NorthWestern Energy Group, Inc.

Current report

Risks Related to the Merger

Current report

Because the exchange ratio is fixed and because the market prices of NorthWestern Common Stock and Black Hills Common Stock will fluctuate, NorthWestern shareholders cannot be certain of the market value of the Merger consideration they will receive in the Merger or the difference between the market value of the Merger consideration they will receive in the Merger and the market value of NorthWestern Common Stock immediately prior to the Merger.

Current report

The exchange ratio in the Merger is fixed and will not be adjusted in the event of any change in the stock prices of NorthWestern or Black Hills prior to the Merger. There may be a significant amount of time between the dates when the shareholders of NorthWestern or Black Hills vote on the Merger Agreement at the special meeting of each company and the date when the Merger is completed. The absolute and relative prices of shares of NorthWestern Common Stock and Black Hills Common Stock may vary significantly between the date the Merger Agreement, the date hereof, the date of the meetings and the date of the completion of the Merger. These variations may be caused by, among other things, changes in the businesses, operations, results or prospects of NorthWestern or Black Hills, market expectations of the likelihood that the Merger will be completed and the timing of completion, the prospects of post-merger operations, general market and economic conditions and other factors. In addition, it is impossible to predict accurately the market price of the Black Hills Common Stock to be received by NorthWestern shareholders after the completion of the Merger. Accordingly, the prices of NorthWestern Common Stock and Black Hills Common Stock on the date hereof and on the date of the meetings may not be indicative of their prices immediately prior to completion of the Merger and the price of the combined company common stock after the Merger is completed.

Current report

The ability of NorthWestern and Black Hills to complete the Merger is subject to various closing conditions, including the receipt of approval of NorthWestern and Black Hills stockholders and the receipt of consents and approvals from various governmental authorities, which may impose conditions that could adversely affect NorthWestern or Black Hills or cause the Merger to be abandoned. Failure to complete the Merger, or significant delays in completing the Merger, could negatively affect the trading price of NorthWestern common stock or other securities and the future business and financial results of NorthWestern.

Current report

To complete the Merger, NorthWestern and Black Hills stockholders must vote to approve a number of proposals related to the Merger and the Merger Agreement. Further, the Merger is subject to the satisfaction or waiver of certain closing conditions, including, (1) the effectiveness of a registration statement on Form S-4 to be filed in connection with the Merger; (2) subject to certain conditions, the receipt of certain regulatory approvals, including expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act (the HSR Act), and approval from the FERC and certain state regulatory commissions, in each case on such terms and conditions that would not result in a material adverse effect on the combined company; (3) the absence of any court order or regulatory injunction prohibiting completion of the Merger; (4) the authorization for listing of shares of Black Hills Common Stock to be issued in connection with the Merger on the New York Stock Exchange (NYSE) or other mutually-agreed stock exchange; (5) subject to specified materiality standards, the accuracy of the representations and warranties of each party; (6) compliance by each party in all material respects with its covenants under the Merger Agreement; (7) the absence of a material adverse effect on each party; and (8) receipt by each party of an opinion relating to the anticipated tax-free treatment of the Merger. If the foregoing conditions are not satisfied or waived, one or both of NorthWestern or Black Hills would not be required to complete the Merger.

Current report

NorthWestern and Black Hills have not yet obtained stockholder approval or the regulatory consents and approvals required to complete the Merger. Governmental or regulatory agencies could seek to block or challenge the Merger or could impose restrictions they deem necessary or desirable in the public interest as a condition to approving the Merger. NorthWestern and Black Hills will be unable to complete the Merger until the waiting period under the HSR Act has expired or been terminated and the required governmental approvals have been received. Regulatory authorities may impose certain requirements or obligations as conditions for their approval. The Merger Agreement may require NorthWestern and/or Black Hills to accept conditions from these regulators that could adversely impact the combined company. If the required governmental approvals are not received, or they are not received on terms that satisfy the conditions set forth in the Merger Agreement, then neither NorthWestern nor Black Hills will be obligated to complete the Merger.

Current report

There can be no assurance that a challenge to the Merger on antitrust grounds will not be made or, if such a challenge is made, of the result of such challenge. Additionally, even after the statutory waiting period under the antitrust laws and even after completion of the Merger, governmental authorities could seek to block or challenge the Merger as they deem necessary or desirable in the public interest. In addition, in some jurisdictions, a private party could initiate an action under the antitrust laws challenging or seeking to enjoin the Merger, before or after it is completed. NorthWestern or Black Hills may not prevail and may incur significant costs in defending or settling any action under the antitrust laws.

Current report

The special meetings at which the NorthWestern stockholders and the Black Hills stockholders will vote on the transactions contemplated by the Merger Agreement may take place before all regulatory approvals have been obtained and, in cases where they have not been obtained, before the terms of any conditions to obtain such regulatory approvals that may be imposed are known. As a result, if stockholder approval of the transactions contemplated by the Merger Agreement is obtained at such meetings, NorthWestern may make decisions after the meetings to waive a condition or approve certain actions required to obtain the necessary approvals without seeking further stockholder approval. Such actions could have an adverse effect on the combined company.

Current report

If NorthWestern and Black Hills are unable to complete the Merger, or there is a significant delay in completing the Merger, NorthWestern would be subject to a number of risks, including the following:

Current report

•NorthWestern would not realize the anticipated benefits of the Merger, including, among other things, increased operating efficiencies and future cost savings;

Current report

•the attention of management of NorthWestern may have been diverted to the Merger rather than to its own operations and the pursuit of other opportunities that could have been beneficial to NorthWestern;

Current report

•the potential loss of key personnel during the pendency of the Merger as employees may experience uncertainty about their future roles with the combined company;

Current report

•NorthWestern will have been subject to certain restrictions on the conduct of its business, which may prevent NorthWestern from making certain acquisitions or dispositions or pursuing certain business opportunities while the Merger is pending;

Current report

•the trading price of NorthWestern Common Stock or other securities may decline to the extent that the current market prices reflect a market assumption that the Merger will be completed; and

Current report

•the parties may be liable for damages to one another, or have to pay a termination fee, under the Merger Agreement.

Current report

NorthWestern can provide no assurance that the various closing conditions will be satisfied and that the required governmental approvals and other approvals will be obtained, or that any required conditions will not materially adversely affect the combined company following the Merger. In addition, NorthWestern can provide no assurance that these conditions will not result in the abandonment or delay of the Merger. The occurrence of any of these events individually or in combination could have a material adverse effect on NorthWestern's results of operations and the trading price of NorthWestern's Common Stock or other securities.

Current report

The Merger Agreement contains provisions that limit NorthWestern's ability to pursue alternatives to the Merger, could discourage a potential acquirer of NorthWestern from making a favorable alternative transaction proposal and, in certain circumstances, could require NorthWestern to pay a termination fee to Black Hills.

Current report

Under the Merger Agreement, NorthWestern and Black Hills have agreed, subject to certain exceptions with respect to unsolicited proposals, not to directly or indirectly solicit competing acquisition proposals or to enter into discussions concerning, or provide confidential information in connection with, any unsolicited alternative acquisition proposals. Additionally, the NorthWestern board of directors and the Black Hills board of directors are each required to recommend the approval of the applicable transaction-related proposals to its respective stockholders, subject to certain exceptions. Prior to the approval of the transaction-related proposals by their respective stockholders, the NorthWestern board of directors or the Black Hills board of directors may change its recommendation in response to an unsolicited proposal for an alternative transaction, if such board of directors determines in good faith after consultation with its outside legal counsel and financial advisor that the proposal constitutes or would reasonably be expected to lead to a “Superior Black Hills Proposal” or “Superior NorthWestern Proposal”, as applicable (as such terms are defined in the Merger Agreement), and that failure to take such action would be inconsistent with their fiduciary duties under applicable law to the applicable company and its stockholders under applicable law, subject to complying with certain procedures set forth in the Merger Agreement. Prior to the approval of the transaction-related proposals by their respective stockholders, the NorthWestern board of directors and the Black Hills board of directors may also change its recommendation upon the occurrence of a “Black Hills Intervening Event” or “NorthWestern Intervening Event”, as applicable (as such terms are defined in the Merger Agreement), and such board of directors determines in good faith after consultation with its outside legal counsel and financial advisor that failing to change its recommendation would be inconsistent with its fiduciary duties under applicable law, subject to complying with certain procedures set forth in the Merger Agreement. The Merger Agreement is subject to a “force-the-vote” provision, which means neither NorthWestern nor Black Hills would have an independent right to terminate the Merger Agreement to accept a superior proposal. These provisions could discourage a third party that may have an interest in acquiring all or a significant part of NorthWestern from considering or proposing that acquisition, even if such third party were prepared to pay consideration with a higher market value than the market value proposed to be received or realized in the Merger, or might result in a potential acquirer proposing to pay a lower price than it would otherwise have proposed to pay. As a result of these restrictions, NorthWestern may not be able to enter into an agreement with respect to a more favorable alternative transaction, or may be able to do so only by incurring po…

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Current report

The Merger Agreement contains certain customary termination rights for each of NorthWestern and Black Hills; provided, that, either party would be required to pay to the other a termination fee equal to $100 million upon termination of the Merger Agreement in certain circumstances involving (i) a change in recommendation by such party’s board of directors (including, in certain circumstances, the failure of such party to publicly reaffirm its recommendation upon request) or (ii) a party entering into a definitive agreement in respect of a competing transaction within twelve months of termination of the Merger Agreement in certain circumstances involving a potential competing acquisition proposal.

Current report

NorthWestern is subject to risk of the Merger having adverse impact on its credit rating while the Merger is pending.

Current report

NorthWestern cannot be assured that its credit ratings will not be lowered as a result of the Merger or for any other reason, including the failure to consummate the Merger. Any reduction in NorthWestern's credit ratings, or the criteria used by rating agencies to determine such ratings, could adversely affect its ability to complete the Merger, its access to capital, its cost of capital and its other operating costs, and its ability to refinance or repay NorthWestern's existing debt and complete new financings, which could have a material adverse effect on NorthWestern's business, financial condition, results of operations or the trading price of its common stock or other securities.

Current report

The market prices of NorthWestern Common Stock and other securities may be subject to fluctuation while the Merger is pending.

Current report

The market price of NorthWestern Common Stock and other securities may fluctuate significantly while the Merger is pending, and any adverse developments related to the Merger or otherwise could result in holders of NorthWestern Common Stock or other securities losing some or all of the value of their investment. In addition, if the stock market experiences significant price and volume fluctuations, such fluctuations could be exacerbated by the pendency of the Merger, which could adversely affect the market for, or liquidity of, NorthWestern Common Stock or other securities, regardless of NorthWestern's actual operating performance.

Current report

Because the Merger Agreement contemplates that Black Hills will issue shares of Black Hills Common Stock to NorthWestern’s stockholders based upon a fixed exchange ratio (subject to certain adjustments for reclassifications, stock splits, and stock dividends), developments with respect to Black Hills and its shares of common stock may affect NorthWestern Common Stock irrespective of their relevance to standalone NorthWestern and even though NorthWestern may have no control over, or knowledge of, such developments. As a result, the market price of NorthWestern Common Stock during the pendency of the Merger may not accurately reflect the value of NorthWestern absent the Merger.

Current report

NorthWestern is subject to contractual restrictions in the Merger Agreement that may hinder its operations while the Merger is pending. The corollary restrictions applicable to Black Hills may not prevent Black Hills from taking actions that are adverse to NorthWestern or its stockholders.

Current report

The Merger Agreement includes certain customary restrictions with respect to the operation of NorthWestern's and Black Hills' respective businesses between the date of the Merger Agreement and the consummation of the Merger. These restrictions may prevent NorthWestern from pursuing otherwise attractive business opportunities and making other changes to its business prior to completion of the Merger or termination of the Merger Agreement.

Current report

Despite these mutual restrictions, NorthWestern and Black Hills will continue to operate their businesses independently of one another during the pendency of the Merger. The restrictions in the Merger Agreement, which are subject to numerous exceptions, may not be adequate to prevent Black Hills from taking actions that are adverse to NorthWestern or its stockholders.

Current report

NorthWestern will incur significant transaction and other costs in connection with the Merger.

Current report

NorthWestern has incurred and expects to incur additional significant costs associated with the Merger, including transaction fees and costs of combining the operations of the two companies. Additional unanticipated costs also may be incurred in the integration of the businesses of NorthWestern and Black Hills. Any net benefit from any anticipated elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may not be achieved in the near term or at all. Transaction costs could have a material adverse impact on the results of operations of NorthWestern, and the failure to achieve the anticipated benefits and efficiencies from the Merger, or the incurrence of additional expenses, could have a material adverse impact on the results of operations of the combined company and its ability to pay dividends after closing. In turn, the current or future market value of NorthWestern Common Stock or other securities could be adversely impacted.

Current report

Uncertainties associated with the Merger may cause a loss of management personnel and other key employees of NorthWestern and Black Hills, which could adversely affect the future business and operations of the combined company following the Merger.

Current report

Each of NorthWestern and Black Hills depends on the experience and industry knowledge of its officers and other key employees to execute its business plans. The success of the combined company after the Merger will depend in part on its ability to retain key management personnel and other key employees. Current and prospective employees of NorthWestern and Black Hills may experience uncertainty about their roles within the combined company following the Merger or other concerns regarding the timing and completion of the Merger or the operations of the combined company following the Merger, any of which may have an adverse effect on the ability of NorthWestern and Black Hills to retain or attract key management and other key personnel. If NorthWestern or Black Hills is unable to retain personnel, including NorthWestern’s or Black Hills’ key management, who are critical to the future operations of the companies, NorthWestern and Black Hills could face disruptions in their operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment and training costs. In addition, the loss of key NorthWestern and Black Hills personnel could diminish the anticipated benefits of the Merger. No assurance can be given that the combined company, following the Merger, will be able to retain or attract key management personnel and other key employees of NorthWestern and Black Hills to the same extent that NorthWestern and Black Hills have previously been able to retain or attract their own employees.

Current report

The business relationships of NorthWestern and Black Hills may be subject to disruption due to uncertainty associated with the Merger, which could have a material effect on the business, financial condition, cash flows and results of operations of NorthWestern or Black Hills pending the combined company and following the Merger.

Current report

Parties with which NorthWestern or Black Hills do business may experience uncertainty associated with the Merger, including with respect to current or future business relationships with NorthWestern or Black Hills following the Merger. NorthWestern’s and Black Hills’ business relationships may be subject to disruption as customers, distributors, suppliers, vendors, landlords, joint venture participants and other third parties with whom they do business may attempt to delay or defer entering into new business relationships, negotiate changes in existing business relationships or consider entering into business relationships with parties other than NorthWestern or Black Hills following the Merger. These disruptions could have a material and adverse effect on the business, financial condition, cash flows and results of operations, of NorthWestern or Black Hills, regardless of whether the Merger is completed, as well as a material and adverse effect on the combined company’s ability to realize the expected cost savings and other benefits of the Merger. The risk, and adverse effects, of any disruption could be exacerbated by a delay in completion of the Merger or termination of the Merger Agreement.

Current report

The Merger may not be accretive to NorthWestern's or Black Hills' earnings and may cause dilution to the combined company's earnings per share, which may negatively affect the current or future market price of NorthWestern Common Stock or other securities.

Current report

Expectations that the Merger will be accretive to earnings per share are based on preliminary estimates any of which may prove to be incorrect or may change materially. NorthWestern and Black Hills may encounter additional transaction and integration-related costs other than those they currently anticipate, may fail to realize all of the benefits anticipated in the Merger or may be subject to other factors that affect preliminary estimates or the ability of either company to realize operational efficiencies. Any of these factors could cause a decrease in NorthWestern's and Black Hills' earnings per share, or negatively affect the current or future market price of NorthWestern Common Stock or other securities.

Current report

If the Merger does not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, certain NorthWestern stockholders may be required to pay substantial U.S. federal, state and/or local income taxes.

Current report

The Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and it is a condition to each party’s obligation to complete the Merger that it receive an opinion from counsel, dated as of the closing date of the Merger, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. However, the foregoing opinions of counsel will each be based on, among other things, the law in effect as of the date of the opinions, certain representations made by NorthWestern and Black Hills and certain assumptions, all of which must be consistent with the state of facts existing at the time of the Merger. If there is a change in law after the date of the opinions, or if any of these representations and assumptions are, or become, inaccurate or incomplete, an opinion may be invalid, and the conclusions reached therein could be jeopardized. In addition, no ruling has been or will be sought from the U.S. Internal Revenue Service (IRS) as to the U.S. federal income tax consequences of the Merger and the other transactions contemplated by the Merger Agreement. There can be no assurance that the IRS will not assert, or that a court will not sustain, a position contrary to the conclusion set forth in any such opinion that the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code.

Current report

If the Merger does not qualify as a “reorganization” within the meaning of Section 368(a) of the Code, each NorthWestern stockholder will recognize gain or loss, for U.S. federal—and applicable state and local—income tax purposes equal to the value of the Black Hills stock received in the Merger (plus any cash received in respect of fractional shares) minus the stockholder’s adjusted tax basis in the stockholder’s NorthWestern stock. Depending on the amount of gain, if any, that is recognized, a NorthWestern stockholder that is subject to U.S. federal, state, or local income taxes may incur a significant income tax liability.

Current report

NorthWestern and/or Black Hills may be subject to litigation challenging the Merger while it is pending, and an unfavorable judgment or ruling in any such lawsuits could prevent or delay the consummation of the Merger and/or result in substantial costs.

Current report

Lawsuits in connection with the Merger while it is pending may be filed against NorthWestern, Black Hills, any parties to the Merger Agreement and/or their respective directors and officers, which could prevent or delay the consummation of the Merger and/or result in additional costs to us. The ultimate resolution of any such lawsuit cannot be predicted with certainty, and an adverse ruling in any such lawsuit may cause the Merger to be delayed or not to be completed and/or result in additional costs to NorthWestern and Black Hills, which could cause NorthWestern and Black Hills not to realize some or all of the anticipated benefits of the Merger. The defense or settlement of any lawsuit that remains unresolved at the time the Merger is consummated may adversely affect the combined company’s business, financial condition, results of operations and cash flows. NorthWestern cannot currently predict the outcome of or reasonably estimate the possible loss or range of loss from any such lawsuit.