Exhibit 99.1
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following presents our unaudited pro forma combined financial
information as of September 30, 2001 and for the year ended December 31, 2000
and for the nine months ended September 30, 2001. The unaudited pro forma
combined statements of income for the year ended December 31, 2000 and the nine
months ended September 30, 2001 give effect to the following transactions as if
each transaction had occurred as of the beginning of the period presented and
the unaudited pro forma combined balance sheet as of September 30, 2001 gives
effect to the following transactions as if each transaction had occurred on
September 30, 2001:
- the sale of 3,680,000 shares of our common stock issued in October 2001
at $21.25 per share and the use of the net proceeds therefrom;
- the sale of 4,000,000 shares of 8 1/4% trust preferred securities of
NorthWestern Capital Financing II on December 21, 2001 and the sale of
270,000 additional shares of 8 1/4% trust preferred securities of
NorthWestern Capital Financing II on January 15, 2002, pursuant to an
overallotment option, at $25 per share and the use of the net proceeds
therefrom;
- the proposed sale of 4,000,000 shares of 8.10% trust preferred securities
of NorthWestern Capital Financing III at $25 per share and the use of the
net proceeds therefrom;
- our pending acquisition of the utility business of Montana Power (the "MPC
Utility"), which includes regulated electric and natural gas distribution
and transmission operations and certain unregulated, energy-related
businesses that provide products and services to industrial, institutional
and commercial customers, for a purchase price of $1.1 billion, including
the assumption of approximately $488 million in existing debt and
preferred stock of The Montana Power Company ("Montana Power"); and
- our anticipated financing of the acquisition of the MPC Utility with the
proceeds from our new credit facility (the "New Credit Facility")
described in Item 5 to the Current Report on Form 8-K of NorthWestern
Corporation, filed with the Securities and Exchange Commission on
January 28, 2002, and assuming interest rates on such facility as of
January 17, 2002. We have classified the New Credit Facility as long-term
because we intend to issue a combination of long-term debt and equity
following the closing of the acquisition of the MPC Utility to refinance
the initial financing and provide working capital.
The unaudited pro forma combined financial information is based upon
currently available information and assumptions that our management believes are
reasonable. The unaudited pro forma combined financial information is prepared
for illustrative purposes only and is not necessarily indicative of the
operating results or financial condition of the company that would have occurred
had the transactions occurred at the periods presented, nor is the unaudited pro
forma combined financial information necessarily indicative of future operating
results or the financial position of the combined companies. Pro forma results
for the nine months ended September 30, 2001 are not necessarily indicative of
the results that may be expected for a full year.
You should read the following tables in conjunction with "Montana Power
Company Utility Unaudited Pro Forma Combined Condensed Financial Data"
included in Exhibit 99.3 to NorthWestern's Current Report on Form 8-K, filed
with the Securities and Exchange Commission on December 12, 2001, (the
"December 12 Current Report"), the consolidated financial statements and
notes thereto of NorthWestern included in NorthWestern's most recent Annual
Report on Form 10-K and Quarterly Report on Form 10-Q and the combined
financial statements and notes thereto of the Utility of The Montana Power
Company included in Exhibit 99.1 to the December 12 Current Report.
NORTHWESTERN CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
(in thousands, except for per share amounts)
<Table>
<Caption>
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
----------------------------------------------------------------
NORTHWESTERN NORTHWESTERN
CAPITAL CAPITAL
FINANCING II FINANCING III
8.25% TRUST 8.10% TRUST
PREFERRED PREFERRED
NORTHWESTERN COMMON STOCK SECURITIES SECURITIES
CORPORATION OFFERING OFFERING OFFERING
ACTUAL ADJUSTMENT(1) ADJUSTMENT(2) ADJUSTMENT(3)
------------ -------------- --------------- ---------------
OPERATING REVENUES........... $3,440,336
COST OF SALES................ 2,784,079
-----------
GROSS MARGIN................. 656,257
-----------
OPERATING EXPENSES:
Selling, general and
administrative
expenses................. 607,596
Depreciation and
amortization............. 91,300
-----------
698,896
-----------
OPERATING INCOME (LOSS)...... (42,639)
Interest expense............. (66,253) $1,325 $3,322 $2,919
Investment income and
other...................... 4,130
----------- ---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME
TAXES AND MINORITY
INTERESTS.................. (104,762) 1,325 3,322 2,919
Benefit (provision) for
income taxes............... 17,247 (517) 1,280 1,231
----------- ---------- ---------- ----------
INCOME (LOSS) BEFORE MINORITY
INTERESTS.................. (87,515) 808 4,602 4,150
Minority interests........... 126,956
----------- ---------- ---------- ----------
NET INCOME................... 39,441 808 4,602 4,150
Minority interest on
preferred securities of
subsidiary trust........... (4,950) (6,605) (6,075)
Dividends on cumulative
preferred stock............ (144)
----------- ---------- ---------- ----------
EARNINGS ON COMMON STOCK..... $34,347 $808 $(2,003) $(1,925)
=========== ========== ========== ===========
AVERAGE COMMON SHARES
OUTSTANDING................ 23,604 3,680
EARNINGS PER AVERAGE COMMON
SHARE
Basic...................... $1.46
Diluted.................... 1.45
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
-----------------------------------------------------------
NORTHWESTERN NORTHWESTERN
PRO FORMA AS PRO FORMA AS
ADJUSTED FOR NORTHWESTERN FURTHER
COMMON STOCK INITIAL MPC ADJUSTED FOR
AND TRUST UTILITY MPC UTILITY
PREFERRED PRO FORMA ACQUISITION ACQUISITION
SECURITIES MPC UTILITY FINANCING AND
OFFERINGS ADJUSTMENT(4) ADJUSTMENT(5) FINANCING
------------ ------------- ------------- ------------
OPERATING REVENUES........... $3,440,336 $490,651 $3,930,987
COST OF SALES................ 2,784,079 248,172 3,032,251
----------- ---------- -----------
GROSS MARGIN................. 656,257 242,479 898,736
----------- ---------- -----------
OPERATING EXPENSES:
Selling, general and
administrative
expenses................. 607,596 124,617 732,213
Depreciation and
amortization............. 91,300 42,765 134,065
----------- ---------- -----------
698,896 167,382 866,278
----------- ---------- -----------
OPERATING INCOME (LOSS)...... (42,639) 75,097 32,458
Interest expense............. (58,687) (24,721) $(20,724) (104,132)
Investment income and
other...................... 4,130 1,707 5,837
----------- ---------- ---------- -----------
INCOME (LOSS) BEFORE INCOME
TAXES AND MINORITY
INTERESTS.................. (97,196) 52,083 (20,724) (65,837)
Benefit (provision) for
income taxes............... 19,241 (18,706) 8,082 8,617
----------- ---------- ---------- -----------
INCOME (LOSS) BEFORE MINORITY
INTERESTS.................. (77,955) 33,377 (12,642) (57,220)
Minority interests........... 126,956 126,956
----------- ---------- ---------- -----------
NET INCOME................... 49,001 33,377 (12,642) 69,736
Minority interest on
preferred securities of
subsidiary trust........... (17,630) (4,119) (21,749)
Dividends on cumulative
preferred stock............ (144) (144)
----------- ---------- ---------- -----------
EARNINGS ON COMMON STOCK..... $31,227 $29,258 $(12,642) $47,843
=========== ========== ========== ===========
AVERAGE COMMON SHARES
OUTSTANDING................ 27,284 27,284
EARNINGS PER AVERAGE COMMON
SHARE
Basic...................... $1.14 $1.75
Diluted.................... 1.14 1.75
</Table>
The accompanying notes are an integral part of these unaudited
pro forma combined financial statements
NORTHWESTERN CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME
(in thousands, except for per share amounts)
<Table>
<Caption>
FOR THE YEAR ENDED DECEMBER 31, 2000
----------------------------------------------------------------
NORTHWESTERN NORTHWESTERN
CAPITAL CAPITAL
FINANCING II FINANCING III
8.25% TRUST 8.10% TRUST
PREFERRED PREFERRED
NORTHWESTERN COMMON STOCK SECURITIES SECURITIES
CORPORATION OFFERING OFFERING OFFERING
ACTUAL ADJUSTMENT(1) ADJUSTMENT(2) ADJUSTMENT(3)
------------ ------------- --------------- ---------------
OPERATING REVENUES............ $7,132,090
COST OF SALES................. 6,295,675
-----------
GROSS MARGIN.................. 836,415
-----------
OPERATING EXPENSES:
Selling, general and
administrative expenses... 686,814
Depreciation and
amortization.............. 108,329
-----------
795,143
-----------
OPERATING INCOME (LOSS)....... 41,272
Interest expense.............. (77,207) $2,986 $7,578 $6,656
Investment income and other... 8,981
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME
TAXES AND MINORITY
INTERESTS................... (26,954) 2,986 7,578 6,656
Benefit (provision) for income
taxes....................... 4,117 (1,165) 479 563
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE MINORITY
INTERESTS................... (22,837) 1,821 8,057 7,219
Minority interests............ 73,436
----------- ----------- ----------- -----------
INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE........ 50,599 1,821 8,057 7,219
Cumulative effect on change in
accounting principle, net of
tax and minority
interests................... (1,046)
----------- ----------- ----------- -----------
NET INCOME.................... 49,553 1,821 8,057 7,219
Minority Interest on Preferred
Securities of Subsidiary
Trust....................... (6,601) (8,807) (8,100)
Dividends on Cumulative
Preferred Stock............. (191)
----------- ----------- ----------- -----------
EARNINGS ON COMMON STOCK...... $42,761 $1,821 $(750) $(881)
=========== =========== =========== ===========
AVERAGE COMMON SHARES
OUTSTANDING................. 23,141 3,680
EARNINGS PER AVERAGE COMMON
SHARE
Basic before cumulative
effect...................... $1.89
Cumulative effect of change
in accounting principle... (0.04)
Basic....................... 1.85
Diluted before cumulative
effect.................... 1.87
Cumulative effect of change
in accounting principle... (0.04)
Diluted..................... 1.83
FOR THE YEAR ENDED DECEMBER 31, 2000
----------------------------------------------------------------
NORTHWESTERN NORTHWESTERN
PRO FORMA AS PRO FORMA AS
ADJUSTED FOR NORTHWESTERN FURTHER
COMMON STOCK INITIAL MPC ADJUSTED FOR
AND TRUST UTILITY MPC UTILITY
PREFERRED PRO FORMA ACQUISITION ACQUISITION
SECURITIES MPC UTILITY FINANCING AND
OFFERINGS ADJUSTMENT(4) ADJUSTMENT(5) FINANCING
------------ ------------- --------------- ---------------
OPERATING REVENUES............ $7,132,090 $628,144 $7,760,234
COST OF SALES................. 6,295,675 319,505 6,615,180
----------- ------------ ------------
GROSS MARGIN.................. 836,415 308,639 1,145,054
----------- ------------
OPERATING EXPENSES:
Selling, general and
administrative expenses... 686,814 186,183 872,997
Depreciation and
amortization.............. 108,329 54,123 162,452
----------- ------------ ------------
795,143 240,306 1,035,449
----------- ------------ ------------
OPERATING INCOME (LOSS)....... 41,272 68,333 109,605
Interest expense.............. (59,505) (35,880) $(27,632) (123,499)
Investment income and other... 8,981 14,481 23,462
----------- ------------ ----------- ------------
INCOME (LOSS) BEFORE INCOME
TAXES AND MINORITY
INTERESTS................... (9,734) 46,934 (27,632) 9,568
Benefit (provision) for income
taxes....................... 3,994 (16,162) 10,776 (1,392)
----------- ------------ ----------- ------------
INCOME (LOSS) BEFORE MINORITY
INTERESTS................... (5,740) 30,772 (16,856) 8,176
Minority interests............ 73,436 73,436
----------- ------------ ----------- ------------
INCOME BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE........ 67,696 30,772 (16,856) 81,612
Cumulative effect on change in
accounting principle, net of
tax and minority
interests................... (1,046) (1,046)
----------- ------------ ----------- ------------
NET INCOME.................... 66,650 30,772 (16,856) 80,566
Minority Interest on Preferred
Securities of Subsidiary
Trust....................... (23,508) (5,492) (29,000)
Dividends on Cumulative
Preferred Stock............. (191) (191)
----------- ------------ ----------- ------------
EARNINGS ON COMMON STOCK...... $42,951 $25,280 $(16,856) $51,375
=========== ============ =========== ============
AVERAGE COMMON SHARES
OUTSTANDING................. 26,821 26,821
EARNINGS PER AVERAGE COMMON
SHARE
Basic before cumulative
effect...................... $1.64 $1.95
Cumulative effect of change
in accounting principle... (0.04) (0.04)
Basic....................... 1.60 1.91
Diluted before cumulative
effect.................... 1.62 1.93
Cumulative effect of change
in accounting principle... (0.04) (0.04)
Diluted..................... 1.58 1.89
</Table>
The accompanying notes are an integral part of these pro forma combined
financial statements
NORTHWESTERN CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(in thousands, except for per share amounts)
<Page>
NORTHWESTERN CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(in thousands)
<Table>
<Caption>
AT SEPTEMBER 30, 2001
-------------------------------------------------------------------------------------------
NORTHWESTERN
OFFERING OF 8 1/4% PRO FORMA AS
TRUST PREFERRED TRUST PREFERRRED ADJUSTED FOR
SECURITIES OF SECURITIES COMMON STOCK
NORTHWESTERN OFFERED BY THIS AND
NORTHWESTERN COMMON STOCK CAPITAL PROSPECTUS TRUST PREFERRED
CORPORATION OFFERING FINANCING II SUPPLEMENT SECURITIES
ACTUAL ADJUSTMENT(6) ADJUSTMENT(7) ADJUSTMENT(8) OFFERINGS
------------- ---------------- ------------------ ---------------- ----------------
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents.......... $84,496 $30,072 $114,568
Accounts receivable,
net.................. 388,243 388,243
Inventories............ 89,290 89,290
Other.................. 83,556 83,556
------------ ------------ --------------
645,585 30,072 675,657
------------ ------------ --------------
PROPERTY, PLANT AND
EQUIPMENT, NET......... 806,236 806,236
GOODWILL AND OTHER
INTANGIBLE ASSETS,
NET.................... 994,721 994,721
OTHER ASSETS:
Investments............ 96,733 96,733
Other assets........... 80,009 $3,863 $2,462 86,334
------------ ------------- ------------- --------------
176,742 3,863 2,462 183,067
------------ ------------ ------------- ------------- --------------
$2,623,284 $30,072 $3,863 $2,462 $2,659,681
============ ============ ============= ============= ==============
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of
long-term debt....... $5,000 $5,000
Current maturities of
long-term debt--
nonrecourse.......... 106,522 106,522
Short-term debt........ 8,000 $(8,000)
Short-term debt of
subsidiaries--
nonrecourse.......... 167,723 167,723
Accounts payable....... 269,002 269,002
Accrued expenses....... 226,195 226,195
------------ ------------ --------------
782,442 (8,000) 774,442
------------ ------------ --------------
LONG-TERM LIABILITIES:
Long-term debt......... 586,350 (1,800) $(102,887) $(72,538) 409,125
Long-term debt of
subsidiaries--
nonrecourse.......... 491,765 491,765
Deferred income
taxes................ 46,663 46,663
Other noncurrent
liabilities.......... 58,469 58,469
------------ ------------ ------------- ------------- --------------
1,183,247 (1,800) (102,887) (72,538) 1,006,022
------------ ------------ ------------- ------------- --------------
MINORITY INTERESTS....... 234,552 (35,000) 199,552
PREFERRED STOCK,
PREFERENCE STOCK AND
PREFERRED SECURITIES:
Preferred stock--4 1/2%
series............... 2,600 2,600
Redeemable preferred
stock--6 1/2%
series............... 1,150 1,150
Preference stock.......
Company obligated
manditorily
redeemable security
of trust holding
solely parent
debentures........... 87,500 106,750 75,000 269,250
------------ ------------- ------------- --------------
91,250 106,750 75,000 273,000
------------ ------------- ------------- --------------
SHAREHOLDERS' EQUITY:
Common stock........... 41,502 6,440 47,942
Paid-in capital........ 172,954 68,432 241,386
Retained earnings...... 117,838 117,838
Accumulated other
comprehensive
income............... (501) (501)
------------ ------------ --------------
331,793 74,872 406,665
------------ ------------ ------------- ------------- --------------
$2,623,284 $30,072 $3,863 $2,462 $2,659,681
============ ============ ============= ============= ==============
<Caption>
AT SEPTEMBER 30, 2001
--------------------------------------------------
NORTHWESTERN
NORTHWESTERN PRO FORMA AS
INITIAL MPC FURTHER
UTILITY ADJUSTED FOR
PRO FORMA ACQUISITION MPC UTILITY
MPC UTILITY FINANCING ACQUISITION
ADJUSTMENT(9) ADJUSTMENT(10) AND FINANCING
-------------- --------------- ---------------
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents.......... $6,504 $121,072
Accounts receivable,
net.................. 54,439 442,682
Inventories............ 11,508 100,798
Other.................. 106,381 189,937
------------ -------------
178,832 854,489
------------ -------------
PROPERTY, PLANT AND
EQUIPMENT, NET......... 1,092,178 1,898,414
GOODWILL AND OTHER
INTANGIBLE ASSETS,
NET.................... 7,561 $111,184 1,113,466
OTHER ASSETS:
Investments............ 25,439 122,172
Other assets........... 226,471 312,805
------------ -------------
251,910 434,977
------------ ------------ -------------
$1,530,481 $111,184 $4,301,346
============ ============ =============
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of
long-term debt....... $3,399 $8,399
Current maturities of
long-term debt--
nonrecourse.......... 106,522
Short-term debt........ --
Short-term debt of
subsidiaries--
nonrecourse.......... 167,723
Accounts payable....... 37,162 306,164
Accrued expenses....... 133,556 359,751
------------ -------------
174,117 948,559
------------ -------------
LONG-TERM LIABILITIES:
Long-term debt......... 419,601 $602,000 1,430,726
Long-term debt of
subsidiaries--
nonrecourse.......... 491,765
Deferred income
taxes................ 46,663
Other noncurrent
liabilities.......... 380,947 439,416
------------ ------------ -------------
800,548 602,000 2,408,570
------------ ------------ -------------
MINORITY INTERESTS....... 199,552
PREFERRED STOCK,
PREFERENCE STOCK AND
PREFERRED SECURITIES:
Preferred stock--4 1/2%
series............... 2,600
Redeemable preferred
stock--6 1/2%
series............... 1,150
Preference stock.......
Company obligated
manditorily
redeemable security
of trust holding
solely parent
debentures........... 65,000 334,250
------------ -------------
65,000 338,000
------------ -------------
SHAREHOLDERS' EQUITY:
Common stock........... 47,942
Paid-in capital........ 490,816 (490,816) 241,386
Retained earnings...... 117,838
Accumulated other
comprehensive
income............... (501)
------------ ------------ -------------
490,816 (490,816) 406,665
------------ ------------ -------------
$1,530,481 $111,184 $4,301,346
============ ============ =============
</Table>
The accompanying notes are an integral part of these unaudited pro forma
combined financial statements.
NORTHWESTERN CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED
FINANCIAL INFORMATION
The Unaudited Pro Forma Combined Financial Information is based on the following
assumptions:
(1) Reflects the receipt of $74.9 million net proceeds, after deducting
offering expenses, from the sale of 3,680,000 shares of NorthWestern common
stock issued in October 2001 at $21.25 per share and the application of the
proceeds therefrom. Approximately $35.0 million of these net proceeds were
contributed to NorthWestern's Blue Dot Services Inc. subsidiary for the
redemption of certain preferred stock and common stock pursuant to existing
agreements, and the remainder was used for general corporate purposes,
including reducing short-term debt and amounts drawn under NorthWestern's
existing credit facility.
(2) Reflects the receipt of $102.9 million of net proceeds, after paying the
underwriting commission and estimated offering expenses totalling
approximately $3.9 million, from the sale of 4,000,000 shares of
NorthWestern Capital Financing II's 8-1/4% trust preferred securities
(liquidation amount $25 per trust preferred security) issued on
December 21, 2001 at $25.00 per share and the sale of 270,000 additional
shares of NorthWestern Capital Financing II's 8-1/4% trust preferred
securities (liquidation amount $25 per trust preferred security) issued on
January 15, 2002 at $25.00 per share plus accrued dividends from
December 21, 2001, pursuant to the exercise of an over allotment option
and the use of proceeds from such sales for general corporate purposes
and to repay a portion of the amounts outstanding under NorthWestern's
existing credit facility.
(3) Reflects the receipt of $96.8 million of net proceeds, after paying the
underwriting commission and approximately $100,000 of estimated offering
expenses, from the proposed sale of 4,000,000 shares of NorthWestern
Capital Financing III's 8.10% trust preferred securities (liquidation
amount $25 per trust preferred security) scheduled to occur on January
31, 2002 and the use of proceeds from the sale for general corporate
purposes and to repay a portion of the amounts outstanding under
NorthWestern's existing credit facility.
(4) Reflects the results of operations of the MPC Utility for a purchase price
of $1.1 billion, including the assumption of approximately $488 million in
existing Montana Power debt and preferred stock.
(5) Reflects NorthWestern's anticipated initial financing of the acquisition of
the MPC Utility with the New Credit Facility described in Item 5 to the
Current Report on Form 8-K of NorthWestern Corporation, filed with the
Securities and Exchange Commission on January 28, 2002. The initial
financing assumes the equity purchase price is fully funded via the New
Credit Facility and assuming interest rates on the New Credit Facility
as of January 17, 2002. Borrowings under the New Credit Facility bear
interest at a variable rate. Based on interest rates as of January 17,
2002, the interest rate on borrowings under the New Credit Facility
would have been 4.59% per annum, including the amortization of financing
charges. A change of 1/8% in interest rates would increase or decrease
pre-tax interest expense by $753,000 per annum. The New Credit Facility
contains a number of representations and warranties and affirmative and
negative covenants, including certain financial ratio maintenance
covenants. We have classified the New Credit Facility as long-term
because we intend to issue a combination of long-term debt and equity
following the closing of the acquisition of the MPC Utility to refinance
the New Credit Facility and provide working capital. We will be required
to pay additional fees in the event that we are unable to refinance the
acquisition term loan portion of the New Credit Facility within 60 and
150 days, respectively, from the closing of the acquisition of the MPC
Utility.
(6) Reflects the receipt of $74.9 million of net proceeds, after deducting
offering expenses, from the sale of 3,680,000 shares of common stock issued
in October 2001 at $21.25 per share and the application of the proceeds
therefrom. Approximately $35.0 million of these net proceeds were
contributed to NorthWestern's Blue Dot Services, Inc. subsidiary for the
redemption of certain preferred stock and common stock pursuant to existing
agreements, and the remainder was used for general corporate purposes,
including reducing short-term debt and amounts drawn under
NorthWestern's existing credit facility.
(7) Reflects the receipt of $102.9 million of net proceeds, after paying the
underwriting commission and estimated offering expenses of approximately
$500,000, from the sale of 4,000,000 shares of NorthWestern Capital
Financing II's 8-1/4% trust preferred securities (liquidation amount $25
per trust preferred security) issued on December 21, 2001 at $25.00 per
share and the sale of 270,000 additional shares of NorthWestern Capital
Financing II's 8-1/4% trust preferred securities (liquidation amount $25
per trust preferred security) issued on January 15, 2002 at $25.00 per
share plus accrued dividends of from December 21, 2001, pursuant to the
exercise of an over allotment option and the use of proceeds from such
sales for general corporate purposes and to repay a portion of the
amounts outstanding under NorthWestern's existing credit facility.
(8) Reflects the receipt of $96.8 million of net proceeds, after paying the
underwriting commission and estimated offering expenses totalling $3.9
million, from the proposed sale of 4,000,000 shares of NorthWestern
Capital Financing III's 8.10% trust preferred securities (liquidation
amount $25 per trust preferred security) scheduled to occur on January
31, 2002 and the use of proceeds from the sale for general corporate
purposes and to repay a portion of the amounts outstanding under
NorthWestern's existing credit facility.
(9) Reflects the balances of the MPC Utility. Purchase adjustments have been
made to the assets and liabilities of the MPC Utility to reflect the effect
of the pending acquisition accounted for under the purchase method of
accounting. Certain pro forma adjustments are based, in part, on the impact
of the terms and conditions of the Unit Purchase Agreement governing our
acquisition of the MPC Utility and we cannot assure you that such terms and
conditions will remain unchanged. Pro forma adjustments exclude certain
cash accounts representing excess proceeds from the MPC Utility's previous
sale of generation assets, which cash will be applied to reduce transition
and stranded costs under the jurisdiction of the MPSC and the FERC. See
"Montana Power Company Utility Unaudited Pro Forma Combined Condensed
Financial Data" included in Exhibit 99.3 to the December 12 Current Report.
(10) Reflects NorthWestern's anticipated initial financing of the acquisition of
the MPC Utility with the New Credit Facility described in Item 5 to the
Current Report on Form 8-K of NorthWestern Corporation, filed with the
Securities and Exchange Commission on January 28, 2002, and note 5
above. Goodwill will be recognized, representing the portion of the
purchase price in excess of the fair value of identified assets and
liabilities. No amortization of goodwill is included in the Unaudited
Pro Forma Combined Financial Information, as provided in Statement of
Financial Accounting Standards No. 142, "Goodwill and Other Intangible
Assets," for business combinations completed after June 30, 2001. The
allocation of the purchase price will be based on the fair value of
identified assets and liabilities as of the date the business
combination is completed. Accordingly, goodwill will be adjusted as a
result of the determination of such fair value and thus will differ from
the amount reported in the Unaudited Pro Forma Combined Condensed
Balance Sheet. While we believe the historical assets and liabilities
approximate fair value, if we identify any intangible assets separate
from goodwill, they will be subject to amortization.