings (2)

$ 162.0 4.1 % $ — — %

Commercial Paper Borrowings - NW Natural 10.0 4.0 % 136.5 4.8 %

NW Holdings Credit Agreement Loans — — % 33.6 5.5 %

Total short-term debt $ 172.0 $ 170.1

(1) Weighted average interest rate on outstanding short-term debt

(2) NW Holdings initiated a commercial paper program in March 2025.

The carrying cost of commercial paper approximates fair value using Level 2 inputs.

See Note 2 for a description of the fair value hierarchy.

At December 31, 2025, NW Holdings' commercial paper had a maximum remaining maturity of 49 days and an average remaining maturity of 26 days.

At December 31, 2025, NW Natural's commercial paper had a maximum remaining maturity of 5 days and an average remaining maturity of 4 days.

Credit Agreements

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.

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.

The NW Holdings credit agreement permits the issuance of letters of credit in an aggregate amount of up to $ 40 million.

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

NW Holdings has a $ 250 million credit agreement, with a feature to request increases up to $ 350 million.

The maturity date of the agreement is November 3, 2030.

This agreement permits the issuance of letters of credit in an aggregate amount up to $ 40 million.

The credit agreement requires NW Holdings to maintain a consolidated indebtedness to total capitalization ratio of 70 % or less.

Failure to comply with this covenant would entitle the lenders to terminate their lending commitments and accelerate the maturity of all amounts outstanding.

NW Holdings was in compliance with this covenant at December 31, 2025 and 2024.

The NW Holdings credit agreement also requires NW Holdings to maintain debt ratings (which are defined by a formula using NW Natural's credit ratings in the event NW Holdings does not have a credit rating) with Standard & Poor's (S&P) and Moody's Investors Service, Inc.

(Moody’s) and notify the lenders of any change in its senior unsecured debt ratings or senior secured debt ratings, as applicable, by such rating agencies.

A change in NW Holdings' debt ratings by S&P or Moody’s is not an event of default, nor is the maintenance of a specific minimum level of debt rating a condition of drawing upon the credit agreement.

Rather, interest rates on any loans outstanding under the credit agreements are tied to debt ratings and therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreements when ratings are changed.

NW Holdings maintains a credit rating with S&P of A- and does not currently maintain ratings with Moody's.

There was $ 33.6 million and $ 73.0 million of outstanding balances under the NW Holdings agreement at December 31, 2024 and 2023, respectively.

The NW Holdings credit agreement requires NW Holdings to maintain debt ratings with specified credit rating agencies.

Interest rates on any loans outstanding are tied to debt ratings;

therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreement.

There were no outstanding balances under the NW Holdings agreement at December 31, 2025 and $ 33.6 million of outstanding balances under the NW Holdings agreement at December 31, 2024.

No letters of credit were issued or outstanding under the NW Holdings agreement at December 31, 2025 and 2024.

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.

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.

NW Natural's credit agreement requires NW Natural to maintain a consolidated indebtedness to total capitalization ratio of 70 % or less.

Failure to comply with this covenant would entitle the lenders to terminate their lending commitments and accelerate the maturity of all amounts outstanding.

NW Natural has a $ 400 million credit agreement for unsecured revolving loans, with a feature that allowed NW Natural to request increases up to a maximum of $ 600 million, with a maturity date of November 3, 2030.

This agreement permits the issuance of letters of credit in an aggregate amount of up to $ 60 million.

The credit agreement requires NW Natural to maintain a consolidated indebtedness to total capitalization ratio of 70 % or less.

NW Natural was in compliance with this covenant at December 31, 2025 and 2024.

The NW Natural credit agreement also requires NW Natural to maintain credit ratings with S&P and Moody’s and notify the lenders of any change in NW Natural's senior unsecured debt ratings or senior secured debt ratings, as applicable, by such rating agencies.

A change in NW Natural's debt ratings by S&P or Moody’s is not an event of default, nor is the maintenance of a specific minimum level of debt rating a condition of drawing upon the credit agreement.

Rather, interest rates on any loans outstanding under the credit agreement are tied to debt ratings and therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreement when ratings are changed.

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.

The NW Natural credit agreement requires NW Natural to maintain debt ratings with specified credit rating agencies.

Interest rates on any loans outstanding under the credit agreement are tied to debt ratings;

therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreement.

There were no outstanding balances under the NW Natural agreement at December 31, 2025 and 2024.There were no letters of credit outstanding under NW Natural's credit agreement at December 31, 2025 and 2024.

On January 7, 2025, NW Holdings acquired all of the issued and outstanding limited liability company interests of SiEnergy.

SiEnergy's subsidiary, SiEnergy Holdings, had a revolving credit facility (the SiEnergy Holdings Facility) that in aggregate had commitments of $ 5.0 million, including a letter of credit sublimit of $ 1.0 million.

Loans extended under the SiEnergy Holdings Facility bore 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 was 0.750 % with respect to Base Rate loans and 1.750 % with respect to SOFR loans.

In August 2025, the SiEnergy Amended Credit Agreement was terminated and associated facilities are no longer available for financing.

On November 3, 2025, SiEnergy Holdings entered into a $ 75 million senior unsecured credit agreement, with a feature that allows SiEnergy to request increases up to a maximum of $ 125 million, with a maturity date of November 3, 2030.

This agreement permits the issuance of letters of credit in an aggregate amount up to $ 20 million.

The credit agreement requires SiEnergy to maintain a consolidated indebtedness to total capitalization ratio of 70% or less.

SiEnergy was in compliance with this covenant at December 31, 2025.

The SiEnergy credit agreement requires SiEnergy to maintain debt ratings with specified credit rating agencies.

Interest rates on any loans outstanding under the credit agreement are tied to debt ratings;

therefore, a change in the debt rating would increase or decrease the cost of any loans under the credit agreement.

There were no outstanding balances under the SiEnergy agreement at December 31, 2025.

There were no letters of credit outstanding at December 31, 2025 under SiEnergy's credit agreement.

Letters of Credit Facility

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NW Natural first mortgage bonds $ 1,544.7 4.7 % $ 1,374.7 4.6 %

NW Holdings unsecured senior bonds 285.0 5.7 % — — %

NW Holdings credit agreement — — % 100.0 5.5 %

NWN Water credit agreement — — % 50.0 5.8 %

SiEnergy secured senior notes 185.0 5.6 % — — %

NWN Water term loan 55.0 4.7 % 55.0 4.7 %

Other long-term debt 6.1 6.6

Other water debt 4.0 6.1

NW Holdings unsecured senior bonds 285.0 5.7 % 285.0 5.7 %

NW Holdings term loan 50.0 5.2 % — — %

NW Holdings junior subordinated debentures 325.0 7.0 % — — %

Long-term debt, gross 2,448.7 1,720.8

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NW Natural Long-Term Debt

NW Natural's issuance of First Mortgage Bonds (FMBs), which includes NW Natural's medium-term notes, under the Mortgage and Deed of Trust (Mortgage) is limited by eligible property, adjusted net earnings, and other provisions of the Mortgage.

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.

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 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.

The Mortgage constitutes a first mortgage lien on certain gas properties owned from time to time by NW Natural, including substantially all of the property constituting NW Natural's natural gas distribution plant balances.

Summary of Significant Debt Issuances

In millions Year ended December 31, 2025

NW Holdings Issuance Date Maturity Date Interest Rate Amount

Unsecured Term Loan (a)(b)

January 2025 August 2026 SOFR + 90 bps Spread (c)

Junior Subordinated Debentures (d)(e)

March 2025 September 2055 7.00 % 325.0

Series A Senior Notes August 2025 August 2030 4.86 % 50.0

Series B Senior Notes August 2025 August 2035 5.42 % 40.0

Series C Senior Notes August 2025 August 2055 6.04 % 95.0

NW Natural (g)

First Mortgage Bonds December 2025 May 2036 5.13 % 75.0

First Mortgage Bonds December 2025 December 2055 5.90 % 125.0

Total long-term debt issuance $ 760.0

(a) Proceeds were used to support working capital needs and for general corporate purposes.

(b) On November 3, 2025, an amendment to the Term Loan extended the maturity date to August 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.

(c) The Term Loan Agreement 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 Term Loan 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.

(d) Proceeds were used to repay the acquisition bridge facility entered into on January 7, 2025 by NW Holdings for the acquisitions of SiEnergy;

any remaining proceeds were used for working capital needs and for general corporate purposes.

(e) The Company will pay interest on the Junior Subordinated Debentures (i) from and including the date of original issuance to, but not including, September 15, 2035, at an annual rate of 7.00 % and (ii) from and including September 15, 2035, during each Interest Reset Period at an annual rate equal to the Five-Year Treasury Rate as of the most recent Reset Interest Determination Date plus 2.701 %.

(f) Proceeds were used to repay SiEnergy's $ 148.8 million remaining balance on the Delayed Draw Term Loan Facility.

(g) Proceeds were used to support working capital needs and for general corporate purposes including repayment of debt.

Summary of Significant Debt Extinguishments and Repayments

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 was repaid in full in March 2025.

In March 2025, the Acquisition Bridge Facility used to finance the acquisition of SiEnergy was repaid in full.

In September 2025, the $ 20.0 million first mortgage bond 7.720 % Series Due 2025 was repaid in full.

In December 2025, the $ 10.0 million first mortgage bond 6.520 % Series Due 2025 was repaid in full.

In August 2025, the proceeds of the senior notes issued by SiEnergy Gas, LLC in August 2025 (the August 2025 Notes) were used to extinguish the $ 148.8 million remaining balance of the SiEnergy Delayed Draw Term Loan Facility (SiEnergy DDTLF) ($ 148.8 million) and the SiEnergy Revolving Credit Facility was terminated.

The SiEnergy DDTLF and Revolving Credit Facility under SiEnergy’s Credit Agreement were acquired by NW Holdings on January 7, 2025 as part of the acquisition of all of the issued and outstanding limited liability company interests of SiEnergy.

The SiEnergy DDTLF had initial aggregate commitments, as amended, of $ 200.0 million.

The SiEnergy DDTLF was scheduled to mature on December 22, 2026.

Loans extended under the SiEnergy DDTLF bore 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 was 0.750 % with respect to Base Rate loans and 1.750 % with respect to SOFR loans.

Maturities and Outstanding Long-Term Debt

Retirement of long-term debt for each of the annual periods through December 31, 2030 and thereafter are as follows:

In thousands NW Natural Other (NW Holdings) NW Holdings

In thousands NW Natural SiEnergy NWN Water NW Holdings Other NW Holdings

2026 $ 55,000 $ — $ 55,703 $ 50,000 $ 160,703

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7.720 % Series due 2025

6.520 % Series due 2025

7.050 % Series due 2026

20,000 20,000

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5.130 % Series due 2036

5.230 % Series due 2038

50,000 50,000

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5.900 % Series due 2055

Long-term debt, gross 1,544,700 1,374,700

current maturities 55,000 30,000

Total long-term debt $ 1,489,700 $ 1,344,700

The following table presents debt outstanding at NW Holdings excluding NW Natural, which is presented above, as of December 31:

In thousands 2025 2024

Unsecured Senior Bonds:

5.780 % Series due 2028

$ 100,000 $ 100,000

1 unchanged sentence

50,000 50,000

5.520 % Series due 2029

90,000 90,000

5.860 % Series due 2034

45,000 45,000

Term Loan due 2026 50,000 —

Junior Subordinated Debentures:

7.00 %Series due 2055

Long-term debt, gross 660,000 285,000

current maturities 50,000 —

Total long-term debt $ 1,344,700 $ 1,374,700

Total NW Holdings long-term debt $ 610,000 $ 285,000

Unsecured Senior Bonds:

4.86 % Series due 2030

5.42 % Series due 2035

6.04 % Series due 2055

Long-term debt, gross 185,000 —

current maturities — —

Total SiEnergy long-term debt $ 185,000 $ —

Water term loan, fixed rate of 3.8 %, due 2026 (3)

$ 55,000 $ 55,000

Other water debt (2)

Long-term debt, gross 59,047 61,052

current maturities 55,703 795

Total Water long-term debt $ 3,344 $ 60,257

(1) Prior year comparative outstanding debt is not provided for SiEnergy as it was acquired by NW Holdings January 7, 2025.

(2) Other water debt consists of immaterial loans at local water entities.

(3) NW Holdings guarantees the debt of its wholly-owned subsidiary, NWN Water.

Fair Value of Long-Term Debt

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The fair value of debt is estimated using the value of outstanding debt at natural gas distribution companies with similar credit ratings, terms, and remaining maturities to NW Holdings' and NW Natural's debt that actively trade in public markets.

Substantially all outstanding debt at NW Holdings is comprised of NW Natural debt.

These valuations are based on Level 2 inputs as defined in the fair value hierarchy.

The following table provides an estimate of the fair value of long-term debt, including current maturities of long-term debt, using market prices in effect on the valuation date :

In thousands 2024 2023

In millions 2025 2024

Gross long-term debt $ 2,448.7 $ 1,720.8

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At December 31, 2025, the net liability (benefit obligations less market value of plan assets) for the Pension Plan d ecreased $ 17.3 million compared to 2024.

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 d ecrease in the net pension liability is primarily due to the $ 1.0 million increase to the pension benefit obligation and the $ 18.3 million increase in plan assets.

The liability for non-qualified plans decreased $ 9.8 million, and the liability for other postretirement benefits increased $ 0.5 million in 2025.

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Net actuarial (gain) loss $ ( 7,727 ) $ 933 $ 10,318 $ 1,293 $ 1,421 $ 2,208 $ ( 729 ) $ ( 290 ) $ 1,630

Settlement loss — — — — — — ( 1,442 ) — —

Amortization of:

6 unchanged sentences

In thousands 2025 2024 2025 2024 2025 2024

Prior service credit $ — $ — $ — $ — $ — $ —

Net actuarial loss (gain) $ 91,999 $ 108,441 $ 4,009 $ 2,794 $ 6,453 $ 9,386

7 unchanged sentences

Amortization of actuarial losses 761 794

Loss from plan settlement 1,442 —

Total reclassifications before tax 3,114 355

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Expected return on plan assets ( 21,745 ) ( 23,749 ) ( 25,723 ) — — —

Amortization of prior service credit — — — — — ( 333 )

Amortization of net actuarial loss 9,477 5,894 713 78 8 —

Settlement expense 1,442 — — — — —

Net periodic cost (benefit) 14,076 7,448 ( 70 ) 1,327 1,133 1,172

3 unchanged sentences

Net amount charged to expense $ 19,263 $ 12,705 $ 5,377 $ 1,288 $ 1,097 $ 1,136

Net periodic benefit costs are reduced by amounts capitalized to NGD plant.

Net periodic benefit costs are reduced by amounts capitalized to NWN Gas Utility plant.

In addition, a certain amount of net periodic benefit costs were recorded to the regulatory balancing account, representing net periodic pension expense for the Pension Plan above the amount set in rates, as approved by the OPUC, from 2011 through October 31, 2018.

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4.00 %- 6.00 %

3.50 % n/a n/a n/a

4.00 %- 5.00 %

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

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Multiemployer Pension Plan

In addition to the NW Natural-sponsored Pension Plan presented above, prior to 2014 NW Natural contributed to a multiemployer pension plan for its NGD union employees known as the Western States Office and Professional Employees International Union Pension Fund (Western States Plan).

In addition to the NW Natural-sponsored Pension Plan presented above, prior to 2014 NW Natural contributed to a multiemployer pension plan for its NWN Gas Utility union employees known as the Western States Office and Professional Employees International Union Pension Fund (Western States Plan).

That plan's employer identification number is 94-6076144.

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These investments primarily consist of institutional investment products, for which the NAV is generally not publicly available.

The following table provides a reconciliation between income taxes calculated at the statutory federal tax rate and the provision for income taxes reflected in the NW Holdings and NW Natural statements of comprehensive income or loss for December 31:

NW Holdings NW Natural

Dollars in thousands 2024 2023 2022 2024 2023 2022

Income taxes at federal statutory rate $ 23,088 $ 26,508 $ 24,241 $ 25,964 $ 29,486 $ 25,746

Increase (decrease):

State income tax, net of federal 9,931 10,875 10,139 10,611 11,510 10,504

The following tables provide a reconciliation between income taxes calculated at the statutory federal tax rate and the provision for income taxes reflected in the NW Holdings and NW Natural statements of comprehensive income or loss for December 31:

in thousands 2025 2024 2023

Federal Statutory Tax Rate $ 32,482 21.0 % $ 23,088 21.0 % $ 26,508 21.0 %

State and Local Income Taxes, Net of Federal Income Tax Effect (a) 11,240 7.3 % 9,931 9.0 % 10,875 8.6 %

Tax Credits ( 747 ) ( 0.5 ) % ( 102 ) ( 0.1 ) % ( 140 ) ( 0.1 ) %

Nontaxable or Nondeductible Items

Nondeductible compensation (Sec.

162(m)) 1,685 1.1 % 780 0.7 % 385 0.3 %

Other nontaxable or nondeductible items ( 960 ) ( 0.6 ) % ( 444 ) ( 0.4 ) % ( 1,290 ) ( 1.0 ) %

Differences required to be flowed-through by regulatory commissions ( 2,341 ) ( 1.5 ) % ( 2,182 ) ( 2.0 ) % ( 3,976 ) ( 3.1 ) %

Other, net 234 ( 1,045 ) ( 502 ) 221 ( 1,352 ) ( 468 )

Total provision for income taxes $ 31,071 $ 32,362 $ 29,130 $ 34,618 $ 35,672 $ 31,036

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.

Total provision for income taxes and Effective Tax Rate $ 41,359 26.7 % $ 31,071 28.3 % $ 32,362 25.6 %

(a) State taxes in Oregon made up the majority (greater than 50 percent) of the tax effect in this category.

in thousands 2025 2024 2023

Federal Statutory Tax Rate $ 36,024 21.0 % $ 25,964 21.0 % $ 29,486 21.0 %

State and Local Income Taxes, Net of Federal Income Tax Effect (a) 13,546 7.9 % 10,611 8.6 % 11,510 8.2 %

Tax Credits ( 747 ) ( 0.4 ) % ( 102 ) ( 0.1 ) % ( 140 ) ( 0.1 ) %

Nontaxable or Nondeductible Items

Nondeductible compensation (Sec.

162(m)) 1,655 1.0 % 780 0.6 % 385 0.3 %

Other nontaxable or nondeductible items ( 848 ) ( 0.5 ) % ( 457 ) ( 0.3 ) % ( 1,597 ) ( 1.2 ) %

Differences required to be flowed-through by regulatory commissions ( 2,308 ) ( 1.3 ) % ( 2,178 ) ( 1.8 ) % ( 3,972 ) ( 2.8 ) %

Total provision for income taxes and Effective Tax Rate $ 47,322 27.6 % $ 34,618 28.0 % $ 35,672 25.4 %

(a) State taxes in Oregon made up the majority (greater than 50 percent) of the tax effect in this category.

The NW Holdings and NW Natural effective income tax rates for 2025 compared to 2024 decreased 1.6 and 0.4 percentage points at NW Holdings and NW Natural, respectively.

At NW Holdings and NW Natural, the increase in income tax expense is primarily due to higher pre-tax income in the current period compared to the prior year, and the lower effective tax rate is primarily the result of state income tax expense growing at a different rate than pretax income.

The NW Holdings and NW Natural effective income tax rates for 2024 compared to 2023 increased 2.7 and 2.6 percentage points at NW Holdings and NW Natural, respectively.

The increase in effective tax rate is primarily related to lower regulatory flow-through.

The decrease in income tax expense is primarily due to lower pre-tax income in the current period compared to the prior year.

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

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At December 31, 2025 and 2024, regulatory income tax assets of $ 3.6 million and $ 5.8 million, respectively, were recorded by NW Natural, a portion of which is recorded in current assets.

These regulatory income tax assets primarily represent future rate recovery of deferred tax liabilities, resulting from differences in NGD plant financial statement and tax bases and NGD plant removal costs, which were previously flowed through for rate making purposes and to take into account the additional future taxes, which will be generated by that recovery.

These regulatory income tax assets primarily represent future rate recovery of deferred tax liabilities, resulting from differences in NWN Gas Utility plant financial statement and tax bases and NWN Gas Utility plant removal costs, which were previously flowed through for rate making purposes and to take into account the additional future taxes, which will be generated by that recovery.

These deferred tax liabilities, and the associated regulatory income tax assets, are currently being recovered through customer rates.

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Based upon this assessment, NW Holdings and NW Natural determined that it is more likely than not that all of their respective deferred tax assets recorded as of December 31, 2025 will be realized.

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 Company estimates it has net operating loss (NOL) carryforwards of $ 24.8 million for federal taxes and $ 22.3 million for state taxes at December 31, 2025.

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

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As of December 31, 2025, income tax years 2021 through 2024 remain open for examination by the states of California and Texas.

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.

Income tax years 2022 through 2024 are open for examination by the states of Arizona, Idaho, Nebraska, and Oregon.

Income tax year 2024 is open for examination by the state of Florida.

PROPERTY, PLANT, AND EQUIPMENT

1 unchanged sentence

In thousands 2025 2024

NGD plant in service $ 4,504,439 $ 4,206,455

NGD construction work in progress 117,121 105,166

Accumulated depreciation 1,199,460 1,159,367

NGD plant, net 3,422,100 3,152,254

Other plant in service 73,516 71,175

Other construction work in progress 11,643 10,963

Accumulated depreciation 22,953 22,595

Other plant, net 62,206 59,543

Total property, plant, and equipment $ 3,484,306 $ 3,211,797

Other (NW Holdings):

Other plant in service $ 191,610 $ 147,040

Other construction work in progress 20,590 15,810

Plant in service $ 5,468,170 $ 4,769,565

Construction work in progress 172,265 149,354

Accumulated depreciation 1,288,422 1,246,592

Other plant, net 188,021 146,257

Total property, plant, and equipment $ 3,672,327 $ 3,358,054

Total property, plant, and equipment, net $ 4,352,013 $ 3,672,327

Capital expenditures in accrued liabilities $ 57,762 $ 26,610

Plant in service $ 4,879,816 $ 4,577,955

Construction work in progress 120,513 128,764

Accumulated depreciation 1,256,289 1,222,413

Total property, plant, and equipment, net $ 3,744,040 $ 3,484,306

Capital expenditures in accrued liabilities $ 33,582 $ 24,625

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

NWN Gas Utility 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.

The OPUC ordered a regulatory disallowance related to $ 13.7 million of undepreciated line extension costs, which resulted in a reduction of NWN Gas Utility 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.

The weighted average depreciation rate for NWN Gas Utility assets was 3.1 % in 2025, 2.9 % in 2024, and 3.0 % 2023.

The weighted average depreciation rate for assets not related to NWN Gas Utility was 1.9 % in 2025, 1.7 % in 2024 and 1.7 % in 2023.

Accumulated depreciation does not include the accumulated provision for asset removal costs of $ 561.6 million and $ 526.5 million at December 31, 2025 and 2024, respectively.

These accrued asset removal costs are reflected on the balance sheet as regulatory liabilities.

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.

Plant balances include long-lived assets associated with SiEnergy and water and wastewater and operations.

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

1 unchanged sentence

NW Holdings NW Natural

In thousands 2024 2023 2024 2023

Thousands 2025 2024 2025 2024

Investments in life insurance policies $ 45,606 $ 45,772 $ 45,606 $ 45,772

Investments in gas reserves, non-current 15,443 18,166 15,443 18,166

Investments in unconsolidated affiliates 18,298 36,345 — 19,539

Investment in unconsolidated affiliates 19,627 18,298 — —

Total other investments $ 80,676 $ 82,236 $ 61,049 $ 63,938

7 unchanged sentences

The amount of gas reserves included in other current assets was $ 2.6 million and $ 2.7 million as of December 31, 2025 and 2024, respectively.

The investment in gas reserves provides long-term price protection and acted to hedge the cost of gas for approximately 3 % and 3 % of NGD gas supplies for the years ended December 31, 2024 and 2023, respectively.

The investment in gas reserves provides long-term price protection and acted to hedge the cost of gas for approximately 3 % and 3 % of NWN Gas Utility gas supplies for the years ended December 31, 2025 and 2024, respectively.

Investments in Unconsolidated Affiliates

7 unchanged sentences

February 2025 $ 1.0 47.9 %

January 2026 $ 1.0 50.0 %

Avion Water operates in Bend, Oregon and the surrounding communities, serving approximately 17,000 customer connections and employing 40 people.

1 unchanged sentence

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

2025 Business Combinations

SiEnergy Acquisition

On January 7, 2025, NW Holdings acquired 100 % of the outstanding membership interests of SiEnergy Operating, LLC from SiEnergy Capital Partners, LLC, an affiliate of Ridgewood Infrastructure.

Total consideration included $ 271.1 million in cash and the assumption of $ 156.1 million of outstanding debt.

SiEnergy owns a regulated natural gas distribution utility and a transmission utility.

Excluding Pines, which was acquired June 2, 2025 and is described further below, SiEnergy currently serves approximately 82,000 customers in the greater metropolitan areas of Houston, Dallas, and Austin, Texas.

The SiEnergy 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 SiEnergy.

This allocation is considered preliminary as of December 31, 2025, as facts and circumstances that existed as of the acquisition date may be discovered as we continue to integrate SiEnergy.

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

Any such adjustments are to be completed

within the one-year measurement period.

Acquisition costs totaling $ 2.3 million in the fourth quarter of 2024 and $ 5.3 million in the first quarter of 2025 were expensed as incurred.

Acquisition costs related to SiEnergy are included in operations and maintenance expenses in the consolidated statements of comprehensive income.

The transaction aligns with NW Holdings' growth strategy and further expands the service territory in Texas.

Preliminary goodwill of $ 171.1 million was recognized from this acquisition.

The goodwill recognized is attributable to SiEnergy's natural gas utility service territory, experienced workforce, and the strategic benefits 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 $ 179.9 million.

The following table summarizes the consideration transferred and the amounts of identified assets acquired and liabilities assumed as of the acquisition date:

Fair value of consideration transferred:

Cash $ 271,087

Recognized amounts of identifiable assets acquired and liabilities assumed:

Current assets $ 16,770

Property, plant and equipment 262,750

Non-current assets 3,872

Current liabilities ( 24,962 )

Non-current liabilities ( 158,397 )

Total identifiable net assets $ 100,033

Goodwill $ 171,054

Hughes Gas Resources, Inc.

(Pines) Acquisition

On June 2, 2025, a subsidiary of SiEnergy Operating, LLC (SiEnergy), a wholly-owned subsidiary of NW Holdings, acquired 100 % of the outstanding equity interests of Hughes Gas Resources, Inc.

from EPCOR USA Inc.

for total consideration of $ 60.4 million in cash.

Hughes currently serves approximately 7,000 customers in 12 communities northeast of Houston, Texas.

Hughes further expands SiEnergy's regulated gas utility business in the southern United States.

Following the closing of the acquisition, Hughes was rebranded as Pines.

The Pines 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 Pines.

This allocation is considered preliminary as of December 31, 2025, as facts and circumstances that existed as of the acquisition date may be discovered as we continue to integrate Pines.

Any such adjustments are to be completed within the one-year measurement period.

Preliminary goodwill of $ 14.7 million was recognized from this acquisition.

The goodwill recognized is attributable to Pines' natural gas utility service territory, experienced workforce, and the strategic benefits expected from growth in the service territory.

No intangible assets aside from goodwill were recognized.

There is no goodwill expected to be deductible for tax purposes.

The following table summarizes the consideration transferred and the amounts of identified assets acquired and liabilities assumed as of the acquisition date:

Fair value of consideration transferred:

Cash $ 60,436

Recognized amounts of identifiable assets acquired and liabilities assumed:

Current assets $ 2,094

Property, plant and equipment 43,594

Non-current assets 1,591

Current liabilities ( 1,441 )

Non-current liabilities ( 105 )

Total identifiable net assets $ 45,733

Goodwill $ 14,703

SiEnergy and Pines Pro Forma

The table below presents the unaudited pro forma revenues and earnings of NW Holdings as if the SiEnergy and Pines acquisitions had occurred as of January 1, 2024:

Twelve Months Ended December 31,

In thousands 2025 2024

Operating revenues $ 1,296,240 $ 1,211,523

Net income (loss) $ 116,970 $ 61,546

The unaudited pro forma results presented above are for informational purposes only and are not necessarily indicative of the results that would have been achieved had the acquisition been completed on January 1, 2024, nor are they indicative of future results of operations of the combined company.

Pro forma net income for the three and twelve months ended December 31, 2025 and 2024 were adjusted to reflect the following:

• acquisition costs of $ 7.6 million incurred by NW Holdings' in the first quarter of 2025 and the fourth quarter of 2024, were reflected to have occurred in the first quarter 2024 and the first quarter 2025 costs were removed from the twelve months ended December 31, 2025 pro forma net income;

• the capital structure for NW Holdings was modified to reflect the Junior Subordinated Debentures issued in March 2025 to represent the ongoing capital structure and reflects the issuance to have occurred on January first of each respective period;

• the results of SiEnergy and Pines were adjusted to represent results as though they were owned as of January first of each respective period;

• all adjustments were net tax effected using a statutory tax rate of 26.5 %.

The amount of SiEnergy and Pines revenues included in NW Holdings' consolidated statements of comprehensive income was $ 66.0 million for the year ended December 31, 2025.

The amount of SiEnergy and Pines net income included in NW Holdings' consolidated statements of comprehensive income was $ 13.7 million for the year ended December 31, 2025.

Other 2025 Business Combinations

During the fourth quarter of 2025, NW Water and its subsidiaries acquired the assets of Inline Utilities, LLC ("Inline") located in Texas, qualifying as a business combination.

The fair value of the consideration transferred for this acquisition was $ 7.2 million, most of which was allocated to property, plant and equipment.

As of December 31, 2025, preliminary goodwill of $ 1.0 million was recognized from this acquisition, including adjustments associated with deferred income taxes.

The amount of goodwill that is expected to be deductible for income tax purposes is $ 4.3 million.

During the first quarter of 2025, NWN Water and its subsidiaries acquired the assets of two businesses qualifying as business combinations.

The aggregate fair value of the consideration transferred for these acquisitions was $ 1.6 million, most of which was allocated to property, plant and equipment and included:

• Everett Square, Inc.

• ES Water Utility Consolidators, Inc.

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

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:

10 unchanged sentences

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.

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

The acquisition closed in two phases:

the unregulated entities closed in September 2024, and the regulated entities closed in November 2024.

The ICH acquisition met the criteria of a business combination, and as such an 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 allocation for both the unregulated and regulated entities is considered final as of December 31, 2025.

Goodwill of $ 18.5 million was recognized from this acquisition.

The majority of the goodwill is attributable to ICH's unregulated operations.

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:

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

The following table summarizes the consideration transferred and the amounts of identified assets and liabilities assumed as the acquisition date:

Fair value of consideration transferred:

Cash $ 29,853

Recognized amounts of identifiable assets acquired and liabilities assumed:

Current assets $ 486

Property, plant and equipment 11,130

Goodwill 18,357

Non-current assets 304

1 unchanged sentence

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.

Total identifiable net assets $ 11,353

Goodwill $ 18,500

The amount of ICH earnings included in NW Holdings' consolidated statements of comprehensive income is $ 1.3 million and $ 2.9 million for the three months and year ended December 31, 2025, respectively.

ICH revenue included in NW Holdings' consolidated statements of comprehensive income is $ 2.3 million and $ 6.3 million, for the three months and year ended December 31, 2025, respectively.

2023 Business Combinations

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

There was $ 0.1 million and $ 0.2 million of amortization expense recognized in 2025 and 2024, respectively.

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.

The amortization will change in future periods if other intangible assets are acquired, impairments are recognized or the preliminary valuations as part of our purchase price allocation is refined.

2022 Business Combinations

Far West Water & Sewer, Inc.

On October 5, 2022, NWN Water completed the acquisition of the water and wastewater utilities of Far West Water & Sewer, Inc.

(Far West), which has a combined approximately 25,000 connections in Yuma, Arizona.

The acquisition-date fair value of the total consideration transferred, after closing adjustments, was approximately $ 97.0 million, of which $ 88.4 million was cash consideration transferred at closing, $ 8.1 million was contingent consideration, and $ 0.5 million was deferred consideration.

The contingent consideration is an earnout payment in an amount equal to the product of (i) the amount, if any, by which the average annual System Operating Revenue for the 2026, 2027, and 2028 years exceeds $ 13.0 million (ii) multiplied by 4 but shall not exceed $ 12.0 million.

As of the acquisition date, the contingent consideration had a fair value of $ 8.1 million and was included in other non-current liabilities.

The fair value as of the acquisition date was determined using a scenario-based technique using management's best estimate of forecast revenue for the years 2026, 2027, and 2028 discounted to present value.

The inputs to determine the fair value of the contingent consideration include estimated future revenue and a risk-adjusted discount rate.

The fair value measurement is based on significant inputs that are not observable in the market and thus represents a fair value measurement categorized within Level 3 of the fair value hierarchy per ASC Topic 820.

The Far West acquisition met the criteria of a business combination, and as such an 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 and was made using existing regulatory conditions for net assets associated with Far West.

The acquisition costs were expensed as incurred.

Goodwill of $ 69.9 million was recognized from this acquisition.

The goodwill recognized is attributable to Far West's regulated 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 $ 63.3 million.

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

Current assets $ 1,569

Property, plant and equipment 25,974

Goodwill 69,890

Non-current assets 1,077

Current liabilities ( 991 )

Non-current liabilities ( 9,115 )

Total net assets acquired $ 88,404

The amount of Far West revenues included in NW Holdings' consolidated statements of comprehensive income is $ 2.9 million for the year ended December 31, 2022.

Earnings from Far West activities for the year ended December 31, 2022 were not material to the results of NW Holdings.

Far West is referred to as Foothills Utilities following the closure of the acquisition.

Other 2022 Business Combinations

During the year ended December 31, 2022, NWN Water and its subsidiaries acquired the assets of six additional businesses qualifying as business combinations.

The aggregate fair value of the consideration transferred for these acquisitions was $ 8.7 million, most of which was 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:

• Belle Oaks Water and Sewer Co., Inc in Texas

• Northwest Water Services, LLC in Washington

• Aquarius Utilities, LLC in Washington

• Valiant Idaho, LLC (The Idaho Club - Sewer) in Idaho

• Caney Creek in Texas

• Water Necessities, Inc.

and Rural Water Co.

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

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As a result of all acquisitions completed, total goodwill was $ 370.8 million as of December 31, 2025 and $ 183.8 million as of December 31, 2024.

The increase in the goodwill balance was primarily due to additions associated with our acquisitions in the water and wastewater sector.

All of our goodwill is related to water and wastewater acquisitions and is included in the other category for segment reporting purposes.

Goodwill as of December 31, 2025, is attributable to gas utility, water and wastewater acquisitions, of which $ 185.7 million is included in the SiEnergy unit and $ 185.1 million is included in the NWN Water unit for segment reporting purposes.

Goodwill as of December 31, 2024, is only attributable to water and wastewater acquisitions and is included in the NWN Water unit for segment reporting purposes.

The annual impairment assessment of goodwill occurs in the fourth quarter of each year.

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DERIVATIVE INSTRUMENTS

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 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.

The foreign currency forward contracts are used to hedge the fluctuation in foreign currency exchange rates for pipeline demand charges paid in Canadian dollars.

In the normal course of business, NW Natural also enters into indexed-price physical forward natural gas commodity purchase contracts and options to meet the requirements of NGD customers.

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

These contracts include swaps, and forward contracts.

These derivative financial instruments are primarily used to manage the price variability of natural gas, interest rates, and foreign currency.

NW Natural enters into these financial derivatives, up to prescribed limits, primarily to hedge price variability related to term physical gas supply contracts, and variable rate debt and for pipeline demand charges paid in Canadian dollars.

In the normal course of business, NW Natural also enters into indexed-price physical forward natural gas commodity purchase contracts and options to meet the requirements of NWN Gas Utility customers.

These contracts qualify for regulatory deferral accounting treatment.

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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.

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

NW Natural entered the 2024-25 gas year with total forecasted sales volumes hedged at approximately 80 %, including 64 % in financial hedges and 16 % in physical gas supplies.

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Unrealized Gain/Loss

Outstanding derivative instruments related to regulated NGD operations are deferred in accordance with regulatory accounting standards.

Outstanding derivative instruments related to regulated NWN Gas Utility operations are deferred in accordance with regulatory accounting standards.

The cost of foreign currency forward and natural gas derivative contracts are recognized immediately in the cost of gas;

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Realized Gain/Loss

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.

NW Natural realized a net loss of $ 91.7 million and a net loss of $ 119.2 million for the years ended December 31, 2025 and 2024, 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 does not speculate in derivatives.

Derivatives are used to manage NW Natural's market risk and we hedge exposure above risk tolerance limits.

Derivatives are used to manage NW Natural's market risks and we hedge exposure above risk tolerance limits.

It is required that increases in market risk created by the use of derivatives is offset by the exposures they modify.

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Additionally, the assessment of non-performance risk is generally derived from the credit default swap market and from bond market credit spreads.

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, 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.

The impact of the credit risk adjustments for all financial derivatives outstanding to the fair value calculation was $ 0.2 million, which decreased the liability at December 31, 2025.

As of December 31, 2025 and 2024, the net fair value was a liability of $ 73.3 million and a liability of $ 81.6 million, respectively.

No Level 3 inputs were used in our derivative valuations during the years ended December 31, 2025 and 2024.

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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.

Unrealized gains related to the interest rate swap agreement are recorded in AOCI on the consolidated balance sheet and totaled $ 0.2 million, net of tax, as of December 31, 2024 and were immaterial as of December 31, 2025.

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.

Gains of $ 0.3 million and $ 0.9 million were reclassified from AOCI to net income during the years ended December 31, 2025 and 2024, respectively.

The estimated amount of gains recorded in AOCI as of December 31, 2025 that are expected to be reclassified to net income within the next twelve months is immaterial.

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.

NWN Renewables Purchase Agreements

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

NWN 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 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.

Under the development agreement, the EDL subsidiary was responsible for the development and construction of the facilities.

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

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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.

In December 2025, Ohio Renewables entered into an agreement to purchase up to an annual specified amount of RNG produced by the EDL facilities from a separate investment-grade counterparty over an 11-year period at a contractually specified price.

Purchase volumes are variable based on production, and purchases may not exceed contracted amounts.

We currently estimate the amount of RNG purchases based on prices and estimated production volumes specified in the agreements to be $ 20.9 million in 2026, $ 31.4 million in 2027, $ 31.6 million in 2028, $ 30.8 million in 2029, $ 31.4 million in 2030 and $ 599.3 million thereafter through 2044.

In 2025, purchases totaled $ 14.5 million.

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

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

RNG Sale Agreements

NWN Renewables 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.

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Ohio Renewables additionally has contracted to sell a fixed-volume amount of RNG under a long-term agreement with an investment-grade utility beginning in 2025 and extending through 2044.

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.

Under the current contract, if less than 75 % of the contracted volumes of RNG are 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.

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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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GASCO SEDIMENTS.

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.

I n 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 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.

Siltronic Corporation is not a party to the amended order.

NW Natural is completing pre-design studies and has submitted a draft Basis of Design Report.

NW Natural is completing pre-design studies and has submitted a Preliminary Design Report, which the EPA approved in December 2024.

These preliminary design steps do not include a cost estimate for cleanup.

No remedial design is more likely than the EE/CA alternatives at this time, and NW Natural expects further design discussion and iteration with the EPA.

The estimated costs for the various sediment remedy alternatives in the draft EE/CA for the additional studies and design work needed before the cleanup can occur, and for regulatory oversight throughout the cleanup range from $ 55.2 million to $ 350 million.

No remedial design for the Gasco Sediments Site is more likely than the EE/CA alternatives at this time, and NW Natural expects further design discussion and iteration with the EPA.

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 at the US Moorings and Navigation Channel remedial design project areas.

Siltronic Corporation is not a party to the amended order.

NW Natural has submitted Basis of Design Reports for the Navigation Channel and US Moorings remedial design project areas to the EPA.

NW Natural has recorded a liability of $ 57.2 million for the Gasco sediment clean-up, which reflects the low end of the range.

At this time, we believe sediments at the Gasco sediments site represent the largest portion of NW Natural's liability related to the Portland Harbor site discussed above.

In September 2023, the EPA approved the In Situ Stabilization and Solidification (ISS) Work Plan for the ISS field pilot study, which was successfully completed during the fall of 2023.

Information obtained from the pilot study will be used to support remedial design of the Gasco sediments project.

OTHER PORTLAND HARBOR.

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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.

The Yakama Nation has filed two amended complaints addressing certain pleading defects and

dismissing the State of Oregon.

On the motion of NW Natural and certain other defendants the federal court has stayed the case pending the outcome of the non-binding allocation proceeding discussed above.

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In March 2015, ODEQ approved the Risk Assessment (RA) for this site, enabling commencement of work on the FS in 2016.

A draft FS is currently anticipated to be submitted in 2024.

NW Natural has recognized a liability for the remediation of the uplands portion of the site which is at the low end of the range of potential liability;

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

In October 2016, ODEQ and NW Natural agreed to amend their VCP agreement for the Gasco uplands to incorporate a portion of the Siltronic property formerly owned by Portland Gas & Coke between 1939 and 1960 into the Gasco RA and FS.

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

The estimated costs for the alternative remedies range from $ 47.1 million to $ 358 million.

NW Natural has recorded a liability of $ 47.1 million, which reflects the low end of the range.

NW Natural is currently revising the FS report to address ODEQ comments.

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.

The selected sediment remedy, which is discussed above under "Gasco Sediments," is currently under separate design for the EPA.

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

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

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;

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;

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

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Current regulatory assets (3)

12,148 10,746

Long-term regulatory assets (3)

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Amounts included in this estimate are still subject to a prudence and earnings test review by the OPUC and do not include the $ 5.0 million tariff rider.

The amounts allocable to Oregon are recoverable through NGD rates, subject to an earnings test.

The amounts allocable to Oregon are recoverable through rates, subject to an earnings test.

See " Oregon SRRM " below.

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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

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.

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 County, Oregon (County of Multnomah v.

Exxon Mobil Corp., et.

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The plaintiffs seek injunctive and equitable relief and damages.

In October 2025, NW Holdings was dismissed as a party to the proceeding.

The plaintiffs subsequently filed a Second Amended Complaint re-alleging claims against NW Holdings.

We are diligently defending against the claims.

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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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Investments in subsidiaries 2,300,272 1,718,849

Other investments — 32

Deferred tax assets 8,845 1,138

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Long-term debt 605,333 283,724

Commitments and contingencies (see Note 16 and Note 17)

Total equity 1,475,076 1,385,371

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Investing activities:

Acquisitions, net of cash acquired ( 271,053 ) — —

Contributions to subsidiaries ( 268,318 ) ( 241,834 ) ( 76,310 )

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Cash dividend payments on common stock ( 77,309 ) ( 72,852 ) ( 67,340 )

Capital contributions — — —

Other ( 766 ) 2,535 2,510

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

For information concerning NW Holdings' guarantees, see Note 9 and Note 16 to the consolidated financial statements included in Item 8 of this report.

NORTHWEST NATURAL HOLDING COMPANY

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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