# EDGAR Filing Document

**Accession Number:** 0001130464
**File Stem:** 0001193125-25-203783
**Filing Date:** 2025-9
**Character Count:** 337705
**Document Hash:** 119d1433e6228e6e38d51935ec821a11
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-25-203783.hdr.sgml**: 20250915

**ACCESSION NUMBER**: 0001193125-25-203783

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20250915

**ITEM INFORMATION**: Other Events

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20250915

**DATE AS OF CHANGE**: 20250915

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BLACK HILLS CORP /SD/
- **CENTRAL INDEX KEY:** 0001130464
- **STANDARD INDUSTRIAL CLASSIFICATION:** ELECTRIC SERVICES [4911]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 460458824
- **STATE OF INCORPORATION:** SD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-31303
- **FILM NUMBER:** 251315087

**BUSINESS ADDRESS:**
- **STREET 1:** 7001 MT RUSHMORE RD
- **STREET 2:** PO BOX 1400
- **CITY:** RAPID CITY
- **STATE:** SD
- **ZIP:** 57709
- **BUSINESS PHONE:** 6057212343

**MAIL ADDRESS:**
- **STREET 1:** 7001 MT RUSHMORE RD
- **STREET 2:** PO BOX 1400
- **CITY:** RAPID
- **STATE:** SD
- **ZIP:** 57709

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** BLACK HILLS HOLDING CORP
- **DATE OF NAME CHANGE:** 20001222

?xml version='1.0' encoding='ASCII'? 8-K

**UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, 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):** September 15, 2025<br>

------

Black Hills Corporation

**(Exact name of Registrant as Specified in Its Charter)**

------

---

| | | |
|:---|:---|:---|
| South Dakota | 001-31303 | 46-0458824 |
| **(State or Other Jurisdiction<br>of Incorporation)** | **(Commission File Number)** | **(IRS Employer<br>Identification No.)** |
| 7001 Mount Rushmore Road |  |  |
| Rapid City**,** South Dakota |  | 57702 |
| **(Address of Principal Executive Offices)** |  | **(Zip Code)** |

---

**Registrant's Telephone Number, Including Area Code:** 605 721-1700<br>

**(Former Name or Former Address, if Changed Since Last Report)**

------

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:

🗷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:**

---

| | |
|:---|:---|
| **<br>Title of each class** | **<br>Name of each exchange on which registered** |
| Common stock of $1.00 par value<br> BKH | The New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company 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 8.01 Other Events.
Black Hills Corporation ("Black Hills" or the "Company") is filing this Current Report on Form 8-K solely to provide certain information relating to the pending merger transaction involving Black Hills and NorthWestern Energy Group, Inc., a Delaware corporation ("NorthWestern"). As previously disclosed in its Current Report on Form 8-K filed on August 19, 2025, Black Hills entered into an Agreement and Plan of Merger (the "Merger Agreement") on August 18, 2025 with NorthWestern and River Merger Sub Inc., a Delaware corporation and direct wholly owned subsidiary of Black Hills. The Merger Agreement, which was unanimously approved on August 18, 2025 by both the board of directors of Black Hills and the board of directors of NorthWestern, provides for an all-stock business combination of Black Hills and NorthWestern upon the terms and subject to the conditions set forth therein. Such conditions include, among other things, clearance under the Hart-Scott Rodino Act, approval from each company's shareholders, and regulatory approvals, including approval from certain state regulatory commissions, as well as the Federal Energy Regulatory Commission.

This Item 8.01 contains:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.Historical financial statements of NorthWestern filed in accordance with Rule 3-05 of Regulation S-X, included as Exhibits 99.1 and 99.2, which are incorporated herein by reference;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Pro forma financial information of Black Hills and NorthWestern on a combined basis in accordance with Article 11 of Regulation S-X giving effect to certain pro forma adjustments related to the pending merger transaction as if it were completed on January 1, 2024 as it relates to the pro forma combined condensed statements of income, and as if it were completed on June 30, 2025 as it relates to the pro forma combined condensed balance sheet, included as Exhibit 99.3 hereto, which is incorporated herein by reference; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.Supplementary risk factors related to the pending merger transaction, included as Exhibit 99.4, which is incorporated herein by reference.

The pro forma information and related notes have been prepared for illustrative purposes only, based upon applicable rules of the Securities and Exchange Commission. The pro forma information does not purport to be indicative of what the combined company's consolidated financial position or results of operations actually would have been had the pending merger transaction been completed as of the dates indicated. In addition, the unaudited pro forma combined condensed financial information does not purport to project the future financial position or operating results of the combined company. The pro forma adjustments, which are subject to uncertainties, are based on the information available at the time of the preparation of these pro forma financial statements and on the basis of certain assumptions and estimates. The pro forma financial information should be read, if at all, with the related qualifications and other notes set forth in Exhibit 99.3.

This Report does not modify or update the consolidated financial statements of Black Hills included in the Company's periodic reports. The historical financial statements of NorthWestern included as Exhibits 99.1 and 99.2 hereto were prepared by NorthWestern and previously disclosed by NorthWestern in its periodic reports; it has not been independently validated or reviewed by Black Hills.

\* \* \*

**<u>Forward-Looking Statements</u>**

This Current Report on Form 8-K contains statements reflecting assumptions, expectations, projections, intentions or beliefs about future events that are intended as "forward-looking statements." We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this Current Report on Form 8-K that address activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. This includes, without limitations, completion of the merger transaction with NorthWestern and statements about the benefits of the proposed transaction between Black Hills and NorthWestern including future financial and operating results. These forward-looking statements are based on assumptions which we believe are reasonable based on current expectations and projections about future events and industry conditions and trends affecting our business. However, whether actual results and developments will conform to our expectations and predictions is subject to a number of risks and uncertainties that, among other things, could cause actual results to differ materially from those contained in the forward-looking statements.

All forward-looking statements are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of Black Hills or NorthWestern to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others, (1) the risk of delays in consummating the pending merger transaction, including as a result of required regulatory and shareholder approvals, which may not be obtained on the expected timeline, or at all, (2) the risk of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (3) the risk that required regulatory approvals are subject to conditions not anticipated by Black Hills and NorthWestern, (4) the possibility that any of the anticipated benefits and projected synergies of the pending merger transaction will not be realized or will not be realized within the expected time period, (5) disruption to the parties' businesses as a result of the announcement and pendency of the merger transaction, including potential distraction of management from current plans and operations of Black Hills or NorthWestern and the ability of Black Hills or NorthWestern to retain and hire key personnel, (6) reputational risk and the reaction of each company's customers, suppliers, employees or other business partners to the pending merger transaction, (7) the possibility that the pending merger transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, (8) the outcome of any legal or regulatory proceedings that may be instituted against Black Hills or NorthWestern related to the Merger Agreement or the pending merger transaction, (9) the risks associated with third party contracts containing consent and/or other provisions that may be triggered by the pending merger transaction, (10) legislative, regulatory, political, market, economic and other conditions, developments and uncertainties affecting Black Hills' or NorthWestern's businesses; (11) the evolving legal, regulatory and tax regimes under which Black Hills and NorthWestern operate; (12) restrictions during the pendency of the merger transaction that may impact Black Hills' or NorthWestern's ability to pursue

------

certain business opportunities or strategic transactions; and (13) unpredictability and severity of catastrophic events, including, but not limited to, extreme weather, natural disasters, acts of terrorism or outbreak of war or hostilities, as well as Black Hills' and NorthWestern's response to any of the aforementioned factors.

Additional factors which could affect future results of Black Hills and NorthWestern can be found in both Black Hills' and NorthWestern's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, in each case filed with the SEC and available on the SEC's website at http://www.sec.gov. Black Hills and NorthWestern disclaim any obligation and do not intend to update or revise any forward-looking statements contained in this communication, which speak only as of the date hereof, whether as a result of new information, future events or otherwise, except as required by federal securities laws.

**<u>No Offer or Solicitation</u>**

This document is for informational purposes only and is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

**<u>Important Information and Where to Find It</u>**

Black Hills intends to file a registration statement on Form S-4 with the SEC to register the shares of Black Hills' common stock that will be issued to NorthWestern stockholders in connection with the pending merger transaction. The registration statement will include a joint proxy statement of Black Hills and NorthWestern that will also constitute a prospectus of Black Hills. The definitive joint proxy statement/prospectus will be sent to the stockholders of each of Black Hills and NorthWestern in connection with the pending merger transaction. Additionally, Black Hills and NorthWestern will file other relevant materials in connection with the pending merger transaction with the SEC. Investors and security holders are urged to read the registration statement and joint proxy statement/prospectus when they become available (and any other documents filed with the SEC in connection with the transaction or incorporated by reference into the joint proxy statement/prospectus) because such documents will contain important information regarding the pending merger transaction and related matters. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC by Black Hills or NorthWestern through the website maintained by the SEC at http://www.sec.gov or by contacting the investor relations department of Black Hills or NorthWestern at investorrelations@blackhillscorp.com or travis.meyer@northwestern.com, respectively.

Before making any voting or investment decision, investors and security holders of Black Hills and NorthWestern are urged to read carefully the entire registration statement and joint proxy statement/prospectus when they become available, including any amendments thereto (and any other documents filed with the SEC in connection with the pending merger transaction) because they will contain important information about the pending merger transaction. Free copies of these documents may be obtained as described above.

**<u>Participants in Solicitation</u>**

Black Hills, NorthWestern and certain of their directors and executive officers may be deemed participants in the solicitation of proxies from the stockholders of each of Black Hills and NorthWestern in connection with the pending merger transaction. Information regarding the directors and executive officers of Black Hills and NorthWestern and other persons who may be deemed participants in the solicitation of the stockholders of Black Hills or of NorthWestern in connection with the pending merger transaction will be included in the joint proxy statement/prospectus related to the pending merger transaction, which will be filed by Black Hills with the SEC. Information about the directors and executive officers of Black Hills and their ownership of Black Hills common stock can also be found in Black Hills' filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed on February 12, 2025, under the header "Information About Our Executive Officers," and its Proxy Statement on Schedule 14A, which was filed on March 14, 2025, under the headers "Election of Directors" and "Security Ownership of Management and Principal Shareholders," and other documents subsequently filed by Black Hills with the SEC. Information about the directors and executive officers of NorthWestern and their ownership of NorthWestern common stock can also be found in NorthWestern's filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed on February 13, 2025, under the header "Information About Our Executive Officers" and its Proxy Statement on Schedule 14A, which was filed on March 12, 2025, under the headers "Election of Directors" and "Who Owns our Stock". To the extent any such person's ownership of Black Hills' or NorthWestern's securities, respectively, has changed since the filing of such proxy statement, such changes have been or will be reflected on Forms 3, 4 or 5 filed with the SEC. Additional information regarding the interests of such participants will be included in the joint proxy statement/prospectus and other relevant documents regarding the pending merger transaction filed with the SEC when they become available.

## Item 9.01 Financial Statements and Exhibits.

---

| | |
|:---|:---|
| **<u>Exhibit No.</u>** | **<u>Description</u>** |
| 23.1 | [<u>Consent of Independent Registered Public Accounting Firm to NorthWestern Energy Group, Inc.</u>](bkh-ex23_1.htm) |
| 99.1 | [<u>Audited consolidated financial statements of NorthWestern Energy Group, Inc. as of and for the years ended December 31, 2024, 2023 and 2022</u>](bkh-ex99_1.htm) |
| 99.2 | [<u>Unaudited consolidated financial statements of NorthWestern Energy Group, Inc. as of and for the six months ended June 30, 2025 and 2024</u>](bkh-ex99_2.htm) |
| 99.3 | [<u>Unaudited pro forma condensed combined financial statements (a) as of and for the six months ended June 30, 2025 and (b) for the year ended December 31, 2024</u>](bkh-ex99_3.htm) |
| 99.4 | [<u>Supplementary risk factors related to the pending merger transaction</u>](bkh-ex99_4.htm) |
| 104 | Cover Page Interactive Data File (formatted as the inline XBRL document) |

---

------

**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.

---

| | | | |
|:---|:---|:---|:---|
|  |  |  | BLACK HILLS CORPORATION |
| Date: | September 15, 2025 | By:  | /s/ Kimberly F. Nooney |
|  |  |  | Kimberly F. Nooney<br>Senior Vice President and Chief Financial Officer |

---

------

## Exhibit 23.1

**CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

<br>We consent to the incorporation by reference in Registration Statement Nos. 333-170451, 333-217679, 333-170448, 333-170452, and 333-203714 on Form S-8 and Registration Statement No. 333- 272739 on Form S-3 of our reports dated February 12, 2025, relating to the financial statements of NorthWestern Energy Group, Inc. (the "Company") and the effectiveness of the Company's internal control over financial reporting appearing in this Current Report on Form 8-K of Black Hills Corporation.

---

| |
|:---|
| /s/ DELOITTE & TOUCHE LLP |
| Minneapolis, Minnesota |
| September 15, 2025 |

---

------

## Exhibit 99.1

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the shareholders and the Board of Directors of NorthWestern Energy Group, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of NorthWestern Energy Group, Inc. and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, cash flows and common shareholders' equity, for each of the three years in the period ended December 31, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively, referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 12, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

**Critical Audit Matter**

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

***Regulatory Matters - Impact of Rate Regulation on the Financial Statements - Refer to Notes 2, 3 and 4 to the financial statements*** 

*Critical Audit Matter Description*

The Company accounts for the financial effects of regulation in accordance with ASC 980, *Regulated Operations.* This guidance allows for the recording of a regulatory asset or liability for certain costs or credits which otherwise would be recognized in the statement of income or comprehensive income based on an expectation that the cost will be recovered or returned in future rates.

The Company is subject to rate regulation by federal and state utility regulatory agencies (collectively, the "Commissions"), which have jurisdiction over the Company's electric and natural gas distribution rates in Montana, South Dakota and Nebraska. The Company assesses the probability of recovery of regulatory assets and the obligations arising from regulatory liabilities on a quarterly basis. Probability estimates incorporate numerous factors, including recent rate making decisions, historical precedents for similar matters, the regulatory environments in which the Company operates, and the impact that incurred costs may have on customers.

While the Company has indicated it expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve full recovery of the costs of providing utility service or full recovery of all amounts invested in the utility business and a reasonable return on that investment.

As a result , we identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about affected account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include the recording of regulatory assets for certain costs which otherwise would be recognized in the statement of income or comprehensive income based on an expectation that the costs will be recovered in future rates and the recording of regulatory liabilities for certain credits which would otherwise be recognized in the statement of income or comprehensive income based on an expectation that the amount will be returned to customers in future rates. Given that management's accounting judgments are based on assumptions about the outcome of future decisions by the Commissions, auditing these judgments requires specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.

*How the Critical Audit Matter Was Addressed in the Audit*

Our audit procedures related to the uncertainty of future decisions by the Commissions included the following, among others:

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of costs incurred as regulatory assets, and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities. We also tested the effectiveness of management's controls over the recognition of amounts as regulatory assets or liabilities the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates and the related disclosures in the notes to the financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We evaluated the Company's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We read relevant regulatory orders issued by the Commissions, regulatory statutes, interpretations, procedural memorandums, filings made by intervenors, filings made by the Company, and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the Commissions' treatment of similar costs under similar circumstances. We evaluated the external information and compared to management's recorded regulatory asset and liability balances for completeness.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We assessed management's conclusion regarding probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess management's assertion that amounts are probable of recovery or a future reduction in rates.

<u>/s/ DELOITTE & TOUCHE LLP</u>

Minneapolis, Minnesota

February 12, 2025

We have served as the Company's auditor since 2002.

------

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the shareholders and the Board of Directors of NorthWestern Energy Group, Inc.

**Opinion on Internal Control over Financial Reporting**

We have audited the internal control over financial reporting of NorthWestern Energy Group, Inc. and subsidiaries (the "Company") as of December 31, 2024, based on criteria established in *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of

December 31, 2024, based on criteria established in *Internal Control — Integrated Framework (2013)* issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 12, 2025, expressed an unqualified

opinion on those financial statements.

**Basis for Opinion**

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying "Management's Annual Report on Internal Control over Financial Reporting." Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm

registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We

believe that our audit provides a reasonable basis for our opinion.

**Definition and Limitations of Internal Control over Financial Reporting**

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly

reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of

effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

<u>/s/ DELOITTE & TOUCHE LLP</u> 

Minneapolis, Minnesota

February 12, 2025

------

---

| | | | |
|:---|:---|:---|:---|
| **NORTHWESTERN ENERGY GROUP** | **NORTHWESTERN ENERGY GROUP** | **NORTHWESTERN ENERGY GROUP** | **NORTHWESTERN ENERGY GROUP** |
| **CONSOLIDATED STATEMENTS OF INCOME** | **CONSOLIDATED STATEMENTS OF INCOME** | **CONSOLIDATED STATEMENTS OF INCOME** | **CONSOLIDATED STATEMENTS OF INCOME** |
| **(in thousands, except per share amounts)** | **(in thousands, except per share amounts)** | **(in thousands, except per share amounts)** | **(in thousands, except per share amounts)** |
|  | **Year Ended December 31,** | **Year Ended December 31,** |  |
|  | **2024** | **2023** | **2022** |
| Revenues |  |  |  |
| &nbsp;&nbsp;&nbsp;Electric | $1200701 | $1068833 | $1106565 |
| &nbsp;&nbsp;&nbsp;Gas | 313197 | 353310 | 371272 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Revenues** | 1513898 | 1422143 | 1477837 |
| Operating Expenses |  |  |  |
| &nbsp;&nbsp;&nbsp;Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) | 433816 | 420262 | 492011 |
| &nbsp;&nbsp;&nbsp;Operating and maintenance | 227836 | 220524 | 221427 |
| &nbsp;&nbsp;&nbsp;Administrative and general | 137437 | 117360 | 113776 |
| &nbsp;&nbsp;&nbsp;Property and other taxes | 163853 | 153068 | 192524 |
| &nbsp;&nbsp;&nbsp;Depreciation and depletion | 227635 | 210474 | 195020 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Operating Expenses** | 1190577 | 1121688 | 1214758 |
| Operating Income | 323321 | 300455 | 263079 |
| Interest Expense, net | (131673) | (114617) | (100110) |
| Other Income, net | 23024 | 15832 | 19434 |
| Income Before Income Taxes | 214672 | 201670 | 182403 |
| Income Tax Benefit (Expense) | 9439 | (7539) | 605 |
| **Net Income** | $224111 | $194131 | $183008 |
| Average Common Shares Outstanding | 61293 | 60321 | 55769 |
| Basic Earnings per Average Common Share | $3.66 | $3.22 | $3.28 |
| Diluted Earnings per Average Common Share | $3.65 | $3.22 | $3.25 |

---

See Notes to Consolidated Financial Statements

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**NORTHWESTERN ENERGY GROUP** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**NORTHWESTERN ENERGY GROUP** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**NORTHWESTERN ENERGY GROUP** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME** |  |  |
|  | **(in thousands)** |  |  |  |
|  |  | **Year Ended December 31,** | **Year Ended December 31,** |  |
|  |  | **2024** | **2023** | **2022** |
| Net Income |  | $224111 | $194131 | $183008 |
| Other comprehensive income (loss), net of tax: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Reclassification of net losses on derivative instruments |  | 452 | 452 | 452 |
| &nbsp;&nbsp;&nbsp;Postretirement medical liability adjustment |  | 504 | (262) | (982) |
| &nbsp;&nbsp;&nbsp;Foreign currency translation |  | (4) | 2 | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Other Comprehensive Income (Loss) |  | 952 | 192 | (538) |
| **Comprehensive Income** |  | $225063 | $194323 | $182470 |

---

See Notes to Consolidated Financial Statements

------

---

| | | |
|:---|:---|:---|
| | **As of December 31,** | **As of December 31,** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**NORTHWESTERN ENERGY GROUP**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CONSOLIDATED BALANCE SHEETS**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(in thousands, except per share amounts)**<br>| **2024** | **2023** |
| **ASSETS** |  |  |
| **Current Assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $4283 | $9164 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 24734 | 16023 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 187764 | 212257 |
| &nbsp;&nbsp;&nbsp;Inventories | 122940 | 114539 |
| &nbsp;&nbsp;&nbsp;Regulatory assets | 39851 | 29626 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other | 38614 | 25397 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | **418186** | **407006** |
| Property, plant, and equipment, net | 6398275 | 6039801 |
| Goodwill | 357586 | 357586 |
| Regulatory assets | 764414 | 743945 |
| Other noncurrent assets | 59063 | 52314 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Assets** | $**7997524** | $**7600652** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| **Current Liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Current maturities of finance leases | $3596 | $3338 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt | 299950 | 99950 |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | 100000 |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 111794 | 124340 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other | 254599 | 246167 |
| &nbsp;&nbsp;&nbsp;Regulatory liabilities | 32261 | 61103 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | **802200** | **534898** |
| Long-term finance leases | 1865 | 5461 |
| Long-term debt | 2695343 | 2684635 |
| Deferred income taxes | 663430 | 600520 |
| Noncurrent regulatory liabilities | 660942 | 657452 |
| Other noncurrent liabilities | 316044 | 332372 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities** | **5139824** | **4815338** |
| Commitments and Contingencies (Note 18) |  |  |
| **Shareholders' Equity:** |  |  |
| Common stock, par value $0.01; authorized 200,000,000 shares; issued and outstanding 64,810,932 and |  |  |
| 61,320,812, respectively; Preferred stock, par value $0.01; authorized 50,000,000 shares; none issued | 648 | 648 |
| &nbsp;&nbsp;&nbsp;Treasury stock at cost | (97394) | (97926) |
| &nbsp;&nbsp;&nbsp;Paid-in capital | 2084133 | 2078753 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 877017 | 811495 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (6704) | (7656) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Shareholders' Equity** | **2857700** | **2785314** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities and Shareholders' Equity** | $**7997524** | $**7600652** |

---

See Notes to Consolidated Financial Statements

------

---

| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**NORTHWESTERN ENERGY GROUP** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**NORTHWESTERN ENERGY GROUP** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CONSOLIDATED STATEMENTS OF CASH FLOWS** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CONSOLIDATED STATEMENTS OF CASH FLOWS** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(in thousands)** |  |  |  |
|  | **Year Ended December 31,** | **Year Ended December 31,** |  |
|  | **2024** | **2023** | **2022** |
| **OPERATING ACTIVITIES:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Income | $224111 | $194131 | $183008 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to cash provided by operations: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and depletion | 227635 | 210474 | 195020 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance costs, discount and deferred hedge gain | 4647 | 5142 | 5321 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation costs | 4721 | 5176 | 5488 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity portion of AFUDC | (18628) | (17614) | (14191) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on disposition of assets | (61) | 316 | 482 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment of alternative energy storage investment | 4159 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | (8969) | 6584 | (8992) |
| &nbsp;&nbsp;&nbsp;Changes in current assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 24493 | 32695 | (46282) |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventories | (8402) | (7180) | (26744) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current assets | (13216) | 2644 | (3833) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 7399 | (54722) | 50537 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 9748 | (3377) | 16846 |
| &nbsp;&nbsp;&nbsp;&nbsp;Regulatory assets | (10109) | 105588 | (20512) |
| &nbsp;&nbsp;&nbsp;&nbsp;Regulatory liabilities | (28842) | 39957 | (7034) |
| &nbsp;&nbsp;&nbsp;Other noncurrent assets and liabilities | (11945) | (30583) | (21872) |
| **Cash Provided by Operating Activities** | 406741 | 489231 | 307242 |
| **INVESTING ACTIVITIES:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Property, plant, and equipment additions | (549244) | (566889) | (515140) |
| &nbsp;&nbsp;&nbsp;Investment in equity securities | (4719) | (3923) | (1719) |
| &nbsp;&nbsp;&nbsp;Other investing activity | (500) |  |  |
| **Cash Used in Investing Activities** | (554463) | (570812) | (516859) |
| **FINANCING ACTIVITIES:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Dividends on common stock | (158589) | (154050) | (140062) |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of common stock, net |  | 73613 | 276971 |
| &nbsp;&nbsp;&nbsp;Issuance of long-term debt | 215000 | 300000 |  |
| &nbsp;&nbsp;&nbsp;Issuances of short-term borrowings | 100000 |  |  |
| &nbsp;&nbsp;&nbsp;Repayments on long-term debt | (100000) |  |  |
| &nbsp;&nbsp;&nbsp;Line of credit borrowings (repayments), net | 95000 | (132000) | 77000 |
| &nbsp;&nbsp;&nbsp;Treasury stock activity | 1192 | 1069 | 603 |
| &nbsp;&nbsp;&nbsp;Financing costs | (1051) | (4327) | (1194) |
| **Cash Provided by Financing Activities** | 151552 | 84305 | 213318 |
| **Net Increase in Cash, Cash Equivalents, and** |  |  |  |
| **Restricted Cash** | 3830 | 2724 | 3701 |
| &nbsp;&nbsp;&nbsp;Cash, Cash Equivalents, and Restricted Cash, beginning of period | 25187 | 22463 | 18762 |
| &nbsp;&nbsp;**Cash, Cash Equivalents, and Restricted Cash, end of period** | $**29017** | $**25187** | $**22463** |

---

See Notes to Consolidated Financial Statements

------

**NORTHWESTERN ENERGY GROUP**

**CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY**

**(in thousands, except per share data)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | | **Common** | &nbsp;&nbsp;**Paid in** | **Treasury** | **Retained** | | |
|  | | | **Common** | &nbsp;&nbsp;**Paid in** | **Treasury** | **Retained** | | |
| | **Number of**<br>**Common**<br>**Shares** | **Number of**<br>**Treasury**<br>**Shares** | **Stock** | &nbsp;&nbsp;**Capital** | **Stock** | **Earnings** | **Accumulated**<br>**Other**<br>**Comprehensive Loss** | **Total**<br>**Shareholders'**<br>**Equity** |
| **Balance at December 31, 2021** | **57606** | **3546** | $**576** | $**1716227** | $**(98248)** | $**728468** | $**(7310)** | $**2339713** |
| Net income |  |  |  |  |  | 183008 |  | 183008 |
| Foreign currency translation |  |  |  |  |  |  | (8) | (8) |
| adjustment, net of tax |  |  |  |  |  |  | (8) | (8) |
| Reclassification of net gains on |  |  |  |  |  |  |  |  |
| derivative instruments from OCI to |  |  |  |  |  |  | 452 | 452 |
| net income, net of tax |  |  |  |  |  |  | 452 | 452 |
| Postretirement medical liability |  |  |  |  |  |  | (982) | (982) |
| adjustment, net of tax |  |  |  |  |  |  | (982) | (982) |
| Stock based compensation | 87 | 16 |  | 7391 | (911) |  |  | 6480 |
| Issuance of shares | 5585 | (28) | 57 | 275758 | 767 |  |  | 276582 |
| Dividends on common stock ($2.52 |  |  |  |  |  | (140062) |  | (140062) |
| per share) |  |  |  |  |  | (140062) |  | (140062) |
| **Balance at December 31, 2022** | **63278** | **3534** | $**633** | $**1999376** | $**(98392)** | $**771414** | $**(7848)** | $**2665183** |
| Net income |  |  |  |  |  | 194131 |  | 194131 |
| Foreign currency translation |  |  |  |  |  |  | 2 | 2 |
| adjustment, net of tax |  |  |  |  |  |  | 2 | 2 |
| Reclassification of net losses on |  |  |  |  |  |  |  |  |
| derivative instruments from OCI to |  |  |  |  |  |  | 452 | 452 |
| net income, net of tax |  |  |  |  |  |  | 452 | 452 |
| Postretirement medical liability |  |  |  |  |  |  | (262) | (262) |
| adjustment, net of tax |  |  |  |  |  |  | (262) | (262) |
| Stock based compensation | 51 |  |  | 4954 |  |  |  | 4954 |
| Issuance of shares | 1433 | (21) | 15 | 74423 | 466 |  |  | 74904 |
| Dividends on common stock ($2.56 |  |  |  |  |  | (154050) |  | (154050) |
| per share) |  |  |  |  |  | (154050) |  | (154050) |
| **Balance at December 31, 2023** | **64762** | **3513** | $**648** | $**2078753** | $**(97926)** | $**811495** | $**(7656)** | $**2785314** |
| Net income |  |  |  |  |  | 224111 |  | 224111 |
| Foreign currency translation |  |  |  |  |  |  | (4) | (4) |
| adjustment, net of tax |  |  |  |  |  |  | (4) | (4) |
| Reclassification of net losses on |  |  |  |  |  |  |  |  |
| derivative instruments from OCI to |  |  |  |  |  |  | 452 | 452 |
| net income, net of tax |  |  |  |  |  |  | 452 | 452 |
| Postretirement medical liability |  |  |  |  |  |  | 504 | 504 |
| adjustment, net of tax |  |  |  |  |  |  | 504 | 504 |
| Stock based compensation | 49 |  |  | 4672 | (272) |  |  | 4400 |
| Issuance of shares |  | (23) |  | 708 | 804 |  |  | 1512 |
| Dividends on common stock ($2.60 |  |  |  |  |  | (158589) |  | (158589) |
| per share) |  |  |  |  |  | (158589) |  | (158589) |
| **Balance at December 31, 2024** | **64811** | **3490** | $**648** | $**2084133** | $**(97394)** | $**877017** | $**(6704)** | $**2857700** |

---

See Notes to Consolidated Financial Statements

------

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(1) Nature of Operations and Basis of Consolidation**

NorthWestern Energy Group, doing business as NorthWestern Energy, provides electricity and / or natural gas to approximately 787,000 customers in Montana, South Dakota, Nebraska and Yellowstone National Park, through its subsidiaries NW Corp and NWE Public Service. We have generated and distributed electricity in South Dakota and distributed natural gas in South Dakota and Nebraska since 1923 and have generated and distributed electricity and distributed natural gas in Montana since 2002.

The Consolidated Financial Statements for the periods included herein have been prepared by NorthWestern Energy Group (NorthWestern, we, or us), pursuant to the rules and regulations of the SEC. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period. Actual results could differ from those estimates. The accompanying Consolidated Financial Statements include our accounts together with those of our wholly and majority-owned or controlled subsidiaries. All intercompany balances and transactions have been eliminated from the Consolidated Financial Statements. Events occurring subsequent to December 31, 2024, have been evaluated as to their potential impact to the Consolidated Financial Statements through the date of issuance.

**<u>Holding Company Reorganization</u>**

On January 1, 2024, we completed the second and final phase of our holding company reorganization. NW Corp contributed the assets and liabilities of its South Dakota and Nebraska regulated utilities to NWE Public Service, and then distributed its equity interest in NWE Public Service and certain other subsidiaries to NorthWestern Energy Group, resulting in NW Corp owning and operating the Montana regulated utility and NWE Public Service owning and operating the Nebraska and South Dakota utilities, each as a direct subsidiary of NorthWestern Energy Group.

**(2) Significant Accounting Policies**

**<u>Use of Estimates</u>**

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for such items as long-lived asset values and impairment charges, long-lived asset useful lives, tax provisions, unrecognized tax benefits, AROs, regulatory assets and liabilities, allowances for uncollectible accounts, our QF liability, environmental liabilities, unbilled revenues and actuarially determined benefit costs and liabilities. We revise the recorded estimates when we receive better information or when we can determine actual amounts. Those revisions can affect operating results.

**<u>Revenue Recognition</u>**

We recognize revenue as customers obtain control of promised goods and services in an amount that reflects consideration expected in exchange for those goods or services. Generally, the delivery of electricity and natural gas results in the transfer of control to customers at the time the commodity is delivered and the amount of revenue recognized is equal to the amount billed to each customer, including estimated volumes delivered when billings have not yet occurred.

**<u>Cash Equivalents</u>**

We consider all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

**<u>Restricted Cash</u>**

Restricted cash consists primarily of funds held in trust accounts to satisfy the requirements of certain stipulation agreements and insurance reserve requirements.

**<u>Accounts Receivable, Net</u>**

Accounts receivable are net of allowances for uncollectible accounts of $2.5 million and $2.8 million at December 31, 2024 and December 31, 2023, respectively. Receivables include unbilled revenues of $95.2 million and $105.1 million at December 31, 2024 and December 31, 2023, respectively.

------

---

| | | |
|:---|:---|:---|
| **Inventories** |  |  |
| Inventories are stated at average cost. Inventory consisted of the following (in thousands): |  |  |
|  | **December 31,** |  |
|  | **2024** | **2023** |
| Materials and supplies | $103671 | $85876 |
| Storage gas and fuel | 19269 | 28663 |
| **Total Inventories** | $122940 | $114539 |

---

**<u>Regulation of Utility Operations</u>**

Our regulated operations are subject to the provisions of ASC 980, *Regulated Operations*. Regulated accounting is appropriate provided that (i) rates are established by or subject to approval by independent, third-party regulators, (ii) rates are designed to recover the specific enterprise's cost of service, and (iii) in view of demand for service, it is reasonable to assume that rates are set at levels that will recover costs and can be charged to and collected from customers.

Our Consolidated Financial Statements reflect the effects of the different rate making principles followed by the jurisdictions regulating us. The economic effects of regulation can result in regulated companies recording costs that have been, or are deemed probable to be, allowed in the ratemaking process in a period different from the period in which the costs would be charged to expense by an unregulated enterprise. When this occurs, costs are deferred as regulatory assets and recorded as expenses in the periods when those same amounts are reflected in rates. Additionally, regulators can impose liabilities upon a regulated company for amounts previously collected from customers and for amounts that are expected to be refunded to customers (regulatory liabilities).

If we were required to terminate the application of these provisions to our regulated operations, all such deferred amounts would be recognized in the Consolidated Statements of Income at that time. This would result in a charge to earnings and accumulated other comprehensive loss (AOCL), net of applicable income taxes, which could be material. In addition, we would determine any impairment to the carrying costs of deregulated plant and inventory assets.

**<u>Derivative Financial Instruments</u>**

We account for derivative instruments in accordance with ASC 815, *Derivatives and Hedging*. All derivatives are recognized in the Consolidated Balance Sheets at their fair value unless they qualify for certain exceptions, including the normal purchases and normal sales exception. Additionally, derivatives that qualify and are designated for hedge accounting are classified as either hedges of the fair value of a recognized asset or liability or of an unrecognized firm commitment (fair-value hedge) or hedges of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability (cash-flow hedge). For fair-value hedges, changes in fair values for both the derivative and the underlying hedged exposure are recognized in earnings each period. For cash-flow hedges, the portion of the derivative gain or loss that is effective in offsetting the change in the cost or value of the underlying exposure is deferred in AOCL and later reclassified into earnings when the underlying transaction occurs. Gains and losses from the ineffective portion of any hedge are recognized in earnings immediately. For other derivative contracts that do not qualify or are not designated for hedge accounting, changes in the fair value of the derivatives are recognized in earnings each period. Cash inflows and outflows related to derivative instruments are included as a component of operating, investing or financing cash flows in the Consolidated Statements of Cash Flows, depending on the underlying nature of the hedged items. As of December 31, 2024, the only derivative instruments we have qualify for the normal purchases and normal sales exception.

Revenues and expenses on contracts that are designated as normal purchases and normal sales are recognized when the underlying physical transaction is completed. While these contracts are considered derivative financial instruments, they are not required to be recorded at fair value, but on an accrual basis of accounting. Normal purchases and normal sales are contracts where physical delivery is probable, quantities are expected to be used or sold in the normal course of business over a reasonable period of time, and price is not tied to an unrelated underlying derivative. As part of our regulated electric and gas operations, we enter into contracts to buy and sell energy to meet the requirements of our customers. These contracts include short-term and long-term commitments to purchase and sell energy in the retail and wholesale markets with the intent and ability to deliver or take delivery. If it were determined that a transaction designated as a normal purchase or a normal sale no longer met the exceptions, the fair value of the related contract would be reflected as an asset or liability and immediately recognized through earnings. See <u>Note 8 - Risk Management and Hedging Activities</u>, for further discussion of our derivative activity.

**<u>Property, Plant and Equipment</u>**

Property, plant and equipment are stated at original cost, including contracted services, direct labor and material, AFUDC, and indirect charges for engineering, supervision and similar overhead items. All expenditures for maintenance and repairs of utility property, plant and equipment are charged to the appropriate maintenance expense accounts. A betterment or replacement of a unit of property is accounted for as an addition and retirement of utility plant. At the time of such a retirement, the accumulated provision for depreciation is charged with the original cost of the property retired and also for the net cost of removal. Also included in plant and equipment are assets under finance lease, which are stated at the present value of minimum lease payments.

------

AFUDC represents the cost of financing construction projects with borrowed funds and equity funds. While cash is not realized currently from such allowance, it is realized under the ratemaking process over the service life of the related property through increased revenues resulting from a higher rate base and higher depreciation expense. The component of AFUDC attributable to borrowed funds is included as a reduction to interest expense, while the equity component is included in other income. This rate averaged 7.0%, 6.4%, and 6.4% for Montana for 2024, 2023, and 2022, respectively. This rate averaged 6.9%, 6.4%, and 6.4% for South Dakota and Nebraska for 2024, 2023, and 2022, respectively. AFUDC capitalized totaled $27.1 million, $24.3 million, and $20.2 million for the years ended December 31, 2024, 2023, and 2022, respectively, for Montana, South Dakota, and Nebraska combined.

We record provisions for depreciation at amounts substantially equivalent to calculations made on a straight-line method by applying various rates based on useful lives of the various classes of properties (ranging from 5 to 127 years) determined from engineering studies. As a percentage of the depreciable utility plant at the beginning of the year, our provision for depreciation of utility plant was approximately 2.9% for 2024, and 2.8% for each of 2023 and 2022.

Depreciation rates include a provision for our share of the estimated costs to decommission our jointly owned plants at the end of the useful life. The annual provision for such costs is included in depreciation expense, while the accumulated provisions are included in noncurrent regulatory liabilities.

**<u>Pension and Postretirement Benefits</u>**

We have liabilities under defined benefit retirement plans and a postretirement plan that offers certain health care and life insurance benefits to eligible employees and their dependents. The costs of these plans are dependent upon numerous factors, assumptions and estimates, including determination of discount rate, expected return on plan assets, rate of future compensation increases, age and mortality and employment periods. In determining the projected benefit obligations and costs, assumptions can change from period to period and may result in material changes in the cost and liabilities we recognize.

**<u>Accrued Expenses and other</u>**

Accrued expenses and other consisted of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31,** |  |
|  | **2024** | **2023** |
| Property taxes | $81716 | $79252 |
| Employee compensation, benefits, and withholdings | 49786 | 41773 |
| Interest | 28702 | 24775 |
| Customer advances | 16535 | 27656 |
| Other (none of which is individually significant) | 77860 | 72711 |
| **Total Accrued Expenses** | $254599 | $246167 |

---

**<u>Other Noncurrent Liabilities</u>**

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other noncurrent liabilities consisted of the following (in thousands): |  |  |
|  | **December 31,** |  |
|  | **2024** | **2023** |
| Customer advances | $123249 | $107470 |
| Pension and other employee benefits | 56603 | 75302 |
| AROs | 37725 | 39255 |
| Future QF obligation, net | 23498 | 28670 |
| Environmental | 20350 | 21135 |
| Other (none of which is individually significant) | 54619 | 60540 |
| **Total Noncurrent Liabilities** | $316044 | $332372 |

---

**<u>Income Taxes</u>**

We follow the liability method in accounting for income taxes. Deferred income tax assets and liabilities represent the future effects on income taxes from temporary differences between the bases of assets and liabilities for financial reporting and tax purposes. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. The probability of realizing deferred tax assets is based on forecasts of future taxable income and the availability of tax planning strategies that can be implemented, if necessary, to realize deferred tax assets. We establish a valuation allowance when it is more likely than not that all, or a portion of, a deferred tax asset will not be realized.

Exposures exist related to various tax filing positions, which may require an extended period of time to resolve and may result in income tax adjustments by taxing authorities. We have reduced deferred tax assets or established liabilities based on our best estimate of future probable

------

adjustments related to these exposures. On a quarterly basis, we evaluate exposures in light of any additional information and make adjustments as necessary to reflect the best estimate of the future outcomes. We believe our deferred tax assets and established liabilities are appropriate for estimated exposures; however, actual results may differ from these estimates. The resolution of tax matters in a particular future period could have a material impact on our Consolidated Income Statements and provision for income taxes.

Under the Inflation Reduction Act of 2022 our production tax credits may be transferred to an unrelated entity. Our policy is to account for these transferable credits within income tax expense.

**<u>Environmental Costs</u>**

We record environmental costs when it is probable we are liable for the costs and we can reasonably estimate the liability. We may defer costs as a regulatory asset if there is precedent for recovering similar costs from customers in rates. Otherwise, we expense the costs. If an environmental cost is related to facilities we currently use, such as pollution control equipment, then we may capitalize and depreciate the costs over the remaining life of the asset, assuming the costs are recoverable in future rates or future cash flows.

Our remediation cost estimates are based on the use of an environmental consultant, our experience, our assessment of the current situation and the technology currently available for use in the remediation. We regularly adjust the recorded costs as we revise estimates and as remediation proceeds. If we are one of several designated responsible parties, then we estimate and record only our share of the cost.

**<u>Supplemental Cash Flow Information</u>**

---

| | | | |
|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Year Ended December 31,** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Year Ended December 31,** |  |
|  | **2024** | **2023** | **2022** |
|  |  | **(in thousands)** |  |
| Cash (received) paid for: |  |  |  |
| &nbsp;&nbsp;&nbsp;Income taxes | $(4284) | $(827) | $4707 |
| &nbsp;&nbsp;Production tax credits<sup>(1)</sup> | (6867) |  |  |
| &nbsp;&nbsp;&nbsp;Interest | 128333 | 105238 | 95400 |
| Significant non-cash transactions: |  |  |  |
| &nbsp;&nbsp;&nbsp;Capital expenditures included in trade accounts payable | 22377 | 42322 | 64758 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Proceeds from production tax credits transferred are included in cash provided by operating activities within the Consolidated Statement of Cash Flows.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  |  | **December 31,** |  |
|  | **2024** | **2023** | **2022** |
| Cash and cash equivalents | $4283 | $9164 | $8489 |
| Restricted cash | 24734 | 16023 | 13974 |
| **Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of** | $29017 | $25187 | $22463 |
| **Cash Flows** | $29017 | $25187 | $22463 |

---

Restricted cash consists primarily of funds held in trust accounts to satisfy the requirements of certain stipulation agreements and insurance reserve requirements.

**<u>Accounting Standards Issued</u>**

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07, *Improvements to Reportable Segment Disclosures*, which expands public entities' segment disclosures by requiring disclosure of significant segment expenses that are regularly reviewed by the Chief Operating Decision Maker (CODM) and included within each reported measure of segment profit or loss. We adopted this standard for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, as required, and used the retrospective method of adoption, with no material impact on our Consolidated Financial Statements or internal controls.

At this time, we are not expecting the adoption of recently issued accounting standards to have a material impact to our financial condition, results of operations, and cash flows.

------

**(3) Regulatory Matters**

**<u>Montana Rate Review</u>**

In July 2024, we filed a Montana electric and natural gas rate review (2023 test year) with the MPSC. The filing requests a base rate annual revenue increase of $156.5 million ($69.4 million net with Property Tax and PCCAM tracker adjustments) for electric and $28.6 million for natural gas. Our request is based on a return on equity of 10.80 percent with a capital structure including 46.81 percent equity, and forecasted 2024 electric and natural gas rate base of $3.45 billion and $731.9 million, respectively. The electric rate base investment includes the 175-megawatt natural gas-fired Yellowstone County Generating Station, which was placed in service in October 2024.

In November 2024, the MPSC partially approved our requested interim rates, which are subject to refund, increasing electric and natural gas base rates by $18.4 million and $17.4 million, respectively, and decreasing our PCCAM base costs by $88.0 million, effective December 1, 2024.

In January 2025, intervenor testimony was filed and we anticipate filing our rebuttal testimony in March 2025. Based on the procedural schedule developed by the MPSC, a hearing on our rate review request is scheduled to commence on April 22, 2025. If 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 the MPSC regulations, our requested rates, which will be subject to refund, until a final order is received.

**<u>South Dakota Natural Gas Rate Review</u>**

In June 2024, we filed a natural gas rate review (2023 test year) with the SDPUC for an annual increase to natural gas rates totaling approximately $6.0 million. Our request was based on a rate of return of 7.75 percent and rate base of $95.6 million. In December 2024, the SDPUC issued a final order approving the settlement agreement between NorthWestern and SDPUC Staff for an annual increase in base rates of approximately $4.6 million and an authorized rate of return of 6.91 percent. The approved settlement is based on a rate base of $96.2 million. Final rates were effective December 19, 2024.

**<u>Nebraska Natural Gas Rate Review</u>**

In June 2024, we filed a natural gas rate review (2023 test year) with the NPSC. The filing requests a base rate annual revenue increase of $3.6 million. Our request is based on a return on equity of 10.70 percent, a capital structure including 53.13 percent equity, and rate base of $47.4 million. Interim rates, which increased base natural gas rates $2.3 million, were implemented on October 1, 2024. Interim rates will remain in effect on a refundable basis until the NPSC issues a final order.

**(4) Regulatory Assets and Liabilities**

We prepare our Consolidated Financial Statements in accordance with the provisions of ASC 980, as discussed in <u>Note 2 - Significant Accounting</u> <u>Policies</u>. Pursuant to this guidance, certain expenses and credits, normally reflected in income as incurred, are deferred and recognized when included in rates and recovered from or refunded to customers. Regulatory assets and liabilities are recorded based on our assessment that it is probable that a cost will be recovered or that an obligation has been incurred. Accordingly, we have recorded the following major classifications of regulatory assets and liabilities that will be recognized in expenses and revenues in future periods when the matching revenues are collected or refunded. Of these regulatory assets and liabilities, energy supply costs are the only items earning a rate of return. The remaining regulatory items have corresponding assets and liabilities that will be paid for or refunded in future periods.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | | **December 31,** |  |
|  | | | **2024** | **2023** |
| | <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Note Reference** | <br>**Remaining**<br>**Amortization Period** | **(in thousands)** | |
| Flow-through income taxes | 12 | Plant Lives | $596265 | $553452 |
| Pension | 14 | See Note 14 | 62096 | 79638 |
| Excess deferred income taxes | 12 | Plant Lives | 45620 | 51404 |
| Employee related benefits | 14 | See Note 14 | 17877 | 21926 |
| Deferred financing costs | 11 | See Note 11 | 17754 | 20028 |
| Wildfire mitigation |  | Undetermined | 17368 | 1623 |
| Supply costs |  | 1 Year | 11441 | 7317 |
| Environmental clean-up | 18 | Undetermined | 11257 | 11131 |
| State & local taxes & fees |  | 1 Year | 8924 | 2733 |
| Other |  | Various | 15663 | 24319 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Regulatory Assets** |  |  | $**804265** | $**773571** |
| Removal cost | 6 | Plant Lives |  |  |
| Removal cost | 6 | Plant Lives | $537210 | $523744 |
| Excess deferred income taxes | 12 | Plant Lives | 125878 | 136382 |
| Supply costs |  | 1 Year | 20933 | 19691 |
| Gas storage sales |  | 15 years | 6205 | 6625 |
| State & local taxes & fees |  | 1 Year | 251 | 30576 |
| Other |  | Various | 2726 | 1537 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Regulatory Liabilities** |  |  | $**693203** | $**718555** |

---

------

**<u>Income Taxes</u>**

Flow-through income taxes primarily reflect the effects of plant related temporary differences such as flow-through of depreciation, repairs related deductions, and removal costs that we will recover or refund in future rates. We amortize these amounts as temporary differences reverse. Excess deferred income tax assets and liabilities are recorded as a result of the Tax Cuts and Jobs Act and will be recovered or refunded in future rates. See <u>Note 12 -</u> <u>Income Taxes</u> for further discussion.

**<u>Pension and Employee Related Benefits</u>**

We recognize the unfunded portion of plan benefit obligations in the Consolidated Balance Sheets, which is remeasured at each year end, with a corresponding adjustment to regulatory assets/liabilities as the costs associated with these plans are recovered in rates. The MPSC allows recovery of pension costs on a cash funding basis. The portion of the regulatory asset related to our Montana pension plan will amortize as cash funding amounts exceed accrual expense under GAAP. The SDPUC allows recovery of pension and postretirement benefit costs on an accrual basis. The MPSC allows recovery of postretirement benefit costs on an accrual basis.

**<u>Deferred Financing Costs</u>**

Consistent with our historical regulatory treatment, a regulatory asset has been established to reflect the remaining deferred financing costs on long-term debt that has been replaced through the issuance of new debt. These amounts are amortized over the life of the new debt.

**<u>Enhanced Wildfire Mitigation Plan</u>**

We have developed an Enhanced Wildfire Mitigation Plan addressing five key areas: situational awareness, operational practices, system preparedness, vegetation management, and public communications outreach. Because of ever-increasing wildfire risk, our plan includes greater focus on situational awareness to monitor changing environmental conditions, operational practices that are more reactive to changing conditions, increased frequency of patrol and repairs, and more robust system hardening programs that target higher risk segments in our transmission and distribution systems. The MPSC has approved the deferral of incremental operating costs related to this Enhanced Wildfire Mitigation Plan.

**<u>Supply Costs</u>**

The MPSC, SDPUC and NPSC have authorized the use of electric and natural gas supply cost trackers that enable us to track actual supply costs and either recover the under collection or refund the over collection to our customers. Accordingly, we have recorded a regulatory asset and liability to reflect the future recovery of under collections and refunding of over collections through the ratemaking process. We earn interest on natural gas supply costs under collected, or apply interest to an over collection, of 6.7 percent in Montana; 6.8 percent and 6.9 percent for electric and natural gas, respectively, in South Dakota; and 8.5 percent for natural gas in Nebraska. For our Montana electric supply tracker, the PCCAM, the interest rate we earn on supply costs under collected, or the interest rate we apply to an over collection, is based on the monthly interest rate for three month commercial paper as published by the Federal Reserve.

**<u>Environmental Clean-Up</u>**

Environmental clean-up costs are the estimated costs of investigating and cleaning up contaminated sites we own. We discuss the specific sites and clean-up requirements further in <u>Note 18 - Commitments and Contingencies</u>. Environmental clean-up costs are typically recoverable in customer rates when they are actually incurred. When cost projections become known and measurable, we coordinate with the appropriate regulatory authority to determine a recovery period.

**<u>State & Local Taxes & Fees</u>**

Under Montana law, we are allowed to track the changes in the actual level of state and local taxes and fees and recover the increase, or refund the decrease, in rates, less the amount allocated to FERC jurisdictional customers and net of the related income tax benefit.

**<u>Removal Cost</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The anticipated costs of removing assets upon retirement are collected from customers in advance of removal activity as a component of depreciation expense. Our depreciation method, including cost of removal, is established by the respective regulatory commissions. Therefore, consistent with this regulated treatment, we reflect this accrual of removal costs for our regulated assets by increasing our regulatory liability. See <u>Note 6 - Asset Retirement Obligations</u>, for further information regarding this item.

**<u>Gas Storage Sales</u>**

A regulatory liability was established in 2000 and 2001 based on gains on cushion gas sales in Montana. This gain is being flowed to customers over a period that matches the depreciable life of surface facilities that were added to maintain deliverability from the field after the withdrawal of the gas. This regulatory liability is a reduction of rate base.

------

**(5) Property, Plant and Equipment**

The following table presents the major classifications of our property, plant and equipment (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31,** |  |
|  | **2024** | **2023** |
|  | **(in thousands)** |  |
| Electric Plant | $6034159 | $5462229 |
| Natural Gas Plant | 1615228 | 1506943 |
| Plant acquisition adjustment<sup>(1)</sup> | 686328 | 686328 |
| Common and Other Plant | 277623 | 267132 |
| Construction work in process | 164767 | 377241 |
| Total property, plant and equipment | 8778105 | 8299873 |
| Less accumulated depreciation | (2019142) | (1930688) |
| Less accumulated amortization | (360688) | (329384) |
| **Net property, plant and equipment** | $6398275 | $6039801 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The plant acquisition adjustment balance above includes our Beethoven wind project acquired in 2015, our hydro generating assets acquired in 2014, and the inclusion of our interest in Colstrip Unit 4 in rate base in 2009. The acquisition adjustment is amortized on a straight-line basis over the estimated remaining useful life of each related asset in depreciation expense.

Net plant and equipment under finance lease were $3.0 million and $5.2 million as of December 31, 2024 and 2023, respectively, which is primarily comprised of a long-term power supply contract with the owners of a natural gas fired peaking plant, which has been accounted for as a finance lease.

**<u>Jointly Owned Electric Generating Plant</u>**

We have an ownership interest in four base-load electric generating plants, all of which are coal fired and operated by other companies. We have an undivided interest in these facilities and are responsible for our proportionate share of the capital and operating costs while being entitled to our proportionate share of the power generated. Our interest in each plant is reflected in the Consolidated Balance Sheets on a pro rata basis and our share of operating expenses is reflected in the Consolidated Statements of Income. The participants each finance their own investment.

In January 2023 and July 2024, we entered into definitive agreements, the first with Avista and the second with Puget, to acquire their respective interests in Colstrip Units 3 & 4. In particular, we agreed to acquire a 15% (222 megawatts) interest from Avista and a 25% (370 megawatts) interest from Puget. Both agreements provide that the purchase price will be $0. These agreements are substantially similar and are both scheduled to close December 31, 2025, subject to the satisfaction of customary closing conditions and approvals contained within the agreements. Under the terms of the agreements, we will be responsible for operating costs starting on January 1, 2026; while Puget and Avista will remain responsible for their respective pre-closing share of environmental and pension liabilities attributed to events or conditions existing prior to the closing of the transaction and for any future decommission and demolition costs associated with the existing facilities that comprise their interests.

Acquisition of Avista and Puget's interests would result in our ownership of 55 percent of the facility with the ability to guide operating and maintenance investments. This would provide capacity to help us meet our obligation to provide reliable and cost effective power to our customers in Montana, while allowing opportunity for us to identify and plan for newer lower or no-carbon technologies in the future.

Either party may terminate the respective separate agreement if any requested regulatory approval is denied or if the closing has not occurred by December 31, 2025 or if any law or order would delay or impair closing.

Information relating to our ownership interest in these facilities is as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Big Stone**<br>**(SD)** | **Neal #4**<br>**(IA)** | **Coyote**<br>**(ND)** | **Colstrip Unit 4**<br>**(MT)** |
| **December 31, 2024** |  |  |  |  |
| Ownership percentages | 23.4% | 8.7% | 10.0% | 30.0% |
| Plant in service | $157572 | $65426 | $52430 | $330888 |
| Accumulated depreciation | 49573 | 39025 | 39887 | 137153 |
| **December 31, 2023** |  |  |  |  |
| Ownership percentages | 23.4% | 8.7% | 10.0% | 30.0% |
| Plant in service | $156696 | $64132 | $52630 | $323793 |
| Accumulated depreciation | 44525 | 37178 | 39393 | 127381 |

---

------

**(6) Asset Retirement Obligations**

We are obligated to dispose of certain long-lived assets upon their abandonment. We recognize a liability for the legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event. We measure the liability at fair value when incurred and capitalize a corresponding amount as part of the book value of the related assets, which increases our property, plant and equipment and other noncurrent liabilities. The increase in the capitalized cost is included in determining depreciation expense over the estimated useful life of these assets. Since the fair value of the ARO is determined using a present value approach, accretion of the liability due to the passage of time is recognized each period and recorded as a regulatory asset until the settlement of the liability. Revisions to estimated AROs can result from changes in retirement cost estimates, revisions to estimated inflation rates, and changes in the estimated timing of abandonment. If the obligation is settled for an amount other than the carrying amount of the liability, we will recognize a regulatory asset or liability for the difference, which will be surcharged/refunded to customers through the rate making process. We record regulatory assets and liabilities for differences in timing of asset retirement costs recovered in rates and AROs recorded since asset retirement costs are recovered through rates charged to customers.

Our AROs relate to the reclamation and removal costs at our jointly-owned coal-fired generation facilities, U.S. Department of Transportation requirements to cut, purge and cap retired natural gas pipeline segments, our obligation to plug and abandon oil and gas wells at the end of their life, and to remove all above-ground wind power facilities and restore the soil surface at the end of their life. The following table presents the change in our ARO (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  |  | **December 31,** |  |
|  |  | **2023** | **2022** |
| Liability at January 1, | $41424 | $40894 | $40631 |
| &nbsp;&nbsp;&nbsp;Accretion expense | 1937 | 1899 | 1853 |
| &nbsp;&nbsp;&nbsp;Liabilities incurred |  |  |  |
| &nbsp;&nbsp;&nbsp;Liabilities settled | (2044) | (1244) | (4004) |
| &nbsp;&nbsp;&nbsp;Revisions to cash flows | (265) | (125) | 2414 |
| Liability at December 31, | $41052 | $41424 | $40894 |

---

During the twelve months ended December 31, 2024, our ARO liability decreased $2.0 million for partial settlement of the legal obligations at our jointly-owned coal-fired generation facilities and natural gas pipeline segments. Additionally, during the twelve months ended December 31, 2024, our ARO liability decreased $0.3 million related to changes in both the timing and amount of retirement cost estimates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, we have identified removal liabilities related to our electric and natural gas transmission and distribution assets that have been installed on easements over property not owned by us. The easements are generally perpetual and only require remediation action upon abandonment or cessation of use of the property for the specified purpose. The ARO liability is not estimable for such easements as we intend to utilize these properties indefinitely. In the event we decide to abandon or cease the use of a particular easement, an ARO liability would be recorded at that time. We also identified AROs associated with our hydroelectric generating facilities; however, due to the indeterminate removal date, the fair value of the associated liabilities currently cannot be estimated and no amounts are recognized in the Consolidated Financial Statements.

We collect removal costs in rates for certain transmission and distribution assets that do not have associated AROs. Generally, the accrual of future non-ARO removal obligations is not required; however, long-standing ratemaking practices approved by applicable state and federal regulatory commissions have allowed provisions for such costs in historical depreciation rates. The recorded amounts of costs collected from customers through depreciation rates are classified as a regulatory liability in recognition of the fact that we have collected these amounts that will be used in the future to fund asset retirement costs and do not represent legal retirement obligations. See <u>Note 4 - Regulatory Assets and Liabilities</u> for removal costs recorded as regulatory liabilities on the Consolidated Balance Sheets as of December 31, 2024 and 2023.

**(7) Goodwill**

We completed our annual goodwill impairment test as of April 1, 2024, and no impairment was identified. We calculate the fair value of our reporting units by considering various factors, including valuation studies based primarily on a discounted cash flow analysis, with published industry valuations and market data as supporting information. Key assumptions in the determination of fair value include the use of an appropriate discount rate and estimated future cash flows. In estimating cash flows, we incorporate expected long-term growth rates in our service territory, regulatory stability, and commodity prices (where appropriate), as well as other factors that affect our revenue, expense and capital expenditure projections.

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill by segment is as follows (in thousands): |  |  |
|  | **December 31,** |  |
|  | **2024** | **2023** |
| Electric | $243558 | $243558 |
| Natural gas | 114028 | 114028 |
| **Total Goodwill** | $357586 | $357586 |

---

------

**(8) Risk Management and Hedging Activities**

**<u>Nature of Our Business and Associated Risks</u>**

We are exposed to certain risks related to the ongoing operations of our business, including the impact of market fluctuations in the price of electricity and natural gas commodities and changes in interest rates. We rely on market purchases to fulfill a portion of our electric and natural gas supply requirements. Several factors influence price levels and volatility. These factors include, but are not limited to, seasonal changes in demand, weather conditions, available generating assets within regions, transportation availability and reliability within and between regions, fuel availability, market liquidity, and the nature and extent of current and potential federal and state regulations.

**<u>Objectives and Strategies for Using Derivatives</u>**

To manage our exposure to fluctuations in commodity prices we routinely enter into derivative contracts. These types of contracts are included in our electric and natural gas supply portfolios and are used to manage price volatility risk by taking advantage of fluctuations in market prices. While individual contracts may be above or below market value, the overall portfolio approach is intended to provide greater price stability for consumers. We do not maintain a trading portfolio, and our derivative transactions are only used for risk management purposes consistent with regulatory guidelines.

In addition, we may use interest rate swaps to manage our interest rate exposures associated with new debt issuances or to manage our exposure to fluctuations in interest rates on variable rate debt.

**<u>Accounting for Derivative Instruments</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We evaluate new and existing transactions and agreements to determine whether they are derivatives. The permitted accounting treatments include: normal purchase normal sale (NPNS); cash flow hedge; fair value hedge; and mark-to-market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mark-to-market accounting is the default accounting treatment for all derivatives unless they qualify, and we specifically designate them, for one of the other accounting treatments. Derivatives designated for any of the elective accounting treatments must meet specific, restrictive criteria both at the time of designation and on an ongoing basis. The changes in the fair value of recognized derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and the type of hedge transaction.

**<u>Normal Purchases and Normal Sales</u>**

We have applied the NPNS scope exception to our contracts involving the physical purchase and sale of gas and electricity at fixed prices in future periods. During our normal course of business, we enter into full-requirement energy contracts, power purchase agreements and physical capacity contracts, which qualify for NPNS. All of these contracts are accounted for using the accrual method of accounting; therefore, there were no unrealized amounts recorded in the Consolidated Financial Statements at December 31, 2024 and 2023. Revenues and expenses from these contracts are reported on a gross basis in the appropriate revenue and expense categories as the commodities are received or delivered.

**<u>Credit Risk</u>**

Credit risk is the potential loss resulting from counterparty non-performance under an agreement. We manage credit risk with policies and procedures for, among other things, counterparty analysis and exposure measurement, monitoring and mitigation. We limit credit risk in our commodity and interest rate derivatives activities by assessing the creditworthiness of potential counterparties before entering into transactions with them and continuing to evaluate their creditworthiness on an ongoing basis.

We are exposed to credit risk through buying and selling electricity and natural gas to serve customers. We may request collateral or other security from our counterparties based on the assessment of creditworthiness and expected credit exposure. It is possible that volatility in commodity prices could cause us to have material credit risk exposures with one or more counterparties. We enter into commodity master enabling agreements with our counterparties to mitigate credit exposure, as these agreements reduce the risk of default by allowing us or our counterparty the ability to make net payments. The agreements generally are: (1) Western Systems Power Pool agreements – standardized power purchase and sales contracts in the electric industry; (2) International Swaps and Derivatives Association agreements – standardized financial gas and electric contracts; (3) North American Energy Standards Board agreements – standardized physical gas contracts; and (4) Edison Electric Institute Master Purchase and Sale Agreements – standardized power sales contracts in the electric industry.

Many of our forward purchase contracts contain provisions that require us to maintain an investment grade credit rating from each of the major credit rating agencies. If our credit rating were to fall below investment grade, the counterparties could require immediate payment or demand immediate and ongoing full overnight collateralization on contracts in net liability positions.

------

**<u>Interest Rate Swaps Designated as Cash Flow Hedges</u>**

We have previously used interest rate swaps designated as cash flow hedges to manage our interest rate exposures associated with new debt issuances. We have no interest rate swaps outstanding. These swaps were designated as cash flow hedges with the effective portion of gains and losses, net of associated deferred income tax effects, recorded in AOCL. We reclassify these gains from AOCL into interest expense during the periods in which the hedged interest payments occur. The following table shows the effect of these interest rate swaps previously terminated on the Consolidated Financial Statements (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Location of Amount Reclassified** | |
| **Cash Flow Hedges** | **Location of Amount Reclassified** | |
| **Cash Flow Hedges** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**from AOCL to Income** | **Amount Reclassified from**<br>**AOCL into Income during the**<br>**Year Ended December 31, 2023** |
| Interest rate contracts | Interest Expense | $612 |

---

A pre-tax loss of approximately $12.2 million is remaining in AOCL as of December 31, 2024, and we expect to reclassify approximately $0.6 million of pre-tax losses from AOCL into interest expense during the next twelve months. These amounts relate to terminated swaps.

**(9) Fair Value Measurements**

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., an exit price). Measuring fair value requires the use of market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, corroborated by market data, or generally unobservable. Valuation techniques are required to maximize the use of observable inputs and minimize the use of unobservable inputs.

Applicable accounting guidance establishes a hierarchy that prioritizes the inputs used to measure fair value, and requires fair value measurements to be categorized based on the observability of those inputs. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). The three levels of the fair value hierarchy are as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 1 – Unadjusted quoted prices available in active markets at the measurement date for identical assets or liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 2 – Pricing inputs, other than quoted prices included within Level 1, which are either directly or indirectly observable as of the reporting date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Level 3 – Significant inputs that are generally not observable from market activity.

We classify assets and liabilities within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement of each individual asset and liability taken as a whole. Due to the short-term nature of cash and cash equivalents, accounts receivable, net, accounts payable, and short-term borrowings, the carrying amount of each such item approximates fair value. The table below sets forth by level within the fair value hierarchy the gross components of our assets and liabilities measured at fair value on a recurring basis. NPNS transactions are not included in the fair values by source table as they are not recorded at fair value. See <u>Note 8 - Risk Management and Hedging Activities</u> for further discussion.

We record transfers between levels of the fair value hierarchy, if necessary, at the end of the reporting period. There were no transfers between levels for the periods presented.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **Significant Other** |  |  |  |
|  | | **Significant Other** | **Significant Unobservable** | **Margin Cash Collateral** |  |
| **December 31, 2024** | | **Observable Inputs (Level** | **Significant Unobservable** | **Margin Cash Collateral** | **Total Net Fair Value** |
| **December 31, 2024** | **Quoted Prices in Active**<br>**Markets for Identical**<br>**Assets or**<br>**Liabilities (Level 1)** | **2)** | **Inputs (Level 3)** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Offset** | **Total Net Fair Value** |
|  |  |  | **(in thousands)** |  |  |
| Restricted cash equivalents | $1076 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $1076 |
| Rabbi trust investments | 18749 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | 18749 |
| **Total** | $**19825** | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**—** | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**—** | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**—** | $**19825** |
| **December 31, 2023** |  |  |  |  |  |
| Restricted cash equivalents | $14996 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $14996 |
| Rabbi trust investments | 17093 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | 17093 |
| **Total** | $**32089** | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**—** | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**—** | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**—** | $**32089** |

---

Restricted cash equivalents represents amounts held in money market mutual funds. Rabbi trust investments represent assets held for non-qualified deferred compensation plans, which consist of our common stock and actively traded mutual funds with quoted prices in active markets.

------

**Financial Instruments**

The estimated fair value of financial instruments is summarized as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2024** | **December 31, 2023** | **December 31, 2023** |
| | &nbsp;&nbsp;**Carrying Amount** | **Fair Value** | **Carrying Amount** | **Fair Value** |
| **Liabilities:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Long-term debt | $2995293 | $2645779 | $2784585 | $2521030 |

---

The estimated fair value amounts have been determined using available market information and appropriate valuation methodologies; however, considerable judgment is required in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we would realize in a current market exchange.

We determined fair value for long-term debt based on interest rates that are currently available to us for issuance of debt with similar terms and remaining maturities, except for publicly traded debt, for which fair value is based on market prices for the same or similar issues or upon the quoted market prices of U.S. treasury issues having a similar term to maturity, adjusted for our bond issuance rating and the present value of future cash flows. These are significant other observable inputs, or level 2 inputs, in the fair value hierarchy.

**(10) Short-Term Borrowings and Credit Arrangements**

**<u>Short-Term Borrowings</u>**

On April 12, 2024, NorthWestern Energy Group entered into a $100.0 million Term Loan Credit Agreement (Term Loan) with a maturity date of April 11, 2025. Borrowings may be made at a variable interest rate equal to the Secured Overnight Financing Rate plus an applicable margin as provided in the Term Loan. These proceeds were used to repay a portion of our outstanding revolving credit facility borrowings and for general corporate purposes. The Term Loan provides for prepayment of the principal and interest; however, amounts prepaid may not be reborrowed. The Term Loan requires us to maintain a consolidated indebtedness to total capitalization ratio of 65 percent or less. It also contains covenants which, among other things, limit our ability to engage in any consolidation or merger or otherwise liquidate or dissolve, dispose of property, and restricts certain affiliate transactions. A default on the South Dakota or Montana First Mortgage Bonds would trigger a cross default on the Term Loan; however a default on the Term Loan would not trigger a default on the South Dakota or Montana First Mortgage Bonds.

**<u>Credit Facility</u>**

On November 29, 2023, NW Corp amended its existing $425.0 million revolving credit facility (the Amended Facility) to address the holding company reorganization and extended the maturity date of the facility to November 29, 2028. The Amended Facility does not amortize and is unsecured. Borrowings may be made at interest rates equal to (a) SOFR, plus a credit spread adjustment of 10.0 basis points plus a margin of 100.0 to 175.0 basis points, or (b) a base rate, plus a margin of 0.0 to 75.0 basis points. After the completion of the holding company reorganization on January 1, 2024, NW Corp owns and operates only the Montana regulated utility, and the base capacity of the Amended Facility automatically reduced to $400.0 million. The Amended Facility has uncommitted features that allow NW Corp to request one-year extensions to the maturity date and increase the size of the Amended Facility by an additional $100.0 million.

On January 24, 2025, NW Corp amended its existing $400.0 million Amended Facility to increase the capacity to $425.0 million. This amendment did not affect the maturity date or borrowing rates.

On March 25, 2023, we amended our existing $25.0 million swingline credit facility (the Swingline Facility) to extend the maturity date of the facility from March 27, 2024 to March 27, 2025. The Swingline Facility does not amortize and is unsecured. Borrowings may be made at interest rates equal to (a) SOFR, plus a margin of 90.0 basis points, or (b) a base rate, plus a margin of 12.5 basis points. As of December 31, 2023, there were no amounts outstanding under this Swingline Facility.

On January 2, 2024, NW Corp terminated its $100.0 million Additional Credit Facility. On January 4, 2024, NW Corp terminated its $25.0 million Swingline Facility.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November 29, 2023, NorthWestern Energy Group and its subsidiary, NWE Public Service, entered into a new $200.0 million unsecured revolver credit facility with base sublimits of $50.0 million for NorthWestern Energy Group and $150.0 million for NWE Public Service (the HoldCo and NWE Public Service Credit Facility). The HoldCo and NWE Public Service Credit Facility has a maturity date of November 29, 2028. Upon the completion of the holding company reorganization on January 1, 2024, this credit facility became effective. The HoldCo and NWE Public Service Credit Facility has uncommitted features that allow both NorthWestern Energy Group and NWE Public Service to request one-year extensions to the maturity date and increase the size of the credit facility by an additional $50 million. The credit facility also gives us the flexibility to adjust the sublimits as needed, provided that NorthWestern Energy Group's base sublimit cannot exceed $100.0 million and NWE Public Service's sublimit cannot exceed $200.0 million. Borrowings may be made at interest rates equal to (a) SOFR, plus a credit spread adjustment of 10.0 basis points plus a margin of 100.0 to 175.0 basis points, or (b) a base rate, plus a margin of 0.0 to 75.0 basis points.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

Commitment fees for the unsecured revolving lines of credit were $0.7 million and $0.6 million for the years ended December 31, 2024 and 2023.

The availability under the facilities in place for the years ended December 31 is shown in the following table (in millions):

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| Unsecured revolving line of credit, expiring November 2028 | 600.0 | 425.0 |
| Unsecured revolving line of credit, expiring April 2024 |  | 100.0 |
| Unsecured revolving line of credit, expiring March 2025 |  | 25.0 |
|  | **600.0** | **550.0** |
| **Amounts outstanding at December 31:** |  |  |
| SOFR borrowings | 413.0 | 318.0 |
| Letters of credit |  |  |
|  | **413.0** | **318.0** |
| **Net availability as of December 31** | $**187.0** | $**232.0** |

---

Our credit facilities include covenants that require us to meet certain financial tests, including a maximum debt to capitalization ratio not to exceed 65 percent. The facilities also contain covenants which, among other things, limit our ability to engage in any consolidation or merger or otherwise liquidate or dissolve, dispose of property, and enter into transactions with affiliates. A default on the Montana First Mortgage Bonds would trigger a cross default on the Amended Facility; however, a default on the Amended Facility would not trigger a default on the Montana First Mortgage Bonds. A default on the South Dakota First Mortgage Bonds would trigger a cross default on the NWE Public Service sublimit of the HoldCo and NWE Public Service Credit Facility; however, a default on the HoldCo and NWE Public Service Credit Facility would not trigger a default on the South Dakota First Mortgage Bonds.

------

**(11) Long-Term Debt and Finance Leases**

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt and finance leases consisted of the following (in thousands): | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt and finance leases consisted of the following (in thousands): |  |  |  |
|  |  |  | **December 31,** |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Due** |  | **2024** | **2023** |
| **Unsecured Debt:** |  |  |  |  |
| Unsecured Revolving Line of Credit | Unsecured Revolving Line of Credit | 2028 | 413000 | 318000 |
| **Secured Debt:** |  |  |  |  |
| Mortgage bonds— | Mortgage bonds— |  |  |  |
| South Dakota—5.01% | South Dakota—5.01% | 2025 | 64000 | 64000 |
| South Dakota—2.80% | South Dakota—2.80% | 2026 | 60000 | 60000 |
| South Dakota—2.66% | South Dakota—2.66% | 2026 | 45000 | 45000 |
| South Dakota—5.55% | South Dakota—5.55% | 2029 | 33000 |  |
| South Dakota—3.21% | South Dakota—3.21% | 2030 | 50000 | 50000 |
| South Dakota—5.57% | South Dakota—5.57% | 2033 | 31000 | 31000 |
| South Dakota—5.42% | South Dakota—5.42% | 2033 | 30000 | 30000 |
| South Dakota—5.75% | South Dakota—5.75% | 2034 | 7000 |  |
| South Dakota—4.26% | South Dakota—4.26% | 2040 | 70000 | 70000 |
| South Dakota—4.15% | South Dakota—4.15% | 2042 | 30000 | 30000 |
| South Dakota—4.85% | South Dakota—4.85% | 2043 | 50000 | 50000 |
| South Dakota—4.22% | South Dakota—4.22% | 2044 | 30000 | 30000 |
| South Dakota—4.30% | South Dakota—4.30% | 2052 | 20000 | 20000 |
| Montana—1.00% | Montana—1.00% | 2024 |  | 100000 |
| Montana—5.01% | Montana—5.01% | 2025 | 161000 | 161000 |
| Montana—3.11% | Montana—3.11% | 2025 | 75000 | 75000 |
| Montana—3.99% | Montana—3.99% | 2028 | 35000 | 35000 |
| Montana—3.21% | Montana—3.21% | 2030 | 100000 | 100000 |
| Montana—5.56% | Montana—5.56% | 2031 | 175000 |  |
| Montana—5.57% | Montana—5.57% | 2033 | 239000 | 239000 |
| Montana—5.71% | Montana—5.71% | 2039 | 55000 | 55000 |
| Montana—4.15% | Montana—4.15% | 2042 | 60000 | 60000 |
| Montana—4.85% | Montana—4.85% | 2043 | 15000 | 15000 |
| Montana—4.176% | Montana—4.176% | 2044 | 450000 | 450000 |
| Montana—4.11% | Montana—4.11% | 2045 | 125000 | 125000 |
| Montana—4.03% | Montana—4.03% | 2047 | 250000 | 250000 |
| Montana—3.98% | Montana—3.98% | 2049 | 150000 | 150000 |
| Montana—4.30% | Montana—4.30% | 2052 | 40000 | 40000 |
| Pollution control obligations— | Pollution control obligations— |  |  |  |
| Montana—3.88% | Montana—3.88% | 2028 | 144660 | 144660 |
| **Other Long Term Debt:** | **Other Long Term Debt:** |  |  |  |
| Discount on Notes and Bonds and Debt Issuance Costs, Net | Discount on Notes and Bonds and Debt Issuance Costs, Net | &nbsp;&nbsp;&nbsp;&nbsp;— | (12367) | (13075) |
| **Total Long-Term Debt** | **Total Long-Term Debt** |  | $2995293 | $2784585 |
| Less current maturities (including associated debt issuance costs) | Less current maturities (including associated debt issuance costs) |  |  |  |
| Less current maturities (including associated debt issuance costs) | Less current maturities (including associated debt issuance costs) |  | (299950) | (99950) |
| **Total Long-Term Debt, Net of Current Maturities** | **Total Long-Term Debt, Net of Current Maturities** |  | $2695343 | $2684635 |
| **Finance Leases:** |  |  |  |  |
| Total Finance Leases | Total Finance Leases | 2026 | $5461 | $8799 |
| Less current maturities | Less current maturities |  | (3596) | (3338) |
| **Total Long-Term Finance Leases** | **Total Long-Term Finance Leases** |  | $1865 | $5461 |

---

**<u>Secured Debt</u>**

***First Mortgage Bonds and Pollution Control Obligations***

The South Dakota First Mortgage Bonds are a series of general obligation bonds issued under our South Dakota indenture. These bonds are secured by substantially all of our South Dakota and Nebraska electric and natural gas assets. The South Dakota indenture was transferred from NW Corp to NWE Public Service upon the completion of the holding company reorganization on January 1, 2024.

The Montana First Mortgage Bonds are a series of general obligation bonds issued under our Montana indenture. These bonds are secured by substantially all of our Montana electric and natural gas assets.

------

On March 30, 2023, we issued and sold $239.0 million aggregate principal amount of Montana First Mortgage Bonds (the bonds) at a fixed interest rate of 5.57 percent maturing on March 30, 2033. On this same day, we issued and sold $31.0 million

aggregate principal amount of South Dakota First Mortgage Bonds at a fixed interest rate of 5.57 percent maturing on March 30, 2033. On May 1, 2023, we issued and sold an additional $30 million aggregate principal amount of South Dakota First Mortgage Bonds at a fixed interest rate of 5.42 percent maturing on May 1, 2033. These bonds were issued in transactions exempt from the registration requirements of the Securities Act of 1933. Proceeds were used to repay a portion of our outstanding borrowings under our revolving credit facilities and for other general corporate purposes.

On June 29, 2023, the City of Forsyth, Rosebud County, Montana issued $144.7 million principal amount of Pollution Control Revenue Refunding Bonds (2023 Pollution Control Bonds) on our behalf. The 2023 Pollution Control Bonds were issued at a fixed interest rate of 3.88 percent maturing on July 1, 2028. The proceeds of the issuance were loaned to us pursuant to a Loan Agreement and were deposited directly with U.S. Bank Trust Company, National Association, as trustee, for the redemption of the 2.00 percent, $144.7 million City of Forsyth Pollution Control Revenue Refunding Bonds due on August 1, 2023 that had previously been issued on our behalf. Pursuant to the Loan Agreement, we are obligated to make payments in such amounts and at such times as will be sufficient to pay, when due, the principal and interest on the 2023 Pollution Control Bonds. Our obligations under the Loan Agreement are secured by delivery of a like amount of our Montana First Mortgage Bonds, which are secured by our Montana electric and natural gas assets. So long as we are making payments under the Loan Agreement, no payments under these mortgage bonds will be due. The 2023 Pollution Control Bonds were issued in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended.

On March 28, 2024, NW Corp issued and sold $175.0 million aggregate principal amount of Montana First Mortgage Bonds at a fixed interest rate of 5.56 percent maturing on March 28, 2031. These bonds were issued in transactions exempt from the registration requirements of the Securities Act of 1933. Proceeds were used to redeem NW Corp's $100.0 million of Montana First Mortgage Bonds due this year and for other general utility purposes. The bonds are secured by NW Corp's electric and natural gas assets associated with its Montana utility operations.

On March 28, 2024, NWE Public Service issued and sold $33.0 million aggregate principal amount of South Dakota First Mortgage Bonds at a fixed interest rate of 5.55 percent maturing on March 28, 2029, and $7.0 million aggregate principal amount of South Dakota First Mortgage Bonds at a fixed interest rate of 5.75 percent maturing on March 28, 2034. These bonds were issued in transactions exempt from the registration requirements of the Securities Act of 1933. Proceeds were used for general utility purposes. The bonds are secured by NWE Public Service's electric and natural gas assets associated with its South Dakota and Nebraska utility operations.

As of December 31, 2024, we were in compliance with our financial debt covenants.

**<u>Maturities of Long-Term Debt</u>**

The aggregate minimum principal maturities of long-term debt and finance leases, during the next five years are $303.6 million in 2025, $106.9 million in 2026, $592.7 million in 2028, and $33.0 million in 2029.

**(12) Income Taxes**

Income tax (benefit) expense is comprised of the following (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Year Ended December 31,** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Year Ended December 31,** |  |
|  | **2024** | **2023** | **2022** |
| Federal |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current | $(8121) | $2925 | $5024 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred | (3807) | 2929 | (5993) |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment tax credits | 1970 | (129) | (130) |
| State |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current | (41) | (1971) | 3363 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred | 560 | 3785 | (2869) |
| **Income Tax (Benefit) Expense** | $(9439) | $7539 | $(605) |
| Deferred income tax expense is comprised of the following (in thousands): |  |  |  |
| Deferred income tax expense is comprised of the following (in thousands): |  |  |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Year Ended December 31,** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Year Ended December 31,** |  |
|  | **2024** | **2023** | **2022** |
| Deferred tax expense excluding items below | $54950 | $61537 | $39349 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to other noncurrent liabilities, regulatory assets, and liabilities | (65596) | (54732) | (48428) |
| &nbsp;&nbsp;&nbsp;&nbsp;Tax (benefit) expense allocated to other comprehensive income | (293) | (91) | 217 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to deferred income taxes for production tax credit cash transfer | 7692 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Investment tax credits | 1970 | (129) | (130) |
| **Deferred tax (benefit) expense** | $(1277) | $6585 | $(8992) |

---

------

Our effective tax rate typically differs from the federal statutory tax rate primarily due to the regulatory impact of flowing through the federal and state tax benefit of repairs deductions, state tax benefit of accelerated tax depreciation deductions (including bonus depreciation when applicable), and production tax credits. The regulatory accounting treatment of these deductions requires immediate income recognition for temporary tax differences of this type, which is referred to as the flow-through method. When the flow-through method of accounting for temporary differences is reflected in regulated revenues, we record deferred income taxes and establish related regulatory assets and liabilities.

The following table reconciles our effective income tax rate to the federal statutory rate:

**Year Ended December 31,**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **2024** | **2023** |  | **2022** |
| Federal statutory rate |  | 21.0% | 21.0% | 21.0% |
| State income tax, net of federal provisions | State income tax, net of federal provisions | 0.2 | 0.3 | 0.3 |
| Flow-through repairs deductions | Flow-through repairs deductions | (10.8) | (12.9) | (12.4) |
| Release of unrecognized tax benefits (inclusive of related interest previously | Release of unrecognized tax benefits (inclusive of related interest previously |  |  |  |
| accrued) | accrued) | (9.8) | (1.6) |  |
| Production tax credits | Production tax credits | (5.2) | (5.1) | (7.2) |
| Gas repairs safe harbor method change | Gas repairs safe harbor method change | (3.3) |  |  |
| Amortization of excess deferred income taxes | Amortization of excess deferred income taxes | (1.4) | (1.1) | (0.9) |
| Prior year permanent return to accrual adjustments | Prior year permanent return to accrual adjustments | (0.2) |  | (0.8) |
| Plant and depreciation of flow through items | Plant and depreciation of flow through items | 4.4 | 3.3 | (0.1) |
| Unregulated Tax Cuts and Jobs Act excess deferred income taxes | Unregulated Tax Cuts and Jobs Act excess deferred income taxes |  | (1.7) |  |
| Reduction to previously claimed alternative minimum tax credit | Reduction to previously claimed alternative minimum tax credit |  | 1.6 |  |
| Other, net |  | 0.7 | (0.1) | (0.2) |
| **Effective tax rate** | **Effective tax rate** | (4.4)% | 3.7% | (0.3)% |

---

The table below summarizes the significant differences in income tax expense (benefit) based on the differences between our effective tax rate and the federal statutory rate (in thousands). All of our income from continuing operations is primarily from domestic operations.

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** |  |
|  | **2024** | **2023** | **2022** |
| Income Before Income Taxes | $214672 | $201670 | $182403 |
| Income tax calculated at federal statutory rate | 45081 | 42350 | 38304 |
| Permanent or flow through adjustments: |  |  |  |
| State income, net of federal provisions | 374 | 606 | 562 |
| Flow-through repairs deductions | (23132) | (25922) | (22665) |
| Release of unrecognized tax benefits (2024 is inclusive of $4.1 million of related |  |  |  |
| interest previously accrued) | (20993) | (3241) |  |
| Production tax credits | (11069) | (10274) | (13166) |
| Gas repairs safe harbor method change | (6994) |  |  |
| Amortization of excess deferred income taxes | (2930) | (2184) | (1657) |
| Prior year permanent return to accrual adjustments | (433) | 45 | (1397) |
| Plant and depreciation of flow through items | 9360 | 6595 | (222) |
| Unregulated Tax Cuts and Jobs Act excess deferred income taxes |  | (3385) |  |
| Reduction to previously claimed alternative minimum tax credit |  | 3186 |  |
| Other, net | 1297 | (237) | (364) |
|  | (54520) | (34811) | (38909) |
| **Income Tax (Benefit) Expense** | $(9439) | $7539 | $(605) |

---

In 2023, the Internal Revenue Service (IRS) issued a safe harbor method of accounting for the repair and maintenance of natural gas transmission and distribution property. For the year ending December 31, 2024, after completion of our impact analysis of the gas repairs safe harbor method change, we recorded an income tax benefit of approximately $7.0 million related to tax deductions for repair costs that were previously capitalized in the 2022 and prior tax years.

------

The components of the net deferred income tax liability recognized in our Consolidated Balance Sheets are related to the following temporary differences (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31,** |  |
|  | **2024** | **2023** |
| NOL carryforward | $123043 | $113366 |
| Production tax credit | 97695 | 94283 |
| Customer advances | 32455 | 28300 |
| Compensation accruals | 12717 | 10716 |
| Pension / postretirement benefits | 9078 | 15131 |
| Unbilled revenue | 6477 | 10604 |
| Environmental liability | 5415 | 5760 |
| Interest rate hedges | 2985 | 3280 |
| Reserves and accruals | 2252 | 3098 |
| Other, net | 3369 | 2677 |
| **Deferred Tax Asset** | **295486** | **287215** |
| Excess tax depreciation | (713416) | (660440) |
| Flow through depreciation | (132944) | (120558) |
| Goodwill amortization | (89827) | (88323) |
| Regulatory assets and other | (22729) | (18414) |
| **Deferred Tax Liability** | **(958916)** | **(887735)** |
| **Deferred Tax Liability, net** | $**(663430)** | $**(600520)** |

---

As of December 31, 2024, our total federal NOL carryforward was approximately $486.6 million. Our federal NOL carryforward does not expire. Our state NOL carryforward as of December 31, 2024 was approximately $391.2 million. If unused, our state NOL carryforwards will expire in 2033. We believe it is more likely than not that sufficient taxable income will be generated to utilize these NOL carryforwards.

At December 31, 2024, our total production tax credit carryforward was approximately $97.7 million. If unused, our production tax credit

carryforwards will expire as follows: $1.8 million in 2035, $10.9 million in 2036, $11.1 million in 2037, $10.9 million in 2038, $11.5 million in 2039, $13.1 million in 2040, $11.5 million in 2041, $13.2 million in 2042, $2.6 million in 2043, and $11.1 million in 2044. We believe it is more likely than not that sufficient taxable income will be generated to utilize these production tax credit carryforwards.

**<u>Unrecognized Tax Benefits</u>**

We recognize tax positions that meet the more-likely-than-not threshold as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. The change in unrecognized tax benefits is as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **2024** | **2023** | **2022** |
| Unrecognized Tax Benefits at January 1 | $28074 | $30330 | $32049 |
| &nbsp;&nbsp;&nbsp;Gross increases - tax positions in prior period |  |  |  |
| &nbsp;&nbsp;&nbsp;Gross increases - tax positions in current period |  |  |  |
| &nbsp;&nbsp;&nbsp;Gross decreases - tax positions in current period | (1574) | (2256) | (1719) |
| &nbsp;&nbsp;&nbsp;Lapse of statute of limitations | (16888) |  |  |
| **Unrecognized Tax Benefits at December 31** | $9612 | $28074 | $30330 |

---

Our unrecognized tax benefits include approximately $7.4 million and $24.4 million related to tax positions as of December 31, 2024 and 2023, that if recognized, would impact our annual effective tax rate. During the year ending December 31, 2024, due to the expiration of the statute of limitations we decreased our unrecognized tax benefits by $16.9 million. On April 14, 2023, the Internal Revenue Service (IRS) issued Revenue Procedure 2023-15, which provides a safe harbor method of accounting for gas repairs expenditures. During the year ended December 31, 2023, we adopted this method and decreased our total unrecognized tax benefits by $0.5 million and recognized an income tax benefit of approximately $3.2 million for previously unrecognized tax benefits. In the next twelve months we expect the statute of limitations to expire for certain unrecognized tax benefits, which would result in a decrease to our total unrecognized tax benefits of approximately $9.4 million.

Our policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense. As of December 31, 2024, we have accrued $3.0 million for the payment of interest and penalties in the Consolidated Balance Sheets. As of December 31, 2023, we had $4.5 million accrued for the payment of interest and penalties.

Tax years 2021 and forward remain subject to examination by the IRS and state taxing authorities. During the first quarter of 2023 the IRS commenced and concluded a limited scope examination of our 2019 amended federal income tax return. This examination resulted in a reduction to our previously claimed alternative minimum tax credit refund that is reflected in the table above.

------

**(13) Comprehensive Income (Loss)**

The following tables display the components of Other Comprehensive Income (Loss), after-tax, and the related tax effects (in thousands):

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  |  | **2024** |  |  | **2023** |  |  | **2022** |  |
|  | **Before-Tax** | **Tax** | **Net-of-Tax** | **Before-Tax** | **Tax Expense** | **Net-of-Tax** | **Before-Tax** | **Tax Expense** | **Net-of-Tax** |
|  | **Before-Tax** | **Expense** | **Net-of-Tax** | **Before-Tax** | **Tax Expense** | **Net-of-Tax** | **Before-Tax** | **Tax Expense** | **Net-of-Tax** |
|  | **Amount** | **Expense** | **Amount** | **Amount** | **Tax Expense** | **Amount** | **Amount** | **Tax Expense** | **Amount** |
|  | **Amount** | **(Benefit)** | **Amount** | **Amount** | **(Benefit)** | **Amount** | **Amount** | **(Benefit)** | **Amount** |
| | | **(Benefit)** | | | **(Benefit)** | | | **(Benefit)** | |
| Foreign currency |  |  |  |  |  |  |  |  |  |
| translation adjustment | $(4) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $(4) | $2 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— | $2 | $(8) | $— | $(8) |
| Reclassification of net |  |  |  |  |  |  |  |  |  |
| income (loss) on |  |  |  |  |  |  |  |  |  |
| derivative instruments | 612 | (160) | 452 | 612 | (160) | 452 | 612 | (160) | 452 |
| Postretirement medical |  |  |  |  |  |  |  |  |  |
| liability adjustment | 637 | (133) | 504 | (331) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;69 | (262) | (1359) | 377 | (982) |
| **Other comprehensive** | $1245 | $(293) | $952 | $283 | $(91) | $192 | $(755) | $217 | $(538) |
| **income (loss)** | $1245 | $(293) | $952 | $283 | $(91) | $192 | $(755) | $217 | $(538) |

---

Balances by classification included within AOCL on the Consolidated Balance Sheets are as follows, net of tax (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31,** |  |
| Foreign currency translation |  | **2023** |
| Foreign currency translation | $1433 | $1437 |
| Derivative instruments designated as cash flow hedges | (8921) | (9373) |
| Postretirement medical plans | 784 | 280 |
| **Accumulated other comprehensive loss** | $(6704) | $(7656) |

---

The following table displays the changes in AOCL by component, net of tax (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **31-Dec-24** | **31-Dec-24** | **31-Dec-24** | **31-Dec-24** |
|  | | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** |
|  | <br>**Affected Line Item in the Consolidated Statements of Income** | **Interest Rate Derivative Instruments Designated as Cash Flow Hedges** | **Postretirement Medical Plans** | **Foreign Currency Translation** | **Total** |
| Beginning balance |  | $(9373) | $280 | $1437 | $(7656) |
| Other comprehensive loss before reclassifications |  |  |  | (4) | (4) |
| Amounts reclassified from AOCL | Interest Expense | 452 |  |  | 452 |
| Amounts reclassified from AOCL |  |  | 504 |  | 504 |
| Net current-period other comprehensive income (loss) |  | 452 | 504 | (4) | 952 |
| **Ending Balance** |  | $(8921) | $784 | $1433 | $(6704) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | | **31-Dec-23** | **31-Dec-23** | **31-Dec-23** | **31-Dec-23** |
|  | | **Year Ended** | **Year Ended** | **Year Ended** | **Year Ended** |
|  | <br>**Affected Line Item in the Consolidated Statements of Income** | **Interest Rate Derivative Instruments Designated as Cash Flow Hedges** | **Postretirement Medical Plans** | **Foreign Currency Translation** | **Total** |
| Beginning balance |  | $(9825) | $542 | $1435 | $(7848) |
| Other comprehensive loss before reclassifications |  |  |  | 2 | 2 |
| Amounts reclassified from AOCL | Interest Expense | 452 |  |  | 452 |
| Amounts reclassified from AOCL |  |  | (262) |  | (262) |
| Net current-period other comprehensive income (loss) |  | 452 | (262) | 2 | 192 |
| **Ending Balance** |  | $(9373) | $280 | $1437 | $(7656) |

---

------

**(14) Employee Benefit Plans**

**<u>Pension and Other Postretirement Benefit Plans</u>**

We sponsor and/or contribute to pension, postretirement health care and life insurance benefit plans for eligible employees. The pension plan for our South Dakota and Nebraska employees is referred to as the NorthWestern Energy SD/NE Plan (formerly known as the NorthWestern Corporation Plan), the pension plan for our Montana employees is referred to as the NorthWestern Energy MT Plan (formerly known as the NorthWestern Energy Plan), and collectively they are referred to as the Plans. We utilize a number of accounting mechanisms that reduce the volatility of reported pension costs. Differences between actuarial assumptions and actual plan results are deferred and are recognized into earnings only when the accumulated differences exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets. If necessary, the excess is amortized over the average remaining service period of active employees. The Plans' funded status is recognized as an asset or liability in our Consolidated Financial Statements. See <u>Note 4 - Regulatory Assets and Liabilities</u>, for further discussion on how these costs are recovered through rates charged to our customers.

**<u>Benefit Obligations and Funded Status</u>**

Following is a reconciliation of the changes in plan benefit obligations and fair value of plan assets, and a statement of the funded status (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Pension Benefits** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Pension Benefits** | **Other Postretirement Benefits** | **Other Postretirement Benefits** |
|  | **December 31,** |  | **December 31,** |  |
|  | **2024** | **2023** | **2024** | **2023** |
| **Change in benefit obligation:** |  |  |  |  |
| Obligation at beginning of period | $473988 | $521798 | $13708 | $15407 |
| &nbsp;&nbsp;&nbsp;Service cost | 5592 | 5646 | 308 | 333 |
| &nbsp;&nbsp;&nbsp;Interest cost | 22944 | 25852 | 557 | 674 |
| &nbsp;&nbsp;&nbsp;Actuarial (gain) loss | (28499) | 3127 | (2514) | (1240) |
| &nbsp;&nbsp;Settlements<sup>(1)</sup> | (848) | (51942) |  |  |
| &nbsp;&nbsp;&nbsp;Benefits paid | (25230) | (30493) | (1333) | (1466) |
| **Benefit Obligation at End of Period** | $447947 | $473988 | $10726 | $13708 |
| **Change in fair value of plan assets:** |  |  |  |  |
| Fair value of plan assets at beginning of period | $402671 | $441539 | $22309 | $20055 |
| &nbsp;&nbsp;&nbsp;Return on plan assets | 9411 | 34367 | 3177 | 3334 |
| &nbsp;&nbsp;&nbsp;Employer contributions | 9322 | 9200 | 619 | 386 |
| &nbsp;&nbsp;Settlements<sup>(1)</sup> | (848) | (51942) |  |  |
| &nbsp;&nbsp;&nbsp;Benefits paid | (25230) | (30493) | (1333) | (1466) |
| Fair value of plan assets at end of period | $395326 | $402671 | $24772 | $22309 |
| **Funded Status** | $(52621) | $(71317) | $14046 | $8601 |

---

**<u>Amounts Recognized in the Balance Sheet Consist of:</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Noncurrent asset | 9467 | 7875 | 16943 | 12378 |
| **Total Assets** | 9467 | 7875 | 16943 | 12378 |
| &nbsp;&nbsp;&nbsp;Current liability | (10000) | (11200) | (1310) | (1355) |
| &nbsp;&nbsp;&nbsp;Noncurrent liability | (52088) | (67992) | (1587) | (2422) |
| **Total Liabilities** | (62088) | (79192) | (2897) | (3777) |
| **Net amount recognized** | $(52621) | $(71317) | $14046 | $8601 |
| **Amounts Recognized in Regulatory Assets Consist of:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Prior service credit |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net actuarial (loss) gain | (31835) | (44453) | 3716 | 15 |
| **Amounts recognized in AOCL consist of:** |  |  |  |  |
| Prior service cost |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net actuarial gain |  |  | 1228 | 590 |
| **Total** | $(31835) | $(44453) | $4944 | $605 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)In October 2023, we entered into a group annuity contract from an insurance company to provide for the payment of pension benefits to select NorthWestern Energy MT Pension Plan participants. We purchased the contract with $51.9 million of plan assets in 2023. A trailing premium of $0.8 million related to final data reconciliation was paid from plan assets in 2024, reflecting a final, annuitized participant count of 276. The insurance company took over the payments of these benefits starting January 1, 2024. This transaction settled $52.7 million of our NorthWestern Energy MT Pension Plan obligation. As a result of this transaction, during the twelve months ended December 31, 2023, we recorded a non-cash, non-operating settlement charge of $4.4 million. This charge is recorded within other income, net on the Consolidated Statements of Income. As discussed within <u>Note 4 – Regulatory Assets and Liabilities</u>, the MPSC allows recovery of pension costs on a cash funding basis. As such, this charge was deferred as a regulatory asset on the Consolidated Balance Sheets, with a corresponding decrease to operating and maintenance expense on the Consolidated Statements of Income.

------

The actuarial gain/loss is primarily due to the change in discount rate assumption and actual asset returns compared with expected amounts. The total projected benefit obligation and fair value of plan assets for the NorthWestern Energy MT Pension Plan with accumulated benefit obligations in excess of plan assets were as follows (in millions):

---

| | | |
|:---|:---|:---|
|  | **NorthWestern Energy MT Pension Plan** | **NorthWestern Energy MT Pension Plan** |
|  | **December 31,** | **December 31,** |
|  |  | **2023** |
| Projected benefit obligation | $404.8 | $427.3 |
| Accumulated benefit obligation | 404.8 | 427.3 |
| Fair value of plan assets | 342.7 | 348.1 |

---

As of December 31, 2024, the fair value of the NorthWestern Energy SD/NE Pension Plan assets exceeds the total projected and accumulated benefit obligation and are therefore excluded from this table.

**<u>Net Periodic Cost (Credit)</u>**

The components of the net costs (credits) for our pension and other postretirement plans are as follows (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  | **Pension Benefits** |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Other Postretirement Benefits** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Other Postretirement Benefits** |  |
|  |  | **December 31,** |  |  | **December 31,** |  |
|  | **2024** | **2023** | **2022** | **2024** | **2023** | **2022** |
| **Components of net periodic benefit** |  |  |  |  |  |  |
| **cost** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Service cost | $5592 | $5646 | $10223 | $308 | $333 | $351 |
| &nbsp;&nbsp;&nbsp;Interest cost | 22944 | 25852 | 18787 | 557 | 674 | 359 |
| &nbsp;&nbsp;&nbsp;Expected return on plan assets | (25325) | (25932) | (24173) | (1280) | (1096) | (1047) |
| &nbsp;&nbsp;&nbsp;Amortization of prior service cost |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(credit) |  |  |  |  | 116 | (1891) |
| &nbsp;&nbsp;&nbsp;Recognized actuarial loss (gain) | 33 | 228 | 383 | (73) | (672) | (897) |
| &nbsp;&nbsp;Settlement loss recognized<sup>(1)</sup> |  | 4395 |  |  |  |  |
| **Net Periodic Benefit Cost (Credit)** | $3244 | $10189 | $5220 | $(488) | $(645) | $(3125) |
| &nbsp;&nbsp;&nbsp;Regulatory deferral of net periodic |  |  |  |  |  |  |
| &nbsp;&nbsp;benefit cost<sup>(2)</sup> | 4850 | (1814) | 2307 |  |  |  |
| &nbsp;&nbsp;Previously deferred costs recognized<sup>(2)</sup> | 75 | 210 |  | 181 | 550 | 292 |
| **Net Periodic Benefit Cost (Credit)** | $8169 | $8585 | $7527 | $(307) | $(95) | $(2833) |
| **Recognized** | $8169 | $8585 | $7527 | $(307) | $(95) | $(2833) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Settlement loss is related to partial annuitization of NorthWestern Energy MT Pension Plan effective October 24, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Net periodic benefit costs for pension and postretirement benefit plans are recognized for financial reporting based on the authorization of each regulatory jurisdiction in which we operate. A portion of these costs are recorded in regulatory assets and recognized in the Consolidated Statements of Income as those costs are recovered through customer rates.

For the years ended December 31, 2024, 2023, and 2022, Service costs were recorded in Operations and maintenance expense while non-service costs were recorded in Other income, net on the Consolidated Statements of Income.

For purposes of calculating the expected return on pension plan assets, the market-related value of assets is used, which is based upon fair value. The difference between actual plan asset returns and estimated plan asset returns are amortized equally over a period not to exceed five years.

**<u>Actuarial Assumptions</u>**

The measurement dates used to determine pension and other postretirement benefit measurements for the plans are December 31, 2024 and 2023. The actuarial assumptions used to compute net periodic pension cost and postretirement benefit cost are based upon information available as of the beginning of the year, specifically, market interest rates, past experience and management's best estimate of future economic conditions. Changes in these assumptions may impact future benefit costs and obligations. In computing future costs and obligations, we must make assumptions about such things as employee mortality and turnover, expected salary and wage increases, discount rate, expected return on plan assets, and expected future cost increases. Two of these assumptions have the most impact on the level of cost: (1) discount rate and (2) expected rate of return on plan assets. During 2022, the plan's actuary conducted an experience study to review five years of plan experience and update these assumptions.

------

On an annual basis, we set the discount rate using a yield curve analysis. This analysis includes constructing a hypothetical bond portfolio whose cash flow from coupons and maturities matches the year-by-year, projected benefit cash flow from our plans. The increase in the discount rate during 2024 decreased our projected benefit obligation by approximately $29.6 million.

In determining the expected long-term rate of return on plan assets, we review historical returns, the future expectations for returns for each asset class weighted by the target asset allocation of the pension and postretirement portfolios, and long-term inflation assumptions. Based on the target asset allocation for our pension assets and future expectations for asset returns, we decreased our long term rates of return on asset assumptions for the NorthWestern Energy MT Pension Plan and the NorthWestern Energy SD/NE Pension Plan to 6.17 percent and 4.58 percent, respectively, for 2025.

The weighted-average assumptions used in calculating the preceding information are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | | **Pension Benefits** | | **Other Postretirement Benefits** | **Other Postretirement Benefits** | **Other Postretirement Benefits** |
|  |  | **December 31,** |  |  | **December 31,** |  |
| | **2024** | &nbsp;&nbsp;**2023** | **2022** | **2024** | **2023** | **2022** |
| Discount rate | 5.50-5.60% | 4.95-5.00 | 5.20% | 5.30-5.45% | 4.85-4.90% | 5.15-5.20% |
| Expected rate of return on assets | 5.15-6.65 | 4.83-6.44 | 2.66-4.26 | 5.84 | 5.62 | 4.23 |
| Long-term rate of increase in compensation levels (non-union) | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 |
| Long-term rate of increase in compensation levels (union) | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 |
| Interest crediting rate | 3.3-6.0 | 3.30-6.00 | 3.30-6.00 | N/A | N/A | N/A |

---

The postretirement benefit obligation is calculated assuming that health care costs increase by a 5.00 percent fixed rate. The company contribution toward the premium cost is capped, therefore future health care cost trend rates are expected to have a minimal impact on company costs and the accumulated postretirement benefit obligation.

**<u>Investment Strategy</u>**

Our investment goals with respect to managing the pension and other postretirement assets are to meet current and future benefit payment needs while maximizing total investment returns (income and appreciation) after inflation within the constraints of diversification, prudent risk taking, Prudent Man Rule of the Employee Retirement Income Security Act of 1974 and liability-based considerations. Each plan is diversified across asset classes to achieve optimal balance between risk and return and between income and growth through capital appreciation. Our investment philosophy is based on the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Each plan should be substantially invested as long-term cash holdings reduce long-term rates of return;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Pension plan portfolio risk is described by volatility in the funded status of the Plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•It is prudent to diversify each plan across the major asset classes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Equity investments provide greater long-term returns than fixed income investments, although with greater short-term volatility;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Fixed income investments of the plans should strongly correlate with the interest rate sensitivity of the plan's aggregate liabilities in order to hedge the risk of change in interest rates negatively impacting the pension plans overall funded status, (such assets will be described as Liability Hedging Fixed Income assets);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Allocation to foreign equities increases the portfolio diversification and thereby decreases portfolio risk while providing for the potential for enhanced long-term returns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Private real estate and broad global opportunistic fixed income asset classes can provide diversification to both equity and liability hedging fixed income investments and that a moderate allocation to each can potentially improve the expected risk-adjusted return for the NorthWestern Energy MT Pension Plan investments over full market cycles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Active management can reduce portfolio risk and potentially add value through security selection strategies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•A portion of plan assets should be allocated to passive, indexed management funds to provide for greater diversification and lower cost; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•It is appropriate to retain more than one investment manager, provided that such managers offer asset class or style diversification.

Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and periodic asset/liability studies.

------

The most important component of an investment strategy is the portfolio asset mix, or the allocation between the various classes of securities available. The mix of assets is based on an optimization study that identifies asset allocation targets in order to achieve the maximum return for an acceptable level of risk, while minimizing the expected contributions and pension and postretirement expense. In the optimization study, assumptions are formulated about characteristics, such as expected asset class investment returns, volatility (risk), and correlation coefficients among the various asset classes, and making adjustments to reflect future conditions expected to prevail over the study period. Based on this, the target asset allocation established, within an allowable range of plus or minus 5 percent, is as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **NorthWestern Energy MT** | **NorthWestern Energy MT** | **NorthWestern Energy SD/NE** | **NorthWestern Energy SD/NE** | **NorthWestern Energy** | **NorthWestern Energy** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Pension** |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Pension** |  | **Health and Welfare** | **Health and Welfare** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2024** | **2023** | **2024** | **2023** | **2024** | **2023** |
| Fixed income securities | 45.0% | 45.0% | 90.0% | 90.0% | 40.0% | 40.0% |
| Non-U.S. fixed income securities |  |  |  |  |  |  |
| Opportunistic fixed income | 11.0 | 11.0 | 3.0 | 3.0 |  |  |
| Global equities | 38.5 | 38.5 | 7.0 | 7.0 | 60.0 | 60.0 |
| Private real estate | 5.5 | 5.5 |  |  |  |  |

---

The actual allocation by plan is as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **NorthWestern Energy MT** | **NorthWestern Energy MT** | **NorthWestern Energy SD/NE** | **NorthWestern Energy SD/NE** | **NorthWestern Energy** | **NorthWestern Energy** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Pension** |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Pension** |  | **Health and Welfare** | **Health and Welfare** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2024** | **2023** | **2024** | **2023** | **2024** | **2023** |
| Cash and cash equivalents | — % | — % | 0.8% | 1.5% | 0.3% | 0.2% |
| Fixed income securities<sup>(1)</sup> | 43.7 | 45.3 | 89.4 | 88.7 | 32.2 | 35.1 |
| Non-U.S. fixed income securities |  |  |  |  |  |  |
| Opportunistic fixed income | 11.1 | 10.6 | 2.9 | 2.9 |  |  |
| Global equities<sup>(1)</sup> | 39.0 | 37.6 | 6.9 | 6.9 | 67.5 | 64.7 |
| Private real estate | 6.2 | 6.5 |  |  |  |  |
|  | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% | 100.0% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)While the NorthWestern Energy Health and Welfare plan allocation of assets as of December 31, 2024, between Fixed income securities and Global equities is greater than 5 percent different from the target allocation, the plan Investment Manager has 60 days to correct this deviation from the plan.

Generally, the asset mix will be rebalanced to the target mix as individual portfolios approach their minimum or maximum levels. The guidelines allow for a transition to targets over time as assets are reallocated to newly-approved asset classes of opportunistic fixed income and private real estate. Debt securities consist of U.S. and international instruments including emerging markets and high yield instruments, as well as government, corporate, asset backed and mortgage backed securities. While the portfolio may invest in high yield securities, the average quality must be rated at least "investment grade" by rating agencies. Equity, real estate and fixed income portfolios may be comprised of both active and passive management strategies. Performance of fixed income investments is measured by both traditional investment benchmarks as well as relative changes in the present value of the plan's liabilities. Equity investments consist primarily of U.S. stocks including large, mid and small cap stocks. We also invest in global equities with exposure to developing and emerging markets. Equity investments may also be diversified across investment styles such as growth and value. Derivatives, options and futures are permitted for the purpose of reducing risk but may not be used for speculative purposes. Real estate investments will consist of global equity or debt interests in tangible property consisting of land, buildings, and other improvements in commercial and residential sectors.

Our plan assets are primarily invested in common collective trusts (CCTs), which are invested in equity and fixed income securities. In accordance with our investment policy, these pooled investment funds must have an adequate asset base relative to their asset class and be invested in a diversified manner and have a minimum of three years of verified investment performance experience or verified portfolio manager investment experience in a particular investment strategy and have management and oversight by an investment advisor registered with the SEC. Investments in a collective investment vehicle are valued by multiplying the investee company's net asset value per share with the number of units or shares owned at the valuation date. Net asset value per share is determined by the trustee. Investments held by the CCT, including collateral invested for securities on loan, are valued on the basis of valuations furnished by a pricing service approved by the CCT's investment manager, which determines valuations using methods based on quoted closing market prices on national securities exchanges, or at fair value as determined in good faith by the CCT's investment manager if applicable. The funds do not contain any redemption restrictions. The direct holding of NorthWestern Energy Group stock is not permitted; however, any holding in a diversified mutual fund or collective investment fund is permitted.

------

**<u>Cash Flows</u>**

In accordance with the Pension Protection Act of 2006 (PPA), and the relief provisions of the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), we are required to meet minimum funding levels in order to avoid required contributions and benefit restrictions. We have elected to use asset smoothing provided by the WRERA, which allows the use of asset averaging, including expected returns (subject to certain limitations), for a 24-month period in the determination of funding requirements. Additional funding relief was passed in the American Rescue Plan Act of 2021, providing for longer amortization and interest rate smoothing, which we elected to use. We expect to continue to make contributions to the pension plans in 2024 and future years that reflect the minimum requirements and discretionary amounts consistent with the amounts recovered in rates. Additional legislative or regulatory measures, as well as fluctuations in financial market conditions, may impact our funding requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the regulatory treatment of pension costs in Montana, pension costs for 2024, 2023 and 2022 were based on actual contributions to the NorthWestern Energy MT Pension Plan. Annual contributions to each of the pension plans are as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  |  | **2023** | **2022** |
| NorthWestern Energy MT Pension Plan | $8122 | $8000 | $7000 |
| NorthWestern Energy SD/NE Pension Plan | 1200 | 1200 | 1200 |
|  | $9322 | $9200 | $8200 |
| We estimate the plans will make future benefit payments to participants as follows (in thousands): |  |  |  |
|  |  | &nbsp;&nbsp;**Pension Benefits** | **Other Postretirement** |
|  |  | &nbsp;&nbsp;**Pension Benefits** | **Benefits** |
| 2025 |  | 28549 | 1919 |
| 2026 |  | 29467 | 1216 |
| 2027 |  | 30393 | 1064 |
| 2028 |  | 31155 | 1015 |
| 2029 |  | 32218 | 935 |
| 2030-2034 |  | 166566 | 4329 |

---

**<u>Defined Contribution Plan</u>**

Our defined contribution plan permits employees to defer receipt of compensation as provided in Section 401(k) of the Internal Revenue Code. Under the plan, employees may elect to direct a percentage of their gross compensation to the plan. We also contribute various percentages of employees' gross compensation to the plan. Company contributions for the years ended December 31, 2024, 2023 and 2022 totaled $14.7 million, $13.2 million, and $12.3 million, respectively.

**(15) Stock-Based Compensation**

We grant stock-based awards through our Amended and Restated Equity Compensation Plan (ECP), which includes restricted stock awards and performance share awards. As of December 31, 2024, there were 558,300 shares of common stock remaining available for grants. The remaining vesting period for awards previously granted ranges from one to three years if the service and/or performance requirements are met. Nonvested shares do not receive dividend distributions. The long-term incentive plan provides for accelerated vesting in the event of a change in control.

We account for our share-based compensation arrangements by recognizing compensation costs for all share-based awards over the respective service period for employee services received in exchange for an award of equity or equity-based compensation. The compensation cost is based on the fair value of the grant on the date it was awarded.

**<u>Performance Unit Awards</u>**

Performance unit awards are granted annually under the ECP. These awards vest at the end of the three-year performance period if we have achieved certain performance goals and the individual remains employed by us. The exact number of shares issued will vary from 0 percent to 200 percent of the target award, depending on actual company performance relative to the performance goals. Beginning in 2023, these awards contain service-, market-, and performance-based components. The service-based component of these awards, representing 30 percent of the award, vest at the end of the three-year performance period as long as the individual has remained employed with us over that term. The performance goals are independent of each other and equally weighted at 35 percent of the award, and are based on two metrics: (i) EPS growth level and average return on equity; and (ii) total shareholder return relative to a peer group. Performance unit awards issued prior to 2023 included both the market- and performance-based components discussed above.

Fair value is determined for each component of the performance unit awards. The fair value of the service-based component is estimated based upon the closing market price of our common stock as of the grant date less the present value of expected dividends. The fair value of the performance-based component is estimated based upon the closing market price of our common stock as of the grant date less the present value of expected dividends, multiplied by an estimated performance multiple determined on the basis of historical experience, which is subsequently trued

------

up at vesting based on actual performance. The fair value of the market-based component is estimated using a statistical model that incorporates the probability of meeting performance targets based on historical returns relative to the peer group. The following summarizes the significant assumptions used to determine the fair value of performance shares and related compensation expense as well as the resulting estimated fair value of performance shares granted:

---

| | | |
|:---|:---|:---|
|  | **2024** | **2023** |
| Risk-free interest rate | 4.38% | 4.33% |
| Expected life, in years | 3 | 3 |
| Expected volatility | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.5% to 29.0% | 30.4% to 41.0% |
| Dividend yield | 5.6% | 4.4% |

---

The risk-free interest rate was based on the U.S. Treasury yield of a three-year bond at the time of grant. The expected term of the performance shares is three years based on the performance cycle. Expected volatility was based on the historical volatility for the peer group. Both performance goals are measured over the three-year vesting period and are charged to compensation expense over the vesting period based on the number of shares expected to vest.

A summary of nonvested shares as of and changes during the year ended December 31, 2024, are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Performance Unit Awards** | **Performance Unit Awards** |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Shares** |  | |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Shares** |  | **Weighted-Average Grant-**<br>|
| Beginning nonvested grants |  | &nbsp;&nbsp;153784 | $53.26 |
| &nbsp;&nbsp;&nbsp;Granted | &nbsp;&nbsp;&nbsp;Granted | &nbsp;&nbsp;150704 | 41.13 |
| &nbsp;&nbsp;&nbsp;Vested | &nbsp;&nbsp;&nbsp;Vested | &nbsp;&nbsp;&nbsp;(60830) | 51.61 |
| &nbsp;&nbsp;&nbsp;Forfeited |  | &nbsp;&nbsp;&nbsp;(11732) | 48.12 |
| **Remaining nonvested grants** | **Remaining nonvested grants** | &nbsp;&nbsp;231926 | $46.07 |

---

**<u>Retirement/Retention Restricted Share Awards</u>**

In December 2011, an executive retirement / retention program was established that provides for the annual grant of restricted share units. Awards granted before 2022 are subject to a five-year performance and vesting period. The performance measure for these awards requires net income for the calendar year of at least three of the five full calendar years during the performance period to exceed net income for the calendar year the awards are granted. Awards granted in 2022 no longer contain this performance measure, instead these awards will vest after five full calendar years if the employee remains employed during that service period. No retirement/retention restricted shares were granted during the year ended December 31, 2024. Once vested, the awards will be paid out in shares of common stock in five equal annual installments after a recipient has separated from service. The fair value of these awards is measured based upon the closing market price of our common stock as of the grant date less the present value of expected dividends.

---

| | | | |
|:---|:---|:---|:---|
| A summary of nonvested shares as of and changes during the year ended December 31, 2024, are as follows: | A summary of nonvested shares as of and changes during the year ended December 31, 2024, are as follows: |  |  |
|  |  |  | **Weighted-Average Grant-** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Shares** |  | **Date** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Shares** |  | **Fair Value** |
| Beginning nonvested grants |  | 60779 | $47.91 |
| &nbsp;&nbsp;&nbsp;Granted | &nbsp;&nbsp;&nbsp;Granted |  |  |
| &nbsp;&nbsp;&nbsp;Vested | &nbsp;&nbsp;&nbsp;Vested |  |  |
| &nbsp;&nbsp;&nbsp;Forfeited |  | (9983) | 60.73 |
| **Remaining nonvested grants** | **Remaining nonvested grants** | 50796 | $45.40 |

---

We recognized total stock-based compensation expense of $3.4 million, $3.6 million, and $4.2 million for the years ended December 31, 2024, 2023, and 2022, respectively, and related income tax benefit of $(0.7) million, $(1.0) million, and $(1.3) million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, we had $6.6 million of unrecognized compensation cost related to the nonvested portion of our outstanding awards. The cost is expected to be recognized over a weighted-average period of 2 years. The total fair value of shares vested was $3.1 million, $4.4 million, and $4.3 million for the years ended December 31, 2024, 2023 and 2022, respectively.

------

**(16) Common Stock**

We have 250,000,000 shares authorized consisting of 200,000,000 shares of common stock with a $0.01 par value and 50,000,000 shares of preferred stock with a $0.01 par value. Of the common stock, 2,856,957 shares are reserved for the incentive plan awards. For further detail of grants under this plan see <u>Note 15 - Stock-Based Compensation</u>.

**<u>Repurchase of Common Stock</u>**

Shares tendered by employees to us to satisfy the employees' tax withholding obligations in connection with the vesting of restricted stock awards totaled 5,809 and 4,167 during the years ended December 31, 2024 and 2023, respectively, and are reflected in treasury stock. These shares were credited to treasury stock based on their fair market value on the vesting date.

**<u>Dividend Restrictions</u>**

Due to our holding company structure, liquidity necessary to pay dividends to holders of our common stock is generally provided by dividend distributions from our utility subsidiaries. Under various state regulatory agreements, debt agreements and the Federal Power Act, our utility subsidiaries have restrictions, including minimum equity ratios, that limit the amount of dividend distributions that can be made.

Pursuant to the MPSC regulatory agreement with NW Corp, if NW Corp's secured credit ratings are above BBB- for S&P Global Ratings and Baa3 for Moody's Investor Services, NW Corp may declare or pay dividends as long as NW Corp's common equity ratio is 40 percent or above. If NW Corp's secured credit ratings are BBB- for S&P Global Ratings or Baa3 for Moody's Investor Services, NW Corp may declare or pay dividends as long as NW Corp's common equity ratio is 43 percent or above. If NW Corp's secured credit ratings fall below BBB- with S&P Global Ratings or Baa3 with Moody's Investor Services, NW Corp may not declare or pay dividends to NorthWestern Energy Group.

NorthWestern Energy Group, NW Corp, and NWE Public Service's ability to pay dividends is also limited by the terms of various debt agreements, pursuant to which, NorthWestern Energy Group, NW Corp, and NWE Public Service are required to maintain a debt to capitalization ratio of no more than 0.65 to 1.00. Further, the declaration of dividends is at the discretion of our Board of Directors and is not guaranteed.

As of December 31, 2024, approximately $784.6 million and $294.6 million of NW Corp and NWE Public Service unrestricted net assets, respectively, were available for the payment of dividends to NorthWestern Energy Group under our most restrictive dividend restriction.

**(17) 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:

---

| | | | |
|:---|:---|:---|:---|
|  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31,** |  |
|  | **2024** | **2023** | **2022** |
| Basic computation | 61293052 | 60321481 | 55769156 |
| &nbsp;&nbsp;&nbsp;*Dilutive effect of* |  |  |  |
| &nbsp;&nbsp;Performance and restricted share awards<sup>(1)</sup> | 81153 | 36312 | 26621 |
| &nbsp;&nbsp;Forward equity sale<sup>(2)</sup> |  |  | 496333 |
| Diluted computation | 61374205 | 60357793 | 56292110 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Forward equity shares 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 forward sale agreement.

As of December 31, 2024, there were 22,470 shares from performance and restricted share awards which were antidilutive and excluded from the earnings per share calculations.

------

**(18) Commitments and Contingencies**

**<u>Qualifying Facilities Liability</u>**

Our QF liability primarily consists of unrecoverable costs associated with three contracts covered under the PURPA. These contracts require us to purchase minimum amounts of energy at prices ranging from $118 to $130 per MWH through 2029. As of December 31, 2024, our estimated gross contractual obligation related to these contracts was approximately $229.0 million through 2029. A portion of the costs incurred to purchase this energy is recoverable through rates, totaling approximately $205.8 million through 2029. As contractual obligations are settled, the related purchases and sales are recorded within Fuel, purchased power and direct transmission expense and Electric revenues in our Consolidated Statements of Income. The present value of the remaining liability is recorded in Other noncurrent liabilities in our Consolidated Balance Sheets. The following summarizes the change in the liability (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2024** | <br>**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2023** |
| Beginning QF liability | $28670 | $49728 |
| &nbsp;&nbsp;&nbsp;Settlements | (7606) | (24707) |
| &nbsp;&nbsp;&nbsp;Interest expense | 2434 | 3649 |
| **Ending QF liability** | $23498 | $28670 |

---

The following summarizes the estimated gross contractual obligation less amounts recoverable through rates (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | | | **Net** |
| | **Gross**<br>**Obligation** | **Recoverable**<br>**Amounts** | **Net** |
| 2025 | $60360 | $52950 | $7410 |
| 2026 | 55393 | 46274 | 9119 |
| 2027 | 56665 | 46668 | 9997 |
| 2028 | 42400 | 41664 | 736 |
| 2029 | 14134 | 18231 | (4097) |
| **Total**<sup>(1)</sup> | $228952 | $205787 | $23165 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)This net unrecoverable amount represents the undiscounted difference between the total gross obligations and recoverable amounts. The ending QF liability in the table above represents the present value of this net unrecoverable amount.

**<u>Long Term Supply and Capacity Purchase Obligations</u>**

We have entered into various commitments, largely purchased power, electric transmission, coal and natural gas supply and natural gas transportation contracts. These commitments range from one to 24 years. Costs incurred under these contracts are included in Fuel, purchased power and direct transmission expense in the Consolidated Statements of Income and were approximately $290.1 million, $340.0 million and $328.0 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, our commitments under these contracts were $345.8 million in 2025, $365.2 million in 2026, $350.4 million in 2027, $349.3 million in 2028, $350.2 million in 2029, and $2.5 billion thereafter. These commitments are not reflected in our Consolidated Financial Statements.

**<u>Hydroelectric License Commitments</u>**

With the 2014 purchase of hydroelectric generating facilities and associated assets located in Montana, we assumed two Memoranda of Understanding (MOUs) existing with state, federal and private entities. The MOUs are periodically updated and renewed and require us to implement plans to mitigate the impact of the projects on fish, wildlife and their habitats, and to increase recreational opportunities. The MOUs were created to maximize collaboration between the parties and enhance the possibility to receive matching funds from relevant federal agencies. Under these MOUs, we have a remaining commitment to spend approximately $19.1 million between 2025 and 2040. These commitments are not reflected in our Consolidated Financial Statements.

**ENVIRONMENTAL LIABILITIES AND REGULATION**

**<u>Environmental Matters</u>**

The operation of electric generating, transmission and distribution facilities, and gas gathering, storage, transportation and distribution facilities, along with the development (involving site selection, environmental assessments, and permitting) and construction of these assets, are subject to extensive federal, state, and local environmental and land use laws and regulations. Our activities involve compliance with diverse laws and regulations that address emissions and impacts to the environment, including air and water, protection of natural resources, avian and wildlife. We monitor federal, state, and local environmental initiatives to determine potential impacts on our financial results. As new laws or regulations are implemented, our policy is to assess their applicability and implement the necessary modifications to our facilities or their operation to maintain ongoing compliance.

------

Our environmental exposure includes a number of components, including remediation expenses related to the cleanup of current or former properties, and costs to comply with changing environmental regulations related to our operations. At present, our environmental reserve, which relates primarily to the remediation of former manufactured gas plant sites owned by us or for which we are responsible, is estimated to range between $19.0 million to $29.9 million. As of December 31, 2024, we had a reserve of approximately $23.7 million, which has not been discounted. Environmental costs are recorded when it is probable we are liable for the remediation and we can reasonably estimate the liability. We use a combination of site investigations and monitoring to formulate an estimate of environmental remediation costs for specific sites. Our monitoring procedures and development of actual remediation plans depend not only on site specific information but also on coordination with the different environmental regulatory agencies in our respective jurisdictions; therefore, while remediation exposure exists, it may be many years before costs are incurred.

The following summarizes the change in our environmental liability (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  |  | **December 31,** |  |
|  |  | **2023** | **2022** |
| Liability at January 1, | $25286 | $26367 | $26866 |
| &nbsp;&nbsp;&nbsp;Deductions | (2262) | (2520) | (2033) |
| &nbsp;&nbsp;&nbsp;Charged to costs and expense | 705 | 1439 | 1534 |
| Liability at December 31, | $23729 | $25286 | $26367 |

---

We are permitted to recover the remediation costs related to certain environmental liabilities within rates. Over time, as costs become determinable, we may seek authorization to recover additional costs in rates or seek insurance reimbursement as available and applicable; therefore, although we cannot guarantee regulatory recovery for all remediation costs, we do not expect these costs to have a material effect on our consolidated financial position or results of operations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***Manufactured Gas Plants*** - Approximately $18.2 million of our environmental reserve accrual is related to the following manufactured gas plants.

<u>South Dakota</u> - A formerly operated manufactured gas plant located in Aberdeen, South Dakota, has been identified on the Federal Comprehensive Environmental Response, Compensation, and Liability Information System list as contaminated with coal tar residue. We are currently conducting feasibility studies, implementing remedial actions pursuant to work plans approved by the South Dakota Department of Agriculture and Natural Resources, and conducting ongoing monitoring and operation and maintenance activities. As of December 31, 2024, the reserve for remediation costs at this site was approximately $7.2 million, and we estimate that approximately $2.1 million of this amount will be incurred through 2029. The SDPUC permits the recovery of these costs within rates.

<u>Nebraska</u> - We own sites in North Platte, Kearney, and Grand Island, Nebraska on which former manufactured gas facilities were located. We are currently working independently to fully characterize the nature and extent of potential impacts associated with these Nebraska sites. Our reserve estimate includes assumptions for site assessment and remedial action work.

At present, we cannot determine with a reasonable degree of certainty the nature and timing of any risk-based remedial action at our Nebraska locations.

<u>Montana</u> - We own or have responsibility for sites in Butte, Missoula, and Helena, Montana on which former manufactured gas plants were located. The Butte and Helena sites, both listed as high priority sites on Montana's state superfund list, were placed into the MDEQ voluntary remediation program for cleanup due to soil and groundwater impacts. Soil and coal tar were removed at the sites in accordance with the MDEQ requirements. Groundwater monitoring is conducted semiannually at both sites. At this time, we cannot estimate with a reasonable degree of certainty the nature and timing of additional remedial actions and/or investigations, if any, at the Butte site.

In August 2016, the MDEQ sent us a Notice of Potential Liability and Request for Remedial Action regarding the Helena site. In October 2019, we submitted a third revised Remedial Investigation Work Plan (RIWP) for the Helena site addressing MDEQ comments. The MDEQ approved the RIWP in March 2020 and field work was completed in 2022. We submitted a Remedial Investigation Report (RI Report) summarizing the work completed to MDEQ in March 2022 and are awaiting its review and comments as to any additional field work. We now expect the MDEQ review of the RI Report to be concluded in 2025, and any additional field work to commence following that.

MDEQ has indicated it expects to proceed in listing the Missoula site as a Montana superfund site. After researching historical ownership, we have identified another potentially responsible party with whom we have entered into an agreement allocating third-party costs to be incurred in addressing the site. The other party has assumed the lead role at the site and has expressed its intention to submit a voluntary remediation plan for the Missoula site to MDEQ. At this time, we cannot estimate with a reasonable degree of certainty the nature and timing of risk-based remedial action, if any, at the Missoula site.

***Global Climate Change -*** National and international actions have been initiated to address global climate change and the contribution of GHG including, most significantly, carbon dioxide (CO2) and methane emissions from natural gas. These actions include legislative proposals, Executive, Congressional and EPA actions at the federal level, state level activity, investor activism and private party litigation relating to emissions. Coal-fired plants have come under particular scrutiny due to their level of emissions. We have joint ownership interests in four coal-fired electric generating plants, all of which are operated by other companies. We are responsible for our proportionate share of the capital and operating costs while being entitled to our proportionate share of the power generated.

------

***EPA Rules -*** Congress has not passed any federal climate change legislation regarding GHG emissions from coal fired plants, and we cannot predict the timing or form of any potential legislation. Section 111(d) of the Clean Air Act (CAA) confers authority on EPA and the states to regulate emissions, including GHGs, from existing stationary sources. In April 2024, the EPA released final rules related to greenhouse gas (GHG) emission standards (GHG Rules) for existing coal-fired facilities and new coal and natural gas-fired facilities as well as final rules strengthening the MATS requirements (MATS Rules). In particular, the GHG Rules will (i) strengthen the current New Source Performance Standards for newly built fossil fuel-fired stationary combustion turbines (generally natural gas-fired); (ii) establish emission guidelines for states to follow in limiting carbon pollution from existing fossil fuel-fired steam generating electric generating units (including coal, oil and natural gas-fired units); and (iii) establish emission guidelines for large, frequently used existing fossil fuel-fired stationary combustion turbines (generally natural gas-fired). The MATS Rules will strengthen emission limits for acid gases, mercury, and other hazardous air pollutants from new and existing electric generating units. 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.

Previous efforts by the EPA were met with extensive litigation, and this time is no different. We, along with many other utilities, electric cooperatives, organizations, and states, have petitioned for judicial review of the GHG and MATS Rules with the U.S. Court of Appeals for the D.C. Circuit. The United States Supreme Court denied multiple stay requests related to the MATS and GHG Rules. The litigation on the merits continues for both the MATS and GHG Rules in the D.C. Circuit Court of Appeals, and decisions are expected in 2025. If the MATS Rule and GHG Rule are ultimately enforced, it would result in additional material compliance costs. We will continue working with federal and state regulatory authorities, other utilities, and stakeholders to seek relief from the MATS and GHG regulations that, in our view, disproportionately impact customers in our region.

These GHG and MATS Rules as well as future additional environmental requirements - federal or state - could cause us to incur material costs of compliance, increase our costs of procuring electricity, decrease transmission revenue and impact cost recovery. Technology to efficiently capture, remove and/or sequester such GHG emissions or hazardous air pollutants may not be available within a timeframe consistent with the implementation of any such requirements.

***Regional Haze Rules -*** In January 2017, the EPA published amendments to the requirements under the CAA for state plans for protection of visibility - regional haze rules. Among other things, these amendments revised the process and requirements for the state implementation plans and extended the due date for the next periodic comprehensive regional haze state implementation plan revisions from 2018 to 2021.

The states of Montana, North Dakota and South Dakota have developed and submitted to the EPA, for its approval, their respective State Implementation Plans (SIP) for Regional Haze compliance. While these states, among others, did not meet the EPA's July 31, 2021, submission deadline, they were all submitted in 2022. The Montana SIP as drafted and submitted to EPA does not call for additional controls for our interest in Colstrip Unit 4. The draft North Dakota SIP does not require any additional controls at the Coyote generating facility. Similarly, the draft South Dakota SIP does not require any additional controls at the Big Stone generating facility. Until these SIPs are finalized and approved by EPA, the potential remains that installation of additional emissions controls might be required at these facilities.

***Jointly Owned Plants*** - We have joint ownership in generation plants located in South Dakota, North Dakota, Iowa, and Montana that are or may become subject to the various regulations discussed above that have been or may be issued or proposed.

***Other* -** We continue to manage equipment containing polychlorinated biphenyl (PCB) oil in accordance with the EPA's Toxic Substance Control Act regulations. We will continue to use certain PCB-contaminated equipment for its remaining useful life and will, thereafter, dispose of the equipment according to pertinent regulations that govern the use and disposal of such equipment.

We routinely engage the services of a third-party environmental consulting firm to assist in performing a comprehensive evaluation of our environmental reserve. Based upon information available at this time, we believe that the current environmental reserve properly reflects our remediation exposure for the sites currently and previously owned by us. The portion of our environmental reserve applicable to site remediation may be subject to change as a result of the following uncertainties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•We may not know all sites for which we are alleged or will be found to be responsible for remediation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Absent performance of certain testing at sites where we have been identified as responsible for remediation, we cannot estimate with a reasonable degree of certainty the total costs of remediation.

**LEGAL PROCEEDINGS**

**<u>State</u> <u>of Montana - Riverbed Rents</u>**

On April 1, 2016, the State of Montana (State) filed a complaint on remand (the State's Complaint) with the Montana First Judicial District Court (State District Court), naming us, along with Talen Montana, LLC (Talen) as defendants. The State claimed it owns the riverbeds underlying 10 of our, and formerly Talen's, hydroelectric facilities (dams, along with reservoirs and tailraces) on the Missouri, Madison and Clark Fork Rivers, and seeks rents for Talen's and our use and occupancy of such lands. The facilities at issue include the Hebgen, Madison, Hauser, Holter, Black Eagle, Rainbow, Cochrane, Ryan, and Morony facilities on the Missouri and Madison Rivers and the Thompson Falls facility on the Clark Fork River. We acquired these facilities from Talen in November 2014.

------

The litigation has a long prior history. In 2012, the United States Supreme Court issued a decision holding that the Montana Supreme Court erred in not considering a segment-by-segment approach to determine navigability and relying on present day recreational use of the rivers. It also held that what it referred to as the Great Falls Reach "at least from the head of the first waterfall to the foot of the last" was not navigable for title purposes, and thus the State did not own the riverbeds in that segment. The United States Supreme Court remanded the case to the Montana Supreme Court for further proceedings not inconsistent with its opinion. Following the 2012 remand, the case laid dormant for four years until the State's Complaint was filed with the State District Court. On April 20, 2016, we removed the case from State District Court to the United States District Court for the District of Montana (Federal District Court). On August 1, 2018, the Federal District Court granted our and Talen's motions to dismiss the State's Complaint as it pertains to the navigability of the riverbeds associated with four of our hydroelectric facilities near Great Falls. A bench trial before the Federal District Court commenced January 4, 2022, and concluded on January 18, 2022, which addressed the issue of navigability concerning our other six facilities. On August 25, 2023, the Federal District Court issued its Findings of Fact, Conclusions of Law, and Order (the "Order"), which found all but one of the segments of the riverbeds in dispute not navigable, and thus not owned by the State of Montana. The one segment found navigable, and thus owned by the State, was the segment on which the Black Eagle development was located. The State filed a motion to pursue an interlocutory appeal of the Order, and on January 2, 2024, the Federal District Court certified the Order for appeal to the 9th Circuit Court of Appeals. The appeal was argued on January 15, 2025, and we await the court's disposition. Damages were bifurcated by agreement and will be tried separately for the Black Eagle segment, and any other segments found navigable, should the State prevail on appeal.

We dispute the State's claims and intend to continue to vigorously defend the lawsuit. If the Federal District Court calculates damages as the State District Court did in 2008, we do not anticipate the resulting annual rent for the Black Eagle segment would have a material impact to our financial position or results of operations. We anticipate that any obligation to pay the State rent for use and occupancy of the riverbeds would be recoverable in rates from customers, although there can be no assurances that the MPSC would approve any such recovery.

**<u>Yellowstone County Generating Station Air Permit</u>**

On October 21, 2021, the Montana Environmental Information Center and the Sierra Club filed a lawsuit in Montana State District Court, against the MDEQ and NorthWestern, alleging that the environmental analysis conducted by MDEQ prior to issuance of the YCGS air quality construction permit was inadequate. On April 4, 2023, the Montana District Court issued an order finding MDEQ's environmental analysis was deficient in not addressing exterior lighting and greenhouse gases and remanded it back to MDEQ to address the deficiencies and vacated the YCGS air quality permit pending that remand. As a result of the vacatur of the permit, we paused construction. On June 8, 2023, the Montana District Court granted our motion to stay the order vacating the air quality permit pending the outcome of our appeal to the Montana Supreme Court. We recommenced YCGS construction in June 2023 and placed the plant in service in October 2024. On January 3, 2025, the Montana Supreme Court ordered that the YCGS air quality permit be reinstated. The Court remanded the matter back to MDEQ for supplemental analysis regarding lighting and greenhouse gas emissions in Montana. YCGS is commercially operable with the reinstated air quality permit.

**<u>Other Legal Proceedings</u>**

We are also subject to various other legal proceedings, governmental audits and claims that arise in the ordinary course of business. In our opinion, the amount of ultimate liability with respect to these other actions will not materially affect our financial position, results of operations, or cash flows.

**(19) Revenue from Contracts with Customers**

**<u>Accounting Policy</u>**

Our revenues are primarily from tariff based sales. We provide gas and/or electricity to customers under these tariffs without a defined contractual term (at-will). As the revenue from these arrangements is equivalent to the electricity or gas supplied and billed in that period (including estimated billings), there will not be a shift in the timing or pattern of revenue recognition for such sales. We have also completed the evaluation of our other revenue streams, including those tied to longer term contractual commitments. These revenue streams have performance obligations that are satisfied at a point in time, and do not have a shift in the timing or pattern of revenue recognition.

Customers are billed monthly on a cycle basis. To match revenues with associated expenses, we accrue unbilled revenues for electric and natural gas services delivered to customers, but not yet billed at month-end.

**<u>Nature of Goods and Services</u>**

We currently provide retail electric and natural gas services to three primary customer classes. Our largest customer class consists of residential customers, which include single private dwellings and individual apartments. Our commercial customers consist primarily of main street businesses, and our industrial customers consist primarily of manufacturing and processing businesses that turn raw materials into products.

***Electric Segment*** - Our regulated electric utility business primarily provides generation, transmission, and distribution services to our customers in our Montana and South Dakota jurisdictions. We recognize revenue when electricity is delivered to the customer. Payments on our tariff based sales are generally due in 20-30 days after the billing date.

------

***Natural Gas Segment -*** Our regulated natural gas utility business primarily provides production, storage, transmission, and distribution services to our customers in our Montana, South Dakota, and Nebraska jurisdictions. We recognize revenue when natural gas is delivered to the customer. Payments on our tariff based sales are generally due in 20-30 days after the billing date.

**<u>Disaggregation of Revenue</u>**

The following tables disaggregate our revenue for the twelve months ended by major source and customer class (in millions):

---

| | | | |
|:---|:---|:---|:---|
| **December 31, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;**Electric** | &nbsp;&nbsp;&nbsp;**Natural Gas** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Montana | 398.8 | 110.2 | 509.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;South Dakota | 70.0 | 26.9 | 96.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nebraska |  | 21.2 | 21.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Residential** | **468.8** | **158.3** | **627.1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Montana | 409.0 | 59.9 | 468.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;South Dakota | 111.8 | 18.1 | 129.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nebraska |  | 11.4 | 11.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Commercial** | **520.8** | **89.4** | **610.2** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial | 46.6 | 1.0 | 47.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lighting, governmental, irrigation, and interdepartmental | 32.8 | 1.4 | 34.2 |
| **Total Retail Revenues** | **1069.0** | **250.1** | **1319.1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory Amortization | 24.9 | 19.0 | 43.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transmission | 97.1 |  | 97.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wholesale and other | 9.7 | 44.1 | 53.8 |
| **Total Revenues** | $**1200.7** | $**313.2** | $**1513.9** |

---

---

| | | | |
|:---|:---|:---|:---|
| **December 31, 2023** | &nbsp;&nbsp;&nbsp;&nbsp;**Electric** | &nbsp;&nbsp;&nbsp;**Natural Gas** | **Total** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Montana | 408.3 | 136.1 | 544.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;South Dakota | 67.9 | 36.6 | 104.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nebraska |  | 35.5 | 35.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Residential** | **476.2** | **208.2** | **684.4** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Montana | 431.4 | 73.7 | 505.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;South Dakota | 103.2 | 25.9 | 129.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nebraska |  | 22.1 | 22.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Commercial** | **534.6** | **121.7** | **656.3** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial | 46.0 | 1.4 | 47.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lighting, governmental, irrigation, and interdepartmental | 32.7 | 1.7 | 34.4 |
| **Total Retail Revenues** | **1089.5** | **333.0** | **1422.5** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory Amortization | (105.6) | (25.0) | (130.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transmission | 78.4 |  | 78.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wholesale and other | 6.5 | 45.3 | 51.8 |
| **Total Revenues**<sup>(1)</sup> | $**1068.8** | $**353.3** | $**1422.1** |
| **December 31, 2022** | &nbsp;&nbsp;&nbsp;&nbsp;**Electric** | &nbsp;&nbsp;&nbsp;**Natural Gas** | **Total** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Montana | 357.4 | 152.3 | 509.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;South Dakota | 69.8 | 39.2 | 109.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nebraska |  | 35.8 | 35.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Residential** | **427.2** | **227.3** | **654.5** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Montana | 368.6 | 79.3 | 447.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;South Dakota | 108.2 | 28.5 | 136.7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nebraska |  | 22.1 | 22.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Commercial** | **476.8** | **129.9** | **606.7** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial | 39.8 | 1.5 | 41.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lighting, governmental, irrigation, and interdepartmental | 31.0 | 1.9 | 32.9 |
| **Total Retail Revenues** | **974.8** | **360.6** | **1335.4** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory Amortization | 46.4 | (28.1) | 18.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transmission | 77.8 |  | 77.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wholesale and other | 7.6 | 38.7 | 46.3 |
| **Total Revenues**<sup>(1)</sup> | $**1106.6** | $**371.2** | $**1477.8** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Certain amounts in the prior period have been reclassified to conform with current period presentation. These reclassifications have no effect on the reported financial results.

------

**(20)** **Segment and Related Information**

Our reportable segments are engaged in the electric and gas utility businesses. Our Electric segment includes the aggregated operating segment results of the regulated electric utility operations of Montana and South Dakota. Our Gas segment includes the aggregated operating segment results of the regulated gas utility operations of Montana, South Dakota, and Nebraska.

Our CODM, who is our Chief Executive Officer, uses segment net income to evaluate if our operating segments are earning their authorized rate of return and in the annual budget and forecasting process. Our CODM uses segment net income to determine how to allocate capital resources between our operating segments and when to allocate the resources necessary to file for rate reviews. The accounting policies of the operating segments are the same as those described within <u>Note 2 – Significant Accounting Policies</u>. Segment asset and capital expenditure information is not provided for our reportable segments. As an integrated electric and gas utility, we operate significant assets that are not dedicated to a specific reportable segment.

Financial data for the business segments for the twelve months ended are as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
| **December 31, 2024** | &nbsp;&nbsp;&nbsp;**Electric** | &nbsp;&nbsp;&nbsp;&nbsp;**Gas** | **Total** |
| Operating revenues | $1200701 | $313197 | $1513898 |
| Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion |  |  |  |
| shown separately below) | 329578 | 104238 | 433816 |
| Operating, general, and administrative | 270145 | 92211 | 362356 |
| Property and other taxes | 126470 | 37386 | 163856 |
| Depreciation and depletion | 189987 | 37648 | 227635 |
| Interest expense, net | (99250) | (27740) | (126990) |
| Other income, net | 18082 | 5803 | 23885 |
| Income tax (expense) benefit | (20892) | 7963 | (12929) |
| Segment net income | $182461 | $27740 | $210201 |
| *Reconciliation to consolidated net income* |  |  |  |
| Other, net<sup>(1)</sup> |  |  | 13910 |
| Consolidated net income |  |  | $224111 |

---

---

| | | | |
|:---|:---|:---|:---|
| **December 31, 2023** | &nbsp;&nbsp;&nbsp;**Electric** | &nbsp;&nbsp;&nbsp;&nbsp;**Gas** | **Total** |
| Operating revenues | $1068833 | $353310 | $1422143 |
| Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion |  |  |  |
| shown separately below) | 262755 | 157507 | 420262 |
| Operating, general, and administrative | 249549 | 87153 | 336702 |
| Property and other taxes | 120289 | 34323 | 154612 |
| Depreciation and depletion | 174071 | 36403 | 210474 |
| Interest expense, net | (84089) | (15719) | (99808) |
| Other income, net | 11580 | 3344 | 14924 |
| Income tax (expense) benefit | (14196) | 4627 | (9569) |
| Segment net income | $175464 | $30176 | $205640 |
| *Reconciliation to consolidated net income* |  |  |  |
| Other, net<sup>(1)</sup> |  |  | (11509) |
| Consolidated net income |  |  | $194131 |

---

---

| | | | |
|:---|:---|:---|:---|
| **December 31, 2022** | &nbsp;&nbsp;&nbsp;**Electric** | &nbsp;&nbsp;&nbsp;&nbsp;**Gas** | &nbsp;&nbsp;&nbsp;&nbsp;**Total** |
| Operating revenues | $1106565 | $371272 | $1477837 |
| Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion |  |  |  |
| shown separately below) | 324434 | 167577 | 492011 |
| Operating, general, and administrative | 250203 | 84631 | 334834 |
| Property and other taxes | 149781 | 42734 | 192515 |
| Depreciation and depletion | 162404 | 32616 | 195020 |
| Interest expense, net | (74420) | (13030) | (87450) |
| Other income, net | 12491 | 6399 | 18890 |
| Income tax benefit (expense) | 798 | (3108) | (2310) |
| Segment net income | $158612 | $33975 | $192587 |
| *Reconciliation to consolidated net income* |  |  |  |
| Other, net<sup>(1)</sup> |  |  | (9579) |
| Consolidated net income |  |  | $183008 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Consists of unallocated corporate costs and some limited unregulated activity within the energy industry. |  |  |  |

---

------

**(21) Fourth Quarter Financial Data (Unaudited)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our fourth quarter financial information has not been audited, but, in management's opinion, includes all adjustments necessary for a fair presentation.

Amounts presented are in thousands, except per share data:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended December 31,** |  |
| Operating revenues | $373466 | $356009 |
| Operating income | 91696 | 103163 |
| Net income | $80552 | $83142 |
| Average common shares outstanding | 61315 | 61244 |
| Income per average common share: |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $1.32 | $1.37 |
| &nbsp;&nbsp;&nbsp;Diluted | $1.31 | $1.37 |

---

------

## Exhibit 99.2

**NORTHWESTERN ENERGY GROUP**

**CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025**

**NORTHWESTERN ENERGY GROUP**

**CONDENSED CONSOLIDATED STATEMENTS OF INCOME**

**(Unaudited)**

**(in thousands, except per share amounts)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Three Months Ended June 30,** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  |  | **2024** | **2025** | **2024** |
| Revenues |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Electric | $279468 | $260134 | $614951 | $603320 |
| &nbsp;&nbsp;&nbsp;Gas | 63245 | 59795 | 194392 | 191951 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Revenues** | 342713 | 319929 | 809343 | 795271 |
| Operating expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Fuel, purchased supply and direct transmission |  |  |  |  |
| &nbsp;&nbsp;&nbsp;expense (exclusive of depreciation and depletion | 75271 | 76480 | 213468 | 251201 |
| &nbsp;&nbsp;&nbsp;shown separately below) | 75271 | 76480 | 213468 | 251201 |
| &nbsp;&nbsp;&nbsp;Operating and maintenance | 62336 | 57367 | 119045 | 111549 |
| &nbsp;&nbsp;&nbsp;Administrative and general | 33773 | 31281 | 75130 | 71726 |
| &nbsp;&nbsp;&nbsp;Property and other taxes | 48168 | 36256 | 91408 | 83427 |
| &nbsp;&nbsp;&nbsp;Depreciation and depletion | 62379 | 56933 | 124779 | 113676 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Operating Expenses** | 281927 | 258317 | 623830 | 631579 |
| Operating income | 60786 | 61612 | 185513 | 163692 |
| Interest expense, net | (36254) | (31875) | (72765) | (62854) |
| Other income, net | 78 | 6160 | 4006 | 10479 |
| Income before income taxes | 24610 | 35897 | 116754 | 111317 |
| Income tax expense | (3382) | (4243) | (18586) | (14577) |
| **Net Income** | $21228 | $31654 | $98168 | $96740 |
| Average Common Shares Outstanding | 61381 | 61289 | 61360 | 61277 |
| Basic Earnings per Average Common Share | $0.35 | $0.52 | $1.60 | $1.58 |
| Diluted Earnings per Average Common Share | $0.35 | $0.52 | $1.60 | $1.58 |
| Dividends Declared per Common Share | $0.66 | $0.65 | $1.32 | $1.30 |

---

See Notes to Condensed Consolidated Financial Statements

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **NORTHWESTERN ENERGY GROUP** | **NORTHWESTERN ENERGY GROUP** | **NORTHWESTERN ENERGY GROUP** | **NORTHWESTERN ENERGY GROUP** | **NORTHWESTERN ENERGY GROUP** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME** |  |
|  | **(Unaudited)** |  |  |  |
|  | **(in thousands)** |  |  |  |
|  | &nbsp;&nbsp;&nbsp;&nbsp;**Three Months Ended June 30,** | &nbsp;&nbsp;&nbsp;&nbsp;**Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Net Income | $21228 | $31654 | $98168 | $96740 |
| Other comprehensive income, net of tax: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | 4 | (1) | 5 | (2) |
| &nbsp;&nbsp;&nbsp;Reclassification of net losses on derivative instruments | 113 | 113 | 226 | 226 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total Other Comprehensive Income | 117 | 112 | 231 | 224 |
| **Comprehensive Income** | $21345 | $31766 | $98399 | $96964 |

---

See Notes to Condensed Consolidated Financial Statements

------

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**NORTHWESTERN ENERGY GROUP** | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**CONDENSED CONSOLIDATED BALANCE SHEETS** | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(Unaudited)** | | |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(in thousands, except share data)** | | |
| **ASSETS** | <br>&nbsp;&nbsp;&nbsp;**June 30, 2025** | <br>**December 31, 2024** |
| **ASSETS** |  |  |
| **Current Assets:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $2936 | $4283 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 23612 | 24734 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 154923 | 187764 |
| &nbsp;&nbsp;&nbsp;Inventories | 125398 | 122940 |
| &nbsp;&nbsp;&nbsp;Regulatory assets | 67504 | 39851 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other | 28707 | 38614 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | **403080** | **418186** |
| Property, plant, and equipment, net | 6531509 | 6398275 |
| Goodwill | 357586 | 357586 |
| Regulatory assets | 778974 | 764414 |
| Other noncurrent assets | 64818 | 59063 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Assets** | $**8135967** | $**7997524** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| **Current Liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Current maturities of finance leases | $3731 | $3596 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt | 59964 | 299950 |
| &nbsp;&nbsp;&nbsp;Short-term borrowings | 100000 | 100000 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 93744 | 111794 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other | 251932 | 254599 |
| &nbsp;&nbsp;&nbsp;Regulatory liabilities | 28061 | 32261 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | **537432** | **802200** |
| Long-term finance leases | 0 | 1865 |
| Long-term debt | 3029611 | 2695343 |
| Deferred income taxes | 702905 | 663430 |
| Noncurrent regulatory liabilities | 674431 | 660942 |
| Other noncurrent liabilities | 311912 | 316044 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities** | **5256291** | **5139824** |
| Commitments and Contingencies (Note 11) |  |  |
| **Shareholders' Equity:** |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, par value $0.01; authorized 200,000,000 shares; issued and outstanding 64,875,751 and 61,387,122 shares, respectively; Preferred stock, par value $0.01; authorized 50,000,000 shares; none Issued | 649 | 648 |
| &nbsp;&nbsp;&nbsp;Treasury stock at cost | (97705) | (97394) |
| &nbsp;&nbsp;&nbsp;Paid-in capital | 2088674 | 2084133 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 894531 | 877017 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss | (6473) | (6704) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Shareholders' Equity** | **2879676** | **2857700** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Liabilities and Shareholders' Equity** | $**8135967** | $**7997524** |

---

See Notes to Condensed Consolidated Financial Statements

------

**NORTHWESTERN ENERGY GROUP**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

**(in thousands)**

**Six Months Ended June 30, 2025 2024**

---

| | | |
|:---|:---|:---|
| **OPERATING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $98168 | $96740 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to cash provided by operations: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and depletion | 124779 | 113676 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt issuance costs, discount and deferred hedge gain | 2343 | 2337 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation costs | 4168 | 3797 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Equity portion of allowance for funds used during construction | (4066) | (9397) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposition of assets | 151 | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment of alternative energy storage investment |  | 4659 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | 16746 | 12953 |
| &nbsp;&nbsp;&nbsp;Changes in current assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 32841 | 62757 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (2458) | (417) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 9907 | (1130) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (27688) | (20693) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses and other | (2861) | (2157) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory assets | (27653) | (12398) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulatory liabilities | (4200) | (24939) |
| &nbsp;&nbsp;&nbsp;Other noncurrent assets and liabilities | (8576) | (1866) |
| **Cash Provided by Operating Activities** | **211601** | **223943** |
| **INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Property, plant, and equipment additions | (220978) | (247361) |
| &nbsp;&nbsp;&nbsp;Investment in debt & equity securities | (5778) | (917) |
| **Cash Used in Investing Activities** | **(226756)** | **(248278)** |
| **FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Dividends on common stock | (80654) | (79275) |
| &nbsp;&nbsp;&nbsp;Issuance of long-term debt | 500000 | 215000 |
| &nbsp;&nbsp;&nbsp;Issuance of short-term borrowings |  | 100000 |
| &nbsp;&nbsp;&nbsp;Repayments on long-term debt | (300000) | (100000) |
| &nbsp;&nbsp;&nbsp;Line of credit repayments, net | (103000) | (105000) |
| &nbsp;&nbsp;&nbsp;Other financing activities, net | (3660) | (539) |
| **Cash Provided by Financing Activities** | **12686** | **30186** |
| **(Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash** | (2469) | 5851 |
| Cash, Cash Equivalents, and Restricted Cash, beginning of period | 29017 | 25187 |
| **Cash, Cash Equivalents, and Restricted Cash, end of period** | $**26548** | $**31038** |
| **Supplemental Cash Flow Information:** |  |  |
| &nbsp;&nbsp;&nbsp;Cash (received) paid during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Production tax credits<sup>(1)</sup> | (8255) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest | 67166 | 59995 |
| &nbsp;&nbsp;&nbsp;Significant non-cash transactions: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital expenditures included in accounts payable | 32015 | 27144 |

---

1) Proceeds from production tax credits transferred are included in cash provided by operating activities within the Condensed Consolidated Statement of Cash Flows. See Notes to Condensed Consolidated Financial Statements

------

**NORTHWESTERN ENERGY GROUP**

**CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY**

**(Unaudited)**

**(in thousands, except per share data)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | &nbsp;&nbsp;&nbsp;**Three Months Ended June 30,** | &nbsp;&nbsp;&nbsp;**Three Months Ended June 30,** | &nbsp;&nbsp;&nbsp;**Three Months Ended June 30,** |  |  |
|  | | | **Common** | **Treasury** |  | &nbsp;&nbsp;**Retained** | | |
|  | | | **Common** | **Treasury** | &nbsp;&nbsp;**Paid in Capital** | &nbsp;&nbsp;**Retained** | | |
| | **Number of**<br>**Common**<br>**Shares** | **Number of**<br>**Treasury**<br>**Shares** | **Stock** | **Stock** | &nbsp;&nbsp;**Paid in Capital** | **Earnings** | **Accumulated Other**<br>**Comprehensive**<br>**Loss** | **Total**<br>**Shareholders'**<br>**Equity** |
| **Balance at March 31, 2024** | **64798** | **3515** | $**648** | $**(97990)** | $**2080953** | $**836951** | $**(7544)** | $**2813018** |
| Net income |  |  |  |  |  | 31654 |  | 31654 |
| Foreign currency translation |  |  |  |  |  |  | (1) | (1) |
| adjustment, net of tax |  |  |  |  |  |  | (1) | (1) |
| Reclassification of net losses on |  |  |  |  |  |  |  |  |
| derivative instruments from OCI to net |  |  |  |  |  |  | **113** | 113 |
| income, net of tax |  |  |  |  |  |  | **113** | 113 |
| Stock-based compensation | 5 |  |  |  | 1732 |  |  | 1732 |
| Issuance of shares |  | (11) |  | 214 | 172 |  |  | 386 |
| Dividends on common stock ($0.650 |  |  |  |  |  | (39645) |  | (39645) |
| per share) |  |  |  |  |  | (39645) |  | (39645) |
| **Balance at June 30, 2024** | **64803** | **3504** | $**648** | $**(97776)** | $**2082857** | $**828960** | $**(7432)** | $**2807257** |
| **Balance at March 31, 2025** | **64870** | **3497** | $**649** | $**(97935)** | $**2086594** | $**913650** | $**(6590)** | $**2896368** |
| Net income |  |  |  |  |  | 21228 |  | 21228 |
| Foreign currency translation |  |  |  |  |  |  | 4 | 4 |
| adjustment, net of tax |  |  |  |  |  |  | 4 | 4 |
| Reclassification of net losses on |  |  |  |  |  |  |  |  |
| derivative instruments from OCI to net |  |  |  |  |  |  | 113 | 113 |
| income, net of tax |  |  |  |  |  |  | 113 | 113 |
| Stock-based compensation | 6 |  |  |  | 1870 |  |  | 1870 |
| Issuance of shares |  | (8) |  | 230 | 210 |  |  | 440 |
| Dividends on common stock ($0.660 |  |  |  |  |  | (40347) |  | (40347) |
| per share) |  |  |  |  |  | (40347) |  | (40347) |
| **Balance at June 30, 2025** | **64876** | **3489** | **649** | **(97705)** | **2088674** | **894531** | **(6473)** | **2879676** |

---

------

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;**Six Months Ended June 30,** | &nbsp;&nbsp;&nbsp;&nbsp;**Six Months Ended June 30,** | &nbsp;&nbsp;&nbsp;&nbsp;**Six Months Ended June 30,** |  |  |
|  | | | **Common** | **Treasury** |  | &nbsp;&nbsp;**Retained** | | |
|  | | | **Common** | **Treasury** | &nbsp;&nbsp;**Paid in Capital** | &nbsp;&nbsp;**Retained** | | |
| | **Number of**<br>**Common**<br>**Shares** | **Number of**<br>**Treasury**<br>**Shares** | **Stock** | **Stock** | &nbsp;&nbsp;**Paid in Capital** | **Earnings** | **Accumulated Other**<br>**Comprehensive**<br>**Loss** | **Total**<br>**Shareholders'**<br>**Equity** |
| **Balance at December 31, 2023** | **64762** | **3513** | $**648** | $**(97926)** | $**2078753** | $**811495** | $**(7656)** | $**2785314** |
| Net income |  |  |  |  |  | 96740 |  | 96740 |
| Foreign currency translation |  |  |  |  |  |  | (2) | (2) |
| adjustment, net of tax |  |  |  |  |  |  | (2) | (2) |
| Reclassification of net losses on |  |  |  |  |  |  |  |  |
| derivative instruments from OCI to |  |  |  |  |  |  | 226 | 226 |
| net income, net of tax |  |  |  |  |  |  | 226 | 226 |
| Stock-based compensation | 41 |  |  | (272) | 3771 |  |  | 3499 |
| Issuance of shares |  | (9) |  | 422 | 333 |  |  | 755 |
| Dividends on common stock ($1.300 |  |  |  |  |  | (79275) |  | (79275) |
| per share) |  |  |  |  |  | (79275) |  | (79275) |
| **Balance at June 30, 2024** | **64803** | **3504** | $**648** | $**(97776)** | $**2082857** | $**828960** | $**(7432)** | $**2807257** |
| **Balance at December 31, 2024** | **64811** | **3490** | $**648** | $**(97394)** | $**2084133** | $**877017** | $**(6704)** | $**2857700** |
| Net income |  |  |  |  |  | 98168 |  | 98168 |
| Foreign currency translation |  |  |  |  |  |  | 5 | 5 |
| adjustment, net of tax |  |  |  |  |  |  | 5 | 5 |
| Reclassification of net losses on |  |  |  |  |  |  |  |  |
| derivative instruments from OCI to |  |  |  |  |  |  | 226 | 226 |
| net income, net of tax |  |  |  |  |  |  | 226 | 226 |
| Stock-based compensation | 65 |  | 1 | (729) | 4142 |  |  | 3414 |
| Issuance of shares |  | (1) |  | 418 | 399 |  |  | 817 |
| Dividends on common stock ($1.320 |  |  |  |  |  | (80654) |  | (80654) |
| per share) |  |  |  |  |  | (80654) |  | (80654) |
| **Balance at June 30, 2025** | **64876** | **3489** | **649** | **(97705)** | **2088674** | **894531** | **(6473)** | **2879676** |

---

See Notes to Condensed Consolidated Financial Statements

------

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(Reference is made to Notes to Financial Statements included in the NorthWestern Energy Group's Annual Report)**

**(Unaudited)**

**(1) Nature of Operations and Basis of Consolidation**

NorthWestern Energy Group, doing business as NorthWestern Energy, provides electricity and/or natural gas to approximately 842,100 customers in Montana, South Dakota, Nebraska and Yellowstone National Park, through its subsidiaries NorthWestern Corporation (NW Corp) and NorthWestern Energy Public Service Corporation (NWE Public Service). We have generated and distributed electricity in South Dakota and distributed natural gas in South Dakota and Nebraska since 1923 and have generated and distributed electricity and distributed natural gas in Montana since 2002.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires us to make estimates and assumptions that may affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period. Actual results could differ from those estimates. The unaudited Condensed Consolidated Financial Statements (Financial Statements) reflect all adjustments (which unless otherwise noted are normal and recurring in nature) that are, in our opinion, necessary to fairly present our financial position, results of operations and cash flows. The actual results for the interim periods are not necessarily indicative of the operating results to be expected for a full year or for other interim periods. Events occurring subsequent to June 30, 2025 have been evaluated as to their potential impact to the Financial Statements through the date of issuance.

The Financial Statements included herein have been prepared by NorthWestern, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations; however, we believe that the condensed disclosures provided are adequate to make the information presented not misleading. We [recommend that these Financial Statements be read in conjunction with the audited financial statements and related footnotes included in the <u>NorthWestern</u>](https://www.sec.gov/ix?doc=/Archives/edgar/data/1993004/000199300425000021/nweg-20241231.htm)[<u>Energy Group Annual Report on Form 10-K for the year ended December 31, 2024</u>.](https://www.sec.gov/ix?doc=/Archives/edgar/data/1993004/000199300425000021/nweg-20241231.htm)

**<u>Supplemental Cash Flow Information</u>**

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Condensed Consolidated Statements of Cash Flows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** | **June 30,**<br>**2024** | **December 31,**<br>**2023** |
| Cash and cash equivalents | $2936 | $4283 | $6398 | $9164 |
| Restricted cash | 23612 | 24734 | 24640 | 16023 |
| **Total cash, cash equivalents, and restricted cash shown in** | $26548 | $29017 | $31038 | $25187 |
| **the Condensed Consolidated Statements of Cash Flows** | $26548 | $29017 | $31038 | $25187 |

---

**<u>Goodwill</u>**

We completed our annual goodwill impairment test as of April 1, 2025, and no impairment was identified. We calculate the fair value of our reporting units by considering various factors, including valuation studies based primarily on a discounted cash flow analysis, with published industry valuations and market data as supporting information. Key assumptions in the determination of fair value include the use of an appropriate discount rate and estimated future cash flows. In estimating cash flows, we incorporate expected long-term growth rates in our service territory, regulatory stability, and commodity prices (where appropriate), as well as other factors that affect our revenue, expense and capital expenditure projections.

**(2) Acquisition**

In July 2024, NW Corp entered into an Asset Purchase Agreement with Hope Utilities to acquire its Energy West natural gas distribution system and operations serving approximately 33,000 customers located in Great Falls, Cut Bank, and West Yellowstone, Montana. In May 2025, the Montana Public Service Commission (MPSC) approved this acquisition and on July 1, 2025, NW Corp completed this acquisition for approximately $36.5 million in cash, which is subject to certain post-closing working capital adjustments. Determination of the final purchase price and allocation to the acquired assets and assumed liabilities are expected to be completed in the second half of 2025. Upon the completion of the acquisition, NW Corp transferred the utility operations to its two wholly-owned subsidiaries, NorthWestern Great Falls Gas LLC and NorthWestern Cut Bank Gas LLC.

------

**(3) Regulatory Matters**

**<u>Montana Rate Review</u>**

In July 2024, we filed a Montana electric and natural gas rate review with the 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. In April 2025, we filed a partial electric settlement with certain other parties. Both settlements 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 filing request, as adjusted in rebuttal testimony, are set forth below:

**Requested Revenue Increase (Decrease) Through Rebuttal Testimony (in millions)**

---

| | | |
|:---|:---|:---|
|  | **Electric** | **Natural Gas** |
| Base Rates | $153.8 | 27.9 |
| Power Cost & Credit Adjustment Mechanism (PCCAM)<sup>(1)</sup> | (94.5) | n/a |
| Property Tax (tracker base adjustment)<sup>(1)</sup> | (1.3) | 0.1 |
| **Total Revenue Increase Requested through Rebuttal Testimony** | $58.0 | $28.0 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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**<sup>(1)</sup> | **Natural Gas**<sup>(2)</sup> |
| Base Rates | $18.4 | $17.4 |
| PCCAM<sup>(3)</sup> | (88.0) | n/a |
| Property Tax (tracker base adjustment)<sup>(3)(4)</sup> | 7.4 | 0.2 |
| **Total Interim Revenue Granted** | $(62.2) | $17.6 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1)These electric interim rates were effective December 1, 2024, through May 22, 2025. See further discussion on revised electric interim rates below.

&nbsp;&nbsp;&nbsp;&nbsp;(2)These natural gas interim rates were effective December 1, 2024, and are expected to remain in effect until the MPSC final order rates are effective.

&nbsp;&nbsp;&nbsp;&nbsp;(3)These items are flow-through costs. PCCAM reflects our fuel and purchased power costs.

&nbsp;&nbsp;&nbsp;&nbsp;(4)Our requested interim property tax base increase went into effect on January 1, 2025, as part of our 2024 property tax tracker filing.

The details of our settlement agreement are set forth below:

**Requested Revenue Increase (Decrease) through Settlement Agreements (in millions)**

---

| | | |
|:---|:---|:---|
|  | **Electric**<sup>(1)</sup> | **Natural Gas** |
| *Base Rates:* |  |  |
| &nbsp;&nbsp;Base Rates (Settled) | $66.4 | $18.0 |
| &nbsp;&nbsp;Base Rates - YCGS (Non-settled)<sup>(2)(3)</sup> | 43.9 | n/a |
| **Requested Base Rates** | 110.3 | 18.0 |
| *Pass-through items:* |  |  |
| &nbsp;&nbsp;Property Tax (tracker base adjustment) (Settled)<sup>(4)</sup> | (5.2) | 0.1 |
| &nbsp;&nbsp;Property Tax (tracker base adjustment) - YCGS (Non-settled)<sup>(2)(4)</sup> | 4.0 | n/a |
| &nbsp;&nbsp;PCCAM (Non-settled)<sup>(2)(3)(4)</sup> | (94.5) | n/a |
| **Requested Pass-Through Rates** | (95.7) | 0.1 |
| **Total Requested Revenue Increase** | $14.6 | $18.1 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)We implemented these electric rates on July 2, 2025, on an interim basis, subject to refund.

&nbsp;&nbsp;&nbsp;&nbsp;(2)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.

&nbsp;&nbsp;&nbsp;&nbsp;(3)Intervenor positions on YCGS 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.

&nbsp;&nbsp;&nbsp;&nbsp;(4)These items are flow-through costs. PCCAM reflects our fuel and purchased power costs.

On May 23, 2025, as permitted by Montana statute, we implemented our initially requested electric rates, reflecting a base rate revenue increase of $156.5 million, on an interim basis, subject to refund with interest. Within our June 30, 2025 financial statements, we have deferred base rate revenues collected between May 23, 2025, and June 30, 2025, down to our requested revised electric interim rates of $110.3 million as shown within

------

the above table. As of June 30, 2025, we have deferred approximately $3.5 million of base rate revenues collected. On June 20, 2025, we submitted the revised electric interim rates as shown within the above table to the MPSC for approval. The MPSC subsequently approved this request and the revised rates were implemented on July 2, 2025.

As discussed above, if the MPSC chooses to accept the intervenors positions on the remaining contested issues or does not accept the Settlement Agreements in its final order, losses related to excess interim revenues collected will be incurred. Additionally, any difference between interim and final approved rates will be refunded to customers with interest. However, if final approved rates are higher than interim rates, we will not recover the difference.

A hearing on the electric and natural gas rate review was held in June 2025, and final briefs are due in August 2025. Interim rates will remain in effect on a refundable basis, with interest, until the MPSC issues a final order.

**<u>Nebraska Natural Gas Rate Review</u>**

In June 2024, we filed a natural gas rate review with the Nebraska Public Service Commission (NPSC). Interim rates, which increased base natural gas rates $2.3 million, were implemented on October 1, 2024. In April 2025, we reached a settlement agreement with certain parties for a base rate annual revenue increase of $2.4 million. In June 2025, the NPSC approved this settlement agreement and final rates were implemented on July 1, 2025.

**(4) Income Taxes**

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 due to the regulatory impact of flowing through the federal and state tax benefit of repairs deductions, state tax benefit of accelerated tax depreciation deductions (including bonus depreciation when applicable) and production tax credits. The regulatory accounting treatment of these deductions requires immediate income recognition for temporary tax differences of this type, which is referred to as the flow-through method. When the flow-through method of accounting for temporary differences is reflected in regulated revenues, we record deferred income taxes and establish related regulatory assets and liabilities.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBB") was signed into law, which includes significant changes to the U.S. tax code and related laws. Key provisions of the OBBB include modifications and extensions to certain provisions of the Tax Cuts and Jobs Act of 2017, changes to interest expense limitations, and updates to energy-related tax incentives. We have evaluated the potential impact of the OBBB to our financial statements and determined that the impact is not material.

During the three months ended June 30, 2025 income tax expense was $3.4 million compared to $4.2 million for the same period in 2024. For the three months ended June 30, 2025, the effective tax rate was 13.7% compared to 11.8% for the same period in 2024. The higher effective tax rate was primarily due to higher plant depreciation flow through items and lower production tax credits, partly offset by higher flow through repairs deductions.

During the six months ended June 30, 2025 income tax expense was $18.6 million compared to $14.6 million for the same period in 2024. For the six months ended June 30, 2025, the effective tax rate was 15.9% compared to 13.1% for the same period in 2024. The higher effective tax rate was primarily due to higher plant depreciation flow through items and lower production tax credits, partly offset by higher flow through repairs deductions.

------

**(5) Comprehensive Income (Loss)**

The following tables display the components of Other Comprehensive Income (Loss), after-tax, and the related tax effects (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2024** | **June 30, 2024** | **June 30, 2024** |
|  | **Before-Tax Amount** | **Tax Expense** | **Net-of-Tax Amount** | **Before-Tax Amount** | **Tax Expense** | **Net-of-Tax Amount** |
| Foreign currency translation adjustment | $4 | $- | $4 | $(1) | $- | $(1) |
| Reclassification of net income on derivative instruments | 153 | (40) | 113 | 153 | (40) | 113 |
| Other comprehensive income (loss) | $157 | $(40) | $117 | $152 | $(40) | $112 |
|  | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2024** | **June 30, 2024** | **June 30, 2024** |
|  | **Before-Tax Amount** | **Tax Expense** | **Net-of-Tax Amount** | **Before-Tax Amount** | **Tax Expense** | **Net-of-Tax Amount** |
| Foreign currency translation adjustment | $5 | $- | $5 | $(2) | $- | $(2) |
| Reclassification of net income on derivative instruments | 306 | (80) | 226 | 306 | (80) | 226 |
| Other comprehensive income (loss) | $311 | $(80) | $231 | $304 | $(80) | $224 |

---

Balances by classification included within accumulated other comprehensive loss (AOCL) on the Condensed Consolidated Balance Sheets are as follows, net of tax (in thousands):

---

| | | |
|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;&nbsp;**June 30, 2025** | **December 31, 2024** |
| Foreign currency translation | $1438 | $1433 |
| Derivative instruments designated as cash flow hedges | (8695) | (8921) |
| Postretirement medical plans | 784 | 784 |
| Accumulated other comprehensive loss | $(6473) | $(6704) |

---

The following tables display the changes in AOCL by component, net of tax (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Three Months Ended**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**June 30, 2025** |  |  |
|  | | | **Postretirement** | **Foreign Currency** |  |
|  | | | **Postretirement** | **Foreign Currency** | **Total** |
| | <br>**Affected Line Item**<br>**in the Condensed**<br>**Consolidated**<br>**Statements of**<br>**Income** | **Interest Rate**<br>**Derivative**<br>**Instruments**<br>**Designated as**<br>**Cash Flow Hedges** | **Medical Plans** | **Translation** | **Total** |
| Beginning balance |  | $(8808) | $784 | $1434 | $(6590) |
| Other comprehensive income before |  |  |  |  |  |
| reclassifications |  |  |  | 4 | 4 |
| Amounts reclassified from AOCL | Interest Expense | 113 |  |  | 113 |
| Net current-period other comprehensive income |  | 113 |  | 4 | 117 |
| Ending balance |  | $(8695) | $784 | $1438 | $(6473) |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Three Months Ended**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**June 30, 2024** |  |  |
|  | | | **Postretirement** | **Foreign Currency** |  |
|  | | | **Postretirement** | **Foreign Currency** | **Total** |
| | <br>**Affected Line Item**<br>**in the Condensed**<br>**Consolidated**<br>**Statements of**<br>**Income** | **Interest Rate**<br>**Derivative**<br>**Instruments**<br>**Designated as**<br>**Cash Flow Hedges** | **Medical Plans** | **Translation** | **Total** |
| Beginning balance |  | $(9260) | $280 | $1436 | $(7544) |
| Other comprehensive loss before |  |  |  |  |  |
| reclassifications |  |  |  | (1) | (1) |
| Amounts reclassified from AOCL | Interest Expense | 113 |  |  | 113 |
| Net current-period other comprehensive income (loss) |  | 113 |  | (1) | 112 |
| Ending balance |  | $(9147) | $280 | $1435 | $(7432) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Six Months Ended**<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**June 30, 2025** |  |  |
|  | | | **Defined Benefit** |  |  |
|  | | | **Defined Benefit** |  |  |
|  | | | **Pension Plan and** | **Foreign Currency** |  |
|  | | | **Postretirement** | **Foreign Currency** | **Total** |
| | <br>**Affected Line Item**<br>**in the Condensed**<br>**Consolidated**<br>**Statements of**<br>**Income** | **Interest Rate**<br>**Derivative**<br>**Instruments**<br>**Designated as**<br>**Cash Flow Hedges** | **Medical Plans** | **Translation** | **Total** |
| Beginning balance |  | $(8921) | $784 | $1433 | $(6704) |
| Other comprehensive loss before |  |  |  |  |  |
| reclassifications |  |  |  | 5 | 5 |
| Amounts reclassified from AOCL | Interest Expense | 226 |  |  | 226 |
| Net current-period other comprehensive income |  | 226 |  | 5 | 231 |
| Ending balance |  | $(8695) | $784 | $1438 | $(6473) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | |  | **Six Months Ended**<br>**June 30, 2024** |  |  |
|  | | | **Pension and** |  |  |
|  | | | **Pension and** | **Foreign Currency** |  |
|  | | | **Postretirement** | **Foreign Currency** | **Total** |
| | <br>**Affected Line Item**<br>**in the Condensed**<br>**Consolidated**<br>**Statements of**<br>**Income** | **Interest Rate**<br>**Derivative**<br>**Instruments**<br>**Designated as**<br>**Cash Flow Hedges** | **Medical Plans** | **Translation** | **Total** |
| Beginning balance |  | $(9373) | $280 | $1437 | $(7656) |
| Other comprehensive loss before |  |  |  |  |  |
| reclassifications |  |  |  | (2) | (2) |
| Amounts reclassified from AOCL | Interest Expense | 226 |  | **—** | 226 |
| Net current-period other comprehensive income (loss) |  | 226 |  | (2) | 224 |
| Ending balance |  | $(9147) | $280 | $1435 | $(7432) |

---

**(6) Financing Activities**

On March 21, 2025, NW Corp issued and sold $400.0 million aggregate principal amount of Montana First Mortgage Bonds at a fixed interest rate of 5.07 percent maturing on March 21, 2030. These bonds were issued and sold to certain initial purchasers without being registered under the Securities Act of 1933, as amended (Securities Act), in reliance upon exemptions therefrom in compliance with Rule 144A under the Securities Act, or under Regulation S under the Securities Act for sales to non-U.S. persons. Proceeds were utilized to redeem NW Corp's $161.0 million of 5.01 percent Montana First Mortgage Bonds due May 1, 2025 and $75.0 million of 3.11 percent Montana First Mortgage Bonds due July 1, 2025, to repay outstanding borrowings under our NW Corp revolving credit facility, and for general utility purposes.

On April 11, 2025, we amended our existing NorthWestern Energy Group $100.0 million Term Loan Credit Agreement to extend the maturity date from April 11, 2025 to April 10, 2026.

On May 1, 2025, NWE Public Service issued and sold $100.0 million aggregate principal amount of South Dakota First Mortgage Bonds at a fixed interest rate of 5.49 percent maturing on May 1, 2035. These bonds were issued in transactions exempt from the registration requirements of the Securities Act of 1933. Proceeds were utilized to repay at maturity $64.0 million of NWE Public Service's 5.01 percent South Dakota First Mortgage Bonds due on May 1, 2025 and for other general utility purposes.

------

**(7) Segment Information**

Our reportable segments are engaged in the electric and natural gas utility businesses.

Our Chief Operating Decision Maker (CODM), who is our Chief Executive Officer, uses segment net income to evaluate if our operating segments are earning their authorized rate of return and in the annual budget and forecasting process. Our CODM also uses segment net income to determine how to allocate capital resources between our operating segments and when to allocate the resources necessary to file for rate reviews. Segment asset and capital expenditure information is not provided for our reportable segments. As an integrated electric and gas utility, we operate significant assets that are not dedicated to a specific reportable segment.

Financial data for the reportable segments are as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
| **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **June 30, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;**Electric** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Gas** | &nbsp;&nbsp;&nbsp;&nbsp;**Total** |
| Operating revenues | $279468 | $63245 | $342713 |
| Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) | 59603 | 15668 | 75271 |
| Operating, general, and administrative | 73615 | 22773 | 96388 |
| Property and other taxes | 37318 | 10850 | 48168 |
| Depreciation and depletion | 52387 | 9992 | 62379 |
| Interest expense, net | (27562) | (7297) | (34859) |
| Other income, net | 121 | 456 | 577 |
| Income tax (expense) benefit | (4230) | 201 | (4029) |
| Segment net income | $24874 | $(2678) | $22196 |
| *Reconciliation to consolidated net income* |  |  |  |
| Other, net<sup>(1)</sup> |  |  | (968) |
| Consolidated net income |  |  | $21228 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| **June 30, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;**Electric** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Gas** | &nbsp;&nbsp;&nbsp;&nbsp;**Total** |
| Operating revenues | $260134 | $59795 | $319929 |
| Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) | 60887 | 15593 | 76480 |
| Operating, general, and administrative | 66761 | 21721 | 88482 |
| Property and other taxes | 28006 | 8251 | 36257 |
| Depreciation and depletion | 47546 | 9387 | 56933 |
| Interest expense, net | (23298) | (7147) | (30445) |
| Other income, net | 4031 | 927 | 4958 |
| Income tax (expense) benefit | (3891) | 304 | (3587) |
| Segment net income | $33776 | $(1073) | $32703 |
| *Reconciliation to consolidated net income* |  |  |  |
| Other, net<sup>(1)</sup> |  |  | (1049) |
| Consolidated net income |  |  | $31654 |

---

------

---

| | | | |
|:---|:---|:---|:---|
| **Six Months Ended**<br>**June 30, 2025** | <br>&nbsp;&nbsp;&nbsp;&nbsp;**Electric** | <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Gas** | <br>**Total** |
| Operating revenues | $614951 | $194392 | $809343 |
| Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) | 152355 | 61113 | 213468 |
| Operating, general, and administrative | 146094 | 47943 | 194037 |
| Property and other taxes | 70604 | 20645 | 91249 |
| Depreciation and depletion | 104875 | 19904 | 124779 |
| Interest expense, net | (55318) | (14331) | (69649) |
| Other income, net | 2611 | 1547 | 4158 |
| Income tax expense | (14102) | (4226) | (18328) |
| Segment net income | $74214 | $27777 | $101991 |
| *Reconciliation to consolidated net income* |  |  |  |
| Other, net<sup>(1)</sup> |  |  | (3823) |
| Consolidated net income |  |  | $98168 |

---

---

| | | | |
|:---|:---|:---|:---|
| **Six Months Ended**<br>**June 30, 2024** | <br>&nbsp;&nbsp;&nbsp;&nbsp;**Electric** | <br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Gas** | <br>**Total** |
| Operating revenues | $603320 | $191951 | $795271 |
| Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) | 176228 | 74973 | 251201 |
| Operating, general, and administrative | 134979 | 45650 | 180629 |
| Property and other taxes | 64306 | 19120 | 83426 |
| Depreciation and depletion | 94850 | 18826 | 113676 |
| Interest expense, net | (47955) | (13396) | (61351) |
| Other income, net | 9492 | 1981 | 11473 |
| Income tax expense | (11174) | (2869) | (14043) |
| Segment net income | $83320 | $19098 | $102418 |
| *Reconciliation to consolidated net income* |  |  |  |
| Other, net<sup>(1)</sup> |  |  | (5678) |
| Consolidated net income |  |  | $96740 |

---

(1) Consists of unallocated corporate costs and certain limited unregulated activity within the energy industry.

**(8) Revenue from Contracts with Customers**

**<u>Nature of Goods and Services</u>**

We provide retail electric and natural gas services to three primary customer classes. Our largest customer class consists of residential customers, which includes single private dwellings and individual apartments. Our commercial customers consist primarily of main street businesses, and our industrial customers consist primarily of manufacturing and processing businesses that turn raw materials into products.

***Electric Segment -*** Our regulated electric utility business primarily provides generation, transmission, and distribution services to customers in our Montana and South Dakota jurisdictions. We recognize revenue when electricity is delivered to the customer. Payments on our tariff-based sales are generally due 0-30 days after the billing date.

***Natural Gas Segment -*** Our regulated natural gas utility business primarily provides production, storage, transmission, and distribution services to customers in our Montana, South Dakota, and Nebraska jurisdictions. We recognize revenue when natural gas is delivered to the customer. Payments on our tariff-based sales are generally due 0-30 days after the billing date.

------

**<u>Disaggregation of Revenue</u>**

The following tables disaggregate our revenue by major source and customer class (in millions):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;**Three Months Ended** | &nbsp;&nbsp;&nbsp;&nbsp;**Three Months Ended** |  |  |
|  |  | **June 30, 2025** |  |  | **June 30, 2024** |  |
|  | &nbsp;&nbsp;**Electric** | **Natural Gas** | **Total** | &nbsp;&nbsp;**Electric** | **Natural Gas** | **Total** |
| &nbsp;&nbsp;&nbsp;&nbsp;Montana | $81.8 | $18.0 | $99.8 | $86.0 | $18.9 | $104.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;South Dakota | 16.2 | 5.6 | 21.8 | 15.4 | 5.9 | 21.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Nebraska |  | 4.5 | 4.5 |  | 3.8 | 3.8 |
| &nbsp;&nbsp;&nbsp;**Residential** | **98.0** | **28.1** | **126.1** | **101.4** | **28.6** | **130.0** |
| &nbsp;&nbsp;&nbsp;&nbsp;Montana | 93.9 | 10.4 | 104.3 | 99.7 | 10.7 | 110.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;South Dakota | 27.8 | 3.9 | 31.7 | 26.3 | 3.7 | 30.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;Nebraska |  | 2.4 | 2.4 |  | 2.0 | 2.0 |
| &nbsp;&nbsp;&nbsp;**Commercial** | **121.7** | **16.7** | **138.4** | **126.0** | **16.4** | **142.4** |
| &nbsp;&nbsp;&nbsp;&nbsp;Industrial | 9.9 | 0.1 | 10.0 | 11.3 | 0.2 | 11.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lighting, governmental, irrigation, and |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;interdepartmental | 9.4 | 0.3 | 9.7 | 8.6 | 0.3 | 8.9 |
| **Total Retail Revenues** | **239.0** | **45.2** | **284.2** | **247.3** | **45.5** | **292.8** |
| &nbsp;&nbsp;&nbsp;Regulatory Amortization | 10.3 | 5.2 | 15.5 | (10.9) | 3.7 | (7.2) |
| &nbsp;&nbsp;&nbsp;Transmission | 28.1 |  | 28.1 | 22.4 |  | 22.4 |
| &nbsp;&nbsp;&nbsp;Transportation, wholesale and other | 2.1 | 12.8 | 14.9 | 1.3 | 10.6 | 11.9 |
| **Total Revenues**<sup>(1)</sup> | $**279.5** | $**63.2** | $**342.7** | $**260.1** | $**59.8** | $**319.9** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Six Months Ended** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Six Months Ended** |  |  |
|  |  | **June 30, 2025** |  |  | **June 30, 2024** |  |
|  | &nbsp;&nbsp;**Electric** | **Natural Gas** | **Total** | &nbsp;&nbsp;**Electric** | **Natural Gas** | **Total** |
| &nbsp;&nbsp;&nbsp;&nbsp;Montana | $196.8 | $69.4 | $266.2 | $203.4 | $67.5 | $270.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;South Dakota | 38.5 | 21.2 | 59.7 | 34.7 | 19.5 | 54.2 |
| &nbsp;&nbsp;&nbsp;&nbsp;Nebraska |  | 17.7 | 17.7 |  | 14.3 | 14.3 |
| &nbsp;&nbsp;&nbsp;**Residential** | **235.3** | **108.3** | **343.6** | **238.1** | **101.3** | **339.4** |
| &nbsp;&nbsp;&nbsp;&nbsp;Montana | 190.9 | 37.2 | 228.1 | 201.2 | 35.8 | 237.0 |
| &nbsp;&nbsp;&nbsp;&nbsp;South Dakota | 57.1 | 15.1 | 72.2 | 54.1 | 13.0 | 67.1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Nebraska |  | 9.8 | 9.8 |  | 8.2 | 8.2 |
| &nbsp;&nbsp;&nbsp;**Commercial** | **248.0** | **62.1** | **310.1** | **255.3** | **57.0** | **312.3** |
| &nbsp;&nbsp;&nbsp;&nbsp;Industrial | 20.0 | 0.6 | 20.6 | 23.0 | 0.6 | 23.6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lighting, governmental, irrigation, and |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;interdepartmental | 14.0 | 0.8 | 14.8 | 13.3 | 0.9 | 14.2 |
| **Total Retail Revenues** | **517.3** | **171.8** | **689.1** | **529.7** | **159.8** | **689.5** |
| &nbsp;&nbsp;&nbsp;Regulatory Amortization | 38.0 | (4.2) | 33.8 | 25.5 | 10.6 | 36.1 |
| &nbsp;&nbsp;&nbsp;Transmission | 54.7 |  | 54.7 | 44.8 |  | 44.8 |
| &nbsp;&nbsp;&nbsp;Transportation, wholesale and other | 5.0 | 26.7 | 31.7 | 3.3 | 21.6 | 24.9 |
| **Total Revenues**<sup>(1)</sup> | $**615.0** | $**194.3** | $**809.3** | $**603.3** | $**192.0** | $**795.3** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1)Certain amounts in the prior period have been reclassified to conform with current period presentation. These reclassifications have no effect on the reported financial results.

------

**(9)** **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** | **Three Months Ended** |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**June 30, 2025** | **June 30, 2024** |
| Basic computation | 61380777 | 61288870 |
| &nbsp;&nbsp;&nbsp;*Dilutive effect of:* |  |  |
| Performance share awards<sup>(1)</sup> | 103169 | 68478 |
| Diluted computation | 61483946 | 61357348 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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.

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**June 30, 2025** | **June 30, 2024** |
| Basic computation | 61360252 | 61277418 |
| &nbsp;&nbsp;&nbsp;*Dilutive effect of:* |  |  |
| Performance share awards<sup>(1)</sup> | 95733 | 56065 |
| Diluted computation | 61455985 | 61333483 |

---

As of June 30, 2025, there were 68,107 shares from performance and restricted share awards which were antidilutive and excluded from the earnings per share calculations, compared to 35,933 shares as of June 30, 2024.

**(10) Employee Benefit Plans**

We sponsor and/or contribute to pension and postretirement health care and life insurance benefit plans for eligible employees. Net periodic benefit cost (credit) for our pension and other postretirement plans consists of the following (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Pension Benefits** |  | **Other Postretirement Benefits** | **Other Postretirement Benefits** |
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
|  |  | **2024** | **2025** | **2024** |
| Components of Net Periodic Benefit Cost (Credit) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Service cost | $1167 | $1378 | $66 | $74 |
| &nbsp;&nbsp;&nbsp;Interest cost | 6104 | 5739 | 129 | 132 |
| &nbsp;&nbsp;&nbsp;Expected return on plan assets | (5734) | (6335) | (355) | (321) |
| &nbsp;&nbsp;&nbsp;Amortization of prior service credit |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Recognized actuarial loss (gain) |  | 6 | (68) | (25) |
| Net periodic benefit cost (credit) | $1537 | $788 | $(228) | $(140) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| Components of Net Periodic Benefit Cost (Credit) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Service cost | $2362 | $2796 | $128 | $154 |
| &nbsp;&nbsp;&nbsp;Interest cost | 12149 | 11472 | 256 | 279 |
| &nbsp;&nbsp;&nbsp;Expected return on plan assets | (11476) | (12663) | (709) | (640) |
| &nbsp;&nbsp;&nbsp;Amortization of prior service credit |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Recognized actuarial loss (gain) |  | 17 | (138) | (37) |
| Net periodic benefit cost (credit) | $3035 | $1622 | $(463) | $(244) |

---

We contributed $4.2 million to our pension plans during the six months ended June 30, 2025. We expect to contribute an additional $5.8 million to our pension plans during the remainder of 2025.

------

**(11) Commitments and Contingencies**

**ENVIRONMENTAL LIABILITIES AND REGULATION**

Except as set forth below, the circumstances set forth in Note 18 - Commitments and Contingencies to the financial statements included in the

[<u>NorthWestern Energy Group Annual Report on Form 10-K for the year ended December 31, 2024</u>](https://www.sec.gov/ix?doc=/Archives/edgar/data/1993004/000199300425000021/nweg-20241231.htm)appropriately represent, in all material respects, the current status of our environmental liabilities and regulation.

**<u>Environmental Protection Agency (EPA) Rules</u>**

On April 25, 2024, the EPA released final rules related to greenhouse gas (GHG) emission standards (GHG Rules) for existing coal-fired facilities and new coal and natural gas-fired facilities as well as final rules strengthening the MATS requirements (MATS Rules). Compliance with the rules would 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.

Previous efforts by the EPA were met with extensive litigation, and this time is no different. We, along with many other utilities, electric cooperatives, organizations, and states, have petitioned for judicial review of the GHG and MATS Rules with the U.S. Court of Appeals for the D.C. Circuit. The United States Supreme Court denied the multiple stay requests related to the MATS Rule and the GHG Rule. The litigation on the merits continues for both the MATS and GHG rules in the D.C. Circuit Court of Appeals, and the cases could be decided in 2025.

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. If the MATS Rules and GHG Rules are fully implemented, it would result in additional material compliance costs for us. On June 11, 2025, the EPA issued a Notice of Proposed Rulemaking containing two proposals to reform GHG regulations. If either the lead or alternative proposal is adopted, our additional material compliance costs would be eliminated. A virtual public hearing on this Notice of Proposed Rulemaking was held on July 8, 2025, and final comments to this rulemaking are due back by August 7, 2025. On June 11, 2025, the EPA also issued a Notice of Proposed Rulemaking to rescind the 2024 MATS Rule, which if enacted, would restore the original 2012 MATS standards. A virtual public hearing on this Notice of Proposed Rulemaking was held on July 10, 2025, and final comments are due by August 11, 2025. There is no mandated timeline from the close of public comment to the time when the final rules are published.

These GHG Rules and MATS Rules as well as future additional environmental requirements - federal or state - could cause us to incur material costs of compliance, increase our costs of procuring electricity, decrease transmission revenue and impact cost recovery. Technology to efficiently capture, remove and/or sequester such GHG emissions or hazardous air pollutants may not be available within a timeframe consistent with the implementation of any such requirements.

**LEGAL PROCEEDINGS**

**<u>State of Montana - Riverbed Rents</u>**

On April 1, 2016, the State of Montana (State) filed a complaint on remand (the State's Complaint) with the Montana First Judicial District Court (State District Court), naming us, along with Talen Montana, LLC (Talen) as defendants. The State claimed it owns the riverbeds underlying 10 of our, and formerly Talen's, hydroelectric facilities (dams, along with reservoirs and tailraces) on the Missouri, Madison and Clark Fork Rivers, and seeks rents for Talen's and our use and occupancy of such lands. The facilities at issue include the Hebgen, Madison, Hauser, Holter, Black Eagle, Rainbow, Cochrane, Ryan, and Morony facilities on the Missouri and Madison Rivers and the Thompson Falls facility on the Clark Fork River. We acquired these facilities from Talen in November 2014.

The litigation has a long prior history in state and federal court, including before the United States Supreme Court, as detailed in Note 18 - Commitments [and Contingencies to the financial statements included in the <u>NorthWestern Energy Group Annual Report on Form 10-K for the year ended December 31,</u>](https://www.sec.gov/ix?doc=/Archives/edgar/data/1993004/000199300425000021/nweg-20241231.htm)[<u>2024</u>. On April 20, 2016, we removed the case from State District Court to the United States District Court for the District of Montana (Federal District](https://www.sec.gov/ix?doc=/Archives/edgar/data/1993004/000199300425000021/nweg-20241231.htm)Court). On August 1, 2018, the Federal District Court granted our and Talen's motions to dismiss the State's Complaint as it pertains to the navigability of the riverbeds associated with four of our hydroelectric facilities near Great Falls. The Federal District Court held a bench trial from January 4 to January 18, 2022, which addressed the issue of navigability concerning our other six facilities. On August 25, 2023, the Federal District Court issued its Findings of Fact, Conclusions of Law, and Order (the "Order"), which found all but one of the segments of the riverbeds in dispute not navigable, and thus not owned by the State of Montana. The one segment found navigable, and thus owned by the State, was the segment on which the Black Eagle development was located. Upon the State's motion, the Federal District Court certified the Order for interlocutory appeal to the 9th Circuit Court of Appeals. After briefing and oral argument, the 9th Circuit affirmed the Federal District Court's Order in full on March 4, 2025.

Following the mandate and remand, the District Court will resume jurisdiction to determine damages for the Sun River to Black Eagle Falls Segment of the Missouri River. If the Federal District Court calculates damages as the State District Court did in 2008, we do not anticipate the resulting annual rent for the Black Eagle segment would have a material impact to our financial position or results of operations. We anticipate that any obligation to pay the State rent for use and occupancy of the riverbeds would be recoverable in rates from customers, although there can be no assurances that the MPSC would approve any such recovery.

------

**<u>Other Legal Proceedings</u>**

We are also subject to various other legal proceedings, governmental audits and claims that arise in the ordinary course of business. In our opinion, the amount of ultimate liability with respect to these other actions will not materially affect our financial position, results of operations, or cash flows.

------

## Exhibit 99.3

**UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL INFORMATION**

On August 18, 2025, Black Hills Corporation, a South Dakota corporation ("Black Hills" or the "Company"), entered into an Agreement and Plan of Merger (the "Merger Agreement") with NorthWestern Energy Group, Inc., a Delaware corporation ("NorthWestern") and River Merger Sub Inc., a Delaware corporation and direct wholly owned subsidiary of Black Hills ("Merger Sub"). The Merger Agreement, which has been unanimously approved by both the board of directors of Black Hills and the board of directors of NorthWestern, provides for an all-stock merger of Black Hills and NorthWestern upon the terms and subject to the conditions set forth therein.

The Merger Agreement provides for Merger Sub to merge with and into NorthWestern (the "Merger"), with NorthWestern continuing as the surviving entity and a direct wholly owned subsidiary of Black Hills, which would assume a new corporate name as the resulting parent company of the combined corporate group.

At the effective time of the Merger (the "Effective Time"), each share of common stock of NorthWestern, par value $0.01 per share (the "NorthWestern Common Stock", issued and outstanding as of immediately prior to the Effective Time will be converted into the right to receive 0.98 (the "Exchange Ratio") validly issued, fully paid and non-assessable shares of common stock of Black Hills, par value $1.00 per share (the "Black Hills Common Stock") (or cash in lieu of fractional shares thereof), in each case upon and subject to the terms and conditions of the Merger Agreement.

The following unaudited pro forma condensed combined financial statements, which have been prepared to give effect to the Merger in accordance with Article 11 of Regulation S-X and are limited to adjustments required by such rules, include adjustments for the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•certain reclassifications to conform the historical financial statement presentation of Black Hills and NorthWestern; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•application of the acquisition method of accounting under the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification, which we refer to as ASC 805, "Business Combinations," to reflect estimated merger consideration of approximately $3.6 billion in exchange for 100% of all outstanding NorthWestern Common Stock;

The unaudited pro forma financial information should be read, if at all, together with its accompanying notes and in conjunction with the following historical consolidated financial statements and accompanying notes of Black Hills and NorthWestern, referenced below. The pro forma financial statements of Black Hills have been derived from:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the audited consolidated statement of income of Black Hills for the year ended December 31, 2024 included in Black Hills' Annual Report on Form 10-K for the fiscal year then ended;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the unaudited consolidated financial statements of Black Hills as of and for the six months ended June 30, 2025 included in Black Hills' Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the audited consolidated statement of income of NorthWestern for the year ended December 31, 2024, which are included in NorthWestern's audited consolidated financial statements that were filed as Exhibit 99.1 to the Current Report on Form 8-K (the "Financial Statement Form 8-K")that this unaudited pro forma condensed combined financial information is attached to as Exhibit 99.3; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the unaudited consolidated financial statements of NorthWestern as of and for the six months ended June 30, 2025, which financial statements were filed as Exhibit 99.2 to the Financial Statement Form 8-K.

The unaudited pro forma combined condensed statements of income combine the Black Hills and NorthWestern historical consolidated income statements for the six months ended June 30, 2025 and the year ended December 31, 2024, giving effect to the Merger as if it were completed on January 1, 2024. The unaudited pro forma combined condensed balance sheet as of June 30, 2025 gives effect to the Merger as if it were completed on that date.

The historical consolidated financial information has been adjusted in the unaudited pro forma financial statements to give effect to certain pro forma events that are directly attributable to the Merger and factually supportable. The unaudited pro forma financial statements do not reflect other potential effects of the Merger, such as anticipated non-recurring transaction costs, any cost savings (or associated costs to achieve such savings) from operating efficiencies or restructuring that could result from the Merger, the effect of any regulatory actions that may impact the pro forma financial statements following completion of the Merger or the effects of any changes in business or market conditions as a result of the Merger or otherwise.

The statements and related notes have been prepared for illustrative purposes only, based upon applicable rules of the Securities and Exchange Commission. The pro forma information does not purport to be indicative of what the combined company's consolidated financial position or results of operations actually would have been had the Merger been completed as of the dates indicated. In addition, the unaudited pro forma combined condensed financial information does not purport to project the future financial position or operating results of the combined company. The pro forma adjustments, which are subject to uncertainties, are based on the information available at the time of the preparation of these pro forma financial statements and on the basis of certain assumptions and estimates.

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** |
| **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** |
| **FOR THE SIX MONTHS ENDED JUNE 30, 2025** | **FOR THE SIX MONTHS ENDED JUNE 30, 2025** | **FOR THE SIX MONTHS ENDED JUNE 30, 2025** | **FOR THE SIX MONTHS ENDED JUNE 30, 2025** | **FOR THE SIX MONTHS ENDED JUNE 30, 2025** | **FOR THE SIX MONTHS ENDED JUNE 30, 2025** | **FOR THE SIX MONTHS ENDED JUNE 30, 2025** |
|  | **Black Hills Corporation Historical** | **NorthWestern Energy Group Historical** | **Presentation Reclass <br>(Note 1)** | **Transaction Accounting Adjustments** | **Note** | **Pro Forma Condensed Combined** |
|  | (in millions, except per share amounts) | (in millions, except per share amounts) | (in millions, except per share amounts) | (in millions, except per share amounts) | (in millions, except per share amounts) | (in millions, except per share amounts) |
| Revenue | $1244 | $809 | $— | $— |  | $2054 |
| Operating expenses: |  |  |  |  |  |  |
| Fuel, purchased power and cost of natural gas sold | 484 | 214 |  |  |  | 697 |
| Operations and maintenance | 301 | 119 | 75 | (4) | 3 (A) | 491 |
| Administrative and general |  | 75 | (75) |  |  |  |
| Depreciation and amortization | 139 | 125 |  |  |  | 264 |
| Taxes other than income taxes | 33 | 91 |  |  |  | 124 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 957 | 624 |  | (4) |  | 1576 |
| Operating income | 287 | 186 |  | 4 |  | 477 |
| Other income (expense): |  |  |  |  |  |  |
| Interest expense, net | (100) | (73) |  |  |  | (173) |
| Other income (expense), net | 1 | 4 |  |  |  | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | (100) | (69) |  |  |  | (168) |
| Income before income taxes | 188 | 117 |  | 4 |  | 309 |
| Income tax (expense) | (23) | (19) |  | (1) | 3 (B) | (42) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | 165 | 98 |  | 3 |  | 267 |
| Net income attributable to non-controlling interest | (4) |  |  |  |  | (4) |
| Net income available for common stock | $162 | $98 | $- | $3 |  | $263 |
| Earnings per share of common stock: |  |  |  |  |  |  |
| Earnings per share, Basic | $2.25 | $1.60 | $- | $- |  | $1.99 |
| Earnings per share, Diluted | $2.24 | $1.60 | $- | $- |  | $1.99 |
| Weighted average common shares outstanding: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 72 | 61 | - | (1) | 3 (C) | 132 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 72 | 61 | - | (1) | 3 (C) | 132 |

---

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** |
| **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** | **UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (LOSS)** |
| **FOR THE YEAR ENDED DECEMBER 31, 2024** | **FOR THE YEAR ENDED DECEMBER 31, 2024** | **FOR THE YEAR ENDED DECEMBER 31, 2024** | **FOR THE YEAR ENDED DECEMBER 31, 2024** | **FOR THE YEAR ENDED DECEMBER 31, 2024** | **FOR THE YEAR ENDED DECEMBER 31, 2024** | **FOR THE YEAR ENDED DECEMBER 31, 2024** |
|  | **Black Hills Corporation Historical** | **NorthWestern Energy Group Historical** | **Presentation Reclass <br>(Note 1)** | **Transaction Accounting Adjustments** | **Note** | **Pro Forma Condensed Combined** |
|  | (in millions, except per share amounts) | (in millions, except per share amounts) | (in millions, except per share amounts) | (in millions, except per share amounts) | (in millions, except per share amounts) | (in millions, except per share amounts) |
| Revenue | $2128 | $1514 | $— | $— |  | $3642 |
| Operating expenses: |  |  |  |  |  |  |
| Fuel, purchased power and cost of natural gas sold | 730 | 434 |  |  |  | 1164 |
| Operations and maintenance | 557 | 228 | 138 | (5) | 3 (A) | 918 |
| Administrative and general |  | 138 | (138) |  |  |  |
| Depreciation and amortization | 270 | 228 |  |  |  | 498 |
| Taxes other than income taxes | 67 | 164 |  |  |  | 231 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 1625 | 1191 |  | (5) |  | 2810 |
| Operating income | 503 | 323 |  | 5 |  | 831 |
| Other income (expense): |  |  |  |  |  |  |
| Interest expense, net | (182) | (132) |  |  |  | (313) |
| Other income (expense), net | (1) | 23 |  |  |  | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | (183) | (109) |  |  |  | (292) |
| Income before income taxes | 320 | 215 |  | 5 |  | 539 |
| Income tax (expense) | (36) | 9 |  | (1) | 3 (B) | (28) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net income | 284 | 224 |  | 4 |  | 511 |
| Net income attributable to non-controlling interest | (11) |  |  |  |  | (11) |
| Net income available for common stock | $273 | $224 | $— | $4 |  | $501 |
| Earnings per share of common stock: |  |  |  |  |  |  |
| Earnings per share, Basic | $3.91 | $3.66 | $— | $— |  | $3.85 |
| Earnings per share, Diluted | $3.91 | $3.65 | $— | $— |  | $3.85 |
| Weighted average common shares outstanding: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Basic | 70 | 61 |  | (1) | 3 (C) | 130 |
| &nbsp;&nbsp;&nbsp;&nbsp;Diluted | 70 | 61 |  | (1) | 3 (C) | 130 |

---

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** | **BLACK HILLS CORPORATION AND NORTHWESTERN ENERGY GROUP** |
| **UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET** | **UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET** | **UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET** | **UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET** | **UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET** | **UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET** | **UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET** |
| **JUNE 30, 2025** | **JUNE 30, 2025** | **JUNE 30, 2025** | **JUNE 30, 2025** | **JUNE 30, 2025** | **JUNE 30, 2025** | **JUNE 30, 2025** |
|  | **Black Hills Corporation Historical** | **NorthWestern Energy Group Historical** | **Presentation Reclass <br>(Note 1)** | **Transaction Accounting Adjustments** | **Note** | **Pro Forma Condensed Combined** |
|  | (in millions) | (in millions) | (in millions) | (in millions) | (in millions) | (in millions) |
| **ASSETS** |  |  |  |  |  |  |
| Current assets: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash, restricted cash and equivalents | $16 | $27 | $— | $(8) | 3 (D) | $34 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 261 | 155 |  |  |  | 416 |
| &nbsp;&nbsp;&nbsp;&nbsp;Materials, supplies and fuel | 145 | 125 |  |  |  | 270 |
| &nbsp;&nbsp;&nbsp;&nbsp;Regulatory assets, current | 132 | 68 |  |  |  | 200 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 55 | 29 |  |  |  | 84 |
| Total current assets | 609 | 403 |  | (8) |  | 1004 |
| Total property, plant and equipment, net | 7860 | 6532 |  |  |  | 14392 |
| Other assets: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Goodwill | 1300 | 358 |  | 648 | 3 (E) | 2305 |
| &nbsp;&nbsp;&nbsp;&nbsp;Regulatory assets, non-current | 248 | 779 |  |  |  | 1027 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets, non-current | 76 | 65 |  |  |  | 140 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other assets, non-current | 1623 | 1201 |  | 648 |  | 3472 |
| TOTAL ASSETS | $10092 | $8136 | $— | $640 |  | $18868 |
| **LIABILITIES AND EQUITY** |  |  |  |  |  |  |
| Current liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | $181 | $94 | $— | $— |  | $275 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 253 | 256 |  |  |  | 508 |
| &nbsp;&nbsp;&nbsp;&nbsp;Regulatory liabilities, current | 97 | 28 |  |  |  | 125 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable | 124 | 100 |  |  |  | 224 |
| &nbsp;&nbsp;&nbsp;&nbsp;Current maturities of long-term debt | 300 | 60 |  |  |  | 360 |
| Total current liabilities | 954 | 537 |  |  |  | 1491 |
| Long-term debt, net of current maturities | 3952 | 3030 |  |  |  | 6982 |
| Deferred credits and other liabilities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax liabilities, net | 674 | 703 |  | (87) | 3 (F) | 1290 |
| &nbsp;&nbsp;&nbsp;&nbsp;Regulatory liabilities, non-current | 480 | 674 |  |  |  | 1154 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other deferred credits and other liabilities | 312 | 312 |  |  |  | 624 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred credits and other liabilities | 1466 | 1689 |  | (87) |  | 3068 |
| Equity: |  |  |  |  |  |  |
| Stockholders' equity - |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Black Hills common stock, additional paid-in capital and treasury stock | 2331 |  |  | 3606 | 3 (G) | 5937 |
| &nbsp;&nbsp;&nbsp;&nbsp;NorthWestern common stock, additional paid-in capital and treasury stock |  | 1992 |  | (1992) | 3 (G) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Retained earnings | 1313 | 895 |  | (895) | 3 (G) | 1313 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) | (8) | (6) |  | 6 | 3 (G) | (8) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 3636 | 2880 |  | 727 |  | 7243 |
| Non-controlling interest | 83 |  |  |  |  | 83 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity | 3719 | 2880 |  | 727 |  | 7326 |
| TOTAL LIABILITIES AND TOTAL EQUITY | $10092 | $8136 | $— | $640 |  | $18868 |

---

------

**NOTES TO THE UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS**

**(1) BASIS OF PROFORMA PRESENTATION** 

The unaudited pro forma combined condensed statements of income combine the Black Hills and NorthWestern historical consolidated income statements for the six months ended June 30, 2025 and the year ended December 31, 2024, giving effect to the Merger as if it were completed on January 1, 2024. The unaudited pro forma combined condensed balance sheet as of June 30, 2025 gives effect to the Merger as if it were completed on that date.

Black Hills' and NorthWestern's historical financial statements were prepared in accordance with U.S. GAAP and presented in U.S. dollars. Certain reclassifications have been made to NorthWestern's historical presentation in order to conform to Black Hills' historical presentation, as presented within the column titled "Presentation Reclass" in the pro forma balance sheet. Black Hills has not identified all adjustments necessary to conform NorthWestern's accounting policies to Black Hills' accounting policies. Upon completion of the Merger, or as more information becomes available, Black Hills will perform a more detailed review of NorthWestern's accounting policies. As a result of that review, differences could be identified between the accounting policies of the two companies that, when conformed, could have a material impact on the combined company's financial information. Further, there were no material transactions and balances between Black Hills and NorthWestern as of and for the six months ended June 30, 2025 and for the year ended December 31, 2024.

The accompanying unaudited pro forma condensed combined financial statements and related notes were prepared using the acquisition method of accounting under the provisions of ASC 805, with Black Hills considered the acquirer of NorthWestern. ASC 805 requires, among other things, that the assets acquired and liabilities assumed in a business combination be recognized at their fair values as of the acquisition date. For purposes of the unaudited pro forma condensed combined balance sheet, the purchase consideration has been allocated to the assets acquired and liabilities assumed of NorthWestern based upon management's preliminary estimate of their fair values as of June 30, 2025. Black Hills has not completed the valuation analysis and calculations in sufficient detail necessary to arrive at the required estimates of the fair market value of the NorthWestern assets to be acquired or liabilities assumed. Accordingly, NorthWestern's assets and liabilities are presented at their respective carrying amounts and should be treated as preliminary fair values. Any differences between the fair value of the consideration transferred and the fair value of the assets acquired and liabilities assumed will be recorded as goodwill. Accordingly, the purchase price allocation and related adjustments reflected in these unaudited pro forma condensed combined financial statements are preliminary and subject to revision based on a final determination of fair value.

The unaudited pro forma financial statements are presented for illustration only and do not reflect anticipated non-recurring transaction costs or any cost savings (or associated costs to achieve such savings) from operating efficiencies or restructuring that could result from the Merger. Further, the pro forma financial statements do not reflect the effect of any regulatory actions that may impact the proforma financial statements when the Merger is completed.

**(2) PRELIMINARY PURCHASE PRICE ALLOCATION**

At the Effective Time, each share of NorthWestern Common Stock, issued and outstanding as of immediately prior to the Effective Time will be converted into the right to receive 0.98 validly issued, fully paid and non-assessable shares of Black Hills Common Stock (or cash in lieu of fractional shares thereof), in each case upon and subject to the terms and conditions of the Merger Agreement.

Refer to the table below for preliminary calculation of estimated merger consideration:

---

| | |
|:---|:---|
|  | **Amount in millions (except exchange ratio and price per share)** |
| Northwestern common stock issued and outstanding as of August 15, 2025 | 61<br> (a) |
| Exchange ratio | 0.98<br> (a) |
| Black Hills common stock to be issued | 60 |
| Black Hills common stock price on August 29, 2025 | $59.81<br> (a) |
| Estimated value of Black Hills common stock to be issued to NorthWestern stockholders pursuant to the Merger Agreement | $3598 |
| Estimated cash consideration attributable to settlement of equity awards | 8<br> (b) |
| Estimated equity consideration attributable to settlement of equity awards | 8<br> (c) |
| Preliminary fair value of estimated total merger consideration | $3614 |

---

____________________

(a)Under the terms of the Merger Agreement, NorthWestern stockholders have the right to receive a fixed exchange ratio of 0.98 of a share of Black Hills Common Stock for each share of NorthWestern Common Stock. For purposes of the unaudited pro forma condensed combined balance sheet, the estimated merger consideration is based on the total NorthWestern Common Stock issued and outstanding as of August 15, 2025 and the closing price per share of Black Hills Common Stock on August 29, 2025. A 10% change in the closing price per share of Black Hills Common Stock would increase or decrease the estimated fair value of the Black Hills Common Stock to be issued to NorthWestern stockholders by approximately $360 million.

(b)Represents the estimated fair value of outstanding NorthWestern restricted stock awards that are expected to be settled in cash at Merger closing.

(c)Represents the estimated fair value of outstanding NorthWestern performance share units, which will be converted to Black Hills stock at Merger closing.

------

The preliminary estimated Merger consideration as shown in the table above is allocated to the tangible assets acquired and liabilities assumed of NorthWestern based on their preliminary estimated fair values. As mentioned above in Note 1, Black Hills has not completed the valuation analysis and calculations in sufficient detail necessary to arrive at the required estimates of the fair market value of the NorthWestern assets to be acquired or liabilities assumed. Accordingly, assets acquired and liabilities assumed are presented at their respective carrying amounts and should be treated as preliminary fair values. The fair value assessments are preliminary and are based upon available information and certain assumptions, which Black Hills believes are reasonable under the circumstances. Actual results may differ materially from the assumptions within the unaudited pro forma condensed combined financial statements.

The following table sets forth a preliminary allocation of the estimated Merger consideration to the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed of NorthWestern using NorthWestern's unaudited consolidated balance sheet as of June 30, 2025, with the excess recorded to goodwill:

---

| | |
|:---|:---|
|  | **Amount (in millions)** |
| Preliminary fair value of estimated total Merger consideration | $3614 |
| **Assets** |  |
| Cash, restricted cash and equivalents | 27 |
| Accounts receivable, net | 155 |
| Materials, supplies and fuel | 125 |
| Regulatory assets, current | 68 |
| Other current assets | 29 |
| Total property, plant and equipment, net | 6532 |
| Regulatory assets, non-current | 779 |
| Other assets, non-current | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total assets | 7778 |
| **Liabilities** |  |
| Accounts payable | (94) |
| Accrued liabilities | (256) |
| Regulatory liabilities, current | (28) |
| Notes payable | (100) |
| Current maturities of long-term debt | (60) |
| Long-term debt, net of current maturities | (3030) |
| Deferred income tax liabilities, net | (616) |
| Regulatory liabilities, non-current | (674) |
| Other deferred credits and other liabilities | (312) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | (5169) |
| Less: Net assets | 2609 |
| Goodwill | $1005 |

---

**(3) TRANSACTION ACCOUNTING ADJUSTMENTS**

The transaction accounting adjustments included in the Unaudited Pro Forma Condensed Combined Statements of Income (Loss) and the Unaudited Pro Forma Condensed Combined Balance Sheet are as follows:

(A)Represents the elimination of NorthWestern historical stock-based compensation expense related to the vested and accelerated awards that were settled for common stock in these Unaudited Pro Forma Condensed Combined Statements of Income (Loss) as if these awards were settled on January 1, 2024.

(B)Represents an increase in income tax expense for the income tax impact of transaction accounting adjustments related to the elimination of NorthWestern historical stock-based compensation expense.

------

(C)The pro forma basic and diluted earnings per share calculations are based on the basic and diluted weighted average shares of Black Hills plus shares issued as part of the Merger. The pro forma basic and diluted weighted average shares outstanding are a combination of historical weighted average shares of Black Hills Common Stock and the share impact as part of the Merger. The the effect of converting certain equity awards held by NorthWestern employees into Black Hills Common Stock is not considered material to the pro forma weighted average number of basic and diluted shares outstanding. Weighted average shares outstanding are as follows:

---

| | | |
|:---|:---|:---|
| **Pro forma weighted average shares (in millions)** | **Six months ended June 30, 2025** | **Year ended December 31, 2024** |
| Historical Black Hills weighted average shares outstanding - basic | 72 | 70 |
| Black Hills common shares to be issued pursuant to the Merger Agreement (Note 2) | 60 | 60 |
| Pro forma weighted average shares - basic | 132 | 130 |
| Historical Black Hills weighted average shares outstanding - diluted | 72 | 70 |
| Black Hills common shares to be issued pursuant to the Merger Agreement (Note 2) | 60 | 60 |
| Pro forma weighted average shares - diluted | 132 | 130 |

---

(D)Represents the estimated fair value of outstanding NorthWestern restricted stock awards that are expected to be settled in cash at Merger closing.

(E)Reflects an adjustment to goodwill based on the preliminary purchase price allocation discussed in Note 2 above:

---

| | |
|:---|:---|
|  | **Amount (in millions)** |
| Fair value of consideration transferred in excess of the preliminary fair value of assets acquired and liabilities assumed (Note 2) | $1005 |
| Removal of NorthWestern's historical goodwill | (358) |
| Pro forma net adjustment to goodwill | $648 |

---

(F)Reflects a $90 million decrease to deferred tax liabilities, net to remove the Northwestern's existing deferred tax liability related to goodwill and a $3 million increase to reflect the elimination of Northwestern's deferred tax asset related to its historical stock-based compensation expense.

(G)Reflects an adjustment to Black Hills and NorthWestern equity based on the following:

---

| | |
|:---|:---|
|  | **Amount (in millions)** |
| Estimated value of Black Hills common shares to be issued to NorthWestern stockholders pursuant to the Merger Agreement | $3598 |
| Estimated equity consideration attributable to settlement of equity awards | 8 |
| Removal of NorthWestern's historical stockholders' equity | (2880) |
| Pro forma net adjustment to total equity | $727 |

---

------

## Exhibit 99.4

**Supplementary Risk Factors** 

Unless these supplemental risk factors indicate otherwise, or the context otherwise requires, references to the term "Black Hills" means Black Hills Corporation and "NorthWestern" means NorthWestern Energy Group, Inc. Capitalized terms used but not defined herein have the meanings ascribed to them in the Current Report on Form 8-K to which these supplementary risk factors are attached as Exhibit 99.4 (the "Financial Statement Form 8-K").

**Risks Related to the Merger** 

***The ability of Black Hills and NorthWestern to complete the Merger is subject to various closing conditions, including the receipt of approval of Black Hills and NorthWestern stockholders and the receipt of consents and approvals from various governmental authorities, which may impose conditions that could adversely affect Black Hills or NorthWestern or cause the Merger to be abandoned. Failure to complete the merger, or significant delays in completing the merger, could negatively affect the trading price of Black Hills common stock or other securities and the future business and financial results of Black Hills.*** 

To complete the merger, Black Hills and NorthWestern stockholders must vote to approve a number of proposals related to the Merger and the Merger Agreement. Further, the Merger is subject to the satisfaction or waiver of certain closing conditions, including, (1) the effectiveness of a registration statement on Form S-4 to be filed in connection with the Merger; (2) subject to certain conditions, the receipt of certain regulatory approvals, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (the "HSR Act"), and approval from the Federal Energy Regulatory Commission and certain state regulatory commissions, in each case on such terms and conditions that would not result in a material adverse effect on the combined company; (3) the absence of any court order or regulatory injunction prohibiting completion of the Merger; (4) the authorization for listing of shares of Black Hills Common Stock to be issued in connection with the Merger on the New York Stock Exchange ("NYSE") or other mutually-agreed stock exchange; (5) subject to specified materiality standards, the accuracy of the representations and warranties of each party; (6) compliance by each party in all material respects with its covenants under the Merger Agreement; (7) the absence of a material adverse effect on each party; and (8) receipt by each party of an opinion relating to the anticipated tax-free treatment of the Merger. If the foregoing conditions are not satisfied or waived, one or both of Black Hills or NorthWestern would not be required to complete the Merger.

Black Hills and NorthWestern have not yet obtained stockholder approval or the regulatory consents and approvals required to complete the Merger. Governmental or regulatory agencies could seek to block or challenge the Merger or could impose restrictions they deem necessary or desirable in the public interest as a condition to approving the Merger. Black Hills and NorthWestern will be unable to complete the Merger until the waiting period under the HSR Act has expired or been terminated and the required governmental approvals have been received. Regulatory authorities may impose certain requirements or obligations as conditions for their approval. The Merger Agreement may require Black Hills and/or NorthWestern to accept conditions from these regulators that could adversely impact the combined company. If the required governmental approvals are not received, or they are not received on terms that satisfy the conditions set forth in the Merger Agreement, then neither Black Hills nor NorthWestern will be obligated to complete the Merger.

Black Hills and NorthWestern believe that the Merger will receive the necessary antitrust clearance. However, there can be no assurance that a challenge to the Merger on antitrust grounds will not be made or, if such a challenge is made, of the result of such challenge.

Additionally, even after the statutory waiting period under the antitrust laws and even after completion of the Merger, governmental authorities could seek to block or challenge the Merger as they deem necessary or desirable in the public interest. In addition, in some jurisdictions, a private party could initiate an action under the antitrust laws challenging or seeking to enjoin the Merger, before or after they are completed. Black Hills or NorthWestern may not prevail and may incur significant costs in defending or settling any action under the antitrust laws.

The special meetings at which the Black Hills stockholders and the NorthWestern stockholders will vote on the transactions contemplated by the Merger Agreement may take place before all regulatory approvals have been obtained and, in cases where they have not been obtained, before the terms of any conditions to obtain such regulatory approvals that may be imposed are known. As a result, if stockholder approval of the transactions

------

contemplated by the Merger Agreement is obtained at such meetings, Black Hills may make decisions after the meetings to waive a condition or approve certain actions required to obtain the necessary approvals without seeking further stockholder approval. Such actions could have an adverse effect on the combined company.

If Black Hills and NorthWestern are unable to complete the Merger, or there is a significant delay in completing the Merger, Black Hills would be subject to a number of risks, including the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Black Hills would not realize the anticipated benefits of the Merger, including, among other things, increased operating efficiencies and future cost savings;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the attention of management of Black Hills may have been diverted to the Merger rather than to its own operations and the pursuit of other opportunities that could have been beneficial to Black Hills;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the potential loss of key personnel during the pendency of the Merger as employees may experience uncertainty about their future roles with the combined company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Black Hills will have been subject to certain restrictions on the conduct of its business, which may prevent Black Hills from making certain acquisitions or dispositions or pursuing certain business opportunities while the Merger is pending;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the trading price of Black Hills Common Stock or other securities may decline to the extent that the current market prices reflect a market assumption that the Merger will be completed; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the parties may be liable for damages to one another, or have to pay a termination fee, under the Merger Agreement.

Black Hills can provide no assurance that the various closing conditions will be satisfied and that the required governmental approvals and other approvals will be obtained, or that any required conditions will not materially adversely affect the combined company following the Merger. In addition, Black Hills can provide no assurance that these conditions will not result in the abandonment or delay of the Merger. The occurrence of any of these events individually or in combination could have a material adverse effect on Black Hills' results of operations and the trading price of Black Hills Common Stock or other securities.

***The Merger Agreement contains provisions that limit Black Hills' ability to pursue alternatives to the Merger, could discourage a potential acquirer of Black Hills from making a favorable alternative transaction proposal and, in certain circumstances, could require Black Hills to pay a termination fee to NorthWestern.*** 

Under the Merger Agreement, Black Hills and NorthWestern have agreed, subject to certain exceptions with respect to unsolicited proposals, not to directly or indirectly solicit competing acquisition proposals or to enter into discussions concerning, or provide confidential information in connection with, any unsolicited alternative acquisition proposals. Additionally, the Black Hills board of directors and the NorthWestern board of directors are each required to recommend the approval of the applicable transaction-related proposals to its respective stockholders, subject to certain exceptions. Prior to the approval of the transaction-related proposals by their respective stockholders, the Black Hills board of directors or the NorthWestern board of directors may change its recommendation in response to an unsolicited proposal for an alternative transaction, if such board of directors determines in good faith after consultation with its outside legal counsel and financial advisor that the proposal constitutes or would reasonably be expected to lead to a "Superior NorthWestern Proposal" or "Superior Black Hills Proposal", as applicable (as such terms are defined in the Merger Agreement), and that failure to take such action would be inconsistent with their fiduciary duties under applicable law to the applicable company and its stockholders under applicable law, subject to complying with certain procedures set forth in the Merger Agreement. Prior to the approval of the transaction-related proposals by their respective stockholders, the Black Hills board of directors and the NorthWestern board of directors may also change its recommendation upon the occurrence of a "NorthWestern Intervening Event" or "Black Hills Intervening Event", as applicable (as such terms are defined in the Merger Agreement), and such board of directors determines in good faith after consultation with its outside legal counsel and financial advisor that failing to change its recommendation would be inconsistent with its fiduciary duties under applicable law, subject to complying with certain procedures set forth in the Merger Agreement. The Merger Agreement is subject to a "force-the-vote" provision, which means neither Black Hills nor NorthWestern would have an independent right to terminate the Merger Agreement to accept a superior proposal. These provisions could discourage a third party that may have an interest in acquiring all or a significant part of Black Hills from

------

considering or proposing that acquisition, even if such third party were prepared to pay consideration with a higher market value than the market value proposed to be received or realized in the merger, or might result in a potential acquirer proposing to pay a lower price than it would otherwise have proposed to pay. As a result of these restrictions, Black Hills may not be able to enter into an agreement with respect to a more favorable alternative transaction, or may be able to do so only by incurring potentially significant liability to NorthWestern.

The Merger Agreement contains certain customary termination rights for each of Black Hills and NorthWestern; provided, that, either party would be required to pay to the other a termination fee equal to $100 million upon termination of the Merger Agreement in certain circumstances involving (i) a change in recommendation by such party's board of directors (including, in certain circumstances, the failure of such party to publicly reaffirm its recommendation upon request) or (ii) a party entering into a definitive agreement in respect of a competing transaction within twelve months of termination of the Merger Agreement in certain circumstances involving a potential competing acquisition proposal.

***Black Hills will be subject to various uncertainties while the Merger is pending that may cause disruption and may make it more difficult to maintain relationships with employees, suppliers and customers.*** 

Uncertainty about the effect of the Merger on employees, suppliers and customers may have an adverse effect on Black Hills. These uncertainties may impair the ability of Black Hills to attract, retain and motivate key personnel until the Merger is completed and for a period of time thereafter, and could cause customers, suppliers and others that deal with Black Hills to seek to change or terminate existing business relationships with Black Hills or not enter into new relationships or transactions.

Employee retention and recruitment may be particularly challenging prior to the completion of the Merger, as employees and prospective employees may experience uncertainty about their future roles with the combined company. Black Hills expects it and NorthWestern to incur incremental costs to address these challenges, which would adversely affect future operating results whether or not the Merger is completed. If, despite Black Hills' and NorthWestern's retention and recruiting efforts, key employees depart or fail to continue employment with either company because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined company, Black Hills' financial results could be adversely affected. Furthermore, the combined company's operational and financial performance following the Merger could be adversely affected if it is unable to retain key employees and skilled workers of Black Hills and NorthWestern. The loss of the services of key employees and skilled workers and their experience and knowledge regarding Black Hills' and NorthWestern's businesses could adversely affect the combined company's future operating results and the successful ongoing operation of its businesses.

***Black Hills is subject to risk of the Merger having adverse impact on its credit rating, both while the Merger is pending and following completion of the Merger.***

<br>Black Hills cannot be assured that its credit ratings will not be lowered as a result of the Merger or for any other reason, including the failure to consummate the Merger. Any reduction in Black Hills' credit ratings, or the criteria used by rating agencies to determine such ratings, could adversely affect its ability to complete the Merger, its access to capital, its cost of capital and its other operating costs, and its ability to refinance or repay Black Hills' existing debt and complete new financings, which could have a material adverse effect on Black Hills' business, financial condition, results of operations or the trading price of its common stock or other securities.

***The market prices of Black Hills Common Stock and other securities may be subject to fluctuation while the Merger is pending and after the Merger is completed.*** 

The market price of Black Hills Common Stock and other securities may fluctuate significantly while the Merger is pending or after it is completed, and any adverse developments related to the Merger or otherwise could result in holders of Black Hills Common Stock or other securities losing some or all of the value of their investment. In addition, if the stock market experiences significant price and volume fluctuations, such fluctuations could be exacerbated by the pendency of the Merger, which could adversely affect the market for, or liquidity of, Black Hills Common Stock or other securities, regardless of Black Hills' or the combined company's actual operating performance.

------

Because the Merger Agreement contemplates that Black Hills will issue shares of Black Hills Common Stock to NorthWestern's stockholders based upon a fixed exchange ratio, developments with respect to NorthWestern and its shares of common stock may affect Black Hills Common Stock irrespective of their relevance to standalone Black Hills and even though Black Hills may have no control over, or knowledge of, such developments. As a result, the market price of Black Hills Common Stock during the pendency of the Merger may not accurately reflect the value of Black Hills absent the Merger.

***Black Hills is subject to contractual restrictions in the Merger Agreement that may hinder its operations while the Merger is pending. The corollary restrictions applicable to NorthWestern may not prevent NorthWestern from taking actions that are adverse to Black Hills or its stockholders.***

The Merger Agreement includes certain customary restrictions with respect to the operation of Black Hills' and NorthWestern's respective businesses between the date of the Merger Agreement and the consummation of the Merger. These restrictions may prevent Black Hills from pursuing otherwise attractive business opportunities and making other changes to its business prior to completion of the Merger or termination of the Merger Agreement.

Despite these mutual restrictions, Black Hills and NorthWestern will continue to operate their businesses independently of one another during the pendency of the Merger. The restrictions in the Merger Agreement, which are subject to numerous exceptions, may not be adequate to prevent NorthWestern from taking actions that are adverse to Black Hills or its stockholders.

***Black Hills will incur significant transaction and other costs in connection with the Merger.*** 

Black Hills has incurred and expects to incur additional significant costs associated with the Merger, including transaction fees and costs of combining the operations of the two companies. Additional unanticipated costs also may be incurred in the integration of the businesses of Black Hills and NorthWestern. Any net benefit from any anticipated elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may not be achieved in the near term or at all. Transaction costs could have a material adverse impact on the results of operations of Black Hills, and the failure to achieve the anticipated benefits and efficiencies from the Merger, or the incurrence of additional expenses, could have a material adverse impact on the results of operations of the combined company and its ability to pay dividends after closing. In turn, the current or future market value of Black Hills Common Stock or other securities could be adversely impacted.

***The unaudited pro forma condensed combined consolidated financial information included in the Financial Statement Form 8-K does not purport to be, and likely is not, representative of the combined results of Black Hills and Northwestern after the Merger.*** 

The unaudited pro forma condensed combined consolidated financial information in the Financial Statement Form 8-K is presented for informational purposes only. It does not purport to be indicative of the financial position or results of operations that would have actually occurred had the Merger been completed at or as of the dates indicated, nor is it indicative of the combined company's future operating results or financial position. The unaudited pro forma condensed combined consolidated financial information in the Financial Statement Form 8-K does not reflect future events that may occur after the closing of the Merger, including the potential realization of operating efficiencies or costs related to the Merger, and does not consider potential market conditions on revenues or expenses. The unaudited pro forma condensed combined consolidated financial information in the Financial Statement Form 8-K is based in part on certain assumptions regarding the Merger that Black Hills believes are reasonable under the circumstances. Black Hills cannot assure you that its assumptions will prove to be accurate over time.

***The Merger may not be accretive to Black Hills' or NorthWestern's earnings and may cause dilution to Black Hills' or NorthWestern's earnings per share, which may negatively affect the current or future market price of Black Hills Common Stock or other securities.***

Black Hills currently anticipates that the Merger will be accretive to Black Hills' forecasted earnings per share on a standalone basis, and NorthWestern currently anticipates that the Merger will be accretive to NorthWestern's forecasted earnings per share on a standalone basis, in each case beginning in the first full calendar year after closing. These expectations are based on preliminary estimates any of which may prove to be incorrect or may change materially. Black Hills and NorthWestern may encounter additional transaction and integration-related costs

------

other than those they currently anticipate, may fail to realize all of the benefits anticipated in the Merger or may be subject to other factors that affect preliminary estimates or the ability of either company to realize operational efficiencies. Any of these factors could cause a decrease in Black Hills' and NorthWestern's earnings per share, or negatively affect the current or future market price of Black Hills Common Stock or other securities.

***If the Merger does not qualify as a "reorganization" within the meaning of Section 368(a) of the Code, certain NorthWestern stockholders may be required to pay substantial U.S. federal, state and/or local income taxes.*** 

The Merger is intended to qualify as a "reorganization" within the meaning of Section 368(a) of the Code, and it is a condition to each party's obligation to complete the Merger that it receive an opinion from counsel, dated as of the closing date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, the Merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Code. However, the foregoing opinions of counsel will each be based on, among other things, the law in effect as of the date of the opinions, certain representations made by Black Hills and NorthWestern and certain assumptions, all of which must be consistent with the state of facts existing at the time of the Merger. If there is a change in law after the date of the opinions, or if any of these representations and assumptions are, or become, inaccurate or incomplete, an opinion may be invalid, and the conclusions reached therein could be jeopardized. In addition, no ruling has been or will be sought from the U.S. Internal Revenue Service (the "IRS") as to the U.S. federal income tax consequences of the Merger and the other transactions contemplated by the Merger Agreement. There can be no assurance that the IRS will not assert, or that a court will not sustain, a position contrary to the conclusion set forth in any such opinion that the Merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Code.

If the Merger does not qualify as a "reorganization" within the meaning of Section 368(a) of the Code, each NorthWestern stockholder will recognize gain or loss, for U.S. federal—and applicable state and local—income tax purposes equal to the value of the Black Hills stock received in the Merger (plus any cash received in respect of fractional shares) minus the stockholder's adjusted tax basis in the stockholder's NorthWestern stock. Depending on the amount of gain, if any, that is recognized, a NorthWestern stockholder that is subject to U.S. federal, state, or local income taxes may incur a significant income tax liability.

***Black Hills and/or NorthWestern may be subject to litigation challenging the Merger while it is pending, and an unfavorable judgment or ruling in any such lawsuits could prevent or delay the consummation of the Merger and/or result in substantial costs.***

Lawsuits in connection with the Merger while it is pending may be filed against Black Hills, Northwestern, any parties to the Merger Agreement and/or their respective directors and officers, which could prevent or delay the consummation of the Merger and/or result in additional costs to us. The ultimate resolution of any such lawsuit cannot be predicted with certainty, and an adverse ruling in any such lawsuit may cause the Merger to be delayed or not to be completed and/or result in additional costs to Black Hills and NorthWestern, which could cause Black Hills and NorthWestern not to realize some or all of the anticipated benefits of the Merger. The defense or settlement of any lawsuit that remains unresolved at the time the Merger is consummated may adversely affect the combined company's business, financial condition, results of operations and cash flows. Black Hills cannot currently predict the outcome of or reasonably estimate the possible loss or range of loss from any such lawsuit.

**Risks Relating to the Combined Company Following Completion of the Merger** 

***Failure to successfully combine the businesses of Black Hills and NorthWestern in the expected time frame or at all may adversely affect the future results of the combined company, and, consequently, the value of the Black Hills Common Stock.*** 

The success of the Merger will depend, in part, on the ability of the combined company to realize in a timely fashion the anticipated benefits and efficiencies from combining the businesses of Black Hills and NorthWestern. The process of integration may reveal that benefits and efficiencies are less than anticipated and may result in additional expenses, all of which could reduce the anticipated benefits of the Merger.

Achieving the anticipated benefits of the Merger is subject to a number of uncertainties, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•whether United States federal and state public utility, antitrust and other regulatory authorities whose approval is required to complete the Merger impose conditions on the Merger, which may have an

------

adverse effect on the combined company, including its ability to achieve the anticipated benefits of the Merger;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the ability of the two companies to combine certain of their operations or take advantage of expected growth opportunities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•general market and economic conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•general competitive factors in the marketplace; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•higher than expected costs required to achieve the anticipated benefits of the Merger.

Failure to achieve the anticipated benefits and efficiencies from the Merger, or the occurrence of additional expenses, could have a material adverse impact on the results of operations of the combined company and its ability to pay dividends after closing. In turn, the market value of the combined company's common stock could be adversely impacted.

***Black Hills stockholders will have a reduced ownership and voting interest after the Merger and will exercise less influence over management.*** 

It is currently anticipated that Black Hills stockholders and NorthWestern stockholders will hold approximately 56 percent and 44 percent, respectively, of the combined company's common stock then-issued and outstanding after the completion of the Merger. Consequently, Black Hills stockholders, as a group, will have reduced ownership and voting power in the combined company compared to their current ownership and voting power in Black Hills. As a result of the reduced ownership percentages, current Black Hills stockholders will have less influence on the management and policies of the combined company than they had with Black Hills. Further, provisions of the Merger Agreement will result in individuals designated by NorthWestern, and not previously subject to a vote of Black Hills stockholders, holding five out of eleven positions on the Black Hills board of directors and there will be changes to the management of Black Hills.

***The market price of Black Hills Common Stock after the completion of the Merger may be affected by factors different from those that historically have affected or currently affect Black Hills Common Stock.*** 

Upon completion of the Merger, NorthWestern stockholders who receive Merger consideration will become holders of Black Hills Common Stock, which will trade on the NYSE or other mutually-agreeable exchange under a new name and ticker to be announced. Black Hills' business differs from that of NorthWestern and certain adjustments may be made to the combined company as a result of the Merger. The financial position of the combined company after completion of the Merger may differ from Black Hills' financial position before the completion of the Merger, and the results of operations and/or cash flows of Black Hills after the completion of the Merger may be affected by factors different from those currently affecting the financial position or results of operations and/or cash flows of Black Hills and NorthWestern, respectively. Accordingly, the market price of Black Hills Common Stock after the completion of the Merger may be affected by factors different from those currently affecting the market prices of Black Hills Common Stock and NorthWestern Common Stock, respectively, in the absence of the Merger. In addition, general fluctuations in stock markets could adversely affect the market for, or liquidity of, Black Hills Common Stock, regardless of the combined company's actual operating performance.

***Each of Black Hills and NorthWestern may have liabilities that are not known to the other party.*** 

Each of Black Hills and NorthWestern may have liabilities that the other party failed, or was unable, to discover in the course of performing its respective due diligence investigations. Black Hills and NorthWestern may learn additional information about the other party that materially adversely affects it, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws. As a result of these factors, the combined company may incur additional costs and expenses and may be forced to later write-down or write-off assets, restructure operations or incur impairment or other charges that could result in the combined company reporting losses. Even if Black Hills' and NorthWestern's respective due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with its expectations. If any of these risks materialize, this could adversely affect the combined company's financial condition and results of

------

operations and could contribute to negative market perceptions about, or price movements of, the combined company's common stock following the Merger.

***Each of NorthWestern and Black Hills and their respective subsidiaries has substantial amounts of indebtedness. Consequently, the combined company will have substantial indebtedness following the Merger. As a result, the rating of the combined company's indebtedness could be downgraded, and it may be difficult for the combined company to pay or refinance its debts or take other actions, and the combined company may need to divert its cash flow from operations to debt service payments.*** 

The combined company's debt service obligations with respect to this indebtedness could have an adverse impact on its earnings and cash flows for as long as the indebtedness is outstanding.

The combined company's indebtedness could also have important consequences to holders of Black Hills Common Stock. For example, it could:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•make it more difficult for the combined company to pay or refinance its debts as they become due during adverse economic and industry conditions because any decrease in revenues could cause the combined company to not have sufficient cash flows from operations to make its scheduled debt payments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•require a substantial portion of the combined company's cash flows from operations to be used for debt service payments, thereby reducing the availability of its cash flow to fund working capital, capital expenditures, acquisitions, dividend payments and other general corporate purposes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•result in a downgrade in the rating of the combined company's indebtedness, which could limit its ability to borrow additional funds or increase the interest rates applicable to its indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increasing the risk of default on debt obligations of the combined company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•limiting the flexibility of the combined company in planning for or reacting to changes in its business and the industry in which it operates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•increasing the exposure of the combined company to a rise in interest rates, which would generate greater interest expense or the costs of obtaining applicable interest rate fluctuation hedges; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•require that additional or more stringent terms, conditions or covenants be placed on Black Hills.

There can be no assurance that the combined company will be able to repay or refinance such borrowings and obligations.

In addition, the Merger will result in NorthWestern becoming a wholly owned subsidiary of Black Hills. The combined company may decide to incur additional indebtedness at subsidiaries of Black Hills, which could have an effect on outstanding securities, including because such subsidiary indebtedness is "structurally senior" to the indebtedness of its parent company with respect to the assets of such subsidiary.

***The future results of the combined company following the Merger will suffer if the combined company does not effectively manage its expanded operations.*** 

Following the Merger, the size, geographic footprint and complexity of the combined company will increase significantly compared to the business of each of Black Hills and NorthWestern. The combined company's future success will depend, in part, upon its ability to manage this expanded business, which will pose substantial challenges for management, including challenges related to the management and monitoring of new operations and geographies and associated increased costs and complexity. The combined company may also face increased scrutiny from, and/or additional regulatory requirements of, governmental authorities as a result of the significant increase in the size, geographic footprint and complexity of its business. There can be no assurances that the combined company will be successful or that it will realize the expected operating efficiencies, cost savings or other benefits currently anticipated from the Merger.

***There is no guarantee that the combined company will declare and pay dividends following the Merger.***

------

Although each of Black Hills and NorthWestern has returned capital to its respective stockholders in the past, including through cash dividends on their respective shares of common stock, the board of directors of the combined company may determine not to declare dividends or use other means to return capital to its stockholders in the future or may reduce the amount, proportion or rate of capital returned to its stockholders through dividends or other means in the future. Decisions on whether, when, by what means and in what amounts to return capital to its stockholders will remain in the discretion of the board of directors of the combined company (as reconstituted following the Merger). Any dividend payment or share repurchase amounts will be determined by the board of directors of the combined company from time to time, and it is possible that the board of directors of the combined company may increase or decrease the amount of dividends paid or shares repurchased in the future, or determine not to declare dividends and/or repurchase shares in the future, at any time and for any reason. Black Hills expects that any such decisions will depend on the combined company's financial condition, results of operations, cash balances, cash requirements, future prospects, the outlook for commodity prices and other considerations that the board of directors of the combined company deems relevant, including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•whether the combined company has enough discretionary cash flow to return capital to its stockholders due to its cash requirements, capital spending plans, cash flows or financial position;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•the combined company's desire to maintain or improve the credit ratings on its debt; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•applicable restrictions under South Dakota law. Stockholders should be aware that they have no contractual or other legal right to dividends that have not been declared.

***The combined company is expected to record a significant amount of goodwill as a result of the Merger, and such goodwill could become impaired in the future.*** 

Accounting standards in the United States require that one party to the Merger be identified as the acquirer. In accordance with these standards, the Merger will be accounted for as an acquisition of NorthWestern's Common Stock by Black Hills and will follow the acquisition method of accounting for business combinations. NorthWestern assets and liabilities will be consolidated with those of Black Hills on the combined company's financial statements. The excess of the purchase price over the fair values of NorthWestern's assets and liabilities will be recorded as goodwill.

Black Hills will be required to assess goodwill for impairment at least annually. To the extent goodwill becomes impaired, Black Hills may be required to incur material charges relating to such impairment. Such a potential impairment charge could have a material impact on Black Hills' future operating results and statements of financial position which may, in turn, have a material adverse effect on the trading price or liquidity of Black Hills securities.

***Black Hills' ability to utilize its and/or NorthWestern's historic net operating loss carryforwards and certain other tax attributes may be limited.***

As of December 31, 2024, NorthWestern had U.S. federal net operating loss carryforwards ("NOLs") of approximately $486.6 million, which do not expire. As of December 31, 2024, Black Hills had NOLs of approximately $547.2 million, which also do not expire. However, the NOLs of each of NorthWestern and Black Hills can only be used to offset 80% of U.S. federal taxable income. Black Hills' ability to utilize these NOLs and other tax attributes to reduce future taxable income following the closing of the Merger depends on many factors, including its future income, which cannot be assured, and which will be determined after the Merger on a consolidated basis with that of NorthWestern. It is possible that the amount of NOLs and other tax attributes that Black Hills is able to utilize in any tax period ending after the closing of the Merger may be less than the amount that Black Hills and NorthWestern together (or either of them separately) would have been able to use had the Merger not taken place.

Additionally, Section 382 of the Code ("Section 382") and Section 383 of the Code generally impose an annual limitation on the amount of NOLs and certain other tax attributes that may be used to offset taxable income when a corporation has undergone an "ownership change" (as determined under Section 382). An ownership change generally occurs if one or more stockholders (or groups of stockholders) who are each deemed to own at least 5% of such corporation's stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. In the event that an ownership change occurs with respect to Black

------

Hills and/or NorthWestern, utilization of Black Hills and/or NorthWestern's NOLs would be subject to an annual limitation under Section 382, generally determined by multiplying (1) the fair market value of its stock at the time of the ownership change by (2) the long-term tax-exempt rate published by the IRS for the month in which the ownership change occurs, subject to certain adjustments. Any unused annual limitation may be carried over to later years.

The completion of the Merger may cause Black Hills and/or NorthWestern to undergo an ownership change under Section 382, which would trigger a limitation (calculated as described above) on Black Hills' ability to utilize its and/or NorthWestern's historic NOLs and other tax attributes.

***Future sales or issuances of Black Hills Common Stock could have a negative impact on the Black Hills Common Stock price.*** 

Under the terms of the Merger Agreement, NorthWestern stockholders will receive a fixed exchange ratio of 0.98 shares of Black Hills Common Stock for each share of NorthWestern Common Stock they own at the close of the Merger. Based on the 61,393,380 shares of NorthWestern Common Stock outstanding as of July 25, 2025, Northwestern stockholders would receive approximately 60,165,512 shares of Black Hills Common Stock upon the closing of the Merger. The treatment of outstanding equity awards of each of Black Hills and NorthWestern will vary depending on the type of award, its terms and conditions, and determinations made or to be made by each company or its board of directors, but additional shares, or cash in respect of share equivalents, would be issued to settle equity awards, and such shares are not reflected in the share totals included in the preceding sentence. The Black Hills Common Stock that NorthWestern stockholders will receive upon the exchange of NorthWestern Common Stock for the Merger consideration or in settlement of outstanding equity awards generally may be sold immediately in the public market. It is possible that some former NorthWestern stockholders may seek to sell some or all of the shares of Black Hills Common Stock they receive as Merger consideration, and the Merger Agreement contains no restriction on the ability of former NorthWestern stockholders to sell such shares of Black Hills Common Stock following completion of the Merger. Other Black Hills stockholders may also seek to sell shares of Black Hills Common Stock held by them following completion of the Merger. These sales or other dispositions of a significant number of shares of Black Hills Common Stock (or the perception that such sales or other dispositions may occur), coupled with the increase in the outstanding number of shares of Black Hills Common Stock as a result of the Merger (as well as any increase resulting from future issuances of Black Hills Common Stock), may affect the market for Black Hills Common Stock in an adverse manner and may cause the price of Black Hills Common Stock to fall.

***Future disclosures relating to the Merger may not align with investor expectations.*** 

In connection with the Merger, Black Hills expects to file a registration statement on Form S-4, including a joint proxy statement and prospectus. Information that will be contained in such registration statement and other future disclosures relating to the Merger, which are expected to include (among other things) detailed background about the process leading the Merger, prospective financial information reviewed by the Black Hills board of directors in connection with the Merger, and updated historical financial information of NorthWestern and pro forma financial information of the combined company, may not align with investor expectations. Such disclosures, the anticipation of such disclosures, or reactions to such disclosures could have an adverse effect on the business of Black Hills and trading price or liquidity of Black Hills Common Stock or other securities. Persons making investment decisions about Black Hills securities prior to such disclosures will be required to do so without the benefit of such information and with the risk that such information may not align with their expectations or that it may have an unexpected impact on Black Hills or the trading price or liquidity of its securities.

------