NorthWestern Energy Reports 2025 Financial Results

• 2025 Diluted GAAP EPS of $2.94, compared to $3.65 in 2024.
• 2025 Adjusted Diluted Non-GAAP EPS of $3.58, compared to $3.40 in 2024.
• Affirms 4% to 6% long-term EPS growth rate.
• Announces 2026 earnings guidance range of $3.68 to $3.83 per diluted share.
• Increases quarterly dividend by 1.5% – to $0.67 per share – payable March 31, 2026.
• Announces $3.2 billion 5-year capital plan, a 17% increase over prior plan.

BUTTE, Mont. & SIOUX FALLS, S.D.–(BUSINESS WIRE)–NorthWestern Energy Group, Inc. d/b/a NorthWestern Energy (Nasdaq: NWE) reported financial results for the year ended December 31, 2025. Net income for the period was $181.1 million, or $2.94 per diluted share, as compared with net income of $224.1 million, or $3.65 per diluted share, for the same period in 2024. This decrease was primarily due to higher operating expenses, including a non-cash charge for the regulatory disallowance of certain Yellowstone County Generating Station (YCGS) capital costs, merger-related costs, and depreciation, interest expense, Montana property tax tracker collections, non-recoverable Montana electric supply costs, and higher income tax expense. These were partly offset by higher rates, electric transmission revenue, natural gas transportation revenues, and retail volumes.

NorthWestern’s 2025 non-GAAP net income and earnings per share were $220.1 million and $3.58, respectively, compared to $208.9 million and $3.40 in 2024. See “Adjusted Non-GAAP Earnings” and “Non-GAAP Financial Measures” sections below for more information on these measures.

“We are pleased to report on what has been an exceptionally busy and transformational year for NorthWestern,” said Brian Bird, President and Chief Executive Officer. “Throughout 2025, we advanced several major initiatives to support safe, reliable, and affordable service for our customers across Montana, South Dakota, and Nebraska. In Montana, the passage of House Bill 490 was a critical achievement, providing clarity and limits around wildfire-related risks and offering greater certainty for our customers, communities, and investors. We also completed the Energy West acquisition, welcoming roughly 33,000 new natural gas customers to our system. In addition, we completed our Montana electric and natural gas rate review in December, receiving recovery of the significant investments we made to reliably serve our customers and incorporating the Yellowstone County Generating Station into rates – an asset that had already been delivering value to customers since the start of 2025.”

“The year also marked important steps forward in our long-term strategic vision. We announced our merger agreement with Black Hills Corporation in August, a combination that will create a stronger, more resilient utility better positioned for the future. Together, we have filed applications with regulators in Montana, South Dakota, Nebraska, and FERC, targeting a close in the back half of 2026. We also completed the acquisition of the Avista and Puget Colstrip interests on January 1, 2026 – a timely and strategic transaction that advances resource adequacy, protects our ability to serve our Montana customers reliably and affordably, and supports the potential integration of large-load customers, delivering long-term benefits for our customers, communities, and investors. Our progress this year reflects the dedication of our exceptional employees and the trust of the customers and communities we proudly serve, and as we move into another year of strong execution, we remain committed to providing safe, reliable, and affordable energy while advancing long-term value for our shareholders,” said Bird.

FOURTH QUARTER FINANCIAL RESULTS

Net income for the three months ending December 31, 2025 was $44.7 million, or $0.72 per diluted share, as compared with net income of $80.6 million, or $1.31 per diluted share, for the same period in 2024. This decrease was primarily due to higher operating expenses, including a non-cash charge for the regulatory disallowance of certain YCGS capital costs, and depreciation, interest expense, Montana property tax tracker collections, and merger-related costs. These were partly offset by higher rates and electric transmission revenue.

Adjusted diluted non-GAAP earnings per share for the quarter was $1.17 as compared to $1.13 for the same period in 2024. See “Adjusted Non-GAAP Earnings” and “Non-GAAP Financial Measures” sections below for more information on these measures.

TRANSACTION UPDATE

On August 18, 2025, we entered into a Merger Agreement with Black Hills Corporation and a wholly owned subsidiary of Black Hills. The Merger Agreement provides for an all-stock merger of equals between NorthWestern and Black Hills upon the terms and subject to the conditions set forth therein.

We have filed applications with the Montana Public Service Commission (MPSC), Nebraska Public Service Commission (NPSC), South Dakota Public Utilities Commission (SDPUC), and Federal Energy Regulatory Commission (FERC) for approval of the Merger. Hearings with the MPSC, NPSC, and SDPUC are scheduled in the second quarter of 2026.

In February 2026, the Form S-4, which contains joint proxy statement/prospectus for NorthWestern and Black Hills, was declared effective by the SEC. Meetings for NorthWestern and Black Hills shareholders to vote on the acquisition are scheduled for April 2, 2026. The new corporate name selected for the resulting parent company of the combined corporate group is Bright Horizon Energy.

We expect to file an application for clearance under the Hart-Scott-Rodino Antitrust Improvements Act in the first quarter of 2026. We anticipate the transaction closing in the second half of 2026, subject to the satisfaction or waiver of certain closing conditions.

During the twelve months ended December 31, 2025, we have incurred $9.3 million of merger-related costs, which are included in our Administrative and general expenses.

FINANCIAL OUTLOOK

Initiating 2026 Guidance, Affirming Long-Term Growth Rates, and Announcing Capital Plan

We are initiating 2026 non-GAAP earnings guidance of $3.68 to $3.83 per diluted share. This guidance is based upon, but not limited to, the following major assumptions:

• Normal weather in our service territories;
• Excludes costs related to the pending merger with Black Hills Corp.;
• Approval of the Power Cost and Credit Adjustment Mechanism (PCCAM) waiver and power prices sufficient to recover operating expense from incremental Avista and Puget Colstrip interests;
• An effective income tax rate of approximately 14 percent to 18 percent; and
• Diluted average shares outstanding of approximately 61.7 million.

We are affirming our long-term diluted earnings per share growth guidance of 4% to 6%, based on our 2024 adjusted diluted non-GAAP EPS baseline of $3.40.

Additionally, we are announcing our $3.2 billion capital investment plan for 2026-2030, which is expected to support rate base growth of 4% to 6% from our 2024 base year of approximately $5.4 billion. We anticipate funding capital expenditures through cash flows from operations, available credit sources, debt issuances, and future rate increases. In order to fund South Dakota generation investment, equity issuances are expected beginning in 2027.

Dividend Declared

NorthWestern Energy Group’s Board of Directors has declared a quarterly common stock dividend of $0.67 per share, representing a 1.5% increase over the previous quarter’s dividend. The dividend is payable on March 31, 2026, to shareholders of record as of March 13, 2026.

Looking ahead, we remain committed to maintaining a dividend payout ratio within our targeted range of 60-70% over the long term.

Additional information regarding this release can be found in the earnings presentation at https://www.northwesternenergy.com/investors/earnings.

COMPANY UPDATES

Montana Rate Review

In July 2024, we filed a Montana electric and natural gas rate review with the MPSC requesting an annual increase to electric and natural gas utility rates. In December 2025, the MPSC issued a final order approving the natural gas settlement agreement and partial electric settlement agreement. Among other things, the approved partial electric settlement agreement provides for the deferral and annual recovery of incremental operating costs related to wildfire mitigation and insurance expenses through the Wildfire Mitigation Balancing Account.

The details of this final order are set forth below:

The final order provides for an update to the PCCAM by adjusting the base costs from $208.3 million to $119.0 million. It also suspended the 90/10 cost sharing mechanism of the PCCAM on a temporary basis pending further review by the MPSC. Within this final order, the MPSC disallowed a portion of the capital costs related to the construction of YCGS. As a result, in the fourth quarter of 2025 we recorded a $30.9 million non-cash charge for the regulatory disallowance within Operating and maintenance on the Consolidated Statements of Income and a corresponding reduction to Property, plant, and equipment, net on the Consolidated Balance Sheets. As of December 31, 2025, we have deferred $7.7 million of base rate revenues collected that will be refunded to customers.

In January 2026, we filed a Motion for Reconsideration (Motion) as it relates to this final order. Among other things, our Motion requests that the MPSC reconsider their prudence conclusions regarding the capital costs associated with the construction of YCGS and clarification as to the effective date of the PCCAM sharing mechanism suspension, of which we have requested an effective date of July 1, 2025, to align with the PCCAM tracker year.

Montana Large-Load Tariff

The MPSC requested information on our plan to serve potential large-load customers and related resource adequacy issues. We responded in March 2025, outlining our policy and legal positions, emphasizing the importance of economic development for Montana and our commitment to serving our existing customers. We expect to submit a filing with the MPSC during the first half of 2026 to address data center development discussed below, incorporating rate design that prevents cost shifting of infrastructure upgrades needed to serve large-load customers to other retail customers.

Data Center Development

In July 2025, we entered into a nonbinding letter of intent with Quantica Infrastructure to evaluate the transmission infrastructure and generation resources needed to support their proposed need. We had previously disclosed, in December 2024, two separate nonbinding letters of intent with Sabey Data Centers (Sabey) and Atlas Power Holdings LLC (Atlas) to provide electric supply services for data centers being developed in Montana. The combined energy service requirement associated with these letters of intent is currently expected to be 175 megawatts beginning in late 2027, or earlier, with growth of up to 1,100 megawatts or more by 2030. We have signed development agreements with both Sabey and Atlas and are working with each of these parties to execute electric service agreements.

Resources and regulatory mechanisms to be utilized for serving these requests are pending further evaluation and regulatory considerations.

Colstrip Acquisitions and Requests for Cost Recovery

As previously disclosed, we entered into definitive agreements with Avista and Puget to acquire their respective interests in Colstrip Units 3 and 4 for $0 and completed these acquisitions on January 1, 2026. Accordingly, we are responsible for the associated operating costs beginning on January 1, 2026, which we will not collect through utility base rates until requested in a future Montana rate review. Puget and Avista will remain responsible for their respective pre-closing share of environmental and pension liabilities attributed to events or conditions existing prior to the closing of the transaction and for any future decommissioning and demolition costs associated with the existing facilities that comprise their interests.

Avista Interests – The 222 megawatts of generation capacity from Colstrip Units 3 and 4 acquired from Avista (Avista Interests) on January 1, 2026, was identified as a key element in our strategy to achieve resource adequacy for customers, as outlined in our 2023 Montana Integrated Resource Plan. Noting the costs associated with operating this resource are not currently reflected in utility customer rates, in August 2025, we filed a temporary PCCAM tariff waiver request with the MPSC that would provide a near-term cost-recovery mechanism expected to largely offset approximately $18.0 million in annual incremental operating and maintenance costs associated with the Avista Interests. This waiver requested that the MPSC allow us to keep 100 percent of the net revenue associated with certain designated power sales contracts up to the amount of the operating and maintenance expenses we incur associated with our Avista Interests. Furthermore, the waiver request indicated that any net revenues from the designated contracts exceeding the operating and maintenance expenses associated with our Avista Interests would continue to flow back to retail customers. In January 2026, the MPSC approved our PCCAM tariff waiver request on an interim basis with final approval or denial subject to the ongoing PCCAM docket process.

Puget Interests – The 370 megawatts of generation capacity from Colstrip Units 3 and 4 acquired from Puget (Puget Interests) on January 1, 2026, increases our ownership share of the facility to 55 percent and provides an increase in voting share in determining strategic direction and investment decisions at the facility. While we expect our future opportunity to serve growing customer demand, including large-load customers, may be supported by this resource, in October 2025, we signed a contract to sell the dispatchable capacity and associated energy from the Puget Interests beginning January 1, 2026, through late 2027. Revenues from this agreement are expected to largely offset the estimated $30.0 million of annual incremental operating and maintenance costs associated with the Puget Interests. In addition, in October 2025, we submitted a request to the FERC for approval of cost-based rates for our subsidiary that will own the Puget Interests. We expect this rate approval to be effective in the first quarter of 2026. If our request for rates effective January 1, 2026, is not approved, we could incur refund liability for contract revenues received during the unauthorized period.

Generation Capacity in South Dakota

The Southwest Power Pool (SPP) has recently updated its resource accreditation and Planning Reserve Margin (PRM) requirements in response to growing reliability concerns. As a result, SPP is requiring additional accredited capacity by 2030 to meet the updated PRM targets. In October 2025, we submitted a project with the SPP under their Expedited Resource Adequacy Study program for the construction of a 131 MW natural gas generating facility located in Aberdeen, South Dakota, to meet regional capacity needs by 2030. Anticipated costs for this project are approximately $300 million.

Regional Transmission Development Activities

In December 2024, we signed a nonbinding memorandum of understanding (MOU) with North Plains Connector LLC, a wholly owned subsidiary of Grid United, to own 10 percent (300 megawatts) of the North Plains Connector (NPC) Consortium project. The project is entering the permitting phase. Currently, construction is planned to commence in 2028, subject to receipt of regulatory approvals, with the project expected to be operational by 2032. Under the terms of the MOU, Grid United will continue to fund the development of the NPC and we will make our investment decision when the regulatory approvals and permits are in place. The project is a critical infrastructure investment that aligns with our commitment to providing reliable and affordable energy to our customers while also supporting broader grid resilience efforts in the region.

We have also entered into a nonbinding letter of intent with Grid United to continue transmission development to further enhance the grid through the southwest corridor of Montana. Development to expand the southwest corridor of Montana through grid build out would represent a significant step in enhancing connectivity between Montana and the broader Western energy market – bolstering grid reliability, allowing for critical import capability, and enabling customers to access and benefit from emerging energy markets in the West.

Montana Wildfire Risk Mitigation

The Montana Legislature approved House Bill 490 in April 2025. It precludes common law strict liability claims for damages related to wildfire and electric activities or wildfire mitigation activities; establishes a statutory standard of care, supplanting common law causes of action and other theories of recovery; and creates a rebuttable presumption that an electric facilities provider acted reasonably if it substantially followed an approved wildfire mitigation plan. The legislation also defines the availability of damages by allowing noneconomic personal injury damages only when there is bodily injury and punitive damages only when an injured party proves by clear and convincing evidence that an electric facilities provider’s actions were grossly negligent or intentional. The MPSC approved our wildfire mitigation plan in November 2025. The wildfire mitigation plan for the Colstrip transmission system was submitted to the MPSC on November 7, 2025, and we anticipate a decision in the first quarter of 2026.

CONSOLIDATED STATEMENT OF INCOME

RECONCILIATION OF PRIMARY CHANGES

EXPLANATION OF CONSOLIDATED RESULTS

Year Ended December 31, 2025 Compared with Year Ended December 31, 2024

Consolidated gross margin in 2025 was $484.3 million as compared with $460.8 million in 2024, an increase of $23.5 million or 5.1 percent. This increase was primarily due to higher rates, electric transmission revenue, natural gas transportation revenues, and retail volumes. These were partly offset by higher operating expenses, including a non-cash charge for the regulatory disallowance of certain YCGS capital costs resulting from the MPSC’s final order on our rate review and depreciation, Montana property tax tracker collections, and non-recoverable Montana electric supply costs.

Consolidated utility margin in 2025 was $1,200.8 million as compared with $1,080.1 million in 2024, an increase of $120.7 million, or 11.2 percent.

Primary components of the change i

Contacts

Investor Relations Contact:

Travis Meyer, (605) 978-2967

[email protected]

Media Contact:
Jo Dee Black, (866) 622-8081

[email protected]

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