What changed in this filing

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Item 9A. Controls and Procedures

2026-02-12 compared with 2025-02-13 · 336 added, 270 removed, 1517 unchanged (29% of the section changed)

45 unchanged sentences

Notes to Consolidated Financial Statements F- 9

Fourth Quarter Unaudited Financial Data for the Years Ended December 31, 2024 and 2023

Note 1 - Nature of Operations and Basis of Consolidation F- 9

Note 2 - Significant Accounting Policies F- 9

Note 3 - Pending Merger with Black Hills Corporation F- 13

Note 4 - Acquisition of Energy West Operations F- 14

Note 5 - Regulatory Matters F- 14

Note 6 - Regulatory Assets and Liabilities F- 16

Note 7 - Property, Plant and Equipment F- 18

Note 8 - Asset Retirement Obligations F- 18

Note 9 - Goodwill F- 19

Note 10 - Risk Management and Hedging Activities F- 20

Note 11 - Fair Value Measurements F- 21

Note 12 - Short-Term Borrowings and Credit Arrangements F- 22

Note 13 - Long-Term Debt and Finance Leases F- 24

Note 14 - Income Taxes F- 26

Note 15 - Comprehensive Income (Loss) F- 30

Note 16 - Employee Benefit Plans F- 32

Note 17 - Stock-Based Compensation F- 39

Note 18 - Common Stock F- 40

Note 19 - Earnings Per Share F- 41

Note 20 - Commitments and Contingencies F- 41

Note 21 - Revenue from Contracts with Customers F- 46

Note 22 - Segment and Related Information F- 47

Note 23 - Fourth Quarter Financial Data (Unaudited) F- 48

Schedule 1 - Condensed Financial Information of NorthWestern Energy Group F- 50

13 unchanged sentences

(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.

Agreement and Plan of Merger, dated as of August 18, 2025, by and among Black Hills Corporation, NorthWestern Energy Group, Inc., and River Merger Sub Inc.(incorporated by reference to Exhibit 2.1 of NorthWestern Energy Group's Current Report on Form 8-K, dated August 18, 2025, 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).

Amended and Restated Bylaws of NorthWestern Energy Group, Inc., dated as of September 29, 2023 (incorporated by reference to Exhibit 3(b) of Northwestern Energy Group Inc.'s Current Report on Form 8-K, date October 2, 2023).

Second Amended and Restated Bylaws of NorthWestern Energy Group, Inc., dated August 18, 2025 (incorporated by reference to Exhibit 10.1 of NorthWestern Energy Group's Current Report on Form 8-K, dated August 18, 2025, Commission File No.

4.1(a) First Mortgage and Deed of Trust, dated as of October 1, 1945, by The Montana Power Company in favor of Guaranty Trust Company of New York and Arthur E.

23 unchanged sentences

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.

Forty-sixth Supplemental Indenture, dated as of March 1, 2025, between NorthWestern Corporation 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 27, 2025, Commission File No.

Forty-seventh Supplemental Indenture, dated as of November 1, 2025, between NorthWestern Corporation 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 November 7, 2025, 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.

15 unchanged sentences

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.

Twenty-Second Supplemental Indenture, dated as of May 1, 2025, between NorthWestern Energy Public Service Corporation and The Bank of New York Mellon, as trustee.

(incorporated by reference to Exhibit 4.1 of NorthWestern Energy Group's Current Report on Form 8-K, dated May 7, 2025, Commission File No.

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

16 unchanged sentences

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 22, 2021, 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 10, 2022, Commission File No.

NorthWestern Energy 2023 Annual Incentive Plan (incorporated by reference to Exhibit 99.1 of NorthWestern Corporation's Current Report on Form 8-K, dated December 13, 2022, Commission File No.

12 unchanged sentences

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.

Chief Executive Officer Agreement, dated August 18, 2025, between Black Hills Corporation and Brian B.

Bird dated August 18, 2025 (incorporated by reference to Exhibit 10.1 of NorthWestern Energy Group's Current Report on Form 8-K, dated August 18, 2025, Commission File No.

Second Amended and Restated Credit Agreement, dated November 29, 2023 (incorporated by reference to Exhibit 10.1 of Northwestern Energy Group Inc.'s Current Report on Form 8-K, dated December 5, 2023).

1 unchanged sentence

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.

(incorporated by reference to Exhibit 10.3 of NorthWestern Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021, Commission File No.

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.

Amendment No.

3 to Term Loan Credit Agreement and Lender Joinder Agreement.

(incorporated by reference to Exhibit 10.1 of NorthWestern Energy Group's Current Report on Form 8-K, dated October 3, 2025, 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

Policy for insider trading, dated October 2, 2023.

(incorporated by reference to Exhibit 19 of Northwestern Energy Group Inc.'s Annual Report on Form 10-K, dated February 13, 2025).

Subsidiaries of NorthWestern Group, Inc.

29 unchanged sentences

Signature Title Date

SULLIVAN Chairman of the Board February 13, 2025

SULLIVAN Board Chair

February 12, 2026

BIRD President, Chief Executive Officer and Director February 12, 2026

104 unchanged sentences

Income Before Income Taxes 187,565 214,672 201,670

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

Income Tax (Expense) Benefit ( 6,473 ) 9,439 ( 7,539 )

Net Income $ 181,092 $ 224,111 $ 194,131

77 unchanged sentences

(Gain) loss on disposition of assets ( 82 ) ( 61 ) 316

Regulatory disallowance of certain YCGS capital costs 30,895 — —

Impairment of alternative energy storage investment — 4,159 —

12 unchanged sentences

Property, plant, and equipment additions ( 524,456 ) ( 549,244 ) ( 566,889 )

Acquisition of Energy West Operations ( 35,938 ) — —

Investment in equity securities ( 10,238 ) ( 4,719 ) ( 3,923 )

7 unchanged sentences

Repayments on long-term debt ( 300,000 ) ( 100,000 ) —

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

Line of credit (repayments) borrowings , net ( 9,000 ) 95,000 ( 132,000 )

Treasury stock activity 709 1,192 1,069

57 unchanged sentences

Events occurring subsequent to December 31, 2025, have been evaluated as to their potential impact to the Consolidated Financial Statements through the date of issuance.

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) Significant Accounting Policies

14 unchanged sentences

Receivables include unbilled revenues of $ 98.8 million and $ 95.2 million at December 31, 2025 and December 31, 2024, respectively.

Inventories are stated at average cost.

Inventories are stated at the lower of average cost or net realizable value.

Inventory consisted of the following (in thousands):

25 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.

14 unchanged sentences

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

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

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 each of 2025 and 2024, and 2.8 % for 2023.

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.

15 unchanged sentences

Customer advances $ 138,255 $ 123,249

Pension and other employee benefits 56,603 75,302

AROs 39,964 37,725

Future QF obligation, net 23,498 28,670

Environmental 22,961 20,350

Pension and other employee benefits 20,134 56,603

Future QF obligation, net 14,877 23,498

Other (none of which is individually significant) 47,344 54,619

6 unchanged sentences

Exposures exist related to various tax filing positions, which may require an extended period of time to resolve and may result in income tax adjustments by taxing authorities.

We have reduced deferred tax assets or established liabilities based on our best estimate of future probable adjustments related to these exposures.

On a quarterly basis, we evaluate exposures in light of any additional information and make adjustments as necessary to reflect the best estimate of the future outcomes.

17 unchanged sentences

Cash (received) paid for:

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

Federal income tax

$ 387 $ 525 $ ( 845 )

State income tax (1)

( 160 ) ( 4,809 ) 18

Total Income taxes

$ 227 $ ( 4,284 ) $ ( 827 )

Production tax credits (2)

3 unchanged sentences

Capital expenditures included in trade accounts payable 41,702 22,377 42,322

(1) For the year ended December 31, 2024, we received $ 4.8 million of cash from the state of Montana.

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

6 unchanged sentences

Accounting Standards Issued

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.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures , which expands public entities' income tax disclosures.

The expanded disclosures require the disclosure of prescribed categories presented in the income tax rate reconciliation and additional disclosures on income tax expense and taxes paid, net of refunds received, for federal, state, and foreign jurisdictions.

We adopted this standard for annual periods beginning after December 15, 2024, and interim periods beginning after December 15, 2025, as required, and used the retrospective method of adoption, with no material impact on our Consolidated Financial Statements.

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

(3) Pending Merger with Black Hills Corporation

On August 18, 2025, we entered into a Merger Agreement with Black Hills and Merger Sub.

The Merger Agreement provides for an all-stock merger of equals between NorthWestern and Black Hills upon the terms and subject to the conditions set forth therein.

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

Under the provisions of ASC Topic 805, which requires the identification of an acquirer in a business combination, Black Hills is the accounting acquirer.

Pursuant to the Merger Agreement, at the effective time of the Merger, each share of NorthWestern, par value $ 0.01 per share, issued and outstanding as of immediately prior to closing will be converted into the right to receive 0.98 validly issued, fully paid and non-assessable shares of Black Hills Common Stock.

In connection with this pending merger, we have incurred merger-related costs.

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

Regulatory and Shareholder Approvals

Our pending merger with Black Hills was unanimously approved by our board of directors and Black Hills' board of directors.

The completion of the Merger is subject to the satisfaction or waiver of certain conditions to closing, including (1) the approval of applicable transaction-related proposals by NorthWestern and Black Hills' shareholders in accordance with applicable law;

(2) subject to certain conditions, the receipt of certain regulatory approvals, including expiration or termination of the applicable waiting period under the HSR Act and approval from the FERC, the MPSC, the NPSC, and the SDPUC, in each case on such terms and conditions that would not result in a material adverse effect on Bright Horizon Energy;

(3) the absence of any court order or regulatory injunction prohibiting the completion of the Merger;

(4) the authorization for listing of shares of Black Hills Common Stock to be issued in the Merger on a mutually agreed stock exchange;

(5) subject to specified materiality standards, the accuracy of the representations and warranties of each party;

(6) compliance by each party in all material respects with its covenants;

(7) the absence of a material adverse effect on each party;

and (8) receipt of each party of an opinion relating to the anticipated tax-free treatment of the Merger.

We have filed applications with the MPSC, NPSC, SDPUC, and FERC for approval of the Merger.

Hearings with the MPSC, NPSC, and SDPUC are scheduled in the second quarter of 2026.

In February 2026, the Form S-4, which contains joint proxy statement/prospectus for NorthWestern and Black Hills, was declared effective by the SEC.

Meetings for NorthWestern and Black Hills shareholders to vote on the acquisition are scheduled for April 2, 2026.

We expect to file an application for clearance under the HSR Act in the first quarter of 2026.

We anticipate the transaction closing in the second half of 2026, subject to the satisfaction or waiver of certain closing conditions.

(4) Acquisition of Energy West Operations

In July 2024, NW Corp entered into an Asset Purchase Agreement with Hope Utilities to acquire its Energy West natural gas distribution system and operations serving approximately 33,000 customers located in Great Falls, Cut Bank, and West Yellowstone, Montana.

In May 2025, the MPSC approved this acquisition and on July 1, 2025, NW Corp completed this acquisition for approximately $ 35.9 million in cash.

Upon the completion of the acquisition, NW Corp transferred the utility operations to its two wholly-owned subsidiaries, NorthWestern Great Falls Gas LLC and NorthWestern Cut Bank Gas LLC.

The assets acquired and liabilities assumed were measured at estimated fair value in accordance with the accounting guidance under the Business Combinations Topic in the Financial Accounting Standards Board Accounting Standards Codification.

These assets and liabilities are subject to rate-setting provisions that provide for revenues derived from costs, including a return on investment of assets less liabilities included in rate base.

As such, the fair values of these assets and liabilities equal their carrying values.

The excess of the purchase price over the fair value of the assets acquired and liabilities assumed has been reflected as $ 10.0 million of goodwill within the Gas segment.

Goodwill resulting from the acquisition is largely attributable to efficiency opportunities.

The goodwill recognized in connection with the acquisition will be deductible for income tax purposes.

(5) Regulatory Matters

Montana Rate Review

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.

In July 2024, we filed a Montana electric and natural gas rate review with the MPSC requesting an annual increase to electric and natural gas utility rates.

In December 2025, the MPSC issued a final order approving the natural gas settlement agreement and partial electric settlement agreement.

Among other things, the approved partial electric settlement agreement provides for the deferral and annual recovery of incremental operating costs related to wildfire mitigation and insurance expenses through the Wildfire Mitigation Balancing Account.

The details of this final order are set forth below:

Returns, Capital Structure & Revenue Increase Resulting From Final Order ($ in millions)

Return on Equity (ROE)

9.65 % 9.60 %

Equity Capital Structure

47.84 % 47.84 %

$ 105.5 $ 18.0

Property Tax (tracker base adjustment) (1)

Total Revenue Increase Through Final Order

(1) These items are flow-through costs.

PCCAM reflects our fuel and purchased power costs.

(2) This PCCAM reduction of $94.5 million represents the reduction in revenue at the previously approved 2021 PCCAM base of $208.3 million using the 2023 Montana rate review test period loads.

The final order provides for an update to the PCCAM by adjusting the base costs from $ 208.3 million to $ 119.0 million.

It also suspended the 90/10 cost sharing mechanism of the PCCAM on a temporary basis pending further review by the MPSC.

Within this final order, the MPSC disallowed a portion of the capital costs related to the construction of YCGS.

As a result, in the fourth quarter of 2025 we recorded a $ 30.9 million non-cash charge for the regulatory disallowance within Operating and maintenance on the Consolidated Statements of Income and a corresponding reduction to Property, plant, and equipment, net on the Consolidated Balance Sheets.

As of December 31, 2025, we have deferred $ 7.7 million of base rate revenues collected that will be refunded to customers.

In January 2026, we filed a Motion for Reconsideration (Motion) as it relates to this final order.

Among other things, our Motion requests that the MPSC reconsider their prudence conclusions regarding the capital costs associated with the construction of YCGS and clarification as to the effective date of the PCCAM sharing mechanism suspension, which we have requested an effective date of July 1, 2025, to align with the PCCAM tracker year.

Any subsequent modifications by the MPSC to their final order would be reflected in our 2026 results.

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.

In June 2024, we filed a natural gas rate review with the NPSC.

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.

In April 2025, we reached a settlement agreement with certain parties for a base rate annual revenue increase of $ 2.4 million.

In June 2025, the NPSC approved this settlement agreement and final rates were implemented on July 1, 2025.

Colstrip Acquisitions and Requests for Cost Recovery

In January 2023, and July 2024, we entered into definitive agreements with Avista and Puget, respectively, to acquire their respective interests in Colstrip Units 3 and 4 for $ 0 and completed these acquisitions on January 1, 2026.

Accordingly, we are responsible for the associated operating costs beginning on January 1, 2026, which we will not collect through utility base rates, until requested in a future Montana rate review.

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

Avista Interests - The 222 megawatts of generation capacity from Colstrip Units 3 and 4 acquired from Avista (Avista Interests) on January 1, 2026, was identified as a key element in our strategy to achieve resource adequacy for customers, as outlined in our 2023 Montana Integrated Resource Plan.

Noting the costs associated with operating this resource are not currently reflected in utility customer rates, in August 2025, we filed a temporary PCCAM tariff waiver request with the MPSC that would provide a near-term cost-recovery mechanism expected to largely offset approximately $ 18.0 million in annual incremental operating and maintenance costs associated with the Avista Interests.

This waiver requested that the MPSC allow us to keep 100 percent of the net revenue associated with certain designated power sales contracts up to the amount of the operating and maintenance expenses we incur associated with our Avista Interests.

Furthermore, the waiver request indicated that any net revenues from the designated contracts exceeding the operating and maintenance expenses associated with our Avista Interests would continue to flow back to retail customers.

In January 2026, the MPSC approved our PCCAM tariff waiver request on an interim basis with final approval or denial subject to the ongoing PCCAM docket process.

Puget Interests - The 370 megawatts of generation capacity from Colstrip Units 3 and 4 acquired from Puget (Puget Interests) on January 1, 2026, increases our ownership share of the facility to 55 percent and provides an increase in voting share in determining strategic direction and investment decisions at the facility.

While we expect our future opportunity to serve growing customer demand, including large-load customers, may be supported by this resource, in October 2025, we signed a

contract to sell the dispatchable capacity and associated energy from the Puget Interests beginning January 1, 2026, through late 2027.

Revenues from this agreement are expected to largely offset the estimated $ 30.0 million of annual incremental operating and maintenance costs associated with the Puget Interests.

In addition, in October 2025, we submitted a request to the FERC for approval of cost-based rates for our subsidiary that will own the Puget Interests.

We expect this rate approval to be effective in the first quarter of 2026.

If our request for rates effective January 1, 2026 is not approved, we could incur refund liability for contract revenues received during the unauthorized period.

(6) Regulatory Assets and Liabilities

8 unchanged sentences

Flow-through income taxes 14 Plant Lives $ 632,322 $ 596,265

Pension 14 See Note 14 62,096 79,638

Supply costs 1 Year 47,438 11,441

Excess deferred income taxes 14 Plant Lives 42,534 45,620

Wildfire mitigation Undetermined 29,433 17,368

Pension 16 See Note 16 26,942 62,096

State & local taxes & fees 1 Year 20,373 8,924

Employee related benefits 16 See Note 16 16,548 17,877

Deferred financing costs 13 See Note 13 16,089 17,754

Wildfire mitigation Undetermined 17,368 1,623

Supply costs 1 Year 11,441 7,317

Environmental clean-up 20 Undetermined 14,755 11,257

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

Other Various 19,137 15,663

3 unchanged sentences

Supply costs 1 Year 17,765 20,933

Rates subject to refund 5 1 Year 7,660 —

Gas storage sales 14 years 5,784 6,205

State & local taxes & fees 1 Year 911 251

Employee related benefits 16 See Note 16 797 —

Other Various 2,912 2,726

4 unchanged sentences

See Note 14 - Income Taxes for further discussion.

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

Accordingly, we

have recorded a regulatory asset and liability to reflect the future recovery of under collections and refunding of over collections through the ratemaking process.

We earn interest on natural gas supply costs under collected, or apply interest to an over collection, of 6.7 percent in Montana;

6.8 percent and 6.9 percent for electric and natural gas, respectively, in South Dakota;

and 7.1 percent for natural gas in Nebraska.

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

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.

Pension and Employee Related Benefits

4 unchanged sentences

The MPSC allows recovery of postretirement benefit costs on an accrual basis.

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.

Deferred Financing Costs

1 unchanged sentence

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

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.

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

Accordingly, we have recorded a regulatory asset and liability to reflect the future recovery of under collections and refunding of over collections through the ratemaking process.

We earn interest on natural gas supply costs under collected, or apply interest to an over collection, of 6.7 percent in Montana;

6.8 percent and 6.9 percent for electric and natural gas, respectively, in South Dakota;

and 8.5 percent for natural gas in Nebraska.

Environmental Clean-Up

3 unchanged sentences

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

State & Local Taxes & Fees

The anticipated costs of removing assets upon retirement are collected from customers in advance of removal activity as a component of depreciation expense.

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

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

regulated assets by increasing our regulatory liability.

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

See Note 8 - Asset Retirement Obligations , for further information regarding this item.

18 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 $ 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.

Net plant and equipment under finance lease were $ 1.0 million and $ 3.0 million as of December 31, 2025 and 2024, respectively, which is a long-term power supply contract with the owners of a natural gas fired peaking plant.

Jointly Owned Electric Generating Plant

3 unchanged sentences

The participants each finance their own investment.

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

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

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

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

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

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

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

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

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

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

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Accumulated depreciation 49,573 39,025 39,887 137,153

On January 1, 2026, we acquired a 15 percent ownership interest in Colstrip Units 3 & 4 from Avista and a 25 percent ownership interest in Colstrip Units 3 & 4 from Puget, bringing our total ownership interest in Colstrip Units 3 & 4 to 55 percent.

See Note 5 - Regulatory Matters for further discussion regarding these acquisitions.

(8) Asset Retirement Obligations

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During the twelve months ended December 31, 2025, our ARO liability decreased $ 3.8 million for partial settlement of the legal obligations at our jointly-owned coal-fired generation facilities and natural gas pipeline segments.

Additionally, during the twelve months ended December 31, 2024, our ARO liability decreased $ 0.3 million related to changes in both the timing and amount of retirement cost estimates.

Additionally, during the twelve months ended December 31, 2025, our ARO liability increased $ 2.2 million related to changes in both the timing and amount of retirement cost estimates and liabilities incurred.

In addition, we have identified removal liabilities related to our electric and natural gas transmission and distribution assets that have been installed on easements over property not owned by us.

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

The ARO liability is not

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

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.

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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.

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.

For the year ended December 31, 2025, goodwill increased $ 10.0 million.

See Note 4 - Acquisition of Energy West O perations for additional information.

Goodwill by segment is as follows (in thousands):

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

On April 11, 2025, we amended our Term Loan to extend the maturity date from April 11, 2025 to April 10, 2026 .

On September 29, 2025, we amended our Term Loan to increase the total commitment to $ 150.0 million.

As of December 31, 2025, we have borrowed $ 150.0 million under the Term Loan and the proceeds were used for general corporate purposes.

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 .

The Amended Facility does not amortize and is unsecured.

On January 24, 2025, NW Corp amended its existing $ 400.0 million revolving credit facility (NW Corp Credit Facility) to increase the capacity to $ 425.0 million.

The NW Corp Credit Facility has a maturity date of November 29, 2028 and this facility does not amortize and is unsecured.

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

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

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

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

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

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

The Swingline Facility does not amortize and is unsecured.

Borrowings may be made at interest rates equal to (a) SOFR, plus a margin of 90.0 basis points, or (b) a base rate, plus a margin of 12.5 basis points.

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

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

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

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

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

The NW Corp Credit 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 $ 75.0 million.

We have a $ 200.0 million unsecured revolver credit facility with base sublimits of $ 50.0 million for NorthWestern Energy Group and $ 150.0 million for NWE Public Service (the HoldCo and NWE Public Service Credit Facility).

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

Upon the completion of the holding company reorganization on January 1, 2024, this credit facility became effective.

The HoldCo and NWE Public Service Credit Facility has uncommitted features that allow both NorthWestern Energy Group and NWE Public Service to request one-year extensions to the maturity date and increase the size of the credit facility by an additional $ 50.0 million.

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Unsecured revolving line of credit, expiring November 2028 $ 625.0 $ 600.0

Unsecured revolving line of credit, expiring April 2024 — 100.0

Unsecured revolving line of credit, expiring March 2025 — 25.0

Amounts outstanding at December 31:

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The facilities also contain covenants which, among other things, limit our ability to engage in any consolidation or merger or otherwise liquidate or dissolve, dispose of property, and enter into transactions with affiliates.

A default on the Montana First Mortgage Bonds would trigger a cross default on the Amended Facility;

however, a default on the Amended Facility would not trigger a default on the Montana First Mortgage Bonds.

A default on the South Dakota First Mortgage Bonds would trigger a cross default on the NWE Public Service sublimit of the HoldCo and NWE Public Service Credit Facility;

however, a default on the HoldCo and NWE Public Service Credit Facility would not trigger a default on the South Dakota First Mortgage Bonds.

As it relates to the pending merger with Black Hills, we anticipate requesting a waiver to allow for the closing of the merger.

A default on the NW Corp Montana First Mortgage Bonds would trigger a cross default on the Amended Facility;

however, a default on the Amended Facility would not trigger a default on the NW Corp Montana First Mortgage Bonds.

A default on the NWE Public Service South Dakota First Mortgage Bonds would trigger a cross default on the NWE Public

Service sublimit of the HoldCo and NWE Public Service Credit Facility;

however, a default on the HoldCo and NWE Public Service Credit Facility would not trigger a default on the NWE Public Service South Dakota First Mortgage Bonds.

(13) Long-Term Debt and Finance Leases

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South Dakota—4.22% 2044 30,000 30,000

South Dakota—4.30% 2052 20,000 20,000

Montana—5.01% 2025 — 161,000

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Other Long Term Debt:

Discount on Notes and Bonds and Debt Issuance Costs, Net — ( 12,367 ) ( 13,075 )

Premium on Notes and Bonds and Debt Issuance Costs, Net ( 12,653 ) ( 12,367 )

Total Long-Term Debt $ 3,286,007 $ 2,995,293

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Total Long-Term Finance Leases $ — $ 1,865

First Mortgage Bonds and Pollution Control Obligations

The South Dakota First Mortgage Bonds are a series of general obligation bonds issued under our South Dakota indenture.

These bonds are secured by substantially all of our South Dakota and Nebraska electric and natural gas assets.

The South Dakota indenture was transferred from NW Corp to NWE Public Service upon the completion of the holding company reorganization on January 1, 2024.

The Montana First Mortgage Bonds are a series of general obligation bonds issued under our Montana indenture.

These bonds are secured by substantially all of our Montana electric and natural gas assets.

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

On this same day, we issued and sold $ 31.0 million

aggregate principal amount of South Dakota First Mortgage Bonds at a fixed interest rate of 5.57 percent maturing on March 30, 2033 .

On May 1, 2023, we issued and sold an additional $ 30 million aggregate principal amount of South Dakota First Mortgage Bonds at a fixed interest rate of 5.42 percent maturing on May 1, 2033 .

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

Proceeds were used to repay a portion of our outstanding borrowings under our revolving credit facilities and for other general corporate purposes.

On June 29, 2023, the City of Forsyth, Rosebud County, Montana issued $ 144.7 million principal amount of Pollution Control Revenue Refunding Bonds (2023 Pollution Control Bonds) on our behalf.

The 2023 Pollution Control Bonds were issued at a fixed interest rate of 3.88 percent maturing on July 1, 2028 .

The proceeds of the issuance were loaned to us pursuant to a Loan Agreement and were deposited directly with U.S.

Bank Trust Company, National Association, as trustee, for the redemption of the 2.00 percent, $ 144.7 million City of Forsyth Pollution Control Revenue Refunding Bonds due on August 1, 2023 that had previously been issued on our behalf.

Pursuant to the Loan Agreement, we are obligated to make payments in such amounts and at such times as will be sufficient to pay, when due, the principal and interest on the 2023 Pollution Control Bonds.

Our obligations under the Loan Agreement are secured by delivery of a like amount of our Montana First Mortgage Bonds, which are secured by our Montana electric and natural gas assets.

So long as we are making payments under the Loan Agreement, no payments under these mortgage bonds will be due.

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

First Mortgage Bonds

The South Dakota First Mortgage Bonds are a series of general obligation bonds issued under NWE Public Service's South Dakota indenture.

These bonds are secured by substantially all of NWE Public Service's South Dakota and Nebraska electric and natural gas assets.

The Montana First Mortgage Bonds are a series of general obligation bonds issued under NW Corp's Montana indenture.

These bonds are secured by substantially all of NW Corp's Montana electric and natural gas assets.

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.

Proceeds were used to redeem NW Corp's $ 100.0 million of Montana First Mortgage Bonds 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.

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

On March 21, 2025, and November 7, 2025, NW Corp issued and sold $ 400.0 million and $ 100.0 million, respectively, aggregate principal amount of Montana First Mortgage Bonds at a fixed interest rate of 5.07 percent maturing on March 21, 2030 .

These bonds were issued and sold to certain initial purchasers without being registered under the Securities Act of 1933, as amended (Securities Act), in reliance upon exemptions therefrom in compliance with Rule 144A under the Securities Act, or under Regulation S under the Securities Act for sales to non-U.S.

The proceeds from the March 2025 issuance were utilized to redeem NW Corp's $ 161.0 million of 5.01 percent Montana First Mortgage Bonds due May 1, 2025 and $ 75.0 million of 3.11 percent Montana First Mortgage Bonds due July 1, 2025 , and for general utility purposes.

The proceeds from the November 2025 issuance, which included $ 2.1 million of debt premium, were used for general utility purposes.

On May 1, 2025, NWE Public Service issued and sold $ 100.0 million aggregate principal amount of South Dakota First Mortgage Bonds at a fixed interest rate of 5.49 percent maturing on May 1, 2035 .

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

Proceeds were utilized to repay at maturity $ 64.0 million of NWE Public Service's 5.01 percent South Dakota First Mortgage Bonds due on May 1, 2025 and for other general utility purposes.

As of December 31, 2025, we were in compliance with our financial debt covenants.

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(14) Income Taxes

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

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

Year Ended December 31,

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Investment tax credits 1,146 1,970 ( 129 )

( 41 ) ( 1,971 ) 3,363

560 3,785 ( 2,869 )

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

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

State and other

Current 37 ( 41 ) ( 1,971 )

Deferred ( 2,444 ) 560 3,785

Income Tax Expense (Benefit) $ 6,473 $ ( 9,439 ) $ 7,539

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

Year Ended December 31,

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Adjustments to other noncurrent liabilities, regulatory assets, and liabilities ( 48,328 ) ( 65,596 ) ( 54,732 )

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

Tax (benefit) expense allocated to other comprehensive income

( 293 ) ( 91 ) 217

Tax benefit allocated to other comprehensive income ( 206 ) ( 293 ) ( 91 )

Adjustments to deferred income taxes for production tax credit cash transfer 13,078 7,692 —

Investment tax credits 1,146 1,970 ( 129 )

Deferred tax (benefit) expense

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

Deferred Tax Expense (Benefit) $ 20,196 $ ( 1,277 ) $ 6,585

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.

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When the flow-through method of accounting for temporary differences is reflected in regulated revenues, we record deferred income taxes and establish related regulatory assets and liabilities.

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

Year Ended December 31,

2024 2023 2022

Federal statutory rate 21.0 % 21.0 % 21.0 %

State income tax, net of federal provisions 0.2 0.3 0.3

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 )

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 —

Other, net 0.7 ( 0.1 ) ( 0.2 )

Effective tax rate ( 4.4 ) % 3.7 % ( 0.3 ) %

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

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

The table below reconciles our effective income tax rate to the federal statutory rate and 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).

Our income from continuing operations is primarily from domestic operations.

Year Ended December 31,

2025 2024 2023

(in percent) (in dollars)

Income before income taxes $ 187,565 $ 214,672 $ 201,670

Income tax calculated at federal statutory rate 39,389 21.0 % 45,081 21.0 % 42,350 21.0 %

Permanent or flow through adjustments:

State income, net of federal provisions 374 606 562

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

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

State income tax, net of federal provision (1)

( 1,500 ) ( 0.8 ) 374 0.2 606 0.3

Production tax credits ( 5,946 ) ( 3.2 ) ( 11,069 ) ( 5.2 ) ( 10,274 ) ( 5.1 )

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

Reduction to previously claimed alternative minimum tax credit — — — — 3,186 1.6

Other 656 0.4 695 0.3 ( 129 ) ( 0.1 )

Impact of utility ratemaking on income taxes

Flow-through repairs deductions ( 30,956 ) ( 16.5 ) ( 23,132 ) ( 10.8 ) ( 25,922 ) ( 12.9 )

Amortization of excess deferred income taxes ( 3,169 ) ( 1.7 ) ( 2,930 ) ( 1.4 ) ( 2,184 ) ( 1.1 )

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

( 1,349 ) ( 0.7 ) ( 2,570 ) ( 1.2 ) ( 2,122 ) ( 1.1 )

Plant and depreciation of flow through items 16,827 9.0 9,360 4.4 6,595 3.3

Gas repairs safe harbor method change — — ( 6,994 ) ( 3.3 ) — —

Changes in Unrecognized Tax Benefits

Release of unrecognized tax benefits ( 7,407 ) ( 4.0 ) ( 16,888 ) ( 7.9 ) ( 3,241 ) ( 1.6 )

Interest and penalties

( 3,039 ) ( 1.6 ) ( 1,500 ) ( 0.7 ) 1,500 0.7

Nontaxable and nondeductible items 2,878 1.5 367 0.2 354 0.2

Unregulated Tax Cuts and Jobs Act excess deferred income taxes — — — — ( 3,385 ) ( 1.7 )

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

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

Other 89 0.1 ( 233 ) 0.0 205 0.2

( 32,916 ) ( 17.5 ) ( 54,520 ) ( 25.4 ) ( 34,811 ) ( 17.3 )

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.

Income Tax Expense (Benefit) and Effective Tax Rate $ 6,473 3.5 % $ ( 9,439 ) ( 4.4 ) % $ 7,539 3.7 %

(1) For all years presented, the state of Montana comprises the majority of the domestic state income taxes, net of federal provisions.

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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Reserves and accruals 1,482 2,252

Other, net 3,369 2,677

Deferred Tax Asset 277,116 295,486

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Goodwill amortization ( 92,009 ) ( 89,827 )

Pension / postretirement benefits ( 1,885 ) —

Regulatory assets and other ( 30,189 ) ( 22,729 )

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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, $ 2.6 million in 2043, and $ 11.1 million in 2044.

$ 0.8 million in 2035, $ 10.9 million in 2036, $ 11.0 million in 2037, $ 10.9 million in 2038, $ 11.4 million in 2039, $ 13.1 million in 2040, $ 11.5 million in 2041, $ 13.2 million in 2042, $ 2.6 million in 2043, $ 2.3 million in 2044, and $ 1.8 million in 2045.

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

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Unrecognized Tax Benefits at December 31 $ — $ 9,612 $ 28,074

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.

During the years ending December 31, 2025 and 2024, due to the expiration of the statute of limitations we decreased our unrecognized tax benefits by $ 9.6 million and $ 16.9 million, respectively.

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 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.

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.

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

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

As of December 31, 2025, we have no accrual for the payment of interest and penalties in the Consolidated Balance Sheets.

As of December 31, 2024, we had $ 3.0 million accrued for the payment of interest and penalties.

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During the first quarter of 2023 the IRS commenced and concluded a limited scope examination of our 2019 amended federal income tax return.

This examination resulted in a reduction to our previously claimed alternative minimum tax credit refund that is reflected in the table above.

This examination resulted in a reduction to our previously claimed alternative minimum tax credit refund that is reflected in the effective income tax rate reconciliation table above.

(15) Comprehensive Income (Loss)

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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.

The pension plan for our South Dakota and Nebraska employees is referred to as the NorthWestern Energy SD/NE Plan, the pension plan for our Montana employees is referred to as the NorthWestern Energy MT 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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Interest cost 20,001 22,944 512 557

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

Actuarial gain ( 11,063 ) ( 28,499 ) ( 1,590 ) ( 2,514 )

Settlements (1)

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Total $ ( 295 ) $ ( 31,835 ) $ 8,489 $ 4,944

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

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

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

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

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

(1) In August 2025, we entered into a group annuity contract with an insurance company to provide for the payment of pension benefits to select NorthWestern Energy MT Pension Plan participants.

We purchased the contract with $ 221.4 million of plan assets, representing 92 percent of the settled benefit obligation.

The insurance company took over the payments of these benefits starting November 1, 2025.

As a result of this transaction, during the twelve months ended December 31, 2025, we recorded a non-cash, non-operating settlement charge of $ 1.2 million.

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As such, this charge was deferred as a regulatory asset on the Consolidated Balance Sheets, with a corresponding decrease to operating and maintenance expense on the Consolidated Statements of Income.

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

The actuarial gain/loss is generally due to discount rate assumptions and actual asset returns compared with expected amounts.

In the case of the NorthWestern Energy MT Pension Plan the actuarial gain/loss is mainly related to demographic changes as a result of the annuitization mentioned above.

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):

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Expected return on plan assets ( 18,882 ) ( 25,325 ) ( 25,932 ) ( 1,418 ) ( 1,280 ) ( 1,096 )

Amortization of prior service cost (credit) — — — — 116 ( 1,891 )

Amortization of prior service cost — — — — — 116

Recognized actuarial loss (gain) — 33 228 ( 275 ) ( 73 ) ( 672 )

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Net Periodic Benefit Cost (Credit) Recognized $ 10,516 $ 8,169 $ 8,585 $ ( 793 ) $ ( 307 ) $ ( 95 )

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

(1) Settlement losses are related to partial annuitizations of the NorthWestern Energy MT Pension Plan.

(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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Two of these assumptions have the most impact on the level of cost:

(1) discount rate and (2) expected rate of return on plan assets.

(1) discount rate and (2) expected rate of return on plan

During 2022, the plan's actuary conducted an experience study to review five years of plan experience and update these assumptions.

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

During 2025, an increase in the discount rate of the MT Pension Plan due to the annuitization discussed above, partially offset by a decrease in the discount rate of SD/NE Pension Plan, resulted in an overall decrease to our projected benefit obligation of approximately $ 0.1 million.

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

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

Based on the target asset allocation for our pension assets and future expectations for asset returns, we increased 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 6.3 percent and 4.96 percent, respectively, for 2026.

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 MT Pension Plan investments over full market cycles;

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

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

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In the optimization study, assumptions are formulated about characteristics, such as expected asset class investment returns, volatility (risk) and correlation coefficients among the various asset classes, and making adjustments to reflect future conditions expected to prevail over the study period.

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

Based on this, the target asset allocations established, within an allowable range of plus or minus 3 - 8.5 percent (depending on investment category), is as follows:

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

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Fixed income securities 45.0 % 45.0 % 90.0 % 90.0 % 40.0 % 40.0 %

fixed income securities — — — — — —

Opportunistic fixed income 11.0 11.0 3.0 3.0 — —

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Cash and cash equivalents (1)

Fixed income securities (1)

4.7 % — % 0.9 % 0.8 % 0.4 % 0.3 %

Fixed income securities (2)

37.9 43.7 89.0 89.4 30.8 32.2

Opportunistic fixed income 9.1 11.1 3.0 2.9 — —

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15.0 6.2 — — — —

(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.

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

(1) Includes a substantial required cash allocation for the NorthWestern Energy MT Pension Plan related to a new overlay strategy designed to mitigate interest rate risk.

Cash and cash equivalents, for purposes of this strategy, would be considered fixed income securities as it relates to target investment allocations.

(2) While some of the actual asset allocations above differ from established target allocations as of December 31, 2025, the plan Investment Manager has 60 days to initiate action to rebalance portfolios, when allocations fall out of acceptable ranges.

While target allocations are the goal, both plan liquidity needs and investment liquidity terms (particularly as they pertain to the NorthWestern Energy MT Pension Plan annuitization mentioned above) may cause temporary imbalances to occur.

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

The guidelines allow for a transition to targets over time as assets are reallocated to newly-approved asset classes of opportunistic fixed income and private real estate.

Both plan liquidity needs and investment liquidity terms may affect the timing of rebalancing.

Investment policy guidelines allow for a transition to targets over time.

Debt securities consist of U.S.

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Equity investments may also be diversified across investment styles such as growth and value.

Derivatives, options and futures are permitted for the purpose of

reducing risk but may not be used for speculative purposes.

Derivatives, options and futures are permitted for the purpose of reducing risk but may not be used for speculative purposes.

Real estate investments will consist of global equity or debt interests in tangible property consisting of land, buildings, and other improvements in commercial and residential sectors.

Our plan assets are primarily invested in common collective trusts (CCTs), which are invested in equity and fixed income securities.

In accordance with our investment policy, these pooled investment funds must have an adequate asset base relative to their asset class and be invested in a diversified manner and have a minimum of three years of verified investment performance experience or verified portfolio manager investment experience in a particular investment strategy and have management and oversight by an investment advisor registered with the SEC.

Investments in a collective investment vehicle are valued by multiplying the investee company’s net asset value per share with the number of units or shares owned at the valuation date.

Net asset value per share is determined by the trustee.

Investments held by the CCT, including collateral invested for securities on loan, are valued on the basis of valuations furnished by a pricing service approved by the CCT’s investment manager, which determines valuations using methods based on quoted closing market prices on national securities exchanges, or at fair value as determined in good faith by the CCT’s investment manager if applicable.

The funds do not contain any redemption restrictions.

The following tables set forth, both by level within the fair value hierarchy and by net asset value (NAV) as a practical expedient, the assets (in thousands) that were accounted for on a recurring basis:

December 31, 2025

Level 1 Level 2 Level 3 Total Investments Measured at Fair Value (1)

Total Investments Measured at NAV (Common Collective Trusts) Total Investments

Cash and cash equivalents $ — $ — $ — $ — $ 7,418 $ 7,418

Fixed income securities — 13,542 — 13,542 88,975 102,517

Opportunistic fixed income — — — — 14,965 14,965

Global equities — — — — 52,660 52,660

Private real estate — — — — 22,079 22,079

Total investments $ — $ 13,542 $ — $ 13,542 $ 186,097 $ 199,639

What changed 10-K

Item 9A. Controls and Procedures