8-K
NorthWestern Energy Group, Inc. (NWE)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 29, 2025
NorthWestern Energy Group, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 000-56598 | 93-2020320 | ||
|---|---|---|---|---|
| (State or other jurisdiction of<br>incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
| 3010 W. 69th Street | Sioux Falls | South Dakota | 57108 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 605-978-2900
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Registrant | Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|---|
| NorthWestern Energy Group, Inc. | Common stock | NWE | Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 2.02 Results of Operations and Financial Condition.
On April 29, 2025, NorthWestern Energy Group, Inc. d/b/a NorthWestern Energy (Nasdaq: NWE) (the “Company”) issued a press release (the “Press Release”) discussing financial results for the quarter ended March 31, 2025. The Press Release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information in this Current Report on Form 8-K provided under Item 2.02 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information provided under Item 2.02 in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure.
Annual Meeting Presentation. As previously announced and as stated in the Press Release, on April 30, 2025, at 11:00 a.m. Eastern time (10:00 a.m. Central time), the Company will hold its virtual annual meeting of shareholders. A virtual annual meeting enables our shareholders—regardless of size, resources, or physical location—to participate in the annual meeting at no cost. We are committed to ensuring that shareholders will be afforded the same rights and opportunities to participate at our virtual meeting as they would in person.
The annual meeting will be webcast live on the internet and can be accessed by visiting www.virtualshareholdermeeting.com/NWE2025. To listen to the meeting, please go to the site at least 10 minutes in advance of the meeting and follow the check-in procedures.
During the annual meeting, Brian Bird, president and chief executive officer of the Company will make a presentation (the "Annual Meeting Presentation") to shareholders and other attendees that will discuss the Company's operations.
Earnings Call Presentation. As previously announced and as stated in the Press Release, the Company will host an investor conference call and webcast on April 30, 2025, at 3:30 p.m. Eastern time to review its financial results. During the conference call, Brian Bird, president and chief executive officer, and Crystal Lail, vice president and chief financial officer, will make a slide presentation (the "Investor Call Presentation") concerning the Company's financial results.
A live webcast of the investor conference call can be accessed from the Company’s website at www.northwesternenergy.com/earnings-registration. To listen and view the slideshow presentation, please go to the site at least 15 minutes in advance of the call to register. An archived webcast will be available shortly after the event and remain active for one year.
Copies of the Annual Meeting Presentation and the Investor Call Presentation are being furnished pursuant to Regulation FD as Exhibits 99.2 and 99.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference. The information in the presentations shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Furthermore, the presentations shall not be deemed to be incorporated by reference into the Company's filings under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except as set forth with respect thereto in any such filing.
Item 9.01 Financial Statements and Exhibits.
| Exhibit No. | Description of Document |
|---|---|
| 99.1* | Press Release, dated April 29, 2025 |
| 99.2* | Annual Meeting Presentation, dated April 30, 2025 |
| 99.3* | Investor Call Presentation, dated April 30, 2025 |
| 104 | Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document |
| * filed herewith |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| NorthWestern Energy Group, Inc. | |
|---|---|
| By: | /s/ Timothy P. Olson |
| Timothy P. Olson | |
| Corporate Secretary |
Date: April 30, 2025
Document
| NorthWestern Energy Group, Inc.<br><br>d/b/a NorthWestern Energy<br><br>3010 W. 69th Street<br><br>Sioux Falls, SD 57108<br><br>www.northwesternenergy.com |
|---|
FOR IMMEDIATE RELEASE
NorthWestern Reports First Quarter 2025 Financial Results
•First Quarter 2025 Diluted GAAP EPS of $1.25, compared to $1.06 in 2024.
•First Quarter 2025 Adjusted Diluted Non-GAAP EPS of $1.22, compared to $1.09 in 2024.
•Affirms $531 million capital plan for 2025 and 4% to 6% long-term EPS and rate base growth rate.
•Announces $0.66 per share quarterly dividend - payable June 30, 2025.
BUTTE, MT / SIOUX FALLS, SD - April 29, 2025 - NorthWestern Energy Group, Inc. d/b/a NorthWestern Energy (Nasdaq: NWE) reported financial results for the first quarter of 2025. Net income for the period was $76.9 million, or $1.25 per diluted share, as compared with net income of $65.1 million, or $1.06 per diluted share, for the same period in 2024. NorthWestern’s first quarter 2025 non-GAAP net income and earnings per share were $75.3 million and $1.22, respectively, compared to $67.2 million and $1.09 in 2024. See “Adjusted Non-GAAP Earnings” and “Non-GAAP Financial Measures” sections below for more information on these measures.
First quarter earnings were driven by new rates in Montana, South Dakota, and Nebraska, higher electric and natural gas retail volumes, higher electric transmission revenues, and higher natural gas transportation revenues. These improvements were partially offset by lower Montana property tax tracker collections and higher depreciation, interest, and operating, administrative, and general expenses.
“We’re pleased with the solid financial and operational results achieved this quarter while continuing to provide safe, reliable, and affordable energy to our customers. We also made great progress in the Montana electric and natural gas rate review by reaching constructive multi-party settlement agreements. If approved, these settlements will allow us to recover increased operating costs and provide an opportunity to earn a fair return on the more than $4.2 billion of energy assets serving our customers and communities,” said Brian Bird, President & Chief Executive Officer.
“On the legislative front, we achieved a major milestone with the Montana Legislature passing House Bill 490. This new legislation, awaiting Governor Gianforte's signature, will clarify and limit wildfire-related liabilities, allowing significantly more certainty in managing the risks that come with owning and operating critical energy infrastructure across Montana. Together, the progress on the rate reviews and the passage of wildfire legislation are critical to positioning NorthWestern as a strong energy partner in the states we serve.”
NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 2
FINANCIAL OUTLOOK
Affirming Long-Term Growth Rates
We are affirming our long-term (five-year) diluted earnings per share growth guidance of 4% to 6%, based on an updated 2024 adjusted diluted non-GAAP EPS baseline of $3.40.
Additionally, we are affirming our $2.7 billion capital investment plan for 2025-2029, which is expected to support rate base growth of 4% to 6% from an updated 2024 base year of approximately $5.4 billion.
We plan to fund this capital program through a combination of cash from operations and secured debt issuances. Any incremental investments in generation, transmission, or other strategic growth opportunities may require equity financing.
Dividend Declared
NorthWestern Energy Group’s Board of Directors has declared a quarterly common stock dividend of $0.66 per share payable on June 30, 2025, to shareholders of record as of June 13, 2025.
Looking ahead, we remain committed to maintaining a dividend payout ratio within our targeted range of 60-70% over the long term.
Additional information regarding this release can be found in the earnings presentation at https://www.northwesternenergy.com/investors/earnings.
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NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 3
COMPANY UPDATES
Regulatory Update
Montana Rate Review - In July 2024, we filed a Montana electric and natural gas rate review with the Montana Public Service Commission (MPSC). In November 2024, the MPSC partially approved our requested interim rates effective December 1, 2024, subject to refund. Subsequently, we modified our request through rebuttal testimony. In March 2025, we filed a natural gas settlement with certain parties and a motion for revised interim natural gas rates. In April 2025, we filed a partial electric settlement with certain other parties and a motion for revised interim electric rates. Both settlements and motions for revised interim rates are subject to approval by the MPSC.
The partial electric settlement includes, among other things, agreement on base revenue increases (excluding base revenues associated with Yellowstone County Generating Station (YCGS)), allocated cost of service, rate design, updates to the amount of revenues associated with property taxes (excluding property taxes associated with YCGS), regulatory policy issues related to requested changes in regulatory mechanisms, and agreement to support a separate motion for revised electric interim rates. The partial electric settlement provides for the deferral and annual recovery of incremental operating costs related to wildfire mitigation and insurance expenses through the Wildfire Mitigation Balancing Account.
The natural gas settlement includes, among other things, agreement on base revenues, allocated cost of service, rate design, updates to the amount of revenues associated with property taxes, and agreement to support a separate motion for revised natural gas interim rates.
The details of our rebuttal request are set forth below:
| Requested Revenue Increase (Decrease) Through Rebuttal Testimony (in millions) | ||||
|---|---|---|---|---|
| Electric | Natural Gas | |||
| Base Rates | $ | 153.8 | 27.9 | |
| Power Costs & Credits Adjustment Mechanism (PCCAM)(1) | (94.5) | n/a | ||
| Property Tax (tracker base adjustment)(1) | (1.3) | 0.1 | ||
| Total Revenue Increase Requested through Rebuttal Testimony | $ | 58.0 | $ | 28.0 |
(1) These items are flow-through costs. PCCAM reflects our fuel and purchased power costs.
The details of our interim rates granted are set forth below:
| Interim Revenue Increase (Decrease) Granted (in millions) | ||||
|---|---|---|---|---|
| Electric | Natural Gas | |||
| Base Rates | $ | 18.4 | $ | 17.4 |
| PCCAM(1) | (88.0) | n/a | ||
| Property Tax (tracker base adjustment)(1)(2) | 7.4 | 0.2 | ||
| Total Interim Revenue Granted | $ | (62.2) | $ | 17.6 |
(1) These items are flow-through costs. PCCAM reflects our fuel and purchased power costs.
(2) Our requested interim property tax base increase went into effect on January 1, 2025, as part of our 2024 property tax tracker filing.
NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 4
The details of our settlement agreement and requested revised interim rates are set forth below:
| Requested Revenue Increase (Decrease) through Settlement Agreements and Revised Interim Filing <br>(in millions) | ||||
|---|---|---|---|---|
| Electric | Natural Gas | |||
| Base Rates: | ||||
| Base Rates (Settled) | $ | 66.4 | $ | 18.0 |
| Base Rates - YCGS (Non-settled)(1)(2) | 43.9 | n/a | ||
| Requested Base Rates for Revised Interim Filing | 110.3 | 18.0 | ||
| Pass-through items: | ||||
| Property Tax (tracker base adjustment) (Settled)(3) | (5.2) | 0.1 | ||
| Property Tax (tracker base adjustment) - YCGS (Non-settled)(1)(3) | 4.0 | n/a | ||
| PCCAM (Non-settled)(1)(2)(3) | (94.5) | n/a | ||
| Requested Pass-Through Rates for Revised Interim Filing | (95.7) | 0.1 | ||
| Total Requested Revenue Increase through Revised Interim Filing | $ | 14.6 | $ | 18.1 |
(1) These items were not included within the partial electric settlement and will be contested items that are expected to be determined in the MPSC's final order.
(2) Intervenor positions propose up to an $11.6 million reduction to the base rate revenue request and an additional $38.4 million decrease to the PCCAM base.
(3) These items are flow-through costs. PCCAM reflects our fuel and purchased power costs.
Revised interim filing rates are requested to be effective May 1, 2025. If the revised interim rates are not approved, and a final order is not received by May 23, 2025, which is 270 days from acceptance of our filing, we intend to implement, as permitted by Montana statute, our rebuttal rates, which will be subject to refund, until a final order is received.
A hearing on the electric and natural gas rate review is scheduled to commence on June 9, 2025. Interim rates will remain in effect on a refundable basis until the MPSC issues a final order.
Nebraska Natural Gas Rate Review - In April 2025, we reached a settlement agreement with certain parties for a base rate annual revenue increase of $2.4 million. This settlement agreement is subject to approval by the Nebraska Public Service Commission (NPSC). Interim rates, which have reflected an annual revenue increase of $2.3 million, will remain in effect on a refundable basis until the NPSC issues a final order.
Environmental Protection Agency (EPA) Rules
In April 2024, the EPA released Greenhouse Gas (GHG) Rules for existing coal-fired facilities and new coal and natural gas-fired facilities as well as Mercury Air Toxics Standards (MATS) Rules. Compliance with the rules will require expensive upgrades at Colstrip Units 3 and 4 with proposed compliance dates that may not be achievable and / or require technology that is unproven, resulting in significant impacts to costs of the facilities. The final MATS and GHG Rules require compliance as early as 2027 and 2032, respectively. On April 8, 2025, President Trump issued a proclamation, "Regulatory Relief for Certain Stationary Sources to Promote American Energy," exempting certain coal plants, including Colstrip Units 3 and 4, Big Stone Plant, and Coyote Plant, from compliance with the MATS Rule through July 8, 2029.
Acquisition of Energy West Montana Assets
In July 2024, we entered into an Asset Purchase Agreement with Hope Utilities to acquire its Energy West natural gas utility distribution system and operations serving approximately 33,000 customers located near Great
NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 5
Falls, Cut Bank, and West Yellowstone, Montana for approximately $39.0 million, subject to certain working capital and other agreed upon closing adjustments. The transaction is subject to a number of customary closing conditions, including MPSC approval, and we expect the acquisition to be completed in the second or third quarter of 2025.
Montana Wildfire Risk Mitigation
The Montana Legislature approved House Bill 490 in April 2025, with broad bipartisan support. The bill awaits the Governor's signature to become law. The legislation requires development, approval, and implementation of electric facilities providers' wildfire mitigation plans. Importantly, House Bill 490 helps address some preexisting liability risks facing electric facilities providers in Montana. It changes Montana law, recognizing utilities' obligation to provide a public service for customers that is different from typical businesses; circumscribes certain damages; and enacts liability protections related to wildfire and wildfire prevention efforts involving providers. More specifically, House Bill 490 precludes common law strict liability claims for damages related to wildfire and electric activities or wildfire mitigation activities; establishes a statutory standard of care, supplanting common law causes of action and other theories of recovery; and creates a rebuttable presumption that an electric facilities provider acted reasonably if it substantially followed an approved wildfire mitigation plan. The legislation also defines the availability of damages by allowing noneconomic personal injury damages only when there is bodily injury and punitive damages only when an injured party proves by clear and convincing evidence that an electric facilities provider's actions were grossly negligent or intentional.
Montana Large Load Customers
The MPSC requested information on our plan to serve potential large load customers and related resource adequacy issues. We responded in March 2025, outlining our policy and legal positions, emphasizing the importance of economic development for Montana and our commitment to serving our existing customers.
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NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 6
CONSOLIDATED STATEMENT OF INCOME
| Three Months Ended March 31, | ||||
|---|---|---|---|---|
| ($ in millions, except per share amounts) | 2025 | 2024 | ||
| Revenues | ||||
| Electric | $ | 335.5 | $ | 343.2 |
| Gas | 131.1 | 132.2 | ||
| Total Revenues | 466.6 | 475.3 | ||
| Operating expenses | ||||
| Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) | 138.2 | 174.7 | ||
| Operating and maintenance | 56.7 | 54.2 | ||
| Administrative and general | 41.4 | 40.4 | ||
| Property and other taxes | 43.2 | 47.2 | ||
| Depreciation and depletion | 62.4 | 56.7 | ||
| Total Operating Expenses | 341.9 | 373.3 | ||
| Operating income | 124.7 | 102.1 | ||
| Interest expense, net | (36.5) | (31.0) | ||
| Other income, net | 3.9 | 4.3 | ||
| Income before income taxes | 92.1 | 75.4 | ||
| Income tax expense | (15.2) | (10.3) | ||
| Net Income | $ | 76.9 | $ | 65.1 |
| Basic Shares Outstanding | 61.3 | 61.3 | ||
| Earnings per Share - Basic | $ | 1.25 | $ | 1.06 |
| Diluted Shares Outstanding | 61.4 | 61.3 | ||
| Earnings per Share - Diluted | $ | 1.25 | $ | 1.06 |
| Dividends Declared per Common Share | $ | 0.66 | $ | 0.65 |
| Note: Subtotal variances may exist due to rounding. |
NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 7
RECONCILIATION OF PRIMARY CHANGES DURING THE QUARTER
| Three Months Ended<br>March 31, 2025 vs. 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|
| ($ in millions, except per share amounts) | Pre-tax<br>Income | Income Tax (Expense) Benefit (3) | Net <br>Income | Diluted<br>Earnings<br>Per Share | ||||
| First Quarter, 2024 | $ | 75.4 | $ | (10.3) | $ | 65.1 | $ | 1.06 |
| Variance in revenue and fuel, purchased supply, and direct transmission expense(1) items impacting net income: | ||||||||
| Rates | 16.5 | (4.2) | 12.3 | 0.20 | ||||
| Electric retail volumes | 7.0 | (1.8) | 5.2 | 0.08 | ||||
| Natural gas retail volumes | 4.3 | (1.1) | 3.2 | 0.05 | ||||
| Electric transmission revenue | 4.2 | (1.1) | 3.1 | 0.05 | ||||
| Natural gas transportation | 1.3 | (0.3) | 1.0 | 0.02 | ||||
| Production tax credits, offset within income tax benefit | 0.8 | (0.8) | — | — | ||||
| Non-recoverable Montana electric supply costs | 0.3 | (0.1) | 0.2 | — | ||||
| Montana property tax tracker collections | (2.5) | 0.6 | (1.9) | (0.03) | ||||
| Other | (0.4) | 0.1 | (0.3) | — | ||||
| Variance in expense items(2) impacting net income: | ||||||||
| Depreciation | (5.7) | 1.4 | (4.3) | (0.07) | ||||
| Interest expense | (5.5) | 1.4 | (4.1) | (0.07) | ||||
| Operating, maintenance, and administrative | (1.7) | 0.4 | (1.3) | (0.02) | ||||
| Property and other taxes not recoverable within trackers | 0.2 | (0.1) | 0.1 | — | ||||
| Other | (2.1) | 0.7 | (1.4) | (0.02) | ||||
| Dilution from higher share count | — | |||||||
| First Quarter, 2025 | $ | 92.1 | $ | (15.2) | $ | 76.9 | $ | 1.25 |
| Change in Net Income | $ | 11.8 | $ | 0.19 | ||||
| (1) Exclusive of depreciation and depletion shown separately below<br><br>(2) Excluding fuel, purchased supply, and direct transmission expense<br><br>(3) Income Tax (Expense) Benefit calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%. |
NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 8
EXPLANATION OF CONSOLIDATED RESULTS
Three Months Ended March 31, 2025 Compared with the Three Months Ended March 31, 2024
Consolidated gross margin for the three months ended March 31, 2025 was $166.2 million as compared with $142.5 million in 2024, an increase of $23.7 million, or 16.6 percent. This increase was primarily due to rates, electric retail volumes, natural gas retail volumes, electric transmission revenues, and natural gas transportation revenues. These were offset in part by Montana property tax tracker collections, depreciation, and operating and maintenance expenses.
| ($ in millions) | Three Months Ended March 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| Reconciliation of gross margin to utility margin: | 2025 | 2024 | ||||||
| Operating Revenues | $ | 466.6 | $ | 475.3 | ||||
| Less: Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) | 138.2 | 174.7 | ||||||
| Less: Operating and maintenance | 56.7 | 54.2 | ||||||
| Less: Property and other taxes | 43.1 | 47.2 | ||||||
| Less: Depreciation and depletion | 62.4 | 56.7 | ||||||
| Gross Margin | 166.2 | 142.5 | ||||||
| Operating and maintenance | 56.7 | 54.2 | ||||||
| Property and other taxes | 43.1 | 47.2 | ||||||
| Depreciation and depletion | 62.4 | 56.7 | ||||||
| Utility Margin(1) | $ | 328.4 | $ | 300.6 | ||||
| (1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below. | ||||||||
| Three Months Ended March 31, | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| ($ in millions) | 2025 | 2024 | Change | % Change | ||||
| Utility Margin | ||||||||
| Electric | $ | 242.7 | $ | 227.8 | $ | 14.9 | 6.5 | % |
| Natural Gas | 85.7 | 72.8 | 12.9 | 17.7 | ||||
| Total Utility Margin(1) | $ | 328.4 | $ | 300.6 | $ | 27.8 | 9.2 | % |
| (1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below. |
Consolidated utility margin for the three months ended March 31, 2025 was $328.4 million as compared with $300.6 million for the same period in 2024, an increase of $27.8 million, or 9.2 percent.
NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 9
Primary components of the change in utility margin include the following:
| ($ in millions) | Utility Margin 2025 vs. 2024 | |
|---|---|---|
| Utility Margin Items Impacting Net Income | ||
| Interim rates (subject to refund) | $ | 13.1 |
| Electric retail volumes | 7.0 | |
| Natural gas retail volumes | 4.3 | |
| Transmission revenue due to market conditions and rates | 4.2 | |
| Base rates | 3.4 | |
| Montana natural gas transportation | 1.3 | |
| Non-recoverable Montana electric supply costs | 0.3 | |
| Montana property tax tracker collections | (2.5) | |
| Other | (0.4) | |
| Change in Utility Margin Items Impacting Net Income | 30.7 | |
| Utility Margin Items Offset Within Net Income | ||
| Property and other taxes recovered in revenue, offset in property and other taxes | (3.8) | |
| Production tax credits, offset in income tax expense | 0.8 | |
| Operating expenses recovered in revenue, offset in operating and maintenance expense | 0.1 | |
| Change in Utility Margin Items Offset Within Net Income | (2.9) | |
| Increase in Consolidated Utility Margin(1) | $ | 27.8 |
| (1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below. |
Higher electric retail volumes were driven by favorable weather in all jurisdictions impacting residential demand, higher commercial demand, and customer growth in all jurisdictions, partly offset by lower industrial demand. Higher natural gas retail volumes were driven by favorable weather and customer growth in all jurisdictions.
Under the PCCAM, net supply costs higher or lower than the PCCAM base rate (PCCAM Base) (excluding qualifying facility (QF) costs) are allocated 90 percent to Montana customers and 10 percent to shareholders. For the three months ended March 31, 2025, we under-collected supply costs of $24.3 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $2.7 million (10 percent of the PCCAM Base cost variance). For the three months ended March 31, 2024, we under-collected supply costs of $27.1 million resulting in an increase to our under collection of costs, and recorded a decrease in pre-tax earnings of $3.0 million.
| Three Months Ended March 31, | ||||||||
|---|---|---|---|---|---|---|---|---|
| ($ in millions) | 2025 | 2024 | Change | % Change | ||||
| Operating Expenses (excluding fuel, purchased supply and direct transmission expense) | ||||||||
| Operating and maintenance | $ | 56.7 | $ | 54.2 | $ | 2.5 | 4.6 | % |
| Administrative and general | 41.4 | 40.4 | 1.0 | 2.5 | ||||
| Property and other taxes | 43.2 | 47.2 | (4.0) | (8.5) | ||||
| Depreciation and depletion | 62.4 | 56.7 | 5.7 | 10.1 | ||||
| Total Operating Expenses (excluding fuel, purchased supply and direct transmission expense) | $ | 203.7 | $ | 198.5 | $ | 5.2 | 2.6 | % |
NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 10
Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were $203.7 million for the three months ended March 31, 2025, as compared with $198.5 million for the three months ended March 31, 2024. Primary components of the change include the following:
| Operating Expenses | ||
|---|---|---|
| ($ in millions) | 2025 vs. 2024 | |
| Operating Expenses (excluding fuel, purchased supply and direct transmission expense) Impacting Net Income | ||
| Depreciation expense due to plant additions and higher depreciation rates | $ | 5.7 |
| Electric generation maintenance | 3.5 | |
| Insurance expense, primarily due to increased wildfire risk premiums | 3.3 | |
| Labor and benefits(1) | 1.1 | |
| Technology implementation and maintenance expenses | 0.5 | |
| Uncollectible accounts | 0.4 | |
| Litigation outcome (Pacific Northwest Solar) | (2.4) | |
| Non-cash impairment of alternative energy storage investment | (2.2) | |
| Property and other taxes not recoverable within trackers | (0.2) | |
| Other | (2.5) | |
| Change in Items Impacting Net Income | 7.2 | |
| Operating Expenses Offset Within Net Income | ||
| Property and other taxes recovered in trackers, offset in revenue | (3.8) | |
| Deferred compensation, offset in other income | 1.2 | |
| Pension and other postretirement benefits, offset in other income(1) | 0.5 | |
| Operating and maintenance expenses recovered in trackers, offset in revenue | 0.1 | |
| Change in Items Offset Within Net Income | (2.0) | |
| Increase in Operating Expenses (excluding fuel, purchased supply and direct transmission expense) | $ | 5.2 |
| (1) In order to present the total change in labor and benefits, we have included the change in the non-service cost component of our pension and other postretirement benefits, which is recorded within other income on our Condensed Consolidated Statements of Income. This change is offset within this table as it does not affect our operating expenses. |
We estimate property taxes throughout each year, and update those estimates based on valuation reports received from the Montana Department of Revenue. Under Montana law, we are allowed to track the increases and decreases in the actual level of state and local taxes and fees and adjust our rates to recover the increase or decrease between rate cases less the amount allocated to Federal Energy Regulatory Commission-jurisdictional customers and net of the associated income tax benefit.
Consolidated operating income for the three months ended March 31, 2025 was $124.7 million as compared with $102.1 million in the same period of 2024. This increase was primarily due to rates, electric retail volumes, natural gas retail volumes, electric transmission revenues, and natural gas transportation revenues. These were offset in part by Montana property tax tracker collections, depreciation, operating, administrative and general costs.
Consolidated interest expense was $36.5 million for the three months ended March 31, 2025 as compared with $31.0 million for the same period of 2024. This increase was due to higher borrowings and interest rates and lower capitalization of Allowance for Funds Used During Construction (AFUDC).
NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 11
Consolidated other income was $3.9 million for the three months ended March 31, 2025 as compared with $4.3 million for the same period of 2024. This decrease was primarily due to lower capitalization of AFUDC and a prior year reversal of $2.3 million from a previously expensed Community Renewable Energy Project penalty due to a favorable legal ruling. This was partly offset by an increase of $2.5 million driven by a prior year non-cash impairment of an alternative energy storage equity investment and an increase in the value of deferred shares held in trust for deferred compensation.
Consolidated income tax expense was $15.2 million for the three months ended March 31, 2025 as compared to $10.3 million for the same period of 2024. Our effective tax rate for the three months ended March 31, 2025 was 16.5% as compared with 13.7% for the same period in 2024.
The following table summarizes the differences between our effective tax rate and the federal statutory rate:
| ($ in millions) | Three Months Ended March 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||
| Income Before Income Taxes | $ | 92.1 | $ | 75.4 | ||||
| Income tax calculated at federal statutory rate | 19.4 | 21.0 | % | 15.8 | 21.0 | % | ||
| Permanent or flow-through adjustments: | ||||||||
| State income tax, net of federal provisions | 0.9 | 0.9 | 0.6 | 0.9 | ||||
| Flow-through repairs deductions | (8.0) | (8.7) | (6.1) | (8.2) | ||||
| Production tax credits | (2.1) | (2.3) | (3.0) | (4.0) | ||||
| Amortization of excess deferred income tax | (0.7) | (0.7) | (0.4) | (0.5) | ||||
| Plant and depreciation flow-through items | 5.3 | 5.8 | 3.1 | 4.1 | ||||
| Share-based compensation | 0.0 | 0.0 | 0.3 | 0.4 | ||||
| Other, net | 0.4 | 0.5 | 0.0 | 0.0 | ||||
| (4.2) | (4.5) | (5.5) | (7.3) | |||||
| Income tax expense | $ | 15.2 | 16.5 | % | $ | 10.3 | 13.7 | % |
We compute income tax expense for each quarter based on the estimated annual effective tax rate for the year, adjusted for certain discrete items. Our effective tax rate typically differs from the federal statutory tax rate primarily due to the regulatory impact of flowing through federal and state tax benefits of repairs deductions, state tax benefit of accelerated tax depreciation deductions (including bonus depreciation when applicable) and production tax credits.
LIQUIDITY AND OTHER CONSIDERATIONS
Liquidity and Capital Resources
As of March 31, 2025, our total net liquidity was approximately $630.0 million, including $56.0 million of cash and $574.0 million of revolving credit facility availability with no letters of credit outstanding. This compares to total net liquidity one year ago at March 31, 2024 of $418.2 million.
NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 12
Earnings Per Share
Basic earnings per share are computed by dividing earnings applicable to common stock by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of common stock equivalent shares that could occur if unvested shares were to vest. Common stock equivalent shares are calculated using the treasury stock method, as applicable. The dilutive effect is computed by dividing earnings applicable to common stock by the weighted average number of common shares outstanding plus the effect of the outstanding unvested restricted stock and performance share awards. Average shares used in computing the basic and diluted earnings per share are as follows:
| Three Months Ended | ||
|---|---|---|
| March 31, 2025 | March 31, 2024 | |
| Basic computation | 61,339,498 | 61,265,967 |
| Dilutive effect of: | ||
| Performance share awards(1) | 86,603 | 43,652 |
| Diluted computation | 61,426,101 | 61,309,619 |
| (1) Performance share awards are included in diluted weighted average number of shares outstanding based upon what would be issued if the end of the most recent reporting period was the end of the term of the award. |
As of March 31, 2025, there were 49,071 shares from performance and restricted share awards which were antidilutive and excluded from the earnings per share calculations, compared to 54,182 shares as of March 31, 2024.
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NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 13
Adjusted Non-GAAP Earnings
We reported GAAP earnings of $1.25 per diluted share for the three months ended March 31, 2025 and $1.06 per diluted share for the same period in 2024. Adjusted Non-GAAP earnings per diluted share for the same periods are $1.22 and $1.09, respectively. A reconciliation of items factored into our Adjusted Non-GAAP diluted earnings are summarized below. The amount below represents a non-GAAP measure that may provide users of this data with additional meaningful information regarding the impact of certain items on our expected earnings. More information on this measure can be found in the "Non-GAAP Financial Measures" section below.
| ( in millions, except EPS) | ||
|---|---|---|
| Three Months Ended March 31, 2025 | ||
| Net(1)<br>Income | DilutedEPS | |
| 2025 Reported GAAP | $76.9 | |
| Non-GAAP Adjustments: | ||
| Favorable weather as compared to normal | (1.6) | (0.03) |
| 2025 Adj. Non-GAAP | $75.3 | 1.22 |
| Three Months Ended March 31, 2024 | ||
| Net(1)<br>Income | DilutedEPS | |
| 2024 Reported GAAP | $65.1 | |
| Non-GAAP Adjustments: | ||
| Unfavorable weather as compared to normal | 0.9 | 0.01 |
| Impairment of Alternative Energy Storage Investment | 3.5 | 0.06 |
| Community Renewable Energy Project Penalty (not tax deductible) | (2.3) | (0.04) |
| 2024 Adj. Non-GAAP | $67.2 | 1.09 |
| (1) Income tax rate on reconciling items assumes blended federal plus state effective tax rate of 25.3%. |
All values are in US Dollars.
Company Hosting Earnings Webinar
NorthWestern will host an investor earnings webinar on Wednesday, April 30, 2025, at 3:30 p.m. Eastern time to review its financial results for the quarter ending March 31, 2025. To register for the webinar, please visit www.northwesternenergy.com/earnings-registration. Please go to the site at least 15 minutes in advance of
the webinar to register. An archived webinar will be available shortly after the event and remain active for one
year.
NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 14
Notice of Virtual Annual Shareholders Meeting
The virtual Annual Shareholders Meeting will be held on Wednesday, April 30, 2025, at 11:00 a.m. Eastern. A virtual Annual Meeting enables our shareholders — regardless of size of investment, resources, or physical location — to participate in the meeting at no cost. We are committed to ensuring that shareholders will be afforded the same rights and opportunities to participate at our virtual meeting as they would in person.
The Annual Meeting will be webcast live and can be accessed by visiting
http://www.virtualshareholdermeeting.com/NWE2025. To participate in the meeting, please go to the site at least 15 minutes in advance of the meeting and follow the check-in procedures.
NorthWestern Energy - Delivering a Bright Future
NorthWestern Energy Group, Inc., doing business as NorthWestern Energy, provides essential energy infrastructure and valuable services that enrich lives and empower communities while serving as long-term partners to our customers and communities. We work to deliver safe, reliable, and innovative energy solutions that create value for customers, communities, employees, and investors. We do this by providing low-cost and reliable service performed by highly-adaptable and skilled employees. We provide electricity and / or natural gas to approximately 809,000 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. Our operations in Montana and Yellowstone National Park are conducted through our subsidiary, NW Corp, and our operations in South Dakota and Nebraska are conducted through our subsidiary, NWE Public Service. We have provided service in South Dakota and Nebraska since 1923 and in Montana since 2002.
Non-GAAP Financial Measures
This press release includes financial information prepared in accordance with GAAP, as well as other financial measures, such as Utility Margin, Adjusted Non-GAAP pretax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.
We define Utility Margin as Operating Revenues less fuel, purchased supply, and direct transmission expense (exclusive of depreciation and depletion) as presented in our Condensed Consolidated Statements of Income. This measure differs from the GAAP definition of Gross Margin due to the exclusion of Operating and maintenance, Property and other taxes, and Depreciation and depletion expenses, which are presented separately in our Condensed Consolidated Statements of Income. A reconciliation of Utility Margin to Gross Margin, the most directly comparable GAAP measure, is included in the press release above.
Management believes that Utility Margin provides a useful measure for investors and other financial statement users to analyze our financial performance in that it excludes the effect on total revenues caused by volatility in energy costs and associated regulatory mechanisms. This information is intended to enhance an investor's overall understanding of results. Under our various state regulatory mechanisms, as detailed below, our supply costs are generally collected from customers. In addition, Utility Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow for recovery of operating costs, as well as to analyze how changes in loads (due to weather, economic or other conditions), rates and other factors impact our results of operations. Our Utility Margin measure may not be comparable to that of other companies' presentations or more useful than the GAAP information provided elsewhere in this report.
NorthWestern Reports First Quarter 2025 Financial Results
April 29, 2025
Page 15
Management also believes the presentation of Adjusted Non-GAAP pre-tax income, Adjusted Non-GAAP net income, and Adjusted Non-GAAP Diluted EPS is more representative of normal earnings than GAAP pre-tax income, net income, and EPS due to the exclusion (or inclusion) of certain impacts that are not reflective of ongoing earnings. The presentation of these non-GAAP measures is intended to supplement investors' understanding of our financial performance and not to replace other GAAP measures as an indicator of actual operating performance. Our measures may not be comparable to other companies' similarly titled measures.
Special Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, the information under "Reconciliation of Non-GAAP Items." Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. We caution that while we make such statements in good faith and believe such statements are based on reasonable assumptions, including without limitation, management's examination of historical operating trends, data contained in records and other data available from third parties, we cannot assure you that we will achieve our projections. Factors that may cause such differences include, but are not limited to:
•adverse determinations by regulators, such as adverse outcomes from the denial of interim rates or final rates not consistent with a reasonable ability to earn our allowed returns, as well as potential adverse federal, state, or local legislation or regulation, including costs of compliance with existing and future environmental requirements, and wildfire damages in excess of liability insurance coverage, could have a material effect on our liquidity, results of operations and financial condition;
•the impact of extraordinary external events and natural disasters, such as a wide-spread or global pandemic, geopolitical events, earthquake, flood, drought, lightning, weather, wind, and fire, could have a material effect on our liquidity, results of operations and financial condition;
•acts of terrorism, cybersecurity attacks, data security breaches, or other malicious acts that cause damage to our generation, transmission, or distribution facilities, information technology systems, or result in the release of confidential customer, employee, or Company information;
•supply chain constraints, recent high levels of inflation for product, services and labor costs, and their impact on capital expenditures, operating activities, and/or our ability to safely and reliably serve our customers;
•changes in availability of trade credit, creditworthiness of counterparties, usage, commodity prices, fuel supply costs or availability due to higher demand, shortages, weather conditions, transportation problems or other developments, may reduce revenues or may increase operating costs, each of which could adversely affect our liquidity and results of operations;
•unscheduled generation outages or forced reductions in output, maintenance or repairs, which may reduce revenues and increase operating costs or may require additional capital expenditures or other increased operating costs; and
•adverse changes in general economic and competitive conditions in the U.S. financial markets and in our service territories.
Our 2024 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, reports on Form 8-K and other
Securities and Exchange Commission filings discuss some of the important risk factors that may affect our
business, results of operations and financial condition. We undertake no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Relations Contact: Media Contact:
Travis Meyer (605) 978-2967 Jo Dee Black (866) 622-8081
travis.meyer@northwestern.com jodee.black@northwestern.com
exh992annmtgpres25
1 Bozeman, Montana Annual Meeting of Shareholders | April 30, 2025
NWE’s President & CEO – Brian Bird 2 Brian Bird • Current position since January 2023 • President & Chief Operating Officer 2021-2022 • Vice President & Chief Financial Officer 2003-2021 • Board member since January 2023 • 25-plus years energy and utility industry experience • Serves on Board of Directors for the following organizations: Energy Insurance Mutual, Feeding South Dakota, Sioux Empire United Way (2021 Campaign Chair), North Central Electric Association (Past President), University of Idaho Utility Executive Course (former board member) • Former CFO and Principal of Insight Energy, VP and Treasurer of NGR Energy, and held financial positions with the following companies: Land O’ Lakes, Northwest Airlines, Minnesota Viking Ventures, and Deluxe Corporation • Earned MBA in Finance from the University of Minnesota and double major undergraduate degree in Accounting and Finance from the University of Wisconsin – Eau Claire. Holds a Certified Public Accounting certificate
Experienced and Engaged Board of Directors 3 Linda Sullivan Board Chair Dave Goodin Director Sherina Edwards Director Brian Bird Director, President & Chief Executive Officer Britt Ide Director Kent Larson Director Mahvash Yazdi Director Jeffrey Yingling Director Human Resources (Chair), Operations Independent Joined December 2019 Independent Joined April 2017 Non-Independent Joined January 2023 Nominating and Governance, Human Resources Independent Joined April 2023 Audit, Operations Independent Joined December 2024 Audit, Operations Independent Joined July 2022 Jan Horsfall Director Operations (Chair), Audit Independent Joined April 2015 Audit (Chair), Nominating and Governance Independent Joined October 2019 Nominating and Governance (Chair), Human Resources Independent Joined April 2017
4 “We’d like to thank Tony Clark for his years of service on our Board of Directors. Tony served on the board from 2016 to 2024. As a respected state and federal utility regulator and transmission expert, his guidance has been invaluable to both our company and shareholders. We wish him the best in his new role as the Executive Director of the National Association of Regulatory Utility Commissioners.” Brian Bird, CEO Thank you and Farewell to Tony Clark
Strong Executive Team 5 Crystal Lail Chief Financial Officer Michael Cashell VP - Transmission Shannon Heim General Counsel & VP – Federal Government Affairs Brian Bird President & Chief Executive Officer Bleau LaFave VP – Asset Management & Business Development Jason Merkel VP - Distribution Bobbi Schroeppel VP – Customer Care, Communications, & Human Resources Jeanne Vold VP - Technology Joined company in 2020, current position since 2023 Joined company in 2003, current position since 2021 (formerly VP and Chief Accounting Officer ’20-’21) Joined company in 1986, current position since 2011 Current position since 2023 (formerly President & Chief Operating Officer ’21-’22 and Chief Financial Officer ’03-’21) Joined company in 1993, current position since 2022 John Hines VP – Supply / Montana Government Affairs Joined company in 2005, current position since 2011 Joined company in 1994, current position since 2023 (formerly Director of Long-Term Resources ‘12-’23) Joined company in 1998, current position since 2002 Joined company in 1999, current position since 2021 (formerly Business Technology Officer ‘12-’21)
NWE’s Auditors – Deloitte & Touche LLP 6 • Independent registered public accounting firm • Deloitte provides the following services for more than 20 industries: • Risk & Financial Advisory • Audit & Assurance • Consulting • Tax • Merger & Acquisition • Artificial Intelligence and Analytics • Cloud • Deloitte and its subsidiaries have nearly 173,000 professionals
NWE’s Board Chair 7 Linda Sullivan • Director since April 27, 2017 • Retired Executive Vice President and Chief Financial Officer (CFO) of American Water Works Company, Inc., the largest publicly traded U.S. water and wastewater utility (2014-19) • 22 years of experience with Edison International Companies, last serving as Senior Vice President and CFO at Southern California Edison (2009-14) • 25-plus years of utility, finance, and regulatory experience • Certified Public Accountant and Certified Management Accountant • Serves on the board of directors for PPL Corporation, a regulated energy company (NYSE: PPL) Meeting Agenda • Call to Order • Secretary’s Report • Declaration of Quorum • Statement of Business • Voting • Company Presentation • Shareholder Questions • Report of Preliminary Voting Results • Adjournment
Corporate Secretary’s Report 8 Report • Affidavit of distribution for the proxy materials • Registered holders of common stock of the Company • Establishment of a quorum
Items of Business to be Considered 9 Election of Directors • Our Board is nominating nine people to serve as directors for one year. Ratification of Deloitte & Touche LLP, as Independent Registered Public Accounting Firm for 2025 • Our Audit, Finance and Risk Committee oversees the integrity of our accounting and financial reporting, and auditing processes. To assist with those responsibilities, the committee has appointed Deloitte & Touche LLP as our independent registered public accounting firm to audit our financial statements for 2025. Advisory Vote to Approve Named Executive Officer Compensation • Our Board will consider the guidance received by the say-on-pay vote when determining executive pay for the remainder of 2025 and beyond. Proposal No. 1 Proposal No. 2 Proposal No. 3
Electronic Voting 10 • If you have not voted: Please use the virtual meeting voting platform to cast your vote now. • If you previously voted but want to change your vote: Please use the virtual meeting voting platform to cast your new vote now.
Forward Looking Statements 11 Forward Looking Statements During the course of this presentation, there will be forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” or “will.” The information in this presentation is based upon our current expectations as of the date of this document unless otherwise noted. Our actual future business and financial performance may differ materially and adversely from our expectations expressed in any forward-looking statements. We undertake no obligation to revise or publicly update our forward-looking statements or this presentation for any reason. Although our expectations and beliefs are based on reasonable assumptions, actual results may differ materially. The factors that may affect our results are listed in certain of our press releases and disclosed in the Company’s 10-K and 10-Q along with other public filings with the SEC. NorthWestern Energy Group, Inc. dba: NorthWestern Energy Ticker: NWE Trading on Nasdaq www.northwesternenergy.com Corporate Office 3010 West 69th Street Sioux Falls, SD 57108 (605) 978-2900 Investor Relations Officer Travis Meyer (605) 978-2967 travis.meyer@northwestern.com Brian Bird President & CEO
Guiding Principles 12
NWE – An Investment for the Long Term 13 • Target 4%-6% EPS growth plus dividend yield to provide competitive total return of 9%-11% • Recent and ongoing rate reviews in all jurisdictions aid earnings, cash flow, and balance sheet strength • NOLs and tax credits expected to mitigate future cash tax obligations • History of consistent annual dividend growth with payout range at 60%-70% • 100% pure electric and natural gas utility with over 100 years of operating history • Solid economic indicators in service territory • Diverse electric supply (owned & contracted) portfolio ~58% hydro, wind, & solar Pure Electric & Gas Utility Solid Utility Foundation Strong Earnings & Cash Flow Attractive Future Growth Prospects Best Practices Corporate Governance • Residential electric and gas rates below national average • Solid system reliability – 2nd quartile in 2024 • Low leaks per 100 miles of pipe – 2nd quartile in 2024 • Solid JD Power Overall Customer Satisfaction scores – top half of combo utilities • Maintenance capital investment focused on reliability, capacity, asset life, and compliance • Opportunity for energy supply and transmission investment to serve existing customer and anticipated large-load customer growth 5th Best Governance Score
About NorthWestern 14 Montana Operations Electric 413,400 customers 25,390 miles – transmission & distribution lines 1,065 MW maximum capacity owned power generation Natural Gas 214,500 customers 7,354 miles of transmission and distribution pipeline 17.85 Bcf of gas storage capacity Own 28.2 Bcf of proven natural gas reserves Nebraska Operations Natural Gas 43,300 customers 830 miles of distribution pipeline Data as of 12/31/2024 South Dakota Operations Electric 65,300 customers 3,735 miles – transmission & distribution lines 420 MW nameplate owned power generation Natural Gas 50,500 customers 1,851 miles of transmission and distribution pipeline
About Our Company 15 787,000 Customers MT – 627,900 SD/NE – 159,100 1,585 Employees MT - 1,277 SD/NE - 308 341 Communities in Montana and South Dakota with electric service MT – 224 (129 electric only / 95 combo) SD – 117 (76 electric only / 41 combo) 206 Communities in Montana, South Dakota, and Nebraska with gas service MT – 121 (26 gas only / 95 combo) SD – 81 (40 gas only / 41 combo) NE – 4 gas communities $5.4 Billion Rate Base MT - $4.4 billion SD/NE – $1.0 billion $549.4 Million Capital Expenditures in 2024 MT - $479.5 million SD/NE - $79.9 million $8.0 Billion Total Assets MT – $6.6 billion SD/NE – $1.4 billion $155.9 million Property Taxes MT – $149.4 million SD/NE – $6.5 million Lone Peak, Big Sky, MT
A Combination Electric and Gas Utility 16 NorthWestern’s ‘80/20’ rules: Approximately 80% Electric and 80% Montana. Nearly $5.4 billion of rate base investment to serve our customers. Data as reported in our 2024 10-K
2024 - Year in Review 17 Operational Performance • Maintained safe and reliable service while reaching new all-time winter and summer electric system peaks in Montana. • Safely completed over $550 million of capital investment. • Substantially completed our 175 MW Yellowstone County Generating Station which is in service and benefiting customers. Regulatory Efforts • Rate reviews filed in all jurisdictions to recover necessary investment to continue to provide safe and reliable service. Seizing Opportunities • Announced plans to invest in several regional transmission projects, including the North Plains Connector project. • Signed letters of intent to serve two large-load data centers in Montana that will ultimately encourage economic development in the state and lower energy costs for all customers. • Entered agreement to acquire Energy West Montana’s and Cut Bank Gas’s natural gas assets and customers. Managing Risk • Released our robust Wildfire Mitigation Plan and Public Safety Power Shutoff plan. • Announced a second zero-dollar Colstrip capacity acquisition (370 MW from Puget Sound Energy) which ensures energy reliability and affordability while opening the door to potential new large-load customers in Montana.
9%-11% Total Growth >11% Total Growth Incremental Opportunities: > 6% EPS Growth ~5% Dividend Yield Base Capital Plan: 4%-6% EPS Growth Data centers & new large-load opportunities FERC Regional Transmission Incremental generating capacity (subject to successful resource procurement bids) $2.74 billion of highly executable and low-risk capital investment forecasted over the next five years. This investment is expected to drive annualized earnings and rate base growth of approximately 4% - 6%. + The NorthWestern Value Proposition + 18 = = 2025-2029 Capital Investment ($ Millions)
Reliability 99.982% Uninterrupted Reliability In 2023 and 2024, our System Average Interruption Duration Index (SAIDI) performance was 88.8 and 95.2 minutes, respectively, ranking in the first and second quartiles compared to other utilities. In 2024, our customers enjoyed uninterrupted power 99.982% of the time on average*. * Excludes planned outages, major event days and catastrophic events. Exceeding industry reliability standards… a remarkable achievement given our rural, rugged and dispersed service territory.
Affordability • Electric - EEI Typical Bills and Average Summer and Winter Rates Reports 2008-2023 ** Natural Gas - EIA U.S. Price of Natural Gas Delivered to Residential Customers 2008-2023 Utility Bills Well-Below National Average Keeping energy bills low… empowering our customers and communities to thrive.
Sustainability Based on MWh's supplied from owned & long-term contracted resources. Contracted Coke & Waste Tailings as well as much of the contracted wind, hydro and solar are federally mandated Qualifying Facilities, as defined under the Public Utility Regulatory Policies Act of 1978 (PURPA). NorthWestern does not own all the renewable energy certificates (RECs) generated by contracted resources and periodically sells its own RECs with proceeds benefiting retail customers. Accordingly, we cannot represent that 100% of carbon-free energy in the portfolio was delivered to our customers. Championing sustainable solutions… preserving our rural landscapes for generations to come. 58% Carbon-Free Portfolio Exceeds 41% National Average* * EIA.gov Table 7.2B Electric Net Generation: U.S. Electric Power Sector - 2023
The Incredible Value of Electricity & Natural Gas 22 Compared to the cost of other niceties of your daily life, the necessity of powering your home remains an incredible value. Coffee / Latte Heat, Cool, Power & Protect Your Entire Home $4 - $5 per day Cell Phone Bill Family of Four $5 - $7 per day Electricity $3-$4 Natural Gas $2-$3 $5 - $11 per day McDonald’s Big Mac Meal $10 - $12 per meal
Conclusion Pure Electric & Gas Utility Solid Utility Foundation Best Practices Corporate Governance Attractive Future Growth Prospects Strong Earnings & Cash Flows 23
Question and Answer 24 • Please submit questions through the virtual annual meeting website. • We will edit profanity or other inappropriate language. • Questions must: • Be pertinent to meeting matters • Be appropriate • Comply with the meeting rules of conduct • We will answer as many questions as time permits. We will edit profanity or other inappropriate language. Questions must: • be pertinent to meeting matters. • comply with the meeting rules of conduct.
Preliminary Results 25 1. Election of Directors 2. Ratification of Deloitte & Touche LLP, as Independent Registered Public Accounting Firm for 2025 3. Advisory Vote to Approve Named Executive Officer Compensation
Thank youDelivering a bright future 26
exh993earnpres25q1
First Quarter Earnings Webcast April 30, 2025 8-K April 30, 2025
NorthWestern Energy 2 Forward Looking Statements During the course of this presentation, there will be forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” or “will.” The information in this presentation is based upon our current expectations as of the date of this document unless otherwise noted. Our actual future business and financial performance may differ materially and adversely from our expectations expressed in any forward-looking statements. We undertake no obligation to revise or publicly update our forward-looking statements or this presentation for any reason. Although our expectations and beliefs are based on reasonable assumptions, actual results may differ materially. The factors that may affect our results are listed in certain of our press releases and disclosed in the Company’s 10-K and 10-Q along with other public filings with the SEC.
Recent Highlights ✓ Reported GAAP diluted EPS of $1.25 o Non-GAAP diluted EPS of $1.221 ✓ Affirming long-term rate base and earnings per share growth rates targets of 4% - 6%2 ✓ Completed debt financing needs for 2025 •No planned equity to finance 5-year capital investment ✓ Dividend Declared: $0.66 per share payable June 30, 2025 to shareholders of record as of June 13, 2025 ✓ Montana rate review nearing completion •Full natural gas settlement reached with major intervenors •Partial electric settlement reached ✓ The Montana legislature has passed wildfire and other constructive bills, now pending the Governor's approval. 1.) See “First Quarter 2025 Non-GAAP Earnings” below and “Non-GAAP Financial Measures” in appendix. 2.) Based on 2024 Adjusted Diluted Non-GAAP EPS of $3.40 and estimated rate base of $5.38 billion.3 Boulder River, MT
9%-11% Total Growth >11% Total Growth Incremental Opportunities: > 6% EPS Growth ~5% Dividend Yield Base Capital Plan: 4%-6% EPS Growth ✓ Data centers & new large- load opportunities ✓ FERC Regional Transmission ✓ Incremental generating capacity (subject to successful resource procurement bids) $2.74 billion of highly executable and low-risk capital investment forecasted over the next five years. This investment is expected to drive annualized earnings and rate base growth of approximately 4% - 6%. See slide titled “Strong Growth Outlook” for additional information. + The NorthWestern Value Proposition + 4 = = 2025-2029 Capital Investment ($ Millions)
Thank youFirst Quarter Financial Review 5
First Quarter 2025 Financial Results 6 1.) See “First Quarter 2025 Non-GAAP Earnings” below and “Non-GAAP Financial Measures” in appendix. First Quarter Net Income vs Prior Period • GAAP: $11.8 million or 18.1% • Non-GAAP1: $8.1 million or 12.1% First Quarter EPS vs Prior Period • GAAP: $0.19 or 17.9% • Non-GAAP1: $0.13 or 11.9%
First Quarter Earnings Drivers 7 Increase in diluted EPS during the quarter is primarily due to improved utility margins offset by higher depreciation, interest, and operating expenses. After-tax EPS vs Prior Year 1.) Utility Margin is a non-GAAP measure. See appendix slide titled “Reconciling Gross Margin to Utility Margin” for additional disclosure. 2.) See “First Quarter 2025 Non-GAAP Earnings” below and “Non-GAAP Financial Measures” in appendix.
First Quarter Utility Margin Bridge Pre-tax Millions vs. Prior Year $30.7 million or 10.2% increase in Utility Margin items that impact Net Income NOTE: Utility Margin is a non-GAAP measure. See appendix slide titled “Reconciling Gross Margin to Utility Margin” for additional disclosure. 8
We estimate weather to be a $2.2 million pre-tax benefit as compared to normal and a $3.4 million benefit as compared to first quarter 2024. (1) As a result of the adoption of Accounting Standard Update 2017-07 in March 2018, pension and other employee benefit expense is now disaggregated on the GAAP income statement with portions now recorded in both OG&A expense and Other (Expense) Income lines. To facilitate better understanding of trends in year-over-year comparisons, the non-GAAP adjustment above re-aggregates the expense in OG&A - as it was historically presented prior to the ASU 2017-07 (with no impact to net income or earnings per share). (2) Utility Margin is a non-GAAP Measure. See the slide titled “Reconciling Gross Margin to Utility Margin” for additional disclosures. First Quarter 2025 Non-GAAP Earnings 9 Note: Subtotal variances may exist due to rounding.
Credit, Cash Flow, and Financing Plans 10 Credit Ratings Stable Outlook at Moody’s, S&P, and Fitch. No equity expected to fund the current $2.74 billion 5-year capital plan. Financing plans (targeting a FFO to Debt ratio > 14%) are expected to maintain our current credit ratings. We expect to pay minimal cash taxes into 2028 due to utilization of our NOL’s and tax credits. Financing plans are subject to change. FFO: Cash from Operations less Working Capital Adjustments. Debt: Long- & Short-term Debt (including unamortized debt issuance costs and pension liability).
11 Montana Electric Rate Review MPSC approval of the partial Joint Party Settlement, along with NorthWestern’s proposals for YCGS and PCCAM, would allow for recovery of increased operating costs and an opportunity to earn a fair return on the investment that funds the critical energy infrastructure in Montana. Key Dates • 5/23/25: Implementation of rebuttal rates (subject to refund) • 6/9/25: Hearing Commences
MPSC approval of the Joint Party Settlement would allow for recovery of increased operating costs and an opportunity to earn a fair return on the investment that funds the critical energy infrastructure in Montana. 12 Montana Natural Gas Rate Review Key Dates • 5/23/25: Implementation of rebuttal rates (subject to refund) • 6/9/25: Hearing Commences
Strong Growth Outlook 13 ✓ 2025 EPS guidance expected to be provided following the outcome of our pending Montana rate review ✓ Affirming long-term growth rates from 2024 base1 • EPS growth of 4% to 6% • Rate base growth of 4% to 6% • Continued focus on closing the gap between earned & authorized returns ✓ No equity expected to fund the current 5-year | $2.74 billion capital plan • Capital plan sized to be funded by cash from operations, aided by net operating losses, and secured debt • Incremental capital opportunities may result in equity financing ✓ Expect to maintain FFO / Debt > 14% in 2025 and beyond ✓ Earnings growth is expected to exceed dividend growth until we return to our targeted 60% to 70% payout ratio 1.) Based on 2024 Adjusted Diluted Non-GAAP EPS of $3.40 and estimated rate base of $5.38 billion. See “Non-GAAP Financial Measures” in appendix. 2.) Assumes implementation of new Montana electric and natural gas rates in May 2025 as filed in the settlement agreements. 2
11% increase in 5-year capital investment plan $2.74 billion of highly-executable and low-risk critical capital investment Regulated Utility Five-Year Capital Forecast (millions) 14
Thank youOther Updates 15
16 Montana Wildfire Bill No Strict Liability: • Confirms strict liability cannot be applied to utility operations related to wildfire Legal Protections for Providers: • Negligence standard based on Montana specific circumstances • Rebuttable presumption utility acted reasonably if it substantially followed a MPSC approved wildfire mitigation plan where wildfire ignited (Burden of proof rests on plaintiffs) • 3-year statute of limitations from date of damage Damages: • Economic: Property damage (market value or restoration) and fire control costs • Noneconomic: Only if bodily injury or death occurs • Punitive: Only with clear & convincing evidence of gross negligence or intent Wildfire Mitigation Plans updated every 3 years HB 490 was passed by the Montana Legislature with broad bipartisan support. Once signed, the new law clarifies and limits wildfire-related risks, protecting our customers, communities and investors.
17 Transmission Bill Allows Certificate of Public Convenience & Necessity (CPCN) for electric transmission to be issued by the Montana Public Service Commission (MPSC) • Advanced Technology Includes solutions like advanced conductors to enhance capacity and reduce wildfire risk • Approvals MPSC shall determine within 300 days of application if transmission projects (greater than 69 kV) are in public interest and may grant or deny a CPCN • Cost Clarity post CPCN Within 90 days of application, the MPSC shall issue an order responding to a utilities request for advanced approval of prudent cost recovery. SB 301 was also passed by the Montana Legislature with broad bipartisan support. Once signed, this new law will provide greater confidence of fair and equitable returns to investors while incentivizing the continued modernization of the grid for our customers and communities.
18 Incremental Colstrip Capacity NorthWestern’s planned no cost acquisition of 592 MW of additional Colstrip capacity supports the integration of large-load customers, delivering substantial benefits to our customers, communities, and investors. 760 MW Existing Ownership Montana Average Load ✓ No cost acquisition of incremental Colstrip ownership allows us to reliably and affordably serve existing customers ▪ Provides energy independence & improves system reliability / integrity ▪ Moves portfolio from short capacity position to long capacity ▪ Maintains affordability while insulating customers from volatile capacity and energy market pricing ✓ Increased ownership (from 15% to 55%) is expected to protect existing interest and provide Montana control to keep the plant open beyond Washington and Oregon mandated closure deadlines ✓ Significant capacity surplus provides opportunity for new large-load customers, spreading fixed costs over more kilowatt-hours, lowering and stabilizing the cost per unit for all our customers 222 MW 222 MW 370 MW Avista & Puget Sound Energy 1400 MW Montana Peak Load + Planning Reserve
✓ Montana ▪ Served by overall utility portfolio, which is expected to be long capacity beginning in 2026 ▪ Served from generating portfolio over 60% carbon free ▪ If data center demand interest develops beyond existing capacity, we will work with the Montana Public Service Commission to structure appropriate tariffs ✓ South Dakota ▪ Significant indications of interest ▪ Any new large load customers would require incremental capacity ▪ South Dakota PUC has an established process for large load customers with a deviated rate tariff 19 Large Load Customers ✓ Confidentially Announced: December 17, 2024 ▪ Company: Sabey Data Centers ▪ Load: 50 MW expected to grow to 250 MW ▪ Start Date: Mid-2027 ▪ Agreement Status: Letter of Intent ✓ Announced: December 19, 2024 ▪ Company: Atlas Power ▪ Load: 75 MW expected to grow to 150 MW ▪ Start Date: January 2026 ▪ Agreement Status: Letter of Intent (Existing transmission customer) ✓ Expect to serve under existing Montana tariffs
20 Regional Transmission Opportunities Colstrip Transmission System North Plains Connector (NPC) Consortium Project • $3.6 billion, 415-mile, high-voltage direct-current transmission line connecting to Montana's Colstrip substation, bridging the eastern and western U.S. energy grids • Project awarded $700M Grid Resilience & Innovation Partnership grant by U.S. Department of Energy1 • $70.0 million of the award is earmarked for upgrades to the Colstrip Transmission System (of which we are ~30% owner) North Plains Connector In December 2024, NorthWestern announced a memorandum of understanding to own 10% of the North Plains Connector. The project, targeting a 2032 in-service date, strengthens grid reliability and efficiency. A separate partnership will explore expanding Montana's southwest transmission corridor to bolster reliability, allow for critical import capability, and enhance Western market access. 1.) President Trump issued an Executive Order on January 20, 2025, "Unleashing American Energy," directing all federal executive agency heads to review all agency actions implicating energy reliability and affordability or potentially burdening the development of domestic energy resources. This Executive Order has delayed the disbursement of the funds granted by the U.S. Department of Energy for the NPC Consortium project.
Conclusion Pure Electric & Gas Utility Solid Utility Foundation Best Practices Corporate Governance Attractive Future Growth Prospects Strong Earnings & Cash Flows 21 NorthWestern Energy Group, Inc. dba: NorthWestern Energy Ticker: NWE (Nasdaq) www.northwesternenergy.com Corporate Support Office 3010 West 69th Street Sioux Falls, SD 57108 (605) 978-2900 Investor Relations Officer Travis Meyer 605-978-2967 travis.meyer@northwestern.com
Thank youAppendix: 22
(1) The revenue requirement associated with the FERC regulated portion of Montana electric transmission and ancillary services are included as revenue credits to our MPSC jurisdictional customers. Therefore, we do not separately reflect FERC authorized rate base or authorized returns. (2) The Montana gas revenue requirement includes a step down which approximates annual depletion of our natural gas production assets included in rate base. (3) For those items marked as "n/a," the respective settlement and/or order was not specific as to these terms. (4) In June 2024, we filed a South Dakota natural gas rate review filing (2023 test year) with the SDPUC and a Nebraska natural gas rate review filing (2023 test year) with the NEPSC. Coal Generation Rate Base as a percentage of Total Rate Base Revenue from coal generation is not easily identifiable due to the use of bundled rates in South Dakota and other rate design and accounting considerations. However, NorthWestern is a fully regulated utility company for which rate base is the primary driver of earnings. The data to the left illustrates that NorthWestern only derives approximately 8-10% of earnings from its jointly owned coal generation rate base. Rate Base & Authorized Return Summary Appendix 23
First Quarter Financial Results 24 1.) Utility Margin is a non-GAAP Measure. See appendix slide titled “Reconciling Gross Margin to Utility Margin” for additional disclosure. Note: Subtotal variances may exist due to rounding. Appendix (in millions except per share amounts) 2025 2024 Variance % Variance Operating Revenues $466.6 $475.3 ($8.7) (1.8%) 138.2 174.7 (36.5) (20.9%) Utility Margin 328.4 300.6 27.8 9.2% Operating Expenses Operating and maintenance 56.7 54.2 2.5 4.6% Administrative and general 41.4 40.4 1.0 2.5% Property and other taxes 43.2 47.2 (4.0) (8.5%) Depreciation and depletion 62.4 56.7 5.7 10.1% Total Operating Expenses 203.7 198.5 5.2 2.6% Operating Income 124.7 102.1 22.6 22.1% Interest expense, net (36.5) (31.0) 5.5 17.7% Other income, net 3.9 4.3 (0.4) (9.3%) Income Before Income Taxes 92.1 75.4 16.7 22.1% Income tax expense (15.2) (10.3) 4.9 47.6% Net Income $76.9 $65.1 $11.8 18.1% Effective Tax Rate 16.5% 13.7% 2.80% Diluted Shares Outstanding 61.4 61.3 0.1 0.2% Diluted Earnings Per Share $1.25 $1.06 $0.19 17.9% Dividends Paid per Common Share $0.66 $0.65 $0.01 1.5% Three Months Ended March 31, Fuel, purchased supply & direct transmission expense (exclusive of depreciation and depletion) 1
Utility Margin (Q1) ($ in millions) Three Months Ended March 31, 2025 2024 Variance Electric $ 242.7 $ 227.8 $ 14.9 6.5% Natural Gas 85.7 72.8 12.9 17.7% Total Utility Margin1 $ 328.4 $ 300.6 $ 27.8 9.2% (1) Utility Margin is a non-GAAP Measure. See appendix slide titled “Reconciling Gross Margin to Utility Margin” for additional disclosure. Increase in utility margin due to the following factors: $ 13.1 Interim rates (subject to refund) 7.0 Electric retail volumes 4.3 Natural gas retail volumes 4.2 Transmission revenue due to market conditions and rates 3.4 Base rates 1.3 Montana natural gas transportation 0.3 Non-recoverable Montana electric supply costs (2.5) Montana property tax tracker collections (0.4) Other $ 30.7 Change in Utility Margin Impacting Net Income $ (3.8) Property & other taxes recovered in revenue, offset in property & other taxes 0.8 Production tax credits, offset in income tax expense 0.1 Operating expenses recovered in revenue, offset in operating & maintenance expense $ (2.9) Change in Utility Margin Offset Within Net Income $ 27.8 Increase in Utility Margin 25 Appendix
Operating Expenses (Q1) Increase in operating expenses due to the following factors: $ 5.7 Depreciation expense due to plant additions and higher depreciation rates 3.5 Electric generation maintenance 3.3 Insurance expense, primarily due to increased wildfire risk premiums 1.1 Labor and benefits(1) 0.5 Technology implementation and maintenance expenses 0.4 Uncollectible accounts (2.4) Litigation outcome (Pacific Northwest Solar) (2.2) Non-cash impairment of alternative energy storage investment (0.2) Property and other taxes not recoverable within trackers (2.5) Other $ 7.2 Change in Operating Expense Items Impacting Net Income (dollars in millions) Three Months Ended March 31, 2025 2024 Variance Operating & maintenance $ 56.7 $ 54.2 $ 2.5 4.6% Administrative & general 41.4 40.4 1.0 2.5% Property & other taxes 43.2 47.2 (4.0) (8.5%) Depreciation & depletion 62.4 56.7 5.7 10.1% Operating Expenses $ 203.7 $ 198.5 $ 5.2 2.6% $ (3.8) Property and other taxes recovered in trackers, offset in revenue 1.2 Deferred compensation, offset in other income 0.5 Pension and other postretirement benefits, offset in other income(1) 0.1 Operating and maintenance expenses recovered in trackers, offset in revenue $ (2.0) Change in Operating Expense Items Offset Within Net Income $ 5.2 Increase in Operating Expenses (1) In order to present the total change in labor and benefits, we have included the change in the non- service cost component of our pension and other postretirement benefits, which is recorded within other income on our Condensed Consolidated Statements of Income. This change is offset within this table as it does not affect our operating expenses. 26 Appendix
Operating to Net Income (Q1) (dollars in millions) Three Months Ended March 31, 2025 2024 Variance Operating Income $ 124.7 $ 102.1 $ 22.6 22.1% Interest expense, net (36.5) (31.0) 5.5 17.7% Other income, net 3.9 4.3 (0.4) (9.3%) Income Before Taxes 92.1 75.4 16.7 22.1% Income tax expense (15.2) (10.3) 4.9 47.6% Net Income $ 76.9 $ 65.1 $ 11.8 18.1% $5.5 million increase in interest expense, net was primarily due to higher borrowings and interest rates and lower capitalization of Allowance for Funds Used During Construction (AFUDC). $0.4 million decrease in other income, net was primarily due to lower capitalization of AFUDC and a prior year reversal of $2.3 million from a previously expensed Community Renewable Energy Project penalty due to a favorable legal ruling. This was partly offset by an increase of $2.5 million driven by a prior year non-cash impairment of an alternative energy storage equity investment and an increase in the value of deferred shares held in trust for deferred compensation. $4.9 million increase in income tax expense was primarily due to an increase in pre-tax income. 27 Appendix
Tax Reconciliation (Q1) 28 Appendix ($ in millions) Variance Income Before Income Taxes $92.1 $75.4 16.7 Income tax calculated at federal statutory rate 19.4 21.0% 15.8 21.0% 3.6 Permanent or flow-through adjustments: State income taxes, net of federal provisions 0.9 0.9% 0.6 0.9% 0.3 Flow-through repairs deductions (8.0) (8.7%) (6.1) (8.2%) (1.9) Production tax credits (2.1) (2.3%) (3.0) (4.0%) 0.9 Amortization of excess deferred income tax (0.7) (0.7%) (0.4) (0.5%) (0.3) Plant and depreciation flow-through items 5.3 5.8% 3.1 4.1% 2.2 Share-based compensation - - 0.3 0.4% (0.3) Other, net 0.4 0.5% - - 0.4 Sub-total (4.2) (4.5%) (5.5) (7.3%) 1.3 Income Tax Expense 15.2$ 16.5% 10.3$ 13.7% 4.9$ Three Months Ended March 31, 2025 2024
Segment Results (Q1) 29 Appendix *Direct transmission expense excludes depreciation and depletion. (1) Utility Margin is a non-GAAP Measure. See appendix slide titled “Reconciling Gross Margin to Utility Margin” for additional disclosure. (2) Consists of unallocated corporate costs and some limited unregulated activity within the energy industry.
Electric Segment (Q1) (1) Included within this line is our lighting customer class, which we have historically counted each lighting district as one customer. We have retroactively modified our customer counts to now reflect each lighting service as a customer as that better aligns with the MWH usage of this customer class. (2) Utility Margin is a non-GAAP Measure. See appendix slide titled “Reconciling Gross Margin to Utility Margin” for additional disclosure. 30 Appendix
Natural Gas Segment (Q1) 31 Appendix (1) Utility Margin is a non-GAAP Measure. See appendix slide titled “Reconciling Gross Margin to Utility Margin” for additional disclosure.
($ in millions) As of March 31, As of December 31, 2025 2024 Cash and cash equivalents 56.0$ 4.3$ Restricted cash 24.0 24.7 Accounts receivable, net 187.5 187.8 Inventories 119.6 122.9 Other current assets 85.7 78.5 Goodwill 357.6 357.6 PP&E and other non-current assets 7,271.0 7,221.8 Total Assets 8,101.4$ 7,997.5$ Payables 88.5 111.8 Current Maturities - debt and leases 3.7 403.5 Other current liabilities 305.5 286.9 Long-term debt & capital leases 3,131.5 2,697.2 Other non-current liabilities 1,675.9 1,640.4 Shareholders' equity 2,896.4 2,857.7 Total Liabilities and Equity 8,101.4$ 7,997.5$ Capitalization: Short-Term Debt & Short-Term Finance Leases 3.7 403.5 Long-Term Debt & Long-Term Finance Leases 3,131.5 2,697.2 Less: Basin Creek Finance Lease (4.6) (5.5) Shareholders' Equity 2,896.4 2,857.7 Total Capitalization 6,027.0$ 5,953.0$ Ratio of Debt to Total Capitalization 51.9% 52.0% Balance Sheet 32 Appendix Debt to Total Capitalization down from last quarter and inside our targeted 50% - 55% range.
($ in millions) 2025 2024 Operating Activities Net Income 76.9$ 65.1$ Non-Cash adjustments to net income 77.1 69.4 Changes in working capital (0.1) 33.4 Other noncurrent assets & liabilities (0.5) (6.2) Cash Provided by Operating Activities 153.4 161.7 Cash Used in Investing Activities (96.7) (109.0) Cash Used in Financing Activities (5.6) (57.5) Cash Provided by Operating Activities 153.4$ 161.7$ Less: Changes in working capital (0.1) 33.4 Funds from Operations 153.5$ 128.3$ PP&E additions 92.1 108.8 Capital expenditures included in trade accounts payable (8.3) (21.2) AFUDC Credit 1.8 4.3 Total Capital Investment 85.5$ 91.9$ Three Months Ended March 31, Cash from Operating Activities decreased by $8.3 million primarily due to lower collections of accounts receivable balances due to timing of colder weather and greater uses of cash in accrued expenses and other due to timing of interest payments on long-term debt. This was partly offset by a decrease in our net cash outflows for energy supply costs. Funds from Operations increased by $25.2 million over prior period. Net Under-Collected Supply Costs (in millions) Beginning (Jan. 1) Ending (Mar. 31) (Outflow) / Inflow 2024 $7.8 $40.4 ($32.6) 2025 $5.9 $25.6 ($19.7) 2025 Decrease in Net Cash Outflows $12.9 First Quarter Cash Flow 33 No Planned Equity Issuances in 2025 Financing plans (targeting a FFO to Debt ratio > 14%) are expected to maintain our current credit ratings and are subject to change. Debt financing in 2025 • Issued $400 million, 5.07% coupon, 5-year Montana FMBs in Q1 • Priced $100 million, 5.49% coupon, 10-year South Dakota FMBs to be issued in Q2 • Amended our existing NorthWestern Energy Group $100 million term loan to extend the maturity date from April 11, 2025 to April 10, 2026. Appendix
Reconciling Gross Margin to Utility Margin Management believes that Utility Margin provides a useful measure for investors and other financial statement users to analyze our financial performance in that it excludes the effect on total revenues caused by volatility in energy costs and associated regulatory mechanisms. This information is intended to enhance an investor's overall understanding of results. Under our various state regulatory mechanisms, as detailed below, our supply costs are generally collected from customers. In addition, Utility Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow recovery of operating costs, as well as to analyze how changes in loads (due to weather, economic or other conditions), rates and other factors impact our results of operations. Our Utility Margin measure may not be comparable to that of other companies' presentations or more useful than the GAAP information provided elsewhere in this report. (1) Utility Margin is a non-GAAP Measure. 34 Appendix
PCCAM Impact by Quarter Qualified Facility Earnings Adjustment Our electric QF liability consists of unrecoverable costs associated with contracts covered under PURPA that are part of a 2002 stipulation with the MPSC and other parties. Risks / losses associated with these contracts are born by shareholders, not customers. Therefore, any mitigation of prior losses and / or benefits of liability reduction also accrue to shareholders. 35 Appendix Pretax millions – shareholder (detriment) benefit
Non-GAAP Financial Measures 36 Appendix Pre-Tax Adjustments ($ Millions) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Reported GAAP Pre-Tax Income 181.2$ 156.5$ 176.1$ 178.3$ 182.2$ 144.2$ 190.2$ 182.4$ 201.6$ 214.7$ Non-GAAP Adjustments to Pre-Tax Income: Weather 13.2 15.2 (3.4) (1.3) (7.3) 9.8 1.1 (8.9) 4.3 10.6 Lost revenue recovery related to prior periods - (14.2) - - - - - - - - Remove benefit of insurance settlement (20.8) - - - - - - - - - QF liability adjustment 6.1 - - (17.5) - - (6.9) - - - Electric tracker disallowance of prior period costs - 12.2 - - - 9.9 - - - - Income tax adjustment - - - 9.4 - - - - - - Community Renewable Energy Project Penalty - - - - - - - 2.5 - (2.3) Impairment of Alternative Energy Storage Investment - - - - - - - - - 4.2 Adjusted Non-GAAP Pre-Tax Income 179.7$ 169.7$ 172.7$ 168.9$ 174.9$ 163.9$ 184.4$ 176.0$ 205.9$ 227.2$ Tax Adjustments to Non-GAAP Items ($ Millions) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 GAAP Net Income 151.2$ 164.2$ 162.7$ 197.0$ 202.1$ 155.2$ 186.8$ 183.0$ 194.1$ 224.1$ Non-GAAP Adjustments Taxed at 38.5% (12'-17') and 25.3% (18'-current): Weather 8.1 9.3 (2.1) (1.0) (5.5) 7.3 0.8 (6.6) 3.2 7.9 Lost revenue recovery related to prior periods - (8.7) - - - - - - - - Remove benefit of insurance settlement (12.8) - - - - - - - - - QF liability adjustment 3.8 - - (13.1) - - (5.2) - - - Electric tracker disallowance of prior period costs - 7.5 - - - 7.4 - - - - Income tax adjustment - (12.5) - (12.8) (22.8) - - - - - Community Renewable Energy Project Penalty - - - - - - - 2.5 - (2.3) Previously claimed AMT credit - - - - - - - - 3.2 - Release of Unrecognized Tax Benefit - - - - - - - - (3.2) (16.9) Impairment of Alternative Energy Storage Investment - - - - - - - - - 3.1 Natural Gas Safe Harbor Method Change - - - - - - - - - (7.0) Non-GAAP Net Income 150.3$ 159.8$ 160.6$ 170.1$ 173.8$ 169.9$ 182.4$ 178.9$ 197.3$ 208.9$ Non-GAAP Diluted Earnings per Share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Diluted Average Shares (Millions) 47.6 48.5 48.7 50.2 50.8 50.7 51.9 56.3 60.4 61.4 Reported GAAP Diluted Earnings per Share 3.17$ 3.39$ 3.34$ 3.92$ 3.98$ 3.06$ 3.60$ 3.25$ 3.22$ 3.65$ Non-GAAP Adjustments: Weather 0.17 0.19 (0.04) (0.02) (0.11) 0.14 0.01 (0.11) 0.05 0.13 Lost revenue recovery related to prior periods - (0.18) - - - - - - - - Remove benefit of insurance settlementments & recoveries (0.27) - - - - - - - - - QF liability adjustment 0.08 - - (0.26) - - (0.10) - - - Electric tracker disallowance of prior period costs - 0.16 - - - 0.15 - - - - Income tax adjustment - (0.26) - (0.25) (0.45) - - - - - Community Renewable Energy Project Penalty - - - - - - - 0.04 - (0.04) Previously claimed AMT credit - - - - - - - - 0.05 - Release of Unrecognized Tax Benefit - - - - - - - - (0.05) (0.28) Impairment of Alternative Energy Storage Investment - - - - - - - - - 0.05 Natural Gas Safe Harbor Method Change - - - - - - - - - (0.11) Non-GAAP Diluted Earnings per Share 3.15$ 3.30$ 3.30$ 3.39$ 3.42$ 3.35$ 3.51$ 3.18$ 3.27$ 3.40$
Non-GAAP Financial Measures This presentation includes financial information prepared in accordance with GAAP, as well as other financial measures, such as Utility Margin, Adjusted Non-GAAP pretax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS that are considered “non-GAAP financial measures.” Generally, a non-GAAP financial measure is a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. We define Utility Margin as Operating Revenues less fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion) as presented in our Consolidated Statements of Income. This measure differs from the GAAP definition of Gross Margin due to the exclusion of Operating and maintenance, Property and other taxes, and Depreciation and depletion expenses, which are presented separately in our Consolidated Statements of Income. A reconciliation of Utility Margin to Gross Margin, the most directly comparable GAAP measure, is included in this presentation. Management believes that Utility Margin provides a useful measure for investors and other financial statement users to analyze our financial performance in that it excludes the effect on total revenues caused by volatility in energy costs and associated regulatory mechanisms. This information is intended to enhance an investor's overall understanding of results. Under our various state regulatory mechanisms, as detailed below, our supply costs are generally collected from customers. In addition, Utility Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow recovery of operating costs, as well as to analyze how changes in loads (due to weather, economic or other conditions), rates and other factors impact our results of operations. Our Utility Margin measure may not be comparable to that of other companies' presentations or more useful than the GAAP information provided elsewhere in this report. Management also believes the presentation of Adjusted Non-GAAP pre-tax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS is more representative of normal earnings than GAAP pre-tax income, net income and EPS due to the exclusion (or inclusion) of certain impacts that are not reflective of ongoing earnings. The presentation of these non-GAAP measures is intended to supplement investors' understanding of our financial performance and not to replace other GAAP measures as an indicator of actual operating performance. Our measures may not be comparable to other companies' similarly titled measures. 37 Appendix
Thank youDelivering a bright future 38