v3.26.1
Business Combinations
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Business Combinations 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 is a regulated natural gas distribution utility and a transmission utility. Excluding Pines Holdings, which was acquired June 2, 2025 and is described further below, SiEnergy serves approximately 88,000 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 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 involved management judgment in determining the significant estimates and assumptions used for net assets associated with SiEnergy. This allocation was finalized in the quarter ended March 31, 2026. Acquisition costs totaling $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.

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 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 equipment262,697 
Non-current assets3,872 
Current liabilities(24,962)
Non-current liabilities(158,397)
Total identifiable net assets$99,980 
Goodwill$171,107 

Hughes Gas Resources, Inc. (Pines Holdings, Inc.) 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 serves approximately 8,000 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 Holdings, Inc. (Pines).

The Pines 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 Pines. This allocation was finalized in the quarter ended June 30, 2026.

Goodwill of $15.4 million was recognized from this acquisition. The goodwill recognized is attributable to Pines' natural gas utility service territory, experienced workforce, and the strategic benefits expected from growth in the service territory. No intangible assets aside from goodwill were recognized. There is no goodwill expected to be deductible for tax purposes.

The following table summarizes the consideration transferred and the amounts of identified assets acquired and liabilities assumed as of the acquisition date:
In thousands
Fair value of consideration transferred:
Cash$60,436 
Recognized amounts of identifiable assets acquired and liabilities assumed:
Current assets$2,036 
Property, plant and equipment42,942 
Non-current assets1,572 
Current liabilities(1,462)
Non-current liabilities(100)
Total identifiable net assets$44,988 
Goodwill$15,448 

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, 2025:
Three Months Ended June 30,Six Months Ended June 30,
In thousands2026202520262025
Operating revenues$243,552 $241,074 $733,955 $737,355 
Net income (loss)$600 $(1,898)$98,089 $89,067 

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, 2025, nor are they indicative of future results of operations of the combined company. Pro forma net income for the three and six months ended June 30, 2025 were adjusted to reflect the following:

•acquisition costs of $5.3 million incurred by NW Holdings in the first quarter of 2025 were removed from the three months ended March 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 1, 2025;
•the results of SiEnergy and Pines were adjusted to represent results as though they were owned as of January 1, 2025; 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 $13.5 million and $45.2 million for the three and six months ended June 30, 2026, respectively, and $11.5 million and $34.2 million for the three and six months ended June 30, 2025, respectively.

The amount of SiEnergy and Pines net income included in NW Holdings' consolidated statements of comprehensive income was $2.0 million and $11.1 million for the three and six months ended June 30, 2026, respectively, and $1.0 million and $6.5 million for the three and six months ended June 30, 2025, respectively.

Other 2025 Business Combinations

During the fourth quarter of 2025, NWN 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 June 30, 2026, 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. These transactions align with NW Holdings' water and wastewater sector strategy as it continues to expand its water and wastewater service territories and included:
•Everett Square, Inc. in Texas
•ES Water Utility Consolidators, Inc. in Texas

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, goodwill totaled $371.6 million, $370.9 million, and $370.8 million as of June 30, 2026, June 30, 2025, and December 31, 2025, respectively, and is attributable to gas utility, water and wastewater acquisitions. Goodwill included in the SiEnergy segment category totaled $186.5 million, $187.2 million, and $185.7 million as of June 30, 2026, June 30, 2025, and December 31, 2025, respectively. Goodwill included in the NWN Water segment category totaled $185.1 million, $183.7 million, and $185.1 million as of June 30, 2026, June 30, 2025, and December 31, 2025, respectively. The annual impairment assessment of goodwill occurs in the fourth quarter of each year. There have been no impairments recognized during the three and six months ended June 30, 2026.