Financial Data and Key Metrics Changes - The company reported GAAP diluted EPS of $0.35, down from $0.52 in the prior period, while non-GAAP diluted EPS was $0.40 compared to $0.53 in the previous year [6][10][17] - Year-to-date results showed net income and EPS in line with 2024, indicating a flat performance against the prior period [12] - The company is initiating its 2025 earnings guidance range of $3.53 to $3.65, with a long-term earnings growth target of 4% to 6% [6][20] Business Line Data and Key Metrics Changes - Quarterly earnings were primarily driven by rate recovery, contributing 24¢ of margin improvement, offset by unfavorable weather and increased operating costs [13][14] - Electric transmission showed an improvement of $0.07, while gas transportation improved by $0.02 [14] Market Data and Key Metrics Changes - The company completed the acquisition of Energy West and Cutbank Gas facilities, adding 33,000 customers and 43 employees [7] - The company is actively pursuing large load customers, particularly in data centers, with significant interest in both Montana and South Dakota [30][31] Company Strategy and Development Direction - The company aims to invest in data centers and large load opportunities, with a focus on achieving a total return of 9% to 11% through strategic capital investments [8] - Legislative outcomes, such as the Montana wildfire bill and transmission bill, are expected to provide better regulatory certainty and support for utility investments [22][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate regulatory challenges and achieve growth targets, emphasizing the importance of the Montana rate review outcome [20][70] - The company anticipates continued interest in data centers and plans to file tariffs to support these customers [30][31] Other Important Information - A dividend of 66¢ per share was declared, payable on September 30, 2025 [7] - The company expects to conclude the year above its downside cash flow threshold despite a dip in cash flows for the quarter [17] Q&A Session Summary Question: Update on data center ESAs - Management indicated that they are wrapping up transmission service issues and expect at least one ESA to be signed by the next call in October [42][44] Question: Addressing load requirements for expanding data center interest - The company is working with data centers on potential self-generation and build-transfer capabilities to meet load requirements [44][45] Question: Timing for megawatt ramp-up on the system - Management stated that the ramp-up will primarily occur in 2027, with some smaller contributions in 2026 [62] Question: Handling costs after acquiring facilities - The company plans to make a filing to address recovery of costs associated with the acquisition and maintain options for both Montana and FERC regulated approaches [64][66]

Financial Performance - NorthWestern Energy reported GAAP diluted EPS of $0.35 and non-GAAP diluted EPS of $0.40 for the second quarter of 2025[4] - The company is initiating 2025 earnings guidance range of $3.53 - $3.65[4] - Second quarter net income decreased by $10.5 million or 33.1% on a GAAP basis, and $8.1 million or 25.2% on a non-GAAP basis compared to the prior period[14, 21] - Diluted earnings per share decreased by $0.17 or 32.7% on a GAAP basis, and $0.13 or 24.5% on a non-GAAP basis for the second quarter[14, 22] - Year-to-date net income increased by $1.5 million or 1.6% on a GAAP basis, and $0.2 million or 0.2% on a non-GAAP basis[23, 28] - Year-to-date diluted earnings per share increased by $0.02 or 1.3% on a GAAP basis, with no change on a non-GAAP basis[24, 29] Growth and Investment - The company is affirming long-term rate base and earnings per share growth rate targets of 4% - 6%[4] - A capital investment of $2.74 billion is forecasted over the next five years, expected to drive annualized earnings and rate base growth of approximately 4% - 6%[11] - The company signed a third Letter of Intent with a 500+ megawatt data center developer[8] Rate Review and Regulatory Updates - Montana electric rate review includes a proposed partial settlement with a $14.6 million increase[41] - The proposed partial settlement for Montana electric rates would result in a $4.63 or 4.2% increase in the typical residential monthly bill[44] - Montana natural gas rate review includes a joint settlement position with an $18.1 million increase[47]

[Overview of Second Quarter 2025 Results](index=1&type=section&id=NorthWestern%20Reports%20Second%20Quarter%202025%20Financial%20Results) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) NorthWestern Energy reported a decrease in second-quarter net income and earnings per share compared to the prior year, primarily due to unfavorable weather impacting usage, higher operating costs, and delays in Montana rate implementation. The company has initiated its 2025 earnings guidance and affirmed its long-term growth targets and capital plan Q2 2025 vs Q2 2024 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $21.2 million | $31.7 million | | GAAP Diluted EPS | $0.35 | $0.52 | | Non-GAAP Net Income | $24.1 million | $32.2 million | | Non-GAAP Diluted EPS | $0.40 | $0.53 | - The decrease in earnings was primarily driven by lower retail gas and electric usage due to weather, non-recoverable Montana electric supply costs, and increased depreciation, operating, and interest expenses. These were partially offset by higher retail rates and transmission revenues[2](index=2&type=chunk) - The company announced 2025 earnings guidance of **$3.53 to $3.65** per diluted share and affirmed its **$531 million** capital plan for 2025[6](index=6&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Brian Bird highlighted strong operational performance, the successful acquisition of Energy West's Montana assets, and progress on a third large-load data center project. He noted that Q2 earnings, while lower than last year, met expectations, with the decline attributed to delays in implementing updated interim rates in Montana. A final decision on the rate review is anticipated in Q4 2025 - Successfully completed the acquisition of Energy West's natural gas system in Montana on July 1, adding over **33,000 customers** and **43 employees**[4](index=4&type=chunk) - Announced a third large-load letter of intent with Quantica Infrastructure for a proposed **500-megawatt** data center project in Montana[4](index=4&type=chunk) - Q2 earnings were impacted by a delay in implementing updated interim electric rates in Montana, which were adjusted in late May. A final outcome in the rate review is expected in early Q4 2025[5](index=5&type=chunk) [Financial Outlook](index=2&type=section&id=FINANCIAL%20OUTLOOK) [2025 Guidance and Long-Term Targets](index=2&type=section&id=2025%20Guidance%20and%20Long-Term%20Targets) The company has initiated its 2025 non-GAAP EPS guidance at $3.53 - $3.65 and affirmed its long-term growth targets. The guidance is based on several assumptions, including normal weather and a favorable outcome in the Montana rate review. The capital investment plan for 2025-2029 remains on track, supporting a 4% to 6% rate base growth Financial Guidance and Targets | Metric | Target/Range | | :--- | :--- | | 2025 Non-GAAP Diluted EPS Guidance | $3.53 - $3.65 | | Long-Term (5-Year) EPS Growth Rate | 4% to 6% (from 2024 base of $3.40) | | 2025-2029 Capital Investment Plan | $2.7 billion | | Long-Term Rate Base Growth Rate | 4% to 6% (from 2024 base of ~$5.4B) | - Key assumptions for 2025 guidance include final approval of the Montana rate review settlement, normal weather, an effective tax rate of **12%-15%**, and **~61.5 million** diluted average shares outstanding[10](index=10&type=chunk) - The capital program will be funded by cash from operations and debt. Equity financing may be required for incremental investments in generation, transmission, or other strategic opportunities[8](index=8&type=chunk) [Dividend Declared](index=2&type=section&id=Dividend%20Declared) The Board of Directors declared a quarterly dividend of $0.66 per share, payable on September 30, 2025. The company remains committed to its long-term dividend payout ratio target - A quarterly dividend of **$0.66** per share was declared, payable September 30, 2025, to shareholders of record as of September 15, 2025[9](index=9&type=chunk) - The company maintains its long-term target dividend payout ratio of **60-70%**[9](index=9&type=chunk) [Company Updates](index=4&type=section&id=COMPANY%20UPDATES) [Regulatory Update](index=4&type=section&id=Regulatory%20Update) The company is progressing through a major electric and natural gas rate review in Montana, with partial settlements filed and a final order expected in Q4 2025. Revised interim electric rates were implemented in July 2025. In Nebraska, a settlement was approved, increasing natural gas base rate revenue by $2.4 million annually - In the Montana rate review, partial settlements have been filed for both electric and natural gas services. A hearing was held in June 2025, with a final MPSC order expected to determine final rates[11](index=11&type=chunk)[21](index=21&type=chunk) Montana Rate Review - Total Requested Revenue Increase (Settlement Agreements) | Service | Requested Revenue Increase (in millions) | | :--- | :--- | | Electric | $14.6 | | Natural Gas | $18.1 | - The Nebraska Public Service Commission approved a settlement increasing annual natural gas base rate revenue by **$2.4 million**, with new rates effective July 1, 2025[21](index=21&type=chunk) [Strategic and Operational Developments](index=6&type=section&id=Strategic%20and%20Operational%20Developments) NorthWestern Energy is actively pursuing strategic growth and operational enhancements. The company completed the acquisition of Energy West's Montana assets, signed a third letter of intent for a major data center load, and will benefit from new state legislation that streamlines transmission construction and provides wildfire liability protections. Additionally, the company is moving forward with acquiring partners' shares in the Colstrip power plant - **Energy West Acquisition:** Completed the acquisition of Energy West's Montana natural gas assets on July 1, 2025, for **~$36.5 million**, adding approximately **33,000 customers**[24](index=24&type=chunk) - **Data Center Growth:** Signed a third nonbinding letter of intent with Quantica Infrastructure for a data center with a potential load of up to **500 megawatts** by 2030[26](index=26&type=chunk) - **Wildfire Mitigation:** New Montana legislation (House Bill 490) establishes liability protections for electric providers related to wildfire prevention efforts, contingent on following an approved wildfire mitigation plan[25](index=25&type=chunk) - **Transmission Construction:** New Montana law (Senate Bill 301) aims to expedite and streamline the construction process for electric transmission lines to meet growing demand[27](index=27&type=chunk) - **Colstrip Acquisitions:** Entered definitive agreements to acquire Avista's and Puget's interests in Colstrip Units 3 and 4 for **$0**, with the transaction expected to close on December 31, 2025[28](index=28&type=chunk) [Environmental Update](index=5&type=section&id=Environmental%20Update) The company is navigating new EPA rules for coal-fired facilities. A presidential proclamation has provided a temporary exemption through mid-2029 from the MATS Rule for key plants, including Colstrip, and the EPA has proposed rescinding the 2024 MATS Rule - Final EPA GHG and MATS rules released in April 2024 would require expensive, potentially unachievable upgrades at Colstrip Units 3 and 4, with compliance dates as early as 2027[22](index=22&type=chunk) - A presidential proclamation issued on April 8, 2025, exempts Colstrip, Big Stone, and Coyote plants from the MATS Rule through July 8, 2029[22](index=22&type=chunk) - On June 11, 2025, the EPA issued a Notice of Proposed Rulemaking to rescind the 2024 MATS Rule[23](index=23&type=chunk) [Financial Results](index=8&type=section&id=Financial%20Results) [Consolidated Statement of Income](index=8&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20INCOME) For the second quarter of 2025, total revenues increased to $342.7 million from $319.9 million in the prior-year period. However, higher operating expenses, particularly in property taxes and depreciation, led to a slight decrease in operating income and a more significant drop in net income to $21.2 million, compared to $31.7 million in Q2 2024 Consolidated Statement of Income (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $342.7 | $319.9 | $809.3 | $795.3 | | Total Operating Expenses | $281.9 | $258.3 | $623.8 | $631.6 | | Operating Income | $60.8 | $61.6 | $185.5 | $163.7 | | Net Income | $21.2 | $31.7 | $98.2 | $96.7 | | Diluted EPS | $0.35 | $0.52 | $1.60 | $1.58 | [Reconciliation of Quarterly Changes (Variance Analysis)](index=9&type=section&id=RECONCILIATION%20OF%20PRIMARY%20CHANGES%20DURING%20THE%20QUARTER) The diluted EPS decreased by $0.17 from Q2 2024 to Q2 2025. Positive impacts from higher rates (+$0.23) and transmission revenue (+$0.07) were more than offset by increased operating expenses (-$0.12), depreciation (-$0.07), interest expense (-$0.05), and lower retail volumes for both gas and electric (-$0.09 combined) Key Drivers of Change in Diluted EPS (Q2 2025 vs. Q2 2024) | Driver | Impact on Diluted EPS | | :--- | :--- | | **Positive Drivers** | | | Rates | +$0.23 | | Electric transmission revenue | +$0.07 | | **Negative Drivers** | | | Operating, maintenance, and administrative | -$0.12 | | Depreciation | -$0.07 | | Interest expense | -$0.05 | | Natural gas retail volumes | -$0.05 | | Montana property tax tracker collections | -$0.05 | | Electric retail volumes | -$0.04 | [Explanation of Consolidated Results](index=10&type=section&id=EXPLANATION%20OF%20CONSOLIDATED%20RESULTS) The company's non-GAAP Utility Margin increased by 9.9% to $267.4 million, driven by interim rates and higher transmission revenue, but partially offset by lower retail volumes due to unfavorable weather. Operating expenses (excluding fuel) rose 13.6%, primarily due to higher property taxes, depreciation from plant additions, and increased insurance premiums. Higher interest expense and lower other income also contributed to the decline in net income - Consolidated non-GAAP Utility Margin increased by **$24.0 million (9.9%)** YoY, primarily due to interim rates (+$17.9M) and higher transmission revenue (+$5.7M)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - Lower electric and natural gas retail volumes were driven by unfavorable spring weather, which impacted residential demand[37](index=37&type=chunk) - Operating expenses (excluding fuel) increased by **$24.8 million (13.6%)**, driven by property taxes (+$11.9M), depreciation (+$5.5M), and O&M (+$4.9M). Key O&M drivers were maintenance, insurance, and wildfire mitigation costs[39](index=39&type=chunk)[40](index=40&type=chunk) - Interest expense increased by **$4.4 million** due to higher borrowings and interest rates[43](index=43&type=chunk) - The effective tax rate for Q2 2025 was **13.7%**, compared to **11.8%** in Q2 2024[45](index=45&type=chunk) [Adjusted Non-GAAP Earnings](index=15&type=section&id=Adjusted%20Non-GAAP%20Earnings) The company provides a reconciliation of GAAP to non-GAAP earnings to adjust for items not reflective of ongoing performance. For Q2 2025, adjustments were made for unfavorable weather and a penalty related to the Community Renewable Energy Project. This resulted in an adjusted non-GAAP diluted EPS of $0.40, compared to the GAAP EPS of $0.35 Reconciliation of GAAP to Non-GAAP EPS (Q2 2025) | Item | Pre-tax Income (in millions) | Net Income (in millions) | Diluted EPS | | :--- | :--- | :--- | :--- | | **Reported GAAP** | **$24.6** | **$21.2** | **$0.35** | | Unfavorable weather | $2.5 | $1.9 | $0.03 | | CREP Penalty | $1.0 | $1.0 | $0.02 | | **Adjusted Non-GAAP** | **$28.1** | **$24.1** | **$0.40** | - Adjusted non-GAAP diluted EPS for Q2 2025 was **$0.40**, compared to **$0.53** in the same period of 2024[51](index=51&type=chunk) [Liquidity and Other Considerations](index=13&type=section&id=LIQUIDITY%20AND%20OTHER%20CONSIDERATIONS) [Liquidity and Capital Resources](index=13&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, NorthWestern Energy maintained a solid liquidity position with total net liquidity of approximately $317.9 million. This figure includes cash on hand and availability under its revolving credit facility - Total net liquidity was **$317.9 million** as of June 30, 2025, consisting of **$2.9 million** in cash and **$315.0 million** in revolving credit facility availability[47](index=47&type=chunk) - This represents a decrease from the **$393.4 million** in total net liquidity reported on June 30, 2024[47](index=47&type=chunk) [Earnings Per Share Calculation](index=14&type=section&id=Earnings%20Per%20Share) The calculation of diluted earnings per share for Q2 2025 was based on a weighted average of 61.5 million shares outstanding. This includes the dilutive effect of performance share awards, which are factored in using the treasury stock method Weighted Average Shares Outstanding (Diluted) | Period | Diluted Shares | | :--- | :--- | | Three Months Ended June 30, 2025 | 61,483,946 | | Three Months Ended June 30, 2024 | 61,357,348 |

Core Viewpoint - NorthWestern (NWE) reported quarterly earnings of $0.4 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, but down from $0.53 per share a year ago, indicating a mixed performance in earnings [1][2] Financial Performance - The company achieved revenues of $342.7 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.72% and showing an increase from $319.9 million year-over-year [2] - Over the last four quarters, NorthWestern has exceeded consensus EPS estimates two times and topped revenue estimates three times [2] Stock Performance - NorthWestern shares have declined approximately 1.7% since the beginning of the year, contrasting with the S&P 500's gain of 8.3% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.81 on revenues of $377.21 million, and for the current fiscal year, it is $3.60 on revenues of $1.59 billion [7] - The trend of earnings estimate revisions is mixed ahead of the earnings release, which may influence future stock performance [6] Industry Context - The Utility - Electric Power industry, to which NorthWestern belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8]

[Special Note Regarding Forward-Looking Statements](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines the nature of forward-looking statements, identifies key risks, and clarifies the company's update policy [Special Note Regarding Forward-Looking Statements](index=3&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines the nature of forward-looking statements, identifies key risks, and clarifies the company's update policy - The report contains forward-looking statements, identified by specific terminology, subject to various risks and uncertainties[11](index=11&type=chunk)[12](index=12&type=chunk) - Key factors that could cause material differences include adverse regulatory outcomes, extraordinary events, cybersecurity threats, supply chain issues, and economic conditions[15](index=15&type=chunk) - The company undertakes no obligation to update forward-looking statements, directing investors to subsequent SEC filings for disclosures[17](index=17&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements, including income, balance sheets, and cash flows, with notes on key events [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2025 revenues increased to **$342.7 million**, but net income decreased to **$21.2 million**, while H1 net income slightly rose to **$98.2 million** Income Statement Highlights (in thousands, except per share amounts) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $342,713 | $319,929 | $809,343 | $795,271 | | **Operating Income** | $60,786 | $61,612 | $185,513 | $163,692 | | **Net Income** | $21,228 | $31,654 | $98,168 | $96,740 | | **Diluted EPS** | $0.35 | $0.52 | $1.60 | $1.58 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$8.14 billion** as of June 30, 2025, driven by property, plant, and equipment, with liabilities rising to **$5.26 billion** Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $403,080 | $418,186 | | **Property, Plant, and Equipment, net** | $6,531,509 | $6,398,275 | | **Total Assets** | $8,135,967 | $7,997,524 | | **Total Current Liabilities** | $537,432 | $802,200 | | **Long-term Debt** | $3,029,611 | $2,695,343 | | **Total Liabilities** | $5,256,291 | $5,139,824 | | **Total Shareholders' Equity** | $2,879,676 | $2,857,700 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was **$211.6 million** for H1 2025, with **$226.8 million** used in investing and **$12.7 million** provided by financing activities Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Cash Provided by Operating Activities** | $211,601 | $223,943 | | **Cash Used in Investing Activities** | $(226,756) | $(248,278) | | **Cash Provided by Financing Activities** | $12,686 | $30,186 | | **(Decrease) Increase in Cash** | $(2,469) | $5,851 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail key accounting policies, including the **$36.5 million** Energy West acquisition, ongoing rate reviews, **$500 million** in new bond issuances, and EPA rule challenges - On July 1, 2025, the company acquired Hope Utilities' Energy West natural gas distribution system for approximately **$36.5 million** in cash[38](index=38&type=chunk)[39](index=39&type=chunk) - The company is undergoing a Montana rate review, with interim rates implemented and settlement agreements filed, seeking a total revenue increase of **$14.6 million** for electric and **$18.1 million** for natural gas[40](index=40&type=chunk)[47](index=47&type=chunk) - In March and May 2025, the company issued **$400.0 million** and **$100.0 million** in First Mortgage Bonds for refinancing and general utility purposes[60](index=60&type=chunk)[62](index=62&type=chunk) - The company is challenging EPA rules on GHG and MATS emissions, with a presidential proclamation providing temporary exemptions and proposed rule changes[82](index=82&type=chunk)[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, noting a Q2 2025 net income decrease to **$21.2 million** but H1 increase to **$98.2 million**, covering segment performance, liquidity, and key developments [Overall Consolidated Results](index=29&type=section&id=OVERALL%20CONSOLIDATED%20RESULTS) Q2 2025 consolidated net income decreased to **$21.2 million** due to lower volumes and higher costs, while H1 net income increased to **$98.2 million** Net Income Reconciliation - Q2 2025 vs. Q2 2024 (in millions) | Description | Impact on Net Income | | :--- | :--- | | **Q2 2024 Net Income** | **$31.7** | | Rates | $14.5 | | Operating, maintenance, and administrative | $(7.5) | | Depreciation | $(4.1) | | Interest expense | $(3.3) | | Natural gas retail volumes | $(3.0) | | Montana property tax tracker collections | $(3.2) | | Electric retail volumes | $(2.2) | | **Q2 2025 Net Income** | **$21.2** | Utility Margin Change - H1 2025 vs. H1 2024 (in millions) | Description | Change in Utility Margin | | :--- | :--- | | Interim rates (subject to refund) | $30.1 | | Transmission revenue | $9.9 | | Base rates | $5.8 | | Electric retail volumes | $4.1 | | Montana property tax tracker collections | $(6.8) | | **Total Increase in Utility Margin** | **$51.8** | [Electric Segment](index=38&type=section&id=ELECTRIC%20SEGMENT) Electric segment utility margin increased by **$20.6 million** in Q2 2025 to **$219.9 million**, driven by interim rates and transmission revenue, despite lower retail volumes Electric Segment Utility Margin (in millions) | Period | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Q2** | $219.9 | $199.2 | $20.6 | 10.3% | | **H1** | $462.6 | $427.1 | $35.5 | 8.3% | - Primary drivers for the Q2 utility margin increase were interim rates of **$14.7 million** and a **$5.7 million** increase in transmission revenue[171](index=171&type=chunk) - Lower Q2 retail volumes resulted from unfavorable spring weather and reduced commercial/industrial demand, partially offset by customer growth[172](index=172&type=chunk) [Natural Gas Segment](index=42&type=section&id=NATURAL%20GAS%20SEGMENT) Natural Gas segment utility margin increased by **$3.4 million** in Q2 2025 to **$47.6 million**, driven by interim rates and transportation revenue, despite lower retail volumes Natural Gas Segment Utility Margin (in millions) | Period | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Q2** | $47.6 | $44.2 | $3.4 | 7.6% | | **H1** | $133.3 | $117.0 | $16.3 | 13.9% | - The Q2 utility margin increase was driven by interim rates of **$3.2 million** and Montana natural gas transportation revenue of **$1.6 million**[193](index=193&type=chunk) - Lower Q2 retail volumes resulted from warmer weather across all jurisdictions, partially offset by customer growth[195](index=195&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of June 30, 2025, the company maintained **$317.9 million** in liquidity, funding operations through cash flow, borrowing capacity, and future debt/equity issuances - Total net liquidity was approximately **$317.9 million** as of June 30, 2025, including **$2.9 million** cash and **$315.0 million** revolving credit facility availability[207](index=207&type=chunk) Consolidated Cash Flows - Six Months Ended June 30 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Cash Provided by Operating Activities** | $211.6 | $223.9 | | **Cash Used in Investing Activities** | $(226.8) | $(248.3) | | **Cash Provided by Financing Activities** | $12.7 | $30.2 | - The company maintains investment-grade credit ratings from Fitch (BBB), Moody's (Baa2), and S&P (BBB) for its primary operating subsidiaries[222](index=222&type=chunk) - Total contractual cash obligations and commitments as of June 30, 2025, are estimated at **$9.28 billion**[225](index=225&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, including interest rates and commodity prices, with no material changes since the 2024 Annual Report - The company's primary market risks relate to interest rates, energy commodity prices, and counterparty credit[235](index=235&type=chunk) - There have been no material changes in the company's market risks since its 2024 Annual Report[235](index=235&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Disclosure controls and procedures were concluded to be effective by principal officers as of the end of the reporting period[237](index=237&type=chunk) - No material changes occurred in internal control over financial reporting during the most recent fiscal quarter[238](index=238&type=chunk) [PART II. OTHER INFORMATION](index=52&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part provides additional information including legal proceedings, risk factors, other disclosures, and exhibits [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is detailed in Note 11 - Commitments and Contingencies, to the Financial Statements - Information regarding legal proceedings is provided in Note 11 - Commitments and Contingencies, to the Financial Statements[241](index=241&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the 2024 Annual Report on Form 10-K - There have been no material changes to the company's risk factors since the disclosure in the 2024 Annual Report on Form 10-K[242](index=242&type=chunk) [Other Information](index=52&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading plan during Q2 2025 - During the second quarter of 2025, no director or officer adopted or terminated a Rule 10b5-1 trading agreement[243](index=243&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including supplemental indentures, officer certifications, and Inline XBRL data files - Exhibits filed include officer certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906, and various Inline XBRL documents[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) [Signatures](index=54&type=section&id=SIGNATURES) The report was formally signed by Crystal Lail, Vice President and Chief Financial Officer, on July 31, 2025 - The report was signed on July 31, 2025, by Crystal Lail, Vice President and Chief Financial Officer[250](index=250&type=chunk)

Company Overview - NorthWestern (NWE) is expected to report a year-over-year decline in earnings, with a projected EPS of $0.38, reflecting a decrease of 28.3% compared to the previous year [3] - Revenues are anticipated to be $328.81 million, which represents a 2.8% increase from the same quarter last year [3] Earnings Expectations - The earnings report is scheduled for July 30, and the stock may rise if the results exceed expectations, while a miss could lead to a decline [2] - The consensus EPS estimate has been revised down by 1.22% over the last 30 days, indicating a bearish sentiment among analysts [4] Earnings Surprise Prediction - The Most Accurate Estimate for NorthWestern is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.33%, which complicates predictions of an earnings beat [12] - NorthWestern currently holds a Zacks Rank of 3, suggesting a hold position, which further complicates the outlook for beating the consensus EPS estimate [12] Historical Performance - In the last reported quarter, NorthWestern had an EPS of $1.22, surpassing the expected $1.16, resulting in a surprise of +5.17% [13] - Over the past four quarters, the company has beaten consensus EPS estimates two times [14] Industry Comparison - DTE Energy, a peer in the utility sector, is expected to report an EPS of $1.54 for the same quarter, indicating a year-over-year increase of 7.7% [18] - DTE Energy's revenues are projected to be $3.02 billion, up 5% from the previous year, but it also has a negative Earnings ESP of -3.8% [19]

Financial Data and Key Metrics Changes - The company reported GAAP diluted EPS of $1.25 and non-GAAP diluted EPS of $1.22 for Q1 2025, compared to $1.06 in Q1 2024, reflecting a significant increase in earnings driven by rate recovery and colder weather [6][9][10] - The company affirmed its long-term rate base and earnings per share growth rate targets of 4% to 6% [6][19] Business Line Data and Key Metrics Changes - The Electric and Gas segments contributed strongly to the earnings, with margin improvements driven by new rates and favorable weather conditions [9][10] - New rates contributed $0.20 to margin improvement, while favorable loads added $0.13, resulting in a total margin increase [10][11] Market Data and Key Metrics Changes - The Montana rate review is nearing completion, with a full natural gas settlement and a partial electric settlement reached [7][14] - The average bill impact from the gas case is approximately 9%, maintaining rates below the national average [18] Company Strategy and Development Direction - The company is focusing on opportunities with data centers and new large load opportunities, potentially achieving greater than 6% EPS growth [8] - The company is committed to maintaining a 5% dividend yield and a total growth profile of 9% to 11% over the next five years [8][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering on earnings and rate-based growth commitments over the long term, despite not providing specific 2025 earnings guidance until the conclusion of the Montana rate review [19][20] - The company expects a lower contribution to overall earnings in Q2 2025 due to the timing of rate implementations [20] Other Important Information - The Montana legislature has passed wildfire and other constructive bills, which are pending the governor's approval, providing significant legal protections for the company [22][24] - The company has successfully priced $500 million of long-term debt to address its financing needs for 2025 [13][14] Q&A Session Summary Question: On the tariff proceeding and data centers - The company is in discussions with multiple parties regarding data centers and expects to finalize contracts with two parties, Atlas and Sabey, by the end of Q2 2025 [40][43][44] Question: EPS guidance for 2025 - Management expects to stay within the 4% to 6% EPS range long-term but acknowledges variability in achieving this target [50] Question: Changes in electric average customer counts - The change in customer counts was due to a new system for counting street lighting districts, with overall customer growth remaining around 1.5% [54][55] Question: Long-term capacity planning - The company is considering natural gas or nuclear as potential replacements for Colstrip, depending on regulatory timelines [64][66] Question: SB301 and approval processes - The 90-day cost prudency review is deemed appropriate, with no overlapping of approval processes expected [68]

Financial Data and Key Metrics Changes - The company reported GAAP diluted EPS of $1.25 and non-GAAP diluted EPS of $1.22 for Q1 2025, compared to $1.06 in Q1 2024, reflecting a solid earnings improvement driven by rate recovery and colder weather [6][9][10] - The company affirmed its long-term rate base and earnings per share growth rate targets of 4% to 6% [6][20] - A dividend of $0.66 per share was declared, payable on June 30, 2025, to shareholders of record as of June 13, 2025 [6] Business Line Data and Key Metrics Changes - The Electric and Gas segments contributed strong margins, with new rates driving a $0.20 margin improvement across all jurisdictions [10][12] - Favorable loads contributed an additional $0.13 to margins due to colder weather, customer growth, and increased usage [10] - Transition revenues added approximately $0.05 to the quarter's earnings [10] Market Data and Key Metrics Changes - The Montana rate review is nearing completion, with a full natural gas settlement and a partial electric settlement reached [7][19] - The average bill impact from the gas case is approximately 9%, maintaining rates below the national average [19] Company Strategy and Development Direction - The company aims to achieve greater than 6% EPS growth through opportunities with data centers and new large load customers, alongside FERC regional transmission and incremental generating capacity [8][20] - Legislative successes include a wildfire bill providing legal protections and a transmission bill facilitating the approval process for large transmission projects [23][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering on earnings and rate-based growth commitments over the long term, despite not providing specific 2025 earnings guidance until the conclusion of the Montana rate review [20][72] - The company anticipates a lower contribution to overall earnings in Q2 2025, estimating it to be approximately 10% of the full year due to the timing of rate implementations [21] Other Important Information - The company successfully priced $500 million of long-term debt in March 2025, addressing its financing needs for the year [14][15] - The company is focused on maintaining reliability and affordability for customers while supporting long-term growth [20][22] Q&A Session Summary Question: How long do you think the tariff proceeding could go for? - Management indicated that there are five levels of process for data centers, with various parties at different stages, and they expect to finalize contracts with two parties by the end of Q2 or early July [40][43] Question: Do you still see yourself within the 4% to 6% EPS range for 2025? - Management acknowledged the question regarding 2025 guidance, indicating they expect to stay within the 4% to 6% range long-term, but noted that it may not be entirely linear [50] Question: Did you change the electric average customer counts? - Management confirmed that the change was due to the way street lighting districts were counted, but overall customer growth remained around 1.5% [54] Question: Is there adequate space at Colstrip for replacement capacity? - Management stated that there is adequate land for potential gas or nuclear plants near Colstrip, with ongoing discussions about nuclear options [61][63]

Financial Data and Key Metrics Changes - The company reported GAAP diluted EPS of $1.25 and non-GAAP diluted EPS of $1.22 for the first quarter of 2025, compared to $1.06 in the same period last year, reflecting a significant increase in earnings driven by rate recovery and colder weather [5][9][10] - The company affirmed its long-term rate base and earnings per share growth rate targets of 4% to 6% [5][20] - A dividend of $0.66 per share was declared, payable on June 30, 2025, to shareholders of record as of June 13, 2025 [5] Business Line Data and Key Metrics Changes - The Electric and Gas segments contributed strongly to the earnings, with margin improvements driven by new rates and favorable weather conditions [9][10] - New rates contributed $0.20 to margin improvement, while favorable loads added $0.13, resulting in a total margin increase [10][12] - Transition revenues contributed approximately $0.05 to the quarter's earnings [10] Market Data and Key Metrics Changes - The Montana rate review is nearing completion, with a full natural gas settlement and a partial electric settlement reached [6][19] - The average bill impact from the gas case is approximately 9%, maintaining rates below the national average [19] Company Strategy and Development Direction - The company aims to achieve greater than 6% EPS growth through opportunities with data centers and new large load opportunities, alongside FERC regional transmission and incremental generating capacity [7][20] - The company is focused on maintaining reliability and affordability for customers while supporting long-term growth [19][22] - Legislative successes include a wildfire bill providing legal protections and a transmission bill facilitating the establishment of CPCNs for large transmission projects [23][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering on earnings and rate-based growth commitments over the long term, despite not providing specific 2025 earnings guidance until the conclusion of the Montana rate review [20][21] - The first quarter performance was solid and slightly ahead of expectations, with a lower contribution anticipated from the second quarter due to the timing of rate implementations [21][22] Other Important Information - The company completed $500 million in long-term debt financing to address its financing needs for 2025 [14][15] - The company is currently at over 60% carbon-free energy in Montana and is exploring opportunities for new large load customers [31] Q&A Session Summary Question: Inquiry about tariff proceedings and data center customers - Management indicated that there are nine parties in the early stages of data center requests, with two parties (Atlas and Sabey) in the contractual estimate phase, expecting contracts by the end of Q2 or early July [42][45] Question: EPS guidance for 2025 - Management acknowledged the inquiry about 2025 guidance, indicating expectations to remain within the 4% to 6% range but noted that it may not be linear [51] Question: Changes in electric average customer counts - Management clarified that changes in customer counts were due to a new system for counting street lighting districts, with overall customer growth remaining around 1.5% [55] Question: Long-term capacity planning and Colstrip - Management confirmed that there is adequate land around Colstrip for potential future capacity, including gas or nuclear options, depending on regulatory timelines [62][66]

Financial Performance - NorthWestern Energy reported GAAP diluted EPS of $1.25 and non-GAAP diluted EPS of $1.22 for the first quarter of 2025[8] - First quarter GAAP net income increased by $11.8 million or 18.1% compared to the prior period[18] - First quarter non-GAAP net income increased by $8.1 million or 12.1% compared to the prior period[18] - Utility Margin increased by $30.7 million or 10.2% in the first quarter of 2025 compared to the prior year[24] Growth and Investment - The company is affirming long-term rate base and earnings per share growth rates targets of 4% - 6%[8] - The company forecasts $2.74 billion of capital investment over the next five years, expected to drive annualized earnings and rate base growth of approximately 4% - 6%[11] - The company expects to maintain FFO to Debt ratio > 14% in 2025 and beyond[42] Regulatory and Strategic Updates - A full natural gas settlement and a partial electric settlement have been reached in Montana rate review[8] - Montana legislature has passed wildfire and transmission bills, pending the Governor's approval[8] - The company plans no cost acquisition of 592 MW of additional Colstrip capacity[61] - The company announced a memorandum of understanding to own 10% of the North Plains Connector project[70]