NorthWestern Energy Group, Inc. · NASDAQ:NWE
NorthWestern Energy — Corporate Update (October 2003)
17 slides from NorthWestern Energy's corporate update, October 2003
Slide 1: Reorganization Update
Cc 0 Reorganization Update October 2003
Slide 2: Chapter 11 overview agenda
———E——— «Chapter 11 overview « Factors that led to filing « Rationale for filing » Reorganization goals * Performance update « Utility operational update « Financial update « Sale of Blue Dot/Expanets/other assets «Key developments in Chapter 11 case «Chapter 11 process and timeline * NorthWestern g
Slide 3: NorthWestern's Reorganization Filing
NorthWestern’ S Reorganization Filing * High debt burden — $2.2 billion * Decline in credit ratings * Pressure from trade creditors (energy suppliers for default supply requiring prepayment) + Inability to sell nonutility businesses outside of court filing + Inability to obtain new financing * Pendi
Slide 4: Rationale Behind Filing
Rationale Behind Filing * Board, new management spent months attempting an out-of-court restructuring * Increasing obstacles prevented out-of-court restructuring + Chapter 11 allows company to continue regular utility service operations while it restructures its finances * Provides legal and financi
Slide 5: Reorganization Filing
Reorganization Filing * Filed in U.S. Bankruptcy Court for District of Delaware * NorthWestern has been a Delaware corporation for 80 years + Filed Chapter 11 to implement orderly financial restructuring of the company * Reorganization, not liquidation » Core utility assets are not for sale * Expane
Slide 6: Goals for Reorganization
ex For Reoaeneaton * Emerge as financially stable, investment grade energy company * Significantly reduce debt « Goal: Approximately $1 billion reduction * Emerge focused on core regulated utility operations NerthWestern ceereaetren
Slide 7: NorthWestern Energy Service Area
Slide 8: Strong Operating Performance 2002 and 2001
Strong Operating Performance 2002 and 2001 Winner for }- Reubmyor’ Plains Region Service Reliabil Customer Satisfaction (Year 2002 Total Outage Time Minutes) (satisfied or very satisfied) Overall W: Overall wey Customer Outage System Interruption | NorthWestern Energy | NorthWestern Energy Duration
Slide 9: Utility Operations
Utility Operations. — * Continuing normal operations * No disruption of service * No utility workforce reductions * Service/response to our customers unaffected « Current delivery rates unaffected by filing * Electric and natural gas commodity rates change monthly * Energy supply continues unchanged
Slide 10: Regulatory Issues During Reorganization
Regulatory Issues During Reorganization — * Process allows for complex energy supply issues to be resolved * Settling League of Cities and Towns and Montana School Boards Association supply contracts » Review of Qualifying Facilities and impact on customers * Resolve natural gas cost disallowance »
Slide 11: Employees and Retirees
Employees ar anc 2 d Retirees * No reductions in utility workforce * No changes in employee compensation or benefits » Court approved motion to ensure continuity of compensation/benefits to employees through process * No changes to retiree qualified pension and benefits * Made $10.2 million payments
Slide 12: Vendors/Suppliers
Vendors/Suppliers * Renegotiated favorable supply agreements with PPL Montana and Avista Energy » Return to normal credit terms * Negotiating with other suppliers + Critical vendor list approved by court » Energy suppliers * Transmission partners » Customer service systems * NorthWestern expects to
Slide 13: Expanets and Blue Dot Sales
Expanets a Blue Dot arms + Agreement for sale of Expanets to Cerberus Capital Management and TenX Capital Management (Sep. 15, 2003) * Transaction valued at $107.5 million, less debt and capitalized leases, plus $27.5 million performance note » 45-day auction for topping bids proceeding * Letters of
Slide 14: Other Assets and Concerns
Ore cerns Sree * Montana First Megawatts « Looking to have someone complete project in Great Falls «Colstrip Transmission Line = Pending litigation with PPL Corporation * CornerStone Propane Senior Note « Business pursuing sale NerthWestern eeereaetrar
Slide 15: Chapter 11 Process and Timeline
Stage 1: Stage 2: Stage 3: Bankruptcy Fill Due Dili and Confirmation of Completion of x Case oe Be Sn of Terms | Plan and Exitfrom Bankruptcy Organization of Reorganization Bankruptcy Process 2-3 months 8-10 months 3-5 months 13-18 months NerthWestern
Slide 16: NorthWestern Going Forward
Not trWestern Going coor «Investment grade energy company * Firmly focused on core utility business * Chapter 11 has had no impact on ability to continue operations or distribution rates * Position company for long-term health and growth NerthWestern eeereaetrar
Slide 17: Winter Heating Update
Winter Heating eenren Oeaate * Bad News: Natural gas supply costs are higher than last year + Good News: Supply costs are not as high as initially projected + Company’s procurement and storage efforts helping to stabilize costs * Sufficient storage and supply available for customers * NorthWestern m