NorthWestern Energy Group, Inc.

Excuse me, 2025. My name is Travis Meyer and I'm the Director of Corporate Development and Investor Relations Officer for Northwestern. Joining us on the call today are Brian Bird, President and Chief Executive Officer, and Crystal Lael, Chief Financial Officer. Brian and Crystal will be walking us through the results and providing a little more color on a very solid quarter. Northwestern's results have been released, and the release is available on our website at northwesternenergy.com. We also released our 10-Q premarket this morning. Please note that the company's press release, this presentation, comments by presenters, and responses to your question may contain forward-looking statements. As such, I will direct you to the disclosures contained in our SEC filings and the safe harbor provisions included on the second slide of this presentation. Also note that this presentation includes non-GAAP financial measures. Please see the non-GAAP disclosures, definitions, and reconciliations included in the presentation. The webcast is being recorded. The archived replay will be available shortly after the event and remain active for one year. Please visit the financial results section of our webcast to access the replay. With that, I'll hand it over to Brian Bird for his opening remarks.

Thanks, Travis. The recent highlights For the quarter reported gap diluted EPS of $1.25 and non-gap diluted EPS of $1.22. We are affirming our long-term rate base and earnings per share growth rate targets of four to 6%. We've completed our debt financing needs for 2025. And again, we'll stress, we have no planned equity to finance our current five-year capital investment. From a dividend declaration standpoint, We declared a 66 per share payable June 30, 2025 dividend to shareholders of record as of June 13, 2025. The Montana rate reviews nearing completion. We have a full natural gas settlement reached with major interveners and a partial electric settlement reached as well. And I think you know the hearing starts on June 9th. And lastly, the Montana legislature has passed wildfire and other constructive bills now pending the governor's approval. As we start presentation day, before we get into the quarterly results, just remind folks of the value proposition for Northwestern. Starting with a 5% dividend yield is very, very attractive, as you know. Add to that a 4% to 6% EPS growth, a great investment, as you know, in the next five years across our total business. provides a 9% to 11% total growth profile. We do believe there are opportunities with data centers and new large load opportunities to actually potentially achieve greater than 6% EPS growth. In addition to that, there's FERC regional transmission, incremental generating capacity, and transmission capacity associated with meeting new large load opportunities, which could result in greater than 11% total growth returns. And with that, I am going to pass it over to Crystal to talk about the first quarter.

Thank you, Brian, and good afternoon, everyone. Thank you for joining us here in our update. In my comments today, I will cover a few things, updates since we last talked at our year-end earnings call in February. As Brian highlighted, we've been busy. So it's been a busy couple of months. So our first quarter 2025 results, I'll give you more detail on those. Also update you, and Brian mentioned a couple of our financing execution in the last couple of months, also providing a bit more additional insight into our key regulatory proceedings and update you on our 2025 outlook. We delivered a solid first quarter driven by strong margin contributions from both the electric and gas segments and ongoing consistent expense management. Moving to slide seven, this details the drivers of our earnings per share compared to the same period last year. We reported earnings of $1.25 on a GAAP basis as compared to $1.06 in the first quarter of 2024. These higher earnings were driven by rate recovery and colder weather, offset by operating costs, depreciation, and interest expense. Moving to slide eight for a bit more detail on how the margin increase breaks down. New rates, both via interim rates and also final base rates, drove 20 cents of margin improvement, which reflects impacts notably in all three of our jurisdictions. We also saw favorable loads of 13 cents during the first quarter here due to both colder weather, customer growth, and usage on our system. In addition, we continue to see favorable transition revenues of about 5 cents of contribution in the quarter, I would also note that the PCAM column here, or the non-recoverable Montana electric supply costs, while that looks like a small variance for the quarter, when you think about total impact there, we had a Q1 detriment this year of 2.7 million. I almost said 27 million, which as many of you who follow us know, that's what the total amount would be. The 10% sharing would be the 2.7 million impact as detriment this quarter. And this compared to 3 million of detriment in the prior quarter so first quarter of 2024 so comparatively only 300,000 of impact they're slightly favorable. But I would just highlight that we expect to see that as an ongoing trend here in 2025 of headwinds on the PCM front again cost being above that baseline and as I'll get into in a little more detail that remains an open item in our Montana rate review. So, again, concluding the earnings for the quarter on margin, significant improvement there on the backs of rate recovery really necessary to offset the costs that are already in place. Moving to slide nine, I highlighted already that weather was favorable during the quarter, so weather favorably impacted the first quarter by three cents. While in the first quarter of 2024, we had milder weather, so it was unfavorable by one cent, so that's a four cent swing between first quarter of 24 to first quarter of 2025. In addition, in the first quarter of 2024, there was net two cents of favorable adjustments that were backed out for other matters during the first quarter of 2024 that were one-time items. So on an adjusted basis, you'll see that our gap reported results for the quarter of $1.25, removing again favorable weather for the quarter of $0.03 to an adjusted earnings of $1.22. And that's a $0.13 improvement over the prior year. Those adjusted earnings were $1.09 in the prior year. And again, on the backs of favorable weather in the first quarter of 2025. Turning to financing activities on slide 10, we are happy to say that during March, we priced $500 million of long-term debt in two separate transactions. One was included in our disclosures in the 10Q detail on these, but 144A transaction and also a smaller first mortgage amount transaction in South Dakota. And with a bit of the volatility in the market, I'm glad to say we had solid investor interest close those out before maybe some of that volatility hit and those transactions successfully addressed. our financing needs for 2025. So in addition to that, I would also note that we consistent with our solid earnings performance in Q1, our cash flows match that. So you'll see that our FFO to debt metrics on a consolidated basis closed out the quarter just above our 14% threshold. And again, remaining focused on building cushion there to where we want to be from a long-term basis. But again, closing out our financing needs for 2025, and we feel good about having that work done So with slide 11, I will transition from talking about the financials for a regulatory update. So you all know the follow-ups that we submitted settlements in the Montana rate review here recently, and it was a partial settlement in the electric case with the remaining key contested issues related to the revenue requirement for the Yellowstone generating station facility and also the PCAM base. But we were able to reach a settlement on the base transition distribution and base generation costs. And of course, that was significant investment for us and on customers' behalf. Importantly, underlying that settlement, it maintains our existing electric ROE and also our as-filed capital structure. The slide here gives you significant detail, and I think there's more in the appendix on what that settlement looks like. And also, importantly, the bookends of the intervener position. So again, the contestant matters. detailed as the Yellowstone revenue requirement and also the PCAM base. And this slide gives you the bookends of what that looks like. Notably, even with the partial settlement, and if you include our position on those contested issues, the average bill impact is just over 4% to our customers. In addition, with the reduction in PCAMs, so putting Yellowstone into base rates, and reducing PKM, the supply mechanism related to that, it's an overall reduction in customer bills. So we feel really good with our position going into hearing to make that known to both the Commission and others, the value customers are receiving on the backs of that facility. Moving to slide 12, to talk about the gas settlement, it is a full settlement. and it has a slight increase in ROEs of 955 in the prior case to 96 in this one, and our as-filed capital structure, the average bill impact from this gas case is approximately 9%, maintaining rates below the national average. For these dockets, a hearing is scheduled in June, and we expect to implement rates in May. Following a hearing, a briefing schedule will be established with a final order we believe likely in late Q3 to potentially early Q4. Concluding my comments on the regulatory front and moving to our outlook slide here on slide 13, we believe we've made significant progress in 2025, and this provides a foundation for advancing critical customer objectives while balancing the importance of reliability and affordability to our customers, as well as the important part of delivering to our shareholders and supporting our long-term growth outlook. We are affirming, and I think Brian mentioned this up front, our long-term earnings and rate-based growth outlook. But as we've previously discussed, we don't expect to provide 2025 earnings guidance until conclusion of a hearing in the Montana Rate Review. However, we also wanted to be proactive in sharing how the timing impacts of that may affect our quarterly distribution of earnings in 2025. And obviously, many of you already have expectations out there for us for where you think our 2025 will land. And as noted in the regulatory update, we expect to implement updated rates in Montana in May versus, of course, incurring what is already a full year of cost associated with those new investments. This causes more of our quarterly distribution to be weighted in the second half of the year. As a result, we expect our second quarter to be a lower contribution to overall earnings than you would typically expect from us. And we have provided an indication of that earnings distribution here for the second quarter of 2025 to be approximately 10% contribution to the full year. I would also note that the first quarter was solid and slightly ahead of what would have been our expectations. So let me conclude my comments here and the outlook discussion by reinforcing our confidence in delivering on our earnings and rate-based growth commitments over the long term, which moves us to slide 14, And this is the capital slide you've seen before from us, our five-year capital plan and expected investments on our customers' behalf. We updated this in February, and the slide remains the same as to what you've seen before. So we are affirming our capital plan and on track for execution here in 25. And again, as Brian highlighted leading in, this is buys to need no equity, but also keeping both reliability and affordability for our customers in mind. So with that, I will turn it back to Brian.