NorthWestern Q4 Earnings Call Highlights

Core Viewpoint - NorthWestern Corporation has updated its five-year capital plan to $3.21 billion, reflecting a 17% increase, and initiated 2026 earnings guidance, indicating growth prospects despite various challenges. Financial Performance - For the fourth quarter, NorthWestern reported adjusted EPS of $1.17, up from $1.13 in the same quarter of 2024, with improved margins attributed to new rates and regulatory execution, offset by mild weather and increased operating costs [3] - The company reported full-year 2025 GAAP diluted EPS of $2.94 and non-GAAP diluted EPS of $3.58, with a 1.5% increase in quarterly dividend to $0.67 per share [5][8] - CFO noted that 2025 non-GAAP results showed 5.3% growth over 2024, despite headwinds such as merger-related costs and warm weather [4] Capital Plan and Investments - The five-year capital plan has been increased to $3.21 billion, including a $300 million South Dakota natural gas project, with expectations for equity financing beyond 2026 on a 50/50 debt-to-equity basis [1][7] - Management indicated that the base capital plan remains self-funded, but incremental investments in South Dakota will likely require additional equity [8] Merger and Regulatory Developments - NorthWestern has filed for an all-stock "merger of equals" with Black Hills, with shareholder votes scheduled for April 2, 2026, and expects the deal to close in the second half of 2026 [6][10] - Joint merger approval requests have been filed in multiple states, with hearings expected in the second quarter of 2026 [11] Large-load and Data Center Initiatives - The company is actively pursuing large-load and data center opportunities in Montana and South Dakota, with progress on letters of intent and development agreements [12][19] - NorthWestern plans to file a Montana large-load tariff in conjunction with signed electric service agreements to ensure fair cost distribution among large-load customers [13] Colstrip Ownership and Cost Recovery - NorthWestern has increased its ownership in Colstrip through acquisitions, enhancing its strategic influence and ability to serve large-load customers [15] - The company has filed for cost recovery measures related to its acquisitions, expecting to offset significant incremental operating costs [16]