Executive Summary

Q4 2024 was operationally solid but mixed financially: revenue rose 4.9% year over year to $373.5M while GAAP EPS declined 4.4% to $1.31; adjusted EPS was $1.13 vs $1.38 in Q4 2023, with weather, insurance, non‑recoverable supply costs, depreciation and interest offsetting rate relief and higher transmission revenues .
Full-year 2024 GAAP EPS was $3.65 and adjusted EPS was $3.40, up 13.4% and 4.0% respectively, driven by Montana/South Dakota rate outcomes, higher electric transmission revenues, and tax benefits (unrecognized tax benefit release and gas repairs method), partially offset by supply costs and higher O&M, depreciation and interest .
Management affirmed 4–6% long-term EPS and rate base growth and raised the quarterly dividend 1.5% to $0.66; a 2025–2029 capital plan of ~$2.7–$2.74B (+11% vs prior plan) will be funded with cash from operations and secured debt, with no equity expected for the base plan; 2025 EPS guidance will be provided after the Montana rate review .
Strategic catalysts: (1) two Montana data center LOIs (75 MW in 2026 growing to 150 MW; 50 MW in 2027 growing to 250 MW+), (2) planned no‑cost acquisition of 592 MW of additional Colstrip capacity by YE 2025 (operations beginning 1/1/2026), (3) North Plains Connector transmission opportunity (10% potential ownership), all positioning NWE to support large-load growth and moderate rates longer-term .

What Went Well and What Went Wrong

What Went Well
- New base rates in Montana and South Dakota and stronger electric transmission revenues supported utility margin; full-year GAAP EPS rose to $3.65, adjusted EPS to $3.40 .
- Yellowstone County Generating Station entered service in October 2024, improving reliability and reducing market purchases; MT Supreme Court reinstated the air quality permit on Jan 3, 2025 .
- CEO on strategic progress: “We substantially completed our 175MW Yellowstone County Generating Station… announced plans to invest in several regional transmission projects… and entered into an agreement to acquire incremental Colstrip ownership… These actions have opened the door to large-load customers like the two recently announced data centers” .
What Went Wrong
- Q4 earnings down YoY on unfavorable weather, higher insurance (wildfire premiums), depreciation and interest, plus non‑recoverable electric supply costs; Q4 adjusted EPS fell to $1.13 from $1.38 .
- Montana interim rates were only partially approved (effective 12/1/24), contributing to under-earning and credit metric pressure; management noted FFO/debt dipped below the >14% “downside threshold” at YE before expected improvement with final rates .
- Persistent headwinds from non-recoverable supply costs and a less favorable QF liability adjustment reduced net income vs prior periods .

Financial Results

Quarterly trend: Q2 2024 → Q3 2024 → Q4 2024

Metric	Q2 2024	Q3 2024	Q4 2024
Operating Revenues ($M)	$319.9	$345.2	$373.5
Utility Margin ($M)	$243.4	$257.3	$278.8
Operating Income ($M)	$61.6	$67.9	$91.7
Net Income ($M)	$31.7	$46.8	$80.6
GAAP EPS ($)	$0.52	$0.76	$1.31
Adjusted Diluted EPS ($)	$0.53	$0.65	$1.13

Q4 YoY comparison and estimates

Metric	Q4 2023	Q4 2024	YoY	Vs. Estimates
Operating Revenues ($M)	$356.0	$373.5	+4.9%	N/A – S&P Global consensus unavailable (see Estimates Context)
Utility Margin ($M)	$257.8	$278.8	+8.1%	N/A – S&P Global consensus unavailable
Operating Income ($M)	$103.2	$91.7	-11.1%	N/A – S&P Global consensus unavailable
Net Income ($M)	$83.1	$80.6	-3.1%	N/A – S&P Global consensus unavailable
GAAP EPS ($)	$1.37	$1.31	-4.4%	N/A – S&P Global consensus unavailable
Adjusted Diluted EPS ($)	$1.38	$1.13	-18.1%	N/A – S&P Global consensus unavailable

Segment breakdown (Q4)

Segment Utility Margin ($M)	Q4 2023	Q4 2024
Electric	$200.0	$218.3
Natural Gas	$57.8	$60.5
Total	$257.8	$278.8

Selected KPIs and balance sheet (FY)

KPI	FY 2023	FY 2024
Funds From Operations ($M)	$373.6	$425.7
Total Capital Investment ($M)	$562.1	$548.0
Debt / Total Capitalization (%)	50.0%	52.0%
Net Liquidity ($M)	$241.2	$191.3
Effective Tax Rate (%)	3.7%	(4.4%)

Notes:

Q4 drivers: base rates (+), higher transmission revenues (+), tax benefits (+) vs insurance, depreciation, interest, mild weather, and non‑recoverable supply costs (−) .
Weather detriment: estimated $8.3M pre‑tax in Q4 vs normal; adjusted out in non‑GAAP .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Long‑term EPS growth	5‑yr	4%–6%	4%–6% (baseline FY24 adj EPS $3.40)	Maintained
Long‑term rate base growth	5‑yr	4%–6%	4%–6%	Maintained
5‑yr Capital Plan	2025–2029	Prior plan not quantified here (company states +11%)	~$2.74B (presentation) / ~$2.7B (press release)	Raised (+11%)
Dividend	Quarterly	$0.65 (Q3 declared)	$0.66 (payable 3/31/25)	Raised 1.5%
2025 EPS guidance	FY 2025	N/A	To be provided after Montana rate review outcome	Deferred
Effective tax rate	FY 2025	N/A	13%–17%	New framework

Financing: “No equity expected” to fund the current $2.74B plan; target FFO/Debt >14% (management acknowledged YE 2024 below 14% due to interim rate outcomes, with a path to improvement) .

Earnings Call Themes & Trends

Topic	Q2 2024 (Q‑2)	Q3 2024 (Q‑1)	Q4 2024 (Current)	Trend
Rate cases / regulatory	Filed rate reviews in all jurisdictions; interim MT rates sought	Interim MT rate relief delayed; guidance revised	Partial interim MT rates effective 12/1/24; settlement talks underway (rebuttal March, hearing Apr 22)	Improving visibility; outcome key to 2025 guidance
Transmission (NPC)	Considering investment; GRIP $700M award to consortium	GRIP grant reiterated	Signed MOU for 10% ownership; permitting/filings; EO may delay grant disbursement up to 90 days	Advancing toward commercial agreements in 2025
Generation (YCGS, Colstrip)	YCGS in‑service expected Q3	YCGS placed in service Oct 2024	YCGS in service; plan to acquire +592 MW Colstrip by 12/31/25 (ops 1/1/26)	Reliability/capacity positioning for large loads
Large loads / Data centers	—	LOIs developing (implicit)	Two LOIs: Atlas Power (75→150 MW) and a developer (50→250+ MW) under existing tariffs; PSC inquiry acknowledged	Building pipeline; potential rate moderation
Taxes / non‑GAAP	—	Q3 tax method change benefit ($7M)	Q4 release of unrecognized tax benefit ($16.9M net); 2025 ETR 13–17%	One‑time tax tailwind in 2024; normalize in 2025
Insurance / wildfire risk	—	—	Higher wildfire-related insurance costs cited; legislative effort to limit noneconomic/punitive damages	Cost headwind; policy mitigation sought
Credit / funding	—	—	No equity for base plan; YE 2024 FFO/debt <14% given MT interim outcome; plan to improve	Manageable with rate outcomes

Management Commentary

CEO (press release): “We… substantially completed our 175MW Yellowstone County Generating Station… announced plans for regional transmission projects… and entered into an agreement to acquire incremental Colstrip ownership… These actions have opened the door to large-load customers like the two recently announced data centers…” .
CFO on Q4/2024 drivers: Q4 GAAP EPS $1.31, adjusted EPS $1.13, with mild weather (-$0.10) and a $0.28 tax benefit adjusted out; full-year adjusted EPS $3.40 (+4% YoY) despite insurance cost headwinds and a difficult MT interim rate decision .
CEO on Colstrip and large loads: acquisitions move portfolio from short to long capacity, enabling service to new data centers under existing tariffs, moderating rates by spreading fixed costs .
CFO on Montana rate review: intervenor testimony “reasonable… sets the base for constructive settlement negotiations”; rebuttal early March; settlements due March 24; hearing April 22 .

Q&A Highlights

Growth base and 2025 trajectory: Management reaffirmed commitment to 4–6% long-term EPS growth off 2024 base; expects to be within range in 2025 but deferred formal guidance pending Montana outcome .
Data center tariffs/regulatory process: PSC inquiry acknowledged; company argues customer benefits via excess capacity (Colstrip, YCGS) and rate moderation; willing to work on tailored tariffs while asserting existing tariffs can serve near term .
NPC milestones: Aim to move from LOI to commercial agreements by mid/3Q 2025; capital commitment expected in back half of five-year window .
Credit metrics and lag: YE 2024 FFO/debt fell below 14% due to partial interim relief; management cites path to >14% with final rate outcomes and cost control .
Ability to earn authorized ROE: Montana’s historic test year introduces structural lag; focus on closing the gap via constructive outcomes; contrasts with more efficient SD process .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable at time of analysis due to access limits; therefore, no “vs. estimates” comparisons are provided. We will update upon availability from S&P Global.

Key Takeaways for Investors

Regulatory outcome is the near-term stock driver: constructive Montana settlement/final order could reset earnings cadence, lift FFO/debt back >14%, and unlock 2025 EPS guidance .
Long-term growth framework intact: 4–6% EPS and rate base growth reaffirmed off a 2024 adjusted baseline; dividend increased to $0.66 with a 60–70% payout target over time .
Capital plan upsize without equity: ~$2.7–$2.74B five-year plan (+11% vs prior) to be funded with cash from operations and secured debt; potential equity only for incremental opportunities (e.g., larger transmission or generation) .
Large-load optionality building: two Montana data center LOIs (total up to ~400 MW by 2030) plus planned Colstrip capacity increase can moderate customer rates and support earnings consistency as loads ramp .
Watch headwinds: elevated insurance/wildfire costs, non-recoverable supply costs, interest expense, and regulatory lag weighed on Q4; management is pursuing cost control and policy remedies (wildfire liability reform) .
Transmission upside: NPC and Southwest MT corridor could add regulated investment visibility; 2025 focus is on moving to commercial agreements .
Tax normalization: 2024 benefited from discrete tax items (unrecognized tax benefit release and gas repairs method); 2025 ETR expected 13–17%, implying less tax tailwind ahead .

NorthWestern Energy Group, Inc. (NWE)·Q4 2024 Earnings Summary