Northwest Natural Holding Co 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS Page 1. Management's Reports on Internal Control Over Financial Reporting 76 2. Reports of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 78 3. Consolidated Financial Statements: Consolidated Statements of Comprehensive Income (Loss) of Northwest Natural Holding Company for the Years Ended December 31, 2025, 2024, and 2023 82 Consolidated Balance Sheets of Northwest Natural Holding Company at December 31, 2025 and 2024 83 Consolidated Statements of Shareholders’ Equity of Northwest Natural Holding Company for the Years Ended December 31, 2025, 2024, and 2023 85 Consolidated Statements of Cash Flows of Northwest Natural Holding Company for the Years Ended December 31, 2025, 2024, and 2023 86 Consolidated Statements of Comprehensive Income (Loss) of Northwest Natural Gas Company for the Years Ended December 31, 2025, 2024, and 2023 88 Consolidated Balance Sheets of Northwest Natural Gas Company at December 31, 2025 and 2024 89 Consolidated Statements of Shareholder's Equity of Northwest Natural Gas Company for the Years Ended December 31, 2025, 2024, and 2023 91 Consolidated Statements of Cash Flows of Northwest Natural Gas Company for the Years Ended December 31, 2025, 2024, and 2023 92 Notes to Consolidated Financial Statements 94 4. Supplementary Data for the Years Ended December 31, 2025, 2024, and 2023: Financial Statement Schedules Schedule I - Condensed Financial Information of Northwest Natural Holding Company at December 31, 2025 and 2024, and for the Years Ended December 31, 2025, 2024, and 2023 147 Schedule II – Valuation and Qualifying Accounts and Reserves of Northwest Natural Holding Company and Northwest Natural Gas Company for the Years Ended December 31, 2025, 2024, and 2023 151 Supplemental Schedules Omitted All other schedules are omitted because of the absence of the conditions under which they are required or because the required information is included elsewhere in the financial statements. 75 NW HOLDINGS MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING NW Holdings management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) or 15d-15(f) under the Securities Exchange Act of 1934, as amended. NW Holdings' internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). NW Holdings' internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions involving company assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and the NW Holdings Board of Directors; and (iii) provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use, or disposition of NW Holdings' assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements or fraud. 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. 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). Based on NW Holdings management's assessment and those criteria, NW Holdings management has concluded that it maintained effective internal control over financial reporting as of December 31, 2025. 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. Palfreyman Justin B. Palfreyman Chief Executive Officer /s/ Raymond Kaszuba III Raymond Kaszuba III Senior Vice President and Chief Financial Officer February 27, 2026 76 NW NATURAL MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING NW Natural management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) or 15d-15(f) under the Securities Exchange Act of 1934, as amended. NW Natural's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). NW Natural's internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions involving company assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures are being made only in accordance with authorizations of management and the NW Natural Board of Directors; and (iii) provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use, or disposition of NW Natural's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements or fraud. 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 Natural management assessed the effectiveness of NW Natural's internal control over financial reporting as of December 31, 2025. In making this assessment, NW Natural management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). 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. Palfreyman Justin B. Palfreyman Chief Executive Officer /s/ Raymond Kaszuba III Raymond Kaszuba III Senior Vice President and Chief Financial Officer February 27, 2026 77 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Northwest Natural Holding Company Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Northwest Natural Holding Company and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income (loss), of shareholders' equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial statement schedules listed in the accompanying index (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. 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 A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. 78 Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Accounting for the Effects of Regulatory Matters 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”), 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 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 Portland, Oregon February 27, 2026 We have served as the Company’s aud itor since 1997. 79 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholder of Northwest Natural Gas Company: Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Northwest Natural Gas Company and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income (loss), of shareholder’s equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Accounting for the Effects of Regulatory Matters As described in Note 2 to the consolidated financial statements, there were $563.0 million of regulatory assets and $886.8 million of regulatory liabilities as of December 31, 2025. The Company’s principal business is the distribution of natural gas, which is 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. 80 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 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 Portland, Oregon February 27, 2026 We have served as the Company’s auditor since 1997. 81 NORTHWEST NATURAL HOLDING COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, In thousands, except per share data 2025 2024 2023 Operating revenues $ 1,289,363 $ 1,152,994 $ 1,197,475 Operating expenses: Cost of gas 395,576 412,382 499,837 Operations and maintenance 327,365 294,658 273,766 Environmental remediation 14,623 14,054 12,899 General taxes 52,046 48,672 46,248 Revenue taxes 48,165 48,343 48,671 Depreciation 165,506 137,898 125,581 Other operating expenses 5,191 5,845 5,532 Total operating expenses 1,008,472 961,852 1,012,534 Income from operations 280,891 191,142 184,941 Other income (expense), net ( 3,700 ) ( 1,108 ) 17,855 Interest expense, net 122,513 80,092 76,566 Income before income taxes 154,678 109,942 126,230 Income tax expense 41,359 31,071 32,362 Net income 113,319 78,871 93,868 Other comprehensive income (loss): Change in employee benefit plan liability, net of taxes of $( 241 ) for 2025, $ 40 for 2024, and $ 443 for 2023 670 ( 399 ) ( 1,233 ) 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 ( 194 ) ( 36 ) 59 Comprehensive income $ 115,472 $ 79,020 $ 93,104 Average common shares outstanding: Basic 40,864 38,809 36,213 Diluted 40,953 38,869 36,265 Earnings per share of common stock: Basic $ 2.77 $ 2.03 $ 2.59 Diluted 2.77 2.03 2.59 See Notes to Consolidated Financial Statements 82 NORTHWEST NATURAL HOLDING COMPANY CONSOLIDATED BALANCE SHEETS As of December 31, In thousands 2025 2024 Assets: Current assets: Cash and cash equivalents $ 36,673 $ 38,490 Accounts receivable 121,875 124,480 Accrued unbilled revenue 97,238 94,400 Allowance for uncollectible accounts ( 4,068 ) ( 3,474 ) Regulatory assets 143,745 130,116 Derivative instruments 3,922 6,628 Inventories 127,697 106,954 Other current assets 75,850 60,180 Total current assets 602,932 557,774 Non-current assets: Property, plant, and equipment 5,640,435 4,918,919 Less: Accumulated depreciation 1,288,422 1,246,592 Total property, plant, and equipment, net 4,352,013 3,672,327 Regulatory assets 424,194 382,499 Derivative instruments 366 535 Other investments 80,676 82,236 Operating lease right of use asset, net 68,224 68,626 Assets under sales-type leases 121,470 125,653 Goodwill 370,815 183,804 Other non-current assets 146,351 160,862 Total non-current assets 5,564,109 4,676,542 Total assets $ 6,167,041 $ 5,234,316 See Notes to Consolidated Financial Statements 83 NORTHWEST NATURAL HOLDING COMPANY CONSOLIDATED BALANCE SHEETS As of December 31, In thousands, except share information 2025 2024 Liabilities and equity: Current liabilities: Short-term debt $ 171,989 $ 170,110 Current maturities of long-term debt 160,627 30,787 Accounts payable 175,566 133,270 Taxes accrued 18,123 16,176 Interest accrued 26,121 18,220 Regulatory liabilities 137,974 116,180 Derivative instruments 63,631 75,272 Operating lease liabilities 3,228 1,840 Other current liabilities 79,186 87,162 Total current liabilities 836,445 649,017 Long-term debt 2,272,202 1,679,355 Deferred credits and other non-current liabilities: Deferred tax liabilities 437,467 397,149 Regulatory liabilities 758,407 730,117 Pension and other postretirement benefit liabilities 112,139 130,397 Derivative instruments 14,039 13,307 Operating lease liabilities 74,986 75,914 Other non-current liabilities 186,280 173,689 Total deferred credits and other non-current liabilities 1,583,318 1,520,573 Commitments and contingencies (see Note 16 and Note 17) Equity: Common stock - no par value; authorized 100,000,000 shares; issued and outstanding 41,563,577 and 40,222,305 at December 31, 2025 and 2024, respectively 1,044,000 989,346 Retained earnings 435,823 402,925 Accumulated other comprehensive loss ( 4,747 ) ( 6,900 ) Total equity 1,475,076 1,385,371 Total liabilities and equity $ 6,167,041 $ 5,234,316 See Notes to Consolidated Financial Statements 84 NORTHWEST NATURAL HOLDING COMPANY CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Equity In thousands Balance at December 31, 2022 $ 805,253 $ 376,473 $ ( 6,285 ) $ 1,175,441 Comprehensive income (loss) — 93,868 ( 764 ) 93,104 Dividends on common stock, $ 1.94 per share — ( 70,430 ) — ( 70,430 ) Stock-based compensation 3,598 — — 3,598 Shares issued in connection with business combinations 12,884 — — 12,884 Shares issued pursuant to equity based plans, 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 — 78,871 149 79,020 Dividends on common stock, $ 1.95 per share — ( 75,857 ) — ( 75,857 ) Shares issued in connection with business combinations 1,429 — — 1,429 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 — 113,319 2,153 115,472 Dividends on common stock, $ 1.96 per share — ( 80,421 ) — ( 80,421 ) Stock-based compensation 4,122 — — 4,122 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 Balance at December 31, 2025 $ 1,044,000 $ 435,823 $ ( 4,747 ) $ 1,475,076 See Notes to Consolidated Financial Statements 85 NORTHWEST NATURAL HOLDING COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, In thousands 2025 2024 2023 Operating activities: Net income $ 113,319 $ 78,871 $ 93,868 Adjustments to reconcile net income to cash provided by operations: Depreciation 165,506 137,898 125,581 Amortization 24,239 20,162 17,641 Deferred income taxes 35,473 11,366 8,966 Qualified defined benefit pension plan expense (benefit) 10,357 4,062 ( 2,430 ) Contributions to qualified defined benefit pension plans ( 11,310 ) ( 20,460 ) — Deferred environmental expenditures, net ( 25,697 ) ( 23,307 ) ( 26,052 ) Environmental remediation expense 14,623 14,054 12,899 Asset optimization revenue sharing bill credits ( 15,549 ) ( 28,874 ) ( 10,471 ) Regulatory disallowance of line extension allowances — 13,700 — Other 12,670 10,799 8,548 Changes in assets and liabilities: Receivables, net 8,170 ( 15,302 ) 50,977 Inventories ( 29,195 ) ( 2,735 ) ( 24,105 ) Income and other taxes ( 5,873 ) 809 ( 1,246 ) Accounts payable 10,115 ( 14,144 ) ( 39,958 ) Deferred gas costs ( 34,201 ) 38,129 52,371 Asset optimization revenue sharing 24,343 14,539 22,637 Decoupling mechanism ( 26,939 ) 5,173 ( 11,415 ) Cloud-based software ( 10,381 ) ( 22,393 ) ( 16,307 ) Regulatory accounts 6,575 12,292 4,617 RNG facility prepayment — ( 51,427 ) — Other, net 2,879 17,070 13,828 Cash provided by operating activities 269,124 200,282 279,949 Investing activities: Capital expenditures ( 466,893 ) ( 394,400 ) ( 327,347 ) Acquisitions, net of cash acquired ( 338,131 ) ( 29,816 ) ( 7,533 ) Purchase of equity method investment ( 1,000 ) ( 1,000 ) ( 1,000 ) Other ( 2,878 ) ( 3,770 ) 383 Cash used in investing activities ( 808,902 ) ( 428,986 ) ( 335,497 ) 86 Year Ended December 31, 2025 2024 2023 Financing activities: Proceeds from common stock issued, net 47,418 90,374 66,495 Long-term debt issued 760,000 285,000 330,000 Long-term debt retired ( 183,127 ) ( 150,000 ) ( 90,000 ) Changes in other short-term debt, net ( 3,121 ) 80,330 ( 168,540 ) Cash dividend payments on common stock ( 77,309 ) ( 72,852 ) ( 67,340 ) Payment of financing fees ( 9,192 ) ( 3,290 ) ( 2,200 ) Shares withheld for tax purposes ( 1,599 ) ( 1,319 ) ( 1,313 ) Other ( 197 ) ( 1,181 ) ( 2,894 ) Cash provided by financing activities 532,873 227,062 64,208 (Decrease) increase in cash, cash equivalents and restricted cash ( 6,905 ) ( 1,642 ) 8,660 Cash, cash equivalents and restricted cash, beginning of period 47,982 49,624 40,964 Cash, cash equivalents and restricted cash, end of period $ 41,077 $ 47,982 $ 49,624 Supplemental disclosure of cash flow information: Interest paid, net of capitalization $ 111,257 $ 71,233 $ 80,197 Income taxes paid, net of refunds: U.S. 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: Shares issued in connection with business combinations $ — $ 1,429 $ 12,884 Debt assumed in connection with business combinations 156,117 — 3,131 See Notes to Consolidated Financial Statements 87 NORTHWEST NATURAL GAS COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended December 31, In thousands 2025 2024 2023 Operating revenues $ 1,125,113 $ 1,100,497 $ 1,158,623 Operating expenses: Cost of gas 356,126 412,320 500,061 Operations and maintenance 268,242 256,995 244,669 Environmental remediation 14,623 14,054 12,899 General taxes 48,785 46,953 44,980 Revenue taxes 45,887 48,037 48,432 Depreciation 149,119 129,602 119,514 Other operating expenses 2,548 2,809 2,423 Total operating expenses 885,330 910,770 972,978 Income from operations 239,783 189,727 185,645 Other income (expense), net ( 6,341 ) ( 2,818 ) 15,358 Interest expense, net 61,898 63,273 60,594 Income before income taxes 171,544 123,636 140,409 Income tax expense 47,322 34,618 35,672 Net income 124,222 89,018 104,737 Other comprehensive income (loss): Change in employee benefit plan liability, net of taxes of $( 241 ) for 2025, $ 40 for 2024, and $ 443 for 2023 670 ( 399 ) ( 1,233 ) 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 See Notes to Consolidated Financial Statements 88 NORTHWEST NATURAL GAS COMPANY CONSOLIDATED BALANCE SHEETS As of December 31, In thousands 2025 2024 Assets: Current assets: Cash and cash equivalents $ 29,347 $ 19,961 Accounts receivable 102,165 119,976 Accrued unbilled revenue 86,600 91,508 Receivables from affiliates 997 591 Allowance for uncollectible accounts ( 3,048 ) ( 2,788 ) Regulatory assets 143,135 130,091 Derivative instruments 3,922 6,563 Inventories 119,319 105,031 Other current assets 61,024 53,781 Total current assets 543,461 524,714 Non-current assets: Property, plant, and equipment 5,000,329 4,706,719 Less: Accumulated depreciation 1,256,289 1,222,413 Total property, plant, and equipment, net 3,744,040 3,484,306 Regulatory assets 419,847 381,682 Derivative instruments 366 394 Other investments 61,049 63,938 Operating lease right of use asset, net 65,650 68,115 Assets under sales-type leases 121,470 125,653 Other non-current assets 93,235 107,493 Total non-current assets 4,505,657 4,231,581 Total assets $ 5,049,118 $ 4,756,295 See Notes to Consolidated Financial Statements 89 NORTHWEST NATURAL GAS COMPANY CONSOLIDATED BALANCE SHEETS As of December 31, In thousands 2025 2024 Liabilities and equity: Current liabilities: Short-term debt $ 9,990 $ 136,510 Current maturities of long-term debt 54,948 29,992 Accounts payable 138,931 125,359 Payables to affiliates 2,354 3,487 Taxes accrued 15,682 15,759 Interest accrued 15,399 15,018 Regulatory liabilities 137,908 116,047 Derivative instruments 63,578 75,272 Operating lease liabilities 2,515 1,653 Other current liabilities 75,667 85,723 Total current liabilities 516,972 604,820 Long-term debt 1,479,942 1,335,407 Deferred credits and other non-current liabilities: Deferred tax liabilities 426,093 382,686 Regulatory liabilities 748,846 729,172 Pension and other postretirement benefit liabilities 112,139 130,397 Derivative instruments 14,039 13,307 Operating lease liabilities 73,097 75,591 Other non-current liabilities 169,746 160,865 Total deferred credits and other non-current liabilities 1,543,960 1,492,018 Commitments and contingencies (see Note 16 and Note 17) Equity: Common stock 854,903 719,903 Retained earnings 658,046 611,199 Accumulated other comprehensive loss ( 4,705 ) ( 7,052 ) Total equity 1,508,244 1,324,050 Total liabilities and equity $ 5,049,118 $ 4,756,295 See Notes to Consolidated Financial Statements 90 NORTHWEST NATURAL GAS COMPANY CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Equity In thousands Balance at December 31, 2022 $ 614,903 $ 582,593 $ ( 6,414 ) $ 1,191,082 Comprehensive income (loss) — 104,737 ( 823 ) 103,914 Dividends on common stock — ( 92,376 ) — ( 92,376 ) Capital contribution from parent 30,000 — — 30,000 Balance at December 31, 2023 644,903 594,954 ( 7,237 ) 1,232,620 Comprehensive income — 89,018 185 89,203 Dividends on common stock — ( 72,773 ) — ( 72,773 ) Capital contributions from parent 75,000 — — 75,000 Balance at December 31, 2024 719,903 611,199 ( 7,052 ) 1,324,050 Comprehensive income — 124,222 2,347 126,569 Dividends on common stock — ( 77,375 ) — ( 77,375 ) Capital contributions from parent 135,000 — — 135,000 Balance at December 31, 2025 $ 854,903 $ 658,046 $ ( 4,705 ) $ 1,508,244 See Notes to Consolidated Financial Statements 91 NORTHWEST NATURAL GAS COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, In thousands 2025 2024 2023 Operating activities: Net income $ 124,222 $ 89,018 $ 104,737 Adjustments to reconcile net income to cash provided by operations: Depreciation 149,119 129,602 119,514 Amortization 22,099 19,692 17,282 Deferred income taxes 38,027 7,544 2,855 Qualified defined benefit pension plan expense (benefit) 10,357 4,062 ( 2,430 ) Contributions to qualified defined benefit pension plans ( 11,310 ) ( 20,460 ) — Deferred environmental expenditures, net ( 25,697 ) ( 23,307 ) ( 26,052 ) Environmental remediation expense 14,623 14,054 12,899 Asset optimization revenue sharing bill credits ( 15,549 ) ( 28,874 ) ( 10,471 ) Regulatory disallowance of line extension allowances — 13,700 — Other 10,377 9,823 8,276 Changes in assets and liabilities: Receivables, net 19,067 ( 13,374 ) 51,391 Inventories ( 25,443 ) ( 2,327 ) ( 23,884 ) Income and other taxes ( 3,303 ) ( 11,204 ) 4,124 Accounts payable 5,328 ( 20,687 ) ( 43,531 ) Deferred gas costs ( 34,201 ) 38,129 52,371 Asset optimization revenue sharing 24,343 14,539 22,637 Decoupling mechanism ( 26,939 ) 5,173 ( 11,415 ) Cloud-based software ( 10,382 ) ( 22,392 ) ( 16,307 ) Regulatory accounts 5,961 12,921 4,645 Other, net ( 5,549 ) 15,109 15,227 Cash provided by operating activities 265,150 230,741 281,868 Investing activities: Capital expenditures ( 355,066 ) ( 353,906 ) ( 290,845 ) Other ( 2,430 ) ( 3,725 ) 384 Cash used in investing activities ( 357,496 ) ( 357,631 ) ( 290,461 ) Financing activities: Long-term debt issued 200,000 — 330,000 Long-term debt retired ( 30,000 ) — ( 90,000 ) Changes in other short-term debt, net ( 126,520 ) 119,730 ( 153,420 ) Cash contributions received from parent 135,000 75,000 30,000 Cash dividend payments on common stock ( 77,375 ) ( 72,773 ) ( 92,376 ) Payment of financing fees ( 2,546 ) ( 311 ) ( 2,080 ) Shares withheld for tax purposes ( 1,599 ) ( 1,319 ) ( 1,313 ) Other ( 316 ) ( 529 ) ( 369 ) Cash provided by financing activities 96,644 119,798 20,442 (Decrease) increase in cash, cash equivalents and restricted cash 4,298 ( 7,092 ) 11,849 Cash, cash equivalents and restricted cash, beginning of period 29,428 36,520 24,671 Cash, cash equivalents and restricted cash, end of period $ 33,726 $ 29,428 $ 36,520 92 Supplemental disclosure of cash flow information: Interest paid, net of capitalization $ 56,652 $ 56,989 $ 64,054 Income taxes paid, net of refunds: U.S. 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 93 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND PRINCIPLES OF CONSOLIDATION 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 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 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. The consolidated financial statements of NW Holdings and NW Natural are presented after elimination of all intercompany balances and transactions. Notes to the consolidated financial statements reflect the activity for both NW Holdings and NW Natural for all periods presented, unless otherwise noted. 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. 2. SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect reported amounts in the consolidated financial statements and accompanying notes. Actual amounts could differ from those estimates, and changes would most likely be reported in future periods. Management believes the estimates and assumptions used are reasonable . Industry Regulation 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. 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. Accounting records and practices of the regulated businesses conform to the requirements and uniform system of accounts prescribed by these regulatory authorities in accordance with U.S. GAAP. The businesses in which customer rates are regulated have approved cost-based rates which are intended to allow such businesses to earn a reasonable return on invested capital. 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. 94 Amounts deferred as regulatory assets and liabilities for NW Holdings and NW Natural were as follows: Regulatory Assets In thousands 2025 2024 NW Natural: Current: Unrealized loss on derivatives (1) $ 63,578 $ 75,272 Gas costs 6,284 5,340 Environmental costs (2) 12,148 10,746 Decoupling (3) 11,631 — Pension balancing (4) 7,131 7,131 Income taxes 2,208 2,208 Washington Climate Commitment Act compliance 7,482 7,778 Security and systems improvements 1,771 2,711 Industrial demand side management (5) 10,539 8,551 Other (6) 20,363 10,354 Total current - NW Natural 143,135 130,091 Other (NW Holdings) 610 25 Total current - NW Holdings $ 143,745 $ 130,116 NW Natural: Non-current: Unrealized loss on derivatives (1) $ 14,039 $ 13,307 Pension balancing (4) 15,647 21,681 Income taxes 9,148 9,560 Pension and other postretirement benefit liabilities 96,008 111,236 Environmental costs (2) 180,063 167,086 Gas costs 9,434 1,442 Decoupling (3) 8,891 — Washington Climate Commitment Act compliance 33,085 22,136 Security and systems improvements 8,234 8,531 Industrial demand side management (5) 9,334 7,390 Other (6) 35,964 19,313 Total non-current - NW Natural 419,847 381,682 Other (NW Holdings) 4,347 817 Total non-current - NW Holdings $ 424,194 $ 382,499 95 Regulatory Liabilities In thousands 2025 2024 NW Natural: Current: Gas costs $ 34,172 $ 35,947 Unrealized gain on derivatives (1) 3,922 6,563 Decoupling (3) 5,181 8,726 Income taxes 5,406 4,726 Asset optimization revenue sharing 25,981 17,500 Washington Climate Commitment Act proceeds 57,441 36,595 Other (6) 5,805 5,990 Total current - NW Natural 137,908 116,047 Other (NW Holdings) 66 133 Total current - NW Holdings $ 137,974 $ 116,180 NW Natural: Non-current: Gas costs $ 687 $ 14,220 Unrealized gain on derivatives (1) 366 394 Decoupling (3) — 2,872 Income taxes (7) 159,176 164,759 Accrued asset removal costs (8) 561,594 526,526 Asset optimization revenue sharing 2,386 2,073 Other (6) 24,637 18,328 Total non-current - NW Natural 748,846 729,172 Other (NW Holdings) 9,561 945 Total non-current - NW Holdings $ 758,407 $ 730,117 (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 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. (3) This deferral represents the margin adjustment resulting from differences between actual and expected volumes. (4) Balance represents deferred net periodic benefit costs as approved by the OPUC. (5) Energy efficiency program for industrial sales customers in Oregon to provide assistance with reducing their gas usage. (6) Balances consist of deferrals and amortizations under approved regulatory mechanisms and typically earn a rate of return or carrying charge. (7) Balance represents excess deferred income tax benefits subject to regulatory flow-through. See Note 11. (8) Estimated costs of removal on certain regulated properties are collected through rates. See "Accounting Policies— Plant, Property, and Accrued Asset Removal Costs " below. 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. Similarly, most other regulatory deferred accounts are amortized over 12 months. However, certain regulatory account balances, such as income taxes, environmental costs, pension liabilities, and accrued asset removal costs, are large and tend to be amortized over longer periods once NW Natural has agreed upon an amortization period with the respective regulatory agency. We believe all costs incurred and deferred at December 31, 2025 are prudent. All regulatory assets are reviewed annually for recoverability, or more often if circumstances warrant. If we should determine that all or a portion of these regulatory assets no longer meet the criteria for continued application of regulatory accounting, then NW Holdings and NW Natural would be required to write-off the net unrecoverable balances in the period such determination is made. Regulatory interest income o f $ 6.2 million and $ 5.4 million and regulatory interest expense of $ 4.3 million and $ 4.0 million was recognized within other income (expense), net for the years ended December 31, 2025 and 2024, respectively. Environmental Regulatory Accounting See Note 17 for information about the SRRM and OPUC orders regarding implementation. 96 New Accounting Standards 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. Recently Issued Accounting Pronouncements JOINT VENTURE FORMATIONS. 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. 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 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. See Note 4. IMPROVEMENTS TO INCOME TAX DISCLOSURES. In December 2023, the FASB issued ASU 2023-09, which requires additional disclosures about income taxes. 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. In November 2024, the FASB issued ASU 2024-03, which requires additional disclosures of disaggregated income statement expenses. The disclosures are required beginning with our annual report for the year ending December 31, 2027. The 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. 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 The accounting policies discussed below apply to both NW Holdings and NW Natural. Plant, Property, and Accrued Asset Removal Costs Plant and property are stated at cost, including capitalized labor, materials, and overhead. In accordance with regulatory accounting standards, the cost of acquiring and constructing long-lived plant and property generally includes an allowance for funds used during construction (AFUDC) or capitalized interest. AFUDC represents the regulatory financing cost incurred when debt and equity funds are used for construction (see “ AFUDC ” below). When constructed assets are subject to market-based rates rather than cost-based rates, the financing costs incurred during construction are included in capitalized interest in accordance with U.S. GAAP, not as regulatory financing costs under AFUDC. 97 In accordance with long-standing regulatory treatment, our depreciation rates consist of three components: one based on the average service life of the asset, a second based on the estimated salvage value of the asset, and a third based on the asset’s estimated cost of removal. We collect, through rates, the estimated cost of removal on certain regulated properties through depreciation expense, with a corresponding offset to accumulated depreciation. These removal costs are non-legal obligations as defined by regulatory accounting guidance. 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 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 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. AFUDC. 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 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 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. We review the carrying value of long-lived assets whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. Factors that would necessitate an impairment assessment of long-lived assets include a significant adverse change in the extent or manner in which the asset is used, a significant adverse change in legal factors or business climate that could affect the value of the asset, or a significant decline in the observable market value or expected future cash flows of the asset, among others. When such factors are present, we assess the recoverability by determining whether the carrying value of the asset will be recovered through expected future cash flows. An asset is determined to be impaired when the carrying value of the asset exceeds the expected undiscounted future cash flows from the use and eventual disposition of the asset. If an impairment is indicated, we record an impairment loss for the difference between the carrying value and the fair value of the long-lived assets. Fair value is estimated using appropriate valuation methodologies, which may include an estimate of discounted cash flows. Cash and Cash Equivalents Cash and cash equivalents include cash on hand plus highly liquid investment accounts with original maturity dates of three months or less. These investments are readily convertible to cash with fair value approximating cost. At December 31, 2025, NW Holdings had outstanding checks of $ 0.3 million, substantially all of which is recorded at NW Natural, and at December 31, 2024, NW Holdings had $ 3.9 million of outstanding checks. These balances are included in accounts payable in the NW Holdings and NW Natural balance sheets. Restricted Cash Restricted cash is primarily comprised of funds from public purpose charges for programs that assist low-income customers with bill payments or energy efficiency. These balances are included in other current assets in the NW Holdings and NW Natural balance sheets. The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances at NW Holdings as of December 31, 2025 and 2024: December 31, In thousands 2025 2024 Cash and cash equivalents $ 36,673 $ 38,490 Restricted cash included in other current assets 4,404 9,492 Cash, cash equivalents and restricted cash $ 41,077 $ 47,982 98 The following table provides a reconciliation of the cash, cash equivalents and restricted cash balances at NW Natural as of December 31, 2025 and 2024: December 31, In thousands 2025 2024 Cash and cash equivalents $ 29,347 $ 19,961 Restricted cash included in other current assets 4,379 9,467 Cash, cash equivalents and restricted cash $ 33,726 $ 29,428 Revenue Recognition and Accrued Unbilled Revenue Revenues, derived primarily from the sale and transportation of natural gas, are recognized upon delivery of gas or water, or service to customers. Revenues include accruals for gas or water delivered but not yet billed to customers based on estimates of deliveries from meter reading dates to month end (accrued unbilled revenue). Accrued unbilled revenue is dependent upon a number of factors that require management’s judgment, including total natural gas receipts and deliveries, customer use of natural gas or water by billing cycle, and weather factors. Accrued unbilled revenue is reversed the following month when actual billings occur. 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. In addition, we also have asset management service revenue from an independent energy marketing company that optimizes commodity, storage, and pipeline capacity release transactions. Under this agreement, guaranteed asset management revenue is recognized using a straight-line, pro-rata methodology over the term of each contract. Revenues earned above the guaranteed amount are recognized as they are earned. Revenue Taxes Revenue-based taxes are primarily franchise taxes, which are collected from customers and remitted to taxing authorities. 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 $ 48.2 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 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 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 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. For extreme situations like a financial crisis, natural disaster, and the economic slowdown caused by the COVID-19 pandemic, we enhanced our review and analysis. For the residential and commercial uncollectible provision, we primarily followed our standard methodology, which includes assessing historical write-off trends and current information on delinquent accounts. Beginning October 1, 2022, new collection rules from the OPUC applied to residential and commercial customers. 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. 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. 99 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 Year ended December 31, 2025 In thousands Beginning Balance Provision recorded, net of adjustments Write-offs recognized, net of recoveries Ending Balance Allowance for uncollectible accounts: Residential $ 2,124 $ 1,353 $ ( 1,197 ) $ 2,280 Commercial 136 716 ( 478 ) 374 Industrial 20 31 ( 5 ) 46 Accrued unbilled and other 508 213 ( 373 ) 348 Total NW Natural 2,788 2,313 ( 2,053 ) 3,048 Other - NW Holdings 686 1,194 ( 860 ) 1,020 Total NW Holdings $ 3,474 $ 3,507 $ ( 2,913 ) $ 4,068 ALLOWANCE FOR NET INVESTMENTS IN SALES-TYPE LEASES. NW Natural currently holds two net investments in sales-type leases, with substantially all of the net investment balance related to the North Mist natural gas storage agreement with Portland General Electric (PGE) which is billed under an OPUC-approved rate schedule. See Note 7 for more information on the North Mist lease. Due to the nature of this service, PGE may recover the costs of the lease through general rate cases. 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. 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. Inventories 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. 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. Gas storage inventories are valued at the lower of average cost or net realizable value. 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 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. During 2025 and 2024, NW Natural entered into certain agreements to purchase renewable thermal certificates (RTCs). RTCs are initially recorded at cost and subsequently assessed for impairment based on the lower-of-cost or market model. NW Natural's RTCs inventory totaled $ 0.8 million and $ 0.4 million at December 31, 2025 and 2024, respectively. Greenhouse Gas Allowances WASHINGTON. NW Natural is subject to greenhouse gas (GHG) emission reduction requirements under the Washington Climate Commitment Act (CCA) regulations. Under Washington's CCA, emission reduction compliance mechanisms include: 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 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. The CCA allows for the sale of compliance instruments or allowances, and as a result, should NW Natural sell these it will recognize revenue when title to the instrument or allowance is transferred to a counterparty, and NW Natural will recognize expense at the time of recognition of the related sale. During the years ended December 31, 2025 and 2024 NW Natural consigned no-cost allowances to Washington auctions and received $ 17.9 million and $ 8.5 million, respectively, in cash, which proceeds were recorded as a regulatory liability for the benefit of customers. 100 We measure the compliance obligation, which is based on emissions, at the carrying value of inventory held plus the fair value of any additional emission allowances NW Natural would need to purchase to satisfy the obligations. Under the Washington program, NW Natural recognized a liability of $ 40.6 million and $ 29.9 million as of December 31, 2025 and 2024, respectively. A portion of the costs to comply with the Washington program are currently being recovered from utility customers through rates beginning January 1, 2024. NW Natural recognized $ 40.6 million and $ 29.9 million of deferred costs as of December 31, 2025 and 2024, respectively. OREGON. In November 2024, the Environmental Quality Commission adopted the Climate Protection Program (CPP). The CPP sets enforceable and declining limits, or caps, on GHG emissions from fossil fuels used throughout Oregon. The first compliance period started January 1, 2025 and covers emissions through the end of 2027. Gas Reserves Gas reserves are payments to acquire and produce natural gas reserves. Gas reserves are stated at cost, adjusted for regulatory amortization, with the associated deferred tax benefits recorded as liabilities on the balance sheet. The current portion is calculated based on expected gas deliveries within the next fiscal year. NW Natural recognizes regulatory amortization of this asset on a volumetric basis calculated using the estimated gas reserves and the estimated therms extracted and sold each month. The amortization of gas reserves is recorded to cost of gas along with gas production revenues and production costs. See Note 13. Derivatives NW Natural's derivatives are measured at fair value and recognized as either assets or liabilities on the balance sheet. 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. In addition, certain derivative contracts are approved by regulatory authorities for recovery or refund through customer rates. Accordingly, the changes in fair value of these approved contracts are deferred as regulatory assets or liabilities pursuant to regulatory accounting principles. NW Natural's financial derivatives generally qualify for deferral under regulatory accounting. 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 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. See Note 15. NW Holdings and NW Natural have financial derivative policies that set forth guidelines for using selected derivative products to support prudent risk management strategies within designated parameters. NW Natural's objective for using derivatives is to decrease the volatility of gas prices, interest rates, foreign currency, and cash flows without speculative risk. The use of derivatives is permitted only after the risk exposures have been identified, are determined to exceed acceptable tolerance levels, and are determined necessary to support normal business activities. NW Natural does not enter into derivative instruments for trading purposes. All commodity and foreign exchange derivatives are currently held at NW Natural, and an interest rate swap was held at NWN Water. Fair Value 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: • Level 1: Valuation is based on quoted prices for identical instruments traded in active markets; • Level 2: Valuation is based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market; and • Level 3: Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimates of assumptions market participants would use in valuing the asset or liability. In addition, the fair value for certain pension trust investments is determined using Net Asset Value per share (NAV) as a practical expedient, and therefore they are not classified within the fair value hierarchy. These investments primarily consist of institutional commingled funds. When developing fair value measurements, it is our policy to use quoted market prices whenever available or to maximize the use of observable inputs and minimize the use of unobservable inputs when quoted market prices are not available. Fair values are primarily developed using industry-standard models that consider various inputs including: (a) quoted future prices for commodities; (b) forward currency prices; (c) time value; (d) volatility factors; (e) current market and contractual prices for 101 underlying instruments; (f) market interest rates and yield curves; (g) credit spreads; and (h) other relevant economic measures. 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 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. Adjustments are recorded during the measurement period to finalize the allocation of the purchase price. The carrying value of goodwill is reviewed annually during the fourth quarter, or whenever events or changes in circumstance indicate that such carrying values may not be recoverable. The goodwill assessment policy begins with a qualitative analysis in which events and circumstances are evaluated, including macroeconomic conditions, industry and market conditions, regulatory environments, and overall financial performance of the reporting unit. If the qualitative assessment indicates that the carrying value may be at risk of recoverability, a quantitative evaluation is performed to measure the carrying value of the goodwill against the fair value of the reporting unit. The reporting unit is determined primarily based on current operating segments and the level of review provided by the Chief Operating Decision Maker (CODM) and/or segment management on the operating segment's financial results. Reporting units are evaluated periodically for changes in the corporate environment. Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at fair value at the acquisition date, and the fair value of any non-controlling interest in the acquiree. Acquisition-related costs are expensed as incurred. 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. Income Taxes We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. 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 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. Investment tax credits associated with rate regulated plant additions are deferred for financial statement purposes and amortized over the estimated useful lives of the related plant. NW Holdings files consolidated or combined income tax returns that include NW Natural. Income tax expense is allocated on a separate company basis incorporating certain consolidated return considerations. Subsidiary income taxes payable or receivable are generally settled with NW Holdings, the common agent for income tax matters. Interest and penalties related to unrecognized tax benefits, if any, are recognized within income tax expense and accrued interest and penalties are recognized within the related tax liability line in the consolidated balance sheets. No accrued interest or penalties for uncertain tax benefits have been recorded. See Note 11. Environmental Contingencies Loss contingencies are recorded as liabilities when it is probable a liability has been incurred and the amount of the loss is reasonably estimable in accordance with accounting standards for contingencies. Estimating probable losses requires an analysis of uncertainties that often depend upon judgments about potential actions by third parties. Accruals for loss contingencies are recorded based on an analysis of potential results. 102 With respect to environmental liabilities and related costs, estimates are developed based on a review of information available from numerous sources, including completed studies and site specific negotiations. NW Natural's policy is to accrue the full amount of such liability when information is sufficient to reasonably estimate the amount of probable liability. When information is not available to reasonably estimate the probable liability, or when only the range of probable liabilities can be estimated and no amount within the range is more likely than another, it is our policy to accrue at the low end of the range. Accordingly, due to numerous uncertainties surrounding the course of environmental remediation and the preliminary nature of several site investigations, in some cases, it may not be possible to reasonably estimate the high end of the range of possible loss. In those cases, the nature of the potential loss and the fact that the high end of the range cannot be reasonably estimated is disclosed. See Note 17. Unconsolidated Affiliates NWN Water has an equity interest in a business which we account for under the equity method as we do not exercise control of the major operating and financial policies. The business transactions with our equity method investment are not significant. We regularly assess the profitability and valuation of our investment for any potential impairment. See Note 13 . Cloud Computing Arrangements 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. The implementation costs are amortized over the term of the related hosting agreement, including renewal periods that are reasonably certain to be exercised. Amortization expense of implementation costs are recorded as operations and maintenance expenses in the consolidated statements of comprehensive income. 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 We monitor significant events occurring after the balance sheet date and prior to the issuance of the financial statements to determine the impacts, if any, of events on the financial statements to be issued. 3. EARNINGS PER SHARE Basic earnings or loss per share are computed using NW Holdings' net income or loss and the weighted average number of common shares outstanding for each period presented. Diluted earnings per share are computed in the same manner, except using the weighted average number of common shares outstanding plus the effects of the assumed exercise of stock options and the payment of estimated stock awards from other stock-based compensation plans that are outstanding at the end of each period presented. Anti-dilutive stock awards are excluded from the calculation of diluted earnings or loss per common share. NW Holdings' diluted earnings or loss per share are calculated as follows: In thousands, except per share data 2025 2024 2023 Net income $ 113,319 $ 78,871 $ 93,868 Average common shares outstanding - basic 40,864 38,809 36,213 Additional shares for stock-based compensation plans (See Note 8) 89 60 52 Average common shares outstanding - diluted 40,953 38,869 36,265 Earnings per share of common stock: Basic $ 2.77 $ 2.03 $ 2.59 Diluted 2.77 2.03 2.59 Additional information: Anti-dilutive shares 4 8 1 4. SEGMENT INFORMATION 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. NW 103 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. 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 Chief Operating Decision Maker (CODM) and is therefore omitted. The following tables presents summary financial information concerning the reportable segments and other: 104 In thousands NWN Gas Utility SiEnergy Gas Utility (1) NWN Water Utility NW Holdings Other NW Holdings 2025 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 from operations (2) 219,949 26,558 18,906 15,478 280,891 Interest expense, net 61,440 9,608 3,048 48,417 122,513 Income tax expense (benefit) 41,952 3,870 3,511 ( 7,974 ) 41,359 Capital expenditures 339,948 67,650 43,917 15,378 466,893 2024 Operating revenues $ 1,075,688 $ — $ 52,036 $ 25,270 $ 1,152,994 Depreciation 128,524 — 8,296 1,078 137,898 Income from operations (2) 173,222 — 9,935 7,985 191,142 Interest expense, net 62,868 — 3,815 13,409 80,092 Income tax expense (benefit) 30,195 — 2,069 ( 1,193 ) 31,071 Capital expenditures 348,913 — 39,988 5,499 394,400 2023 Operating revenues $ 1,136,400 $ — $ 38,852 $ 22,223 $ 1,197,475 Depreciation 118,417 — 6,067 1,097 125,581 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 31,688 — 450 224 32,362 Capital expenditures 285,998 — 36,686 4,663 327,347 (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 2025 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 2024 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 2023 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. 105 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 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 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 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 operating revenues 1,096,785 1,075,688 1,136,400 Less: 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 Margin 680,149 601,278 575,008 Operations and maintenance 264,273 253,297 241,721 General taxes 48,045 46,235 44,279 Depreciation 147,882 128,524 118,417 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 Less: 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. 106 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. 5. COMMON STOCK As of December 31, 2025 and 2024, NW Holdings had 100 million shares of common stock authorized. As of December 31, 2025, NW Holdings had 221,577 shares reserved for issuance of common stock under the Employee Stock Purchase Plan (ESPP) and 184,491 shares reserved for issuance under the Dividend Reinvestment and Direct Stock Purchase Plan (DRPP). At NW Holdings' election, shares sold through the DRPP may be purchased in the open market or through original issuance of shares reserved for issuance under the DRPP. In August 2021, NW Holdings initiated an at-the-market (ATM) equity program by entering into an equity distribution agreement under which NW Holdings issued and sold from time to time shares of common stock, no par value, having an aggregate gross sales price of up to $ 200 million. In August 2024, the Finance Committee of the NW Holdings' Board of Directors authorized NW Holdings' sale of an additional $ 200 million in the aggregate gross sales price under the ATM equity program, with the result that a total of $ 400 million in the aggregate gross sales price has been authorized for issuance and sale under the ATM equity program. NW Holdings is under no obligation to offer and sell common stock under the ATM equity program, which the Finance Committee of the NW Holdings' Board of Directors has authorized through August 2027. Any shares of common stock offered under the ATM equity program are registered on NW Holdings’ universal shelf registration statement filed with the SEC, which expires in August 2027, or will be registered on a subsequent registration statement to be filed by NW Holdings. During the year ended December 31, 2025, NW Holdings issued and sold 1,178,509 shares of common stock pursuant to the ATM equity program resulting in cash proceeds of $ 47.4 million, net of fees and commissions paid to agents of $ 0.9 million. As of December 31, 2025, NW Holdings had $ 103.4 million of equity available for issuance under the program. Stock Repurchase Program Effective May 23, 2024, NW Holdings’ Board authorized a new share repurchase program under which NW Holdings may repurchase in open market or privately negotiated transactions up to an aggregate of 5.0 million shares or an amount not to exceed $ 150 million. The new share repurchase program is authorized to continue until the program is used, terminated or replaced. The repurchase program replaces the Company’s previously authorized share repurchase program, which commenced in 2000 and authorized the repurchase of up to 2.8 million shares, or an amount not to exceed $ 100 million, in the aggregate. No shares of common stock were repurchased pursuant to our new program or prior program during the year ended December 31, 2025. Since the previous plan’s inception in 2000 under NW Natural, a total of 2.1 million shares have been repurchased at a total cost of $ 83.3 million. 107 The following table summarizes the changes in the number of shares of NW Holdings' common stock issued and outstanding: In thousands Shares Balance, December 31, 2022 35,525 Sales to employees under ESPP 13 Stock-based compensation 39 Equity issuance 1,658 Sales to shareholders under DRPP 69 Shares issued in connection with business combinations 327 Balance, December 31, 2023 37,631 Sales to employees under ESPP 46 Stock-based compensation 43 Equity issuance 2,391 Sales to shareholders under DRPP 75 Shares issued in connection with business combinations 36 Balance, December 31, 2024 40,222 Sales to employees under ESPP 40 Stock-based compensation 48 Equity issuance 1,188 Sales to shareholders under DRPP 66 Balance, December 31, 2025 41,564 108 6. REVENUE The following table presents disaggregated revenue from continuing operations: In thousands NWN Gas Utility SiEnergy Gas Utility (1) NWN Water Utility NW Holdings Other NW Holdings 2025 Natural gas sales $ 1,014,807 $ 64,740 $ — $ 3,463 $ 1,083,010 Gas storage revenue, net — — — 16,774 16,774 Asset management revenue, net — — — 6,816 6,816 Water and wastewater revenue — — 65,646 — 65,646 Appliance retail center revenue — — — 4,738 4,738 Renewable natural gas sales — — — 29,157 29,157 Other revenue 3,850 — — — 3,850 Revenue from contracts with customers 1,018,657 64,740 65,646 60,948 1,209,991 Alternative revenue 60,919 1,244 — — 62,163 Leasing revenue 17,209 — — — 17,209 Total operating revenues $ 1,096,785 $ 65,984 $ 65,646 $ 60,948 $ 1,289,363 2024 Natural gas sales $ 1,035,839 $ — $ — $ 33 $ 1,035,872 Gas storage revenue, net — — — 15,119 15,119 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 Revenue from contracts with customers 1,038,950 — 52,036 25,270 1,116,256 Alternative revenue 20,246 — — — 20,246 Leasing revenue 16,492 — — — 16,492 Total operating revenues $ 1,075,688 $ — $ 52,036 $ 25,270 $ 1,152,994 2023 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 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 Revenue from contracts with customers 1,112,152 — 38,852 22,223 1,173,227 Alternative revenue 8,198 — — — 8,198 Leasing revenue 16,050 — — — 16,050 Total operating revenues $ 1,136,400 $ — $ 38,852 $ 22,223 $ 1,197,475 (1) Prior year comparatives are not provided for SiEnergy as it was acquired by NW Holdings January 7, 2025. 109 The following table present disaggregated revenue of NW Natural: In thousands NWN Gas Utility NW Natural Other NW Natural 2025 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 2024 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 2023 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. 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. NW Holdings and NW Natural do not have any material contract assets, as net accounts receivable and accrued unbilled revenue balances are unconditional and only involve the passage of time until such balances are billed and collected. NW Holdings and NW Natural do not have any material contract liabilities. 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 NWN Gas Utility customers and remitted to taxing authorities. 110 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 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. Revenues include firm and interruptible sales and transportation services, franchise taxes recovered from the customer, late payment fees, service fees, and accruals for gas delivered but not yet billed (accrued unbilled revenue). The accrued unbilled revenue balance is based on estimates of deliveries during the period from the last meter reading and management judgment is required for a number of factors used in this calculation, including customer use and weather factors. 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 (WARM) and decoupling mechanisms are considered to be alternative revenue programs. Alternative revenue programs are considered to be contracts between NW Natural and its regulator and are excluded from revenue from contracts with customers. Leasing Revenue 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 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. The majority of these transactions are accounted for as operating leases and the revenue is recognized over the term of the lease agreement. Lease revenue is excluded from revenue from contracts with customers. See Note 7 for additional information. 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. 111 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. Gas storage revenue is generally recognized over time as the gas storage service is provided to the customer and the amount of consideration received and recognized as revenue is dependent on set rates defined per the storage agreements. Noncash consideration in the form of dekatherms of natural gas is received as consideration for providing gas injection services to gas storage customers. This noncash consideration is measured at fair value using the average spot rate. 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 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. Variable revenues earned above guaranteed amounts are estimated and recognized at the end of each period using the most likely amount approach. Additionally, other asset management revenues may be based on a fixed rate. Generally, asset management accounts are settled on a monthly basis. As of December 31, 2025, unrecognized revenue for the fixed component of the transaction price related to gas storage and asset management revenue was approximately $ 114.7 million. Of this amount, approximately $ 26.8 million will be recognized in 2026, $ 20.3 million in 2027, $ 16.8 million in 2028, $ 16.8 million in 2029, $ 16.3 million in 2030 and $ 17.7 million thereafter. The amounts presented here are calculated using current contracted rates. 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. Revenue from the sale of appliances is recognized at the point in time in which the appliance is transferred to the third party responsible for delivery and installation services and when the customer has legal title to the appliance. It is required that the sale be paid for in full prior to transfer of legal title. The amount of consideration received and recognized as revenue varies with changes in marketing incentives and discounts offered to customers. The components of NW Natural's revenue are described above in NWN Gas Utility and NW Holdings Other. 7. LEASES Lease Revenue Leasing revenue primarily consists of NW Natural's North Mist natural gas storage agreement with PGE which is billed under an OPUC-approved rate schedule and includes an initial 30 -year term beginning May 2019 with options to extend, totaling up to an additional 50 years upon mutual agreement of the parties. Under U.S. GAAP, this agreement is classified as a sales-type lease and qualifies for regulatory accounting deferral treatment. The investment in the storage facility is included in rate base under a separately established cost-of-service tariff, with revenues recognized according to the tariff schedule. As such, the selling profit that was calculated upon commencement as part of the sale-type lease recognition was deferred and will be amortized over the lease term. Billing rates under the cost-of-service tariff will be updated annually to reflect current information including depreciable asset levels, forecasted operating expenses, and the results of regulatory proceedings, as applicable, and revenue received under this agreement is recognized as operating revenue on the consolidated statements of comprehensive income. There are no variable payments or residual value guarantees. 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. Lease payments are outlined in an OPUC-approved rate schedule over a 10 -year term. There are no variable payments or residual value guarantees. The selling profit computed upon lease commencement was not significant. Our lessor portfolio also contains small leases of property owned by NW Natural to third parties. These transactions are accounted for as operating leases and the revenue is recognized over the term of the lease agreement. 112 The components of lease revenue at NW Natural were as follows: Year ended December 31, In thousands 2025 2024 2023 Lease revenue Operating leases $ 82 $ 86 $ 76 Sales-type leases 17,127 16,406 15,974 Total lease revenue $ 17,209 $ 16,492 $ 16,050 Additionally, lease revenue of $ 0.6 million was recognized for each of the years ended December 31, 2025, 2024, and 2023, respectively, related to operating leases associated with non-utility property rentals. Lease revenue related to these leases was presented in other income (expense), net on the consolidated statements of comprehensive income as it is non-operating income. Total future minimum lease payments to be received under non-cancelable leases at December 31, 2025 are as follows: In thousands Operating Sales-Type Total NW Natural: 2026 $ 43 $ 14,901 $ 14,944 2027 27 14,500 14,527 2028 — 14,004 14,004 2029 — 13,594 13,594 2030 — 13,204 13,204 Thereafter — 181,518 181,518 Total minimum lease payments $ 70 251,721 $ 251,791 Less: imputed interest 132,173 Total leases receivable $ 119,548 Other NW Holdings: 2026 $ 56 $ — $ 56 2027 57 — 57 2028 58 — 58 2029 59 — 59 2030 60 — 60 Thereafter 681 — 681 Total minimum lease payments $ 971 $ — $ 971 NW Holdings: 2026 $ 99 $ 14,901 $ 15,000 2027 84 14,500 14,584 2028 58 14,004 14,062 2029 59 13,594 13,653 2030 60 13,204 13,264 Thereafter 681 181,518 182,199 Total minimum lease payments $ 1,041 251,721 $ 252,762 Less: imputed interest 132,173 Total leases receivable $ 119,548 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. Lease Expense Operating Leases We have operating leases for land, buildings and equipment. Our primary lease is for NW Natural's headquarters and operations center. 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. Short-term leases with a term of 12 months or less are not recorded on the balance sheet. 113 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: Year ended December 31, 2025 In thousands NW Natural Other (NW Holdings) NW Holdings Operating lease expense $ 7,754 $ 957 $ 8,711 Short-term lease expense 557 — 557 Year ended December 31, 2024 In thousands NW Natural Other (NW Holdings) NW Holdings Operating lease expense $ 7,545 $ 198 $ 7,743 Short-term lease expense 595 — 595 Year ended December 31, 2023 In thousands NW Natural Other (NW Holdings) NW Holdings Operating lease expense $ 7,244 $ 176 $ 7,420 Short-term lease expense 925 — 925 Supplemental balance sheet information related to operating leases as of December 31, 2025 is as follows: In thousands NW Natural Other (NW Holdings) NW Holdings Operating lease right of use assets $ 65,650 $ 2,574 $ 68,224 Operating lease liabilities - current liabilities $ 2,515 $ 713 $ 3,228 Operating lease liabilities - non-current liabilities 73,097 1,889 74,986 Total operating lease liabilities $ 75,612 $ 2,602 $ 78,214 Supplemental balance sheet information related to operating leases as of December 31, 2024 is as follows: In thousands NW Natural Other (NW Holdings) NW Holdings Operating lease right of use assets $ 68,115 $ 511 $ 68,626 Operating lease liabilities - current liabilities $ 1,653 $ 187 $ 1,840 Operating lease liabilities - non-current liabilities 75,591 323 75,914 Total operating lease liabilities $ 77,244 $ 510 $ 77,754 The weighted-average remaining lease terms and weighted-average discount rates for the operating leases at NW Natural were as follows: 2025 2024 Weighted-average remaining lease term (years) 14.3 15.3 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. 114 Headquarters and Operations Center Lease NW Natural commenced a 20 -year operating lease agreement in March 2020 for a new headquarters and operations center in Portland, Oregon. There is an option to extend the term of the lease for two additional periods of seven years . There is a material timing difference between the minimum lease payments and expense recognition as calculated under operating lease accounting rules. OPUC issued an order allowing us to align our expense recognition with cash payments for ratemaking purposes. We recorded the difference between the minimum lease payments and the aggregate of the imputed interest on the finance lease obligation and amortization of the right-of-use asset as a regulatory asset on our balance sheet. The balance of the regulatory asset was $ 9.7 million and $ 9.0 million as of December 31, 2025 and 2024, respectively. Maturities of operating lease liabilities at December 31, 2025 were as follows: In thousands NW Natural Other (NW Holdings) NW Holdings 2026 $ 7,619 $ 846 $ 8,465 2027 7,612 721 8,333 2028 7,795 598 8,393 2029 7,983 567 8,550 2030 8,080 232 8,312 Thereafter 85,329 85,329 Total lease payments 124,418 2,964 127,382 Less: imputed interest 48,806 362 49,168 Total lease obligations 75,612 2,602 78,214 Less: current obligations 2,515 713 3,228 Long-term lease obligations $ 73,097 $ 1,889 $ 74,986 As of December 31, 2025, there were no finance lease liabilities at NW Natural and NW Holdings. Cash Flow Information Supplemental cash flow information related to leases was as follows: Year ended December 31, 2025 In thousands NW Natural Other (NW Holdings) NW Holdings Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases (1) $ 7,709 $ 733 $ 8,442 Finance cash flows from finance leases 340 — 340 Right of use assets obtained in exchange for lease obligations Operating leases $ 568 $ 2,671 $ 3,239 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 In thousands NW Natural Other (NW Holdings) NW Holdings Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 7,495 $ 199 $ 7,694 Finance cash flows from finance leases 529 — 529 Right of use assets obtained in exchange for lease obligations Operating leases $ 250 $ 108 $ 358 Finance leases 529 — 529 115 Year ended December 31, 2023 In thousands NW Natural Other (NW Holdings) NW Holdings Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 7,434 $ 176 $ 7,610 Finance cash flows from finance leases 369 — 369 Right of use assets obtained in exchange for lease obligations Operating leases $ 659 $ — $ 659 Finance leases 369 101 470 Finance Leases NW Natural also leases building storage spaces for use as a gas meter room in order to provide natural gas to multifamily or mixed use developments. These contracts are accounted for as finance leases and typically involve a one-time upfront payment with no remaining liability. The right of use asset for finance leases was $ 3.3 million and $ 3.0 million at December 31, 2025 and 2024, respectively. 8. STOCK-BASED COMPENSATION Stock-based compensation plans are designed to promote stock ownership in NW Holdings by employees and officers of NW Holdings and its affiliates. These compensation plans include a Long Term Incentive Plan (LTIP) and an ESPP. Long Term Incentive Plan The LTIP is intended to provide a flexible competitive compensation program for eligible officers and key employees. Under the LTIP, shares of NW Holdings common stock are authorized for equity incentive grants in the form of stock, restricted stock, restricted stock units, stock options, or performance shares. An aggregate of 2,250,000 shares were authorized for issuance as of December 31, 2025. Shares awarded under the LTIP may be purchased on the open market or issued as original shares. Of the 2,250,000 shares of common stock authorized for LTIP awards at December 31, 2025, there were 1,117,110 shares available for issuance under any type of award. This assumes market, performance, and service-based grants currently outstanding are awarded at the target level. There were no outstanding grants of restricted stock or stock options under the LTIP at December 31, 2025 or 2024. The LTIP stock awards are compensatory awards for which compensation expense is based on the fair value of stock awards, with expense being recognized over the performance and vesting period of the outstanding awards. Forfeitures are recognized as they occur. Performance Shares LTIP performance shares incorporate a combination of market, performance, and service-based factors. The following table summarizes performance share expense information: Dollars in thousands Shares (1) Expense During Award Year (2) Total Expense for Award Estimated award: 2023-2025 grant (3) 57,437 $ 1,825 $ 1,825 2025-2027 grant (4) 5,097 $ 70 $ 70 Actual award: 2022-2024 grant 37,059 $ 1,098 $ 1,098 2021-2023 grant 40,719 $ 1,581 $ 1,581 (1) In addition to common stock shares, a participant also receives a dividend equivalent cash payment equal to the number of shares of common stock received on the award payout multiplied by the aggregate cash dividends paid per share during the performance period. (2) Amount represents the expense recognized in the third year of the vesting period noted above. 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. 116 The aggregate number of performance shares granted and outstanding at the target and maximum levels were as follows: Dollars in thousands Performance Share Awards Outstanding 2025 Performance Period Target Maximum Expense 2023-25 41,678 83,356 $ 1,825 2024-26 — — — 2025-27 6,135 12,270 70 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 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 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 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 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. The grant may also include a cash payment equal to the total amount of dividends paid per share between the grant date and vesting date of that portion of the RSU depending on the structure of the award agreement. The fair value of an RSU is equal to the closing market price of NW Holdings' common stock on the grant date. 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 . Information regarding the RSU activity is summarized as follows: Number of RSUs Weighted - Average Price Per RSU Nonvested, December 31, 2022 99,848 $ 50.44 Granted 45,532 48.24 Vested ( 36,393 ) 56.65 Forfeited ( 11,696 ) 49.98 Nonvested, December 31, 2023 97,291 49.80 Granted 68,907 39.18 Vested ( 35,662 ) 52.51 Forfeited ( 8,131 ) 45.33 Nonvested, December 31, 2024 122,405 43.34 Granted 69,612 41.77 Vested ( 45,107 ) 45.14 Forfeited ( 8,374 ) 42.38 Nonvested, December 31, 2025 138,536 $ 42.02 117 Employee Stock Purchase Plan NW Holdings' ESPP allows employees of NW Holdings, NW Natural and certain designated subsidiaries to purchase common stock at 85 % of the closing price on the trading day immediately preceding the initial offering date, which is set annually. For the 2025-2026 ESPP period, each eligible employee may purchase up to $ 21,216 worth of stock through payroll deductions over a period defined by the Board of Directors, with shares issued at the end of the subscription period. Stock-Based Compensation Expense Stock-based compensation expense is recognized as operations and maintenance expense or is capitalized as part of construction overhead at the entity at which the award recipient is employed. The following table summarizes the NW Holdings' financial statement impact, substantially all of which was recorded at NW Natural, of stock-based compensation under the LTIP and ESPP: In thousands 2025 2024 2023 Operations and maintenance expense, for stock-based compensation $ 3,739 $ 2,907 $ 3,293 Income tax benefit ( 990 ) ( 770 ) ( 872 ) Net stock-based compensation effect on net income 2,749 2,137 2,421 Amounts capitalized for stock-based compensation $ 384 $ 325 $ 305 9. DEBT 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, 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. In addition to issuing commercial paper or entering into bank loans to meet working capital requirements, including seasonal requirements to finance gas purchases and accounts receivable, short-term debt may also be used to temporarily fund capital requirements. For NW Natural, commercial paper and bank loans are periodically refinanced through the sale of long-term debt or equity contributions from NW Holdings. Commercial paper, when outstanding, is sold through two commercial banks under an issuing and paying agency agreement and is supported by one or more unsecured revolving credit facilities. See “ Credit Agreements ” below. At December 31, 2025 and 2024, NW Holdings' short-term debt consisted of the following: December 31, 2025 December 31, 2024 In millions Balance Outstanding Weighted Average Interest Rate (1) Balance Outstanding Weighted Average Interest Rate (1) 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. 118 Credit Agreements NW Holdings 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. NW Holdings was in compliance with this covenant at December 31, 2025 and 2024. 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. NW Natural 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 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. SiEnergy 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 In January 2024, NW Natural entered into an Uncommitted Letter of Credit and Reimbursement Agreement (LC Reimbursement Agreement), pursuant to which NW Natural agreed to reimburse each Lender acting as an issuing bank (Issuing Bank) thereunder for disbursements in respect of letters of credit (Letters of Credit) issued pursuant to the LC Reimbursement Agreement from time to time. The Company expects to use Letters of Credit issued under the facility created by the LC Reimbursement Agreement (LC Facility) primarily to support its participation in Washington Climate Commitment Act cap-and-invest program auctions. 119 Although there is no expressly stated maximum amount of Letters of Credit that can be issued or outstanding under the LC Facility, under current regulatory authority from the OPUC, the aggregate sum of Letters of Credit outstanding and available to be drawn under the LC Reimbursement Agreement may not exceed $ 100 million at any one time. The Issuing Banks have no commitment to issue Letters of Credit under the LC Facility and will have the discretion to limit and condition the terms for the issuance of Letters of Credit (including maximum face amounts) in their sole discretion. The LC Reimbursement Agreement requires NW Natural to maintain certain ratings with S&P and Moody’s. NW Natural must also notify the Administrative Agent and Lenders of any change in the S&P or Moody’s Ratings, although any such change is not an event of default. The LC Reimbursement Agreement prohibits NW Natural from permitting Consolidated Indebtedness to be greater than 70 % of Total Capitalization, each as defined therein and calculated as of the end of each fiscal quarter of NW Natural. Failure to comply with this financial covenant would constitute an Event of Default under the LC Reimbursement Agreement. The occurrence of this or any other Event of Default would entitle the Administrative Agent to require cash collateral for the LC Exposure, as defined in the LC Reimbursement Agreement, and to exercise all other rights and remedies available to it and the Lenders under the Credit Documents, as defined in the LC Reimbursement Agreement, and under applicable law. There were no letters of credit issued or outstanding under the LC Reimbursement Agreement at December 31, 2025. Long-Term Debt At December 31, 2025 and 2024, NW Holdings long-term debt consisted of the following: December 31, 2025 December 31, 2024 In millions Balance Outstanding Weighted Average Interest Rate (1) Balance Outstanding Weighted Average Interest Rate (1) NW Natural first mortgage bonds $ 1,544.7 4.7 % $ 1,374.7 4.6 % SiEnergy secured senior notes 185.0 5.6 % — — % NWN Water term loan 55.0 4.7 % 55.0 4.7 % 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 Less: unamortized debt issuance costs 15.9 10.6 Less: current maturities 160.6 30.8 Total long-term debt $ 2,272.2 $ 1,679.4 (1) Weighted average interest rate for the years ended December 31, 2025 and 2024. 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 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 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) $ 50.0 Junior Subordinated Debentures (d)(e) March 2025 September 2055 7.00 % 325.0 SiEnergy (f) 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. 120 (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 NW Holdings 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. NW Natural 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. SiEnergy 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 SiEnergy NWN Water NW Holdings Other NW Holdings 2026 $ 55,000 $ — $ 55,703 $ 50,000 $ 160,703 2027 64,700 — 724 — 65,424 2028 10,000 — 701 100,000 110,701 2029 50,000 — 384 140,000 190,384 2030 30,000 50,000 115 — 80,115 Thereafter 1,335,000 135,000 1,420 370,000 1,841,420 Total $ 1,544,700 $ 185,000 $ 59,047 $ 660,000 $ 2,448,747 121 The following table presents debt outstanding at NW Natural as of December 31: In thousands 2025 2024 NW Natural: First Mortgage Bonds: 7.720 % Series due 2025 $ — $ 20,000 6.520 % Series due 2025 — 10,000 7.050 % Series due 2026 20,000 20,000 3.211 % Series due 2026 35,000 35,000 7.000 % Series due 2027 20,000 20,000 2.822 % Series due 2027 25,000 25,000 6.650 % Series due 2027 19,700 19,700 6.650 % Series due 2028 10,000 10,000 3.141 % Series due 2029 50,000 50,000 7.740 % Series due 2030 20,000 20,000 7.850 % Series due 2030 10,000 10,000 5.820 % Series due 2032 30,000 30,000 5.660 % Series due 2033 40,000 40,000 5.750 % Series due 2033 100,000 100,000 5.180 % Series due 2034 80,000 80,000 5.250 % Series due 2035 10,000 10,000 5.130 % Series due 2036 75,000 — 5.230 % Series due 2038 50,000 50,000 4.000 % Series due 2042 50,000 50,000 4.136 % Series due 2046 40,000 40,000 3.685 % Series due 2047 75,000 75,000 4.110 % Series due 2048 50,000 50,000 3.869 % Series due 2049 90,000 90,000 3.600 % Series due 2050 150,000 150,000 3.078 % Series due 2051 130,000 130,000 4.780 % Series due 2052 140,000 140,000 5.430 % Series due 2053 100,000 100,000 5.900 % Series due 2055 125,000 — Long-term debt, gross 1,544,700 1,374,700 Less: current maturities 55,000 30,000 Total long-term debt $ 1,489,700 $ 1,344,700 122 The following table presents debt outstanding at NW Holdings excluding NW Natural, which is presented above, as of December 31: In thousands 2025 2024 NW Holdings Unsecured Senior Bonds: 5.780 % Series due 2028 $ 100,000 $ 100,000 5.840 % Series due 2029 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 325,000 — Long-term debt, gross 660,000 285,000 Less: current maturities 50,000 — Total NW Holdings long-term debt $ 610,000 $ 285,000 SiEnergy (1) Unsecured Senior Bonds: 4.86 % Series due 2030 $ 50,000 $ — 5.42 % Series due 2035 40,000 — 6.04 % Series due 2055 95,000 — Long-term debt, gross 185,000 — Less: current maturities — — Total SiEnergy long-term debt $ 185,000 $ — NWN Water Water term loan, fixed rate of 3.8 %, due 2026 (3) $ 55,000 $ 55,000 Other water debt (2) 4,047 6,052 Long-term debt, gross 59,047 61,052 Less: 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 NW Holdings' and NW Natural's outstanding debt does not trade in active markets. 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. These valuations are based on Level 2 inputs as defined in the fair value hierarchy. See Note 2. 123 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 : December 31, In millions 2025 2024 NW Holdings: Gross long-term debt $ 2,448.7 $ 1,720.8 Unamortized debt issuance costs ( 15.9 ) ( 10.6 ) Carrying amount 2,432.8 1,710.2 Estimated fair value (1) 2,317.1 1,542.2 NW Natural: Gross long-term debt $ 1,544.7 $ 1,374.7 Unamortized debt issuance costs ( 9.8 ) ( 9.3 ) Carrying amount 1,534.9 1,365.4 Estimated fair value (1) 1,383.1 1,191.2 (1) Estimated fair value does not include unamortized debt issuance costs. 10. PENSION AND OTHER POSTRETIREMENT BENEFIT COSTS NW Natural maintains a qualified non-contributory defined benefit pension plan (Pension Plan) for all eligible employees, non-qualified supplemental pension plans for eligible executive officers and other key employees, and other postretirement employee benefit plans. NW Natural also has a qualified defined contribution plan (Retirement K Savings Plan) for all eligible employees. The Pension Plan and Retirement K Savings Plan have plan assets, which are held in qualified trusts to fund retirement benefits. Effective January 1, 2007 and 2010, the Pension Plan and postretirement benefits for non-union employees and union employees, respectively, were closed to new participants. Non-union and union employees hired or re-hired after December 31, 2006 and 2009, respectively, and employees of NW Natural subsidiaries are provided an enhanced Retirement K Savings Plan benefit. The following table provides a reconciliation of the changes in NW Natural's benefit obligations and fair value of plan assets, as applicable, for NW Natural's pension and other postretirement benefit plans, excluding the Retirement K Savings Plan, and a summary of the funded status and amounts recognized in NW Holdings' and NW Natural's consolidated balance sheets as of December 31: Postretirement Benefit Plans Pension Benefits Other Benefits In thousands 2025 2024 2025 2024 Reconciliation of change in benefit obligation: Obligation at January 1 $ 405,552 $ 425,450 $ 22,031 $ 21,467 Service cost 3,505 3,837 97 90 Interest cost 21,397 21,466 1,152 1,035 Net actuarial (loss) gain 1,636 ( 18,215 ) 1,292 1,421 Benefits paid ( 35,396 ) ( 26,986 ) ( 2,009 ) ( 1,982 ) Obligation at December 31 396,694 405,552 22,563 22,031 Reconciliation of change in plan assets: Fair value of plan assets at January 1 284,148 283,444 — — Actual return on plan assets 31,633 4,892 — — Employer contributions 21,942 22,798 2,009 1,982 Benefits paid ( 35,396 ) ( 26,986 ) ( 2,009 ) ( 1,982 ) Fair value of plan assets at December 31 302,327 284,148 — — Funded status at December 31 $ ( 94,367 ) $ ( 121,404 ) $ ( 22,563 ) $ ( 22,031 ) 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 $ 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. 124 NW Natural's Pension Plan had a projected benefit obligation of $ 373.8 million and $ 372.8 million at December 31, 2025 and 2024, respectively, and fair values of plan assets of $ 302.3 million and $ 284.1 million, respectively. The plan had an accumulated benefit obligation of $ 348.1 million and $ 343.7 million at December 31, 2025 and 2024, respectively. The following table presents amounts realized through regulatory assets or in other comprehensive loss (income) for the years ended December 31: Regulatory Assets Other Comprehensive Loss (Income) Pension Benefits Other Postretirement Benefits Pension Benefits In thousands 2025 2024 2023 2025 2024 2023 2025 2024 2023 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: Prior service credit — — — — — — — — — Actuarial loss ( 8,716 ) ( 5,049 ) — ( 78 ) ( 8 ) — ( 761 ) ( 845 ) ( 713 ) Total $ ( 16,443 ) $ ( 4,116 ) $ 10,318 $ 1,215 $ 1,413 $ 2,208 $ ( 2,932 ) $ ( 1,135 ) $ 917 125 The following table presents amounts recognized in regulatory assets and accumulated other comprehensive loss (AOCL) at December 31: Regulatory Assets AOCL Pension Benefits Other Postretirement Benefits Pension Benefits In thousands 2025 2024 2025 2024 2025 2024 Net actuarial loss (gain) $ 91,999 $ 108,441 $ 4,009 $ 2,794 $ 6,453 $ 9,386 Total $ 91,999 $ 108,441 $ 4,009 $ 2,794 $ 6,453 $ 9,386 The following table presents amounts recognized by NW Holdings and NW Natural in AOCL and the changes in AOCL related to NW Natural's non-qualified employee benefit plans: Year ended December 31, In thousands 2025 2024 Beginning balance $ ( 7,052 ) $ ( 7,237 ) Amounts reclassified to AOCL 911 ( 439 ) Amounts reclassified from AOCL: Amortization of actuarial losses 761 794 Loss from plan settlement 1,442 — Total reclassifications before tax 3,114 355 Tax (expense) benefit ( 767 ) ( 170 ) Total reclassifications for the period 2,347 185 Ending balance $ ( 4,705 ) $ ( 7,052 ) In 2026, NW Natural will amortize $ 8.9 million in estimated costs from regulatory assets to net periodic benefit costs. The assumed discount rates for NW Natural's Pension Plan and other postretirement benefit plans were determined independently based on the FTSE Above Median Curve (discount rate curve), which uses high quality corporate bonds rated AA- or higher by S&P or Aa3 or higher by Moody’s. The discount rate curve was applied to match the estimated cash flows in each of the plans to reflect the timing and amount of expected future benefit payments for these plans. The assumed expected long-term rate of return on plan assets for the Pension Plan was developed using a weighted-average of the expected returns for the target asset portfolio. In developing the expected long-term rate of return assumption, consideration was given to the historical performance of each asset class in which the plan’s assets are invested and the target asset allocation for plan assets. The investment strategy and policies for Pension Plan assets held in the retirement trust fund were approved by the NW Natural Retirement Committee, which is composed of senior management with the assistance of an outside investment consultant. The policies set forth the guidelines and objectives governing the investment of plan assets. Plan assets are invested for total return with appropriate consideration for liquidity, portfolio risk, and return expectations. All investments are expected to satisfy the prudent investments rule under the Employee Retirement Income Security Act of 1974. The approved asset classes may include cash and short-term investments, fixed income, common stock and convertible securities, absolute and real return strategies, and real estate. Plan assets may be invested in separately managed accounts or in commingled or mutual funds. Investment re-balancing takes place periodically as needed, or when significant cash flows occur, in order to maintain the allocation of assets within the stated target ranges. The retirement trust fund for the Pension Plan is not currently invested in NW Holdings or NW Natural securities. The following table presents the Pension Plan asset target allocation at December 31, 2025: Asset Category Target Allocation Long government/credit 40 % U.S. large cap equity 21 Global equity 15 Developed non-U.S. equity 11 Emerging market equity 5 High yield bonds 4 Real estate investment trusts 2 Emerging market debt 2 Non-qualified supplemental defined benefit plan obligations were $ 22.9 million and $ 32.7 million at December 31, 2025 and 2024, respectively. These plans are not subject to regulatory deferral, and the changes in actuarial gains and losses, prior 126 service costs, and transition assets or obligations are recognized in AOCL, net of tax until they are amortized as a component of net periodic benefit cost. These are unfunded, non-qualified plans with no plan assets; however, a significant portion of the obligations is indirectly funded with company and trust-owned life insurance and other assets. Other postretirement benefit plans are unfunded plans but are subject to regulatory deferral. The actuarial gains and losses, prior service costs, and transition assets or obligations for these plans are recognized as a regulatory asset. Net periodic benefit costs consist of service costs, interest costs, the expected returns on plan assets, and the amortization of gains and losses and prior service costs. The gains and losses are the sum of the actuarial and asset gains and losses throughout the year and are amortized over the average remaining service period of active participants. The asset gains and losses are based in part on a market-related valuation of assets. The market-related valuation reflects differences between expected returns and actual investment returns with the differences recognized over a two-year period from the year in which they occur, thereby reducing year-to-year net periodic benefit cost volatility. The service cost component of net periodic benefit cost for NW Natural pension and other postretirement benefit plans is recognized in operations and maintenance expense in the consolidated statements of comprehensive income. The other non-service cost components are recognized in other income (expense), net in the consolidated statements of comprehensive income. The following table provides the components of net periodic benefit cost for NW Natural's pension and other postretirement benefit plans for the years ended December 31: Pension Benefits Other Postretirement Benefits In thousands 2025 2024 2023 2025 2024 2023 Service cost $ 3,505 $ 3,837 $ 3,922 $ 97 $ 90 $ 105 Interest cost 21,397 21,466 21,018 1,152 1,035 1,067 Expected return on plan assets ( 21,745 ) ( 23,749 ) ( 25,723 ) — — — 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 Amount allocated to construction ( 1,944 ) ( 1,874 ) ( 1,684 ) ( 39 ) ( 36 ) ( 36 ) Net periodic cost (benefit) charged to expense 12,132 5,574 ( 1,754 ) 1,288 1,097 1,136 Amortization of regulatory balancing account 7,131 7,131 7,131 — — — 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 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. Total amortization of the regulatory balancing account of $ 7.1 million was recognized in each of the years ended December 31, 2025 and 2024, of which $ 2.6 million was charged to operations and maintenance expense and $ 4.5 million was charged to other income (expense). The following table provides the assumptions used in measuring periodic benefit costs and benefit obligations for the years ended December 31: Pension Benefits Other Postretirement Benefits 2025 2024 2023 2025 2024 2023 Assumptions for net periodic benefit cost: Weighted-average discount rate 5.57 % 4.96 % 5.14 % 5.53 % 4.98 % 5.19 % Rate of increase in compensation 4.80 %- 5.05 % 4.00 %- 6.00 % 4.00 %- 5.00 % n/a n/a n/a Expected long-term rate of return 7.50 % 7.50 % 7.50 % n/a n/a n/a Assumptions for year-end funded status: Weighted-average discount rate 5.35 % 5.56 % 4.98 % 5.28 % 5.53 % 4.98 % Rate of increase in compensation (1) 4.80 %- 5.05 % 4.80 %- 5.05 % 4.00 %- 4.73 % n/a n/a n/a Expected long-term rate of return 7.50 % 7.50 % 7.50 % n/a n/a n/a (1) Rate assumption ranges fr om 4.5 % to 5.1 % in 2026 and thereafter. 127 The assumed annual increase in health care cost trend rates used in measuring other postretirement benefits as of December 31, 2025 was 7.50 % . These trend rates apply to both medical and prescription drugs. Medical costs and prescription drugs are assumed to decrease gradually each year to a rate of 4.00 % by 2032. Assumed health care cost trend rates can have a significant effect on the amounts reported for the health care plans; however, other postretirement benefit plans have a cap on the amount of costs reimbursable by NW Natural. Mortality assumptions are reviewed annually and are updated for material changes as necessary. In 2025, mortality rate assumptions remained consistent with 2024, using Pri-2012 mortality tables using scale MP-2021. The following table provides information regarding employer contributions and benefit payments for NW Natural's Pension Plan, non-qualified pension plans, and other postretirement benefit plans for the years ended December 31, and estimated future contributions and payments: In thousands Pension Benefits Other Benefits Employer Contributions: 2024 $ 22,798 $ 1,982 2025 21,942 2,009 2026 (estimated) 19,018 2,426 Benefit Payments: 2023 $ 27,970 $ 1,793 2024 26,986 1,982 2025 35,396 2,009 Estimated Future Benefit Payments: 2026 $ 27,629 $ 2,426 2027 27,994 1,848 2028 28,308 1,842 2029 28,541 1,800 2030 28,846 1,819 2031-2035 146,460 8,616 Employer Contributions to Company-Sponsored Defined Benefit Pension Plan NW Natural makes contributions to its Pension Plan based on actuarial assumptions and estimates, tax regulations, and funding requirements under federal law. The American Rescue Plan, which was signed into law on March 11, 2021, includes a provision for pension relief that extends the amortization period for required contributions from 7 to 15 years and provides for the stabilization of interest rates used to calculate future required contributions. NW Natural made $ 11.3 million of cash contributions to its Pension Plan for 2025. The Pension Plan was underfunded by $ 71.5 million at December 31, 2025. During 2026, NW Natural expects to make cash contributions of approximately $ 16.7 million to the Pension Plan. 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 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. Effective December 22, 2013, NW Natural withdrew from the plan, which was a noncash transaction. Vested participants will receive all benefits accrued through the date of withdrawal. As the plan was underfunded at the time of withdrawal, NW Natural was assessed a withdrawal liability of $ 8.3 million, plus interest, which requires NW Natural to pay $ 0.6 million each year to the plan for 20 years beginning in July 2014. The cost of the withdrawal liability was deferred to a regulatory account on the balance sheet. Payments were $ 0.6 million for 2025, and as of December 31, 2025, the liability balance was $ 4.1 million. For 2024 and 2023, contributions to the plan were $ 0.6 million each year, which was approximately 6 % to 17 % of the total contributions to the plan by all employer participants in those years. Defined Contribution Plan NW Natural's Retirement K Savings Plan is a qualified defined contribution plan under Internal Revenue Code Sections 401(a) and 401(k). NW Natural contributions totaled $ 12.5 million, $ 11.1 million, and $ 10.4 million for 2025, 2024, and 2023, respectively. 128 Deferred Compensation Plans NW Natural's supplemental deferred compensation plans for eligible officers and senior managers are non-qualified plans. These plans are designed to enhance the retirement savings of employees and to assist them in strengthening their financial security by providing an incentive to save and invest regularly. Fair Value Below is a description of the valuation methodologies used for assets measured at fair value. In cases where NW Natural's Pension Plan is invested through a collective trust fund or mutual fund, the fund's market value is utilized. Market values for investments directly owned are also utilized. U.S. EQUITY. These are non-published net asset value (NAV) assets. The non-published NAV assets consist of commingled trusts where NAV is not published but the investment can be readily disposed of at NAV or market value. The underlying investments in this asset class includes investments primarily in U.S. common stocks. INTERNATIONAL/GLOBAL EQUITY. These are Level 1 and non-published NAV assets. The Level 1 asset is a mutual fund, and the non-published NAV assets consist of commingled trusts where the NAV/unit price is not published, but the investment can be readily disposed of at the NAV/unit price. The mutual fund has a readily determinable fair value, including a published NAV, and the commingled trusts are valued at unit price. This asset class includes investments primarily in foreign equity common stocks. LIABILITY HEDGING. These are non-published NAV assets. The non-published NAV assets consist of commingled trusts where NAV is not published but the investment can be readily disposed of at NAV or market value. The underlying investments in this asset class include long duration fixed income investments primarily in U.S. treasuries, U.S. government agencies, municipal securities, mortgage-backed securities, asset-backed securities, as well as U.S. and international investment-grade corporate bonds. OPPORTUNISTIC. These are non-published NAV assets. The non-published NAV assets consist of commingled trusts where NAV is not published but the investment can be readily disposed of at NAV or market value. The underlying investments in this asset class include real estate investment trust equities, high yield bonds, floating rate debt, emerging market debt and a commodity index pool. CASH AND CASH EQUIVALENTS. These are non-published NAV assets. The non-published NAV assets represent mutual funds without published NAV's but the investment can be readily disposed of at the NAV. The mutual funds are valued at the NAV of the shares held by the plan at the valuation date. The preceding valuation methods may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values. Although we believe these valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain investments could result in a different fair value measurement at the reporting date. Commingled trust investments are subject to a redemption notice period of five business days. There were no unfunded commitments for Plan investments as of December 31, 2025 and 2024. Investment securities are exposed to various financial risks including interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of NW Natural's investment securities will occur in the near term and such changes could materially affect NW Natural's investment account balances and the amounts reported as plan assets available for benefit payments. 129 The following tables present the fair value of NW Natural's Pension Plan assets, including outstanding receivables and liabilities, of NW Natural's retirement trust fund: In thousands December 31, 2025 Investments Level 1 Level 2 Level 3 Non-Published NAV (1) Total US equity $ 422 $ — $ — $ 64,450 $ 64,872 International / Global equity 16,961 — — 87,742 104,703 Liability hedging — — — 112,762 112,762 Opportunistic 2,259 — — 14,478 16,737 Cash and cash equivalents — — — 3,253 3,253 Total investments $ 19,642 $ — $ — $ 282,685 $ 302,327 December 31, 2024 Investments Level 1 Level 2 Level 3 Non-Published NAV (1) Total US equity $ 284 $ — $ — $ 68,160 $ 68,444 International / Global equity — — — 86,498 86,498 Liability hedging — — — 108,680 108,680 Opportunistic 2,269 — — 15,532 17,801 Cash and cash equivalents 27 — — 2,698 2,725 Total investments $ 2,580 $ — $ — $ 281,568 $ 284,148 December 31, 2025 2024 Receivables: Accrued interest and dividend income $ 1 $ 2 Due from broker for securities sold 16,872 7,033 Total receivables 16,873 7,035 Liabilities: Due to broker for securities purchased ( 16,872 ) ( 7,032 ) Total investment in retirement trust $ 302,328 $ 284,151 (1) The fair value for these investments is determined using Net Asset Value per share (NAV) as of December 31, as a practical expedient, and therefore they are not classified within the fair value hierarchy. These investments primarily consist of institutional investment products, for which the NAV is generally not publicly available. 130 11. INCOME TAX 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: NW Holdings in thousands 2025 2024 2023 U.S. 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 ) % Other Differences required to be flowed-through by regulatory commissions ( 2,341 ) ( 1.5 ) % ( 2,182 ) ( 2.0 ) % ( 3,976 ) ( 3.1 ) % 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. NW Natural in thousands 2025 2024 2023 U.S. 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 ) % Other 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. 131 The provision for current and deferred income taxes consists of the following at December 31: NW Holdings NW Natural In thousands 2025 2024 2023 2025 2024 2023 Current Federal $ 413 $ 10,489 $ 13,496 $ 3,349 $ 15,996 $ 20,512 State 5,473 9,216 9,901 5,946 11,078 12,304 Total current income taxes 5,886 19,705 23,397 9,295 27,074 32,816 Deferred Federal 26,720 8,012 5,100 26,827 5,191 591 State 8,753 3,354 3,865 11,200 2,353 2,265 Total deferred income taxes 35,473 11,366 8,965 38,027 7,544 2,856 Income tax provision $ 41,359 $ 31,071 $ 32,362 $ 47,322 $ 34,618 $ 35,672 The following table summarizes the tax effect of significant items comprising NW Holdings and NW Natural's deferred income tax balances recorded at December 31: NW Holdings NW Natural In thousands 2025 2024 2025 2024 Deferred tax liabilities: Plant and property $ 391,216 $ 370,072 $ 379,653 $ 357,944 Leases receivable 33,647 34,477 33,647 34,477 Pension and postretirement obligations 29,550 26,116 29,550 26,116 Income tax regulatory asset 11,697 11,768 11,357 11,768 Lease right of use assets 20,513 20,542 19,960 20,407 Other intangible assets 7,465 3,388 — — Other 12,957 — 14,188 — Total deferred income tax liabilities 507,045 466,363 488,355 450,712 Deferred income tax assets: Income tax regulatory liability 44,135 45,570 43,900 45,320 Lease liabilities 20,575 20,585 20,017 20,449 Net operating losses and credits carried forward 6,692 105 169 44 Other 5,457 4,716 Total deferred income tax assets 71,402 71,717 64,086 70,529 Deferred investment tax credits 1,824 2,503 1,824 2,503 Total net deferred income tax liabilities $ 437,467 $ 397,149 $ 426,093 $ 382,686 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 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. At December 31, 2025 and 2024, regulatory income tax assets of $ 7.8 million and $ 6.0 million, respectively, were recorded by NW Natural, representing future recovery of deferred tax liabilities resulting from the equity portion of AFUDC. At December 31, 2025 and 2024, deferred tax assets of $ 43.6 million and $ 44.9 million, respectively, were recorded by NW Natural representing the future income tax benefit associated with the excess deferred income tax regulatory liability recorded as a result of the lower federal corporate income tax rate provided for by the TCJA. At December 31, 2025 and 2024, regulatory liability balances representing the benefit of the change in deferred taxes as a result of the TCJA of $ 164.6 million and $ 169.5 million, respectively, were recorded by NW Natural. NW Holdings and NW Natural assess the available positive and negative evidence to estimate if sufficient taxable income will be generated to utilize their respective existing deferred tax assets. 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 $ 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 132 balances before they begin to expire in 2036. California alternative minimum tax (AMT) credits of $ 56 thousand are also available. The AMT credits do not expire. Uncertain tax positions are accounted for in accordance with accounting standards that require an assessment of the anticipated settlement outcome of material uncertain tax positions taken in a prior year, or planned to be taken in the current year. Until such positions are sustained, the uncertain tax benefits resulting from such positions would not be recognized. No reserves for uncertain tax positions were recorded as of December 31, 2025, 2024, or 2023. The federal income tax returns for tax years 2021 and earlier are closed by statute. The IRS Compliance Assurance Process (CAP) examination of the 2022 and 2023 tax years have been completed. There were no material changes to these returns as filed. The 2024 and 2025 tax years are currently under IRS CAP examination. The 2026 CAP application has been filed. Under the CAP program, NW Holdings and NW Natural work with the IRS to identify and resolve material tax matters before the tax return is filed each year. 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 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. 12. PROPERTY, PLANT, AND EQUIPMENT The following table sets forth the major classifications of property, plant, and equipment and accumulated depreciation of continuing operations at December 31: In thousands 2025 2024 NW Holdings: Plant in service $ 5,468,170 $ 4,769,565 Construction work in progress 172,265 149,354 Less: Accumulated depreciation 1,288,422 1,246,592 Total property, plant, and equipment, net $ 4,352,013 $ 3,672,327 Capital expenditures in accrued liabilities $ 57,762 $ 26,610 NW Natural: Plant in service $ 4,879,816 $ 4,577,955 Construction work in progress 120,513 128,764 Less: 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 NW Natural 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 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. See Note 2. NW Holdings Plant balances include long-lived assets associated with SiEnergy and water and wastewater and operations. 133 13. INVESTMENTS Investments include gas reserves, financial investments in life insurance policies, and equity method investments. The following table summarizes other investments at December 31: NW Holdings NW Natural 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 Investment in unconsolidated affiliates 19,627 18,298 — — Total other investments $ 80,676 $ 82,236 $ 61,049 $ 63,938 Investment in Life Insurance Policies NW Natural has invested in key person life insurance contracts to provide an indirect funding vehicle for certain long-term employee and director benefit plan liabilities. The amount in the above table is reported at cash surrender value, net of policy loans. NW Natural Gas Reserves NW Natural has invested $ 188 million through the gas reserves program in the Jonah Field located in Wyoming as of December 31, 2025. Gas reserves are stated at cost, net of regulatory amortization, with the associated deferred tax benefits of $ 1.8 million and $ 2.6 million, which are recorded as liabilities in the December 31, 2025 and 2024 consolidated balance sheets, respectively. NW Natural's investment is included in NW Holdings' and NW Natural's consolidated balance sheets under other current assets and other investments (non-current portion) with the maximum loss exposure limited to the investment balance. 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 NWN Gas Utility gas supplies for the years ended December 31, 2025 and 2024, respectively. Investments in Unconsolidated Affiliates In December 2021, NWN Water purchased a 37.3 % ownership stake in Avion Water Company, Inc. (Avion Water), an investor-owned water utility for $ 14.5 million. NWN Water subsequently increased its ownership stake in Avion Water as follows: In millions Amount Ownership % July 2022 $ 1.0 40.3 % June 2023 $ 1.0 43.1 % January 2024 $ 1.0 45.6 % February 2025 $ 1.0 47.9 % 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. The carrying value of the equity method investment is $ 9.8 million higher than the underlying equity in the net assets of the investee at December 31, 2025 due to equity method goodwill. NWN Water's share in the earnings (loss) of Avion Water is included in other income (expense), net. 14. 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 134 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: In thousands 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. 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. 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. 135 The following table summarizes the consideration transferred and the amounts of identified assets acquired and liabilities assumed as of the acquisition date: In thousands 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; and • 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. in Texas • ES Water Utility Consolidators, Inc. in Texas 136 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: • Avimor Water Reclamation Company, LLC • Bents Court Water Company, LLC • Emerald Valley Wastewater Company, LLC • OMSID Infrastructure Holdings Company, LLC • Quigley Recycled Water Company, LLC • Mines Park Infrastructure Holdings Company, LLC • Puttman Infrastructure Services Company, LLC • Lakeshore Water Company, LLC • Seavey Loop Water Company, LLC • South Coast Water Company, LLC The acquisition added wastewater and recycled water customers across Oregon, Idaho and California. The acquisition-date fair value of the total consideration transferred was $ 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. 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 $ 18.4 million. The following table summarizes the consideration transferred and the amounts of identified assets and liabilities assumed as the acquisition date: In thousands 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 Non-current assets 304 Current liabilities ( 503 ) Non-current liabilities ( 64 ) Total identifiable net assets $ 11,353 Goodwill $ 18,500 137 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 During the year ended December 31, 2023, NWN Water and its subsidiaries acquired the assets of five businesses qualifying as business combinations. The aggregate fair value of the total consideration transferred for these acquisitions was $ 22.8 million, most of which was preliminarily allocated to property, plant, and equipment, and goodwill. These transactions align with NW Holdings' water and wastewater sector strategy as it continues to expand its water and wastewater service territories and included: • Pedersen Family, LLC in Washington • King Water Corporation in Washington • Rose Valley Water Company in Arizona • Hiland Water in Oregon • Truxton and Cerbat in Arizona Intangible Assets 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 $ 0.1 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. Goodwill NW Holdings allocates goodwill to reporting units based on the expected benefit from the business combination. We perform an annual impairment assessment of goodwill at the reporting unit level, or more frequently if events and circumstances indicate that goodwill might be impaired. An impairment loss is recognized if the carrying value of a reporting unit’s goodwill exceeds its fair value. 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. 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. There have been no impairments recognized to date. 15. DERIVATIVE INSTRUMENTS NW Natural 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. Notional Amounts The following table presents the absolute notional amounts related to open positions on NW Natural derivative instruments: At December 31, In thousands 2025 2024 Natural gas (in therms): Financial 757,895 771,110 Physical 692,275 560,900 Foreign exchange $ 8,596 $ 10,332 138 Purchased Gas Adjustment (PGA) Rates and hedging approaches may vary between states due to different rate structures and mechanisms. Under the PGA mechanism in Oregon, derivatives entered into by NW Natural for the procurement or hedging of natural gas for future gas years generally receive regulatory deferral accounting treatment. In general, commodity hedging for the current gas year is completed prior to the start of the gas year, and hedge prices are fully recovered and reflected in the weighted-average cost of gas in the PGA filing. Hedge contracts entered into after the start of the PGA period for the current PGA year are subject to the PGA incentive sharing mechanism in Oregon. Under the PGA mechanism in Washington, NW Natural incorporates a risk-responsive hedging strategy, and receives regulatory deferral accounting treatment for its Washington gas 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. The total hedged was approximately 86 % in Oregon and 32 % in Washington. NW Natural entered the 2025-26 gas year with total forecasted sales volume hedged at approxima tely 79 %, including 64 % in financial hedges and 15 % in physical gas supplies. The total hedged was approximately 84 % in Oregon and 33 % in Washington. Unrealized and Realized Gain/Loss The following table reflects the income statement presentation for the unrealized gains and losses from NW Natural's derivative instruments: December 31, 2025 December 31, 2024 In thousands Natural gas commodity Foreign exchange Natural gas commodity Foreign exchange Benefit (expense) to cost of gas $ ( 32,065 ) $ 49 $ 4,431 $ ( 524 ) Amounts deferred to regulatory accounts on balance sheet 32,065 ( 49 ) ( 4,431 ) 524 Total gain (loss) in pre-tax earnings $ — $ — $ — $ — Unrealized Gain/Loss 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; however, costs above or below the amount embedded in the current year PGA are subject to a regulatory deferral tariff and therefore, are recorded as a regulatory asset or liability. Realized Gain/Loss 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. Credit Risk Management of Financial Derivatives Instruments No collateral was posted with or by NW Natural counterparties as of December 31, 2025 or 2024. NW Natural attempts to minimize the potential exposure to collateral calls by diversifying counterparties and using credit limits to manage liquidity risk. Counterparties generally allow a certain credit limit threshold based on our credit rating before requiring NW Natural to post collateral against unrealized loss positions. Given NW Natural's credit ratings, counterparty credit limits and portfolio diversification, it was not subject to collateral calls in 2025 or 2024. The collateral call exposure is set forth under credit support agreements, which generally contain credit limits. NW Natural could also be subject to collateral call exposure where it has agreed to provide adequate assurance, which is not specific as to the amount of credit limit allowed, but could potentially require additional collateral posting by NW Natural in the event of a material adverse change in NW Natural's ability to perform. NW Natural's financial derivative instruments are subject to master netting arrangements; however, they are presented on a gross basis in the consolidated balance sheets. NW Natural and its counterparties have the ability to set-off obligations to each other under specified circumstances. Such circumstances may include a defaulting party, a credit change due to a merger affecting either party, or any other termination event. If netted by its counterparties, NW Natural's physical and financial derivative position would result in an asset of $ 2.8 million and a liability of $ 76.1 million as of December 31, 2025, and an asset of $ 4.4 million and a liability of $ 86.0 million as of December 31, 2024. NW Natural is exposed to derivative credit and liquidity risk primarily through securing fixed-price natural gas commodity swaps and interest rate swaps with financial counterparties. NW Natural utilizes master netting arrangements with International Swaps and Derivatives Association (ISDA) contracts to minimize these risks including ISDA Credit Support Agreements with counterparties based on their credit ratings. Additionally, NW Natural uses counterparty, industry, sector and country diversification to minimize credit risk. In certain cases, NW Natural may require counterparties to post collateral, guarantees, or letters of credit to maintain its minimum credit requirement standards or for liquidity management purposes. 139 NW Natural's financial derivatives policy requires counterparties to have an investment-grade credit rating at the time the derivative instrument is entered into and specifies limits on the contract amount and duration based on each counterparty’s credit rating. NW Natural does not speculate in derivatives. 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. We actively monitor NW Natural's derivative credit exposure and place counterparties on hold for trading purposes or require other forms of credit assurance, such as letters of credit, cash collateral, or guarantees as circumstances warrant. The ongoing assessment of counterparty credit risk includes consideration of credit ratings, credit default swap spreads, bond market credit spreads, financial conditions, government actions, and market news. A Monte Carlo simulation model is used to estimate the change in credit and liquidity risk from the volatility of natural gas prices. The results of the model are used to establish trading limits. NW Natural's outstanding financial derivatives at December 31, 2025 mature by November 1, 2028. We could become materially exposed to credit risk with one or more of our counterparties if natural gas prices experience a significant increase. If a counterparty were to become insolvent or fail to perform on its obligations, we could suffer a material loss; however, we would expect such a loss to be eligible for regulatory deferral and rate recovery, subject to a prudence review. All of our existing counterparties currently have investment-grade credit ratings. Fair Value In accordance with fair value accounting, NW Natural includes non-performance risk in calculating fair value adjustments. This includes a credit risk adjustment based on the credit spreads of NW Natural counterparties when in an unrealized gain position, or on NW Natural's own credit spread when it is in an unrealized loss position. The inputs in our valuation models include natural gas futures, volatility, credit default swap spreads, and interest rates. 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 $ 0.2 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. NWN Water Interest Rate Swap Agreement In January 2023, NWN Water entered into an interest rate swap agreement with a major financial institution for $ 55.0 million that effectively converted variable-rate debt to a fixed rate of 3.80 %. Interest payments made between the effective date and expiration date are hedged by the swap agreement. The interest rate swap agreement expires in June 2026, along with the variable-rate debt. Unrealized gains related to the interest rate swap agreement are recorded in AOCI on the consolidated balance sheet and totaled $ 0.2 million, 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 $ 0.3 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. 16. COMMITMENTS AND CONTINGENCIES Gas Purchase Agreements NW Natural enters into short-term and long-term physical baseload gas purchase agreements. The majority of our gas purchase agreements include year-round, winter-only, summer-only, and monthly purchases. Pipeline Capacity Purchase and Release Commitments NW Natural has signed agreements providing for the reservation of firm pipeline capacity under which it is required to make monthly payments for contracted capacity. The pricing component of the monthly payment is established, subject to change, by U.S. or Canadian regulatory bodies, or is established directly with private counterparties, as applicable. In addition, NW Natural has entered into long-term agreements to release firm pipeline capacity. The parties that we release this capacity to make payments directly to the related pipelines. 140 The aggregate amounts of these agreements at NW Natural were as follows at December 31, 2025: In thousands Gas Purchase Agreements (1) Pipeline Capacity Purchase Agreements Pipeline Capacity Release Agreements 2026 $ 261,333 $ 84,234 $ 8,800 2027 98,670 88,442 5,197 2028 91,862 81,575 5,197 2029 78,724 72,972 5,197 2030 31,151 69,353 4,330 Thereafter 191,047 375,061 — Total 752,787 771,637 28,721 Less: Amount representing interest 110,276 194,416 2,213 Total at present value $ 642,511 $ 577,221 $ 26,508 (1) Gas purchase agreements include environmental attributes of RNG. Total fixed charges under capacity purchase agreements were $ 89.4 million for 2025, $ 85.1 million for 2024, and $ 87.0 million for 2023, of which $ 9.3 million, $ 8.9 million, and $ 8.2 million, respectively, related to capacity releases which third parties paid directly to the related pipelines. In addition, per-unit charges are required to be paid based on the actual quantities shipped under the agreements. 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. 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 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. Upon reaching this milestone, Ohio Renewables paid $ 26.0 million to the EDL subsidiary. The second facility was completed and commenced delivery of RNG to Ohio Renewables in December 2024 at which point Ohio Renewables made an additional payment of $ 25.4 million to the EDL subsidiary. The payments were recorded as long-term prepaid assets and will be amortized based on the volumes delivered over the life of the agreement. Under the purchase agreement, Ohio Renewables and the subsidiary of EDL executed agreements for Ohio Renewables to purchase up to an annual specified amount of RNG produced by the EDL facilities over a 20-year period at a contractually specified price. 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. Per the guarantee, NW Holdings unconditionally and irrevocably guarantees the timely payment and performance when due of all obligations of Ohio Renewables. NW Holdings has not recognized a liability for its obligations under the guarantee in accordance with ASC 460, Guarantees . NWN Renewables Sale Agreements 2024 - 2026 Ohio Renewables has contracted to sell RNG produced by the EDL facilities up to certain specified volumes in each of calendar years 2024 through 2026 to an investment-grade counterparty. Upon each delivery of RNG, Ohio Renewables will purchase an equal quantity of natural gas without renewable attributes at the same delivery point. Ohio Renewables has separately contracted to sell the natural gas purchased from EDL to another counterparty also at the same delivery point upon receipt. Alongside these agreements, NW Holdings entered into a guarantee on behalf of Ohio Renewables. Per the guarantee, NW Holdings unconditionally and irrevocably guarantees the prompt payment of all present and future obligations of Ohio Renewables. NW Holdings has not recognized a liability for its obligations under the guarantee in accordance with ASC 460, Guarantees . The guarantee specifies annual cap amounts on the aggregate liability covered by the Guarantee as follows: 141 In thousands 2025 2026 Cap Amount $ 44,226 $ 21,113 2025 - 2044 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 delivered on an annual basis, Ohio Renewables is obligated to pay the per MMbtu price for volumes between the amount delivered and 75 % of the contracted volumes on an annual basis. NW Holdings entered into a guarantee on behalf of Ohio Renewables. Per the guarantee, NW Holdings unconditionally and irrevocably guarantees the prompt payment of all present and future obligations of Ohio Renewables. The total liability under this guarantee cannot exceed $ 2.0 million. NW Holdings has not recognized a liability for its obligations under the guarantee in accordance with ASC 460, Guarantees . Leases Refer to Note 7 for a discussion of lease commitments and contingencies. Environmental Matters Refer to Note 17 for a discussion of environmental commitments and contingencies. 17. ENVIRONMENTAL MATTERS NW Natural owns, or previously owned, properties that may require environmental remediation or action. The range of loss for environmental liabilities is estimated based on current remediation technology, enacted laws and regulations, industry experience gained at similar sites, and an assessment of the probable level of involvement and financial condition of other potentially responsible parties (PRPs). When amounts are prudently expended related to site remediation of those sites described herein, NW Natural has recovery mechanisms in place to collect 96.7 % of remediation costs allocable to Oregon customers and 3.3 % of costs allocable to Washington customers. These sites are subject to the remediation process prescribed by the Environmental Protection Agency (EPA) and the Oregon Department of Environmental Quality (ODEQ). The process begins with a remedial investigation (RI) to determine the nature and extent of contamination and then a risk assessment (RA) to establish whether the contamination at the site poses unacceptable risks to humans and the environment. 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. From this study, the regulatory agency selects a remedy and issues a Record of Decision (ROD). After a ROD is issued, NW Natural would seek to negotiate a consent decree or consent judgment for designing and implementing the remedy. NW Natural would have the ability to further refine estimates of remediation liabilities based upon an approved remedial design. Remediation may include treatment of contaminated media such as sediment, soil and groundwater, removal and disposal of media, institutional controls such as legal restrictions on future property use, or natural recovery. Following construction of the remedy, the EPA and ODEQ also have requirements for ongoing maintenance, monitoring and other post-remediation care that may continue for many years. Where appropriate and reasonably known, NW Natural will provide for these costs in the remediation liabilities described below. Due to the numerous uncertainties surrounding the course of environmental remediation and the preliminary nature of several site investigations, in some cases, NW Natural may not be able to reasonably estimate the high end of the range of possible loss. In those cases, the nature of the possible loss has been disclosed, as has the fact that the high end of the range cannot be reasonably estimated where a range of potential loss is available. Unless there is an estimate within the range of possible losses that is more likely than other cost estimates within that range, NW Natural records the liability at the low end of this range. It is likely changes in these estimates and ranges will occur throughout the remediation process for each of these sites due to the continued evaluation and clarification concerning responsibility, the complexity of environmental laws and regulations and the determination by regulators of remediation alternatives. In addition to remediation costs, NW Natural could also be subject to Natural Resource Damages (NRD) claims. NW Natural will assess the likelihood and probability of each claim and recognize a liability if deemed appropriate. Refer to " Other Portland Harbor " below. 142 Environmental Sites The following table summarizes information regarding liabilities related to environmental sites, which are recorded in other current liabilities and other noncurrent liabilities in NW Natural's balance sheet at December 31: Current Liabilities Non-Current Liabilities In thousands 2025 2024 2025 2024 Portland Harbor site: Gasco/Siltronic Sediments $ 13,950 $ 13,626 $ 43,247 $ 41,565 Other Portland Harbor 3,669 3,308 12,770 12,270 Gasco/Siltronic Uplands site 25,643 23,400 61,782 64,522 Front Street site 486 841 292 279 Oregon Steel Mills — — 179 179 Total $ 43,748 $ 41,175 $ 118,270 $ 118,815 Portland Harbor Site The Portland Harbor is an EPA listed Superfund site that is approximately 10 miles long on the Willamette River and is adjacent to NW Natural's Gasco uplands site. NW Natural is one of over one hundred PRPs, each jointly and severally liable, at the Superfund site. In January 2017, the EPA issued its Record of Decision, which selects the remedy for the clean-up of the Portland Harbor site (Portland Harbor ROD). The Portland Harbor ROD estimates the present value total cost at approximately $ 1.05 billion with an accuracy between - 30 % and + 50 % of actual costs. NW Natural's potential liability is a portion of the costs of the remedy for the entire Portland Harbor Superfund site. The cost of that remedy is expected to be allocated among more than one hundred PRPs. NW Natural is participating in a non-binding allocation process with other PRPs in an effort to resolve its potential liability. The Portland Harbor ROD does not provide any additional clarification around allocation of costs among PRPs; accordingly, NW Natural has not modified any of the recorded liabilities at this time as a result of the issuance of the Portland Harbor ROD. NW Natural manages its liability related to the Superfund site as two distinct remediation projects, the Gasco Sediments Site and Other Portland Harbor projects. GASCO SEDIMENTS. 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. 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 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. 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 fr om $ 57.2 million to $ 350 million. 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. OTHER PORTLAND HARBOR. While we believe liabilities associated with the Gasco sediments site represent NW Natural's largest exposure, there are other potential exposures associated with the Portland Harbor ROD, including NRD costs and harborwide remedial design and cleanup costs (including downstream petroleum contamination), for which allocations among the PRPs have not yet been determined. NW Natural and other parties have signed a cooperative agreement with the Portland Harbor Natural Resource Trustee council to participate in a phased NRD assessment to estimate liabilities to support an early restoration-based settlement of NRD claims. One member of this Trustee council, the Yakama Nation, withdrew from the council in 2009, and in 2017, filed suit against NW Natural and 29 other parties seeking remedial costs and NRD assessment costs associated with the Portland Harbor site, set forth in the complaint. The complaint seeks recovery of alleged costs totaling $ 0.3 million in connection with the selection of a remedial action for the Portland Harbor site as well as declaratory judgment for unspecified future remedial action costs and for costs to assess the injury, loss or destruction of natural resources resulting from the release of hazardous substances at and from the Portland Harbor site. The Yakama Nation has filed two amended complaints addressing certain pleading defects and 143 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. NW Natural has recorded a liability for NRD claims which is at the low end of the range of the potential liability; the high end of the range cannot be reasonably estimated at this time. The NRD liability is not included in the aforementioned range of costs provided in the Portland Harbor ROD. Gasco Uplands Site A predecessor of NW Natural, Portland Gas and Coke Company, owned a former gas manufacturing plant that was closed in 1958 (Gasco site) and is adjacent to the Portland Harbor site described above. The Gasco site has been under investigation by NW Natural for environmental contamination under the ODEQ Voluntary Cleanup Program (VCP). It is not included in the range of remedial costs for the Portland Harbor site noted above. The Gasco site is managed in two parts, the uplands portion and the groundwater source control action. NW Natural submitted a revised Remedial Investigation Report for the uplands to ODEQ in May 2007. In March 2015, ODEQ approved the Risk Assessment (RA) for this site, enabling commencement of work on the FS in 2016. 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. Previously, NW Natural was conducting an investigation of manufactured gas plant constituents on the entire Siltronic uplands for ODEQ. Siltronic will be working with ODEQ directly on environmental impacts to the remainder of its property. In September 2013, NW Natural completed construction of a groundwater source control system, including a water treatment station, at the Gasco site. NW Natural has estimated the cost associated with the ongoing operation of the system and has recognized a liability which is at the low end of the range of potential cost. NW Natural cannot estimate the high end of the range at this time due to the uncertainty associated with the duration of running the water treatment station, which is highly dependent on the remedy determined for both the upland portion as well as the final remedy for the Gasco sediments site. In December 2024, NW Natural submitted the Gasco uplands FS to ODEQ. The FS presents a set of remedial action alternatives and provides the basis for 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, 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. An Interim Remedial Action Measure (IRAM) for the Gasco uplands is the regulatory mechanism ODEQ has selected to accomplish that goal. As a result, the Gasco uplands FS also includes a separate cost range for the IRAM. The estimated costs for the IRAM range from $ 10.4 million to $ 78 million. NW Natural has recorded a liability of $ 10.4 million, which reflects the low end of the range. Other Sites In addition to those sites above, NW Natural has environmental exposures at three other sites: Central Service Center, Front Street and Oregon Steel Mills. NW Natural may have exposure at other sites that have not been identified at this time. Due to the uncertainty of the design of remediation, regulation, timing of the remediation and in the case of the Oregon Steel Mills site, pending litigation, liabilities for each of these sites have been recognized at their respective low end of the range of potential liability; the high end of the range could not be reasonably estimated at this time. FRONT STREET SITE. The Front Street site was the former location of a gas manufacturing plant NW Natural operated (the former Portland Gas Manufacturing site, or PGM). At ODEQ’s request, NW Natural conducted a sediment and source control investigation and provided findings to ODEQ. In December 2015, an FS on the former Portland Gas Manufacturing site was completed. In July 2017, ODEQ issued the PGM ROD. The ROD specifies the selected remedy, which requires a combination of dredging, capping, treatment, and natural recovery. In addition, the selected remedy also requires institutional controls and long-term inspection and maintenance. Construction of the remedy began in July 2020 and was completed in October 2020. The second year of post-construction monitoring was completed in 2022 and demonstrated that the cap was intact and performing as designed. NW Natural has recognized an additional liability of $ 0.8 million associated with long-term monitoring and post-construction work. OREGON STEEL MILLS SITE. Refer to “Legal Proceedings,” below. 144 Environmental Cost Deferral and Recovery NW Natural has authorizations in Oregon and Washington to defer costs related to remediation of properties that are owned or were previously owned by NW Natural. In Oregon, a Site Remediation and Recovery Mechanism (SRRM) is currently in place to recover prudently incurred costs allocable to Oregon customers, subject to an earnings test. On October 21, 2019 the WUTC authorized an Environmental Cost Recovery Mechanism (ECRM) for recovery of prudently incurred costs allocable to Washington customers beginning November 1, 2019. The following table presents information regarding the total regulatory asset deferred as of December 31: In thousands 2025 2024 Deferred costs and interest (1) $ 71,954 $ 64,940 Accrued site liabilities (2) 161,993 159,954 Insurance proceeds and interest ( 41,736 ) ( 47,062 ) Total regulatory asset deferral (1) 192,211 177,832 Current regulatory assets (3) 12,148 10,746 Long-term regulatory assets (3) 180,063 167,086 (1) Includes pre-review and post-review deferred costs, amounts currently in amortization, and interest, net of amounts collected from customers. (2) Excludes 3.3 % of the Front Street site liability as the OPUC only allows recovery of 96.7 % of costs for those sites allocable to Oregon, including those that historically served only Oregon customers. Amounts excluded from regulatory assets were $ 25 thousand in 2025 and $ 36 thousand in 2024. (3) Environmental costs relate to specific sites approved for regulatory deferral by the OPUC and WUTC. In Oregon, NW Natural earns a carrying charge on cash amounts paid, whereas amounts accrued but not yet paid do not earn a carrying charge until expended. It also accrues a carrying charge on insurance proceeds for amounts owed to customers. In Washington, neither the cash paid nor insurance proceeds received accrue a carrying charge. Current environmental costs represent remediation costs management expects to collect from customers in the next 12 months. 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 rates, subject to an earnings test. See " Oregon SRRM " below. Oregon SRRM Collections From Oregon Customers Under the SRRM collection process, there are three types of deferred environmental remediation expense: • Pre-review - This class of costs represents remediation spend that has not yet been deemed prudent by the OPUC. Carrying costs on these remediation expenses are recorded at NW Natural's authorized cost of capital. NW Natural anticipates the prudence review for annual costs and approval of the earnings test prescribed by the OPUC to occur by the third quarter of the following year. • Post-review - This class of costs represents remediation spend that has been deemed prudent and allowed after applying the earnings test, but is not yet included in amortization. NW Natural earns a carrying cost on these amounts at a rate equal to the five-year treasury rate plus 100 basis points. • Amortization - This class of costs represents amounts included in current customer rates for collection and is generally calculated as one-fifth of the post-review deferred balance. NW Natural earns a carrying cost equal to the amortization rate determined annually by the OPUC, which approximates a short-term borrowing rate. 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. NW Natural received total environmental insurance proceeds of approximately $ 150 million as a result of settlements from litigation that was dismissed in July 2014. Under a 2015 OPUC order which established the SRRM, one-third of the Oregon allocated proceeds were applied to costs deferred through 2012 with the remaining two-thirds applied to costs at a rate of $ 5.0 million per year plus interest over the following 20 years. NW Natural accrues interest on the Oregon allocated insurance proceeds in the customer’s favor at a rate equal to the five-year treasury rate plus 100 basis points. As of December 31, 2025, NW Natural has applied $ 110.7 million of insurance proceeds to prudently incurred remediation costs allocated to Oregon. Environmental Earnings Test To the extent NW Natural earns at or below its authorized Return on Equity (ROE) as defined by the SRRM, remediation expenses and interest in excess of the $ 5.0 million tariff rider and $ 5.0 million insurance proceeds are recoverable through the SRRM. To the extent NW Natural earns more than its authorized ROE in a year, it is required to cover environmental expenses and interest on expenses greater than the $ 10.0 million with those earnings that exceed its authorized ROE. 145 Washington ECRM Washington Deferral On October 21, 2019, the WUTC issued an order (WUTC Order) establishing the ECRM which allows for recovery of past deferred and future prudently incurred environmental remediation costs allocable to Washington customers through application of insurance proceeds and collections from customers. Environmental remediation expenses relating to sites that previously served both Oregon and Washington customers are allocated between states with Washington customers receiving 3.3 % percent of the costs and insurance proceeds. In accordance with the WUTC Order, insurance proceeds were fully applied to costs incurred between December 2018 and June 2019 that were deemed prudent. Remaining insurance proceeds will be amortized over a 10.5 year period ending December 31, 2029. As of December 31, 2025 , approximately $ 4.3 million of proceeds have been applied to prudently incurred costs. On an annual basis, NW Natural files for a prudence determination and a request to amortize costs to the extent that remediation expenses exceed the insurance amortization. After insurance proceeds are fully amortized, if in a particular year the request to collect deferred amounts exceeds one percent of Washington normalized revenues, then the excess will be collected over three years with interest. 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 County, Oregon (County of Multnomah v. Exxon Mobil Corp., et. al., No.23-cv-25164) against more than a dozen oil and gas producers seeking damages relating to climate change impacts. The County asserts various causes of action, including negligence, fraud, trespass and public nuisance under Oregon law related to the refining, producing and/or marketing of fossil fuels. NW Natural is diligently defending against the claims. On October 14, 2024, NW Natural and NW Holdings were named the defendants in a lawsuit filed in the Circuit Court for Multnomah County, Oregon (Blumm et. al. v. Northwest Natural Gas Company , 24-cv-48490), that is seeking class certification on behalf of all Oregon NW Natural Smart Energy-enrolled customers during the past approximately six years. The lawsuit alleges claims under Oregon's Unlawful Trade Practices Act and for breach of contract, with respect to NW Natural's Smart Energy program. The plaintiffs seek injunctive and equitable relief and damages. 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. NW Natural and NW Holdings are subject to claims and litigation arising in the ordinary course of business, including the matters discussed above. Although the final outcome of any of these legal proceedings cannot be predicted with certainty, including the matter relating to the Oregon Steel Mills site referenced below, NW Natural and NW Holdings do not expect that the ultimate disposition of any of these matters will have a material effect on their financial condition, results of operations, or cash flows. See also Part I, Item 3, “Legal Proceedings". Oregon Steel Mills Site In 2004, NW Natural was served with a third-party complaint by the Port of Portland (the Port) in a Multnomah County Circuit Court case, Oregon Steel Mills, Inc. v. The Port of Portland. The Port alleges that in the 1940s and 1950s petroleum wastes generated by NW Natural's predecessor, Portland Gas & Coke Company, and 10 other third-party defendants, were disposed of in a waste oil disposal facility operated by the United States or Shaver Transportation Company on property then owned by the Port and now owned by Evraz Oregon Steel Mills. The complaint seeks contribution for unspecified past remedial action costs incurred by the Port regarding the former waste oil disposal facility as well as a declaratory judgment allocating liability for future remedial action costs. No date has been set for trial. In August 2017, the case was stayed pending the outcome of the Portland Harbor allocation process or other mediation. 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. 146 SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF NORTHWEST NATURAL HOLDING COMPANY NORTHWEST NATURAL HOLDING COMPANY CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (PARENT COMPANY ONLY) Year Ended December 31, In thousands 2025 2024 2023 Operating expenses: Operations and maintenance $ 14,950 $ 6,603 $ 5,145 Total operating expenses 14,950 6,603 5,145 Loss from operations ( 14,950 ) ( 6,603 ) ( 5,145 ) Earnings from investment in subsidiaries, net of tax 160,477 93,074 106,267 Other income (expense), net 176 295 ( 1,156 ) Interest expense, net 47,959 13,004 10,022 Income before income taxes 97,744 73,762 89,944 Income tax benefit ( 15,575 ) ( 5,109 ) ( 3,924 ) Net income 113,319 78,871 93,868 Other comprehensive income (loss) from subsidiaries, net of tax 2,153 264 ( 868 ) Unrealized (loss) gain on interest rate swap, net of tax — ( 115 ) 104 Comprehensive income $ 115,472 $ 79,020 $ 93,104 See Notes to Condensed Financial Statements 147 NORTHWEST NATURAL HOLDING COMPANY CONDENSED BALANCE SHEETS (PARENT COMPANY ONLY) As of December 31, In thousands 2025 2024 Assets: Current assets: Cash and cash equivalents $ 29 $ 484 Receivables from affiliates 4,678 5,765 Other current assets 8,232 3,038 Total current assets 12,939 9,287 Non-current assets: Investments in subsidiaries 2,300,272 1,718,849 Deferred tax assets 8,845 1,138 Other non-current assets 1,036 396 Total non-current assets 2,310,153 1,720,383 Total assets $ 2,323,092 $ 1,729,670 Liabilities and equity: Current liabilities: Short-term debt $ 161,999 $ 33,600 Current maturities of long-term debt 49,976 — Accounts payable 643 1,073 Payables to affiliates 19,820 22,831 Other current liabilities 10,245 3,071 Total current liabilities 242,683 60,575 Long-term debt 605,333 283,724 Commitments and contingencies (see Note 16 and Note 17) Total equity 1,475,076 1,385,371 Total liabilities and equity $ 2,323,092 $ 1,729,670 See Notes to Condensed Financial Statements 148 NORTHWEST NATURAL HOLDING COMPANY CONDENSED STATEMENTS OF CASH FLOWS (PARENT COMPANY ONLY) Year Ended December 31, In thousands 2025 2024 2023 Operating activities: Net income $ 113,319 $ 78,871 $ 93,868 Adjustments to reconcile net income to cash used in operations: Equity in earnings of subsidiaries, net of tax ( 160,477 ) ( 93,074 ) ( 106,267 ) Cash dividends received from subsidiaries 86,525 72,773 92,375 Deferred income taxes ( 7,707 ) ( 584 ) ( 31 ) Other 900 284 164 Changes in assets and liabilities: Receivables from affiliates 1,488 11,260 ( 5,629 ) Income and other taxes ( 5,659 ) 420 ( 491 ) Accounts payable ( 2,996 ) 3,362 6,314 Interest accrued 7,106 2,640 103 Other, net 25 ( 302 ) ( 380 ) Cash provided by operating activities 32,524 75,650 80,026 Investing activities: Acquisitions, net of cash acquired ( 271,053 ) — — Contributions to subsidiaries ( 268,318 ) ( 241,834 ) ( 76,310 ) Return of capital from subsidiaries 33,650 — 3,350 Cash used in investing activities ( 505,721 ) ( 241,834 ) ( 72,960 ) Financing activities: Proceeds from common stock issued, net 47,418 90,374 66,495 Long-term debt issued 375,000 285,000 — Long-term debt retired — ( 100,000 ) — Changes in other short-term debt, net 128,399 ( 39,400 ) ( 15,000 ) Cash dividend payments on common stock ( 77,309 ) ( 72,852 ) ( 67,340 ) Capital contributions — — — Other ( 766 ) 2,535 2,510 Cash provided by (used in) financing activities 472,742 165,657 ( 13,335 ) (Decrease) increase in cash and cash equivalents ( 455 ) ( 527 ) ( 6,269 ) Cash, cash equivalents and restricted cash, beginning of period 484 1,011 7,280 Cash, cash equivalents and restricted cash, end of period $ 29 $ 484 $ 1,011 See Notes to Condensed Financial Statements 149 NOTES TO CONDENSED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION NW Holdings is an energy services holding company that conducts substantially all of its business operations through its subsidiaries, particularly NW Natural. These condensed financial statements and related footnotes have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto of NW Holdings included in Item 8 of this Form 10-K. NW Holdings' wholly-owned subsidiaries are recorded based upon its proportionate share of the subsidiaries' net assets (similar to presenting them on the equity method). Equity earnings of subsidiaries including earnings from NW Natural were $ 160.5 million, $ 93.1 million, and $ 106.3 million for the years ended December 31, 2025, 2024, and 2023 respectively. There was $ 120.2 million, $ 72.8 million and $ 95.7 million of cash paid to NW Holdings from wholly-owned subsidiaries for the years ended December 31, 2025, 2024 and 2023, respectively. 2. DEBT For information concerning NW Holdings' debt obligations, see Note 9 to the consolidated financial statements included in Item 8 of this report. 3. GUARANTEES For information concerning NW Holdings' guarantees, see Note 9 and Note 16 to the consolidated financial statements included in Item 8 of this report. 150 NORTHWEST NATURAL HOLDING COMPANY SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E Additions Deductions In thousands (year ended December 31) Balance at beginning of period Charged to costs and expenses Charged to other accounts Net write-offs Balance at end of period 2025 Reserves deducted in balance sheet from assets to which they apply: Allowance for uncollectible accounts $ 3,474 $ 3,507 $ — $ 2,913 $ 4,068 2024 Reserves deducted in balance sheet from assets to which they apply: Allowance for uncollectible accounts $ 3,455 $ 2,437 $ ( 154 ) $ 2,264 $ 3,474 2023 Reserves deducted in balance sheet from assets to which they apply: Allowance for uncollectible accounts $ 3,296 $ 2,869 $ 263 $ 2,973 $ 3,455 NORTHWEST NATURAL GAS COMPANY SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E Additions Deductions In thousands (year ended December 31) Balance at beginning of period Charged to costs and expenses Charged to other accounts Net write-offs Balance at end of period 2025 Reserves deducted in balance sheet from assets to which they apply: Allowance for uncollectible accounts $ 2,788 $ 2,313 $ — $ 2,053 $ 3,048 2024 Reserves deducted in balance sheet from assets to which they apply: Allowance for uncollectible accounts $ 3,228 $ 1,785 $ ( 154 ) $ 2,071 $ 2,788 2023 Reserves deducted in balance sheet from assets to which they apply: Allowance for uncollectible accounts $ 3,079 $ 2,859 $ 263 $ 2,973 $ 3,228 151 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.