NorthWestern (NWE) 8-K Results of Operations and Financial Condition

Exhibit 99.2

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AGA Financial Forum

Michael J. Hanson
President

Brian B. Bird
Chief Financial Officer

New Orleans, La.

May 2, 2005

Michael J. Hanson
President

[LOGO]

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Forward-Looking Statement

During the course of this presentation today, we will be discussing certain subjects including those pertaining to our strategy, and our discussions may contain forward-looking information. Although our expectations and beliefs are based on reasonable assumptions, actual results may differ materially. These factors also are listed in each of our press releases and disclosed in the company’s public filings with the SEC.

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Introduction

•Following emergence, NorthWestern is a much stronger company

•Significantly reduced debt, strong balance sheet, solid cash flow

•Focused on our transmission and distribution utility operations

•Better positioned to serve our customers

•Able to grow with the communities we serve

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Company Overview

•NorthWestern Corporation, headquartered in Sioux Falls, S.D., is an investor-owned utility and one of the largest providers of electricity and natural gas in the northwest quadrant of the United States

•We serve approximately 617,100 customers – 368,200 electric and 248,900 natural gas – in Montana, South Dakota and Nebraska

•We have approximately 1,350 employees

•Our market capitalization is approximately $1 billion

•In March 2005, we initiated a quarterly dividend of 22 cents per share

•Annualizes to 88 cents per share (3.2% yield)

•Payout ratio of approximately 60% to 65% (continuing operations)

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Service Territory

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First Quarter 2005 Highlights

Consolidated Operations

(millions)

	First Quarter 2005		First Quarter 2004		Increase
Gross Margin	$	144.7	$	132.7	9.0	%
Income from Continuing Operations	18.4		12.1		52.5	%
Net Income	18.9		17.0		11.4	%

•Nearly $94 million provided by cash flow from operations in first quarter of 2005

•Invested approximately $13.4 million in capital expenditures

•Paid down approximately $12 million in debt and capital leases in first quarter of 2005

•Paid dividends on common stock of $7.8 million

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Value Drivers

•T&D business focus

•Solid and reliable operations

•Complete default supply portfolio procurement

•Continue to improve regulatory environment

•Efficiency improvement and cost control

•Asset sales

•Attain investment grade rating

•Resolve outstanding bankruptcy claims

•Develop strategy to redeploy excess free cash flow

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Brian B. Bird
Chief Financial Officer

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2004 Financial Overview

•2004 results utilize fresh-start reporting

•Consolidated net income was $544.4 million in 2004 vs. loss of $128.7 million in 2003

•Earnings improvement primarily reorganization items

•Gross margin was $475.2 million compared to $476.8 million in 2003

•Nearly $175 million provided by cash flow from operations and asset sales in 2004

•Invested approximately $80 million in cap ex

•Paid down approximately $80 million in debt

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2004 Electric and Natural Gas Operations

2004 Revenues	2004 Gross Margin
(millions)	(millions)
[CHART]	[CHART]

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2004 P&L Summary

	UNAUDITED
(in millions)	Successor and Predecessor Combined Dec. 31, 2004			Reorganization Impacts and Other Significant Items			2004 as Adjusted
OPERATING REVENUES	$	1,039.0		$	—		$	1,039.0
COST OF SALES	563.8			(10.0		)(b)	553.8
GROSS MARGIN	475.2			10.0			485.2
OPERATING EXPENSES
Operating, general and administrative	221.7			—			221.7
Property and other taxes	65.1			—			65.1
Depreciation	72.8			—			72.8
Reorganization items	(532.6		)	532.6			—
Impairment on assets held for sale	10.0			(10.0		)	—
Total Operating Expenses	(163.0		)	522.6			359.6
OPERATING INCOME	638.2			(512.6		)	125.6
Interest Expense	(83.8		)	—			(83.8		)
Gain (Loss) on Debt Extinguishment	(21.3		)	21.3			—
Investment Income and Other	3.2			—			3.2
Income (Loss) from Continuing Operations Before Income Taxes	536.3			(491.3		)	45.0
Benefit (Provision) for Income Taxes	6.3			(23.6		)	(17.3		)(a)
Income (Loss) from Continuing Operations	$	542.6		$	(514.9	)	$	27.7
Estimated Basic EPS from Continuing Operations (35.6 million shares)							$	0.78

(a) 2004 as Adjusted assumed an effective book tax rate of 38.75%.

(b) Consists of losses on fixed-price natural gas and electric contracts and disallowed natural gas costs.

We believe presenting adjustments for the reorganization and other significant items above provides investors with a more meaningful analysis of 2004 for comparison with future operating results.  While we believe this to be useful information, it should not be used in isolation or as a substitute for consolidated statement of income (loss) data prepared in accordance with generally accepted accounting principles.

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2005 Outlook

•Projecting earnings from continuing operations of $1.30 to $1.45 per share (basic)

•Absent any unusual weather and unforeseen reorganization issues

•Bridge from 2004 to 2005

•Significant reduction in interest expense

•Reduced G&A expense

•Modest increase in margins due to organic growth

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First Quarter 2005 –
Financial Overview

Consolidated Operations

(millions)

	Q1 2005		Q1 2004		Increase
•      Gross Margin	$	144.7	$	132.7	9.0	%
•      Increase due to a gain on amendment to a Montana Qualifying Facility of approximately $4.9 million
•      Unregulated electric segment (Colstrip 4) margins increased approximately $5.0 million due to higher market prices
•     Income from Continuing Operations Before Income Taxes	$	32.1	$	11.9	169.0	%
•     Increase due to margin improvement
•     Decrease in reorganization items of $3.5 million from 2004
•     Interest expense decreased approximately $5.4 million from 2004
•     Income from Continuing Operations	$	18.4	$	12.1	52.5	%
•     Since emergence, the Company books a full provision for income taxes

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First Quarter 2005 – P&L Summary

	Successor Company			Predecessor Company
	Three Months Ended March 31,
(000’s)	2005			2004
Operating Revenues	$	335,093		$	305,627
Cost of Sales	190,381			172,918
Gross Margin	144,712			132,709
Operating Expenses
Operating, general and administrative	56,655			56,805
Property and other taxes	18,205			17,903
Depreciation	18,690			18,176
Reorganization Items	3,363			6,830
Total Operating Expenses	96,913			99,714
Operating Income	47,799			32,995
Interest Expense	(16,342		)	(21,775		)
Investment Income and Other	607			701
Income from Continuing Operations Before Income Taxes	32,064			11,921
(Provision) Benefit for Income Taxes	(13,670		)	138
Income from Continuing Operations	18,394			12,059
Discontinued Operations,Net of Taxes	524			4,922
Net Income	$	18,918		$	16,981

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First Quarter 2005 –

Electric and Natural Gas Operations

Q1 2005 Revenues	Q1 2005 Gross Margin
(millions)	(millions)
[CHART]	[CHART]

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First Quarter 2005 – Segment Information

Three Months Ended March 31, 2005

(thousands)

	Regulated				Unregulated
	Electric		Natural Gas		Electric		Natural Gas		Other			Total
Gross Margin	$	84,296	$	40,190	$	18,066	$	2,576	$	(416	)	144,712
Operating Income	$	27,333	$	16,581	$	7,519	$	1,606	$	(5,240	)	47,799

	MWH	MMBtu	MWH	MMBtu
Volumes (000’s)	2,449	12,938	511	7,012

Three Months Ended March 31, 2004

(thousands)

	Regulated				Unregulated
	Electric		Natural Gas		Electric			Natural Gas		Other			Total
Gross Margin	$	76,710	$	40,203	$	13,039		$	3,168	$	(411	)	132,709
Operating Income	$	22,817	$	18,159	$	(1,398	)	$	2,078	$	(8,661	)	32,995

	MWH	MMBtu	MWH	MMBtu
Volumes (000’s)	2,374	13,214	454	6,353

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First Quarter 2005 – Balance Sheet

	Successor Company
(000’s)	Mar. 31, 2005		Dec. 31, 2004
ASSETS
Cash	$	77,314	$	17,058
Other Current Assets	294,518		330,620
Property, Plant and Equipment, Net	1,378,468		1,379,060
Goodwill	435,076		435,076
Regulatory Assets	218,964		224,192
Other Noncurrent Assets	29,426		27,510
Total assets	$	2,433,766	$	2,413,516
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current maturities of long term debt	$	67,665	$	73,380
Current Liabilities	270,261		254,688
Long-term Debt	757,354		763,566
Noncurrent Regulatory Liabilities	164,425		160,750
Other Noncurrent Liabilities	453,496		451,797
Total liabilities	1,713,201		1,704,181
Total shareholders’ equity	720,565		709,335
Total liabilities and shareholders’ equity	$	2,433,766	$	2,413,516

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First Quarter 2005 – Cash Flow

	Successor Company			Predecessor Company
	Three Months Ended March 31,
(000’s)	2005			2004
Net Income	$	18,918		$	16,981
Depreciation	18,690			18,176
(Gain) Loss on QF Contract Restructuring	(4,888		)	—
Deferred Income Taxes	13,387			(916		)
(Income) Loss on Disco. Ops., Net	(524		)	(4,922		)
Working Capital and Other Non-cash	48,373			68,662
Cash Flow from Operations	93,956			97,981
Capital Expenditures & Investment Activities	(13,395		)	(12,899		)
Free Cash Flow	80,561			85,082
Dividends on Common Stock	(7,834		)	—
Debt Increase / (Decrease), Net	(12,039		)	(4,215		)
Other	(432		)	—
Increase / (Decrease) in Cash	60,256			80,867
Beginning Cash	17,058			15,183
Ending Cash	$	77,314		$	96,050

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Rating Agency Update

	Secured		Unsecured
	Rating	Outlook	Rating	Outlook
Fitch	BB+	Positive	N/A	N/A
Moody’s	Ba1	Stable	Ba2	Stable
S&P	BB	Positive	BB-	Positive

Steps necessary for investment grade rating

1.Financial performance track record

2.Asset sales proceeds received

3.Progress on outstanding litigation

4.Pay down debt

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Summary

•Solid first quarter 2005 financial results

•Reaffirming guidance on basic earnings from continuing operations of $1.30 to $1.45 per share

•Absent any unusual weather and unforeseen reorganization items

•Taking steps to attain investment grade rating

•Developing strategy to redeploy excess free cash flow

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