Operator: Hello everyone. Thank you for joining us and welcome to the NorthWestern Energy Second Quarter 2026 Financial Results Webinar. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press one. To raise your hand. To withdraw your question, press one again. I will now hand the conference over to Travis Meyer, Director of Corporate Development and Investor Relations Officer. Travis? Please go ahead.
Travis Meyer: Thank you, Kendra. Good afternoon, and thank you for joining NorthWestern Energy Group's financial results webcast for the quarter ended June 30, 2026. Joining us on the call today are Brian Bird, President and Chief Executive Officer and Crystal Dawn Lail, chief financial officer. Brian and Crystal will walk us through the results, and provide an overall update on the great progress we have made this quarter. Before handing the call over, however, a few reminders regarding today's call. 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 questions may contain forward-looking statements. As such, I will direct you to the disclosures contained within our SEC filings in the Safe Harbor provisions included on the second slide of this presentation. Also note that this presentation includes non-GAAP financial measures and information regarding the pending merger transaction. See the non-GAAP disclosure, definitions, and reconciliations in the merger-related disclosures in the appendix of today's materials. The webcast is being recorded. An archived replay will be available shortly after the event and will remain active for one year. Please visit the financial results section of our website to access the replay. With those details behind us, I will hand the presentation over to Brian Bird for his opening remarks.
Brian Bird: Thank you, Travis, for recent highlights for the quarter. We reported GAAP diluted EPS of $0.40 and a non-GAAP diluted EPS of $0.50. We are also affirming our 2026 earnings guidance range of $3.68 to $3.83. And also affirming our long-term rate base and EPS growth rate targets of 4% to 6%. Regarding the merger, during the quarter, we received approvals from the Nebraska PSC, the South Dakota PUC, and FERC, We also had our Montana hearing, and the final briefing is now completed, and we are awaiting the final word. Lastly, in terms of dividend, we declared $0.67 per share payable September 1, 2026. You might note there is a change in the payment date and August 17 record date to make sure we align with Black Hills Corporation's dividend dates which was intended to simplify the closing mechanics in the merger. And with that, I am going to hand it over to Crystal to cover the second quarter financial review.
Crystal Dawn Lail: Thank you, Brian. I will begin my comments on Slide 7. In my comments today, I will cover our second quarter results, our 2026 earnings outlook and our capital plan. As Brian mentioned, for the second quarter, we delivered GAAP earnings of $0.40. $0.40 includes merger-related costs, costs related to incremental Colstrip ownership, and weather impacts. On an adjusted basis, we delivered $0.50 which reflects a $0.10 increase from 2025. Moving to Slide 8, on a year-to-date basis, we have GAAP earnings of $1.43 versus $1.60 in the prior period. On an adjusted basis, that is $1.81 versus $1.62 I will remind you that we started off the year with an unseasonably warm winter reflecting a significant adjustment to adjust out that weather impact for Q1 impacting our year-to-date results. Slide 9 moves to a bit more of the key drivers for the quarter in particular. Key drivers include improved margin net of weather, offset by higher costs, depreciation, and interest expense. Increased operating costs include $0.12 from incremental Colstrip ownership, which we spoke about a lot on our Q1 call, as to the impact of us owning those assets and the importance to resource adequacy. Moving to Slide 10, I will discuss in more detail our margin impact, including the $0.38 improvement over the prior period. Margin for the second quarter reflects new rates in Montana. We will remind you that we implemented rates in the rate review from 2024. And May 2025 toward the end. So you could see the continued improvement from that. And impacting the first half of the year for us. It also reflects the sales from the Puget Colstrip interest and growth in transmission revenues. Moving to Slide 11, to address our adjusted second quarter earnings, Again, as I alluded to, while the first quarter had a very significant weather impact, we returned to a closer to normal impact here. You will see weather was unfavorable by $0.01 versus normal. The quarter also included $0.04 of merger costs, and $0.05 of operating expenses from Colstrip that were not recovered. These adjustments move from $0.40 on a GAAP basis to $0.50 delivered on a non-GAAP adjusted basis versus $0.40 in the prior quarter of 2025 as compared and, again, noting that was really driven off of improved base rate recovery versus last year. Moving to Slide 12, as Brian indicated, we are pleased with our start to 2026 and it is in line with our expectations, and we are reaffirming our guidance. We have executed on the financing plans for the year, expect that to not have an impact in the back part of the year. Moving to Slide 13 and concluding my comments, our $3.2 billion capital plan from 2026 through 2030 remains on track and unchanged and is driven by the essential investments we need to meet our customers' needs. This plan does not include any incremental investment that may be driven by additional opportunities related to regional transmission growth or serving large loads, and we are excited to continue pursuing those opportunities. With that, I will turn it back to Brian for a further business update.
Brian Bird: Thanks, Crystal, my comments on Page 15. You know, specific to the merger with Black Hills and the benefits to stakeholders. We certainly have talked quite a bit about benefits to shareholders and certainly want to thank all of those who voted on the approval from a shareholder perspective of the transaction and acknowledge the overwhelming support. That also took place in the second quarter. And also, opportunity on this page, the center of the page, also remind folks that there is also substantial long-term value for customers. Not only are we bringing together two strong teams from a service perspective, we are gonna continue to provide great service on a going-forward basis on a combined basis. Not only that, any benefits that are accrued for putting these two companies together from a cost savings perspective that will ultimately accrue to customers in future rate reviews. Moving forward to Page 16, if you think about the timeline, we now have all the necessary approvals other than the MPSC's approval. As you note on this page, you see a lot of green checks. As a matter of fact, like we said earlier, shareholder approval, FERC, Nebraska, South Dakota, you think about, like, what was all done in the quarter, it was a pretty busy quarter from a merger perspective. We also as we sit here today, we are working extremely hard with our friends at Black Hills from an integration planning perspective. And so we are we are prepared. We would be prepared if, in fact, we do get approval from the Montana Commission to close and actually start providing the benefits of the merger to our customers and other stakeholders. Speaking of the decision, waiting on decision from the Montana Public Service Commission, we note on this slide that is the fourth quarter. I think people understand, from the timing that is in front of the commission that we believe that on our filing of our briefing in mid July, that we would see a decision sometime in 90 days or they can extend another 30 days, so 90 to 120 days we should see a decision. That should mean a decision sometime between mid October and mid November. And so we are certainly cautiously optimistic about that decision and working really hard so that we are prepared to provide benefits to stakeholders on a going-forward basis. If, in fact, we get that approval. Moving forward with data centers, we continue to work hard on the data center process on Page 17. I think you can see some change in the high-level assessments. We are still very active in terms of folks looking at primarily Montana and South Dakota. From a data center perspective. More importantly, we continue to work for those with those folks that we have development agreements with. And striving to get to ESAs with those parties. And as I mentioned on the prior quarter's call, I noted no guarantees, but I mentioned on that call, I do it again. No guarantees. Here. We still expect to have ESAs with that two of those three parties. And the reason it is two of those three, I said three last quarter, is that two parties, Quantica and Atlas, we still believe by year end, The issue where we sit here today with Sabey is they still are dealing with land procurement items. And so until that happens, it is difficult to say we would have an ESA done with them by the end of the year as we sit here today. We continue to work with all three parties and those parties in the both the data center request and high-level assessment to continue to move forward to ultimately have data center load that we can provide in Montana and South Dakota. Moving forward, just a little bit more on large load customers. Think you are also aware in March, of this year, we did submit our large new load tariff. The hope at that time when we filed it, we would be filing it with an ESA. We did not. We wanted to make sure that we were aware that we are trying to protect customers with this large load of tariffs, and we wanted to get that in front of the commission. it is there for people to see. In addition, we would like to when we do sign an ESA, file that with the large new tariff decision on that ESA as well. In South Dakota, any new large load customers, we require incremental capacity, but we do have an infrastructure rider there to help us with generation cost recovery. And the South Dakota PUC already has an established large load tariff that we can serve large load customers with. The one issue in South Dakota continues to be the sales tax issue on equipment purchases and we are hopeful in the upcoming legislative session that issue will be dealt with. On the right-hand side of the slide here, I continue to show from a megawatt perspective, each of those three entities in the development stage, nothing's necessarily changed there. So continue to forge ahead with them. On their current plans. Lastly, on slide 19, is our standalone value proposition with an approximate 4% dividend yield with our base capital plan, we can achieve a 4% to 6% EPS growth, ultimately, today provide an 8% to 10% total return. We are able to take an opportunity and execute on data center and other large load opportunities for regional transmission and any incremental generating capacity we should be able to grow at a faster rate and get above the 6% range, that plus that dividend yield I talked about earlier, around 4%, we could see total returns greater than 10%. Obviously, that is our standalone proposition. As we sit here today, we think we could be able to deliver a 5% to 7% EPS growth on a combined basis in our merger with Black Hills. that is ultimately what we believe is the best thing we can do from a shareholder perspective. But as I mentioned earlier, another thing we really want to do for customers particularly in this day and age where affordability is a key issue. We wanna make sure we continue to be as efficient as we can and even more so on a merged basis to provide those cost-saving benefits to customers on a going-forward basis. And with that, I will turn it back over to Kendra to conduct the Q&A session.
Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please standby while we compile the Q&A roster. Your first question from the line of Aidan Charles Kelly with JPMorgan Securities. Aidan, your line is open. You may now go ahead.
Aidan Kelly: Thanks. Hey, guys. Good afternoon. Thanks for the time today. Thanks, Ed. Yeah. Just want to hone in on the Quantica project first. I think many are focused on the quoted 7.2 GW interconnection request laid out there. I know, which is clearly a substantial number. And I understand when you capacity adjust, it could be closer to, like, the 3 GW range. But still clearly implies some upside beyond Phase 1 what you disclosed. So would just be curious to hear your take on the probability of realizing the full 7 GW and any physical considerations that come to mind here.
Brian Bird: I put in this context, Aidan, I do not wanna speak for Quantica here. I think as you noted, on the document we shared here, 1.1 GW is what we are talking about from a Quantica perspective. I think we all need to have success at these lower gigawatt levels. And if we are ultimately in an ESA perspective and we are moving forward with Quantica, we will let them talk about their relative success and how to ultimately build up to that level. But as we sit here today, we are focused on the 1.1 GW.
Aidan Kelly: Understood. Understood. Thanks, Brian. And then just maybe wanted to ask a high-level question on the Colstrip ownership pieces. You know, in the 10-Q, you guys lay out that the PCCAM tariff waiver was insufficient to contribute to the recovery of the O&M for the Avista share. Could you just remind us on the action plan for getting better protection on these costs? And how are you thinking about the timing there?
Crystal Dawn Lail: Hi, Aidan. I will take that 1. it is a fair question. We have laid out the impact year-to-date. And we do have a tariff waiver currently for how that the impact of those cells flows through PCAM. If you listen to the merger hearing, you would have heard a lot of commentary from the commission on their overall support for Colstrip. And their view on what that asset means to Montanans and keeping costs low. Our action plan eventually is to file a rate review and put that asset into base rates where it should be. The thing I would mention and remind you all of is we are waiting for a motion for reconsideration on our 2024 rate review. And by my clock here, we are close to July 2026. So we need to see that order. We are continuing to invest in Montana and to your point and action plan for ultimately adjudicating that piece of Colstrip with the commission. I think we will need to file a rate review to address that, and that is something that we are considering timing of. And meanwhile, the PCCAM docket where that tariff waiver sits, progresses. That was granted on an interim basis and we expect that docket to move through probably timeline of Q4 of this year and maybe end of or early of 27.
Aidan Kelly: Great. that is helpful. Thanks, Crystal. I will leave it there.
Crystal Dawn Lail: Thank you, Aidan.
Brian Bird: Thanks, Aidan.
Operator: Your next question from the line of Shahriar Pourreza. From Wells Fargo Securities. Shar, your line is open. You may now go ahead.
Whitney Mutalemwa: Good afternoon, Brian and Crystal. This is Whitney Mutalemwa on for Shahriar. Yep. Hi there. Hey. So I am looking through the IRP materials, and they show available import capacity on your transmission path declining through 2028 even before accounting for the large load pipeline Obviously, there is the North Plains Connector, and the utility has a 10% stake that is still contingent on permits. Is that 300 MW going to matter given how much load you are now discussing? Or does the real transmission answer have to be a bigger Bright Horizons-led project rather than a minority position in someone else's line?
Brian Bird: I would-- you know, I feel bad now I did not include our regional transmission material in our presentation, which we have certainly spoken about in the past. North Plains Connector is certainly something that we think is necessary. Our Montana to Idaho line that we are working with, we think is also crucial to provide capacity on a going-forward basis Those are in addition to some other opportunities. On path 8, is our current Colstrip line that we share with other partners that serve the West, there are opportunities to expand the capacity on that line. And that as you would expect is a little easier to do than other greenfield projects and even reconductoring. So there is some work on that line that we think is extremely easy to do on a relative basis to other opportunities, but we are gonna pursue those. We are also looking at Path 18 as an opportunity. But I would argue that there is a lot of transmission capacity that we are going to need, particularly if there is going to be growth in the Pacific Northwest and certainly in Montana. So we are excited about that opportunity and our ability to invest in transmission in a going-forward basis.
Whitney Mutalemwa: Sounds good. Well said. And then just to squeeze in a tiny question there has been a run of local pushback this quarter. There were the moratorium discussions in a couple of counties a couple of ballot petitions. Just zooming out, is that changing how you and developers approach siting? More preengagement, more flexibility on location, that kind of thing, or do you see it as pretty contained to a handful of communities? That will be all. Thank you.
Brian Bird: Yeah. I could spend half an hour talking on this topic I would say it this way. We as an industry and certainly the data centers themselves, and the developers that may be between the utilities and the data centers, we all need to do a better job in terms of communicating and working with communities to find out what the communities want not necessarily what we think they want. And I think there is a lot of misinformation about data centers. We believe data centers are gonna be great things for our service territory, and we think it is gonna help our communities. So many ways. We are gonna continue to be supportive of their efforts. But we have to work collectively as a group and demonstrate benefits in a more concise way so they understand that these are actually good projects that are going to help their communities. And so there is work to be done. I would argue that is something that is to be done in all states, not just the two states that we operate in from an electric perspective. Think it is more of an industry issue than just a NorthWestern Energy issue. There are certain states, of course, that support this. Support data centers, and we can certainly name those states. But even those are running into some public pushback, I think as we continue to educate folks around energy use, and around water use. I think what has been recently done here in terms of an acknowledgment by utilities and data centers that we are not gonna pass on higher cost to customers that data centers are going to pay their own way those commitments are going to help deal with some of these issues. But this is gonna be a continuing issue for the industry for some time.
Whitney Mutalemwa: All set. Thank you.
Brian Bird: Thank you.
Operator: Your next question from the line of Chris Ellinghaus. With Siebert Williams Shank. Chris, your line is open. Please go ahead.
Chris Ellinghaus: Hey, everybody.
Crystal Dawn Lail: Hey, Chris.
Brian Bird: Hey, Chris.
Chris Ellinghaus: Crystal, can you give us a breakdown of the weather adjustment by segment?
Crystal Dawn Lail: Chris, I think that is in our appendix, but I would remind you for Q2, it is only 1 cent. So it is pretty small. As it relates to the quarter. Obviously, a much bigger impact for Q1 as we saw really mild weather there. Travis might have it off top of his head.
Travis Meyer: And we have not disclosed that, Chris, by segment. I assume you are looking to electric gas, South Dakota, Montana. We do not disclose that. that is something we can consider in the future.
Chris Ellinghaus: But Okay. That would be helpful. The weather seems like it was pretty warm for July, certainly across Montana anyway, I saw Crystal, can you give us any sense of how you see the progression of the 2, you know, Puget and the Avista Colstrip pieces through the rest of the year, particularly with what the third quarter weather looks like so far?
Crystal Dawn Lail: Sure, Chris. And by the way, I will comment that I did see the you have come around to our way of thinking on the weather. So I do not know if that is been a 10- or 15-year running conversation, but glad to see we finally got you there. The next question is after a super-mild kind of winter weather in the whole Pacific Northwest and abnormal call it Q2 shoulder. What that had done, and we had talked a lot about market prices and the impact to finally being resource adequate in Montana. Having assets where we could sell into the market and seeing really low market prices that obviously continued through the first and second quarters. I will tell you here in July that we have seen, I think we set a new balancing area record again. So we have seen warmer temps and demand on our system. I will tell you the market prices for a variety of reasons that our supply folks could get into have not necessarily there have not been kind of those big peaking events that you sometimes see in the market, but certainly an improvement as you are about through July here as to what we have seen for prices and the ability to cover our costs of those assets. What that continues into late summer and fall I do not know that I will be on the record for predicting the weather since meteorologists cannot seem to do it for the next day or so. But I will say we did see some improvement here in July based off that demand and temps being higher across the West and hope to see that continue as we go through the year. Obviously, we would like to see those market sales impact our ability to cover those costs at Colstrip and hopefully earn back a bit of what happened in the first half of the year, but I will not give you any predictions as to where that might be.
Chris Ellinghaus: Okay. that is that is helpful. Brian, 1 more thing. Now that what is-his-name Voldemort is gone from the MPSC, do you still stick to the sort of 90- to 120-day expectation? Does that sort of slow or speed the process of the merger approval? And how does that affect the large tariff docket also?
Brian Bird: Yeah. Of course, I assume you are talking about Commissioner Molnar. I do not think that has bearing on the timing here. I think the 90 to 120 days still should hold. And my expectation is as folks know, there are many times when commissioners are not present to vote, as long as there is a quorum, they can continue to vote on any matters. And I expect that to be the case here as we move forward.
Chris Ellinghaus: Okay. Thanks. Appreciate it.
Brian Bird: Thanks, Chris.
Crystal Dawn Lail: Thank you, Chris.
Operator: Your next question from the line of Paul Fremont from Ladenburg. Paul, your line is open. Please go ahead.
Paul Fremont: Thanks. I guess I would like to start with the high-level assessment pool. Which seemed to have doubled to 8 customers. Can we get a sense of sort of the megawatt size of demand that is in that queue?
Brian Bird: Paul, no. We have not shared nor do we share who is in that queue nor do we share the megawatts that folks are talking about. At this point in time.
Paul Fremont: Well, how about in terms of with the customers doubling, should we assume that also represents a doubling of the megawatt demand in that in that bucket?
Brian Bird: I would say it this way. I would not concern yourself too much with megawatts until you see development agreements.
Paul Fremont: And then it looks like 2 may have come from the data center request bucket. And that 2 of those customers are you know, would have come from somewhere else. Like, is that a fair way to look at it?
Brian Bird: Yeah. I would say what happens many times when, you know, you get to an assessment, some people fall away because they find out they have got a preliminary idea of what the costs are gonna be, and so they may fall away. So I cannot speak to how the bucket shifted from requests to you know, high-level assessment But typically what happens when you get to a certain point, you actually know your cost. You do see some folks fall away. You also see some folks that work pretty quickly through that process.
Paul Fremont: And then maybe last question for me are is there sort of anything you can tell us about the geography? Of where those new high-level assessment customers are looking? Is it is it South Dakota or is it Montana?
Brian Bird: I mean, I will say it this way. I think in those two earlier buckets, we are seeing interest in both states.
Paul Fremont: Great. that is it for me. Thank you.
Crystal Dawn Lail: Thank you.
Brian Bird: Thanks, Paul.
Travis Meyer: Thanks, Paul.
Operator: Your final question comes from the line of Rex Savage with Clear Street. Rex, your line is open. Please go ahead.
Rex Savage: Hi. Thank you. I wanted to ask a version of a prior question on the commissioner status and so forth. It appears, you know, that commissioner is challenging his removal in Lewis and Clark State Court. I was wondering if you had any thoughts about that. Plus, it appears the governor is maybe moving to replace him for this, you know, one-year period. Does that potentially change the 90 to 120 days? And then, you know, related question is, hey, on Quantica, which was brought up, I believe, on the first question, that 7.2 GW in the filing did seem to activate 1 of the opposers on the merger docket. To ask to reopen the record, Are we past that point? Do you believe that commission is going to look at it as is?
Brian Bird: For my understanding, I think the commission's forging ahead here. I do not think-- I think they have done a good enough job through this process to say, that this transaction's not about data centers. I think that conversation was had frequently during the hearing. And so I do not believe we are going to see a delay as a result of anything that is happening with Commissioner Molnar at this point in time or any incremental information that may have happened since the hearing. Thank you. Thanks, Rex.
Operator: There are no further questions at this time. I will now turn the call back to Brian Bird for closing remarks.
Brian Bird: From a closing remarks perspective, I just want to say this again. I think we think about what we need to do as a company to grow and what is changing in the energy space. This merger is really important, not only obviously to the folks listening to this call today, but our customers and ultimately our employees. We need to be bigger. We need-- it is more of a competitive environment that we sit in today. Than utilities have seen in certainly their first 100 years of existence. And so it is critical that we move forward, and we become bigger, it allows us to better serve our customers and all of you We continue to be very, very focused on that as do our friends at Black Hills. And we hope to be talking about that with you if not in October, sometime shortly thereafter. And until next time, I wanna continue to thank you for your support of NorthWestern Energy and obviously our friends at Black Hills. Thank you very much.
Operator: This concludes today's call. Thank you for attending. You may now disconnect.
