EX-99 2 ex991_aga-presentation09.htm

AGA Financial Forum

JW Marriott Resort
Las Vegas, NV

May 4, 2009

forward-looking statement…

During the course of this presentation, there will be forward-looking
statements within the meaning of the “safe harbor” provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements often address our expected future business and financial
performance, and often contain words such as “expects,” “anticipates,”
“intends,” “plans,” “believes,” “seeks,” or “will.”

The information in this presentation is based upon our current
expectations as of the date hereof. Our actual future business and
financial performance may differ materially and adversely from those
expressed in any forward-looking statements. We undertake no obligation
to revise or publicly update our forward-looking statements or this
presentation for any reason. Although our expectations and beliefs are
based on reasonable assumptions, actual results may differ materially.
The factors that may affect our results are listed in certain of our press
releases and disclosed in the Company’s public filings with the SEC.

who we are…

(1)

As of 3/31/09

(2)

Book capitalization calculated as total debt, excluding capital leases, plus shareholders’ equity.

656,000 customers

392,000 electric

264,000 natural gas

Approximately 123,000 square
miles of service territory in
Montana, Nebraska and South Dakota

Total generation (mostly base load coal)

MT – 222 MW – regulated as of 1/1/09

SD – 312 MW – regulated

Total Assets: $2,791 MM ⁽¹⁾

Total Capitalization: $1,675 MM ⁽¹⁾⁽²⁾

Total Employees: 1,385 ⁽¹⁾

Located in relatively stable economies with potential grid expansion in the Northwest.

NorthWestern’s attributes…

Solid operations

Cost competitive

Above-average reliability

Award-winning customer service

Increasing earnings

Colstrip Unit 4 into rates effective Jan. 1, 2009

Expected to add $9 million or $.25/share in earnings over 2008

Rate case to be filed in Montana on electric and gas distribution business in 3Q ‘09

Strong cash flows

NOLs provide an effective tax shield until 2012

Improving debt ratings

Secured credit ratings of A-(MT) BBB+(SD) / BBB+ / Baa1

Moody’s has on “positive” outlook

Strong growth prospects

Electric generation and transmission opportunities

Solid operations with strong growth prospects.

regulatory update…

Rate case to be filed in Montana in 2009

Filing will include both electric and natural gas distribution businesses

Expect to file in 3Q 2009 on 2008 test year

Expect decision by July 1, 2010

Mill Creek Generation Station filed with MPSC

Filed for pre-approval on the plant in August 2008

Hearings occurred in February 2009

Expect decision by June 30, 2009

Filed with the FERC to conduct a second Open Season on MSTI

Requested ability to allow new participants the opportunity to reserve
capacity, while providing existing participants the opportunity to
reaffirm existing reservations

Reflects the change and increase of renewables in the generation
queue in Montana

Establishing constructive regulatory regulations in all jurisdictions.

2009 first quarter results…

Confirming earnings guidance for 2009.

Gross Margin increased
mainly due to transfer of
interest in CU4 into regulated
Electric ($5.8M) and other
miscellaneous items ($0.2M).

OG&A increased mainly due
to insurance reserves ($2.6M),
Pension ($2.1M), labor and
benefits ($1.6M), offset slightly
by other lower costs ($1.0).

Property and other taxes
increased due to higher
estimated valuations.

Depreciation increased
primarily due to 2008 plant
additions.

Interest Expense decreased
primarily due to lower rates on
our variable debt.

2009 income guidance…

Drivers

CU4 increase expected to be approximately $9 million or
$.25/share

Pension expense expected to be flat compared to 2008

Planned insurance recoveries will offset our Q1 insurance
reserve expense increase

Retail electric and natural gas volumes expected to
approximate 2008

Wholesale electric volumes in SD expected to decrease due
to a planned outage for regularly scheduled maintenance in
2009

Normal weather in our service territories for the rest of 2009

Expect increase of 5% to 13% over 2008 earnings of $1.77/share .

$1.85 to $2.00 per fully diluted share

strong balance sheet…

Plan to maintain a 50%-55% debt to total capitalization ratio.

Audited (Dollars in 000's)

March 31,

December 31,

2009

2008

Cash

83,246

11,292

Restricted Cash

14,948

14,727

Accounts Receivable, Net

142,377

155,672

Inventories

34,929

70,741

Other Current Assets

73,651

60,985

Goodwill

355,128

PP&E and Other Non-current Assets

2,087,570

2,093,492

Total Assets

2,791,849

2,762,037

Payables

66,289

94,685

Other Current Liabilities

283,396

264,654

Long & Short Term Capital Leases

37,828

37,991

Long & Short Term Debt

900,629

862,056

Other Non-current Liabilities

729,197

739,118

Shareholders' Equity

774,510

763,533

Total Liabilities and Equity

2,791,849

2,762,037

Long & Short Term Debt / Total Capitalization

53.8%

53.0%

liquidity highlights…

Total liquidity currently in the
$275 million range

Recently issued $250 million in
First Mortgage Bonds

10 year maturity with interest
rate of 6.34%

Primarily used proceeds to:

Refinance our Colstrip loan
maturing in December 2009

Pay down our revolver

Debt maturities in late 2009

Unsecured revolver matures on
Nov. 1, 2009

Currently no drawings on the
facility

Liquidity position remains strong

Nearly all long-term debt matures after 2014

credit ratings…

Fitch S&P Moody’s

Senior Secured Rating BBB+ A- (MT) Baa1
BBB+ (SD)

Senior Unsecured BBB BBB Baa2

Outlook Stable Stable Positive

Fitch upgraded in January 2009 and Moody’s upgraded in March 2009.

generation growth highlights…

In service date for Mill Creek Generation Station is 4Q 2010

Mill Creek Generating Unit in Montana

Existing regulating services are
becoming more expensive and scarce

120-150 MW plant near Anaconda, MT

To be built for regulation services to
balance supply and load for NWE’s
Balancing Area

Rate-based cost of service investment

Estimated to cost approximately
$200 million

Public hearing held in front of MPSC

Decision expected 2Q ‘09

our proposed transmission projects…

generation plans shifting to wind…

New generation in Montana mostly wind and will need to find an end user.

supply - Montana wind potential…

Very strong wind regime in Montana.

demand - renewable standards…

The current renewable percentage of NorthWestern’s
electric supply in Montana is a little more than 8%.

our transmission developments…

Line already exists – represents an
upgrade

Upgrades substation capacity

Increases load capacity of existing line by 500-600
MW’s

Needed to relieve congestion to the West

Market interest is increasing for
Montana’s high quality wind profile

NorthWestern announced joint
development agreement with others

Portland General

Puget Sound Energy

Pacificorp

Avista

Bonneville Power Authority

Cost estimate of our portion of 500 kV
upgrade = $50M - $75M

Anticipated ownership interest of 30% on upgrade

In service date of January 1, 2012.

Colstrip 500 kV Upgrade

transmission project developments…

In service date in 2014.

230 kV “Collector System”

Provides gathering system for
new generation to access
MSTI and network system
benefits

Our project with no partners

Informational meeting with
customers in 2Q 2009

Open Season 3Q ‘09 to
determine demand

Cost estimate of “collector”
project = $200M

transmission project developments cont’d…

Provides additional capacity on a
historically constrained path, and
connects expanding new
renewable markets in Idaho, Utah
and the Southwest U.S.

Total project cost estimated from
$800 million to $1 billion

Considering strategic partners

Plan to be operational in 2014

FERC filing in January ’09

Information meeting with FERC in
March ‘09

Start construction 2011

For current information:
www.MSTI500kV.com

Estimated to be on line early 2014.

MSTI

cap ex spending – next few years…

Includes more than $1 billion of potential generation
and transmission growth projects.

Non-discretionary
capex is funded 100%
by free cash flow.

Company doesn’t anticipate
needing equity unless we
proceed with MSTI.

We will move forward with
the funding of these projects
only when they make
economic sense.

MSTI project is now slated for
early 2014 and capex has
been modified accordingly.

Non-discretionary

growth project potential…

Possibility to double and diversify earnings as compared with our
existing $1.5 billion rate base as of 1/1/09.

(in millions)

Timing

Mill Creek Generation Station

200

10.0

Dec 2011

Colstrip 500 kV transmission upgrade **

2.5

3.8

Jan 2012

South Dakota Peaking generation

3.8

4.5

Jan 2013

230 kV Wind Collector system

150

200

7.5

10.0

Jan 2014

MSTI transmission line

800

1,000

40.0

50.0

Jan 2014

Totals

1,275

1,565

63.8

78.3

* For illustrative purposes = Cost of project times 50% equity ratio times estimated ROE of 10%.

** Assumes a 30% ownership of the $200 million project.

Cost of Project

Annual Earnings

Opportunity *

growth project milestones ’09 & ’10…

Mill Creek

2009

Expect decision from the MPSC Q2

Begin construction (if approved) Q3

500 kV upgrade

2009

Complete engineering and planning studies Q4

WECC regional planning process begins Q4

Finalize commercial terms w/partners Q4

230 kV Collector system

2009

Information meeting with customers Q2

FERC ruling allowing “open season” Q2

Conduct “open season” Q3

Complete commercial terms Q4

MSTI

2009

FERC ruling allowing “open season” Q2

Continue discussions w/possible JV partner Q2

Conduct “open season”/commercial terms Q3

EIS draft for public review due Q4

Mill Creek

2010

Complete construction Q4

Start up, commissioning and completion Q4

500 kV upgrade

2010

Run subscription process Q1

Complete regional planning process Q4

Begin construction Q4

230 kV Collector system

2010

Siting and permitting process begins Q1

WECC regional planning process Q2

MSTI

2010

Final EIS Q1

Record of decision Q3

Begin right of way procurement Q4

Final Engineering Q4

summary…

Value

Dividend yield in excess of 6.0%

Currently trading at approximately book value

Strong financial profile

All debt is investment grade rated

2009 earnings expected to increase 5%-13% over 2008

Strong cash flows from increasing earnings and NOLs expected into
2012

Improving regulatory relationships

Opportunity for growth

Montana T&D rate case to be filed in 2009

expecting a rate increase request

effective in 2010

Possibility of increasing rate base on growth projects with investment in
excess of $1 billion

Potential additional annual earnings of more than $60 million post 2014

Current value with growth opportunities.