# EDGAR Filing Document

**Accession Number:** 0000073088
**File Stem:** 0000073088-23-000030
**Filing Date:** 2023-2
**Character Count:** 104499
**Document Hash:** bbcd7c931a39fe02561f306ca968f587
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000073088-23-000030.hdr.sgml**: 20230217

**ACCESSION NUMBER**: 0000073088-23-000030

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 70

**CONFORMED PERIOD OF REPORT**: 20230216

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230217

**DATE AS OF CHANGE**: 20230217

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NORTHWESTERN CORP
- **CENTRAL INDEX KEY:** 0000073088
- **STANDARD INDUSTRIAL CLASSIFICATION:** ELECTRIC & OTHER SERVICES COMBINED [4931]
- **IRS NUMBER:** 460172280
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-10499
- **FILM NUMBER:** 23640454

**BUSINESS ADDRESS:**
- **STREET 1:** 3010 W 69TH STREET
- **CITY:** SIOUX FALLS
- **STATE:** SD
- **ZIP:** 57108
- **BUSINESS PHONE:** 6059782908

**MAIL ADDRESS:**
- **STREET 1:** 3010 W 69TH STREET
- **CITY:** SIOUX FALLS
- **STATE:** SD
- **ZIP:** 57108

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NORTHWESTERN PUBLIC SERVICE CO
- **DATE OF NAME CHANGE:** 19920703

?xml version="1.0" ? nwe-20230216

    

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): February 16, 2023

![nwe-20230216_g1.jpg](nwe-20230216_g1.jpg)<br>

**NorthWestern Corporation** 

(Exact name of registrant as specified in its charter)

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Delaware** | **Delaware** | **Delaware** | **1-10499** | **46-0172280** |
| (State or other jurisdiction of<br>incorporation or organization) | (State or other jurisdiction of<br>incorporation or organization) | (State or other jurisdiction of<br>incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| **3010 W. 69th Street** | **Sioux Falls** | **South Dakota** | | **57108** |
| (Address of principal executive offices) | (Address of principal executive offices) | (Address of principal executive offices) | | (Zip Code) |

---

**Registrant's telephone number, including area code: 605-978-2900** 

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| **Common stock** | **NWE** | **Nasdaq Stock Market LLC** |

---

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 (<u>see</u> General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

    

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**Item 2.02&nbsp;&nbsp;&nbsp;&nbsp;Results of Operations and Financial Condition**

On February 16, 2023, NorthWestern Corporation d/b/a NorthWestern Energy (Nasdaq: NWE) (the "*Company*") issued a press release (the "*Press Release*") discussing financial results for the year ended December 31, 2022. The Press Release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information in this Current Report on Form 8-K provided under Item 2.02 shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information provided under Item 2.02 in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

**Item 7.01 Regulation FD Disclosure.**

As previously announced and as stated in the Press Release, the Company will host an investor conference call and webcast on Friday, February 17, 2023, at 3:30 p.m. Eastern time to review its financial results for the year ending December 31, 2022. During the conference call, Brian Bird, president and chief executive officer, and Crystal Lail, vice president and chief financial officer of the Company, will make a slide presentation (the "*Investor Call Presentation*") concerning the Company's financial results.

The conference call will be webcast live on the Internet at www.northwesternenergy.com/earnings-registration. To participate, please go to the site at least 15 minutes in advance of the webcast to register. An archived webcast will be available shortly after the call and remain active for one year.

A copy of the Investor Call Presentation is being furnished pursuant to Regulation FD as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. The information in the presentation shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Furthermore, the presentation shall not be deemed to be incorporated by reference into the Company's filings under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except as set forth with respect thereto in any such filing.

**Item 9.01**&nbsp;&nbsp;&nbsp;&nbsp;**Financial Statements and Exhibits.**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description of Document** |
| <u>[99.1\*](ex991pressreleaseq42022.htm)</u> | Press Release, dated February 16, 2023 |
| <u>[99.2\*](exh992q4earningspresenta.htm)</u> | Investor Call Presentation, dated February 17, 2023 |
| \* filed herewith | \* filed herewith |

---

------

**Signatures**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | |
|:---|:---|
| | **NorthWestern Corporation** |
| By: | /s/ Timothy P. Olson |
|  | Timothy P. Olson |
|  | Corporate Secretary |

---

Date: February 17, 2023

## Exhibit 99.1

---

| | |
|:---|:---|
| ![a2incolora27.jpg](a2incolora27.jpg) | &nbsp;&nbsp;&nbsp;&nbsp;NorthWestern Corporation<br>d/b/a NorthWestern Energy<br>3010 W. 69<sup>th</sup> Street<br>Sioux Falls, SD 57108<br>www.northwesternenergy.com |

---

**NorthWestern Reports 2022 Financial Results**

***Company reports GAAP diluted earnings per share of $3.25 for 2022, announces a***

 ***$510 million capital plan for 2023 and a 1.6% increase to the quarterly dividend -<br>to $0.64 per share - payable March 31, 2023***

**BUTTE, MT / SIOUX FALLS, SD - February 16, 2023 -** NorthWestern Corporation d/b/a NorthWestern Energy (Nasdaq: NWE) reported financial results for the year ended December 31, 2022. Net income for the period was $183.0 million, or $3.25 per diluted share, as compared with net income of $186.8 million, or $3.60 per diluted share, for the same period in 2021. This decrease of $3.8 million in net income was primarily due to higher operating expense (including depreciation and property taxes) and interest expense, lower transmission revenues, a less favorable Qualifying Facilities (QF) liability adjustment as compared to the prior year and higher non-recoverable electric supply costs in Montana. These impacts were partly offset by increased revenue from higher electric and natural gas retail volumes due to favorable weather and customer growth and Montana electric and natural gas interim rates (which are subject to refund). The decrease in per share earnings was also affected by equity issuances during 2022, which increased average common shares outstanding. Equity issuances during the year contributed to $0.27 of the $0.35 decrease in per share earnings.

Non-GAAP Adjusted diluted earnings per share for 2022 was $3.18 and slightly below our previously communicated guidance range of $3.20 - $3.35 primarily due to higher non-recoverable Montana supply costs, higher interest expense on our revolving credit facility (driven by the significant delay in the recoverable electric supply balances in conjunction with higher interest rates) and continued operating costs inflation. See "Significant items not contemplated in Guidance" and "Non-GAAP Financial Measures" sections below for additional information on these measures, including a reconciliation of GAAP diluted earnings per share to Non-GAAP adjusted diluted earnings per share.

*"2022 was a foundational year for us with the filing of our Montana general rate review; requesting a sustainable level of operating expenses and issuing incremental equity to fund our capital plan while protecting our credit ratings – both necessitating the guide to lower earnings for 2022. Significant items that impacted our performance that were not anticipated include extremely high power prices in Montana that are not fully recovered and an unprecedented increase in interest rates and operating cost inflation. Fourth quarter was a strong quarter but not enough to overcome the unanticipated items"* said Brian Bird, President and Chief Executive Officer.

*"We safely completed a record level of capital work; recognized with a vast improvement in our JD Power Customer Satisfaction Survey scores; exceeded our electric and gas reliability targets; and advanced our Montana general rate review filing - which continues to proceed in a timely, constructive and collaborative manner. We remain focused on recovering the more than one billion dollars of investment made since the last electric and natural gas rate filings and adjusting our power cost recovery mechanism as proposed in this rate review - both are critical to closing the gap on earning our authorized returns. In addition, in January 2023, we announced an agreement with Avista to transfer their ownership in the Colstrip facility at the end of 2025, reducing supply risks for our customers and shareholders."*

Additional information regarding this release can be found in the earnings presentation found at www.northwesternenergy.com/about-us/investors/financials/earnings

------

*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 2*

**Fourth Quarter Financial Results**

Net income for the three months ending December 31, 2022 was $66.7 million, or $1.16 per diluted share, as compared with net income of $51.3 million, or $0.96 per diluted share, for the same period in 2021. This increase of $15.4 million in net income was primarily due to increased revenue from higher electric and natural gas retail volumes due to favorable weather and customer growth and Montana electric and natural gas interim rates (which are subject to refund). These favorable impacts were partly offset by higher operating expense (including depreciation and property taxes) and interest expense. The increase in per share earnings for the quarter was partially offset by equity issuances during the year, which increased average common shares outstanding. Equity issuances resulted in $0.09 of earnings per share dilution offsetting a $0.29 increase in earnings per share due to higher net income (a net $0.20 increase in diluted earnings per share for the quarter).

Non-GAAP Adjusted diluted earnings per share for the quarter was $1.13 as compared to $1.04 for the same period last year. See "Significant items not contemplated in Guidance" and "Non-GAAP Financial Measures" sections below for additional information on these measures, including a reconciliation of GAAP diluted earnings per share to Non-GAAP adjusted diluted earnings per share.

------

*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 3*

**Financial Results**

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions)* | **2022** | **2021** |
| **Reconciliation of gross margin to utility margin:** |  |  |
| Operating Revenues | $1477.8 | $1372.3 |
| Less: Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) | 492.0 | 425.5 |
| Less: Operating and maintenance | 221.4 | 208.3 |
| Less: Property and other taxes | 192.5 | 173.4 |
| Less: Depreciation and depletion | 195.0 | 187.4 |
| **Gross Margin** | **376.9** | **377.7** |
| Plus: Operating and maintenance | 221.4 | 208.3 |
| Plus: Property and other taxes | 192.5 | 173.4 |
| Plus: Depreciation and depletion | 187.5 | 187.4 |
| **Utility Margin**<sup>(1)</sup> | $**985.8** | $**946.8** |

---

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions, except per share amounts)* | **2022** | **2021** |
| **Consolidated Statements of Income** |  |  |
| Revenues | $1477.8 | $1372.3 |
| Fuel, purchased supply and direct transmission expense <sup>(2)</sup> | 492.0 | 425.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Utility Margin** <sup>(1)</sup> | 985.8 | 946.8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating and maintenance | 221.4 | 208.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Administrative and general | 113.8 | 101.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property and other taxes | 192.5 | 173.4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and depletion | 195.0 | 187.5 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Operating Expenses** | 722.7 | 671.1 |
| Operating income | 263.1 | 275.7 |
| Interest expense, net | (100.1) | (93.7) |
| Other income, net | 19.4 | 8.3 |
| Income before income taxes | 182.4 | 190.2 |
| Income tax benefit (expense) | 0.6 | (3.4) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net Income** | **183.0** | **186.8** |
| Basic Shares Outstanding | 55.8 | 51.7 |
| **&nbsp;&nbsp;&nbsp;&nbsp; Earnings per Share - Basic** | $**3.28** | $**3.61** |
| Diluted Shares Outstanding | 56.3 | 51.9 |
| **&nbsp;&nbsp;&nbsp;&nbsp; Earnings per Share - Diluted** | $**3.25** | $**3.60** |
| Dividends Declared per Common Share | $2.52 | $2.48 |
| *(1) Utility Margin is a Non-GAAP financial measure.* <br>*&nbsp;&nbsp;&nbsp;&nbsp; See Reconciliation of Gross Margin to Utility Margin and Non-GAAP Financial Measure sections that follow.* | *(1) Utility Margin is a Non-GAAP financial measure.* <br>*&nbsp;&nbsp;&nbsp;&nbsp; See Reconciliation of Gross Margin to Utility Margin and Non-GAAP Financial Measure sections that follow.* | *(1) Utility Margin is a Non-GAAP financial measure.* <br>*&nbsp;&nbsp;&nbsp;&nbsp; See Reconciliation of Gross Margin to Utility Margin and Non-GAAP Financial Measure sections that follow.* |
| *(2) Exclusive of depreciation and depletion.* |  |  |

---

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 4*

**Reconciliation of Primary Changes from 2021 to 2022 Results**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2022 vs. 2021** | **Year Ended December 31, 2022 vs. 2021** | **Year Ended December 31, 2022 vs. 2021** | **Year Ended December 31, 2022 vs. 2021** |
| | **Pre-tax<br>Income** | **Inc. Tax**<br>**(Expense)**<br>**Benefit** <sup>(3)</sup> | **Net<br>Income** | **Diluted Earnings Per Share** |
| | **(in millions)** | **(in millions)** | **(in millions)** | |
| **Year ended December 31, 2021** | $190.2 | $(3.4) | $186.8 | $3.60 |
| *Variance in revenue and fuel, purchased supply, and direct transmission expense*<sup>(1)</sup> *items impacting net income:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Higher electric retail volumes | 14.8 | (3.7) | 11.1 | $0.21 |
| &nbsp;&nbsp;&nbsp;Montana interim rates (subject to refund) | 9.5 | (2.4) | 7.1 | $0.14 |
| &nbsp;&nbsp;&nbsp;Higher natural gas volumes | 8.1 | (2.1) | 6.0 | $0.12 |
| &nbsp;&nbsp;&nbsp;Lower electric transmission revenue | (4.8) | 1.2 | (3.6) | $(0.07) |
| &nbsp;&nbsp;&nbsp;A less favorable electric QF liability adjustment | (2.4) | 0.6 | (1.8) | $(0.03) |
| &nbsp;&nbsp;&nbsp;Higher non-recoverable Montana electric supply costs<br>($7.2 million in 2022 as compared to $5.4 million in 2021) | (1.8) | 0.5 | (1.3) | $(0.03) |
| *Variance in expense items*<sup>(2)</sup> *impacting net income:* |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Higher operating, maintenance, and admin. expenses | (10.9) | 2.8 | (8.1) | $(0.16) |
| &nbsp;&nbsp;&nbsp;Higher depreciation expense | (7.5) | 1.9 | (5.6) | $(0.11) |
| &nbsp;&nbsp;&nbsp;Higher interest expense | (6.4) | 1.6 | (4.8) | $(0.09) |
| &nbsp;&nbsp;&nbsp;Higher property tax expenses | (5.5) | 1.5 | (4.0) | $(0.08) |
| &nbsp;&nbsp;&nbsp;Other | (0.9) | 2.1 | 1.2 | $0.02 |
| &nbsp;&nbsp;&nbsp;Dilution from higher share count |  |  |  | $(0.27) |
| **Year ended December 31, 2022** | $182.4 | $0.6 | $183.0 | $3.25 |
| **Change in Net Income** |  |  | $(3.8) | $(0.35) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Exclusive of depreciation and depletion shown separately below

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Excluding fuel, purchased supply, and direct transmission expense

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Income Tax (Expense) Benefit calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%.

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 5*

**Significant Trends and Regulation**

**<u>Regulatory Update</u>**

*Rate Review Filings* – On August 8, 2022, we filed a Montana electric and natural gas rate review filing (2021 test year) under Docket 2022.07.78. A summary of our requests within this rate review is below:

---

| | | |
|:---|:---|:---|
| **Montana Rate Review ($ in millions)** | **Montana Rate Review ($ in millions)** | **Montana Rate Review ($ in millions)** |
| | **Electric** | **Natural Gas** |
| Proposed Return on Equity (ROE) | 10.60% | 10.60% |
| Proposed Equity Ratio | 48.02% | 48.02% |
| Forecasted 2022 Rate Base | $2790 | $575 |
| Net Rate Base Increase | $453 | $143 |
| &nbsp;&nbsp;&nbsp;**Requested Revenue Increase (in millions)** | &nbsp;&nbsp;&nbsp;**Requested Revenue Increase (in millions)** | &nbsp;&nbsp;&nbsp;**Requested Revenue Increase (in millions)** |
|  | **Electric** | **Natural Gas** |
| Base Rates | $91.8 | $20.2 |
| Power Cost & Credit Mechanism (PCCAM)<sup>(1)</sup> | $68.1 | n/a |
| Property Tax (tracker true-up)<sup>(1)</sup> | $11.1 | $2.8 |
| **Total** | $171.0 | $23.0 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) These items are flow-through costs, which represent approximately 42% of the requested electric and natural gas revenue increase.

Within this rate review filing we requested an increase to the PCCAM base rate (PCCAM Base) of $68.1 million as well as structural revisions to the PCCAM mechanism to provide customers with prices that better reflect the cost of services received. We also proposed to implement a revised electric only pilot for the Fixed Cost Recovery Mechanism (FCRM) beginning July 1, 2023, or alternatively to terminate the FCRM. Our rate review filing also includes proposals for more timely cost recovery beyond the test period, including critical reliability resources, such as the Yellowstone County Generating Station, our Enhanced Wildfire Mitigation plan, and business technology maintenance costs.

<u>Interim Rates</u> - On September 28, 2022, the Montana Public Service Commission (MPSC) approved the recommendations of the MPSC Staff for interim rates, subject to refund, which increased base electric rates $29.4 million, PCCAM Base rates $61.1 million, and base natural gas rates $1.7 million, effective October 1, 2022.

Key dates in the procedural schedule are expected to be as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• NorthWestern rebuttal testimony and cross-intervenor testimony - March 6, 2023

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Hearing commences - April 11, 2023

*Montana PCCAM* - The Montana PCCAM Base of $138.7 million, approved in 2019, no longer reflects an accurate current forecast of our normal fuel and power costs. The MPSC's September 28, 2022 decision approving interim rates, which are subject to refund, in our rate review included an increase to the PCCAM Base of $61.1 million, on an interim basis, effective October 1, 2022. As of December 31, 2022, we have under-collected our total Montana electric supply costs for the current July 2022 through June 2023 PCCAM year by approximately $44.8 million. Absent the interim rate PCCAM Base increase, as of December 31, 2022, our under-collected position would have been approximately $55.9 million. Under-collections are not reflected in customer bills and are not

------

*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 6*

recovered until the subsequent power cost adjustment year, adversely affecting our cash flows and liquidity.

Under the PCCAM, under and over-collection of non-qualifying facility related net costs are allocated 90% to Montana customers and 10% to shareholders. For the twelve months ended December 31, 2022, we deferred $64.8 million of costs to be collected from customers (90% of the costs above base) and recorded a reduction in pre-tax earnings of $7.2 million (10% of the variance). For the twelve months ended December 31, 2021, we deferred $48.7 million of costs for future collection from customers and recorded a reduction in pre-tax earnings of $5.4 million.

Our electric supply from owned and long-term contracted resources is not adequate to meet our peak-demand needs. Because of this, the volatility of market prices for energy on peak-demand days, even if only for a few days in duration, exposes us to potentially significant market purchases that could negatively impact our results of operations and cash flows. See the Electric Resource Planning - Montana section below for how we are working to address this market exposure.

*Holding Company Filings* - On June 1, 2022, we filed a legal corporate restructuring application (Restructuring Plan) with the state commissions in Montana, South Dakota and Nebraska and the Federal Energy Regulatory Commission (FERC). Currently, our utility businesses are held in the same legal entity. Under the proposed Restructuring Plan, we would legally separate our Montana public utility business from our South Dakota and Nebraska public utility business and establish a holding company to hold the ownership interests of all of the subsidiaries. The purpose of the reorganization is to integrate our organizational structure to be more transparent and in line with the public utility industry.

The Restructuring Plan does not propose and we do not expect any procedural or substantive change in how the state public utility commissions regulate those services. Implementation of the Restructuring Plan is subject to receipt of all regulatory approvals. On July 26, 2022, the Nebraska Public Service Commission approved our Restructuring Plan application. On August 3, 2022, the South Dakota Public Utilities Commission approved the application. On November 29, 2022, the FERC approved the application. NorthWestern reached settlement terms with the intervenors in the Montana proceeding, and the MPSC is reviewing those terms.

**<u>Electric Resource Planning - Montana</u>**

*Yellowstone County 175 MW plant -* Construction at the site began in April 2022 with a current schedule that is expected to allow the plant to serve our Montana customers during 2024 with total construction costs of approximately $275.0 million ($154.9 million incurred through December 31, 2022).

On October 21, 2021, the Montana Environmental Information Center and the Sierra Club filed a lawsuit in Montana State Court, against the Montana Department of Environmental Quality and us, alleging that the environmental analysis conducted prior to issuance of the Yellowstone County Generating Station's air quality permit was inadequate. The Montana District Court judge held oral argument on June 20, 2022. We expect a decision in 2023. This lawsuit, as well as additional legal challenges related to the Yellowstone County Generating Station, could delay the project timing. Construction is ongoing while we are awaiting this decision.

*Acquisition of Colstrip Interest* - On January 16, 2023, we entered into a definitive agreement (the Avista Agreement) with Avista Corporation (Avista) to acquire Avista's 15 percent interest in each of Units 3 and 4 at the Colstrip Generating Station, a coal-fired, base-load electric generation facility located in Colstrip, Montana. The Avista Agreement provides that the purchase price will be $0 and

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 7*

that we will acquire Avista's interest effective December 31, 2025, subject to the satisfaction of the closing conditions contained within the Avista Agreement. Under the terms of this Avista Agreement, we will be responsible for operating costs starting on January 1, 2026; while Avista will retain responsibility for its 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 Avista's interest.

The Avista Agreement contains customary representations and warranties, covenants, and indemnification obligations, and the Avista Agreement is subject to customary conditions and approvals, including approval from the FERC. Closing is also conditioned on our ability to enter into a new coal supply agreement for Colstrip by December 31, 2024. Such coal supply agreement must provide a sufficient amount of coal to Colstrip to permit the generation of electric power by the maximum permitted capacity of the interest in Colstrip then held by us during the period from January 1, 2026 through, December 31, 2030.

Either party may terminate the Avista 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. The Avista Agreement may be subject to the exercise by other Colstrip owners of a right of first refusal set forth in the Ownership & Operation (O&O) Agreement. Should any other owners exercise such rights, we intend to exercise our right of first refusal under the O&O Agreement to the fullest extent permitted, and Avista has agreed that it will not exercise its right of first refusal.

The acquisition of an additional interest under this Avista Agreement in 2026 will 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 technologies to provide reliable, affordable and carbon free power through our Integrated Resource Planning process.

*Future Integrated Resource Planning* - Resource adequacy in the Western third of the U.S. has been declining with the retirement of thermal power plants. Our owned and long-term contracted resources are inadequate to supply the necessary capacity we require to meet our peak-demand loads, which exposes us to large quantities of market purchases at typically high and volatile energy prices. To comply with regulatory resource planning requirements, we expect to submit an integrated resource plan to the MPSC by the end of March 2023.

We remain concerned regarding an overall lack of capacity in the West and our owned and long-term contracted capacity deficit to meet peak-demand loads. The construction of the Yellowstone County Generating Station and acquisition of Avista's Colstrip Units 3 and 4 interests, as discussed above, will reduce our exposure to market purchases at typically high and volatile energy prices.

**<u>Electric Resource Supply - South Dakota</u>**

Our new Bob Glanzer Generating Station was operational as of May 27, 2022. The 58 MW natural gas plant is located in Huron, South Dakota.

Our electric supply resource plans for South Dakota continue to identify portfolio requirements including potential investments resulting from a completed competitive solicitation process. We filed an updated integrated resource plan on September 6, 2022, which is consistent with the prior plan laying out a retire-and-replace generation asset strategy. A decision on what process to use, and what type of generation technology to add, is expected to be made in the first half of 2023.

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 8*

**<u>Supply Chain and Inflation Challenges</u>**

We place significant reliance on our third-party business partners to supply materials, equipment and labor necessary for us to operate our utility and reliably serve current customers and future customers. As a result of current macroeconomic conditions, both nationally and globally, we have recently experienced issues with our supply chain for materials and components used in our operations and capital project construction activities. Issues include higher prices, scarcities/shortages, longer fulfillment times for orders from our suppliers, workforce availability, and wage increases. Should challenges with product and services availability and price inflation continue, we could have difficulty timely completing the operations activities necessary to serve our customers safely and reliably, and/or achieving our capital investment program, which ultimately could result in higher customer utility rates, longer outages, and could have a material adverse impact on our business, financial condition and operations.

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

With changing weather conditions which include more significant wind events, drought conditions, and warmer air temperatures, we do not consider the fire season specific to a time of year, but rather a condition that may exist at any time of year. Each year's weather conditions impact these situations differently: early season rains encourage plant growth which fuels fires later in the growing season, and winters with little snow leave dry plant material available for late season fires. The threat is not only in forested areas, where insect infestations and resulting tree death has been severe, but across the entire system including rural areas where grassland fires could be ignited, along with urban areas where extreme weather conditions pose a great risk to heavily populated areas.

Recognizing the risk of significant wildfires in Montana, we continue to proactively seek to mitigate wildfire risk. We have developed an Enhanced Wildfire Mitigation Plan addressing five key areas: situational awareness, operational practices, system preparedness, vegetation management, and public communications and outreach. This plan builds upon several key initiatives that were initiated and executed over the past decade including nearly $80 million spent on vegetation management and hazard tree removal programs and our growing annual investment to harden our transmission and distribution system infrastructure. 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. We included a request for expected costs associated with the mitigation plan in our 2022 Montana rate review.

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 9*

**Earnings Drivers**

***Gross Margin***

Consolidated gross margin in 2022 was $376.9 million as compared with $377.7 million in 2021, a decrease of $0.8 million or 0.2 percent. This decrease was primarily due to lower transmission revenues due to the prior year recognition of deferred transmission revenue and lower prices, a less favorable QF liability adjustment as compared to the prior year, higher operating and maintenance expense, and higher depreciation and depletion, partly offset by higher electric and natural gas retail volumes due to favorable weather and customer growth and the interim rate increase, which is subject to refund.

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** |
| *(in millions)* | **2022** | **2021** |
| **Reconciliation of gross margin to utility margin:** |  |  |
| Operating Revenues | $1477.8 | $1372.3 |
| Less: Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) | 492.0 | 425.5 |
| Less: Operating and maintenance | 221.4 | 208.3 |
| Less: Property and other taxes | 192.5 | 173.4 |
| Less: Depreciation and depletion | 195.0 | 187.4 |
| **Gross Margin** | **376.9** | **377.7** |
| Plus: Operating and maintenance | 221.4 | 208.3 |
| Plus: Property and other taxes | 192.5 | 173.4 |
| Plus: Depreciation and depletion | 187.5 | 187.4 |
| **Utility Margin**<sup>(1)</sup> | $**985.8** | $**946.8** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Utility Margin is a Non-GAAP financial measure.

***Utility Margin***<sup>(1)</sup>

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| | **2022** | **2021** | **Change** | **% Change** |
| | **(in millions)** | **(in millions)** | **(in millions)** | **(in millions)** |
| **Utility Margin** |  |  |  |  |
| Electric | $782.1 | $757.4 | $24.7 | 3.3% |
| Natural Gas | 203.7 | 189.4 | 14.3 | 7.6 |
| **Total Utility Margin** | $**985.8** | $**946.8** | $**39.0** | **4.1%** |

---

Consolidated utility margin in 2022 was $985.8 million as compared with $946.8 million in 2021, an increase of $39.0 million, or 4.1 percent. Primary components of the change in utility margin include the following:

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 10*

---

| | |
|:---|:---|
| **(in millions)** | **Utility Margin<br>2022 vs. 2021** |
| **Utility Margin Items Impacting Net Income** | |
| Higher electric retail volumes | $14.8 |
| Montana interim rates (subject to refund) | 9.5 |
| Higher natural gas retail volumes | 8.1 |
| Lower transmission revenue due to lower transmission rates and the prior year recognition of approximately $4.7 million of deferred interim rates, partly offset by higher demand | (4.8) |
| A less favorable electric QF liability adjustment | (2.4) |
| Higher non-recoverable Montana electric supply costs<br>($7.2 million in 2022 as compared to $5.4 million in 2021) | (1.8) |
| Reduction of rates from the step down of our Montana gas production assets | (0.8) |
| Other | 2.3 |
| **Change in Utility Margin Impacting Net Income** | **24.9** |
| **Utility Margin Items Offset Within Net Income** |  |
| Higher property taxes recovered in revenue, offset in property tax expense | 13.3 |
| Higher operating expenses recovered in revenue, offset in operating and maintenance expense | 2.5 |
| Higher gas production taxes recovered in revenue, offset in property and other taxes | 0.3 |
| Lower revenue from higher production tax credits, offset in income tax expense | (2.0) |
| **Change in Items Offset Within Net Income** | **14.1** |
| **Increase in Consolidated Utility Margin**<sup>(1)</sup> | $**39.0** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Utility Margin is a Non-GAAP financial measure.

Higher electric retail volumes were driven by overall favorable weather in all jurisdictions and customer growth. Higher natural gas retail volumes were driven by favorable weather in all jurisdictions and customer growth. Interim rates in our Montana rate review were effective October 1, 2022, and are subject to refund pending an outcome in the proceeding.

The less favorable adjustment to our electric QF liability (unrecoverable costs associated with PURPA contracts as part of a 2002 stipulation with the MPSC and other parties) reflects a $5.1 million gain in 2022, as compared with a $7.5 million gain for the same period in 2021, due to the combination of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***•*** A $1.8 million favorable reduction in costs for the current contract year to record the annual adjustment for actual output and pricing as compared with a $2.6 million favorable reduction in costs in the prior period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***•*** A favorable adjustment, decreasing the QF liability by $3.3 million, reflecting annual actual contract price escalation for the 2022-2023 contract year, which was less than previously estimated, partly offset by an increase in estimated contract prices for the 2023-2024 contract year, which is the last year of the contract that contains variable pricing terms. This is compared to an unfavorable adjustment of $2.1 million in the prior year due to higher actual price escalation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***•*** A favorable adjustment in the prior year, decreasing the QF liability by approximately $7.0 million, associated with a one-time clarification in contract term.

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 11*

***Operating, General and Administrative Expenses***

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in millions)** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** | **Change** | **% Change** |
| **Operating Expenses (excluding fuel, purchased supply and direct transmission expense)** |  |  |  |  |
| Operating and maintenance | $221.4 | $208.3 | $13.1 | 6.3% |
| Administrative and general | 113.8 | 101.9 | 11.9 | 11.7 |
| Property and other taxes | 192.5 | 173.4 | 19.1 | 11.0 |
| Depreciation and depletion | 195.0 | 187.5 | 7.5 | 4.0 |
| **Total Operating Expenses (excluding fuel, purchased supply and direct transmission expense)** | $**722.7** | $**671.1** | $**51.6** | **7.7%** |

---

Consolidated operating expenses, excluding fuel, purchased supply and direct transmission expense, were $722.7 million in 2022, as compared with $671.1 million in 2021. Primary components of the change include the following:

---

| | |
|:---|:---|
| **(in millions)** | |
| | **Operating Expenses**<br>**2022 vs. 2021** |
| **Operating Expenses (excluding fuel, purchased supply and direct transmission expense) Impacting Net Income** | |
| Higher depreciation expense due to plant additions | $7.5 |
| Higher property tax expense due to an increase in estimated state and local taxes | 5.5 |
| Higher insurance expense | 2.2 |
| Increase in uncollectible accounts due to the prior year collection of previously written off balances | 2.0 |
| Higher cost of materials | 1.9 |
| Higher technology implementation and maintenance expenses | 1.8 |
| Higher travel expenses | 1.6 |
| Higher advertising expenses | 1.0 |
| Higher expenses at our electric generation facilities | 0.4 |
| Lower labor and benefits due to higher capitalization of labor and benefits costs and lower pension costs, partly offset by higher labor costs(1) | (2.1) |
| Prior year write off of preliminary construction costs | (1.6) |
| Other | 2.1 |
| **Change in Items Impacting Net Income** | **23.9** |
| **Operating Expenses Offset Within Net Income** |  |
| Higher property and other taxes recovered in trackers, offset in revenue | 13.6 |
| Higher pension and other postretirement benefits, offset in other income<sup>(1)</sup> | 12.8 |
| Higher operating expenses recovered in trackers, offset in revenue | 2.5 |
| Lower non-employee directors deferred compensation, offset in other income | (1.2) |
| **Change in Items Offset Within Net Income** | **27.7** |
| **Increase in Operating Expenses (excluding fuel, purchased supply and direct transmission expense)** | $**51.6** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) In order to present the total change in labor and benefits, we have included the change in the non-service cost component of our pension and other postretirement benefits, which is recorded within other income on our Condensed Consolidated Statements of Income. This change is offset within this table as it does not affect our operating expenses.

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 12*

***Operating Income***

Consolidated operating income in 2022 was $263.1 million as compared with $275.7 million in 2021. This decrease was primarily due to lower transmission revenues due to the prior year recognition of deferred transmission revenue and lower prices, a less favorable QF liability adjustment as compared to the prior year, higher operating and maintenance expense, higher administrative and general expense, higher property tax expense, and higher depreciation and depletion, partly offset by higher electric and natural gas retail volumes due to favorable weather and customer growth, and the interim rate increase, which is subject to refund pending an outcome in the proceeding.

***Interest Expense***

Consolidated interest expense in 2022 was $100.1 million, as compared with $93.7 million in 2021. This increase was primarily due to higher interest rates on borrowings under our revolving credit facilities partly offset by higher capitalization of allowance for funds used during construction (AFUDC).

***Other Income***

Consolidated other income in 2022 was $19.4 million, as compared with $8.3 million in 2021. This increase was primarily due to a decrease in the non-service cost component of pension expense and higher capitalization of AFUDC, partly offset by a $2.5 million Montana Community Renewable Energy Projects (CREP) penalty, which relates to litigation we have been involved in associated with our past progress towards meeting obligations to acquire renewable energy projects as mandated by the recently repealed Montana CREP requirement, and a decrease in the value of deferred shares held in trust for non-employee directors deferred compensation.

***Income Tax***

Consolidated income tax benefit in 2022 was $0.6 million, as compared to an income tax expense of $3.4 million in 2021. Our effective tax rate for the twelve months ended December 31, 2022 was (0.3) percent as compared with 1.8 percent for the same period of 2021.

The following table summarizes the differences between our effective tax rate and the federal statutory rate:

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 13*

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in millions)** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2022** | **2021** | **2021** |
| Income Before Income Taxes | $182.4 |  | $190.3 |  |
| Income tax calculated at federal statutory rate | 38.3 | 21.0% | 40.0 | 21.0% |
| Permanent or flow through adjustments: |  |  |  |  |
| State income taxes, net of federal provisions | 0.6 | 0.3 | 0.4 | 0.1 |
| Flow-through repairs deductions | (22.7) | (12.4) | (21.9) | (11.5) |
| Production tax credits | (13.2) | (7.2) | (11.5) | (6.1) |
| Amortization of excess deferred income taxes | (1.7) | (0.9) | (0.6) | (0.3) |
| Prior year permanent return to accrual adjustments | (1.4) | (0.8) |  |  |
| Plant and depreciation of flow through items | (0.2) | (0.1) | (0.9) | (0.6) |
| Other, net | (0.3) | (0.2) | (2.1) | (0.8) |
|  | (38.9) | (21.3) | (36.6) | (19.2) |
| **Income Tax (Benefit) Expense** | $(0.6) | (0.3)% | $3.4 | 1.8% |

---

Our effective tax rate typically differs from the federal statutory tax rate primarily due to the regulatory impact of flowing through federal and state tax benefits of repairs deductions, state tax benefit of accelerated tax depreciation deductions (including bonus depreciation when applicable) and production tax credits.

***Net Income***

Consolidated net income in 2022 was $183.0 million as compared with $186.8 million in 2021, a decrease of $3.8 million. This decrease was primarily due to higher operating costs, higher depreciation expense, higher interest expense, higher property taxes that were not offset in revenues, lower transmission revenues due to the prior year recognition of deferred transmission revenue and lower prices, and a less favorable QF liability adjustment as compared to the prior year, partly offset by higher electric and natural gas retail volumes due to favorable weather and customer growth and higher Montana electric and natural gas interim rate revenue, which is subject to refund.

***Liquidity and Capital Resources***

As of December 31, 2022, our total net liquidity was approximately $108.5 million, including $8.5 million of cash and $100.0 million of revolving credit facility availability with no letters of credit outstanding. This compares to total net liquidity one year ago at December 31, 2021 of $79.8 million.

***Dividend Declared***

NorthWestern's Board of Directors declared a quarterly common dividend of $0.64 per share (a 1.6% increase over the prior quarter's dividend) payable March 31, 2023 to common shareholders of record as of March 15, 2023. Over the longer-term, we expect to maintain a dividend payout ratio within a targeted 60-70% range.

***Significant items not contemplated in Guidance***

We reported GAAP earnings of $3.25 per diluted share for the year-ended December 31, 2022 and $3.60 per diluted share for the same period in 2021. Adjusted Non-GAAP earnings per diluted share for the same periods are $3.18 and $3.51, respectively. A reconciliation of items not factored into our

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 14*

Adjusted Non-GAAP diluted earnings per share are summarized below. The amount below represents a non-GAAP measure that may provide users of this data with additional meaningful information regarding the impact of certain items on our expected earnings. More information on this measure can be found in the "Non-GAAP Financial Measures" section below.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| *(in millions, except per share amounts)* | *(in millions, except per share amounts)* | *(in millions, except per share amounts)* | *(in millions, except per share amounts)* | | | | | | |
| **Actual** | **Actual** | **Actual** | **Actual** | **Actual** | **Actual** | **Actual** | **Actual** | **Actual** | **Actual** |
| **Nine Months Ended September 30, 2022** | **Nine Months Ended September 30, 2022** | **Nine Months Ended September 30, 2022** | **Nine Months Ended September 30, 2022** | **Q4 2022** | **Q4 2022** | **Q4 2022** | **Full Year 2022** | **Full Year 2022** | **Full Year 2022** |
|  | **Pre-tax<br>Income** | **Net**<sup>(1)</sup>**Income**  | **Diluted<br>EPS** | **Pre-tax<br>Income** | **Net**<sup>(1)</sup>**Income**  | **Diluted<br>EPS** | **Pre-tax<br>Income** | **Net**<sup>(1)</sup>**Income**  | **Diluted**<br>**EPS**<sup>(2)</sup> |
| **2022 Reported GAAP** | **$118.6** | **$116.3** | **$2.09** | **$63.8** | **$66.7** | **$1.16** | **$182.4** | **$183.0** | **$3.25** |
| **<u>Non-GAAP Adjustments:</u>** | **<u>Non-GAAP Adjustments:</u>** | **<u>Non-GAAP Adjustments:</u>** | **<u>Non-GAAP Adjustments:</u>** |  |  |  |  |  |  |
| Remove impact of favorable weather <sup>(1)</sup> | (6.6) | (4.9) | (0.08) | (2.3) | (1.7) | (0.03) | (8.9) | (6.6) | (0.11) |
| Remove impact of CREP penalty (non-tax deductible) | 2.5 | 2.5 | 0.04 |  |  |  | 2.5 | 2.5 | 0.04 |
| 2022 Adj. Non-GAAP | $114.5 | $113.9 | $2.05 | $61.5 | $65.0 | $1.13 | $176.0 | $178.9 | $3.18 |
| **Nine Months Ended September 30, 2021** | **Nine Months Ended September 30, 2021** | **Nine Months Ended September 30, 2021** | **Nine Months Ended September 30, 2021** | **Q4 2021** | **Q4 2021** | **Q4 2021** | **Full Year 2021** | **Full Year 2021** | **Full Year 2021** |
|  | **Pre-tax<br>Income** | **Net**<sup>(1)</sup>**Income**  | **Diluted<br>EPS** | **Pre-tax<br>Income** | **Net**<sup>(1)</sup>**Income**  | **Diluted<br>EPS** | **Pre-tax<br>Income** | **Net**<sup>(1)</sup>**Income**  | **Diluted**<br>**EPS**<sup>(2)</sup> |
| **2021 Reported GAAP** | **$139.4** | **$135.5** | **$2.64** | **$50.9** | **$51.3** | **$0.96** | **$190.2** | **$186.8** | **$3.60** |
| **<u>Non-GAAP Adjustments:</u>** | **<u>Non-GAAP Adjustments:</u>** | **<u>Non-GAAP Adjustments:</u>** | **<u>Non-GAAP Adjustments:</u>** |  |  |  |  |  |  |
| QF Liability - adjustment associated with one-time clarification of contract term | (7.4) | (5.5) | (0.11) | 0.5 | 0.4 | 0.01 | (6.9) | (5.2) | (0.10) |
| Remove impact of (favorable) unfavorable weather | (4.1) | (3.1) | (0.06) | 5.2 | 3.9 | 0.07 | 1.1 | 0.8 | 0.01 |
| 2021 Adj. Non-GAAP | $127.9 | $126.9 | $2.47 | $56.6 | $55.6 | $1.04 | $184.4 | $182.4 | $3.51 |
| *(1) Income tax benefit or expense calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%.* | *(1) Income tax benefit or expense calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%.* | *(1) Income tax benefit or expense calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%.* | *(1) Income tax benefit or expense calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%.* | *(1) Income tax benefit or expense calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%.* | *(1) Income tax benefit or expense calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%.* | *(1) Income tax benefit or expense calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%.* | *(1) Income tax benefit or expense calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%.* | *(1) Income tax benefit or expense calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%.* | *(1) Income tax benefit or expense calculation on reconciling items assumes blended federal plus state effective tax rate of 25.3%.* |
| *(2) Due to changes in the quarterly diluted share count, full year EPS may be +/- $0.01 different than the sum of the quarters.* | *(2) Due to changes in the quarterly diluted share count, full year EPS may be +/- $0.01 different than the sum of the quarters.* | *(2) Due to changes in the quarterly diluted share count, full year EPS may be +/- $0.01 different than the sum of the quarters.* | *(2) Due to changes in the quarterly diluted share count, full year EPS may be +/- $0.01 different than the sum of the quarters.* | *(2) Due to changes in the quarterly diluted share count, full year EPS may be +/- $0.01 different than the sum of the quarters.* | *(2) Due to changes in the quarterly diluted share count, full year EPS may be +/- $0.01 different than the sum of the quarters.* | *(2) Due to changes in the quarterly diluted share count, full year EPS may be +/- $0.01 different than the sum of the quarters.* | *(2) Due to changes in the quarterly diluted share count, full year EPS may be +/- $0.01 different than the sum of the quarters.* | *(2) Due to changes in the quarterly diluted share count, full year EPS may be +/- $0.01 different than the sum of the quarters.* | *(2) Due to changes in the quarterly diluted share count, full year EPS may be +/- $0.01 different than the sum of the quarters.* |

---

<u>Revision to non-GAAP weather normalization method</u> - Up to, and including, Q3 2022, our weather normalizing adjustment included the estimated impact from four customer classes; commercial electric, residential electric, commercial natural gas and residential natural gas. Due to a statistically low correlation coefficient of our commercial electric customers' usage patterns, we will no longer include a weather normalizing adjustment for this customer class. As a result, the weather adjustment in the fourth quarter reflects the reversal of the first three quarters of commercial electric customer impact (eliminating the commercial electric impact for the year). See table that follows.

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 15*

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

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ***(millions)*** | **2022 Pretax (Favorable) Unfavorable Impact** | **2022 Pretax (Favorable) Unfavorable Impact** | **2022 Pretax (Favorable) Unfavorable Impact** | **2022 Pretax (Favorable) Unfavorable Impact** | **2022 Pretax (Favorable) Unfavorable Impact** | **2022 Pretax (Favorable) Unfavorable Impact** |
| **<u>Customer Class</u>** | **<u>Q1</u>** | **<u>Q2</u>** | **<u>Q3</u>** | **<u>Q1-Q3</u>** | **<u>Q4</u>** | **<u>2022</u>** |
| Commercial Electric (reversed in Q4) | $0.1 | $(0.1) | $(2.1) | $**(2.1)** | $2.1 | $**—** |
| Residential Electric | 0.1 | (0.7) | (3.2) | **(3.8)** | (1.8) | **(5.6)** |
| Commercial Natural Gas | 0.1 | (0.6) | 0.3 | **(0.2)** | (0.7) | **(0.9)** |
| Residential Natural Gas | 0.3 | (1.6) | 0.8 | **(0.5)** | (1.9) | **(2.4)** |
| Non-GAAP adjustment for<br>&nbsp;&nbsp;&nbsp;&nbsp;unfavorable (favorable) weather | $0.6 | $(3.0) | $(4.2) | $**(6.6)** | $(2.3) | $**(8.9)** |
|  | **2021 Pretax (Favorable) Unfavorable Impact** | **2021 Pretax (Favorable) Unfavorable Impact** | **2021 Pretax (Favorable) Unfavorable Impact** | **2021 Pretax (Favorable) Unfavorable Impact** | **2021 Pretax (Favorable) Unfavorable Impact** | **2021 Pretax (Favorable) Unfavorable Impact** |
| **<u>Customer Class</u>** | **<u>Q1</u>** | **<u>Q2</u>** | **<u>Q3</u>** | **<u>Q1-Q3</u>** | **<u>Q4</u>** | **<u>2022</u>** |
| Commercial Electric | $0.1 | $(0.9) | $(1.6) | $**(2.4)** | $0.5 | $**(1.9)** |
| Residential Electric | 0.3 | (1.3) | (2.1) | **(3.1)** | 1.4 | **(1.7)** |
| Commercial Natural Gas | 0.3 | 0.1 | 0.1 | **0.5** | 1.0 | **1.5** |
| Residential Natural Gas | 0.6 | 0.1 | 0.2 | **0.9** | 2.3 | **3.2** |
| Non-GAAP adjustment for<br>&nbsp;&nbsp;&nbsp;&nbsp;unfavorable (favorable) weather | $1.3 | $(2.0) | $(3.4) | $**(4.1)** | $5.2 | $**1.1** |

---

***2023 Earnings Guidance and Capital Expenditures Forecast***

NorthWestern expects to issue 2023 earnings guidance following an outcome in the currently pending Montana general rate review. Our estimated capital expenditures for 2023 are $510 million. Over the next five years (2023 to 2027) we estimate investment of $2.4 billion in our electric and natural gas transmission and distribution and electric generation infrastructure.

***Company Hosting Investor Webinar***

NorthWestern will host an investor webinar on Friday, February 17, 2023, at 3:30 p.m. Eastern time to review its financial results for the year ending December 31, 2022.

To register for the webinar, please visit www.northwesternenergy.com/earnings-registration. Please go to the site at least 15 minutes in advance of the webinar to register. An archived webcast will be available shortly after the event and remain active for one year.

***NorthWestern Energy - Delivering a Bright Future***

NorthWestern Corporation, doing business as NorthWestern Energy, provides essential energy infrastructure and valuable services that enrich lives and empower communities while serving as long-term partners to our customers and communities. We work to deliver safe, reliable, and innovative energy solutions that create value for customers, communities, employees, and investors. We do this by providing low-cost and reliable service performed by highly-adaptable and skilled employees. We provide electricity and / or natural gas to approximately 764,200 customers in Montana, South Dakota, Nebraska, and Yellowstone National Park. We have provided service in South Dakota and Nebraska since 1923 and in Montana since 2002.

***Non-GAAP Financial Measures***

This press release includes financial information prepared in accordance with GAAP, as well as other financial measures, such as Utility Margin, Adjusted Non-GAAP pretax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS that are considered "non-GAAP financial measures." Generally, a non-GAAP financial measure is a numerical measure of a company's financial performance, financial position or cash flows that excludes (or includes) amounts that are

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 16*

included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP.

We define Utility Margin as Operating Revenues less fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion) as presented in our Consolidated Statements of Income. This measure differs from the GAAP definition of Gross Margin due to the exclusion of Operating and maintenance, Property and other taxes, and Depreciation and depletion expenses, which are presented separately in our Consolidated Statements of Income. A reconciliation of Utility Margin to Gross Margin, the most directly comparable GAAP measure, is included in the press release above.

Management believes that Utility Margin provides a useful measure for investors and other financial statement users to analyze our financial performance in that it excludes the effect on total revenues caused by volatility in energy costs and associated regulatory mechanisms. This information is intended to enhance an investor's overall understanding of results. Under our various state regulatory mechanisms, as detailed below, our supply costs are generally collected from customers. In addition, Utility Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow recovery of operating costs, as well as to analyze how changes in loads (due to weather, economic or other conditions), rates and other factors impact our results of operations. Our Utility Margin measure may not be comparable to that of other companies' presentations or more useful than the GAAP information provided elsewhere in this report.

Management also believes the presentation of Adjusted Non-GAAP pre-tax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS is more representative of normal earnings than GAAP pre-tax income, net income and EPS due to the exclusion (or inclusion) of certain impacts that are not reflective of ongoing earnings. The presentation of these non-GAAP measures is intended to supplement investors' understanding of our financial performance and not to replace other GAAP measures as an indicator of actual operating performance. Our measures may not be comparable to other companies' similarly titled measures.

***Special Note Regarding Forward-Looking Statements***

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, the information under "Significant Items Not Contemplated in Earnings." Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. We caution that while we make such statements in good faith and believe such statements are based on reasonable assumptions, including without limitation, management's examination of historical operating trends, data contained in records and other data available from third parties, we cannot assure you that we will achieve our projections. Factors that may cause such differences include, but are not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse determinations by regulators, as well as potential adverse federal, state, or local legislation or regulation, including costs of compliance with existing and future environmental requirements, could have a material effect on our liquidity, results of operations and financial condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the impact of extraordinary external events and natural disasters, such as a wide-spread or global pandemic, geopolitical events, earthquake, flood, drought, lightning, weather, wind, and fire, could have a material effect on our liquidity, results of operations and financial condition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acts of terrorism, cybersecurity attacks, data security breaches, or other malicious acts that cause damage to our generation, transmission, or distribution facilities, information technology systems, or result in the release of confidential customer, employee, or Company information;

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*NorthWestern Reports 2022 Financial Results*

*February 16, 2023*

*Page 17*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• supply chain constraints, recent high levels of inflation for product, services and labor costs, and their impact on capital expenditures, operating activities, and/or our ability to safely and reliably serve our customers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in availability of trade credit, creditworthiness of counterparties, usage, commodity prices, fuel supply costs or availability due to higher demand, shortages, weather conditions, transportation problems or other developments, may reduce revenues or may increase operating costs, each of which could adversely affect our liquidity and results of operations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unscheduled generation outages or forced reductions in output, maintenance or repairs, which may reduce revenues and increase operating costs or may require additional capital expenditures or other increased operating costs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• adverse changes in general economic and competitive conditions in the U.S. financial markets and in our service territories.

Our 2022 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, reports on Form 8-K and other Securities and Exchange Commission filings discuss some of the important risk factors that may affect our business, results of operations and financial condition. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

**Investor Relations Contact:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Media Contact:**

Travis Meyer (605) 978-2967&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jo Dee Black (866) 622-8081

travis.meyer@northwestern.com&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;jodee.black@northwestern.com

## Exhibit 99.2

![](exh992q4earningspresenta001.jpg)

2022 Full Year Earnings Webcast February 17, 2023

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Presenting Today 2 Forward Looking Statements During the course of this presentation, there will be forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." The information in this presentation is based upon our current expectations as of the date of this document unless otherwise noted. Our actual future business and financial performance may differ materially and adversely from our expectations expressed in any forward- looking statements. We undertake no obligation to revise or publicly update our forward-looking statements or this presentation for any reason. Although our expectations and beliefs are based on reasonable assumptions, actual results may differ materially. The factors that may affect our results are listed in certain of our press releases and disclosed in the Company's 10-K and 10-Q along with other public filings with the SEC. Crystal Lail Vice President & CFO Brian Bird President & CEO

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 Operational performance • Maintained safe and reliable service while reaching new all-time system peaks for both electric (Montana & South Dakota) and natural gas (Montana & Nebraska) systems in 2022 • EEI Emergency Response Award recipient following May derecho in South Dakota and June historic flooding in Montana and Yellowstone National Park • One of very few utilities with improved JD Power Overall Customer Satisfaction scores in 2022 and most improved (both electric and gas) among "West Midsized" peers  Regulatory execution • Filed Montana electric and natural gas rate review and received interim rates in October 2022  Safely completed a record level of capital investment • $580 million invested in 2022 and a $510 million capital plan for 2023 Commitment to sustainability • Announced Net Zero by 2050 and published our TCFD / SASB aligned Sustainability Report  Driving reliability and affordability • Negotiated agreement with Avista to transfer Colstrip ownership • 222 megawatts, effective December 31, 2025 for zero purchase price 2022 in Review 3 Recognized by Newsweek as one of "America's Most Responsible Companies"

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Why Colstrip? 4 Reliable  Existing resource, ready to serve our Montana customers. Avoids lengthy planning, permitting and construction of a new facility that would stretch in-service beyond 2026.  Reduces reliance on imported power and volatile markets, providing increased energy independence.  In-state and on-system asset mitigating the transmission constraints we experience importing capacity.  Adds critical long-duration, 24/7 on-demand generation necessary for balancing our existing portfolio. Affordable  222 MW of capacity with no upfront capital costs and stable operating costs going forward. o Equivalent new build would cost in excess of $500 million. o Incremental operating costs are known and reasonable. Resulting variable generation costs represent a 90%+ discount to market prices incurred during December's polar vortex.  In addition to no upfront capital, low and stably priced mine-mouth coal supply costs. Sustainable  We remain committed to our net zero goal by 2050. This additional capacity, with a remaining life of up to 20 years, helps bridge the interim gap and will likely lead to less carbon post 2040.  Yellowstone County Generating Station is potentially our last natural gas resource addition in Montana.  Partners are committed to evaluate non-carbon long-duration alternative resources for the site.  Keeps the existing plant open and retains its highly skilled jobs vital to the Colstrip community.  Protects existing ownership interests with an ultimate goal of majority ownership of Unit 4. NorthWestern Energy executed an agreement with Avista Corporation for the transfer of Avista's ownership interests in Colstrip Units 3 & 4. • Effective date of transfer: 12/31/2025 • Generating capacity: 222 MW • Transfer price: $0.00

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December 2022 Polar Vortex 5 The chart illustrates the actual resource specific contribution of energy, the capacity deficit we faced, and the market price of power during the late December 2022 multi-day cold weather event in Montana. As a result of our capacity deficit, we were reliant upon the high and volatile power market a majority of the time to meet customer demand.

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2022 Financial Results 6 \*See slides 10 & 14 and "Non-GAAP Financial Measures" slide in the appendix for additional detail on this measure. Fourth Quarter EPS vs Prior Period • GAAP: ↑ $0.20 (or 21%) • Non-GAAP\*: ↑ $0.09 (or 9%) Full Year EPS vs Prior Period • GAAP: ↓ $0.35 (or 10%) • Non-GAAP\*: ↓ $0.33 (or 10%)

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2022 Comparison to Guidance 7 Significant Drivers The dramatic rise in interest rates, inflationary impacts to operating costs, and volatility of market supply costs presented significant headwinds in 2022. In addition, extreme weather conditions in late December drove higher supply costs (which we don't fully, or timely, recover) and higher operating costs across the system. While we adjust the favorable weather out on a non-GAAP basis, we leave the costs in. While we were able to offset significant headwinds throughout the year, results were ultimately outside our guidance range. 2022 Diluted EPS

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Fourth Quarter Financial Results 8 (1) (1) Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure.

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Fourth Quarter EPS Bridge 9 Solid improvement in fourth quarter earnings per share driven by weather, customer growth and Montana interim rates offset by increased operating expense (including property taxes and depreciation), interest expense and dilution from higher average shares outstanding. After-tax Earnings Per Share See slide 10 and "Non-GAAP Financial Measures" slide in the appendix for additional detail on this measure. \*Interim rates subject to refund

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Fourth Quarter Non-GAAP Earnings 10 The adjusted non- GAAP measures presented in the table are being shown to reflect significant items that are non-recurring or a variance from normal weather, however they should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. (1) As a result of the adoption of Accounting Standard Update 2017-07 in March 2018, pension and other employee benefit expense is now disaggregated on the GAAP income statement with portions now recorded in both OG&A expense and Other (Expense) Income lines. To facilitate better understanding of trends in year-over-year comparisons, the non-GAAP adjustment above re-aggregates the expense in OG&A - as it was historically presented prior to the ASU 2017-07 (with no impact to net income or earnings per share). (2) Utility Margin is a non-GAAP Measure See the slide titled "Explaining Utility Margin" for additional disclosure.

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Full Year Financial Results 11 (1) (1) Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure.

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Full Year EPS Bridge 12 Full year earnings per share driven by increased operating expense (including property taxes and depreciation), interest expense and dilution from higher average shares outstanding. These determents were partly offset by weather, customer growth and Montana interim rates. After-tax Earnings Per Share See slide 14 and "Non-GAAP Financial Measures" slide in the appendix for additional detail on this measure.

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Full Year Utility Margin Bridge 13 $24.9 Million or 2.6% increase in Utility Margin due to items that impact Net Income. NOTE: Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure. Pre-tax Millions \*Interim rates subject to refund \*\* Primarily due to prior year recognition of $4.7M of deferred interim rates PCCAM Impact $7.2M in 2022 vs. $5.4M in 2021

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Full Year Non-GAAP Earnings 14 The adjusted non- GAAP measures presented in the table are being shown to reflect significant items that are non-recurring or a variance from normal weather, however they should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP. (1) As a result of the adoption of Accounting Standard Update 2017-07 in March 2018, pension and other employee benefit expense is now disaggregated on the GAAP income statement with portions now recorded in both OG&A expense and Other (Expense) Income lines. To facilitate better understanding of trends in year-over-year comparisons, the non-GAAP adjustment above re-aggregates the expense in OG&A - as it was historically presented prior to the ASU 2017-07 (with no impact to net income or earnings per share). (2) Utility Margin is a non-GAAP Measure See the slide titled "Explaining Utility Margin" for additional disclosure.

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Full Year Cash Flow 15 Cash from Operating Activities increased by $87.2 million primarily due to $78.0 million increase in collection of energy supply costs from customers. Funds from Operations increased by $3.6 million over prior period. Net Under-Collected Supply Costs (in millions) Beginning (Jan. 1) Ending (Dec. 31) Outflow 2021 $4.8 $99.1 ($94.3) 2022 $99.1 $115.4 ($16.3) 2022 Improvement (less outflow) $78.0 We anticipate issuing $75 million of common stock through our At-the-Market program in 2023. Debt maturities are manageable with approximately $144 million due in 2023. Financing plans (targeting a FFO to Debt ratio > 14%) are expected maintain our current credit ratings and are subject to change.

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2023 earnings guidance is expected to be provided following an outcome in our pending Montana rate review. $510 million capital plan for 2023 (inclusive of $80 million of investment specific to Yellowstone County Generating Station). Long-term growth targets remain; 3-6% EPS and 4-5% rate base. 2023 annualized dividend of $2.56 is expected to be above targeted 60-70% payout ratio. Over the longer-term, we expect to maintain a dividend payout ratio within a targeted 60-70% range . Financing plans are intended to maintain current credit ratings; targeting FFO to debt ratio greater than 14%. Financial Outlook 16 Rowe Dam at Mystic Lake, Montana

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Capital Investment 17 $2.4 billion of forecasted low-risk capital investment opportunity… • Capital investment addresses generation and transmission capacity constraints, grid modernization and renewable energy integration. This does not include any incremental opportunities related to additional supply investment. • This sustainable level of capex is expected to drive an annualized rate base growth of approximately 4%-5%. • We expect to finance this capital with a combination of cash flows from operations, first mortgage bonds and equity issuances. Over $2.1 Billion investment\* over last 5 years \* Historical Capital Investment includes property, plant and equipment additions, acquisitions and capital expenditures included in accounts payable. 5 Year History of Capital Investment 5 Year Forecast of Capital Investment ($millions, unless stated otherwise) Yellowstone County Generating Station

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175 megawatt Yellowstone County generating project in Montana • Construction began in April 2022 • Construction costs of approximately $275 million with $154.9 million invested to date • Current schedule anticipates commercial operation during 2024\* Electric Supply Resource Plans South Dakota • Filed an updated integrated resource plan in September 2022 • Plan identifies 43 megawatts as retire and replace candidates with potential for competitive solicitation during 2023-2024 Looking Forward 18 The recently completed 58-megawatt Bob Glanzer Generating Station in Huron, South Dakota, provides on-demand resources to support the variability of wind and solar projects coming onto our system and the grid in our region and help serve our customers during extended periods of peak demand. Montana • Expect to submit an integrated resource plan to the MPSC by the end of March 2023. \* On October 21, 2021, the Montana Environmental Information Center (MEIC) and the Sierra Club filed a lawsuit in Montana State Court, against the Montana Department of Environmental Quality (MDEQ) and us, alleging that the environmental analysis conducted prior to issuance of the Yellowstone County project's air quality permit was inadequate. The Montana District Court judge held oral argument on June 20, 2022. We expect a decision in 2023. This lawsuit, as well as additional legal challenges related to the Yellowstone County plant, could delay the project timing. Construction continues while we are awaiting this decision.

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Conclusion 19 Pure Electric & Gas Utility Solid Utility Foundation Best Practices Corporate Governance Attractive Future Growth Prospects Strong Earnings & Cash Flows

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20 Appendix

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Montana Rate Review Progress – Next Steps 21 Procedural Schedule 03/06/2023 – NorthWestern to file rebuttal testimony 04/03/2023 – Pre-hearing memoranda due and final day for stipulations and settlement agreements 04/11/2023 – Hearing commences and continues day-to-day, as necessary  Requested base rate increase supports over a billion dollars invested in Montana critical infrastructure, while keeping operating costs below the rate of inflation, since our last rate reviews.  On September 28, 2022, the MPSC approved the recommendations of the MPSC Staff for interim rates effective October 1, 2022, subject to refund. Final rates, once approved, will be retroactive back to interim effective date. Appendix

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Regulated Utility Five-Year Capital Forecast 22 Appendix $2.4 billion of highly-executable and low-risk capital investment Electric Supply Resource Plans - Our energy resource plans identify portfolio resource requirements including potential investments. Included within our projections is approximately $120.0 million of capital to complete construction of the 175 MW Yellowstone County Generating Station to be on line in 2024. Distribution and Transmission Modernization and Maintenance - The primary goals of our infrastructure investments are to reverse the trend in aging infrastructure, maintain reliability, proactively manage safety, build capacity into the system, and prepare our network for the adoption of new technologies. We are taking a proactive and pragmatic approach to replacing these assets while also evaluating the implementation of additional technologies to prepare the overall system for smart grid applications. Beginning in 2021, and continuing through 2025, we are installing automated metering infrastructure in Montana at a total cost of approximately $112.0 million, of which, $66.1 million remains and is reflected in the five year capital forecast.

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Montana Rate Review 23 Approximately 42% of the requested total electric and natural gas revenue increase is driven by flow-through costs including market power purchases and property taxes. (subject to refund) Appendix

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Rate Base & Authorized Return Summary 24 Appendix (1) The revenue requirement associated with the FERC regulated portion of Montana electric transmission and ancillary services are included as revenue credits to our MPSC jurisdictional customers. Therefore, we do not separately reflect FERC authorized rate base or authorized returns. (2) The Montana gas revenue requirement includes a step down which approximates annual depletion of our natural gas production assets included in rate base. (3) For those items marked as "n/a," the respective settlement and/or order was not specific as to these terms. (4) On August 8, 2022, we filed a Montana electric and natural gas rate review filing (2021 test year) requesting an increase to our authorized rate base, return on equity, and equity level in our capital structure. We expect a final order regarding this rate review in 2023. Coal Generation Rate Base as a percentage of Total Rate Base Revenue from coal generation is not easily identifiable due to the use of bundled rates in South Dakota and other rate design and accounting considerations. However, NorthWestern is a fully regulated utility company for which rate base is the primary driver for earnings. The data to the left illustrates that NorthWestern only derives approximately 9 -14% of earnings from its jointly owned coal generation rate base.

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NorthWestern Energy executed an agreement with Avista Corporation (Exit Agreement) for the transfer of Avista's ownership interests in Colstrip Units 3 and 4. • Effective date of transfer: December 31, 2025 • Generating capacity: 222 MW (bringing our total ownership to 444 MW) • Transfer price: $0.00 Colstrip Transaction Overview 25 • NorthWestern will be responsible for operational and capital costs beginning January 1, 2026. • The agreement does not require approval by the Montana Public Service Commission (MPSC). We expect to work with the MPSC in a future docket for cost recovery in 2026. • NorthWestern will have the right to exercise Avista's vote with respect to capital expenditures1 between now and 2025 with Avista responsible for its pro rata share2. • Avista will retain its existing environmental and decommissioning obligations through life of plant. • Under the Colstrip Ownership & Operating Agreement, each of the owners will have a 90-day period in which to evaluate the transaction between NorthWestern and Avista to determine whether to exercise their respective right of first refusal. • We expect to file our Montana Integrated Resource Plan during the first quarter 2023. This transaction is expected to satisfy our capacity needs in Montana for at least the next 5 years. 1. Avista retains the vote related to remediation activities. 2. Avista bears its current project share (15%) costs through 2025, other than "Enhancement Work Costs" for which it bears a time-based pro-rata share. Enhancement Work Costs are costs that are not performed on a least-costs basis or are intended to extend the life of the facility beyond 2025. See the Exit Agreement for additional detail. Appendix

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Reduces Risk  We are in a supply capacity crisis due to lack of resource adequacy, with approx. 40% of our customers' peak needs on the market. This transaction will reduce our need to import expensive capacity during critical times.  Establishes clarity regarding operations past 2025 Washington state legislation deadline.  Reduces PCCAM risk sharing for customers and shareholders. Bill Headroom  Stable pricing reduces impact of market volatility and high energy prices on customers. Aligned with 'All of the Above' energy transition in Montana  Supports our generating portfolio that is nearly 60% carbon-free today.  Provides future opportunity at the site while supporting economic development in Montana.  Agreement considers the appropriate balance of reliability, affordability and sustainability. 26 Why Colstrip?Appendix

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Facility Ownership Overview 27 NorthWestern is actively working with the other owners to resolve outstanding issues, including the associated pending legal proceedings. Additionally, the owners intend to pursue a mutually beneficial reallocation (swap) of megawatts between the two units that would ideally provide NorthWestern with a controlling (> 370 megawatts) share of Unit 4. Appendix

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Our Net-Zero Vision 28 Over the past 100 years, NorthWestern Energy has maintained our commitment to provide customers with reliable and affordable electric and natural gas service while also being good stewards of the environment. We have responded to climate change, its implications and risks, by increasing our environmental sustainability efforts and our access to clean energy resources. But more must be done. We are committed to achieving net zero emissions by 2050. • Committed to achieving net-zero by 2050 for Scope 1 and 2 emissions • Must balance Affordability, Reliability and Sustainability in this transition • No new carbon emitting generation additions after 2035 • Pipeline modernization, enhanced leak detection and development of alternative fuels for natural gas business • Electrify fleet and add charging infrastructure • Carbon offsets likely needed to ultimately achieve net-zero • Please visit www.NorthWesternEnergy.com/NetZero to learn more about our Net Zero Vision. Appendix

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Increase in utility margin due to the following factors: $14.8 Higher electric retail volumes 9.5 Montana interim rates (subject to refund) 8.1 Higher natural gas retail volumes (4.8) Lower transmission revenue (due primarily to $4.7M prior year recognition of deferred transmission interim rates) (2.4) Less favorable electric QF liability adjustment (1.8) Higher non-recoverable Montana electric supply costs (0.8) Reduction of rates from the step down of natural gas production assets 2.3 Other $24.9 Change in Utility Margin Items Impacting Net Income 29 Utility Margin (Full Year) (dollars in millions) 12 Months Ended December 31, 2022 2021 Variance Electric $782.1 $757.4 $24.7 3.3% Natural Gas 203.7 189.4 14.3 7.6% Total Utility Margin $985.8 $946.8 $39.0 4.1% $13.3 Higher property taxes recovered in revenue, offset in property tax expense 2.5 Higher operating expenses recovered in revenue, offset in O&M expense 0.3 Higher gas production taxes recovered in revenue, offset in property & other taxes (2.0) Lower revenue from higher production tax credits, offset in income tax expense $14.1 Change in Utility Margin Offset Within Net Income $39.0 Increase in Utility Margin (1) Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure. (1) Appendix

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Increase in operating expenses due to the following factors: $7.5 Higher depreciation expense due to plant additions 5.5 Higher property tax expense due to an increase in the estimated state and local taxes 2.2 Higher insurance expense 2.0 Increase in uncollectible accounts (due to prior year collection of previously written off balances) 1.9 Higher cost of materials 1.8 Higher technology implementation and maintenance expense 1.6 Higher travel expenses 1.6 Higher fleet fuel costs 1.0 Higher advertising expenses 0.4 Higher expenses at our electric generation facilities (2.1) Lower labor and benefits (1) (1.6) Prior year write off of preliminary construction costs 2.1 Other $23.9 Change in Operating Expense Items Impacting Net Income Operating Expenses 30 (Full Year) (dollars in millions) Twelve Months Ended December 31, 2022 2021 Variance Operating & maintenance $221.4 $208.3 $13.1 6.3% Administrative & general 113.8 101.9 11.9 11.7% Property and other taxes 192.5 173.4 19.1 11.0% Depreciation and depletion 195.0 187.5 7.5 4.0% Operating Expenses (2) $722.7 $671.1 $51.6 7.7% $13.6 Higher property and other taxes recovered in trackers, offset in revenue 12.8 Higher pension and other postretirement benefits, offset in other income (1) 2.5 Higher operating and maintenance expenses recovered in trackers, offset in revenue (1.2) Lower non-employee directors deferred compensation, offset in other income $27.7 Change in Operating Expense Items Offset Within Net Income $51.6 Increase in Operating Expenses $25.0 Appendix (1) In order to present the total change in labor and benefits, we have included the change in the non-service cost component of our pension and other postretirement benefits, which is recorded within other income on our Condensed Consolidated Statements of Income. This change is offset within this table as it does not affect our operating expenses. (2) (excluding fuel, purchased supply and direct transmission expense)"

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Operating to Net Income 31 (dollars in millions) Twelve Months Ended December 31, 2022 2021 Variance Operating Income $263.1 $275.7 $(12.6) (4.6%) Interest expense (100.1) (93.7) (6.4) (6.8%) Other income, net 19.4 8.2 11.2 136.6% Income Before Taxes 182.4 190.2 (7.8) (4.1%) Income tax benefit (expense) 0.6 (3.4) 4.0 117.6% Net Income $183.0 $186.8 $(3.8) (2.0%) (Full Year) $6.4 million increase in interest expenses was primarily due to higher interest rates on borrowings under our revolving credit facilities, partly offset by higher capitalization of allowance for funds used during construction (AFUDC). $11.2 million increase in other income was primarily due to a decrease in the non- service cost component of pension expense and higher capitalization of AFUDC, partly offset by a $2.5 million CREP penalty, which relates to litigation we have been involved in associated with our past progress towards meeting obligations to acquire renewable energy projects as mandated by the recently repealed Montana CREP requirement, and a decrease in the value of deferred shares held in trust for non-employee directors deferred compensation (which is offset in operating expense).. $4.0 million Income tax improvement was primarily due to lower pre-tax income along with higher flow-through benefits. Appendix

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Tax Reconciliation 32 Appendix (Full Year)

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Weather 33 Approximately 60% of the state of Montana is in moderate and 37% in severe drought conditions. However, this is a significant improvement from a year ago where approximately 86% of the state was in severe drought conditions. We estimated a $8.9 million pre-tax benefit as compared to normal and a $10.0 million benefit as compared to the full year 2021. Appendix (Full Year) Mean Temperature Departures from 30-Year Average Drought Conditions in Montana vs 30-Year Normal Source: www.drought. gov/states/ montana

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Weather Impact Adjustment 34 Appendix Revision to non-GAAP weather normalization method - Up to, and including, Q3 2022, our weather normalizing adjustment included the estimated impact from four customer classes; commercial electric, residential electric, commercial natural gas and residential natural gas. Due to a statistically low correlation coefficient of our commercial electric customers' usage patterns, we will no longer include a weather normalizing adjustment for this customer class. As a result, the weather adjustment in the fourth quarter reflects the reversal of the first three quarters of commercial electric customer impact (eliminating the commercial electric impact for the year).

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GAAP to Non-GAAP 35 Appendix The comparison above updates 2021 non-GAAP earnings to exclude the estimated weather impacts of our commercial electric customers consistent with 2022 non-GAAP presentation. Revised 2021 Presentation (Excluding commercial electric impact) 2021 as originally presented The adjusted non-GAAP measures presented in the table are being shown to reflect significant items that are non-recurring or a variance from normal weather, however they should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

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Quarterly PCCAM Impacts 36 Appendix In 2017, the Montana legislature revised the statute regarding our recovery of electric supply costs. In response, the MPSC approved a new design for our electric tracker in 2018, effective July 1, 2017. The revised electric tracker, or PCCAM established a baseline of power supply costs and tracks the differences between the actual costs and revenues. Variances in supply costs above or below the baseline are allocated 90% to customers and 10% to shareholders, with an annual adjustment. From July 2017 to May 2019, the PCCAM also included a "deadband" which required us to absorb the variances within +/- $4.1 million from the base, with 90% of the variance above or below the deadband collected from or refunded to customers. In 2019, the Montana legislature revised the statute effective May 7, 2019, prohibiting a deadband, allowing 100% recovery of QF purchases, and maintaining the 90% / 10% sharing ratio for other purchases. Pre-tax Millions

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Qualified Facility Earnings Adjustment 37 Appendix Our electric QF liability consists of unrecoverable costs associated with contracts covered under PURPA that are part of a 2002 stipulation with the MPSC and other parties. Risks / losses associated with these contracts are born by shareholders, not customers. Therefore, any mitigation of prior losses and / or benefits of liability reduction also accrue to shareholders.

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Balance Sheet 38 Debt to Total Capitalization down from last year and slightly below our targeted 50% - 55% range with the incremental equity issuance in the 4th quarter of 2022. Appendix

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39 Segment ResultsAppendix (1) (1) (Full Year) (1) Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure.

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40 Electric SegmentAppendix (1) (Full Year) (1) Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure.

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41 Natural Gas SegmentAppendix (1) (Full Year) (1) Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure.

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Quarter Financial Results 42 (1) (1) Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure. Appendix (4th Quarter)

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Increase in utility margin due to the following factors: $9.5 Montana interim rates 9.2 Electric retail volumes 5.8 Natural gas retail volumes 0.8 Higher transmission revenue (higher demand from market conditions) 0.4 Prior year electric QF liability adjustment (0.2) Higher non-recoverable Montana electric supply costs 1.8 Other $27.3 Change in Utility Margin Impacting Net Income 43 Utility Margin (4th Quarter) (dollars in millions) Three Months Ended December 31, 2022 2021 Variance Electric $205.6 $177.2 $28.5 16.1% Natural Gas 66.6 55.7 11.0 19.7% Total Utility Margin $272.2 $232.9 $39.4 16.9% $11.4 Higher property taxes recovered in revenue, offset in property tax expense 0.5 Higher operating expenses recovered in revenue, offset in O&M expense 0.2 Higher revenue from higher production tax credits, offset in income tax expense $12.1 Change in Utility Margin Offset Within Net Income $39.4 Increase in Utility Margin (1) Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure. (1) Appendix

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Increase in operating expenses due to the following factors: $5.5 Higher property and other taxes 2.7 Higher depreciation due to plant additions 0.8 Higher expenses at our electric generation facilities 0.5 Higher travel expense 0.4 Higher insurance expense 0.3 Higher technology implementation and maintenance expense (2.3) Lower labor and benefits (1) (0.4) Prior year write-off of preliminary construction costs (0.2) Lower Uncollectible accounts expenses 3.8 Other miscellaneous $11.2 Change in Operating Expense Items Impacting Net Income Operating Expenses 44 (4th Quarter) (dollars in millions) Three Months Ended December 31, 2022 2021 Variance Operating & maintenance $60.7 $49.0 $11.7 23.9% Administrative & general 26.8 22.3 4.5 20.2% Property and other taxes 52.2 35.0 17.2 49.1% Depreciation and depletion 49.3 46.6 2.7 5.8% Operating Expenses $189.0 $152.9 $36.1 23.6% $12.0 Higher pension and other postretirement benefits, offset in other income 11.7 Higher property and other taxes recovered in trackers, offset in revenue 0.7 Higher non-employee directors deferred compensation, offset in other income (1) 0.5 Higher operating and maintenance expenses recovered in trackers, offset in revenue $24.9 Change in Operating Expense Items Offset Within Net Income $36.1 Increase in Operating Expenses $16.2 Appendix (1) In order to present the total change in labor and benefits, we have included the change in the non- service cost component of our pension and other postretirement benefits, which is recorded within other income on our Condensed Consolidated Statements of Income. This change is offset within this table as it does not affect our operating expenses.

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Operating to Net Income 45 (dollars in millions) Three Months Ended December 31, 2022 2021 Variance Operating Income $83.3 $80.0 $3.3 4.1% Interest expense (27.1) (23.4) (3.7) (15.8%) Other income, net 7.6 (5.7) 13.3 233.3% Income Before Taxes 63.8 50.9 12.9 25.3% Income tax benefit 2.9 0.4 2.5 625.0% Net Income $66.7 $51.3 $15.3 30.0% (4th Quarter) $3.7 million increase in interest expenses was primarily due to higher interest rates on borrowings under our revolving credit facilities, partly offset by higher capitalization of AFUDC. $13.3 million increase in other income was primarily due to a decrease in the non- service cost component of pension expense, higher capitalization of AFUDC, and a increase in the value of deferred shares held in trust for non-employee directors deferred compensation (which is offset in operating expense). $2.5 million increase in income tax benefits was primarily due higher flow-through benefits partially offset by higher pre-tax income. Appendix

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Tax Reconciliation 46 Appendix (4th Quarter)

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47 Segment ResultsAppendix (1) (1) (4th Quarter) (1) Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure.

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Weather / Hydro Conditions 48 Snow water equivalents generally in line with the 30-year medians. (Missouri, Madison & Clark Fork Rivers and West Rosebud Creek basins) We estimated a $2.3 million pre-tax benefit as compared to normal and a $7.5 million benefit as compared to Q4 2021. Appendix (4th Quarter) Snow Water Equivalent Percent to 30-Year Normal

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49 Electric SegmentAppendix (1) (4th Quarter) (1) Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure.

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50 Natural Gas SegmentAppendix (1) (4th Quarter) (1) Utility Margin is a non-GAAP Measure See appendix slide titled "Explaining Utility Margin" for additional disclosure.

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Management believes that Utility Margin provides a useful measure for investors and other financial statement users to analyze our financial performance in that it excludes the effect on total revenues caused by volatility in energy costs and associated regulatory mechanisms. This information is intended to enhance an investor's overall understanding of results. Under our various state regulatory mechanisms, as detailed below, our supply costs are generally collected from customers. In addition, Utility Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow recovery of operating costs, as well as to analyze how changes in loads (due to weather, economic or other conditions), rates and other factors impact our results of operations. Our Utility Margin measure may not be comparable to that of other companies' presentations or more useful than the GAAP information provided elsewhere in this report. Explaining Utility Margin 51 (1) Utility Margin is a non-GAAP Measure. Appendix

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Non-GAAP Financial Measures 52 Appendix

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Non-GAAP Financial Measures 53 Appendix This presentation includes financial information prepared in accordance with GAAP, as well as other financial measures, such as Utility Margin, Adjusted Non-GAAP pretax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS that are considered "non-GAAP financial measures." Generally, a non-GAAP financial measure is a numerical measure of a company's financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. We define Utility Margin as Operating Revenues less fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion) as presented in our Consolidated Statements of Income. This measure differs from the GAAP definition of Gross Margin due to the exclusion of Operating and maintenance, Property and other taxes, and Depreciation and depletion expenses, which are presented separately in our Consolidated Statements of Income. A reconciliation of Utility Margin to Gross Margin, the most directly comparable GAAP measure, is included in this presentation. Management believes that Utility Margin provides a useful measure for investors and other financial statement users to analyze our financial performance in that it excludes the effect on total revenues caused by volatility in energy costs and associated regulatory mechanisms. This information is intended to enhance an investor's overall understanding of results. Under our various state regulatory mechanisms, as detailed below, our supply costs are generally collected from customers. In addition, Utility Margin is used by us to determine whether we are collecting the appropriate amount of energy costs from customers to allow recovery of operating costs, as well as to analyze how changes in loads (due to weather, economic or other conditions), rates and other factors impact our results of operations. Our Utility Margin measure may not be comparable to that of other companies' presentations or more useful than the GAAP information provided elsewhere in this report. Management also believes the presentation of Adjusted Non-GAAP pre-tax income, Adjusted Non-GAAP net income and Adjusted Non-GAAP Diluted EPS is more representative of normal earnings than GAAP pre-tax income, net income and EPS due to the exclusion (or inclusion) of certain impacts that are not reflective of ongoing earnings. The presentation of these non-GAAP measures is intended to supplement investors' understanding of our financial performance and not to replace other GAAP measures as an indicator of actual operating performance. Our measures may not be comparable to other companies' similarly titled measures.

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