NorthWestern Reports Third Quarter 2013 Financial Results

          NorthWestern Reports Third Quarter 2013 Financial Results

Company reports diluted earnings per share of $0.40 for third quarter 2013

Reaffirms full year 2013 guidance of $2.45 - $2.60 per diluted share

Declares a quarterly dividend of $0.38 per share, payable December 31, 2013

PR Newswire

SIOUX FALLS, S.D., Oct. 24, 2013

SIOUX FALLS, S.D., Oct. 24, 2013 /PRNewswire/ -- NorthWestern Corporation
d/b/a NorthWestern Energy (NYSE: NWE) reported financial results for the
quarter ended September30, 2013. Net income was $15.6 million or $0.40 per
diluted share, for the quarter ended September30, 2013, compared with a net
loss of $3.8 million, or a loss of $0.10 per diluted share, for the quarter
ended September30, 2012. The loss in the third quarter last year was
primarily related to the impairment of the Mountain States Transmission
Intertie (MSTI) project and the revenue deferral due to the FERC ALJ's
nonbinding decision regarding revenue allocation at our Dave Gates Generating
Station (DGGS).

"We are very excited about our recently announced $900 million hydro
acquisition and the long-term benefits it will provide all of our stakeholders
for decades to come. There is no resource better suited to serve the needs of
our Montana customers. We continue to be keenly focused on our day-to-day
responsibilities of delivering safe and reliable services to our customers
while delivering a fair return to our investors," said Bob Rowe, Chief
Executive Officer. "This was another solid quarter demonstrating that
commitment."

                                Three Months Ended      Nine Months Ended
Summary Financial Results
                                September 30,           September 30,
(in thousands, except per share 2013        2012        2013        2012
amounts)
Total Revenues                  $ 262,248   $ 235,866   $ 835,429   $ 789,569
Cost of Sales                   104,298     93,061      343,407     327,884
Gross Margin                    157,950     142,805     492,022     461,685
Operating Expenses
Operating, general and          72,540      63,056      208,741     195,725
administrative
MSTI impairment                 —           24,039      —           24,039
Property and other taxes        25,956      24,796      77,525      74,395
Depreciation                    28,053      26,505      84,685      79,364
Total Operating Expenses        126,549     138,396     370,951     373,523
Operating Income                31,401      4,409       121,071     88,162
Interest Expense, net           (17,056)    (17,743)    (50,976)    (49,598)
Other Income                    3,117       974         6,760       3,134
Income (Loss) Before Income     17,462      (12,360)    76,855      41,698
Taxes
Income Tax (Expense) Benefit    (1,815)     8,588       (8,965)     (1,989)
Net Income (Loss)               $ 15,647    $ (3,772)   $ 67,890    $ 39,709
Average Common Shares           38,459      37,201      37,983      36,723
Outstanding
Basic Earnings (Loss) per       $ 0.41      $ (0.10)    $ 1.79      $ 1.09
Average Common Share
Diluted Earnings (Loss) per     $ 0.40      $ (0.10)    $ 1.78      $ 1.08
Average Common Share
Dividends Declared per Common   $ 0.38      $ 0.37      $ 1.14      $ 1.11
Share

Significant items during the third quarter

  oEntered into an agreement with PPL Montana, LLC (PPL Montana), a wholly
    owned subsidiary of PPL Corporation to purchase PPL Montana's
    hydro-electric generating facilities and associated assets located in
    Montana, which includes approximately 633 megawatts of hydro-electric
    generation capacity, for a purchase price of $900 million (Hydro
    Transaction); and
  oAn improvement in net income of approximately $19.4 million as compared
    with the same period in 2012, due primarily to:

       o$15.1 Million - Improvement in gross margin primarily due to:

            +Higher FERC DGGS revenue due to $11.4 million deferral recorded
              in the third quarter of 2012 related to the FERC ALJ nonbinding
              decision;
            +Increased recovery of electric Demand Side Management (DSM) lost
              revenues;
            +The acquisition of the Spion Kop wind farm in the fourth quarter
              of 2012;
            +An increase in natural gas production margin due to the full
              period effect of the acquisition of production assets in the
              third quarter of 2012;
            +An increase in Montana natural gas delivery rates implemented in
              April 2013; and
            +An increase in property taxes included in a tracker.
            +These increases were partly offset by a decrease in electric
              retail volumes due to cooler summer weather and less customer
              irrigation, lower revenues for operating expenses recovered in
              trackers and a decrease in electric transmission revenues due
              primarily to the outage at Colstrip Unit 4.

       o$24.0 Million - Improvement from the absence of the MSTI impairment
         in the third quarter 2012.
       o$0.6 Million - Reduced interest expense due to higher interest on
         DGGS accrued during the third quarter 2012 partially offset by higher
         debt outstanding in 2013.
       o$2.1 Million - Increased other income due to the change in value of
         deferred shares held in trust for non-employee directors deferred
         compensation (offset in expense).

These improvements were partially offset by:

     o$9.4 Million - Increased operating, general and administrative expenses
       primarily due to:

          +Distribution System Infrastructure Project (DSIP) expense;
          +Hydro Transaction legal and professional fees;
          +Increased labor costs;
          +Higher plant operator costs;
          +Non-employee directors deferred compensation due to changes in our
            stock price (offset in other income); and
          +Higher bad debt expense.
          +These increases were partly offset by decreased pension expense
            (net of higher other employee benefit costs) and lower operating
            expenses recovered in trackers.

     o$1.2 Million - Higher property and other taxes
     o$1.6 Million - Increased depreciation expense
     o$10.4 Million - Increased income tax expense

Reconciliation of Primary Changes from 2012 to 2013
                   Three Months Ended Sept. 30,    Nine Months Ended Sept. 30,
                   Pre-tax   Net       EPS         Pre-tax   Net       EPS
 ($millions,       Income    Income(1) Diluted     Income    Income(1) Diluted
 except EPS)
 2012 reported     $ (12.4)  $  (3.8)  $ (0.10)    $  41.7   $  39.7   $ 1.08
Gross Margin
 DGGS              10.2      6.3       0.16        5.1       3.1       0.08
 DSM lost revenues 5.0       3.1       0.08        —         —         —
 Spion Kop         1.6       1.0       0.03        4.6       2.8       0.07
 Natural gas       1.2       0.7       0.02        7.0       4.3       0.11
 production
 Montana natural   1.2       0.7       0.02        2.1       1.3       0.03
 gas rate increase
 Property tax      0.9       0.6       0.02        1.9       1.2       0.03
 trackers
 Electric retail   (3.5)     (2.2)     (0.06)      (0.5)     (0.3)     (0.01)
 volumes
 Operating
 expenses          (1.9)     (1.2)     (0.03)      (2.4)     (1.5)     (0.04)
 recovered in
 trackers
 Electric
 transmission      (0.4)     (0.2)     (0.01)      3.6       2.3       0.06
 revenue
 Natural gas       —         —         —           3.4       2.1       0.06
 retail volumes
 Natural gas
 transportation    —         —         —           1.1       0.7       0.02
 capacity
 Electric QF       —         —         —           1.0       0.6       0.02
 supply costs
 Other             0.8       0.5       0.01        3.6       2.2       0.06
 Subtotal - Gross  15.1      9.3       0.24        30.5      18.8      0.49
 Margin
OG&A Expense
 DSIP expenses     (3.3)     (2.0)     (0.05)      (8.8)     (5.4)     (0.14)
 Hydro Transaction
 related legal and (2.8)     (1.7)     (0.05)      (3.3)     (2.0)     (0.05)
 professional fees
 Labor             (1.7)     (1.0)     (0.03)      (2.8)     (1.7)     (0.04)
 Plant operator    (1.6)     (1.0)     (0.03)      (3.0)     (1.8)     (0.05)
 costs
 Nonemployee
 directors         (1.5)     (0.9)     (0.02)      (2.6)     (1.6)     (0.04)
 deferred
 compensation
 Bad debt expense  (0.6)     (0.4)     (0.01)      (1.0)     (0.6)     (0.02)
 Pension and       3.1       1.9       0.05        10.7      6.6       0.17
 employee benefits
 Operating
 expenses          1.9       1.2       0.03        2.4       1.5       0.04
 recovered in
 trackers
 Natural gas       —         —         —           (1.6)     (1.0)     (0.03)
 production
 Other             (2.9)     (1.8)     (0.05)      (3.0)     (1.8)     (0.05)
 Subtotal - OG&A   (9.4)     (5.7)     (0.16)      (13.0)    (7.8)     (0.21)
 Expense
Other
 MSTI Impairment   24.0      14.8      0.40        24.0      14.8      0.40
 Depreciation      (1.6)     (1.0)     (0.03)      (5.3)     (3.3)     (0.09)
 expense
 Property and      (1.2)     (0.7)     (0.02)      (3.1)     (1.9)     (0.05)
 other taxes
 Interest expense  0.6       0.4       0.01        (1.4)     (0.9)     (0.02)
 Other Income      2.1       1.3       0.03        3.7       2.2       0.06
Income tax and
other items
 Flow-through
 repairs                     1.3       0.03                  3.4       0.09
 deductions
 Flow-through of state bonus 0.5       0.01                  1.1       0.03
 depreciation deduction
 Production tax              0.5       0.01                  2.1       0.06
 credits
 Prior year permanent return (1.9)     (0.05)                (2.4)     (0.06)
 to accrual adjustments
 Recognition of state NOL
 benefit / valuation         (0.1)     —                     (0.1)     —
 allowance release
 State income tax            (0.3)     (0.01)                1.2       0.03
 and other, net
 Impact of higher                      (0.02)                          (0.07)
 share count
 All other, net    0.3       1.0       0.06        (0.2)     1.0       0.04
 Total EPS impact                      0.50                            0.70
 of above items
 2013 reported     $ 17.5    $  15.6   $ 0.40      $  76.9   $  67.9   $ 1.78
(1) Income Tax Benefit (Expense) calculation on reconciling items assumes
effective tax rate of 38.5%.

Significant Drivers

Gross Margin

Consolidated gross margin for the quarter ended September30, 2013 was $158.0
million compared with $142.9 million for the same period of 2012.
Consolidated gross margin increased $15.1million primarily due to the
following:

  oHigher DGGS revenue primarily due to the inclusion in 2012 results of the
    deferral of $11.4 million related to the FERC ALJ nonbinding decision;
  oA $5.8 million increase in electric DSM lost revenues recovered through
    our supply trackers related to efficiency measures implemented by
    customers, offset in part by a decrease of $0.8 million related to natural
    gas DSM lost revenues. The three months ended September 30, 2013 included
    recognition of approximately $4.6 million in revenues related to prior
    periods (including $2.3 million related to calendar year 2012) that we had
    previously deferred pending approval of our electric tracker filing;
  oGross margin from the acquisition of the Spion Kop wind farm in the fourth
    quarter of 2012;
  oAn increase in natural gas production margin, primarily due to the full
    period effect of the acquisition of natural gas production assets in the
    third quarter of 2012;
  oAn increase in Montana natural gas delivery rates implemented in April
    2013; and
  oAn increase in property taxes included in a tracker.

These increases were partly offset by:

  oA decrease in electric retail volumes due primarily to cooler summer
    weather and reduced customer irrigation;
  oLower revenues for operating expenses recovered in trackers, primarily
    related to customer efficiency programs; and
  oA decrease in electric transmission revenues due primarily to an outage at
    Colstrip Unit 4 during the third quarter of 2013. We expect the outage at
    Colstrip Unit 4 to have a negative impact on transmission revenues for the
    remainder of 2013.

Consolidated gross margin for the nine months ended September 30, 2013 was
$492.1 million compared with $461.6 million for the same period of 2012.

Operating, General and Administrative Expenses

Consolidated operating, general and administrative expenses were $72.5 million
for the quarter ended September30, 2013 as compared with $63.1 million during
the same period of 2012. The increase in operating, general and
administrative expenses of $9.4 million was primarily due to:

  oIncremental operating and maintenance costs related to the phase-in of
    DSIP during 2012 and 2011 were deferred in accordance with the Montana
    Public Service Commission's (MPSC) approval of an accounting order.
    Incremental DSIP costs for 2013 forward are being expensed as incurred and
    the amounts previously deferred are being amortized over five years.
    During the third quarter of 2013 we amortized approximately $0.8 million
    and incurred incremental DSIP expenses of approximately $2.5 million;
  oLegal and professional fees associated with the Hydro Transaction;
  oIncreased labor costs due primarily to compensation increases and a larger
    number of employees;
  oHigher plant operator costs due primarily to the Spion Kop acquisition and
    higher maintenance and outage costs at Colstrip Unit 4;
  oNon-employee directors deferred compensation increased as compared to the
    prior year, primarily due to changes in our stock price. Directors may
    defer their board fees into deferred shares held in a rabbi trust. If the
    market value of our stock goes up, deferred compensation expense
    increases; however, we account for the deferred shares as trading
    securities and their increase in value is reflected in other income with
    no impact on net income; and
  oHigher bad debt expense.

These increases were partly offset by:

  oDecreased pension expense, offset in part by higher other employee benefit
    costs. Our Montana pension costs are included in expense on a pay as you
    go (cash funding) basis. We received a pension accounting order from the
    MPSC in 2008, which based our Montana pension expense on an average of our
    funding requirements for calendar years 2005 through 2012 in order to
    smooth the impact of increased cash funding. We expect our 2013 Montana
    pension expense to be approximately $17.0 million to $20.0 million lower
    than 2012 on an annualized basis due to the expiration of this order and
    our current cash funding estimate; and
  oLower operating expenses recovered in trackers, primarily related to
    customer efficiency programs.

Consolidated operating, general and administrative expenses were $208.7
million for the nine months ended September 30, 2013 as compared with $195.7
million during the same period of 2012.

Property and Other Taxes

Property and other taxes were $26.0 million for the quarter ended
September30, 2013, as compared with $24.8 million in the same period of
2012. This increase was primarily due to higher estimated property valuations
in Montana and plant additions. We estimate property taxes throughout each
year and update to the actual expense when we receive our Montana property tax
bills in November.

Property and other taxes were $77.5 million for the nine months ended
September 30, 2013, as compared with $74.4 million in the same period of 2012.

Depreciation Expense

Depreciation expense was $28.1 million for the quarter ended September30,
2013, as compared with $26.5 millionin the same period of 2012. This reflects
an increase in depreciation expense due to plant additions, offset in part by
a reduction in depreciation rates of approximately $1.5 million as a result of
new depreciation studies conducted by an independent consultant and
implemented during the second quarter of 2013. These studies reflect longer
asset lives on our electric and natural gas assets in Montana, and electric
assets in South Dakota. We expect depreciation expense to be reduced due to
the change in rates by approximately $1.5million for the remainder of 2013.

Depreciation expense was $84.7 million for the nine months ended September 30,
2013, as compared with $79.4 millionin the same period of 2012.

Interest Expense

Consolidated interest expense was $17.1 million for the quarter ended
September30, 2013 as compared with $17.7 million during the same period of
2012. This decrease was primarily due to higher interest accrued on DGGS
deferred revenues in 2012 due to the FERC ALJ nonbinding decision as discussed
above partially offset by higher debt outstanding in 2013.

Consolidated interest expense was $51.0 million for the nine months ended
September 30, 2013 as compared with $49.6 million during the same period of
2012.

Income Tax Expense

Consolidated income tax expense for the quarter ended September30, 2013 was
$1.8 million as compared with a $8.6 million benefit in the same period of
2012. Our effective tax rate for the quarter ended September30, 2013 was
10.4% as compared with (69.5)% for the same period of 2012. The effective tax
rate differs from the federal statutory tax rate of 35% primarily due to the
regulatory impact of flowing through federal and state tax benefit of repairs
deductions, state tax benefit of bonus depreciation deductions and production
tax credits.

Consolidated income tax expense for the nine months ended September30, 2013
was $9.0 million as compared with $2.0 million in same period of 2012. The
effective tax rate for the nine months ended September 30, 2013 was 11.7% as
compared with 4.8% for the same period of 2012.

The following table summarizes the significant differences from the federal
statutory rate, which result in reduced income tax expense:

                                         Three Months Ended  Nine Months Ended
(in millions)
                                         September 30,       September 30,
                                         2013     2012       2013      2012
Income (Loss) Before Income Taxes        $ 17.5   $ (12.4)   $  76.9   $ 41.7
Income tax calculated at 35% federal     6.1      (4.3)      26.9      14.6
statutory rate
Permanent or flow through adjustments:
Flow-through repairs deductions          (3.1)    (1.8)      (12.9)    (9.5)
Flow-through of state bonus depreciation (0.8)    (0.3)      (3.3)     (2.2)
deduction
Production tax credits                   (0.5)    —          (2.1)     —
Prior year permanent return to accrual   —        (1.9)      0.5       (1.9)
adjustments
Recognition of state net operating loss  —        (0.1)      —         (0.1)
benefit / valuation allowance release
State income tax and other, net          0.1      (0.2)      (0.1)     1.1
                                         (4.3)    (4.3)      (17.9)    (12.6)
Income tax expense (benefit)             $ 1.8    $ (8.6)    $  9.0    $ 2.0

Liquidity and Capital Resources

As of September30, 2013, cash and cash equivalents were $10.9 million
compared with $18.2 million at September30, 2012. The Company had $197.0
million available from its revolving credit facility at September30, 2013,
compared with $294.0 million at September30, 2012.

Dividend Declared

NorthWestern's Board of Directors declared a quarterly common stock dividend
of $0.38 per share, payable December31, 2013, to common shareholders of
record as of December13, 2013.

2013 Earnings Guidance Reaffirmed

NorthWestern reaffirms the updated 2013 earnings guidance range of $2.45 -
$2.60 per diluted share. Basic assumptions incorporate the following
expectations:

  oA consolidated income tax rate of approximately 12% of pre-tax income;
  oNormal weather in our electric and natural gas service territories for the
    remainder of 2013;
  oExcludes any potential additional impact as a result of the FERC decision
    regarding revenue allocation at our Dave Gates Generating Station; and
  oDiluted average shares outstanding of 38.3 million.

Significant Items Not Contemplated in Guidance

A reconciliation of items not factored into our updated 2013 and final 2012
earnings guidance of $2.45 - $2.60 and $2.30 - $2.40 per diluted share,
respectively, is as follows. The amount below represents an after-tax non-GAAP
measure that may provide users of this financial information with additional
meaningful information regarding the impact of certain items on the Company's
expected earnings. More information on this measure can be found in the
"Non-GAAP Financial Measures" section below.

2013                                Q1 2013 Q2 2013 Q3 2013   Q4 2013 YTD 2013
Reported GAAP diluted EPS           $ 1.01  $ 0.37  $ 0.40            $  1.78
Non-GAAP Adjustments:
Weather                                     (0.02)  (0.02)            (0.04)
Hydro Transaction related legal and                 0.05              0.05
professional fees
DSM lost revenue recovery - portion                 (0.04)            (0.04)
related to 2012
Adjusted Diluted EPS                $ 1.01  $ 0.35  $ 0.39    —       $  1.75
2012                                Q1 2012 Q2 2012 Q3 2012   Q4 2012 FY 2012
Reported GAAP diluted EPS           $ 0.88  $ 0.31  $ (0.10)  $ 1.57  $  2.66
Non-GAAP Adjustments:
Weather                             0.09    0.05    (0.06)    0.06    0.14
Release of MPSC DGGS deferral       (0.05)                            (0.05)
DSM Lost revenue recovery related to        (0.05)                    (0.05)
2010/2011
DGGS FERC ALJ initial decision - portion            0.12              0.12
related to 2011
MSTI Impairment                                     0.40              0.40
Favorable CELP arbitration decision                           (0.79)  (0.79)
Income tax adjustment - benefit from MT NOL                   (0.06)  (0.06)
Adjusted Diluted EPS                $ 0.92  $ 0.31  $ 0.36    $ 0.78  $  2.37

Company Hosting Investor Conference Call

As previously announced, NorthWestern will host an investor conference call
and webcast today at 4:00 pm Eastern Time to review its financial results.
The conference call will be webcast live on the Internet at
http://www.northwesternenergy.com under the "Our Company / Investor Relations
/ Presentations and Webcasts" heading or by visiting
www.videonewswire.com/event.asp?id=96365. To listen, please go to the site at
least 10 minutes in advance of the call to register. An archived webcast will
be available shortly after the call.

A telephonic replay of the call will be available beginning at 6:00 p.m. ET on
October 24, 2013 through November 24, 2013, at (888) 203-1112 access code
8605196.

About NorthWestern Energy

NorthWestern Energy provides electricity and natural gas in the Upper Midwest
and Northwest, serving approximately 673,200 customers in Montana, South
Dakota and Nebraska. More information on NorthWestern Energy is available on
the Company's Web site at www.northwesternenergy.com.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995, including, without limitation, the information under "2013 Earnings
Outlook". 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." These
statements are based upon our current expectations and speak only 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 as a result of various factors and uncertainties, including, but
not limited to:

  opotential adverse federal, state, or local legislation or regulation,
    including costs of compliance with existing and future environmental
    requirements, as well as adverse determinations by regulators, could have
    a material effect on our liquidity, results of operations and financial
    condition;
  ochanges in availability of trade credit, creditworthiness of
    counterparties, usage, commodity prices, fuel supply costs or availability
    due to higher demand, shortages, weather conditions, transportation
    problems or other developments, may reduce revenues or may increase
    operating costs, each of which could adversely affect our liquidity and
    results of operations;
  ounscheduled generation outages or forced reductions in output, maintenance
    or repairs, which may reduce revenues and increase cost of sales or may
    require additional capital expenditures or other increased operating
    costs; and
  oadverse changes in general economic and competitive conditions in the U.S.
    financial markets and in our service territories.

Our Annual Report on Form10-K, recent and forthcoming Quarterly Reports on
Form10-Q, recent Current Reports on Form8-K and other Securities and
Exchange Commission filings discuss some of the important risk factors that
may affect our business, results of operations and financial condition.

We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. In addition, actual results may differ materially from those
contemplated in any forward-looking statement due to the timing and likelihood
of the closing of the purchase of PPL Montana LLC's hydro-electric generating
facilities.

Non-GAAP Financial Measures

This press release includes financial information prepared in accordance with
GAAP, as well as other financial measures, such as Gross Margin and Adjusted
Diluted EPS, that are considered "non-GAAP financial measures." Generally, a
non-GAAP financial measure is a numerical measure of a company's financial
performance, financial position or cash flows that exclude (or include)
amounts that are included in (or excluded from) the most directly comparable
measure calculated and presented in accordance with GAAP. Gross Margin
(Revenues less Cost of Sales) is a non-GAAP financial measure due to the
exclusion of depreciation from the measure. Gross Margin is used by us to
determine whether we are collecting the appropriate amount of energy costs
from customers to allow recovery of operating costs. Adjusted Diluted EPS is
another non-GAAP measure. The Company believes the presentation of Adjusted
Diluted EPS is more representative of our normal earnings than the GAAP EPS
due to the exclusion (or inclusion) of certain impacts that are not reflective
of ongoing earnings.

The presentation of these non-GAAP measures is intended to supplement
investors' understanding of our financial performance and not to replace other
GAAP measures as an indicator of actual operating performance.Our measures
may not be comparable to other companies' similarly titled measures.



NORTHWESTERN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
                                Three Months Ended      Nine Months Ended

                                September 30,           September 30,
                                2013        2012        2013        2012
Revenues
Electric                        $ 227,103   $ 202,485   $ 637,667   $ 605,716
Gas                             34,772      32,965      196,652     182,812
Other                           373         416         1,110       1,041
Total Revenues                  262,248     235,866     835,429     789,569
Operating Expenses
Cost of Sales                   104,298     93,061      343,407     327,884
Operating, general and          72,540      63,056      208,741     195,725
administrative
MSTI Impairment                 —           24,039      —           24,039
Property and other taxes        25,956      24,796      77,525      74,395
Depreciation                    28,053      26,505      84,685      79,364
Total Operating Expenses        230,847     231,457     714,358     701,407
Operating Income                31,401      4,409       121,071     88,162
Interest Expense, net           (17,056)    (17,743)    (50,976)    (49,598)
Other Income                    3,117       974         6,760       3,134
Income (Loss) Before Income     17,462      (12,360)    76,855      41,698
Taxes
Income Tax (Expense) Benefit    (1,815)     8,588       (8,965)     (1,989)
Net Income (Loss)               $ 15,647    $ (3,772)   $ 67,890    $ 39,709
Average Common Shares           38,459      37,201      37,983      36,723
Outstanding
Basic Earnings (Loss) per       $ 0.41      $ (0.10)    $ 1.79      $ 1.09
Average Common Share
Diluted Earnings (Loss) per     $ 0.40      $ (0.10)    $ 1.78      $ 1.08
Average Common Share
Dividends Declared per Average  $ 0.38      $ 0.37      $ 1.14      $ 1.11
Share

Average shares used in computing the basic and diluted earnings per share are
as follows:

                                       Three Months Ended   Nine Months Ended

                                       September 30,        September 30,
                                       2013        2012     2013       2012
Basic computation                      38,459      37,201   37,983     36,723
Dilutive effect of
Restricted stock and performance       186         —        181        71
share awards (1,2)
Diluted computation                    38,645      37,201   38,164     36,794

(1) Performance share awards are included in diluted weighted average number
of shares outstanding based upon what would be issued if the end of the most
recent reporting period was the end of the term of the award.
(2) In periods in which a net loss has been incurred, all potentially
dilutive shares are considered antidilutive and thus are excluded from the
calculation. For the three months ended September 30, 2012, we had 173,624
potentially dilutive restricted stock and performance share awards which were
not included in the calculation.





NORTHWESTERN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
                                         September30, 2013  December31, 2012
ASSETS
Current assets                           $   280,661         $   303,128
Property, plant, and equipment, net      2,573,562           2,435,590
Goodwill                                 355,128             355,128
Regulatory assets                        395,746             367,890
Other noncurrent assets                  28,553              23,797
Total Assets                             $   3,633,650       $   3,485,533
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt and $   1,659           $   1,612
capital leases
Short-term borrowings                    102,980             122,934
Other current liabilities                313,325             324,719
Long-term capital leases                 30,315              31,562
Long-term debt                           1,055,091           1,055,074
Deferred income taxes                    397,856             363,928
Noncurrent regulatory liabilities        343,597             276,618
Other noncurrent liabilities             384,545             375,054
Total Liabilities                        2,629,368           2,551,501
Total Shareholders' Equity               1,004,282           934,032
Total Liabilities and Shareholders'      $   3,633,650       $   3,485,533
Equity







NORTHWESTERN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                                               Nine Months Ended

                                               September 30,
                                               2013          2012
Operating Activities
Net income                                     $ 67,890      $ 39,709
Non-cash items                                 $ 123,627     $ 123,995
Changes in operating assets and liabilities    $ (20,179)    $ 58,924
Cash Provided by Operating Activities          $ 171,338     $ 222,628
Cash Used in Investing Activities              $ (150,064)   $ (175,981)
Cash Used in Financing Activities              $ (20,175)    $ (34,379)
Increase in Cash and Cash Equivalents          $ 1,099       $ 12,268
Cash and Cash Equivalents, beginning of period $ 9,822       $ 5,928
Cash and Cash Equivalents, end of period       $ 10,921      $ 18,196







NORTHWESTERN CORPORATION
REGULATED ELECTRIC SEGMENT
Three Months Ended September 30,
(Unaudited)
                        Results
                        2013      2012      Change    % Change
                        (dollars in millions)
Retail revenue          $ 201.5   $ 203.3   $ (1.8)   (0.9)%
Regulatory Amortization 11.8      (5.2)     17.0      (326.9)
Total Retail Revenue    213.3     198.1     15.2      7.7
Transmission            11.2      11.6      (0.4)     (3.4)
Ancillary services      0.4       (9.2)     9.6       (104.3)
Wholesale               0.8       0.8       —         —
Other                   1.4       1.2       0.2       16.7
Total Revenues          $ 227.1   $ 202.5   $ 24.6    12.1
Total Cost of Sales     95.3      83.8      11.5      13.7
Gross Margin            $ 131.8   $ 118.7   $ 13.1    11.0%

             Revenues                Megawatt Hours      Avg. Customer Counts
                                     (MWH)
             2013        2012        2013      2012      2013        2012
             (in thousands)
Retail
Electric
Montana      $ 65,455    $ 63,951    $ 575     $ 587     $ 274,835   $ 273,130
South Dakota 12,698      13,947      146       158       49,350      48,940
Residential 78,153      77,898      721       745       324,185     322,070
Montana      83,624      83,605      823       867       62,639      62,179
South Dakota 18,502      19,643      255       259       12,154      12,235
Commercial   102,126     103,248     1,078     1,126     74,793      74,414
Industrial   10,105      10,011      737       806       74          74
Other        11,131      12,148      91        103       7,813       7,816
Total Retail $ 201,515   $ 203,305   $ 2,627   $ 2,780   $ 406,865   $ 404,374
Electric
Total
Wholesale    $ 845       $ 781       $ 39      $ 41      $ —         $ —
Electric

                    Degree Days                   2013ascomparedwith:
Cooling Degree-Days 2013  2012  Historic Average  2012        Historic Average
Montana             393   395   259               1% cooler   52% warmer
South Dakota        702   911   639               23% cooler  10% warmer
                    Degree Days                   2013ascomparedwith:
Heating Degree-Days 2013  2012  Historic Average  2012        Historic Average
Montana             231   244   357               5% warmer   35% warmer
South Dakota        60    65    90                8% warmer   33% warmer







NORTHWESTERN CORPORATION
REGULATED ELECTRIC SEGMENT
Nine Months Ended September 30,
(Unaudited)
                        Results
                        2013      2012      Change   % Change
                        (dollars in millions)
Retail revenue          $ 581.5   $ 561.9   $ 19.6   3.5%
Regulatory Amortization 11.9      10.8      1.1      10.2
Total Retail Revenue    593.4     572.7     20.7     3.6
Transmission            37.3      33.7      3.6      10.7
Ancillary Services      1.1       (6.5)     7.6      (116.9)
Wholesale               2.0       2.4       (0.4)    (16.7)
Other                   3.9       3.4       0.5      14.7
Total Revenues          $ 637.7   $ 605.7   $ 32.0   5.3
Total Cost of Sales     260.9     244.9     16.0     6.5
Gross Margin            $ 376.8   $ 360.8   $ 16.0   4.4%

             Revenues                Megawatt Hours      Avg. Customer Counts
                                     (MWH)
             2013        2012        2013      2012      2013        2012
             (in thousands)
Retail
Electric
Montana      $ 198,375   $ 188,768   $ 1,751   $ 1,749   $ 275,913   $ 273,711
South Dakota 37,150      36,993      447       424       49,250      48,887
Residential 235,525     225,761     2,198     2,173     325,163     322,598
Montana      238,482     230,498     2,356     2,416     62,638      62,046
South Dakota 52,009      52,887      722       712       12,168      12,116
Commercial   290,491     283,385     3,078     3,128     74,806      74,162
Industrial   31,089      28,185      2,194     2,217     74          74
Other        24,352      24,600      168       178       6,129       6,101
Total Retail $ 581,457   $ 561,931   $ 7,638   $ 7,696   $ 406,172   $ 402,935
Electric
Total
Wholesale    $ 2,022     $ 2,382     $ 97      $ 137     $ —         $ —
Electric

                 Degree Days                      2013ascomparedwith:
Cooling          2013    2012    Historic         2012         Historic
Degree-Days                      Average                       Average
Montana          438     450     300              3% cooler    46% warmer
South Dakota     752     1,061   696              29% cooler   8% warmer
                 Degree Days                      2013ascomparedwith:
Heating          2013    2012    Historic         2012         Historic
Degree-Days                      Average                       Average
Montana          4,721   4,488   4,947            5% colder    5% warmer
South Dakota     6,174   4,375   5,573            41% colder   11% colder







NORTHWESTERN CORPORATION
REGULATED NATURAL GAS SEGMENT
Three Months Ended September 30,
(Unaudited)
                        Results
                        2013     2012     Change  % Change
                        (dollars in millions)
Retail revenues         $ 22.8   $ 19.9   $ 2.9   14.6%
Regulatory amortization 3.2      5.1      (1.9)   (37.3)
Total retail revenues   26.0     25.0     1.0     4.0
Wholesale and other     8.8      8.0      0.8     10.0
Total Revenues          34.8     33.0     1.8     5.5
Total Cost of Sales     9.0      9.2      (0.2)   (2.2)
Gross Margin            $ 25.8   $ 23.8   $ 2.0   8.4%

                Revenue               Dekatherms (Dkt)   Avg. Customer Counts
                2013       2012       2013       2012    2013         2012
                (in thousands)
Retail Gas
Montana         $ 9,770    $ 8,795    807        758     159,197      158,524
South Dakota    1,916      1,757      124        113     37,846       37,551
Nebraska        2,257      1,887      157        149     36,315       36,222
Residential     13,943     12,439     1,088      1,020   233,358      232,297
Montana         6,042      5,171      581        515     22,271       22,181
South Dakota    1,296      1,130      171        171     5,971        5,931
Nebraska        1,281      985        185        187     4,538        4,517
Commercial      8,619      7,286      937        873     32,780       32,629
Industrial      145        93         12         10      262          269
Other           94         68         10         8       156          150
Total Retail    $ 22,801   $ 19,886   2,047      1,911   266,556      265,345
Gas

                    Degree Days                  2013ascomparedwith:
Heating Degree-Days 2013  2012  Historic         2012         Historic Average
                                Average
Montana             231   244   357              5% warmer    35% warmer
South Dakota        60    65    90               8% warmer    33% warmer
Nebraska            21    27    49               22% warmer   57% warmer





NORTHWESTERN CORPORATION
REGULATED NATURAL GAS SEGMENT
Nine Months Ended September 30,
(Unaudited)
                        Results
                        2013      2012      Change   % Change
                        (dollars in millions)
Retail revenues         $ 173.5   $ 150.0   $ 23.5   15.7%
Regulatory amortization (6.3)     7.3       (13.6)   (186.3)
Total retail revenues   167.2     157.3     9.9      6.3
Wholesale and other     29.5      25.5      4.0      15.7
Total Revenues          196.7     182.8     13.9     7.6
Total Cost of Sales     82.5      83.0      (0.5)    (0.6)
Gross Margin            $ 114.2   $ 99.8    $ 14.4   14.4%

              Revenue                 Dekatherms (Dkt)   Avg. Customer Counts
              2013        2012        2013      2012     2013         2012
              (in thousands)
Retail Gas
Montana       $ 72,171    $ 67,049    8,014     7,656    160,330      159,316
South Dakota  20,227      15,447      2,354     1,709    38,146       37,792
Nebraska      18,774      14,234      2,012     1,578    36,656       36,520
Residential   111,172     96,730      12,380    10,943   235,132      233,628
Montana       37,338      34,409      4,252     4,004    22,443       22,329
South Dakota  13,498      9,656       2,119     1,545    6,028        5,961
Nebraska      10,016      7,880       1,496     1,279    4,596        4,571
Commercial    60,852      51,945      7,867     6,828    33,067       32,861
Industrial    776         672         88        80       264          273
Other         720         641         97        85       157          150
Total Retail  $ 173,520   $ 149,988   20,432    17,936   268,620      266,912
Gas

                   Degree Days                   2013ascomparedwith:
Heating            2013   2012   Historic        2012         Historic Average
Degree-Days                      Average
Montana            4,721  4,488  4,947           5% colder    5% warmer
South Dakota       6,174  4,375  5,573           41% colder   11% colder
Nebraska           4,741  3,611  4,584           31% colder   3% colder





NORTHWESTERN CORPORATION
SEGMENT RESULTS
Three Months Ended September 30,
(Unaudited)
(in thousands)
Three Months
Ended
September30,     Electric    Gas         Other       Eliminations  Total
2013
Operating         $ 227,103   $ 34,772    $ 373       $    —        $ 262,248
revenues
Cost of sales     95,264      9,034       —           —             104,298
Gross margin      131,839     25,738      373         —             157,950
Operating,
general and       49,155      18,521      4,864       —             72,540
administrative
Property and      19,381      6,572       3           —             25,956
other taxes
Depreciation      22,150      5,895       8           —             28,053
Operating income  41,153      (5,250)     (4,502)     —             31,401
(loss)
Interest expense  (14,302)    (2,560)     (194)       —             (17,056)
Other income      2,213       878         26          —             3,117
Income tax        (8,412)     3,520       3,077       —             (1,815)
(expense) benefit
Net income (loss) $ 20,652    $ (3,412)   $ (1,593)   $    —        $ 15,647

Three Months Ended
September30, 2012  Electric    Gas         Other     Eliminations  Total
Operating revenues  $ 202,485   $ 32,965    $ 416     $    —        $ 235,866
Cost of sales       83,814      9,247       —         —             93,061
Gross margin        118,671     23,718      416       —             142,805
Operating, general  44,711      17,452      893       —             63,056
and administrative
MSTI Impairment     24,039      —           —         —             24,039
Property and other  18,621      6,172       3         —             24,796
taxes
Depreciation        21,636      4,860       9         —             26,505
Operating income    9,664       (4,766)     (489)     —             4,409
(loss)
Interest expense    (15,181)    (2,363)     (199)     —             (17,743)
Other income        405         541         28        —             974
Income tax benefit  5,762       3,102       (276)     —             8,588
(expense)
Net income (loss)   $ 650       $ (3,486)   $ (936)   $    —        $ (3,772)





NORTHWESTERN CORPORATION
SEGMENT RESULTS
Nine Months Ended September 30,
(Unaudited)
(in thousands)
Nine Months Ended
September30,     Electric    Gas         Other       Eliminations  Total
2013
Operating         $ 637,667   $ 196,652   $ 1,110     $    —        $ 835,429
revenues
Cost of sales     260,879     82,528      —           —             343,407
Gross margin      376,788     114,124     1,110       —             492,022
Operating,
general and       142,594     56,899      9,248       —             208,741
administrative
Property and      57,549      19,968      8           —             77,525
other taxes
Depreciation      67,454      17,206      25          —             84,685
Operating income  109,191     20,051      (8,171)     —             121,071
(loss)
Interest expense  (42,840)    (7,553)     (583)       —             (50,976)
Other income      4,926       1,753       81          —             6,760
Income tax        (12,792)    (153)       3,980       —             (8,965)
(expense) benefit
Net income (loss) $ 58,485    $ 14,098    $ (4,693)   $    —        $ 67,890

Nine Months Ended
September30,     Electric    Gas         Other       Eliminations  Total
2012
Operating         $ 605,716   $ 182,812   $ 1,041     $    —        $ 789,569
revenues
Cost of sales     244,902     82,982      —           —             327,884
Gross margin      360,814     99,830      1,041       —             461,685
Operating,
general and       137,753     55,397      2,575       —             195,725
administrative
MSTI impairment   24,039      —           —           —             24,039
Property and      55,628      18,759      8           —             74,395
other taxes
Depreciation      64,770      14,569      25          —             79,364
Operating income  78,624      11,105      (1,567)     —             88,162
(loss)
Interest expense  (42,257)    (6,660)     (681)       —             (49,598)
Other income      1,818       1,235       81          —             3,134
Income tax        (3,322)     522         811         —             (1,989)
(expense) benefit
Net income (loss) $ 34,863    $ 6,202     $ (1,356)   $    —        $ 39,709

SOURCE NorthWestern Corporation

Website: http://www.northwesternenergy.com
Contact: Claudia Rapkoch (866) 622-8081, claudia.rapkoch@northwestern.com,
Investor Relations Contact, Travis Meyer (605) 978-2967,
travis.meyer@northwestern.com
 
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