[GRAPHIC OMMITTED] News Release
NYSE:NOR
Contacts:
Investors: Media:
Elizabeth A. Evans Roger Schrum
605-978-2929 605-978-2848
liz.evans@northwestern.com roger.schrum@northwestern.com
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NORTHWESTERN CORPORATION EXPECTS STRONG
FIRST QUARTER 2002 RESULTS FROM CONTINUING OPERATIONS;
REAFFIRMS FULL YEAR EARNINGS TARGETS
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SIOUX FALLS, S.D. - April 15, 2002 - NorthWestern Corporation (NYSE:NOR) said
today it expects its first quarter 2002 diluted earnings per share from
continuing operations will be between 60 to 65 cents per share, excluding the
earnings contribution of CornerStone Propane Partners L.P. which will be
reflected as discontinued operations, thereby outperforming the company's 48
cents per diluted share achieved in the first quarter of 2001. NorthWestern's
first quarter 2002 results will include results from the recently acquired
Montana Power energy operations, effective Feb. 1, 2002. The company estimates
that the addition of January 2002 results from the Montana operations would have
increased the first quarter results by approximately an additional 23 cents per
share. The company expects to release its first quarter 2002 results before the
market opens on Tuesday, April 30, 2002.
"We expect to report solid first quarter results from our energy and
communications businesses, and we continue to target our previously announced
2002 earnings guidance of $2.30 to $2.55 per share from continuing operations,"
said Merle Lewis, chairman and chief executive officer. "We are well positioned
to achieve improved operating performance in 2002 from our energy and
communications businesses, and we are extremely excited about the future
prospects of the company to drive further value to our shareholders."
Richard R. Hylland, NorthWestern's president and chief operating officer,
pointed out that the addition of the former Montana Power energy operations to
NorthWestern Energy's results, significant positive activities and performance
at Expanets and success to date of its previously announced Operational
Excellence initiatives are driving improved results for the first quarter.
"The integration of our new Montana energy operations is ahead of schedule,
and we expect to recognize strong performance from our combined energy business
during the first quarter and full year. On an annualized basis, our energy
business is targeted to deliver in
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NorthWestern Expects Strong First Quarter Results
April 15, 2002
Page 2
excess of $250 million in earnings before interest, taxes, depreciation and
amortization (EBITDA) while requiring less than $65 million in maintenance
capital expenditures," Hylland said. "In addition, we are on track for
delivering substantially improved results in our communications business,
Expanets, which has been enhanced in the first quarter by the restructuring of
its sales force for future growth initiatives, migration of the business to a
common information technology platform and the elimination of costly transition
expenses. Consistent with its 2002 plans, Expanets has significantly reduced its
cost structure such that the volume of monthly sales necessary to achieve
breakeven EBITDA has been lowered from more than $120 million in revenues
required at the beginning of 2001, to less than $60 million by the end of the
first quarter of 2002 while enhancing its customer service capabilities. As a
result, Expanets should reflect EBITDA in excess of $7 million for the first
quarter of 2002 on sales of approximately $200 million, compared with an EBITDA
loss of $37.7 million on revenues of $269 million during the first quarter of
2001. The first quarter results, which are in line with expectations, strongly
position Expanets to achieve previously targeted EBITDA of between $80 to $87
million for 2002 as the full year impact of implemented cost reduction and
margin enhancement initiatives are realized."
Hylland further commented that as a result of the factors discussed above,
the company is on track to meet its target of generating in excess of $100
million in consolidated free cash flow on an annualized basis by year end, which
will allow for further debt reduction and profitability going forward.
As previously announced, on March 13, 2002, NorthWestern completed the sale
of $720 million of Senior Notes and applied the proceeds, together with other
available cash, toward the complete retirement of its $720 million acquisition
term loan. The acquisition term loan was used to finance the purchase of the
energy distribution and transmission business of Montana Power. In conjunction
with the retirement of the acquisition facility, related bank and other
acquisition fees totaling approximately $15 million after tax will be recorded
as an extraordinary nonrecurring charge during the first quarter of 2002.
NorthWestern retains full access to its $280 million revolving credit facility,
which was undrawn at March 31, 2002.
"We are extremely pleased to have successfully completed this financing
which, coupled with our unused credit facility and free cash flow capabilities,
further strengthens NorthWestern's capital position," Hylland said.
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NorthWestern Expects Strong First Quarter Results
April 15, 2002
Page 3
Also as previously indicated, NorthWestern's first quarter 2002 results
will reflect the results of CornerStone Propane Partners L.P. as discontinued
operations. Accordingly, the results of CornerStone's operations, for all
periods reported, will be presented separately below income from continuing
operations. As a result, fully diluted earnings per share from continuing
operations under this presentation are 48 cents for the first quarter of 2001
and $1.57 for full year 2001 ($2.07 before the net impact of 2001 restructuring
charges). The adoption of discontinued operations accounting treatment is in
recognition of CornerStone's announcement on Jan. 18, 2002, that it had retained
Credit Suisse First Boston to pursue strategic options, including the possible
sale or merger of the partnership. Divestiture of its CornerStone interest is
consistent with NorthWestern's strategy to focus its resources on its energy and
communications growth platforms. In conjunction with the adoption of
discontinued operations accounting for CornerStone, substantially all of
NorthWestern's approximately $40 million net carrying value in the partnership
is anticipated to be recorded as a noncash charge during the first quarter of
2002.
NorthWestern will conduct a webcast conference call at 11 a.m. EDT on April
30, 2002, with interested investors to discuss the company's first quarter
results. Interested parties may listen to the Internet webcast both live and in
replay via the company's Web site at www.northwestern.com. The webcast also will
be distributed over CCBN's Investor Distribution Network. Investors can listen
to the conference call through CCBN's investor center at
www.companyboardroom.com or by visiting any of the investor sites in CCBN's
Individual Investor Network. Institutional investors can access the call via
CCBN's password protected management site, StreetEvents at www.streetevents.com.
NorthWestern Corporation, a FORTUNE 500 company, is a leading provider of
services and solutions to more than 2.5 million customers across America in the
energy and communications sectors. NorthWestern's partner businesses include
NorthWestern Energy, a provider of electricity, natural gas and related services
to customers in Montana, South Dakota and Nebraska; Expanets, a leading
mid-market provider of networked communications solutions and services in the
United States; and Blue Dot, a nationwide provider of air conditioning, heating,
plumbing and related services. Further information about NorthWestern is
available on the Internet at www.northwestern.com.
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NorthWestern Expects Strong First Quarter Results
April 15, 2002
Page 4
Forward-Looking Statements
STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: All
statements contained herein, as well as statements made in press releases and
oral statements that may be made by us or by officers, directors or employees
acting on our behalf, that are not statements of historical fact constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that could cause our actual
results to be materially different from historical results or from any future
results expressed or implied by such forward-looking statements. Among the
factors that could cause our actual results to differ materially are: the
adverse impact of weather conditions; unscheduled generation outages;
unscheduled maintenance or repairs; unanticipated changes to fossil fuel or gas
supply costs or availability due to higher demand, shortages, transportation
problems or other developments; developments in the federal and state regulatory
environment and the terms associated with obtaining regulatory approvals; costs
associated with environmental liabilities and compliance with environmental
laws; the rate of growth and economic conditions in our service areas and those
of our subsidiaries; the speed and degree to which competition enters the
industries and markets in which our businesses operate; the timing and extent of
changes in interest rates and fluctuations in energy-related commodity prices;
risks associated with acquisitions, transition and integration of acquired
companies, including implementation of information systems and realizing
efficiencies in excess of any related restructuring charges; reduction of
minority interest basis requiring us to recognize an increased share of
operating losses at certain of our subsidiaries; our ability to recover
transition costs and approval of our default supply contract portfolio in
Montana; disruptions and adverse effects in the capital market due to the
changing economic environment; our credit ratings with Moody's, Standard &
Poor's and Fitch; changes in customer usage patterns and preferences; and
changing conditions in the economy, capital markets and other factors identified
from time to time in our filings with the SEC. This news release should be read
in conjunction with our Annual Report on Form 10K for 2001, and any subsequent
quarterly reports on Form 10-Q and current reports on Form 8-K, which can be
located at www.sec.gov or requested from the company.
Any forward-looking statement speaks only as of the date on which such
statement is made, and, except as required by law, we undertake no obligation to
update any forward-looking statement to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time and it is not
possible for management to predict all such factors.
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