What changed in this filing

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Item 9A. Controls and Procedures

2025-02-13 compared with 2024-02-15 · 307 added, 264 removed, 1480 unchanged (28% of the section changed)

59 unchanged sentences

Colstrip Units 3&4 Interests Abandonment and Acquisition Agreement, dated as of January 16, 2023, by and between Avista Corporation and Northwestern Corporation (incorporated by reference to Exhibit 2.1 of NorthWestern Corporation's Current Report on Form 8-K, dated January 17, 2023, Commission File No.

Colstrip Units 3&4 Interests Abandonment and Acquisition Agreement, dated as of July 30, 2024 by and between Northwestern Corporation and Puget Sound Energy Inc.

(incorporated by reference to Exhibit 2.1 of NorthWestern Energy Group, Inc.'s Current Report on Form 8-K, dated July 30, 2024 Commission File No.

Amended and Restated Certificate of Incorporation of NorthWestern Energy Group, Inc., dated as of September 25, 2023 (incorporated by reference to Exhibit 3(a) of Northwestern Energy Group Inc.'s Current Report on Form 8-K, dated October 2, 2023).

24 unchanged sentences

Forty-fourth Supplemental Indenture, dated as of June 1, 2023, between NorthWestern Corporation and The Bank of New York Mellon and Mary Miselis, as trustees (incorporated by reference to Exhibit 4.4 of NorthWestern Corporation's Current Report on Form 8-K, dated June 29, 2023, Commission File No.

Forty-fifth Supplemental Indenture, dated as of March 1, 2024, between NW Corp and The Bank of New York Mellon and Dimple Gandhi, as trustees (incorporated by reference to Exhibit 4.1 of NorthWestern Energy Group's Current Report on Form 8-K, dated March 28, 2024, Commission File No.

4.2(a) General Mortgage Indenture and Deed of Trust, dated as of August 1, 1993, from NorthWestern Corporation to The Chase Manhattan Bank (National Association), as Trustee (incorporated by reference to Exhibit 4(a) of NorthWestern Corporation's Current Report on Form 8-K, dated August 16, 1993, Commission File No.

13 unchanged sentences

(incorporated by reference to Exhibit 4.1 of NorthWestern Corporation's Current Report on Form 8-K, dated June 5, 2023, Commission File No.

Twentieth Supplemental Indenture, dated as of January 1, 2024, between NWE Public Service and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.1of NorthWestern Energy Group's Current Report on Form 8-K, dated January 2, 2024, Commission File No.

Twenty-first Supplemental Indenture, dated as of March 1, 2024, between NWE Public Service and The Bank of New York Mellon, as trustee (incorporated by reference to Exhibit 4.2 of NorthWestern Energy Group's Current Report on Form 8-K, dated March 28, 2024, Commission File No.

Indenture, dated as of August 1, 2016, between City of Forsyth, Rosebud County, Montana and U.S.

13 unchanged sentences

NorthWestern Corporation Officers Deferred Compensation Plan, as amended October 2, 2023.

NorthWestern Corporation Key Employee Severance Plan 2016 (incorporated by reference to Exhibit 10.1 of NorthWestern Corporation's Current Report on Form 8-K, dated October 25, 2016, Commission File No.

Form of NorthWestern Corporation Executive Retirement/Retention Program Restricted Share Unit Award Agreement (incorporated by reference to Exhibit 99.2 of NorthWestern Corporation's Current Report on Form 8-K, dated December 19, 2018, Commission File No.

(incorporated by reference to Exhibit 10.1a of NorthWestern Energy Group's Report on Form 10-K for the year ended December 31, 2023, Commission File No.

Form of NorthWestern Corporation Performance Unit Award Agreement (incorporated by reference to Exhibit 99.1 of NorthWestern Corporation’s Current Report on Form 8-K, dated February 11, 2021, Commission File No.

5 unchanged sentences

NorthWestern Energy Group, Inc., Deferred Compensation Plan for Non-Employee Directors, as amended and renamed effective October 2, 2023 (incorporated by reference to Exhibit 10.1(b) of NorthWestern Group Inc.’s Current Report on form 10-Q, dated October 27, 2023, Commission File No.

NorthWestern Energy Group Inc.'s 2024 Annual Incentive Plan (incorporated by reference to Exhibit 99.1 of NorthWestern Corporation's Current Report on Form 8-K, dated December 20, 2023, Commission File No.

Form of 2024 Performance Unit Award Agreement (incorporated by reference to Exhibit 99.1 of NorthWestern Energy Group’s Current Report on Form 8-K, dated February 20, 2024, Commission File No.

Form of 2024 Restricted Unit Award Agreement (incorporated by reference to Exhibit 99.2 of NorthWestern Energy Group’s Current Report on Form 8-K, dated February 20, 2024, Commission File No.

NorthWestern Corporation Amended and Restated Key Employee Severance Plan, as amended and restated effective April 25, 2024.

(incorporated by reference to Exhibit 10.7 of NorthWestern Energy Group's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, Commission File No.

NorthWestern Energy Group, Inc.

Amended and Restated Equity Compensation Plan, as amended and restated effective October 2, 2023 (incorporated by reference to Exhibit 10.1(b) of NorthWestern Group Inc.’s Current Report on form 10-Q, dated October 27, 2023, Commission File No.

Amended and Restated Equity Compensation Plan, as amended and restated effective April 25, 2024.

(incorporated by reference to Exhibit 10.8 of NorthWestern Energy Group's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, Commission File No.

NorthWestern Energy Group Inc.'s 2025 Annual Incentive Plan (incorporated by reference to Exhibit 99.1 of NorthWestern Corporation's Current Report on Form 8-K, dated December 12, 2024, Commission File No.

1 unchanged sentence

$200,000,000 Credit Agreement, dated November 29, 2023 (incorporated by reference to Exhibit 10.2 of Northwestern Energy Group Inc.'s Current Report on Form 8-K, dated December 5, 2023).

Term Loan Credit Agreement, dated April 12, 2024 (incorporated by reference to Exhibit 10.1 of NorthWestern Energy Group's Current Report on Form 8-K, dated April 12, 2024, Commission File No.

Engineering, Procurement, and Construction Contract, dated April 19, 2021, between Northwestern Energy and Burns & McDonnell Engineering Company, Inc.

1 unchanged sentence

Procurement Contract, dated April 19, 2021, between Northwestern Energy and Caterpillar Power Generation Systems, LLC (incorporated by reference to Exhibit 10.4 of NorthWestern Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, Commission File No.

Asset and Stock Transfer Agreement, dated December 27, 2023 (incorporated by reference to Exhibit 10.1 of Northwestern Energy Group Inc.'s Current Report on Form 8-K, dated January 2, 2024).

Policy for insider trading

Subsidiaries of NorthWestern Group, Inc.

6 unchanged sentences

Certification of Crystal Lail pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Policy for the recovery of erroneously awarded compensation.

Policy for the recovery of erroneously awarded compensation (incorporated by reference to Exhibit 97 of the NorthWestern Energy Group, Inc.'s Report on Form 10-K for the year ended December 31, 2023, Commission File No.

101.INS* Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

20 unchanged sentences

Signature Title Date

Chairman of the Board February 15, 2024

SULLIVAN Chairman of the Board February 13, 2025

BIRD President, Chief Executive Officer and Director February 13, 2025

6 unchanged sentences

Berzina (Principal Accounting Officer)

/s/ ANTHONY T.

CLARK Director February 15, 2024

HORSFALL Director February 13, 2025

1 unchanged sentence

LARSON Director February 13, 2025

SULLIVAN Director February 15, 2024

GOODIN Director February 13, 2025

/s/ MAHVASH YAZDI Director February 13, 2025

92 unchanged sentences

Income Before Income Taxes 214,672 201,670 182,403

Income Tax (Expense) Benefit ( 7,539 ) 605 ( 3,419 )

Income Tax Benefit (Expense) 9,439 ( 7,539 ) 605

Net Income $ 224,111 $ 194,131 $ 183,008

38 unchanged sentences

Current portion of long-term debt 299,950 99,950

Short-term borrowings 100,000 —

Accounts payable 111,794 124,340

Accrued expenses 246,167 250,579

Accrued expenses and other 254,599 246,167

Regulatory liabilities 32,261 61,103

28 unchanged sentences

Net Income $ 224,111 $ 194,131 $ 183,008

Items not affecting cash:

Adjustments to reconcile net income to cash provided by operations:

Depreciation and depletion 227,635 210,474 195,020

2 unchanged sentences

Equity portion of AFUDC ( 18,628 ) ( 17,614 ) ( 14,191 )

Loss (gain) on disposition of assets 316 482 ( 47 )

(Gain) loss on disposition of assets ( 61 ) 316 482

Impairment of alternative energy storage investment 4,159 — —

Deferred income taxes ( 8,969 ) 6,584 ( 8,992 )

12 unchanged sentences

Investment in equity securities ( 4,719 ) ( 3,923 ) ( 1,719 )

Other investing activity ( 500 ) — —

Cash Used in Investing Activities ( 554,463 ) ( 570,812 ) ( 516,859 )

3 unchanged sentences

Issuance of long-term debt 215,000 300,000 —

Issuances of short-term borrowings 100,000 — —

Repayments on long-term debt ( 100,000 ) — —

Line of credit (repayments) borrowings, net ( 132,000 ) 77,000 151,000

Repayments of short-term borrowings — — ( 100,000 )

Line of credit borrowings (repayments), net 95,000 ( 132,000 ) 77,000

Treasury stock activity 1,192 1,069 603

58 unchanged sentences

Holding Company Reorganization

On October 2, 2023, NW Corp and NorthWestern Energy Group completed a merger transaction pursuant to which NorthWestern Energy Group became the holding company parent of NW Corp.

In this reorganization, shareholders of NW Corp (the predecessor publicly held parent company) became shareholders of NorthWestern Energy Group, maintaining the same number of shares and ownership percentage as held in NW Corp immediately prior to the reorganization.

NW Corp became a wholly-owned subsidiary of NorthWestern Energy Group.

The transaction was effected pursuant to a merger pursuant to Section 251(g) of the General Corporation Law of the State of Delaware, which provides for the formation of a holding company without a vote of the shareholders of the constituent corporation.

Immediately after consummation of the reorganization, NorthWestern Energy Group had, on a consolidated basis, the same assets, businesses and operations as NW Corp had immediately prior to the consummation of the reorganization.

As a result of the reorganization, NorthWestern Energy Group became the successor issuer to NW Corp pursuant to Rule 12g-3(a) of the Securities Exchange Act of 1934, and as a result, NorthWestern Energy Group's common stock was deemed registered under Section 12(b) of the Securities Exchange Act of 1934.

On January 1, 2024, we completed the second and final phase of the holding company reorganization.

On January 1, 2024, we completed the second and final phase of our holding company reorganization.

NW Corp contributed the assets and liabilities of its South Dakota and Nebraska regulated utilities to NWE Public Service, and then distributed its equity interest in NWE Public Service and certain other subsidiaries to NorthWestern Energy Group, resulting in NW Corp owning and operating the Montana regulated utility and NWE Public Service owning and operating the Nebraska and South Dakota utilities, each as a direct subsidiary of NorthWestern Energy Group.

2 unchanged sentences

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.

Estimates are used for such items as long-lived asset values and impairment charges, long-lived asset useful lives, tax provisions, uncertain tax position reserves, AROs, regulatory assets and liabilities, allowances for uncollectible accounts, our QF liability, environmental liabilities, unbilled revenues and actuarially determined benefit costs and liabilities.

Estimates are used for such items as long-lived asset values and impairment charges, long-lived asset useful lives, tax provisions, unrecognized tax benefits, AROs, regulatory assets and liabilities, allowances for uncollectible accounts, our QF liability, environmental liabilities, unbilled revenues and actuarially determined benefit costs and liabilities.

We revise the recorded estimates when we receive better information or when we can determine actual amounts.

1 unchanged sentence

Revenue Recognition

The Company recognizes revenue as customers obtain control of promised goods and services in an amount that reflects consideration expected in exchange for those goods or services.

We recognize revenue as customers obtain control of promised goods and services in an amount that reflects consideration expected in exchange for those goods or services.

Generally, the delivery of electricity and natural gas results in the transfer of control to customers at the time the commodity is delivered and the amount of revenue recognized is equal to the amount billed to each customer, including estimated volumes delivered when billings have not yet occurred.

28 unchanged sentences

Gains and losses from the ineffective portion of any hedge are recognized in earnings immediately.

For other derivative contracts that do not qualify or are not designated for hedge accounting, changes in the fair

value of the derivatives are recognized in earnings each period.

For other derivative contracts that do not qualify or are not designated for hedge accounting, changes in the fair value of the derivatives are recognized in earnings each period.

Cash inflows and outflows related to derivative instruments are included as a component of operating, investing or financing cash flows in the Consolidated Statements of Cash Flows, depending on the underlying nature of the hedged items.

3 unchanged sentences

Normal purchases and normal sales are contracts where physical delivery is probable, quantities are expected to be used or sold in the normal course of business over a reasonable period of time, and price is not tied to an unrelated underlying derivative.

As part of our regulated electric and gas operations, we enter into contracts to buy and sell energy to meet the requirements of our customers.

As part of our regulated electric and gas

operations, we enter into contracts to buy and sell energy to meet the requirements of our customers.

These contracts include short-term and long-term commitments to purchase and sell energy in the retail and wholesale markets with the intent and ability to deliver or take delivery.

11 unchanged sentences

This rate averaged 7.0 %, 6.4 %, and 6.4 % for Montana for 2024, 2023, and 2022, respectively.

This rate averaged 6.4 % for South Dakota in each of 2023 , 2022, and 2021.

AFUDC capitalized totaled $ 24.3 million, $ 20.2 million, and $ 15.9 million for the years ended December 31, 2023, 2022, and 2021, respectively, for Montana and South Dakota combined.

This rate averaged 6.9 %, 6.4 %, and 6.4 % for South Dakota and Nebraska for 2024 , 2023, and 2022, respectively.

AFUDC capitalized totaled $ 27.1 million, $ 24.3 million, and $ 20.2 million for the years ended December 31, 2024, 2023, and 2022, respectively, for Montana, South Dakota, and Nebraska combined.

We record provisions for depreciation at amounts substantially equivalent to calculations made on a straight-line method by applying various rates based on useful lives of the various classes of properties (ranging from 5 to 127 years) determined from engineering studies.

As a percentage of the depreciable utility plant at the beginning of the year, our provision for depreciation of utility plant was approximately 2.8 % for 2023, 2022, and 2021.

As a percentage of the depreciable utility plant at the beginning of the year, our provision for depreciation of utility plant was approximately 2.9 % for 2024, and 2.8 % for each of 2023 and 2022.

Depreciation rates include a provision for our share of the estimated costs to decommission our jointly owned plants at the end of the useful life.

8 unchanged sentences

Employee compensation, benefits, and withholdings 49,786 41,773

Customer advances 27,656 26,137

Interest 28,702 24,775

Customer advances 16,535 27,656

Other (none of which is individually significant) 77,860 72,711

28 unchanged sentences

Our remediation cost estimates are based on the use of an environmental consultant, our experience, our assessment of the current situation and the technology currently available for use in the remediation.

We regularly adjust the recorded costs as we

revise estimates and as remediation proceeds.

We regularly adjust the recorded costs as we revise estimates and as remediation proceeds.

If we are one of several designated responsible parties, then we estimate and record only our share of the cost.

3 unchanged sentences

(in thousands)

Cash paid (received) for:

Cash (received) paid for:

Income taxes $ ( 4,284 ) $ ( 827 ) $ 4,707

Production tax credits (1)

( 6,867 ) — —

Interest 128,333 105,238 95,400

1 unchanged sentence

Capital expenditures included in trade accounts payable 22,377 42,322 64,758

New Market Tax Credit (NMTC) debt extinguishment included in other noncurrent assets — — 18,169

NMTC debt extinguishment included in property, plant and equipment, net — — 6,594

NMTC debt extinguishment included in long-term debt — — 1,259

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

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

5 unchanged sentences

Accounting Standards Issued

There were no accounting standards adopted in the current year that had a material impact to our financial condition, results of operations, and cash flows.

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07, Improvements to Reportable Segment Disclosures , which expands public entities' segment disclosures by requiring disclosure of significant segment expenses that are regularly reviewed by the Chief Operating Decision Maker (CODM) and included within each reported measure of segment profit or loss.

We adopted this standard for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, as required, and used the retrospective method of adoption, with no material impact on our Consolidated Financial Statements or internal controls.

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

1 unchanged sentence

Montana Rate Review

On August 8, 2022, we filed a Montana electric and natural gas rate review with the MPSC under Docket 2022.07.78 requesting an annual increase to electric and natural gas utility rates.

On October 27, 2023, the MPSC issued a final order approving the settlement agreement filed April 3, 2023.

Final rates, adjusting from interim to settled rates, were effective November 1, 2023.

The details of our settlement agreement are set forth below:

Returns, Capital Structure & Revenue Increase Resulting From Approved Settlement Agreement ($ in millions)

Electric Natural Gas

Return on Equity (ROE) 9.65 % 9.55 %

Equity Capital Structure 48.02 % 48.02 %

Base Rates $ 67.4 $ 14.1

Property Tax (tracker base adjustment) (1)

Total Revenue Increase Through Approved Settlement Agreement $ 151.6 $ 18.3

(1) These items are flow-through costs.

PCCAM reflects our fuel and purchased power costs.

The approved settlement includes, among other things, agreement on electric and natural gas base revenue increases, allocated cost of service, rate design, updates to the base amount of revenues associated with property taxes and electric supply costs, and regulatory policy issues related to requested changes in regulatory mechanisms.

The approved settlement agreement provides for an update to the PCCAM by adjusting the base costs from $ 138.7 million to $ 208.4 million and providing for more timely quarterly recovery of deferred balances instead of annual recovery.

It also addresses the potential for future recovery of certain operating costs associated with the Yellowstone County Generating Station and provides for the deferral of incremental operating costs related to our Enhanced Wildfire Mitigation Plan.

The settling parties agreed to terminate the pilot decoupling program (Fixed Cost Recovery Mechanism) and that the proposed business technology rider will not be implemented.

South Dakota Electric Rate Review

On June 15, 2023, we filed a South Dakota electric rate review filing (2022 test year) under Docket EL23-016 for an annual increase to electric rates totaling approximately $ 30.9 million.

Our request was based on a rate of return of 7.54 percent, a capital structure including 50.5 percent equity, and rate base of $ 787.3 million.

On January 10, 2024, the SDPUC issued a final order approving the settlement agreement between NorthWestern and SDPUC Staff for an annual increase in base rates of approximately $ 21.5 million and an authorized rate of return of 6.81 percent.

The approved settlement is based on a capital structure of 50.5 percent equity and a rate base of $ 791.8 million.

Final rates were effective January 10, 2024.

In addition, NorthWestern was approved a phase in rate plan rider that allows for the recovery of capital investments not yet included in base rates.

In July 2024, we filed a Montana electric and natural gas rate review (2023 test year) with the MPSC.

The filing requests a base rate annual revenue increase of $ 156.5 million ($ 69.4 million net with Property Tax and PCCAM tracker adjustments) for electric and $ 28.6 million for natural gas.

Our request is based on a return on equity of 10.80 percent with a capital structure including 46.81 percent equity, and forecasted 2024 electric and natural gas rate base of $ 3.45 billion and $ 731.9 million, respectively.

The electric rate base investment includes the 175-megawatt natural gas-fired Yellowstone County Generating Station, which was placed in service in October 2024.

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

In January 2025, intervenor testimony was filed and we anticipate filing our rebuttal testimony in March 2025.

Based on the procedural schedule developed by the MPSC, a hearing on our rate review request is scheduled to commence on April 22,

If a final order is not received by May 23, 2025, which is 270 days from acceptance of our filing, we intend to implement, as permitted by the MPSC regulations, our requested rates, which will be subject to refund, until a final order is received.

South Dakota Natural Gas Rate Review

In June 2024, we filed a natural gas rate review (2023 test year) with the SDPUC for an annual increase to natural gas rates totaling approximately $ 6.0 million.

Our request was based on a rate of return of 7.75 percent and rate base of $ 95.6 million.

In December 2024, the SDPUC issued a final order approving the settlement agreement between NorthWestern and SDPUC Staff for an annual increase in base rates of approximately $ 4.6 million and an authorized rate of return of 6.91 percent.

The approved settlement is based on a rate base of $ 96.2 million.

Final rates were effective December 19, 2024.

Nebraska Natural Gas Rate Review

In June 2024, we filed a natural gas rate review (2023 test year) with the NPSC.

The filing requests a base rate annual revenue increase of $ 3.6 million.

Our request is based on a return on equity of 10.70 percent, a capital structure including 53.13 percent equity, and rate base of $ 47.4 million.

Interim rates, which increased base natural gas rates $ 2.3 million, were implemented on October 1, 2024.

Interim rates will remain in effect on a refundable basis until the NPSC issues a final order.

(4) Regulatory Assets and Liabilities

1 unchanged sentence

Pursuant to this guidance, certain expenses and credits, normally reflected in income as incurred, are deferred and recognized when included in rates and recovered from or refunded to customers.

Regulatory assets and liabilities are recorded based on management's assessment that it is probable that a cost will be recovered or that an obligation has been incurred.

Regulatory assets and liabilities are recorded based on our assessment that it is probable that a cost will be recovered or that an obligation has been incurred.

Accordingly, we have recorded the following major classifications of regulatory assets and liabilities that will be recognized in expenses and revenues in future periods when the matching revenues are collected or refunded.

8 unchanged sentences

Deferred financing costs 11 See Note 11 17,754 20,028

Environmental clean-up 18 Undetermined 11,131 10,963

Wildfire mitigation Undetermined 17,368 1,623

Supply costs 1 Year 11,441 7,317

Environmental clean-up 18 Undetermined 11,257 11,131

State & local taxes & fees 1 Year 8,924 2,733

3 unchanged sentences

Excess deferred income taxes 12 Plant Lives 125,878 136,382

State & local taxes & fees 1 Year 30,576 2,327

Supply costs 1 Year 20,933 19,691

Gas storage sales 15 years 6,205 6,625

Environmental clean-up 1 Year — 592

State & local taxes & fees 1 Year 251 30,576

Other Various 2,726 1,537

13 unchanged sentences

These amounts are amortized over the life of the new debt.

Environmental Clean-Up

Environmental clean-up costs are the estimated costs of investigating and cleaning up contaminated sites we own.

We discuss the specific sites and clean-up requirements further in Note 18 - Commitments and Contingencies .

Environmental clean-up costs are typically recoverable in customer rates when they are actually incurred.

When cost projections become known and measurable, we coordinate with the appropriate regulatory authority to determine a recovery period.

Enhanced Wildfire Mitigation Plan

We have developed an Enhanced Wildfire Mitigation Plan addressing five key areas:

situational awareness, operational practices, system preparedness, vegetation management, and public communications outreach.

Because of ever-increasing wildfire risk, our plan includes greater focus on situational awareness to monitor changing environmental conditions, operational practices that are more reactive to changing conditions, increased frequency of patrol and repairs, and more robust system hardening programs that target higher risk segments in our transmission and distribution systems.

The MPSC has approved the deferral of incremental operating costs related to this Enhanced Wildfire Mitigation Plan.

The MPSC, SDPUC and NPSC have authorized the use of electric and natural gas supply cost trackers that enable us to track actual supply costs and either recover the under collection or refund the over collection to our customers.

4 unchanged sentences

For our Montana electric supply tracker, the PCCAM, the interest rate we earn on supply costs under collected, or the interest rate we apply to an over collection, is based on the monthly interest rate for three month commercial paper as published by the Federal Reserve.

State & Local Taxes & Fees (Montana Property Tax Tracker)

Environmental Clean-Up

Environmental clean-up costs are the estimated costs of investigating and cleaning up contaminated sites we own.

We discuss the specific sites and clean-up requirements further in Note 18 - Commitments and Contingencies .

Environmental clean-up costs are typically recoverable in customer rates when they are actually incurred.

When cost projections become known and measurable, we coordinate with the appropriate regulatory authority to determine a recovery period.

State & Local Taxes & Fees

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

1 unchanged sentence

Our depreciation method, including cost of removal, is established by the respective regulatory commissions.

Therefore, consistent with this regulated treatment, we reflect this accrual of removal costs for our regulated assets by increasing our regulatory liability.

Therefore, consistent with this regulated treatment, we reflect this accrual of removal costs for our

regulated assets by increasing our regulatory liability.

See Note 6 - Asset Retirement Obligations , for further information regarding this item.

3 unchanged sentences

This regulatory liability is a reduction of rate base.

Enhanced Wildfire Mitigation Plan

We have developed an Enhanced Wildfire Mitigation Plan addressing five key areas:

situational awareness, operational practices, system preparedness, vegetation management, and public communications outreach.

As discussed within Note 3 - Regulatory Matters , the approved Montana rate review settlement provides for the deferral of incremental operating costs related to this Enhanced Wildfire Mitigation Plan.

As of December 31, 2023, we have deferred $ 1.6 million of incremental costs as a regulatory asset related to this plan for future recovery.

(5) Property, Plant and Equipment

13 unchanged sentences

The acquisition adjustment is amortized on a straight-line basis over the estimated remaining useful life of each related asset in depreciation expense.

Net plant and equipment under finance lease were $ 5.2 million and $ 7.2 million as of December 31, 2023 and 2022, respectively, which included $ 5.0 million and $ 7.0 million as of December 31, 2023 and 2022, respectively, related to a long-term power supply contract with the owners of a natural gas fired peaking plant, which has been accounted for as a finance lease.

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

Jointly Owned Electric Generating Plant

3 unchanged sentences

The participants each finance their own investment.

On January 16, 2023, we entered into a definitive agreement (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.

As noted in the table below, we currently have a 30 percent interest in Unit 4.

The Agreement provides that the purchase price will be $ 0 and that we will acquire Avista's interest effective December 31, 2025 , subject to the satisfaction of the closing conditions contained within the agreement.

Under the terms of this 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 Agreement contains customary representations and warranties, covenants, and indemnification obligations, and the Agreement is subject to customary conditions and approvals, including approval from the FERC.

Closing also is 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 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.

In January 2023 and July 2024, we entered into definitive agreements, the first with Avista and the second with Puget, to acquire their respective interests in Colstrip Units 3 & 4.

In particular, we agreed to acquire a 15 % (222 megawatts) interest from Avista and a 25 % (370 megawatts) interest from Puget.

Both agreements provide that the purchase price will be $ 0 .

These agreements are substantially similar and are both scheduled to close December 31, 2025 , subject to the satisfaction of customary closing conditions and approvals contained within the agreements.

Under the terms of the agreements, we will be responsible for operating costs starting on January 1, 2026;

while Puget and Avista will remain responsible for their respective pre-closing share of environmental and pension liabilities attributed to events or conditions existing prior to the closing of the transaction and for any future decommission and demolition costs associated with the existing facilities that comprise their interests.

Acquisition of Avista and Puget's interests would result in our ownership of 55 percent of the facility with the ability to guide operating and maintenance investments.

This would provide capacity to help us meet our obligation to provide reliable and cost effective power to our customers in Montana, while allowing opportunity for us to identify and plan for newer lower or no-carbon technologies in the future.

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

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

31 unchanged sentences

The easements are generally perpetual and only require remediation action upon abandonment or cessation of use of the property for the specified purpose.

The ARO liability is not estimable for such easements as we intend to utilize these properties indefinitely.

The ARO liability is not

estimable for such easements as we intend to utilize these properties indefinitely.

In the event we decide to abandon or cease the use of a particular easement, an ARO liability would be recorded at that time.

6 unchanged sentences

See Note 4 - Regulatory Assets and Liabilities for removal costs recorded as regulatory liabilities on the Consolidated Balance Sheets as of December 31, 2024 and 2023.

We completed our annual goodwill impairment test as of April 1, 2023.

We evaluated qualitative factors (including macroeconomic conditions, industry and market considerations, cost factors, and overall financial performance) to determine whether it was more likely than not that the fair value of our reporting units were less than their carrying amounts.

Our evaluation of these factors concluded that it was not more likely than not that the fair value of our reporting units was less than their carrying amounts and therefore no further testing was necessary.

We completed our annual goodwill impairment test as of April 1, 2024, and no impairment was identified.

We calculate the fair value of our reporting units by considering various factors, including valuation studies based primarily on a discounted cash flow analysis, with published industry valuations and market data as supporting information.

Key assumptions in the determination of fair value include the use of an appropriate discount rate and estimated future cash flows.

In estimating cash flows, we incorporate expected long-term growth rates in our service territory, regulatory stability, and commodity prices (where appropriate), as well as other factors that affect our revenue, expense and capital expenditure projections.

Goodwill by segment is as follows (in thousands):

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Measuring fair value requires the use of market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique.

These inputs can be readily observable, corroborated by market

data, or generally unobservable.

These inputs can be readily observable, corroborated by market data, or generally unobservable.

Valuation techniques are required to maximize the use of observable inputs and minimize the use of unobservable inputs.

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These are significant other observable inputs, or level 2 inputs, in the fair value hierarchy.

(10) Unsecured Credit Facilities

(10) Short-Term Borrowings and Credit Arrangements

Short-Term Borrowings

On April 12, 2024, NorthWestern Energy Group entered into a $ 100.0 million Term Loan Credit Agreement (Term Loan) with a maturity date of April 11, 2025 .

Borrowings may be made at a variable interest rate equal to the Secured Overnight Financing Rate plus an applicable margin as provided in the Term Loan.

These proceeds were used to repay a portion of our outstanding revolving credit facility borrowings and for general corporate purposes.

The Term Loan provides for prepayment of the principal and interest;

however, amounts prepaid may not be reborrowed.

The Term Loan requires us to maintain a consolidated indebtedness to total capitalization ratio of 65 percent or less.

It also contains covenants which, among other things, limit our ability to engage in any consolidation or merger or otherwise liquidate or dissolve, dispose of property, and restricts certain affiliate transactions.

A default on the South Dakota or Montana First Mortgage Bonds would trigger a cross default on the Term Loan;

however a default on the Term Loan would not trigger a default on the South Dakota or Montana First Mortgage Bonds.

Credit Facility

On November 29, 2023, NW Corp amended its existing $ 425.0 million revolving credit facility (the Amended Facility) to address the holding company reorganization and extended the maturity date of the facility to November 29, 2028 .

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After the completion of the holding company reorganization on January 1, 2024, NW Corp owns and operates only the Montana regulated utility, and the base capacity of the Amended Facility automatically reduced to $ 400.0 million.

On October 28, 2022, we entered into a $ 100.0 million Credit Agreement (the Additional Credit Facility) to supplement our existing $ 425.0 million revolving credit facility.

The Additional Credit Facility has a maturity date of April 28, 2024 .

The Additional Credit Facility does not amortize and is unsecured.

Borrowings may be made at interest rates equal to (a) SOFR, plus a credit spread adjustment of 10.0 basis points, plus a margin of 100.0 to 175.0 basis points, or (b) a base rate, plus a margin of 0.0 to 75.0 basis points.

As of December 31, 2023, there were no amounts outstanding under this Additional Credit Facility.

The Amended Facility has uncommitted features that allow NW Corp to request one-year extensions to the maturity date and increase the size of the Amended Facility by an additional $ 100.0 million.

On January 24, 2025, NW Corp amended its existing $ 400.0 million Amended Facility to increase the capacity to $ 425.0 million.

This amendment did not affect the maturity date or borrowing rates.

On March 25, 2023, we amended our existing $ 25.0 million swingline credit facility (the Swingline Facility) to extend the maturity date of the facility from March 27, 2024 to March 27, 2025 .

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On January 4, 2024, NW Corp terminated its $ 25.0 million Swingline Facility.

On November 29, 2023, NorthWestern Energy Group and its subsidiary, NWE Public Service, entered into a new $ 200.0 million unsecured revolver credit facility with base sublimits of $ 50.0 million for NorthWestern Energy Group and $ 150.0 million for NWE Public Service (the HoldCo and NWE Public Service Credit Facility).

million for NWE Public Service (the HoldCo and NWE Public Service Credit Facility).

The HoldCo and NWE Public Service Credit Facility has a maturity date of November 29, 2028.

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

Unsecured revolving line of credit, expiring May 2027 $ — $ 425.0

Unsecured revolving line of credit, expiring November 2028 600.0 425.0

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Net availability as of December 31 $ 187.0 $ 232.0

$ 232.0 $ 100.0

(1) Upon the completion of the holding company reorganization on January 1, 2024, the base capacity of this facility decreased to $400.0 million.

(2) NW Corp terminated the $100.0 million Additional Credit Facility on January 2, 2024, and the $25.0 million Swingline Facility on January 4, 2024.

(3) As discussed above, upon the completion of the holding company reorganization on January 1, 2024, our total consolidated base capacity increased to $600.0 million and our net availability increased to $282.0 million.

Our credit facilities include covenants that require us to meet certain financial tests, including a maximum debt to capitalization ratio not to exceed 65 percent.

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Unsecured Revolving Line of Credit 2028 413,000 318,000

Unsecured Revolving Line of Credit 2028 318,000 —

Unsecured Revolving Line of Credit 2024 — 25,000

Secured Debt:

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South Dakota—4.85% 2043 50,000 50,000

South Dakota—4.22% 2044 30,000 30,000

South Dakota—4.30% 2052 20,000 20,000

Montana—1.00% 2024 — 100,000

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Montana—5.56%

2031 175,000 —

Montana—5.57% 2033 239,000 239,000

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Montana—3.98% 2049 150,000 150,000

Pollution control obligations—

Montana—4.30% 2052 40,000 40,000

Pollution control obligations—

Montana—3.88% 2028 144,660 144,660

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Finance Leases:

Total Finance Leases Various $ 8,799 $ 11,897

Total Finance Leases 2026 $ 5,461 $ 8,799

Less current maturities ( 3,596 ) ( 3,338 )

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The 2023 Pollution Control Bonds were issued in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended.

On March 28, 2024, NW Corp issued and sold $ 175.0 million aggregate principal amount of Montana First Mortgage Bonds at a fixed interest rate of 5.56 percent maturing on March 28, 2031 .

These bonds were issued in transactions exempt from the registration requirements of the Securities Act of 1933.

Proceeds were used to redeem NW Corp's $ 100.0 million of Montana First Mortgage Bonds due this year and for other general utility purposes.

The bonds are secured by NW Corp's electric and natural gas assets associated with its Montana utility operations.

On March 28, 2024, NWE Public Service issued and sold $ 33.0 million aggregate principal amount of South Dakota First Mortgage Bonds at a fixed interest rate of 5.55 percent maturing on March 28, 2029 , and $ 7.0 million aggregate principal amount of South Dakota First Mortgage Bonds at a fixed interest rate of 5.75 percent maturing on March 28, 2034 .

These bonds were issued in transactions exempt from the registration requirements of the Securities Act of 1933.

Proceeds were used for general utility purposes.

The bonds are secured by NWE Public Service's electric and natural gas assets associated with its South Dakota and Nebraska utility operations.

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

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560 3,785 ( 2,869 )

Income Tax Expense (Benefit) $ 7,539 $ ( 605 ) $ 3,419

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

Income Tax (Benefit) Expense $ ( 9,439 ) $ 7,539 $ ( 605 )

Deferred income tax expense is comprised of the following (in thousands):

Year Ended December 31,

2024 2023 2022

Deferred tax expense excluding items below

$ 54,950 $ 61,537 $ 39,349

Adjustments to other noncurrent liabilities, regulatory assets, and liabilities

( 65,596 ) ( 54,732 ) ( 48,428 )

Tax (benefit) expense allocated to other comprehensive income

( 293 ) ( 91 ) 217

Adjustments to deferred income taxes for production tax credit cash transfer

Investment tax credits 1,970 ( 129 ) ( 130 )

Deferred tax (benefit) expense

$ ( 1,277 ) $ 6,585 $ ( 8,992 )

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

The regulatory accounting treatment of these deductions requires immediate income recognition for temporary tax differences of this type, which is referred to as the flow-through method.

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Flow-through repairs deductions ( 10.8 ) ( 12.9 ) ( 12.4 )

Release of unrecognized tax benefits (inclusive of related interest previously accrued) ( 9.8 ) ( 1.6 ) —

Production tax credits ( 5.2 ) ( 5.1 ) ( 7.2 )

Unregulated Tax Cuts and Jobs Act excess deferred income taxes ( 1.7 ) — —

Release of unrecognized tax benefits

Gas repairs safe harbor method change ( 3.3 ) — —

Amortization of excess deferred income taxes ( 1.4 ) ( 1.1 ) ( 0.9 )

Prior year permanent return to accrual adjustments ( 0.2 ) — ( 0.8 )

Plant and depreciation of flow through items 4.4 3.3 ( 0.1 )

Unregulated Tax Cuts and Jobs Act excess deferred income taxes — ( 1.7 ) —

Reduction to previously claimed alternative minimum tax credit — 1.6 —

Prior year permanent return to accrual adjustments 0.0 ( 0.8 ) 0.0

Other, net 0.7 ( 0.1 ) ( 0.2 )

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The table below summarizes the significant differences in income tax expense (benefit) based on the differences between our effective tax rate and the federal statutory rate (in thousands).

All of our income from continuing operations is primarily from domestic operations.

Year Ended December 31,

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Flow-through repairs deductions ( 23,132 ) ( 25,922 ) ( 22,665 )

Production tax credits ( 10,274 ) ( 13,166 ) ( 11,532 )

Unregulated Tax Cuts and Jobs Act excess deferred income taxes ( 3,385 ) — —

Release of unrecognized tax benefits

Release of unrecognized tax benefits (2024 is inclusive of $4.1 million of related interest previously accrued)

( 20,993 ) ( 3,241 ) —

Production tax credits ( 11,069 ) ( 10,274 ) ( 13,166 )

Gas repairs safe harbor method change ( 6,994 ) — —

Amortization of excess deferred income taxes ( 2,930 ) ( 2,184 ) ( 1,657 )

Prior year permanent return to accrual adjustments ( 433 ) 45 ( 1,397 )

Plant and depreciation of flow through items 9,360 6,595 ( 222 )

Unregulated Tax Cuts and Jobs Act excess deferred income taxes — ( 3,385 ) —

Reduction to previously claimed alternative minimum tax credit — 3,186 —

Prior year permanent return to accrual adjustments 45 ( 1,397 ) ( 12 )

Other, net 1,297 ( 237 ) ( 364 )

( 54,520 ) ( 34,811 ) ( 38,909 )

Income Tax Expense (Benefit) $ 7,539 $ ( 605 ) $ 3,419

Income Tax (Benefit) Expense $ ( 9,439 ) $ 7,539 $ ( 605 )

In 2023, the Internal Revenue Service (IRS) issued a safe harbor method of accounting for the repair and maintenance of natural gas transmission and distribution property.

For the year ending December 31, 2024, after completion of our impact analysis of the gas repairs safe harbor method change, we recorded an income tax benefit of approximately $ 7.0 million related to tax deductions for repair costs that were previously capitalized in the 2022 and prior tax years.

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

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Customer advances 32,455 28,300

Pension / postretirement benefits 15,131 19,291

Compensation accruals 12,717 10,716

Pension / postretirement benefits 9,078 15,131

Unbilled revenue 6,477 10,604

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If unused, our production tax credit carryforwards will expire as follows:

$ 1.8 million in 2035, $ 10.9 million in 2036, $ 11.1 million in 2037, $ 10.9 million in 2038, $ 11.5 million in 2039, $ 13.1 million in 2040, $ 11.5 million in 2041, $ 13.2 million in 2042, and $ 10.4 million in 2043.

We believe it is more likely than not that sufficient taxable income will be generated to utilize these production tax credit carryforwards.

Uncertain Tax Positions

Unrecognized Tax Benefits

We recognize tax positions that meet the more-likely-than-not threshold as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

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Our unrecognized tax benefits include approximately $ 7.4 million and $ 24.4 million related to tax positions as of December 31, 2024 and 2023, that if recognized, would impact our annual effective tax rate.

During the year ending December 31, 2024, due to the expiration of the statute of limitations we decreased our unrecognized tax benefits by $ 16.9 million.

On April 14, 2023, the Internal Revenue Service (IRS) issued Revenue Procedure 2023-15, which provides a safe harbor method of accounting for gas repairs expenditures.

During the year ended December 31, 2023, we adopted this method and decreased our total unrecognized tax benefits by $ 0.5 million and recognized an income tax benefit of approximately $ 3.2 million for previously unrecognized tax benefits.

In the next twelve months we expect the statute of limitations to expire for certain uncertain tax benefits, which would result in a decrease to our total unrecognized tax benefits of approximately $ 16.9 million.

Our policy is to recognize interest and penalties related to uncertain tax positions in income tax expense.

During the year ended December 31, 2023, we adopted this method

and decreased our total unrecognized tax benefits by $ 0.5 million and recognized an income tax benefit of approximately $ 3.2 million for previously unrecognized tax ben efits.

In the next twelve months we expect the statute of limitations to expire for certain unrecognized tax benefits, which would result in a decrease to our total unrecognized tax benefits of approximately $ 9.4 million.

Our policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense.

As of December 31, 2024, we have accrued $ 3.0 million for the payment of interest and penalties in the Consolidated Balance Sheets.

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2024 2023 2022

Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount Before-Tax Amount Tax Expense Net-of-Tax Amount Before-Tax Amount Tax Expense Net-of-Tax Amount

Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount Before-Tax Amount Tax Expense (Benefit) Net-of-Tax Amount

Foreign currency translation adjustment $ ( 4 ) $ — $ ( 4 ) $ 2 $ — $ 2 $ ( 8 ) $ — $ ( 8 )

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Postretirement medical liability adjustment 637 ( 133 ) 504 ( 331 ) 69 ( 262 ) ( 1,359 ) 377 ( 982 )

Other comprehensive (loss) income $ 283 $ ( 91 ) $ 192 $ ( 755 ) $ 217 $ ( 538 ) $ ( 28 ) $ ( 13 ) $ ( 41 )

Other comprehensive income (loss) $ 1,245 $ ( 293 ) $ 952 $ 283 $ ( 91 ) $ 192 $ ( 755 ) $ 217 $ ( 538 )

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

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Pension and Other Postretirement Benefit Plans

We sponsor and/or contribute to pension and postretirement health care and life insurance benefit plans for eligible employees.

The pension plan for our South Dakota and Nebraska employees is referred to as the NorthWestern Corporation plan, the pension plan for our Montana employees is referred to as the NorthWestern Energy plan, and collectively they are referred to as the Plans.

We sponsor and/or contribute to pension, postretirement health care and life insurance benefit plans for eligible employees.

The pension plan for our South Dakota and Nebraska employees is referred to as the NorthWestern Energy SD/NE Plan (formerly known as the NorthWestern Corporation Plan), the pension plan for our Montana employees is referred to as the NorthWestern Energy MT Plan (formerly known as the NorthWestern Energy Plan), and collectively they are referred to as the Plans.

We utilize a number of accounting mechanisms that reduce the volatility of reported pension costs.

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See Note 4 - Regulatory Assets and Liabilities , for further discussion on how these costs are recovered through rates charged to our customers.

Benefit Obligation and Funded Status

Benefit Obligations and Funded Status

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

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Interest cost 22,944 25,852 557 674

Actuarial loss 3,127 ( 176,389 ) ( 1,240 ) ( 99 )

Actuarial (gain) loss ( 28,499 ) 3,127 ( 2,514 ) ( 1,240 )

Settlements (1)

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Net actuarial (loss) gain ( 31,835 ) ( 44,453 ) 3,716 15

Amounts recognized in AOCL consist of:

A mounts recognized in AOCL consist of:

Prior service cost — — — —

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Total $ ( 31,835 ) $ ( 44,453 ) $ 4,944 $ 605

(1) In October 2023, we entered into a group annuity contract from an insurance company to provide for the payment of pension benefits to 285 NorthWestern Energy Pension Plan participants.

We purchased the contract with $ 51.9 million of plan assets.

(1) In October 2023, we entered into a group annuity contract from an insurance company to provide for the payment of pension benefits to select NorthWestern Energy MT Pension Plan participants.

We purchased the contract with $ 51.9 million of plan assets in 2023.

A trailing premium of $ 0.8 million related to final data reconciliation was paid from plan assets in 2024, reflecting a final, annuitized participant count of 276.

The insurance company took over the payments of these benefits starting January 1, 2024.

This transaction settled $ 51.9 million of our NorthWestern Energy Pension Plan obligation.

This transaction settled $ 52.7 million of our NorthWestern Energy MT Pension Plan obligation.

As a result of this transaction, during the twelve months ended December 31, 2023, we recorded a non-cash, non-operating settlement charge of $ 4.4 million.

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The actuarial gain/loss is primarily due to the change in discount rate assumption and actual asset returns compared with expected amounts.

The total projected benefit obligation and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets were as follows (in millions):

NorthWestern Energy Pension Plan

The total projected benefit obligation and fair value of plan assets for the NorthWestern Energy MT Pension Plan with accumulated benefit obligations in excess of plan assets were as follows (in millions):

NorthWestern Energy MT Pension Plan

Projected benefit obligation $ 404.8 $ 427.3

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Fair value of plan assets 342.7 348.1

As of December 31, 2023, the fair value of the NorthWestern Corporation pension plan assets exceed the total projected and accumulated benefit obligation and are therefore excluded from this table.

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

Net Periodic Cost (Credit)

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75 210 — 181 550 292

Net Periodic Benefit Cost Recognized $ 8,585 $ 7,527 $ 9,211 $ ( 95 ) $ ( 2,833 ) $ ( 2,209 )

(1) Settlement losses are related to partial annuitization of NorthWestern Energy Pension Plan effective October 24, 2023 and December 1, 2021, respectively.

Net Periodic Benefit Cost (Credit) Recognized $ 8,169 $ 8,585 $ 7,527 $ ( 307 ) $ ( 95 ) $ ( 2,833 )

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

(2) Net periodic benefit costs for pension and postretirement benefit plans are recognized for financial reporting based on the authorization of each regulatory jurisdiction in which we operate.

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This analysis includes constructing a hypothetical bond portfolio whose cash flow from coupons and maturities matches the year-by-year, projected benefit cash flow from our plans.

The decrease in the discount rate during 2023 increased our projected benefit obligation by approximately $ 10.5 million.

The increase in the discount rate during 2024 decreased our projected benefit obligation by approximately $ 29.6 million.

In determining the expected long-term rate of return on plan assets, we review historical returns, the future expectations for returns for each asset class weighted by the target asset allocation of the pension and postretirement portfolios, and long-term inflation assumptions.

Based on the target asset allocation for our pension assets and future expectations for asset returns, we increased our long term rate of return on assets assumption for NorthWestern Energy Pension Plan to 6.65 percent and increased our assumption on the NorthWestern Corporation Pension Plan to 5.15 percent for 2024.

Based on the target asset allocation for our pension assets and future expectations for asset returns, we decreased our long term rates of return on asset assumptions for the NorthWestern Energy MT Pension Plan and the NorthWestern Energy SD/NE Pension Plan to 6.17 percent and 4.58 percent, respectively, for 2025.

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

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

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

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

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Based on this, the target asset allocation established, within an allowable range of plus or minus 5 percent, is as follows:

NorthWestern Energy Pension NorthWestern Corporation Pension NorthWestern Energy

NorthWestern Energy MT Pension NorthWestern Energy SD/NE Pension NorthWestern Energy

Health and Welfare

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The actual allocation by plan is as follows:

NorthWestern Energy Pension NorthWestern Corporation Pension NorthWestern Energy

NorthWestern Energy MT Pension NorthWestern Energy SD/NE Pension NorthWestern Energy

Health and Welfare

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Fixed income securities (1)

43.7 45.3 89.4 88.7 32.2 35.1

fixed income securities — — — — — —

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Global equities (1)

39.0 37.6 6.9 6.9 67.5 64.7

Private real estate 6.2 6.5 — — — —

100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

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

Generally, the asset mix will be rebalanced to the target mix as individual portfolios approach their minimum or maximum levels.

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Additional legislative or regulatory measures, as well as fluctuations in financial market conditions, may impact our funding requirements.

Due to the regulatory treatment of pension costs in Montana, pension costs for 2023 , 2022 and 2021 were based on actual contributions to the plan.

Due to the regulatory treatment of pension costs in Montana, pension costs for 2024 , 2023 and 2022 were based on actual contributions to the NorthWestern Energy MT Pension Plan.

Annual contributions to each of the pension plans are as follows (in thousands):

2024 2023 2022

NorthWestern Energy Pension Plan (MT) $ 8,000 $ 7,000 $ 9,000

NorthWestern Corporation Pension Plan (SD and NE) 1,200 1,200 1,200

NorthWestern Energy MT Pension Plan $ 8,122 $ 8,000 $ 7,000

NorthWestern Energy SD/NE Pension Plan 1,200 1,200 1,200

$ 9,322 $ 9,200 $ 8,200

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Our defined contribution plan permits employees to defer receipt of compensation as provided in Section 401(k) of the Internal Revenue Code.

Under the plan, employees may elect to direct a percentage of their gross compensation to be contributed to the plan.

We contribute various percentage amounts of the employee's gross compensation contributed to the plan.

Matching contributions for the years ended December 31, 2023, 2022 and 2021 were $ 13.2 million, $ 12.3 million, and $ 11.8 million, respectively.

Under the plan, employees may elect to direct a percentage of their gross compensation to the plan.

We also contribute various percentages of employees' gross compensation to the plan.

Company contributions for the years ended December 31, 2024, 2023 and 2022 totaled $ 14.7 million, $ 13.2 million, and $ 12.3 million, respectively.

(15) Stock-Based Compensation

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As of December 31, 2024, there were 558,300 shares of common stock remaining available for grants.

The remaining vesting period for awards previously granted ranges from one to four years if the service and/or performance requirements are met.

The remaining vesting period for awards previously granted ranges from one to three years if the service and/or performance requirements are met.

Nonvested shares do not receive dividend distributions.

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These shares were credited to treasury stock based on their fair market value on the vesting date.

Issuance of Common Stock

In April 2021, NW Corp entered into an Equity Distribution Agreement pursuant to which we could offer and sell shares of our common stock from time to time, having an aggregate gross sales price of up to $ 200.0 million, through an At-the-Market (ATM) offering program.

During the twelve months ended December 31, 2023, NW Corp issued 1,432,738 shares of our common stock under the ATM program at an average price of $ 52.02 , for net proceeds of $ 73.6 million, which is net of sales commissions and other fees paid of approximately $ 0.9 million.

We have completed the ATM offering program under this Equity Distribution Agreement.

Dividend Restrictions

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NorthWestern Energy Group, NW Corp, and NWE Public Service's ability to pay dividends is also limited by the terms of various debt agreements, pursuant to which, NorthWestern Energy Group, NW Corp, and NWE Public Service are required to maintain a debt to capitalization ratio of no more than 0.65 to 1.00.

As of December 31, 2023, approximately $ 920.0 million of NW Corp unrestricted net assets were available for the payment of dividends to NorthWestern Energy Group under our most restrictive dividend restriction.

Further, the declaration of dividends is at the discretion of our Board of Directors and is not guaranteed.

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

(17) Earnings Per Share

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Forward equity sale (2)

— 496,333 51,057

Diluted computation 61,374,205 60,357,793 56,292,110

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Beginning QF liability $ 28,670 $ 49,728

Settlements (1)

( 7,606 ) ( 24,707 )

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Ending QF liability $ 23,498 $ 28,670

(1) The primary components of the change in settlement amounts includes (i) a lower periodic adjustment of $ 4.2 million due to actual price escalation, which was less than previously modeled;

and (ii) higher costs of approximately $ 1.0 million, due to a $ 0.8 million reduction in costs for the adjustment to actual output and pricing for the current contract year as compared with a $ 1.8 million reduction in costs in the prior period.

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

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$ 228,952 $ 205,787 $ 23,165

$ 303,062 $ 266,493 $ 36,569

(1) This net unrecoverable amount represents the undiscounted difference between the total gross obligations and recoverable amounts.

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The MOUs were created to maximize collaboration between the parties and enhance the possibility to receive matching funds from relevant federal agencies.

Under these MOUs, we have a remaining commitment to spend approximately $ 22.4 million between 2024 and 2040.

Under these MOUs, we have a remaining commitment to

spend approximately $ 19.1 million between 2025 and 2040.

These commitments are not reflected in our Consolidated Financial Statements.

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We use a combination of site investigations and monitoring to formulate an estimate of environmental remediation costs for specific sites.

Our monitoring procedures and development of actual remediation plans depend not only on site specific information but also on coordination with the different

environmental regulatory agencies in our respective jurisdictions;

Our monitoring procedures and development of actual remediation plans depend not only on site specific information but also on coordination with the different environmental regulatory agencies in our respective jurisdictions;

therefore, while remediation exposure exists, it may be many years before costs are incurred.

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Liability at December 31, $ 23,729 $ 25,286 $ 26,367

Over time, as costs become determinable, we may seek authorization to recover such costs in rates or seek insurance reimbursement as available and applicable;

therefore, although we cannot guarantee regulatory recovery, we do not expect these costs to have a material effect on our consolidated financial position or results of operations.

We are permitted to recover the remediation costs related to certain environmental liabilities within rates.

Over time, as costs become determinable, we may seek authorization to recover additional costs in rates or seek insurance reimbursement as available and applicable;

therefore, although we cannot guarantee regulatory recovery for all remediation costs, we do not expect these costs to have a material effect on our consolidated financial position or results of operations.

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

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As of December 31, 2024, the reserve for remediation costs at this site was approximately $ 7.2 million, and we estimate that approximately $ 2.1 million of this amount will be incurred through 2029.

The SDPUC permits the recovery of these costs within rates.

Nebraska - We own sites in North Platte, Kearney, and Grand Island, Nebraska on which former manufactured gas facilities were located.

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We are responsible for our proportionate share of the capital and operating costs while being entitled to our proportionate share of the power generated.

Proposed EPA Rules - Congress has not passed any federal climate change legislation regarding GHG emissions from coal fired plants, and we cannot predict the timing or form of any potential legislation.

EPA Rules - Congress has not passed any federal climate change legislation regarding GHG emissions from coal fired plants, and we cannot predict the timing or form of any potential legislation.

Section 111(d) of the Clean Air Act (CAA) confers authority on EPA and the states to regulate emissions, including GHGs, from existing stationary sources.

In May 2023, EPA proposed new GHG emissions standards for coal and natural gas-fired plants.

In particular, the proposed rules would (i) strengthen the current New Source Performance Standards for newly built fossil fuel-fired stationary combustion turbines (generally natural gas-fired);

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

In particular, the GHG Rules will (i) strengthen the current New Source Performance Standards for newly built fossil fuel-fired stationary combustion turbines (generally natural gas-fired);

(ii) establish emission guidelines for states to follow in limiting carbon pollution from existing fossil fuel-fired steam generating electric generating units (including coal, oil and natural gas-fired units);

and (iii) establish emission guidelines for large, frequently used existing fossil fuel-fired stationary combustion turbines (generally natural gas-fired).

In addition, in April 2023, EPA proposed to amend the MATS.

Among other things, MATS currently sets stringent emission limits for acid gases, mercury, and other hazardous air pollutants from new and existing electric generating units.

We are in compliance with existing MATS requirements.

The proposed amendment of the MATS would strengthen the MATS requirements, and if adopted as written, both the GHG and MATS proposed rules could have a material negative impact on our coal-fired plants, including requiring potentially expensive upgrades or the early retirement of Colstrip Unit's 3 and 4 due to the rules making the facility uneconomic.

Previous efforts by the EPA were met with extensive litigation and we anticipate a similar response if the proposed rules are adopted.

As MATS and GHG regulations are implemented, it could result in additional material compliance costs.

We will continue working with federal and state regulatory authorities, other utilities, and stakeholders to seek relief from any MATS or GHG regulations that, in our view, disproportionately impact customers in our region.

Future additional environmental requirements - federal or state - could cause us to incur material costs of compliance, increase our costs of procuring electricity, decrease transmission revenue and impact cost recovery.

The MATS Rules will strengthen emission limits for acid gases, mercury, and other hazardous air pollutants from new and existing electric generating units.

Compliance with the rules will require expensive upgrades at Colstrip Units 3 and 4 with proposed compliance dates that may not be achievable and / or require technology that is unproven, resulting in significant impacts to costs of the facilities.

The final MATS and GHG Rules require compliance as early as 2027 and 2032, respectively.

Previous efforts by the EPA were met with extensive litigation, and this time is no different.

We, along with many other utilities, electric cooperatives, organizations, and states, have petitioned for judicial review of the GHG and MATS Rules with the U.S.

Court of Appeals for the D.C.

The United States Supreme Court denied multiple stay requests related to the MATS and GHG Rules.

The litigation on the merits continues for both the MATS and GHG Rules in the D.C.

Circuit Court of Appeals, and decisions are expected in 2025.

If the MATS Rule and GHG Rule are ultimately enforced, it would result in additional material compliance costs.

We will continue working with federal and state regulatory authorities, other utilities, and stakeholders to seek relief from the MATS and GHG regulations that, in our view, disproportionately impact customers in our region.

These GHG and MATS Rules as well as future additional environmental requirements - federal or state - could cause us to incur material costs of compliance, increase our costs of procuring electricity, decrease transmission revenue and impact cost recovery.

Technology to efficiently capture, remove and/or sequester such GHG emissions or hazardous air pollutants may not be available within a timeframe consistent with the implementation of any such requirements.

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The State filed a motion to pursue an interlocutory appeal of the Order, and on January 2, 2024, the Federal District Court certified the Order for appeal to the 9th Circuit Court of Appeals.

Damages were bifurcated by agreement and will be tried separately for the Black Eagle segment, and any other segments found navigable should an appeal be granted and other segments found navigable.

The appeal was argued on January 15, 2025, and we await the court's disposition.

Damages were bifurcated by agreement and will be tried separately for the Black Eagle segment, and any other segments found navigable, should the State prevail on appeal.

We dispute the State’s claims and intend to continue to vigorously defend the lawsuit.

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We anticipate that any obligation to pay the State rent for use and occupancy of the riverbeds would be recoverable in rates from customers, although there can be no assurances that the MPSC would approve any such recovery.

Colstrip Arbitration

The remaining depreciable life of our investment in Colstrip Unit 4 is through 2042.

The six owners of Colstrip Units 3 and 4 currently share the operating costs pursuant to the terms of an Ownership and Operation Agreement (O&O Agreement).

However, several of the owners are mandated by Washington and Oregon law to eliminate coal-fired resources in 2025 and 2029, respectively.

As a result of the mandate, the owners have disagreed on various operational funding decisions, including whether closure requires each owner’s consent under the O&O Agreement.

On March 12, 2021, we initiated an arbitration under the O&O Agreement (the “Arbitration”), to resolve the issues of whether closure requires each owner's consent and to clarify each owner's obligations to continue to fund operations until all joint owners agree on closure.

The owners previously initiated efforts to identify arbitrators and have agreed to stay the Arbitration through March 31, 2024, while they explore a potential resolution to their disagreements.

Colstrip Coal Dust Litigation

On December 14, 2020, a claim was filed against Talen in the Montana Sixteenth Judicial District Court, Rosebud County, Cause No.

Talen is one of the co-owners of Colstrip Unit 3, and the operator of Units 3 and 4.

The plaintiffs allege they have suffered adverse effects from coal dust generated during operations associated with Colstrip.

On August 26, 2021, the claim was amended to add in excess of 100 plaintiffs.

It also added NorthWestern, the other owners of Colstrip, and Westmoreland Rosebud Mining LLC, as defendants.

Plaintiffs are seeking economic damages, costs and disbursements, punitive damages, attorneys’ fees, and an injunction prohibiting defendants from allowing coal dust to blow onto plaintiffs’ properties.

Since this lawsuit remains in its discovery stages, we are unable to predict outcomes.

We continue to evaluate a range of reasonably possible losses.

BNSF Demands for Indemnity and Remediation Costs

NorthWestern has received a demand for indemnity from BNSF Railway Company (BNSF) for past and future environmental investigation and remediation costs incurred by BNSF at one of the three operable units at the Anaconda Copper Mining (ACM) Smelter and Refinery Superfund Site, located near Great Falls, Montana.

Smelter and refining operations at the site commenced in 1893 and continued until 1980.

NorthWestern owns property in the Railroad Corridor sub-section of Operable Unit 1.

BNSF claims it is entitled to indemnity and contribution from NorthWestern for the costs it has and will incur to investigate and remediate contamination in Operable Unit 1.

NorthWestern and BNSF have settled the majority of the dispute for a non-material sum.

Any potential remaining claims are not expected to be material.

Yellowstone County Generating Station Air Permit

On October 21, 2021, the Montana Environmental Information Center and the Sierra Club filed a lawsuit in Montana State District Court, against the MDEQ and NorthWestern, alleging that the environmental analysis conducted by MDEQ prior to issuance of the Yellowstone County Generating Station's air quality construction permit was inadequate.

On April 4, 2023, the Montana District Court issued an order finding MDEQ's environmental analysis was deficient in not addressing exterior lighting and greenhouse gases and remanded it back to MDEQ to address the deficiencies and vacated the air quality permit pending that remand.

On October 21, 2021, the Montana Environmental Information Center and the Sierra Club filed a lawsuit in Montana State District Court, against the MDEQ and NorthWestern, alleging that the environmental analysis conducted by MDEQ prior to issuance of the YCGS air quality construction permit was inadequate.

As a result of the vacatur of the permit, we paused construction.

On June 8, 2023, the Montana District Court granted our motion to stay the order vacating the air quality permit pending the outcome of our notice of appeal with the Montana Supreme Court.

Oral argument is scheduled for April 22, 2024 and a determination of the appeal will follow.

We recommenced construction in June 2023 and expect the plant to be operational no later than the end of the third quarter 2024.

The ultimate resolution of the lawsuit challenging the Yellowstone County Generating Station air quality permit could delay the project and increase costs.

During the litigation of the air permit, Montana House Bill 971 was signed into law, preventing the MDEQ from, except under certain exceptions, evaluating greenhouse gas emissions and corresponding impacts to the climate in environmental reviews of large projects such as coal mines and power plants.

On June 1, 2023, the MDEQ issued its supplemental environmental assessment that contained the updated exterior lighting analysis, and the MDEQ indicated that no other analysis was necessary.

The comment period concerning the MDEQ’s supplemental air quality permit ended on July 3, 2023.

On August 4, 2023, the Montana First Judicial District Court in Held v.

State of Montana, a separate case by Montana youths alleging climate damages, issued its order finding House Bill 971 unconstitutional delaying the issuance of the revised Yellowstone County Generating Station's air permit.

The Montana Supreme Court granted NorthWestern permission to participate in the Held appeal.

The outcome of the Held case could pose additional delays and costs for the Yellowstone County Generating Station.

On June 8, 2023, the Montana District Court granted our motion to stay the order vacating the air quality permit pending the outcome of our appeal to the Montana Supreme Court.

We recommenced YCGS construction in June 2023 and placed the plant in service in October 2024.

On January 3, 2025, the Montana Supreme Court ordered that the YCGS air quality permit be reinstated.

The Court remanded the matter back to MDEQ for supplemental analysis regarding lighting and greenhouse gas emissions in Montana.

YCGS is commercially operable with the reinstated air quality permit.

Other Legal Proceedings

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Lighting, governmental, irrigation, and interdepartmental 32.8 1.4 34.2

Total Customer Revenues 1,089.5 333.1 1,422.6

Other tariff and contract based revenues 86.9 45.3 132.2

Total Revenue from Contracts with Customers 1,176.4 378.4 1,554.8

Regulatory amortization and other ( 107.6 ) ( 25.1 ) ( 132.7 )

Total Retail Revenues 1,069.0 250.1 1,319.1

Regulatory Amortization 24.9 19.0 43.9

Transmission 97.1 — 97.1

Wholesale and other 9.7 44.1 53.8

Total Revenues $ 1,200.7 $ 313.2 $ 1,513.9

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Lighting, governmental, irrigation, and interdepartmental 32.7 1.7 34.4

Total Customer Revenues 974.8 360.6 1,335.4

Other Tariff and Contract Based Revenues 85.7 38.3 124.0

Total Revenue from Contracts with Customers 1,060.5 398.9 1,459.4

Regulatory amortization and other 46.1 ( 27.7 ) 18.4

Total Retail Revenues 1,089.5 333.0 1,422.5

Regulatory Amortization ( 105.6 ) ( 25.0 ) ( 130.6 )

Transmission 78.4 — 78.4

Wholesale and other 6.5 45.3 51.8

Total Revenues (1)

$ 1,068.8 $ 353.3 $ 1,422.1

December 31, 2022 Electric Natural Gas Total

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Lighting, governmental, irrigation, and interdepartmental 31.0 1.9 32.9

Total Customer Revenues 929.2 271.3 1,200.5

Other Tariff and Contract Based Revenues 89.5 36.8 126.3

Total Revenue from Contracts with Customers 1,018.7 308.1 1,326.8

Regulatory amortization and other 33.5 12.0 45.5

Total Retail Revenues 974.8 360.6 1,335.4

Regulatory Amortization 46.4 ( 28.1 ) 18.3

Transmission 77.8 — 77.8

Wholesale and other 7.6 38.7 46.3

Total Revenues (1)

$ 1,106.6 $ 371.2 $ 1,477.8

(1) Certain amounts in the prior period have been reclassified to conform with current period presentation.

These reclassifications have no effect on the reported financial results.

(20) Segment and Related Information

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

The remainder of our business activities are presented as other, which primarily consists of unallocated corporate costs and some limited unregulated activity within the energy industry.

We evaluate the performance of these segments based on utility margin.

The accounting policies of the operating segments are the same as the parent except that the parent allocates some of its operating expenses to the operating segments according to a methodology designed by management for internal reporting purposes and involves estimates and assumptions.

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

Our Electric segment includes the aggregated operating segment results of the regulated electric utility operations of Montana and South Dakota.

Our Gas segment includes the aggregated operating segment results of the regulated gas utility operations of Montana, South Dakota, and Nebraska.

Our CODM, who is our Chief Executive Officer, uses segment net income to evaluate if our operating segments are earning their authorized rate of return and in the annual budget and forecasting process.

Our CODM uses segment net income to determine how to allocate capital resources between our operating segments and when to allocate the resources necessary to file for rate reviews.

The accounting policies of the operating segments are the same as those described within Note 2 – Significant Accounting Policies .

Segment asset and capital expenditure information is not provided for our reportable segments.

As an integrated electric and gas utility, we operate significant assets that are not dedicated to a specific reportable segment.

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

December 31, 2023 Electric Gas Other Eliminations Total

December 31, 2024 Electric Gas Total

Operating revenues $ 1,200,701 $ 313,197 $ 1,513,898

Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) 329,578 104,238 433,816

Utility Margin 806,078 195,803 — — 1,001,881

Operating and maintenance 166,028 54,496 — — 220,524

Administrative and general 83,521 32,657 1,182 — 117,360

Operating, general, and administrative 270,145 92,211 362,356

Property and other taxes 126,470 37,386 163,856

Depreciation and depletion 189,987 37,648 227,635

Operating income 262,169 37,924 362 — 300,455

Interest expense, net ( 99,250 ) ( 27,740 ) ( 126,990 )

1 unchanged sentence

Income tax (expense) benefit ( 20,892 ) 7,963 ( 12,929 )

Net income (loss) $ 175,464 $ 30,176 $ ( 11,509 ) $ — $ 194,131

Total assets $ 6,071,021 $ 1,512,135 $ 17,496 $ — $ 7,600,652

Capital expenditures $ 431,547 $ 135,342 $ — $ — $ 566,889

December 31, 2022 Electric Gas Other Eliminations Total

Segment net income $ 182,461 $ 27,740 $ 210,201

Reconciliation to consolidated net income

Other, net (1)

Consolidated net income $ 224,111

December 31, 2023 Electric Gas Total

Operating revenues $ 1,068,833 $ 353,310 $ 1,422,143

Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) 262,755 157,507 420,262

Utility margin 782,131 203,695 — — 985,826

Operating and maintenance 167,798 53,629 — — 221,427

Administrative and general 82,405 31,002 369 — 113,776

Operating, general, and administrative 249,549 87,153 336,702

Property and other taxes 120,289 34,323 154,612

Depreciation and depletion 174,071 36,403 210,474

Operating income (loss) 219,743 43,714 ( 378 ) — 263,079

Interest expense, net ( 84,089 ) ( 15,719 ) ( 99,808 )

Other income, net 11,580 3,344 14,924

Income tax benefit (expense) 798 ( 3,108 ) 2,915 — 605

Net income (loss) $ 158,612 $ 33,975 $ ( 9,579 ) $ — $ 183,008

Total assets $ 5,892,508 $ 1,418,059 $ 7,216 $ — $ 7,317,783

Capital expenditures $ 409,707 $ 105,433 $ — $ — $ 515,140

December 31, 2021 Electric Gas Other Eliminations Total

Income tax (expense) benefit ( 14,196 ) 4,627 ( 9,569 )

Segment net income $ 175,464 $ 30,176 $ 205,640

Reconciliation to consolidated net income

Other, net (1)

Consolidated net income $ 194,131

December 31, 2022 Electric Gas Total

Operating revenues $ 1,106,565 $ 371,272 $ 1,477,837

Fuel, purchased supply and direct transmission expense (exclusive of depreciation and depletion shown separately below) 324,434 167,577 492,011

Utility margin 757,362 189,406 — — 946,768

Operating and maintenance 156,383 51,920 — — 208,303

Administrative and general 72,641 27,550 1,682 — 101,873

Operating, general, and administrative 250,203 84,631 334,834

Property and other taxes 149,781 42,734 192,515

Depreciation and depletion 162,404 32,616 195,020

Operating income 238,802 38,569 ( 1,690 ) — 275,681

Interest expense, net ( 74,420 ) ( 13,030 ) ( 87,450 )

Other income, net 12,491 6,399 18,890

Income tax (expense) benefit ( 2,512 ) ( 2,640 ) 1,733 — ( 3,419 )

Net income (loss) $ 157,288 $ 32,892 $ ( 3,340 ) $ — $ 186,840

Total assets $ 5,432,578 $ 1,342,031 $ 5,834 $ — $ 6,780,443

Capital expenditures $ 354,775 $ 79,553 $ — $ — $ 434,328

Income tax benefit (expense) 798 ( 3,108 ) ( 2,310 )

Segment net income $ 158,612 $ 33,975 $ 192,587

Reconciliation to consolidated net income

Other, net (1)

Consolidated net income $ 183,008

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

(21) Fourth Quarter Financial Data (Unaudited)

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Year Ended December 31,

2024 2023 (1)

Operating Expenses:

2 unchanged sentences

Operating Loss 1,134 231

Interest expense ( 4,683 ) —

Earnings from investments in subsidiaries, net of tax 207,650 83,142

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Income before income taxes 202,045 83,141

Income tax (expense) —

Income tax benefit 22,066 —

Net Income 224,111 83,141

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Comprehensive Income $ 225,063 $ 83,506

(1) NorthWestern Energy Group did not have operational activity until October 2, 2023.

Refer to Note 1 - Basis of Presentation to the Condensed Financial Statements for further information.

See Notes to Condensed Financial Statements

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Investments in subsidiaries 2,996,648 2,784,924

Deferred tax assets 9,578 —

Other noncurrent assets 4,613 4,063

1 unchanged sentence

LIABILITIES AND SHAREHOLDERS EQUITY

Current Liabilities:

Short-term borrowings $ 100,000 $ —

Accounts payable 2,742 —

Accrued expenses and other 21 —

Total current liabilities 102,763 —

Long-term debt 36,901 —

Deferred tax liabilities 3,083 —

Other noncurrent liabilities 12,807 3,939

8 unchanged sentences

Year Ended December 31,

2024 2023 (1)

OPERATING ACTIVITIES:

3 unchanged sentences

Cash dividends received from subsidiaries 91,183 39,042

Amortization of debt issuance costs 25 —

Stock-based compensation costs 50 —

Deferred income taxes ( 18,588 ) —

Changes in assets and liabilities

Accounts receivable ( 1,483 ) ( 207 )

Accounts payable 684 —

Accrued expenses ( 219 ) —

Other noncurrent assets and liabilities ( 2,272 ) —

Cash Provided by Operating Activities 85,841 38,834

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Return of capital from subsidiaries — —

Cash Provided by Investing Activities —

Cash Used in Investing Activities ( 64,777 ) —

FINANCING ACTIVITIES:

Treasury stock activity 351

Dividends on common stock ( 158,589 ) ( 39,002 )

Issuances of short-term borrowings 100,000 —

Line of credit borrowings, net 37,000 —

Treasury stock activity 1,192 351

Financing costs — ( 124 )

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Cash and Cash Equivalents end of period $ 726 $ 59

(1) NorthWestern Energy Group did not have operational activity until October 2, 2023.

Refer to Note 1 - Basis of Presentation to the Condensed Financial Statements for further information.

See Notes to Condensed Financial Statements

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These financial statements, in which NorthWestern Energy Groups' subsidiary has been included using the equity method of accounting, should be read in conjunction with the Consolidated Financial Statements and notes thereto of NorthWestern Energy Group contained elsewhere within this Form 10-K.

There were $ 39.0 million of cash dividends paid to NorthWestern Energy Group from wholly-owned subsidiaries for the year ended December 31, 2023.

There were $ 91.2 million and $ 39.0 million of cash dividends paid to NorthWestern Energy Group from wholly-owned subsidiaries for the year ending December 31, 2024 , and December 31, 2023, respectively.

Holding Company Reorganization

On October 2, 2023, NW Corp and NorthWestern Energy Group completed a merger transaction pursuant to which NorthWestern Energy Group became the holding company parent of NW Corp.

NW Corp became a wholly-owned subsidiary of NorthWestern Energy Group.

(2) Short-Term Borrowings and Credit Arrangements

For information concerning NorthWestern Energy Groups' short-term borrowings and credit arrangements, see Note 10 - Short -Term Borrowings and Credit Arra ngements to the Consolidated Financial Statements of NorthWestern Energy Group included within this Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures